AGRICULTURE, FOOD AND FISHERY
There are important investment opportunities within agriculture and farming, but especially in the food processing industry of Jordan. Importantly Jordan has for the last years played the role of a gateway to the Iraqi market, because of its geographical proximity and easy market access to Iraq.
IntroductionJordan is a relatively small country of 89,210 km², divided into three main geographical areas with different climate: the Jordan Valley, the Highlands and the Eastern Desert. Less than 5 % of the total area is arable land and the cultivated area is 3.4 %, mostly in the Jordan Valley with limited water resources. Although intensive irrigation and modernization processes are available, the local agriculture has to cope with the limited water resources. The country is currently exploring ways to expand its water supply and use its existing water resources more efficiently, including regional cooperation. Market indicators
The contribution of the agricultural sector to the country’s GDP was 3% in 2007 coming down from 6% in 1992, and around 10% of the labour force is working in the sector. The principal crops are vegetables which account for around 70% of the agricultural production. Besides that the major crops are fruits, wheat, barley, and olives (olive oil), and livestock like sheep, cows and poultry. The agricultural production is subject to heavy competition in comparison to other sectors, and the production is competitive, preparing the ground for food processing industries. The food industry is the second most important industrial sector, only after the service sector, and the most important manufacturing sector according to Jordan Investment Board.
The climate of Jordan offers the possibility of production of several crops, including several cash crops. There is the problem of water scarcity as mentioned above, and therefore the market openings are not in the agricultural production, but in the food processing industry. On the sideline, there is also an existing market in Jordan for the latest technology in water conservation and irrigation systems.
Processed tomato is the largest component of Jordan’s agro-industrial sector. The industry produces a wide range of products coming from the local tomato crops. The Jordanian meat processing industry, mainly poultry, is active and specialized in frozen processed products. Other kinds of processed or canned meat are imported. This also goes for dairy products, milk powder and butter in particular. The soft drinks and mineral water industry is still unable to cope with local demand, and there are market openings in producing locally under license. There is no industrial fishery and no significant fish processing capabilities in Jordan. Jordan's seafood demand is currently satisfied almost entirely by imports.
In 2007 Jordan’s exports of food, beverages, vegetables, live animals and animal products amounted to half a billion (JD 531 mn), with vegetables accounting for more than half of this amount. The import for same product group was JD 1.5 bn, out of which vegetables products is the major component, but prepared food and beverages are also imported to a large extent.The high value of import is due to the import of raw materials for manufacturing. These products come from Syria and Lebanon (mainly fruit and vegetables), Europe (semi-manufactured goods, ingredients, and concentrates), USA, and Australia (grain and wheat).
The food and beverage production in Jordan has had growth rates of around 12% for the past 5 years, with the production reaching JD 1.1 bn in 2007.
The Danish exports of animal products, mainly diary products, are significant with an export amounting to JD 4.5 mn (2007), and the export of prepared foodstuff reaching around JD 1.5 mn (2007).
Jordan benefits from a wide integration in the international and the regional markets. It became a member of the World Trade Organization in April 2000. Furthermore, the country signed bilateral agreements, such as the Association Agreement with EU as a partner of the MEDA Euro Mediterranean programme, and the Greater Arab Free Trade Area Agreement (GAFTA). Special zones make use of the different agreements, and tax exemptions.
According to the Jordanian Investment Promotion Law, projects in this sector are fully exempt from income and social service taxes, when they are either used for processed products, or for export. Imported inputs for the manufacturing of processed products are exempt from customs duties. Specialized credit institutions also provide soft-term loans for projects in this sector.
Market trendsThe potentials in the food processing industry are greater than those in the agricultural sector. As a result of the lack of local raw materials, with the exception of certain crops like tomatoes, dependency on imports of other agricultural products is likely to increase. Because of its geographical proximity and easy market access to Iraq, Jordan has for the last couple of years played the role of a gateway to the Iraqi market. In the agriculture and food sector, there are considerable opportunities for trade and investment. A majority of Iraq's total food requirement is imported. Both Iraqi and Jordanian traders have developed excellent business connections and facilities for Jordanian and imported products to enter Iraq. There is a continuous focus from the government’s side to improve the conditions for this trade, which includes final consumer goods, including several types of agri-products, processed foods, pharmaceuticals, etc.Market assessmentThere are investment opportunities in the agriculture, farming and food processing industry in Jordan. In fact, many local firms and entrepreneurs seem to attach great importance to the sector, thus shifting towards food processing enterprises that can supply the local and the regional markets. The sector is also attractive because of the skilled and relatively cheap labour force. Food processing makes use of the many resources at different steps in the manufacturing process, by creating up-stream and down-stream linkages connecting the farming products, agricultural business services, agro input, and agro industries.
The attractive investment possibilities in the food processing industry of Jordan, combined with the market openings steaming from the strategic location of the country makes Jordan worth looking into. The country is becoming an increasingly attractive market for international trade and investment, and is seeking to become a trade centre for the region. This is evident in its role as a gateway to Iraq, which offers Danish exporters several reasons to seriously consider business opportunities in the Jordanian agro-industry sector.
Besides the market opening with Iraq, the main potential lies within the food processing industry, especially for products that take advantage of the main products of Jordan.
Relevant food exhibitions in Jordan:
Relevant links
