sectors | 18 February 2016

Agriculture & Food

Innovative thinking focused on quality and sustainability is filtering into Cyprus agriculture, supporting the growth of superfood crops, the fight against climate change and the development of unique exports which are all helping to transform the sector.

Over the last two years, Cyprus has introduced a number of initiatives to boost the agricultural sector in areas such as water and waste management, smart farming, environmental protection and new measures to ensure better animal welfare. In addition, the country is focusing on protecting and promoting quality traditional products worldwide, which will soon be marked with a new national and official ‘seal of origin’ to identify products made by the local agricultural sector using local raw materials. 

Nurturing resource-efficient farming and focusing on quality rather than quantity are key aims going forward into a new decade. The government has invested heavily in modernising and reorganising the overall agricultural sector with the help of generous EU funds and provided additional support to the sector through various programmes and subsidies. This overhaul of the agricultural sector is being conducted with the rural development programme co-funded by the EU and Cyprus, 52% and 48% respectively. More than €485 million was expected through the Common Agricultural Policy (CAP) between 2014 and 2020, with further funds for modernisation and development under the new CAP from 2021 to 2027. The programme is open to all sectors for investment in the primary and secondary sectors, including organic farming, training, promotion, agritourism and applying for Protected Designation of Origin (PDO) or Protected Geographical Indication (PGI) status. Cyprus agriculture is definitely seeing a revival into a more efficient and value-added industry with the help of innovation and investment in renewable energy and smart tech, and with a business- minded younger generation keen to capture new markets around the world and capitalise on the future potential of this sector. 

High-Value Produce 

With today’s strong focus on healthy eating trends, Cyprus has seized the opportunity to achieve commercial success in niche markets by the systematic cultivation of long-overlooked fruit and vegetables – and bring back traditional local varieties of grapes to expand its rapidly developing wine industry. Long renowned for its citrus fruit, potatoes and olives, Cyprus is also becoming associated with high-value produce such as prickly pears, pomegranates, carobs, aloe vera and others that grow well in the island’s dry climate. 

Over 50% of agricultural exports go the EU, followed by other European countries, the Middle East and Asia. Although unlikely that Cyprus’ agricultural sector will ever regain its high-performing levels of the 1960s, when it contributed 20% to the GDP, there is no doubt that its economic significance is steadily growing. The value of agricultural production plunged during the 2012-2014 economic crisis but picked up again in 2015 and grew by an impressive 12% over the next two years. In 2017, the value of agricultural production exceeded pre-crisis levels, reaching nearly €740 million, accounting for 2.1% of GDP compared to 1.8% in 2014. Niche crops and traditional products unique to Cyprus are leading the way in this revival, with exports of halloumi alone showing a strong upward swing over the past decade. 

Home of Halloumi 

Halloumi is one of the country’s most unique trademarks worldwide. The value and quantities of halloumi shipped around the world has grown every year, and currently totals over 30 million kilos worth more than €200 million a year and is exported to over 40 countries. With the popularity of halloumi rising and more markets steadily being opened, producers predict that exports could reach over €300 million in 2023. Today, the production of the famous squeaky cheese is associated as much with high-tech labs as it is with a rustic lifestyle, with many boutique producers also making organic versions to cater to discerning market demands.

In April 2021, the European Commission registered ‘Χαλλούμι (Halloumi)/Hellim’ as a Protected Designation of Origin (PDO), protecting the valuable name against imitation and misuse across the EU as of 1 October 2021. The name ‘Χαλλούμι (Halloumi)/Hellim’ is now in the register of protected designations of origin and protected geographical indications. Only ‘Χαλλούμι (Halloumi) / Hellim’ produced on the island of Cyprus, and according to the traditional recipe, can now be marketed in the European Union under that name. 

