Lebanon’s Agriculture Sector Falls Victim to Smuggling, High Export Tariffs

A grape picker harvests grapes in a farm at Taanayel Monastery, in Lebanon's Bekaa Valley, September 15, 2018. REUTERS/Jamal Saidi
A grape picker harvests grapes in a farm at Taanayel Monastery, in Lebanon's Bekaa Valley, September 15, 2018. REUTERS/Jamal Saidi
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Lebanon’s Agriculture Sector Falls Victim to Smuggling, High Export Tariffs

A grape picker harvests grapes in a farm at Taanayel Monastery, in Lebanon's Bekaa Valley, September 15, 2018. REUTERS/Jamal Saidi
A grape picker harvests grapes in a farm at Taanayel Monastery, in Lebanon's Bekaa Valley, September 15, 2018. REUTERS/Jamal Saidi

Prime Minister Saad Hariri has said that Lebanon’s agriculture sector should be organized to compete in outside markets amid complaints by farmers that they have fallen victim to smuggling and high export tariffs.

Hariri spoke during a workshop titled “Transforming Lebanon’s Agriculture: Challenges and Opportunities” that was held at the Grand Serail in Beirut on Friday.

“The sectors linked to agricultural policies should be developed,” said Hariri. “We need a unified agenda for a roadmap on developing the sector.”

“Agriculture accounts for only four percent of GDP,” he told the conference, saying the sector’s success brings back farmers to their villages.

Agriculture comes in third place after the services and industry sectors in Lebanon. But its budget forms only eight percent of the state budget.

Around 200,000 families work in agriculture, which means 20 to 30 percent of the labor force.

However, the chief of the Bekaa Farmers Association, Ibrahim Tarshishi, told Asharq Al-Awsat that smuggling has severely affected the sector.

“Whenever a farmer has a good crop season, he sees his same produce at lesser cost,” said Tarshishi. The sector faces other severe constraints such as increasing water scarcity and loss of arable land.

In addition, there isn’t enough subsidies. The Investment Development Authority of Lebanon (IDAL) gives farmers 100 Lebanese pounds for every kilogram of exported apples, and 65 pounds for every kilogram of potato.

“The subsidies were at first acceptable, but they no longer meet the current challenges,” said Tarshishi.

Subsidies to farmers are meaningless when there are high export costs, he told the newspaper. There are tariffs of around 4,000 dollars for each truck that passes through al-Boukamal crossing on the Syrian-Iraqi border.

As for the Nasib border crossing between Jordan and Syria, there is a cost of 1,000 dollars for each lorry, he added.



Oil Prices Ease but Remain Near 2-week Highs on Russia, Iran Tensions

FILE PHOTO: Pump jacks operate in front of a drilling rig in an oil field in Midland, Texas US August 22, 2018. Picture taken August 22, 2018. REUTERS/Nick Oxford//File Photo
FILE PHOTO: Pump jacks operate in front of a drilling rig in an oil field in Midland, Texas US August 22, 2018. Picture taken August 22, 2018. REUTERS/Nick Oxford//File Photo
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Oil Prices Ease but Remain Near 2-week Highs on Russia, Iran Tensions

FILE PHOTO: Pump jacks operate in front of a drilling rig in an oil field in Midland, Texas US August 22, 2018. Picture taken August 22, 2018. REUTERS/Nick Oxford//File Photo
FILE PHOTO: Pump jacks operate in front of a drilling rig in an oil field in Midland, Texas US August 22, 2018. Picture taken August 22, 2018. REUTERS/Nick Oxford//File Photo

Oil prices retreated on Monday following 6% gains last week, but remained near two-week highs as geopolitical tensions grew between Western powers and major oil producers Russia and Iran, raising risks of supply disruption.
Brent crude futures slipped 26 cents, or 0.35%, to $74.91 a barrel by 0440 GMT, while US West Texas Intermediate crude futures were at $70.97 a barrel, down 27 cents, or 0.38%.
Both contracts last week notched their biggest weekly gains since late September to reach their highest settlement levels since Nov. 7 after Russia fired a hypersonic missile at Ukraine in a warning to the United States and UK following strikes by Kyiv on Russia using US and British weapons.
"Oil prices are starting the new week with some slight cool-off as market participants await more cues from geopolitical developments and the Fed’s policy outlook to set the tone," said Yeap Jun Rong, market strategist at IG.
"Tensions between Ukraine and Russia have edged up a notch lately, leading to some pricing for the risks of a wider escalation potentially impacting oil supplies."
As both Ukraine and Russia vie to gain some leverage ahead of any upcoming negotiations under a Trump administration, the tensions may likely persist into the year-end, keeping Brent prices supported around $70-$80, Yeap added.
In addition, Iran reacted to a resolution passed by the UN nuclear watchdog on Thursday by ordering measures such as activating various new and advanced centrifuges used in enriching uranium.
"The IAEA censure and Iran’s response heightens the likelihood that Trump will look to enforce sanctions against Iran’s oil exports when he comes into power," Vivek Dhar, a commodities strategist at Commonwealth Bank of Australia said in a note.
Enforced sanctions could sideline about 1 million barrels per day of Iran’s oil exports, about 1% of global oil supply, he said.
The Iranian foreign ministry said on Sunday that it will hold talks about its disputed nuclear program with three European powers on Nov. 29.
"Markets are concerned not only about damage to oil ports and infrastructure, but also the possibility of war contagion and involvement of more countries," said Priyanka Sachdeva, senior market analyst at Phillip Nova.
Investors were also focused on rising crude oil demand at China and India, the world's top and third-largest importers, respectively.
China's crude imports rebounded in November as lower prices drew stockpiling demand while Indian refiners increased crude throughput by 3% on year to 5.04 million bpd in October, buoyed by fuel exports.
For the week, traders will be eyeing US personal consumption expenditures (PCE) data, due on Wednesday, as that will likely inform the Federal Reserve’s policy meeting scheduled for Dec. 17-18, Sachdeva said.