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Abstract
During the last decade the Cypriot agricultural sector has been
declining in terms of most indices in the economy, mainly due to the spiraling
growth of tourism, as crucial investment outlays were diverted from
agriculture to tourism; the most important factors of production being land
and labor due to substantially higher yields accruing to both. The Domestic
Resource Cost (DRC) revealed that the three products studied for the period
1997 to 2000, i.e. tomatoes, oranges and olive oil had a comparative
advantage. However, the opening of the European market with EU accession
led to the substantive undermining of competitiveness of agricultural
products and to the reduction of the value of exports. It is believed that DRC
ratios would be higher today that the ones reported, due to
unchanged /decreased border prices and increased costs of tradable inputs. It
is suggested that the tomato, orange and olive oil sectors will become more
competitive in the European market if factors that are affecting their
marketing, like differentiation of production and quality, are improved. New
concepts like organic farming and products of origin are very important and
may provide profitable outlets in the new globalized economy. Additionally,
favorable climatic conditions are vastly for and conducive to the production
of early season Mediterranean products with obvious premium attached in
the market place.