A Protected Designation of Origin (PDO) recognition is part of the EU quality policy that aims to protect the names of specific products to promote their unique characteristics, linked to their geographical origin, as well as traditional know-how. Product names can be granted a 'geographical indication' (GI) – such as a PDO indication – if they have a specific link to the place where they are made. Product names registered as PDO are those that have the strongest links to the place in which they are made. The PDO recognition enables consumers to trust and distinguish quality products. 

Success in Niche Crops 

Due to its small size, Cyprus cannot compete with countries that produce huge volumes at low cost, but what the country can excel at is quality, organic farming, bioproduction and superfoods. The decades-old success of the famous Cyprus potato provides a good example of what can be achieved by combining quality produce with strong marketing campaigns in key markets. The delicious flavour and quality, as well as their early harvest, make Cypriot potatoes one of the island’s most important agricultural export products constituting around 40% of total raw agricultural products. They get their winning flavour from the distinctive potassium-rich red soil of Cyprus. Around 96% of potato exports are to the EU, with main markets being Greece, the UK and Germany. 

Today, there is less cultivation of various types of citrus fruit. Exports of these were hit around a decade ago after the EU reduced tariffs on imports of citrus from third countries in the Mediterranean such as Morocco, Egypt and Turkey – where labour costs are far lower and production volume significantly greater. Farmers dedicated to citrus were encouraged to shift to varieties that perform well in export markets, such as the tango orange and lemons. Government incentives are also in place to substitute citrus trees, which require a lot of irrigation and expensive pesticides, with hardy crops that naturally thrive in dry climates, such as vitamin-rich fruit like pomegranates and prickly pears. The medicinal oil from the seeds of prickly pears can sell for up to €40,000 a litre, proving that developing these types of fruit can be a highly specialised and lucrative business. In addition, aloe vera cultivation holds much potential in making beverages, skin lotions and cosmetics. 

Demand for such products in niche export markets is steadily rising because of the increased interest in well-sourced, nutritious food and the growth of European vegetarian and vegan communities. Cyprus has a clear advantage as many of these foods come from hardy plants that thrive in Cyprus’ climate and wider cultivation of such crops will help to address the challenge of water scarcity. Farmers have enjoyed greater water security in recent years thanks to the latest desalination and recycling technology. Also, many of these crops do not require large land holdings, which again suits Cyprus where around 90% of holdings are under five acres and most farms are owned and run by individual families. 

For centuries, olive oil has been hailed for its health benefits and one Cypriot farm has taken cultivation to the next level, garnering worldwide attention for its oil. The positive effects come from the number of phenolic compounds, and Atsas olive oil has by far the highest number of these compounds ever recorded worldwide. The oil, which is exported to Russia, Canada and the US, has attracted the attention of the scientific world who are researching the benefits of high phenolic olive oil in lowering cholesterol and combatting cancer. California’s UC Davis research institute is now running clinical tests in the anti-inflammatory effects of the oil, and the University of Athens school of pharmacology started clinical tests on Alzheimer’s. More recently, the prestigious Yale University announced its interest in researching the Cypriot oil. The philosophy of the organically certified Atsas farm is to use agroecology design to create agricultural systems which have the diversity, stability and resilience of a natural ecosystem. The idea is part of the new regenerative agriculture movement which is gathering momentum around the world, and the Cyprus- olive oil producer is a pioneer in the field. 

Innovation has helped revitalise traditional minor crops, or ones that were set aside by the advent of high-intensity cropping systems. For instance, a current joint effort spearheaded by the University of Cyprus (UCY), the Agricultural Research Institute (ARI) and the Central Chemistry Laboratory, is screening the indigenous carob genetic resources and developing food, beverages and medicinal products of high added value. Once dubbed ‘black gold’, but gradually abandoned over the decades, carobs are making a strong comeback. Under the UCY project, 6,000 carob trees were planted in November 2017, with another 34,000 to follow on land leased from the forestry department in Orites, Paphos, for what will be the island’s biggest organic carob plantation. 

