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Plan Maroc Vert
1
1
CONTENTS
Plan Maroc Vert – an ambitious yet pragmatic recovery
program2
The challenge lies in its execution – a new approach,
additional resources3
1Strategic context – Moroccan agriculture at a
crossroads
Focus on agriculture industry sub-sectors4
2
2
MOROCCAN AGRICULTURE – SOCIO-ECONOMIC STAKES ARE HUGE
Social stakes are high as well as the impact on
sustainable developmentMajor economic stakes
Significant direct and indirect impact on growth (14% upstream + 5% downstream of GDP)
Potentially massive impact on jobs (4 million jobs)
Impact on macroeconomic stability, particularly balance of payments
Stability of a large number of very vulnerable farmers at stake
Land management in all regions at stake
Sustainable development at stake, particularly competition for access to water
Consumption-related impact (quality/price) for 30 million
consumers
3
3
SURFACE AREAS DOMINATED BY CEREALS, EXPORTS BY HIGH VALUE
ADDED FRUITS & VEGETABLES AND JOBS BY ANIMAL FARMING
20-35%
5-10%
MAD70-80bn
45-50%
60-70%
3-4m jobs
35-40%
10-15%
JobsSales
Fresh50-55%
MAD13bn
Transformed45-50%
Exports
High value added
fruits and vegetables
Cereals and forages
25%
7.4m ha
75%
UAA
Animal farming
4
4
EXCESSIVE FRAGMENTATION OF SURFACE AREAS THE SOURCE OF
RURAL POVERTY
Simulation of annual revenues
(MAD)
149,000Tomatoes
115,000Apples
66,000Oranges
7,000Olives
2,000Wheat
Shortfall in investment and value added
1.5m 9.2m ha
Farms UAA
< 5 ha
> 5 ha
71%
25%
Excessive fragmentation of UAA
Average
2.1 ha per
farm
5
5
MASSIVE SHORTFALL IN INVESTMENT AND RISK-TAKING, WELL BELOW
INTERNATIONAL BENCHMARKSUse of fertilisers and mechanisation – Morocco vs. main agricultural nations
26
41
52
108
113
114
204
245
249Chile
Vietnam
France
USA
Thailand
Spain
Morocco
Romania
Tunisia
Israel 1,608
X 626
13
16
16
18
24
27
31
43
68
69
72
Spain
France
Turkey
Egypt
Chile
Vietnam
Romania
Thailand
India
Tunisia
Morocco
Israel
X 12
Use of fertilisers
Kg of fertiliser per ha of UAA
Mechanisation
Number of tractors per 1000 ha of UAA
Source: FAOStat, analysis by McKinsey
6
6
MOROCCAN AGRICULTURE AT A CROSSROADS
Huge opportunities…
European and US markets easily accessible in terms of customs and logistics
Very strong growth in domestic demand
Strong growth in overall demand for Mediterranean-type products
Recognised comparative advantages in key products Industry framework sometimes
out of step with the fundamental issues relating to deregulation
Large number of farmers are vulnerable
Lack of administrative flexibility concerning land issues
Water policy poorly implemented resulting in overexploitation and depletion
… but major obstacles still exist
Ministry’s managerial structures need to be modernised
7
7
MOROCCAN AGRICULTURE LOWLY SUBSIDISED
Source : OCDE, Agricultural policies 2004 at a glance
0
10
20
30
40
50
60
70
80
90
New
Zealand
Australia Poland Turkey Canada Slovak
Republic*
United
States
Czech
Republic
Mexico Hungary* OECD** European
Union
Japan Iceland Korea Norway Switzer-
land
Maroc
Producer support by country
Percent of value of gross farm receipts
1986-88
2001-03
INITIAL ESTIMATES
8
8
SOME GENUINE SUCCESS STORIES IN MOROCCAN AGRICULTURE
RELATED TO AGGREGATION AND PROACTIVE MANAGEMENT
Source: World Bank, analysis by McKinsey
Unquestionable success in establishing a domestic dairy sub-sector with close ties to downstream activities
– Dairy sub-sector established around collection centres responsible for integration with the national industry and transformation of dairy products
– Modernisation of production methods to achieve milk yields which, in some cases, are equivalent to large Europeanfarms (25 litres/day/cow)
Collection centre in the dairy industry
Large scale aggregation in the sugar industry– Aggregation of 80,000 farmers around sugar refiners– Supervision of farmers resulting in optimisation of farming practices
and higher sugarbeet yields in irrigated areas e.g. 80 t/ha
Sugar production
• Despite results being
well below their
intrinsic potential,
Moroccan
agriculture has
recorded some
genuine successes
• These poles of
excellence
demonstrate the
unquestionable
potential for
replication across
the industry
• The keystone to these
sucesses is a
genuine
entrepreneurial
management
approach by farmers
who have access to
private investment
Spectacular and rapid development of a strawberry export sub-sector in the north of the country with several opportunities
– Top-quality fresh strawberries for the European market e.g. Great Britain
– Frozen strawberries for food-processing companies, particularly French producers of yoghurt
– Model now being duplicated using other soft fruit
Strawberry exports
The development of the tomato industry internationally is an exemplary success story
– Development of tomato export business in the Souss region by capitalising on opportunities offered by the European calendar
