Agriculture & Food

    Quality not Quantity

    Agriculture & Food

    Innovation and diversification of Cyprus’ top-quality agricultural produce is strengthening the country’s reputation as the ‘Food Island’ of the Eastern Mediterranean.

    Cyprus is opting to identify niche markets for its high-quality produce. Taking a decisive step towards quality, rather than quantity, the agricultural sector is also following the trend in the wider economy. The long-term strategy of Cyprus is to achieve a greener and more resource-efficient economy, as well as developing competitive and sustainable agriculture and fisheries industries. These will also contribute to the stimulation of the Cyprus economy, with the creation of new employment opportunities and growth in rural and coastal areas – while ensuring high quality of life and the protection of the environment.

    Resilient and Adaptive

    Although abundant with fresh produce and fertile soil, farmers of Cyprus certainly don’t have it easy. They face an ongoing struggle for economic relevance, one that has been compounded by both environmental and political challenges. However, the sector has responded by adopting new technologies, bringing new products to the market and seeking out new customer bases. Cyprus is characterised by the growth of the services sector and the downsizing of the more traditional sectors of the economy. Indicative of this trend, is that in the early years of Cyprus’ independence, the contribution of the agricultural sector to GDP was about 20%, whereas today it has dropped to about 1.9% and employs around 4.6% of the workforce. However, the sector has shown remarkable resilience and agricultural production has remained at the same level, despite this challenge and the economic crisis of recent years – proving there are positive future prospects for agriculture in Cyprus if it continues to transform the sector on a more professional and scientific basis. New structural reforms are also set to increase competitiveness and productivity, making it essential for Cyprus to proceed with changes that will allow the sector to become more dynamic, export-oriented and most importantly adopting a mentality of continuous modernisation. Along with the ongoing initiatives, Cyprus is also tackling head-on chronic problems such as water scarcity, while making a turn to a higher quality production of local products such as the famous Cypriot cheese halloumi.

    Delectable Exports

    Cyprus’ main agricultural exports are quintessentially Mediterranean: health-promoting foods such as olives, citrus fruit and grapes, along with potatoes, all of which thrive in a mild, sunny climate. The flipside of the wonderful warm climate is that farming in Cyprus is vulnerable to drought. It relies heavily on irrigation and consumes 70% of the island’s valuable water resources. However, thanks to the latest desalination technology, agricultural drought will be mitigated. New state-of-the-art desalination plants mean Cyprus is now self-sufficient in its domestic water needs for the first time in its history. As part of its commitment to reform the rural economy, the government is also promoting the treatment of waste water for use in agricultural irrigation, a reduction in the quantities of water-hungry citrus fruit and the cultivation of more drought-tolerant crops. Aquaculture products are the third most important produce in terms of value and albacore (species of tuna) is the main product in terms of exports, with Spain ranking as the most important trading partner. The annual production of albacore in Cyprus is around 400 tons (2014), with most of it exported, along with sea-bass and sea bream, with 65% of the total national production exported to markets in the Middle East and the US.

    Key Markets

    The traditional markets for Cypriot citrus products have been Russia and the United Kingdom, both enthusiastic consumers of oranges, tangerines and mandora, a cross between a mandarin and an orange. Agricultural exports to the EU constitute around 64.2%, other European countries 16.7% and Asia 16.2%.The main exported raw agricultural products are potatoes, citrus, vegetables and grapes, and the main exported processed agricultural products are halloumi cheese, fruit and vegetable juices, meat and wines. The Russian ban on importing EU food products forced citrus farmers to seek EU aid to compensate for the losses they incurred following these developments. But it has also seen the sector responding quickly to seek out new markets. Preliminary talks with importers from the United Arab Emirates and other Gulf countries have been productive and it is hoped may lead to the establishment of a long-term consumer base not just for citrus fruits but also for potatoes, vegetables and dairy products.

    Key Crops

    The most important crops produced in Cyprus are: cereals (wheat, barley), vegetables and melons – such as potatoes, carrots, tomatoes, water melons, sweet melons – and cucumbers, and other fruit and tree crops, such as grapes, oranges, lemons, grapefruit, apples, pears, peaches, cherries, bananas, almonds, olives and carobs. An area of success has been the marketing of the Cyprus potato – one of the most important agricultural export products of Cyprus and easily recognisable by its reddish peel and extraordinary taste. Thanks to climatic conditions, fresh new Cyprus potatoes intended for export are available to European markets far before the traditional ‘continental’ season – and have been especially popular in the UK. In 2013, Cyprus potato exports reached over €60 million. Cypriot farmers are used to adapting to changing market conditions and the recent success in marketing halloumi cheese as an international brand – a Protected Designation of Origin (PDO) – is an achievement that demonstrated how the island can establish a unique identity for its products. The authorities are now seeking to repeat this success with other agricultural produce like processed meat products, olive oil, fruits, vegetables and potatoes – strengthening Cyprus’ reputation as a source of high quality produce for which the consumer is willing to pay more. In addition, the Ministry of Agriculture continuously evaluates new export opportunities for agricultural products, such as pomegranates, biological potatoes and sweet potatoes, avocados and herbs. One interesting new niche area of cultivation is hemp. A new legal framework for hemp cultivation in Cyprus could be another game changer, creating a sub-sector of agricultural production. Hemp is set to be subsidised from direct payments and the Rural Developing Program and foreign investors have already shown interest in setting up operations in Cyprus for hemp cultivation and to sell it as a natural fibre source – in similar fashion to the industries in France, Spain, the UK, the Netherlands and Germany.

    Developing Wine Industry

    The Wine Products Council (WPC) has also had considerable success in transforming the Cypriot wine industry, which until recently had an indifferent reputation overseas. Adopting the maxim ‘quality not quantity’, the WPC introduced financial incentives for the cultivation of grape strains more suitable for the export market and actively sought experienced international wine makers to invest in high-quality wineries. There are now over 40 local boutique wineries producing high quality wines. To showcase the rich viticultureof the island, the Cyprus Tourism Organisation (CTO) has created a wine trail project, offering six different organised routes for wine-lovers to tour the island and visit the various wine producing regions and wineries. The reputation of the annual Limassol Wine Festival, launched in 1961, has also spread beyond the country’s borders and attracts over 100,000 visitors every year to the city’s municipal gardens to discover the wine portfolios of both the smaller independent producers and the four big wine cooperatives – KEO, SODAP, ETKO and LOEL.

    Organic Growth

    Organic farming has shown an increase during the last few years. According to 2014 statistical data, Cyprus has a total area of 3,890 hectares cultivated as organic, a number showing a significant increase compared to 900 hectares in 2004. Organic farming represents 3% of the total utilised agricultural area in Cyprus. Also retail shops selling fresh and local organic products have increased significantly. Cyprus has proposed various measures within its Rural Development Program to support and stimulate the development of the organic sector, ranging from support in applying organic farming practices, providing marketing and promotion aid, to facilitating more cooperation among different actors of the food industry to create short supply chains.

    A Fertile Future

    While challenges remain for agriculture, Cyprus has demonstrated that it is adaptable, resilient and capable of responding to adversity with creativity and vision. Cyprus agriculture may not be able to compete in quantities and prices in the mass production model, but with its supreme produce the real opportunity and key ingredient for success is to invest in quality. Creating more registered Protected Designation of Origin (PDO) products will strengthen regional development through the creation of new small businesses and thus new jobs. A focus on innovation and sustainability will be the key objectives to gradually drive the transition of Cyprus to a low-carbon resource efficient economy, influencing market demand, and creating new investment and employment opportunities.

    August 2016

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