Plan for supporting agriculture

Subsidy on agricultural exports ranges from $40 to $200 per ton depending on product, and destination

The Investment Development Authority for Lebanon (IDAL) will begin applying a new program for supporting agricultural exports, Agri-Plus, starting the first of January 2012.

The cost of the new program is estimated at LL50 billion ($34 million) per year.

“Agri-Plus is based on preserving balance between the demand and supply in the local market ,” said Abbas Ramadan, Senior Investment Officer at IDAL. He said it is more flexible than the previous export support program, Export-Plus.
Export-Plus consisted of a unified subsidy rate on the transport of goods for all export items. Though the program had officially ended in July, it would remain effective till the end of the year.

“The World Trade Organization had restrictions on subsidizing the transportation costs of exports,” Ramadan said. He said that the new scheme mainly involves a subsidy on the costs of packaging. “We studied the costs of packaging, by product, and compared them to the costs of our competitor markets, mainly Syria and Jordan,” Ramadan said.

The support aims at reducing the gap between the production cost in Lebanon and in its competitor markets through covering the largest amount possible of the difference.

According to Ramadan, the subsidy on exports of vegetables will range from LL60,000 to LL240,000 ($40 to $163) for every ton, while that on fruits from LL70,000 to LL300,000 ($47 to $204) per ton. The amount of the subsidy would vary according to the kind of product, and the destination.

The program divides the export markets into four geographic zones. The first zone includes neighboring states like Syria and Jordan. The second includes the rest of the Arab states (Gulf countries, Egypt, Tunisia...) plus Iran. The third area consists of European countries, and the fourth includes the Americas and Australia.