– High-performance sub-sector along the entire value chain, even at a European level
– Model of integrated development around a genuine pole in Agadir specialising in fresh fruit and vegetable and bringing together an array of participants e.g. fertilisers, advisory services, packaging and logistics
Tomatoes (fresh fruit and vegetables in general)
Description Aggregation models
Contract nucleus farming
Classic cooperative
Success in development of sheep and goat farming by ANOC– Bringing together 5000 members– Technical supervision and training resulting in a significant improvement
in farmers’ performance (doubling in productivity by weight)
Sheep and goat farming
Producers association
Contract nucleus farming
Contract nucleus farming
9
9
CONTENTS
Plan Maroc Vert – an ambitious yet pragmatic
programme 2
The challenge lies in its execution – a new approach,
additional resources3
1Strategic context – Moroccan agriculture at a
crossroads
Focus on agriculture industry sub-sectors4
10
10
Nécessité d’une stratégie autour de 2 piliers prenant en compte
toutes les catégories d’acteurs, y compris les plus fragiles3 Une conviction claire : l’agriculture comme principal moteur de croissance
et de lutte contre la pauvreté au Maroc (« Emergence x 2 »)1
Nécessité d’une stratégie autour de 2 piliers prenant en compte
toutes les catégories d’acteurs, y compris les plus fragiles3 « Une agriculture pour tous sans exclusive »
mais des stratégies différenciées selon le tissu cible (Pilier I et Pilier II)2
Nécessité d’une stratégie autour de 2 piliers prenant en compte
toutes les catégories d’acteurs, y compris les plus fragiles3 « Traiter le problème de fond du tissu des acteurs » : modèles d’agrégation
innovants, adaptés à chaque filière et socialement équitables3
Nécessité d’une stratégie autour de 2 piliers prenant en compte
toutes les catégories d’acteurs, y compris les plus fragiles3 « Au centre de l’équation : l’investissement »
Objectif : 10 Md DH par an autour d’une Offre Maroc ciblée4
Nécessité d’une stratégie autour de 2 piliers prenant en compte
toutes les catégories d’acteurs, y compris les plus fragiles3 « Aucune filière condamnée au Maroc » :
importance de libérer les acteurs de marché au service du développement6
Nécessité d’une stratégie autour de 2 piliers prenant en compte
toutes les catégories d’acteurs, y compris les plus fragiles3 « A pragmatic, transactional approach»
1,000 to 1.500 practical development projects5
RECOVERY STRATEGY BASED ON 6 CORE THEMES
Nécessité d’une stratégie autour de 2 piliers prenant en compte
toutes les catégories d’acteurs, y compris les plus fragiles3 A clear conviction – agriculture as main catalyst for growth to combat
poverty in Morocco (« Emergence x 2 »)1
Nécessité d’une stratégie autour de 2 piliers prenant en compte
toutes les catégories d’acteurs, y compris les plus fragiles3 « An all-inclusive agricultural sector » but differentiated strategies
depending on target producers (Pillar I and Pillar II)2
Nécessité d’une stratégie autour de 2 piliers prenant en compte
toutes les catégories d’acteurs, y compris les plus fragiles3 « Address the underlying problem relating to producers – innovative
aggregation models which are socially just and adapted to each sub-sector3
Nécessité d’une stratégie autour de 2 piliers prenant en compte
toutes les catégories d’acteurs, y compris les plus fragiles3 « At the centre of the equation – investment »
Objective: MAD10bn a year around a targeted « Offre Maroc »4
Nécessité d’une stratégie autour de 2 piliers prenant en compte
toutes les catégories d’acteurs, y compris les plus fragiles3 « No sub-sector condemned in Morocco » - important to provide a
liberalised market environment to boost growth potential6
Nécessité d’une stratégie autour de 2 piliers prenant en compte
toutes les catégories d’acteurs, y compris les plus fragiles3 « A pragmatic, transactional approach »
1,000 to 1,500 practical development projects5
11
11
Agriculture as a major catalyst for economic and social progress
Modernise industry framework and improve multi-disciplinary factors
Pillar II
Modernisation with a social impact:
Investment in social initiatives to combat rural poverty
Pillar I
Development of a modern agricultural sector:
Investment in high productivity/high value added sub-sectors
Transactional approach
around practical projects
Land Water FTAsDomestic
market
Doing
business
Inter-
professional
Ministerial
refocus
REFORM STRATEGY BUILT AROUND TWO PILLARS
Pillar I – Aggressively
develop a high value
added/high productivity
agricultural sector
7 plans established with aggressive targets for sub-
sectors with high productivity/high added value
Transactional approach relating to 700-900
practical aggregation projects which are socially just
and growth-generating
A wave of new domestic and international private
investors with strong managerial capabilities
MAD110-150bn
investment
over 10 years
12
12
Aggregation models requiring strong guarantees
