You haven’t really lived until you taste olive oil fresh from the processing line. The Global Impact Experience (GIX) team in Morocco traveled across northern Morocco to investigate the current market and energy constraints in sector growth for the liquid gold of Morocco: olive oil. Sponsored by the Energy Department of the United States Agency for International Development (USAID), this GIX project focused specifically on analyzing energy usage – from water, electricity, fuel and labor – in the olive oil value chain. Visits to production facilities, private research centers, government ministries and restaurants helped to educate us about the industry as well as to refine our taste buds.
Led by one of the GIX program’s student leaders, Phil Wong (OE), other team members included Ramy Alsammarae (HKS MPA2), Leo Buehler (OE), Max Gonzalez-Costa (NA), and Katie Laidlaw (HBS OI / HKS MPA2). From the perspective of identifying hurdles to future olive oil sector development, our analysis centered upon constraints in water, energy and marketing. We presented our findings at the U.S. Embassy to the newly appointed Ambassador Kaplan and his staff, in addition to sharing our analysis and fielding questions with the USAID Rabat office.
Moroccan Olives Today: Catching up on Lost Time
During the 1960s, Morocco’s national agricultural policy focused on producing cereals and other grains. Although the Mediterranean climate makes Morocco, particularly the MeknŠs region, prime olive planting territory, government policy shifted resources elsewhere. As a result, Moroccans today cook far more often with imported sunflower and soy oils – mostly due to both their familiarity in local cuisine and a far lower price point. Based on its far more limited production, higher quality olive oil (virgin and extra virgin) can cost up to three or four times the price of its substitutes in domestic supermarkets. However, there is a bright future and significant opportunity to grow the olive oil market both domestically and for international export.
From Olive to Oil: The Value Chain
The best way to learn about the value chain was to follow an olive through the process: production, processing and distribution. Our team had a chance to dive deep into this olive transformation with visits to three processing plants – Aicha, Zniber and Bouayad – to witness olive delivery, oil and solid separation, and final product packaging. As olives are harvested only between November and January, this study was well-timed at the height of olive season.
Green Morocco as the Future
Morocco recently adopted the “Maroc Vert” (Green Morocco) strategic plan to revitalize agriculture broadly. Olives play a crucial role in the nation’s future agricultural development. In order to bolster the sector and increase small farmer incomes, Morocco must successfully convert farmers to modern farming methods to increase both production volumes and olive quality. In response to the goals set in the Maroc Vert plan, the Milliennium Challenge Corporation (MCC) is currently investing almost $300 million in planting olive trees in targeted regions across the country. Our GIX project helped to determine the scale of investment required to support current olive production and the additional MCC plantings with irrigation systems. New challenges such as high energy costs in the operation of water pumping from costly irrigation systems and increased labor costs during harvest from modern planting methods raise the total cost of production. The investment analysis revealed significant vulnerabilities, yet surmountable obstacles, to the future of the olive sector. Additional public and private investment will be required to achieve intended results. As a result, one of our team’s recommendations was focused on exploring creative subsidies and government collaborations with funding partners to increase irrigation installation and benefit small-holding farmers.
From Rabat to Marrakech
Traveling a country from the vantage point of olive oil – rather than merely as a pure tourist – was a unique experience for everyone on our team. The hip lounge of La Tour Hassan hotel in the quiet capital of Rabat served as our “office” – our typical days were spent gathering information, then working well into the evening on data analysis and presentation development. Travels to Casablanca, MeknŠs and Fes for meetings with project partners and research resources enabled us to mix data collection with sight-seeing. Without the help of an afternoon tour guide, we might still be wandering the serpentine alleyways of the medina in Fes! After we presented our findings, our team traveled to Marrakech to explore more of the country – from visiting historic sights to conducting “negotiations” in the souks to enjoying multi-course Moroccan cuisine.
We would like to extend our appreciation to members of the USAID Energy Department Team in DC and members of the USAID Rabat, Morocco offices for making this opportunity possible. Merci beaucoup and Shukran.