Reference Date: 21-August-2013
FOOD SECURITY SNAPSHOT
Wheat import needs estimated around average levels
Recovery from the civil war observed although challenges remain
Food and fuel subsidy reform is being considered by the Government
Above average domestic crop production in 2013
The 2013 grain harvest in Libya was concluded in June. Normal meteorological conditions were reported to have favoured good crop establishment and development of the 2013 winter wheat and barley crops, resulting in a harvest of about 200 000 tonnes, similar to last year.
The Libyan Government aims at gradually increasing cereal production by four fold to 800 000 tonnes by 2020 from their current levels of about 200 000 to 220 000 tonnes. Generally however, natural and environmental conditions limit Libya’s agricultural production potential.
Libya relies heavily on imports (up to 90 percent) for its cereal consumption requirements. The actual import requirement appears to remain around the average of the last five years of about 2.5 million tonnes, mostly wheat. In July 2013 Libya already purchased 50 000 tonnes of wheat of Russian origin.
Recovery from the 2011 conflict
Libya is one of the most hydrocarbon dependent economies in the world. Libyan oil production has recovered faster than expected following the conflict in 2011, although some problems persist from protests, attacks and electricity shortages. Challenges also remain in the areas of infrastructure and economic diversification.
After a contraction in GDP in 2011 by almost 60 percent caused by the fall in oil production, the economy grew by over 92 percent in 2012 (year-on-year). A growth rate of about 9 percent is expected in 2013. Inflation decreased from almost 16 percent in 2011 to about 6 percent in 2012 following the resumption of imports and the Central Bank’s sales of foreign currency. Additional decline in inflation is expected in 2013. The unemployment rate – estimated at 26 percent as of end-2010 – is likely to remain unchanged in the short run.
Food and fuel subsidy reform being considered
The Government is considering launching food and fuel subsidy reform and replacing it with a direct monthly cash transfer to Libyans. It is estimated that around one-third of subsidised food and fuel are smuggled into neighbouring countries. In 2012 the fiscal cost of food subsidies is about USD 2.4 billion, representing 2.8 percent of the GDP (about USD 400 per capita). Spending on fuel, food and electricity subsidies is twice current spending on education and health combined. Among the subsidised food commodities are flour, rice, semolina and pasta.