Opportunities are enormous
Highly ambitious plans for sub-sectors
• Highly ambitious plans commensurate with Morocco’s enormous
potential in its stronghold products
• Objective for each sub-sector:
– Increase production
– Significantly improve yields
• Opportunities are enormous for fresh and transformed
products:
– Supplying the domestic market which is growing strongly
– Gain market share in all European markets
– Develop new markets (e.g. USA, Russia, Asia)
• Need to provide firm guarantees to investors in relation to
aggregation contracts as a function of the size of the investment
(e.g. installing grenhouses)
• Distribution of aggregation areas according to regional
specialisations but also the existence of areas to be privatised or
aggregated
Key factors
underlying the
development
strategies of high
value added
sectors
PILLAR I – AGGRESSIVELY DEVELOP HIGH VALUE ADDED
FRUIT AND VEGETABLE SUB-SECTORS AROUND
INTEGRATED/AGGREGATED PROJECTS IN CONDITIONING
OR TRANSFORMATION
13
13
13
Agriculture as a major catalyst for economic and social progress
Modernise industry framework and improve multi-disciplinary factors
Pillar II
Modernisation with a social impact
Investment in social initiatives to combat rural poverty
Pilier I
Développement d’une agriculture moderne:
Investissement industriel à haute productivité/ valeur ajoutée
Transactional approach
around practical projects
Land Water FTAsDomestic
market
Doing
business
Inter-
professional
Ministerial
refocus
REFORM STRATEGY BUILT AROUND TWO PILLARS
Pillar II – Modernisation
with a social impact –
investment in social
initiatives to combat rural
poverty
MAD15-20bn
investment
over 10 years
Proactive marketing to domestic and
international investors (e.g. Hassan II
Fund, Bill & Melinda Gates Foundation)
Increase the number of social institutions
capable of implementing the projects at
ground level
Reconversion projects
Intensification projects
Diversification projects
Implementation of 300-400 social projects in
the context of 16 regional projects
14
14
Integrating these measures in an integrated development strategy
Strategy of providing proactive support to farmers
• Complementary strategy of providing proactive support to producers to cover all farms as a
way to combat poverty – adoption of an arsenal of new measures with a value proposition
adapted to social investors:
– Social aggregation projects around operators or associations (e.g. ANOC) possessing
extensive regional coverage and enhancement techniques (logistics, supervision,
transformation)
– Integrated reconversion projects taking into account realities/social risks along the lines of
the reconversion model adopted as part of the MCA (Millennium Challenge Account)
– Supervision overhauled and relaunched around new structures and new contract-
programmes involving regions, sub-sectors and farmers – use of public-private sector
partnerships as the best way of providing support services
• The integration of this arsenal of measures in an integrated development strategy is based
on 3 elements:
– Basic public services
– Diversification of revenues
– Social policy
At the heart of Pillar II lie regional development strategies aimed at carrying out reconversion and/or aggregation projects – duplicating the MCA experience as a way to combat poverty at its source
PILLAR II – A MORE DETAILED EXPLANATION
Target reconversion
or social aggregation
projects - replicating
the MCA experience
15
15
Access to land/size without
need for massive investment
1
Linkage optimised between
the market and
upstream production
2
Sharing of best
farming practices
3
• Aggregation is an attractive and competitive solution for extending upstream farming areas in the
face of limited supply of land in rural areas – no acquisition investment needed, freeing up funds for
productive investment
• Aggregated, traditionally marginalised parties given access to the market economy
- Aggregator contributes its knowledge and understanding of the market
- Aggregator facilitates logistical links between production and the market at competitive prices,
thereby avoiding the need for a multitude of intermediaries and excessive margin erosion
• Transfer of skills and technology to farmers (all the more so if the aggregator is strongly
involved)
• Demonstration farm resulting in the dissemination of sound practice sometimes even beyond the
aggregated area
REASONS FOR CHOOSING AGGREGATION AS AN
IMPORTANT DRIVER OF AGRICULTURAL POLICY
Financing solutions
4• Establishing a link between small farmers and capital markets primarily thanks to partnerships with
lending establishments
- Direct financing for farms on the basis of the aggregation contract, providing the bank with a
guarantee for the loan
- System of advances made by the aggregator to the aggregated parties
- Supply of production inputs also a means of financing for farmers
Risks more
evenly spread
