Insights | 16 December 2023

Petros Xenophontos , Minister of Agriculture, Rural Development and Environment

The agriculture sector continues to be a vital economic sector with plenty of development opportunities. The encouragement of cross-sector cooperation in the agri-food sector could lead to smart solutions which may be applied to the entire agri-food supply chain.

How would you assess the current state of the Cyprus agriculture sector? Was 2023 a good year for the sector and were any key milestones reached? 

The agricultural sector in Cyprus in 2023 has faced several adversities and challenges. The fallout from the Russian invasion of Ukraine continues to impact the agricultural sector on the basis that Cyprus relies heavily on imported agricultural products and the Cypriot agricultural sector is highly vulnerable to price volatility and market shocks. Due to the increased costs of grain, animal feed and all raw materials, such as, fertilisers, pesticides, agricultural fuel and electricity, farmers are coming under tremendous pressure as they see their profit margins decreasing.

What strategies are being implemented to increase market access for Cypriot agricultural products globally?

In addition to the measures and strategies that have already been carried out by the Ministry of Energy, Commerce, and Industry to globally promote Cypriot agricultural products and especially halloumi cheese and Cyprus potatoes, the Ministry of Agriculture, Rural Development and Environment has placed particular emphasis in safeguarding the protection accorded to halloumi cheese as a product with a Protected Designation of Origin (PDO).

Recent agricultural policies have aimed at modernising the sector. Can you provide specific examples of how these policies have positively impacted small-scale farmers and producers, as well as infrastructure development?

Following the European Commission’s approval, the Ministry of Agriculture, Rural Development and Environment initiated the implementation of the Common Agriculture Policy (CAP) Strategic Plan for the period 2023-2027, which should be seen as the main policy tool for the development and modernisation of the primary sector.

In terms of modernising the agriculture sector, the CAP Strategic Plan provides for a variety of actions to be taken including financial support for environmental investments, support of young farmers in setting up in agricultural activity and encouraging knowledge transfer especially in regard to innovative practices such as smart agriculture techniques. Small-scale farmers and producers can benefit from such a mixture of policy tools for purposes of modernising their units and improving competition. For example, financial support is provided to farmers with an aim to reduce their energy consumption by installing renewable energy systems. Such incentives in support of the use of renewable energy systems place particular emphasis in promoting and achieving environmental objectives. Another example of a policy tool is the financial support given for investment purposes to plantations located in ‘high-risk areas’ where the crops are regularly affected by hail and other climate conditions.

There are growing concerns about the environmental impact of farming, particularly on soil health and biodiversity. What measures are being taken to promote more environmentally friendly agricultural practices without compromising productivity? Water scarcity and changing climate patterns are also a real threat, how do you plan to ensure sustainable agricultural practices while mitigating these challenges?

We acknowledge the importance of addressing the environmental impact of farming, which is one of the Ministry’s main priorities. In fact, the Ministry of Agriculture, Rural Development and Environment has already undertaken a number of measures to address growing concerns about the environmental impact of farming, such as supporting plans for investments and/or restructuring of agriculture cultivations as well as supporting plans for the development of water recycling infrastructure.

It is worth mentioning that a comprehensive package of measures forms part of the CAP Strategic Plan 2023-2027 and aims to enhance farming practices by reducing the negative impact they have on climate, natural resources and biodiversity. We are grateful that the majority of the Cypriot farmers have taken an interest to participate in these initiatives and in doing so, they are implementing stringent agro-environmental commitments.

As regards to the issue of water scarcity, it is undoubtfully one of the most serious issues currently facing the Cypriot agriculture sector. Having said that, it should be noted that it has been a long-standing practice for Cypriot farmers to use efficient irrigation systems helping to conserve water. In any case, in the last couple years a number of significant steps have been taken in the research field on the use of precision agriculture and smart equipment in order to further improve water conservation.

Technology plays an increasingly pivotal role in agriculture. How is the government supporting the integration of modern technologies, or precision farming, to enhance productivity and competitiveness in Cypriot agriculture?

