in the Economic Debate: the Resilience of Cypriot Agriculture in the 20th century, 1921 – 2000. Cyprus
Department of Economic History
Development Economist, Chairman
This paper is a preliminary introduction of
in the Economic Debate: the Resilience of Cypriot Agriculture in the 20th century 1921 -2000 Cyprus
Anyone who writes about farming is likely to be writing critically of the way the farming is carried out… government reports are aimed at seeking weaknesses and correcting them: the speeches and writings of political leaders… are aimed at stressing the effect of bad weather or wrong policy; and even the farmer themselves are usually writing with the idea of securing easier credit or better prices and therefore paint the gloomiest possible picture. With such a background one is apt to overlook the big achievements of the Cyprus Farmer, who in the face of great climatic and political handicaps has for many centuries supported a considerable population and has established a remarkable range of products.
D. A. Percival, Superintendent of the Census 1946 p.59
This paper is an attempt to provide longer term perspective of Cypriot agricultural development than previously attempted. It is part of an ongoing effort to estimate the Gross Domestic Product (GDP) for the period 1921 – 1939. The paper has omitted the livestock sector due to data constraints; research for this sector is ongoing and it will be introduced at a latter date.
Over the period 1921 – 2000 agriculture in
Perhaps the most pessimistic portrayal of Cypriot agricultural prospects was provided by Mayer, writing around the time of the declaration of independence in 1960. Mayer dramatically stated that “
Although Mayer’s comments are unusual in their severity, there was a consensus by contemporary writers that Cypriot agriculture was pivotal to future development. The sector was underperforming: the low productivity of agricultural workers, the lack of an adequate system of agricultural credit, the low rate of capital accumulation, and the fragmented system of land tenure were emphasized as the main problems. The fact that the island was a net importer of food and that its agricultural products were not internationally competitive further highlighted how the agricultural sector was inhibiting the development of
Percival ‘s comment in the 1946 agricultural census encapsulates that the practical focus of the literature resulted in concentrating on the problems of agriculture; this evaluation of the agricultural sector of Cyprus over an eighty year period allows a more optimistic assessment of its contribution to the economy as a whole.
The paper attempts to merge existing published data on agriculture, which is scattered and segmented, and standardize them throughout the eighty year period in order to evaluate the sectors’ performance. Colonial period and early independence data are standardized as far as possible to current weights and practices. However both data availability and reliability deteriorate as one moves further back in time. Periods of particularly poor data availability are in 1921 – 1931 (when less data was published), and 1955 – 1960 (a period of an anti-colonial struggle and communal strife known as “the emergency”).
The paper is divided in four distinct time periods, bounded by important events in the history of Cypriot agriculture:
· The interwar period (1921 – 1938)
· The Second World War and
· The period of rapid economic growth and invasion (1960 – 1974)
· The period of recovery, and relative decline (1975 – 2000)
Whenever possible, comparisons will be made of results with neighboring
Figure 1 compares the share of Agriculture in Gross Domestic Product (GDP) in both
Estimates of the output share of agriculture for the period 1921 – 1949 do not exist, but an indication of the importance of agriculture for the period is possible by comparing the proportion of actively employed population in agriculture as provided by Figure 2. By 1946 the proportion of male and total active population in agriculture in
Despite the above
Section 1. The Interwar Years: 1921 – 1939
The period was difficult for Mediterranean countries; most of the countries in the
The steep drop in prices after the First World War was particularly serious for farmers in the plains and coastal drylands, who where primarily cultivators of grain (mainly wheat and barley). For farmers that were reliant on grain for the majority of their income the interwar period was one of compounded distress; the end of the 1921 recession found such farmers heavily in debt, facing stiff competition from imported flour.
The most important products in the interwar period were wheat, barley and carobs, while the cultivation of tobacco, cotton and flax were encouraged by the colonial authorities. A volume index for the eighty year period is currently compiled; however a compilation of an index of production (without corresponding price data, which is currently unavailable) allows us a partial analysis of trends of agricultural production. The volume index indicates that in the majority of the 13 products with a complete series for the period 1921 -1938, four had an overall decrease (wheat, barley, cheese, wool). Figure 5 exhibits the volume indexes of 6 major products.