The ARI, which cooperates with numerous international organisations and has five experimental stations in Cyprus, is also conducting research on how Cyprus can produce a bigger biodiversity of crops while improving yield, quality, resilience and taste. The objective is to increase the biodiversity in agricultural ecosystems by looking at traditional species no longer grown in Cyprus, as these old species – genotypes – have suitable characteristics to diversify crops and also improve the quality of products that can be enjoyed by consumers. Scientists from this European research project are testing an experimental breeding technology aimed at identifying plants adapted to Cyprus’ scorching heat and lack of water. In an experimental field that covers some 11 hectares, more than 20 varieties are grown, including corn, barley, ancient wheat, chickpeas and cowpeas. The more promising candidates will be naturally crossed among them to produce drought-resistant varieties. The project’s aim is to help local farmers expand their offering to potential new markets, and researchers predict that new crops could become a market reality in Europe by 2023. 

Developing Aquaculture 

Cyprus has a longstanding fisheries tradition and history despite its limited contribution to GDP. However, aquaculture is an important activity constituting around 80% in terms of both value and volume of the total fisheries production. The aquaculture sector has nine marine offshore farms and seven inland farms located in Troodos mountain area, as well as three marine fish hatcheries, one shrimp hatchery and two other inland units culturing ornamental fish. 

Marine fish production (mariculture) in open sea cage farms accounts for some 90% of the total sales value, and steady growth in this sector due to strong marketing on both a local and international level is likely to attract further investment. The main commercially cultured marine species are the gilthead seabream and European seabass, accounting for around 70% and 30% respectively of total production. Around 65% of the total national production of marine species is exported to markets in Europe, the Middle East and the US, with the rest consumed domestically.

The main factors favouring the development of the aquaculture sector are the good environmental and climatic conditions of Cyprus, availability of adequate sea areas at a reasonable distance from the coastline, and the existence of appropriate infrastructure, skilled human resources and access to research facilities in Cyprus. 

Financing from the European Maritime and Fisheries Fund (EMFF) supports the aquaculture sector’s competitiveness and environmental sustainability, mainly through the development of joint support facilities and infrastructures, investment to increase the efficiency of aquaculture units, promotion of aquaculture products in new markets and the development of maritime spatial planning. According to the EMFF, aquaculture activities in Cyprus are expected to treble by 2023, contributing to food supply, environmental protection and employment. 

Revitalising Viticulture 

Cyprus has been producing wines since 3,500 BC which were widely traded in the Eastern Mediterranean region and the Aegean Sea. Perhaps the best-known ancient variety of Cyprus wine is Commandaria, a unique dessert wine made from sun-dried Xynisteri and Mavro grapes and reputedly enjoyed by Richard the Lionheart on his way to the crusades. The wine holds the distinction of the world’s oldest named wine still in production and is documented as far back as 800 BC, while the name Commandaria dates back to the 12th century crusades. In the 1980s the country embarked on a campaign to eradicate local grapes in favour of foreign varieties, such as Chardonnay, Sauvignon, Merlot, Grenache and Syrah in the belief that they would be more exportable. Fortunately, the trend was reversed after Cyprus joined the EU in 2004 and with the Union’s focus on highlighting local produce of its member states. A programme was adopted to save native varieties that have been grown for centuries and were in danger of becoming extinct. 

Efforts to save the heritage of Cypriot viticulture has seen enormous success, and with the country now producing interesting vintages, the reputation of Cyprus wine and this new territory is growing rapidly worldwide. Four different wine regions have been designated as producing their own unique product with controlled appellations of origin. In each case, different proportions of indigenous Cypriot red grapes such as Maratheftiko, Ofthalmo or Mavro, or the white grape Xynisteri, are blended with smaller quantities of specified foreign varieties such as Cabernet Sauvignon, Cabernet Franc, Syrah or Merlot. The unique native varieties and local character of Cyprus wines reflect the country’s terroir – which is also one of the few places left in the world that is free from phylloxera, the pest dreaded by winemakers worldwide. 

