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Abstract
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.