Agriculture is a small but stable partof the Lebanese economy. Approximately 20 to 25 percent ofLebanon's active population is involved in the sectorin one way or another. This note is a synthesis of previouswork written on agriculture development in Lebanon andrelated public expenditures in the sector. It starts with anoverview of the agriculture sector in Lebanon and its roleand contribution to the economy. Approximately eight percentof Lebanese households live below the poverty line. Amongmajor economic sectors, agriculture has the highest rate ofpoverty. Over 20 percent of heads of households engaged inthis sector are very poor. The North governorate is amongthe hardest hit areas with one in four agriculture workerslikely to be poor. Agriculture sector development could playan important role in pro-poor growth. This note aims tofocus on an agriculture sub-sector with significant growthpotential. The Strengths, Weaknesses, Opportunities, andThreats (SWOT) analysis explains that Lebanon is relativelymore competitive in fruits and vegetables than in cerealsand livestock. First, Lebanon is a relatively water scarcecountry and livestock put a greater strain on waterresources than fruits and vegetables. Second, cereals are alower-value crop than fruits and vegetables, and have morevolatile returns. Third, competitiveness in cereal marketsrequires producing in high volume. Lebanon is a smallcountry that is very dependent on cereal imports, comprisingroughly 83 percent of consumption. Thus, profitability islimited by a constraint on economies of scale. Moreover,making significant investments to reduce cereal importdependency may actually reduce food security by puttingfurther strain on Government of Lebanon's (GoL's)fiscal balance, thereby limiting its ability to respond tofood-price shocks. Livestock growth is also unattractivefrom a food security perspective because it wouldsignificantly increase domestic demand for cereals,increasing the country's exposure to market volatility.
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