This decrease of output of wheat and barley are particularly important since the total market value (in current prices) of the combined wheat and barley production dropped by over 39% between 1920 – 1924 and 1930 – 1934, and did not fully recover to its pre-1924 level by 1939. Despite a slight drop in acreage of both grains, wheat and barley remained the most significant crops in terms of output and acreage: in 1938 they still constituted 53% of total cultivated area.
The years 1931 – 1932 must have been particularly difficult for Cypriot grain farmers; the steep drop in grain prices during the world depression coincided with a serious drought in
Contemporary reports confirm the dire situation. Both Surridge and Sir Oakden in 1930 and 1934 respectively highlighted that the main burden of the falling product prices fell on the wheat farmer. However in some areas of
Of particular importance for
The expansion of tobacco is important in the period. A rapid increase of both the area cultivated and output produced occurred particularly towards the end of the 1920s. However output was very volatile and subject to violent swings. In 1921 volume of output was at 38.3% of the 1938 level; by 1934 volume of output was 44 times larger than 1938; limited access to the main tobacco export markets due to increased protectionism in major markets led to its decline in 1938. However,
Likewise crops that were actively promoted as export staples by the Colonial authorities did not dominate agricultural production. Cotton production only constituted a maximum 4.5% of the area cultivated throughout the period and exhibited a cyclical output related to rainfall conditions. Flax and Hemp remained very small and localized industries; output remained low and exports were insignificant.
Figure 4 is a comparison of wheat and barley yields of
Section 2. The Second World War and Run up to
1940 - 1959 Independence
In this period the Cypriot economy received a tremendous boost due to the Second World War. A shortage of food and raw materials in the
During the war years 1939-1945 the Cyprus economy was integrated into the wartime economic strategy of the Middle East Supply Centre, the primary aims of which were to minimize the use of shipping for civilian goods, to minimize hardship on populations caused by the reduction in overseas imports, and to utilize regional sources of goods for the war effort. The effect was a general rise in prices: average prices during the 1940 - 1945 were higher for wheat (80%), barley (176%), tobacco (294%), potatoes (66%), carobs (61%), olives (297%), and grapes (298%). However production suffered due to the combination of low rainfall and the lack of previously imported agricultural inputs (especially chemical fertilizers). Output of barley and wheat in 1944, which was greatly dependent on chemical fertilizers, fell by 56% and 45% compared to 1938, despite a slight increase of the total area cultivated Out of 30 products, only citrus fruit, tobacco, potatoes, flax fibre, haricot beans, tomatoes, taro (kolokassi) and sponges show higher levels of output than in 1938. The increase in most of these products was due to the co-ordination of regional demand by the Middle East Supply Centre, allowing
Thus the increase in agricultural production was more a phenomenon of the latter stages of the war, when shortages of imported agricultural inputs eased. In this period wheat production increased much faster than barley, perhaps due to the existence of a 32% price gap established by government subsidization polices. Onions exhibited a 10% increase in 1946, despite production of onions dropping by 49% of their 1938 output in 1944. Potatoes, unlike barley and wheat, show an increase of output both in 1944 and 1946, increasing output by 28% and 54.6% respectively of the 1938 level. The general increase in output also affected less important products; by far the largest increase in output was of aniseed that grew by 3178% during the period 1937 to 1946, possibly due to the increased demand for spirits.
The post war development of agriculture was rapid; the GDP share of agriculture grew slightly less than the rest of the economy at 4.6% per annum. The economy as a whole exhibited a faster rate of growth than agriculture for the first half of the 1950s; but economic conditions deteriorated during the Emergency of 1955 to 1959.
During this period the co-operative movement reached its maturity: Co-operatives for credit, retail trade, and marketing managed to break the dependence of agricultural producers on money lenders. Agricultural loans more than tripled and deposits grew five-fold. Marketing co-operatives were established for cherries, lemons, apricots and cereals and a large co-operative winery was established. By 1960 co-operative societies were marketing 50% of the total agricultural market production. The growth of the co-operative movement is seen as correcting the institutional infrastructure to allow faster growth in agriculture in this period. An additional factor in this progress was a ten year development plan implemented between 1946 and 1956. It included provision for electricity, roads, communications, health and water supply which led to significant increases in agricultural productivity, especially due to irrigation works that allowed an expansion of citrus output and deciduous fruits.