5 • Aggregation methods and reassurance provided by contracts (loyalty, quality, mutual commitment
to supply) mean that risks are shared between the aggregator and aggregated parties
• Insurance policies to insure against unforeseen events
16
16
POTENTIALLY HUGE IMPACT IN ECONOMIC AND SOCIAL TERMS
• GDP: +MAD70-100bn
• Jobs: +1-1.5m
• Reduction in poverty
at its source –
doubling or tripling in
income for 2-3m
farmers
• 600,000-800,000 farmers targeted
• MAD15–20bn in investment
• 300-400 projects
Pillar II – modernisation with a social impact
• 400,000 farms targeted
• MAD110-150bn in investment
• 700-900 projects
Pillar I – Development of a high value
added/high productivity agricultural sector
16 regional plans
formalised
17
17
CONTENTS
Plan Maroc Vert – an ambitious yet pragmatic
programme2
The challenge lies in its execution – a new approach,
additional resources3
1Strategic context – Moroccan agriculture at a
crossroads
Focus on agriculture industry sub-sectors4
18
18
CHANGE REQUIRED IN INSTITUTIONAL, MANAGERIAL AND FINANCIAL
RESOURCES
Overhaul of the Ministry’s internal management processes• Rationalisation of management processes at the Ministry aimed at creating a more flexible/adaptable operational culture
• Policy to recruit high-calibre individuals to breathe new energy into internal operations
Reorientation of government’s agricultural policy – high aspirations adapted to strategic
objectives
Reorientation of government policy compatible with the new environment resulting from the arrival of well-
structured private-sector players
• Refocus on regulatory functions
• Operational functions increasingly transferred to the private sector
Creation and promotion of a
trade association (GIPA)
around 5 key areas
Creation of new entities/skills
in the context of implementing
the strategy
Increasing use of PPPs for
operational functions
« Office National de la Santé
Sanitaire des Aliments »• Authority independent from the
Ministère de l’Agriculture
responsible for regulatory matters,
quality control and health and
safety standards
Irrigation management• The « Grande Hydraulique » irrigation
project given over to delegated management (via concessions)
• Service providers chosen on the basis of competition (tenders)
• Economical water pricing policy to be implemented progressively
Supervisory-related services• Progressively outsourced to the private sector
• Creation of a job profile known as Private Agricultural Advisor (e.g. certification, help with setting up etc.)
« Agence de Développement
Agricole »• Agency dedicated to implementing strategy and possessing the necessary human and financial resources
+
• Agrotech and R&D
• Access to production
inputs and mechanisation
• Exports, logistics and
containerisation
• HR development and
training
• Branding and quality management
Additional financial and budgetary resources •An additional ~MAD50bn is needed which is to be financed by the State budget over 10 years
•Contribution from the Hassan II Fund
•Long-term partnerships with domestic and international sponsors
19
19
CREATION OF A DEVELOPMENT AGENCY AROUND THREE
CRITICALLY IMPORTANT MISSIONS
Gives impetus through programme
initiatives
Provides strategic monitoring and
reinvigorates « Offre Maroc »
Monitors and ensures implementation
Identifies projects and aggregation areas
Managese tenders and puts in place
transpillars
Monitors projects
Manages « Plan Maroc Vert » Acts as intermediary and launches
practical projectsManages partnerships with institutional
and social investors
Prospects for potential investors
Negotiates with partners
Manages long-term relations
Creation of a Development Agency
Mission relating to Pillar I
Mission relating to Pillar II
20
20
« OFFRE MAROC » FOR INVESTORS – A WIN-WIN
PARTNERSHIP IN THE CONTEXT OF AGGREGATION
Strategic aggregation
programme based on
contracts with clearly
defined conditions
upstream, by sub-sector and
by aggregation area
Underlying principles
– Win-win partnership
– Results-oriented commitments made by aggregators
– Market transparency
Commitments made by the State
(framework of incentives)
Innovative framework of incentives (targeted
subsidies, special tax regime, subsidies for
training)
V1
Preferential access to land
V2
Preferential access to financing (aggregators and
aggregated)
V3
Support for aggregation over the long-term
– Proactively promote aggregation amongst farmers
(prospection and contractualisation)
– Assistance relating to arbitration and the
resolution of disputes
V4
Preferential access to trade associative benefits
– Exports and logistics
– Branding and quality management
– Agrotech and R&D
– HR development and training
– Acces to inputs and mechanisation
V5
Commitments made by aggregators
Commitment to generate growth and investment
(upstream+downstream)
– Investments
– Sales and value added
– Jobs
– Know-how
E2
Commitment to stimulate aggregated upstream
– Support for investment (e.g. uptake guarantees)
– Increase value added
