ANALYSIS - Cyprus has a high quality agriculture and fishery sector but due to high input costs the sector is not competitive. Lucy Towers, TheFishSite Editor, spoke with the Cypriot Minister of Agriculture during a visit to Cyprus to find out the challenges the sector faces and what is being done to help the sector grow.
Speaking to TheFishSite.com, the Cypriot Minister of Agriculture, Natural Resources and Environment, Nicos Kouyialis, said that the agriculture sector represents around 2.6 per cent of the country's GDP and mainly revolves around the production of poultry, fish, sheep, potatoes and cattle (for milk).
Despite the high quality of agricultural products, high production costs and a challenging hot climate mean that Cyprus's agriculture sector is not competitive. The country produces mainly for the local market with only Cyprus's famous halloumi cheese and potatoes, which can fetch up to €3 per kilo, going to export.
Minister Kouyialis stated that farmers currently struggle with high prices for feed, electric, water and petrol. Joining the EU has also added further pressures and costs as farmers must use certain equipment to meet EU policy. This equipment is often expensive and needs to be imported. The hot dry climate is also a challenge to access foreign markets as it means large volumes of products cannot be produced year round.
Despite the limitations that joining to EU has created, the EU is providing various measures through the Common Agricultural Policy (CAP) to help farmers such as, the new Rural Development Programme, which will run from 2014-2020 and invest around €600 million. This new policy is more focused on helping farmers to improve quality, said the Minister.
The Cypriot government is also trying various schemes to reduce production costs for farmers. A five per cent petrol price reduction for farmers is currently in the works while it is also hoped that VAT can be reduced from 18 per cent to five per cent for farmers.
In order to help new people into the agricultural sector the Cypriot government is providing training programmes. These programmes aim to equip potential farmers with the skills they need to farm sustainably in line with new technology.
The government is also helping to provide land for those who cannot afford it and it is grouping farmers into cooperatives so that they are able to set up contracts with exporters. Minister Kouyialis noted that by grouping farmers together they are able to produce the constant supply and large volume required for export contracts.