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WEEKLY NEWSLETTER
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Libya
Index
The history of Libya's agricultural development has been
closely related, although inversely, to the development of its oil
industry. In 1958, before the era of oil wealth, agriculture
supplied over 26 percent of GDP, and Libya actually exported food.
Although gross levels of agricultural production have remained
relatively constant, increasing oil revenues have resulted in a
decline in agriculture's overall share of national income. Thus, by
1962 agriculture was only responsible for 9 percent of GDP, and by
1978 this figure had tumbled to a mere 2 percent. Even more
striking than the downward trend in agriculture's share of GDP was
the rise in food imports. In 1977 the value of food imports was
more than 37 times greater than it had been in 1958. Therefore, a
large part of the rising oil wealth between 1960 and 1979 was spent
on imported food products.
To some extent, these trends were neither surprising nor
disturbing. Libya's comparatively strong agricultural position in
1958 masked an even greater level of general poverty. Agriculture
during the 1950s was characterized by low levels of productivity
and income. The advent of oil wealth provided many peasants with
opportunities to engage in less exacting and more remunerative work
in the urban areas, resulting in a huge rural migration to the
cities. In addition, Libya is not well endowed with agricultural
resources; over 94 percent of the land consists of agriculturally
useless wasteland. The large number of people engaged in
agriculture prior to 1960 reflected, therefore, not a thriving
agricultural economy but merely the absence of attractive
alternatives.
The number of peasants who gave up farming to look for jobs in
the oil industry and in urban areas rose dramatically throughout
the 1955-62 period. Another adverse effect on agricultural
production occurred during the 1961-63 period, when the government
offered its citizens long-term loans to purchase land from Italian
settlers. This encouraged urban dwellers to purchase rural lands
for recreational purposes rather than as productive farms, thereby
inflating land values and contributing to a decline in production.
Since 1962 Libyan governments have paid more attention to
agricultural development. The government has given inducements to
absentee landlords to encourage them to put their lands to
productive use and initiated high agricultural wage policies to
stem the rural-to-urban flow of labor. These policies met with some
success. Production levels began to rise slightly, and many foreign
workers were attracted to the agricultural sector. Agricultural
development became the cornerstone of the 1981-85 development plan,
which attached high priority to funding the GMMR project, designed
to bring water from the large desert oasis aquifers of Sarir and Al
Kufrah. Agricultural credit was provided by the National
Agricultural Bank, which in 1981 made almost 10,000 loans to
farmers at an average of nearly LD1,500 each. The substantial
amounts of funds made available by this bank may have been a major
reason why so many Libyans--nearly 20 percent of the labor force in
1984--chose to remain in the agricultural sector (see
table 4,
Appendix).
Despite the greater attention to agriculture, however, in 1984
this sector only accounted for about 3.5 percent of GDP, and Libya
still imported over 1 million metric tons of cereals (up from
612,000 metric tons in 1974). Also in 1984, the average index of
food production per capita indicated a decline of 6 percent from
the period 1974 to 1976. On the average, about 70 percent of
Libya's food needs were met by imports during the mid-1980s.
Data as of 1987
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