– Improve yields (supervision)
E1
Commitment to fairness
– Policy of fair and attractive remuneration of
aggregated farmers
E3
21
21
CONTENTS
Plan Maroc Vert – an ambitious yet pragmatic
programme2
The challenge lies in its execution – a new approach,
additional resources3
1Strategic context – Moroccan agriculture at a
crossroads
Focus on agriculture industry sub-sectors4
22
22
GENERAL OUTLINE OF DEVELOPMENT STRATEGY BY SUB-SECTOR
Citrus cultivation – aggressively boost sub-sector’s output (quality and quantity)
Cereals – modernisation of the cereal sub-sector on a sustainable basis with a focus on productivity
Dairy – aggressively develop the dairy sub-sector to reach international standards
Beef – drastically improve value-for-money offer in beef for Moroccan consumers
Lamb – modernise the lamb sub-sector to act as a catalyst for social change
Poultry – accelerate the modernisation of the poultry sub-sector as the bedrock of meat consumption in Morocco
Olive cultivation – massively increase olive cultivation and improve quality
Fresh fruit and vegetables – aggressively develop the sub-sector as a catalyst for the overall growth of the agricultural sector
Pillar II – modernisation with a social impact – social investment to combat rural poverty
Fra
me
wo
rk o
bje
cti
ve
s a
nd
co
nd
itio
ns
fo
r s
ub
-se
cto
rs
CONFIDENTIEL
Plan Maroc VertIntegrated development strategy for Moroccan agriculture
Ministère de l’Agriculture et des Pêches Maritimes
Development strategy outline
June 2008
Olive cultivation sub-sector
24
24
A SUB-SECTOR WHICH HAS DIFFICULTY TAKING-OFF AND REQUIRING
AN AMBITIOUS RECOVERY PLAN
Potential key factors underlying strategy
• Need to raise ambitions and bolster development
resources
5
Proactive recovery plan around 3 factors:
• Morocco’s intrinsic competitive position the same as
global leaders in olive cultivation, new investment
dynamic with a risk of pricing pressure
4
Summary of current situation and main issues at stake
• A heavy-weight sub-sector but clearly not growing as fast as global market growth in the face of stiffer competition
1
Historically, performance below the ambitions outlined
in the national olive cultivation plan of 1998, due to a
massive shortfall in investment and in vertical integration
2
Practically unlimited investment opportunities in a
global market showing strong growth with market share
gains to be made in new markets despite very aggresive
competition
3
1 Aggressive strategy to boost production and
quality through investment and better vertical
integration
2 Develop a strong and sustainable platform to
improve quality
3 Improve framework conditions in two major areas
Massively accelerate growth in olive cultivation and improve quality
• Objective: to increase production fourfold in value terms • Develop opportunities with a view to sustainable quality
improvement • Greater upstream-downstream integration and
specialisation
Ambitious growth strategy aimed at massively increasing production and improving quality
25
25
DEVELOPMENT STRATEGY FOR THE OLIVE CULTIVATION SUB-SECTOR
Massively acelerate growth in
Aggressively boost production and quality according to an integrated model. Objective in 2020: 1.2 million ha, ~MAD22bn in income
Market strategy aimed at developing a strong and sustainable platform to improve quality
Improve framework conditions in 2 major areas
Gain market share in olive oil markets to reestablish Morocco’s rightful position
Premium quality –
niche offering
around an « AOC »
label boosting
Morocco’s brand
image
• Objective: to increase production fourfold in value terms • Develop opportunities with a view to sustainable quality improvement• Greater upstream-downstream integration and specialisation
olive cultivation and improve quality
• Simultaneous approach targeting volume and quality
• Differentiated PMC approach (in bulk, bottled, private
label)
Table olive oil – objective:
reestablish Morocco’s historic
position in global markets with a
20% market share
• Reconquer traditional bastions
such as France
• Move upmarket, diversify and
develop sales and marketing
activities
+
Establish a trade association in 4+1 key formative areasC1
Plan to rationalise traditional olive mills
Management of labelling and quality
(Morocco’s brand image, standardisation,
traceability)
New markets –
create a
Moroccan brand
image
UE – B2B
partnership
strategy –
quality oil and
conditioning
Domestically –
potential for
growth and
moving
upmarket
Integrated
approach based
on « terroir »
MAD1 -> ~3m MAD1 -> ~4.5m MAD1 -> ~4.5m
Drastically overhaul Morocco’s stock of olive groves – repeat of the 3 upstream objectives In the form of 300-450 aggregation/
integrated projects (800-1000 ha),
~MAD150-200m +
Pillar II – reduce poverty
• 50-70 projects for reconversion to
olive cultivation
• 400k ha of unfavourable rain-fed
(bour) surface area
Develop a speciality investment fund along the Oléa Capital model