Products in high demand during the war expanded their output after its end; oranges and vegetables (especially tomatoes), as well as potatoes and tobacco increased their volume (and value) shares in total agricultural production. Potatoes became a significant export as well as the second largest item in terms of output after viniculture. Deciduous fruits, citrus and melons showed explosive growth, partly due to the development of new water resources.
Much of the expansion of the agricultural sector was in irrigated crops, and the perennially irrigated area accounted for 8.7% of the cultivated land in 1960, as against 6.5% in 1955.Citrus output in 1958 was ten times greater than in 1933, while productivity per acre was comparable to Israel. Food processing industries produced 58% of industrial gross output, but these industries accounted for only about 4% of GDP. Crop production and animal husbandry had a 60% - 70% value added as a proportion of gross output, as compared to only 20% for the economy as a whole. Thus agriculture in this period was not stagnating; it was largely keeping pace with the growth of the economy as a whole.
Section 3: Economic Catch-up, and Invasion 1960 -1974
Economic growth for the period up to 1973 was very rapid in real terms with low inflation. Rather surprisingly the agricultural sector matched this overall growth in GDP as shown in Figure 1. However agricultural productivity relative to other sectors was low; in 1960 agriculture contributed 17.6% of GDP (constant 1967 prices), while it still employed 44% of the labour force (Figure 2) partly due to part-time agricultural employment gradually becoming the norm. Crops under irrigation, which can increase the productivity per acre by a factor of eight, doubled. Fodder crops were expanded to meet the needs of the livestock sector; however by 1972 crop production was still the most important sub-sector producing 64% of the value added of agriculture. The period saw a rapid increase of exports; by 1972 the value of agricultural exports grew to a third of agricultural gross output. Almost all these exports were from crop production, the main items being potatoes, citrus, table grapes. In part these exports were encouraged by an ability to produce early potatoes and table grapes for the
The 1974 invasion and its aftermath created a very serious situation for the Cyrpiot economy as a whole and the agricultural sector in particular, which lost much of its resource base, as 37% of the islands’ area was occupied. Substantially developed agricultural areas such as the large irrigated areas of citrus groves in Morphou and
Section 4: Recovery, Growth and Relative Decline 1975 -2000
The period from 1977 into the 1980’s was one of continuous rapid economic growth. However agriculture output failed to expand as rapidly as the previous period despite the accelerating mechanization of the sector. From 1975 to 2000 the economy of
In the agricultural sector the emphasis was on resettling displaced farmers and expanding irrigation; by 1985 the level of agricultural production was on par to the level of production of 1972 (despite the loss in acreage). From 1975 onwards employment in agriculture fell at an average rate of 6% per year; by 2000 only 24,000 people were actively employed in agriculture with 75% of farmers having agriculture as a secondary occupation. Relative productivity vis-à-vis the whole economy was still low; by 2000 the income differential widened to its 1975 level.
The application of
Looking at the role of Cypriot agriculture in a longer timeframe allows us to have a more optimistic view of its contribution to the economy as a whole. Overall output has been growing; the Second World War and the invasion in 1974 transformed the role of agriculture within the
The resilience of Cypriot agriculture lies mainly in the flexibility in capitalizing market and taste trends by altering its product mix. This resulted in cyclical changes of the most dynamic products: cereals, carobs, citrus fruits, vegetables and potatoes exhibit different periods of rapid growth and relative decline during the period. In the interwar period the effects of the falling prices of agricultural products, especially during the depression, were serious especially for dry land farmers mainly dependent on their income on grain; however the effects on wine growing areas of Limassol and Paphos were less marked. Over the period agriculture has played a significant role in economic development, but with the reduction of its resource base in 1974 it has declined in importance for the economy and now has to adjust to effects of the free market and the common agricultural policy of the European Union.
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