Effect of incentive policy on performance and international competitiveness of fruits, vegetables, and olive oil in Morocco: the case of greenhouse tomatoes, Clementine mandarins, and Maroc-Late oranges

This article presents a brief review of agriculture situation in Morocco and deals with evaluating the effects of Morocco's incentive policy on performance and international competitiveness of four agricultural produce. These products are: green house tomatoes, two citrus fruits: the large orange variety Maroc- Late and the small fruit Clementine, and olive oil. Data of the respective agricultural chains of the four products were collected in two major producing areas of the products, and were used to calculate the Nominal Protection Coefficients (NPC) and the Effective Protection Coefficients (EPC) to evaluate the effects of the local incentive policy, and to calculate the Domestic Resource Cost (DRC) ratios as indicators of international competitiveness of the products. The four NPC ratios, which all were less than one, indicate that the four products are relatively taxed. In addition, the EPC's show that along with the direct taxes on these products, indirect taxes on their inputs are further penalizing these products. All the DRC ratios for the four products were also less than one, indicating a comparative advantage and an efficient allocation of domestic resources. Green house tomatoes had the smallest DRC, 0.36. Those of the two citrus products were a little higher; 0.41 for the Clementine and 0.50 for Maroc- Late. Olive oil had the highest, 0.93, DRC. The low yield per hectare is the main contributor to this relatively modest performance. However, there is a considerable potential for this product if its productivity is improved and the processing industry along with the marketing channels are modernized. Reforms therefore need to be implemented to correct the distortions introduced by the current incentive system which is biased against the export oriented products and is favorable to import substitute products. Such reforms will have to ensure better allocations of domestic resources according to the comparative advantage of the country and to deal with the challenges facing the agricultural sector within the trade agreements signed by Morocco with its trade partners.


Issue Date:
2006
Publication Type:
Conference Paper/ Presentation
Record Identifier:
http://ageconsearch.umn.edu/record/10066
PURL Identifier:
http://purl.umn.edu/10066
Total Pages:
15
Series Statement:
Seminar Paper




 Record created 2017-04-01, last modified 2018-01-22

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