Transparency and rationalisation of the Moroccan market
• Price transparency (contractual price indices)• Educate Moroccan consumers
C2
MAD0 -> ~1m
Intensification of existing olive groves
Establish intensive farming poles
Establish olive growing zones in the Piémont
MAD2.5 -> ~10m
Exports and logistics
Agrotech and R&D
HR development and
training
Access to inputs and
mechanisation
26
26
Current situation
Locked into a low value added set-up, restricting investment
and volumes
High-quality
bulk
Basic quality
bulk
Low-price conditioned
DEVELOP QUALITY, DOWNSTREAM INTEGRATION AND VOLUMES TO
REPOSITION MOROCCO’S OLIVE CULTIVATION INDUSTRY WHERE IT
NATURALLY BELONGSQ
uality
Downstream integration
Basic
Vir
gin
(Extr
a)
Pre
miu
m
Bulk Bottled Private label
Objective
To boost volumes and value added by a considerable
improvement in quality and downstream integration
Sophisticated
premium oils
(« AOC », bio)
Moroccan
brandsB2B partnerHigh-quality
bulk
Low-price conditioned
Qu
ality
Downstream integration
Basic
Vir
gin
(Extr
a)
Pre
miu
m
Bulk Bottled Private label
Increase
surface areasIntensification
Develop
conditioning
activity
Vertical
integration
Develop
Moroccan
brands
Upstream Downstream
Massively increase
volumes and improve
quality
OLIVE OIL
Pillar II – modernisation with a social
impact – social investment to combat
rural poverty
Plan Maroc VertIntegrated development strategy for Morccan agriculture
28
28
PILLAR II STRATEGY STRUCTURED AROUND THREE PROJECTS
Portfolio of key social projects oulined in regional plansRegional plan 1
Regional plan 2
Regional plan 3
Reconversion projectsCultivation of:• Olives • Figs
• Almonds • Others
Intensification/quality improvement
projects
• Cereals
• Sheep/beef farming
Diversification/niche projects
• Bee-keeping
• Truffles• Snails• Small livestock
Increase the number of social institutions to facilitate implementation
• Bolster trade associations and cooperatives• Massive commitment by the financial sector to the
rural population (particularly AMC)• Attract new institutions (e.g. market aggregators,
international social sponsors)
Mobilise social investors around an «Offre Sociale Maroc»
• Overhaul relations with existing and new
international sponsors
• Mobilise Moroccan social investors
• Develop innovative financing methods
Source: analysis by McKinsey
• Forestry• Dates
50-70 projecs
100-150projects
100-150 projects
Impetus and intermediation provided by a
dedicated structure
• Social investment to combat poverty by increasing farmers’ incomes, as a complement to Pillar I
• Objective: significantly raise living standards for 500,000-600,000 farmers through 300-400 projects generating MAD16-18bn in investment
Modernisation with a social impact
Coordination with policies of integrated rural development
• Basic public services / Diversification (handicrafts/tourism) / Social policy
• 300-400 projects • 500,000-600,000 target farmers • MAD16-18bn invested • 800-900,000 haObjectives:
29
29
MASSIVE IMPACT OF SOCIAL PROJECTS AT A NATIONAL LEVELR
eco
nv
ers
ion
pro
jects
Inte
nsif
icati
on
/Qu
ality
imp
rov
men
t p
roje
cts
Div
ers
ific
ati
on
/nic
he
pro
jects
Reconversion
Intensification/Quality improvement
Diversification/niche
• Target: 200,000 farms (1.2 million
rural persons)
• Surface area: ~400,000 ha
• Investment: MAD13-15bn over 10
years Impact at national level
• Target : ~500,000-600,000 farms
(~40% of Morocco’s farms, ~3 million
rural persons
• Surface area: 800,000-900,000 ha
(~10% of UAA)
• Investment: MAD16-18bn over 10
years:
– Upstream: MAD11-12bn
– Downstream: MAD5-6bn
• Objective: increase farming income by
2x-10x for targeted farms
50-70
projects
• Target: 300,000 farms (~1.8 million
rural persons)
• Surface area: ~400,000 ha
• Livestock: 2-3 million animals
• Investment: MAD3.5-4bn over 10
years
• Target: 30,000-40,000 farms
• Surface area: N/A
• Investment: MAD0.3-0.5bn over 10
years
100-150
projects
100-150
projects
Source : Analyses McKinsey
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30
MOBILISE SOCIAL INVESTORS AROUND « OFFRE SOCIALE MAROC»
* Crédit Agricole du Maroc
Source: analysis by McKinsey
Overhaul relations
with international
sponsors
Enhance/refocus
existing partnerships
Attract new leading
sponsors
Mobilise Moroccan
social investors
Sign contracts with
existing domestic
sponsors
Framework encouraging new Moroccan investors
Develop innovative financing methods
• Overhaul existing relations with international sponsors based on long-term partnerships around « Offre Sociale
Maroc » with sponsors being considered as investors
• Absolute necessity to successfully implement the MCC programme, considered as a test case for Pillar II
• Enhance existing partnerships with sponsors (German, Italy, France) and refocus their financing on agriculture as a
means to combat rural poverty
• From amongst 10-15 major international sponsors, attract 4-5 major new « value added « sponsors (e.g. DFID, Bill &
