inputs. Moreover, certain subsidies provided to these products before EU
accession are no more available.
7. Policy Outlook
The future of MEDFROL products studied in this report will depend
upon the readiness of people involved in the production process to
response timely to the market pulse. Based on the current situation, the
tomato, orange and olive oil sectors will become more competitive in the
European market if factors that are affecting their marketing, like
production cost and quality, are improved. New concepts like organic
farming and products of origin are very important and may provide
profitable outlets in the new globalized economy. Furthermore, climatic
conditions in Cyprus are vastly favorable for and conducive to the
production of early season Mediterranean products with obvious premium
attached in the market place.
Currently the production cost in most crops, including olive oil, citrus
and tomatoes, is higher in Cyprus compared to other EU members or third
countries; a difference that is attributed mainly to the higher labor cost
imposed by structural imbalances inherent in the agricultural sector. In
order for the olive oil sector to become more competitive new technology
that will minimize labor costs must be introduced. This is however, a long
lasting process that may take several years before it is fully achieved. In the
citrus sector one major problem is the existence of old fashioned varieties.
The solution to this problem is the introduction of new and improved citrus
varieties. It is assumed therefore, that due to the perennial nature of citrus,
the situation in this sector will potentially be improved in a period of 5 to
10 years. Concerning the tomato sector its future looks more favorable,
basically because of high yields and the possibility to compete on lower
prices. In the mid to long- term, the tomato sector can become even more
successful with increased export opportunities, especially if improvements
in the processing industry are achieved.
In terms of exports, the volume of the three products examined is
expected to remain more or less stable in the coming few years. The most
important opportunity resulted from EU accession is the potential of
agricultural products to be traded without restrictions or obstacles in the
enlarged EU market. Evenly important is the possibility offered to farmers to
maintain a minimum agricultural income through various support schemes
dispensable by the EU or state- aid provisions.
Certain handicaps, like the absence or ill equipped producers’
organizations indispensable to correctly organize the production and
marketing of products and the late adoption of technological improvements,
lead to the deterioration of competitiveness in foreign markets. It is
expected that through optimal use of the financial means provided in the
RDP agriculture in Cyprus will be reshaped in a sustainable manner, taking
into consideration consumers’ demand and citizens’ worries for
environment protection and animal welfare. Therefore, it is estimated that
in the long - term certain agricultural commodities, like tomatoes, oranges
and olive oil, will find the way to their export destinations securing better
prices and higher income to their producers.
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