What would help in expediting the digitisation of the agriculture sector would be the farmers’ willingness to integrate smart technologies into their daily operations. In particular, in order to achieve a greener, more sustainable, and more productive agriculture sector, farmers would need to ensure the viability and market acceptance of their products and utilise latest technology to enhance their day-to-day tasks. Furthermore, the encouragement of cross-sector cooperation in the agri-food sector would lead to the development of smart solutions – such as precision agriculture – which may be applied to the entire agri-food supply chain, and as such it would facilitate the shift to the digitisation of the agri-food industry.

As a measure to promote innovation in the agri-food industry, our Ministry will enable the establishment of an agricultural knowledge and innovation system (AKIS) within the parameters of the Cyprus CAP Strategic Plan. Our goal is to give farmers access to pertinent education and training on new technologies to ensure knowledge transfer in the agricultural sector. By encouraging farmers to come up with creative solutions and practices, they will be more eager to invest in digital technologies.

Our three key initiatives to promote the digital transition in the agri-food industry are as follows. First, to encourage and financially support the implementation of research projects concerning smart agriculture technologies. Second, to train Agricultural Extension Officers on new technologies so they can provide technical support to farmers and agriculture businesses. And third is raising awareness about the advantages of technology to encourage farmers and agriculture businesses to embrace new technologies.

With an aging farming population, attracting younger generations to farming is crucial. How does the Ministry plan to encourage youth involvement in agriculture through innovation, education, and attractive incentives?

It is a fact that the viability and competitiveness of the primary sector depends on the younger generation and there is an urgent need to encourage their involvement in the sector. In fact, the CAP Strategic Plan includes measures for encouraging the younger generation in setting up in agricultural activity by providing them with financial support to assist them in setting up as well as financial support to finance their investments. The Ministry of Agriculture, Rural Development and Environment has been eager to provide incentives to young farmers. Furthermore, it is very important to communicate with members of the younger generation to have a better understanding of their needs and take note of their suggestions. In this respect, an annual meeting is organised by the Ministry, in cooperation with the Paying Agency and the Youth Board of Cyprus during which representatives from these organisations are invited to attend and are encouraged to share their ideas, suggestions and concerns with the Ministry.

What key opportunities are there for foreign investment in the agricultural sector at the moment? And are there any particular incentives that investors should know about?

There are several investment incentives in place for purposes of attracting foreign and domestic investments in the agricultural sector. The agriculture sector in Cyprus continues to be a vital sector of the economy of Cyprus and it is a sector that has plenty opportunities for development.

As a Ministry our strategy is to focus on quality, rather than quantity when it comes to production because we believe that this is the way Cyprus can fully utilise its comparative advantage. In this respect, the sector of Quality Products is one of the sectors that is expected to grow especially by placing focus in promoting the certification of Cypriot products to be accorded with protection as products with Protected Designation of Origin (PDO) and Protected Geographical Indications (PGI), the registration of both quality and system standards, and the improvement of packaging and processing of products. Furthermore, both the crop production sector and the organic farming sector have significant potential for growth.

We encourage anybody who is interested to invest in the Cyprus agriculture sector to examine in detail the various measures and actions that form part of the CAP Strategic Plan, which, in our view, encourage investment opportunities.

How prepared is Cyprus’ agriculture sector to handle crises such as pandemics, extreme weather events, or market disruptions? What contingency plans or support systems are in place for farmers during such unforeseen circumstances? 

The Department of Agriculture is in charge of implementing a scheme which can grant state aid to farmers in case their farms suffer losses exceeding 30% due to adverse weather conditions. Another scheme for state aid covers losses incurred due to national calamities, including wildfires and we are also offering subsidy to install fences. Furthermore, we are working towards giving the option to farmers of adopting subsidised active protection measures to prevent their crops from damages. In case of extreme events, the MARDE can set an ad-hoc state aid scheme, always in accordance with applicable EU regulations. Additional measures regarding animal pandemics have been undertaken by the Veterinary Services.

What are your expectations for the sector in 2024?

The challenges we have been facing in the last couple of years are expected to continue in 2024 as well. With this in mind, in 2024 the Ministry of Agriculture, Rural Development and Environment will continue its efforts to improve the competitiveness and the sustainability of the agricultural sector by implementing the Strategic Plan of the Common Agricultural Policy 2023-2027 while, at the same time, ensuring the mitigation of risks in light of climate change.

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