Melinda Gates and Rockefeller Foundations)
• Requirement to harness sponsors’ energies towards agriculture, considered as a major means of combatting the nation’s poverty around an adapted « Offre Sociale Maroc ». Requirement to treat Moroccan social investors in the same way as international sponsors
• Critically important to be an example to international sponsors (e.g. making systematised additional payments as in the case of the Hassan II Fund)
• Sign contract programmes with existing domestic sponsors (primarily with the Hassan II Fund, but also with CAM*,
Zakoura, Al Amana)
• Systematically adopt innovative financing methods with a proven international track record around 3 factors:
– Regional « ethnic funds » for Moroccan expatriates
– Particular development mechanisms such as the Fonds Carbone (in relation to reconversion projects)
– « Ethical funds » (a share of the revenues on certain products to be given away (« centime additionnel » principle), in
partnership with businesses e.g. Maroc Telecom, Western Union, Poste Maroc)
• Establish a framework of incentives encouraging the development of new Moroccan social investors (e.g. creation
of OCP, CDG, ONE Foundations)
MAD8-10bn
MAD3-4bn
MAD0.5-1bn
Highly dynamic and proactive prospection of all potential sponsors (public- or private sector, Moroccan or international) as part of a systematised and highly professional approach around « Offre Sociale Maroc »; the objective is to raise MAD12-15bn ("MCC x 10") covering ~80% of total funding requirements for Pillar II projects
Develop an adapted
« Offre Sociale Maroc »
• Develop an attractive « Offre Sociale’ Maroc » around 4 factors aimed at domestic and international social investors:– Access to a vast portfolio of pre-packaged social projects– Possibility of making a huge impact in a short space of time with precise follow-up– Access to high performance operators at ground level– Possibility for sponsors to tie-up long-term partnerships
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Moroccan sponsors
• Domestic public funds (Hassan
II Fund, ADS*)
• Domestic private foundations
(e.g. Mohammed V Foundation)
Innovative financing
methods
• Financial products targeting
Moroccan expatriates (regional
projects)
• Particular development
mechanisms such as ‘’Fonds
Carbone’’
• « Ethical » financial products
• Public sponsors:
– Bilateral (e.g. USAID, MCC, AFD, JBIC,
KFW)
– Multilateral (e.g. BIRD, BAD, UE, BID)
• Private sponsors (Bill & Melinda Gates and
Rockefeller Foundations)
International sponsors
Pillar II social projects:• Reconversion
• Intensification
• Diversification/niche
SYSTEMATISED, COORDINATED APPROACH REQUIRED TARGETING
« SOCIAL INVESTORS »
* Agence de Développement Social
Source : Analyses McKinsey
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« OFFRE SOCIALE MAROC » - A UNIQUE VALUE PROPOSITION
WITH FOUR DIMENSIONS
Diverse portfolio of pre-packaged
practical projects
• Projects aimed at reconversion to
higher income farming activities
• Projects aimed at improving
productivity and supervision of
existing farms
• Projects aimed at diversifying
sources of farming income
Establish genuine long-term
partnerships
« Offre Sociale Maroc »
aims to reduce rural
poverty
Social projects having a potentially
huge impact
• Target zones of rural poverty as a
priority
• Several thousand farms affected by
this project
• Increase by 2-5x the farming
income of targeted farms
• Un solide tissu d’organisations
professionnelles et de coopératives
• Engagement massif du secteur
financier vers la ruralité
• Présence d’acteurs sociaux
internationaux de référence
Accesibility to leading social
institutions at ground level
• A solid network of trade
associations and cooperatives
• Massive commitment of the
financial sector to the rural
population
• Long-term commitment with projects
spanning several years
• Strong involvement and joint-
investment by the Moroccan
government in projects
Source : Analyses McKinsey
• Involvement of leading international
social institutions
• Strong execution capacity and control
by the Moroccan Administration
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BOLSTER SOCIAL INSTITUTIONS AS A MEANS OF FACILITATING
IMPLEMENTATION
* Association Nationale des Producteurs de Viande Rouge ** Microcredit associations
Source: analysis by McKinsey
• Support the most vulnerable producers regarding supervisory issues at a national/regional level
(professional organisations) and at a local level (communautarian cooperatives)Bolster professional organisations and cooperatives
Bolster professional organisations
Promote communautarian cooperatives
Strengthen/expand existing operators
Masssively bolster the financial sector in rural areas around new models
Attract new development institutions
Attract new institutions to the agricultural sector
Leading international institutions
Concession of downstream projects to private institutions