The wine scene has developed dramatically in recent years, with around 70 wineries producing award-winning wines in the foothills and high altitudes of the Troodos mountains – establishing some as the highest altitude vineyards in Europe. The government has recognised the budding success of this sector and announced €23 million would be made available to the local industry through the National Viticulture Support Programme for the period 2019-2023. Many vineyards today are run by young entrepreneurial Cypriots with solid training in viticulture and oenology from famous winemaking regions such as France, Italy and Australia. This along with the establishment and promotional work of an association of 11 leading Cypriot wineries – branded the ‘ambassador wineries’ through the Evoinos partnership programme – are definitely putting Cyprus’ wine territory on the map for international wine connoisseurs. 

Showcasing the rich viticulture of the island, Cyprus has created a wine trail project, offering six different organised routes for visitors to tour the island’s wine-producing regions. 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 August to the city’s municipal gardens to discover the wine portfolios of one of the world’s oldest wine-producing countries. 

Opportunities and Challenges 

Climate change is undoubtedly one of the biggest challenges facing Cyprus and the entire region, and the agricultural sector has felt the effects first hand. For example, €11.2 million in compensation has been paid for damages suffered to certain types of crops due to extreme weather conditions – this figure exceeds by far the average compensation of the last 20 years. This reality has placed research at the heart of finding solutions to fight the effects of global warming. To this end, Cyprus along with 15 other countries has launched an initiative to create a new climate change action plan. The research and recording of relevant measurements in the region will be led by the preeminent and globally renowned research organisation the Cyprus Institute (CyI), and the data gathered combined with the scientific expertise is expected to result in new ideas and solutions. Currently there are around 55 research projects in various stages of completion in Cyprus thanks to the numerous research centres and universities leading the way in innovation. 

New trends in farming methods and produce are helping to address another challenge that Cypriot agriculture has long faced, the ever-increasing average age of farmers. Younger educated people are now entering what is seen as a cutting-edge sector and many also have the marketing skills to make their agribusiness a success – changing the image of farming. The University of Central Lancashire (UCLan), the first British university to establish a campus in Cyprus, now offers a popular diploma programme in agriculture and animal husbandry, and the numerous private and university-led research projects and initiatives are also enticing the younger generation to explore opportunities in the sector. 

Another interesting initiative is the recent legislation allowing for the cultivation and trade of medical cannabis. Apart from the benefits it would bring patients – a number-one priority – it would also bring a boost to the economic development of the island, as well as attract significant foreign investment for the entire production chain. 

To promote the quality of Cyprus’ agricultural products, the government has pushed to register more PDOs and two other international quality logos that attest to specific traditions and qualities of food, agricultural products and wines. Like the PDO, the PGI denotes a specific link to a region’s product while the third logo, the Traditional Speciality Guaranteed (TSG), highlights a traditional production process. In the wine category Cyprus boasts the famous Commandaria, which is said to be the earliest known wine brand in the world. In addition, Zivania and Ouzo are potent alcoholic beverages listed as PGI products since 2004. There is growing interest to gain these unique badges of quality because they bring added value to any produce, especially as European consumers are prepared to pay more for well-sourced food and ingredients. Achieving more certifications for Cypriot products is a good opportunity to help rebrand Cyprus and its agricultural sector. 

Diversification is Key 

Cyprus is determined to become cleaner and greener by adopting principles of sustainability, and with increasing input from scientists and researchers agriculture is diversifying with its boutique wineries, aquaculture and farmers cultivating nutritious and medicinal plants. Agri-tech and smart farming methods are on the rise and start-ups and research centres are working more closely with farmers for fresh ideas to transform agribusiness. With a winning mix of resilient and resourceful farmers, increased government support and cutting edge research, Cyprus agriculture is experiencing a transformation that will allow it to respond to the fast-changing trends in the European market and to ultimately become a more sustainable sector in the future. 

For more information, contact Cyprus' investment promotion agency, Invest Cyprus.

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