• Proactively bolster professional oganisations covering all sub-sectors (e.g. ANPVR*, ANOC, COPAG)• Sign contract programmes setting management objectives at a national level (number of farmers/farms,
geographical coverage) as a prerequisite for obtaining development subsidies
• Promote and support communautarian cooperatives: new incentives framework, targeted subsidies based on specific requirements
• Conduct an offensive aimed at developing the domestic and international financial sector (banks, AMC**) in rural areas, along the model used in India (ICICI)
3-4 contract
programmes
2-3 financial
institutions
4-5 new institutions
• Bolster existing banking and microfinance institutions (e.g. CAM, Zakoura, Al Amana) around 2 factors: i) expand their geographical coverage and ii) their product range including non-financial products and services (market information, education and health services)
Massively bolster social institutions by approaching professional organisations, the financial sector and new institutions; the objective is to sign 3-4 contract
programmes, secure a massive commitment by 2-3 financial institutions and attract 4-5 leading international social institutions
• Attract new domestic instititions (e.g. Poste Maroc, Banque Populaire) and international institutions not yet committed to the rural sector in Morocco: use their networks and develop a product offering tailor-made for vulnerable farms
• Attract domestic and international private institutions to facilitate the implementation and functioning of projects at ground level
• Attract 4-5 social institutions/leading NGOs with a global stature in terms of expertise and reputation (e.g. TechnoServe, ACDI-VOCA) as facilitators in the implementation of Pillar II projects at ground level
• Launch tenders for the concession of aggregator projects with private institutions, particularly for downstream reconversion and diversification projects (e.g. conditioning and grinding units, oil mills)
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PROFESSIONAL ORGANISATIONS – CONTRACT PROGRAMMES SIGNED,
SETTING TRAINING OBJECTIVES AT A DOMESTIC LEVEL
Underlying principles
• Win-win partnership
• Results-oriented commitments made by
institutions
• Subsidies linked to results
The State’s commitment
Commitment to supervision of
farms within the sub-sector:
• Training
• Technical and management
issues
Professional
organisations Each programme adapted to
each sub-sector
Commitment to represent and
promote the sub-sector’s interests
at a regional and national level
Commitment to the sub-sector’s
organisation:
• Upstream (inputs, equipment)
• Downstream (transformation/
sales and marketing)
Innovative framework of
incentives:
• Targeted subsidies (on
launch/on results attained)
• Subsidies for training
Preferential access to financing:
• CAM
• Microcredit
Partnerships with research
(INRA) and training
organisations
Source: analysis by McKinsey
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4 PRINCIPLES FOR CONSTRUCTING A ROADMAP
1
Boost the MCC programme and simultaneously launch 3 interdependent projects
• Need to boost the MCC programme as an imperative prerequisite (‘’test case for Pillar II’’)
• Simultaneously launch 3 strategic projects:
– Launch 3 projects at the same time by anchoring different project teams and mobilising the
necessary resources
– Follow-up on all the projects by a supervisory committee (public-private)
3
Implement projects in 3 consecutive phases building on what already exists
• Scheduling strategic projects in 3 phases:
– A phase consisting of 12-15 ‘’pilot projects’’ over 12-18 months with existing sponsors and institutions
in Morocco
– A 1st large-scale phase consisting of 50-70 projects over 24-36 months with existing and new
sponsor/institutions
– A 2nd large-scale phase consisting of 80-120 projects over 24-36 months as an extension of sucessful
experiences
4
Detailed appraisal at the national agricultural annual conference
• Communicate the general outline of how the projects are progressing to all the parties
involved for a greater collective and mutually supportive effort:
– At the national agricultural annual conference, provide a progress report/appraisal of
accomplishments and results by comparison with objectives (predefined KPI) and present
opportunities (e.g.investment) by comparison with actions launched
– Overall progress report every 2 years to reexamine strategy
• 3 initiatives
– Contract Programme, Application Contract, Progress Review
• Initiative 1 over 12-18 months: CP
– Prepare the General Contract Programme
– Detailed planning by theme (scheduling, priorities)
– Put in place a dedicated supervisory structure for Pillar II within the Agence Nationale Agricole
(missions, financial and human resources etc.)
2
3 key initiatives for
Pillar II –
CP/AC/Progress
Review
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Thank you for your
attention
