The Moorish Wanderer

‘Plan Maroc Vert’ – Grand Dams Redux?

Morocco’s Godwin Law evolves usually around the Big Dams built during the late 1960s and 1970s to burnish the economic legacy of King Hassan II.

La politique des barrages lancée par Feu Sa Majesté le Roi Hassan II dès 1967 traduit la pertinence des choix stratégiques opérés en matière de développement économique et social et de valorisation des potentialités agricoles du pays à travers le développement de l’irrigation.

(Rapport Cinquentenaire – Ressources en eau et bassins versants du Maroc : 50 ans de développement)

It also serves as the opening gambit for the strategy to justify nowadays’ “Grands Chantiers” policy. Let me go on the record to state my complete adherence to a policy designed to improve and expand public infrastructure with large public investment. There is nothing wrong with it, quite the contrary. However, the snag with the Grands Chantiers is essentially institutional: I suppose the benevolent authority only goes as far in its benevolence as its own interest lies in the mechanism design it enforce. Unfortunately, there is ample evidence that a benevolent authority in Morocco doesn’t exist: once a player gets to set the rules, these are bound to be bent to their advantages.

But this does not fall within the purview of my post today; I have had a bit of a difficulty to gather data on the matter, but here it is. In a nutshell, I am interested in the dynamics of Agricultural and Non-Agricultural GDP per effective worker since 1955. The (big) Dams have been built with the ostentatious purpose of improving agricultural output by storing and distributing water. As one might assume, such investment should have led to an increased productivity per agricultural worker: after all, production in that particular subject is subject to diminishing returns (because of the fixed stock of land) and improving the use of a vital input should, at least on paper, increase productivity per worker over time. I am no expert in agricultural economics, but there are some properties one can observe across all productive sectors: building the dams should have a positive impact on productivity per worker; otherwise, why bother spending billions of Dirhams?

Base year 1955: Non agricultural output per worker increased 7 folds. Agricultural output per worker only doubled.

To compute productivity per worker means to first split total labour force and output into agricultural and non-agricultural, and compute their respective ratios (which is no easy task since HCP does not provide data on 1955-1959) and then plot their annual growth with 1955 as base year. Output per worker radically diverges right from the early years, from 1958 to be precise.

By 2011, the gap increased to the point where an agricultural worker has to work 5 times as much to match the output produced by their non-agricultural opposite number. Not only that, but agriculture in Morocco did not improve its productivity since it has stagnated; it has exhibited an average real productivity growth rate of 1,23% versus 3,71% for the other sector. In that respect at least, dams did not do very well.

Perhaps a case can be made as to the way I have computed agricultural productivity; after all, if rural population exhibits higher demographic growth, the ratio is flawed since rural labour market is a lot more homogeneous than national or urban markets, and hence demographic growth is akin to annual growth in the labour force. If anything, rural population has proven to increase at significantly lower levels compared to nationwide and urban growth. So this precludes a demographic caveat: productivity in Morocco’s rural fields is lagging, even as the whole economy grew and made use of technological change. So, did the dams do well? To check if these have been useful, we would expect a gradual cut in output volatility. After all, much of output fluctuations (especially in Morocco) is due to rain forecast (although that particular argument is bound to be discussed too) and the dams were there precisely to alleviate the randomness of rain seasons.

Before 1967, logged agricultural output per worker was around 9.14% and gradually increases to 10.68% for an average volatility around 10.21% an empirical evidence strong enough to conclude that agricultural output grew more volatile after the dams were built. Though there is no proof of definite correlation between both events, it is safe to say that these public investments failed to achieve their initial aim. If anything, the dams and the agricultural policy pursued since then hurts the vast majority of the Moroccan farmers. The quantitative impact of these policies remains to be published by the relevant authorities.

In that respect, agricultural GDP has been a drag on the aggregate growth, because it has failed to go beyond their structural diminishing returns. It has been a drag because in the final analysis, aggregate productivity is closer to that of rural sectors, which implies disproportionate concentration of technology in one sector and deprive the other actual weakens the sum of both. In that sense, to improve GDP growth means bigger technological changes in rural output per worker.

Plan Maroc Vert has made it clear their main action allocates 80% of its funds to the top 20% already modern, mechanized and export-oriented agribusiness industries (). This concentration in technology is similar to the failed experiences carried out ever since 1958, because it will confirm strong incumbents and at the same time submit smaller farmers permanently.

3 Responses

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  1. arabist said, on July 2, 2012 at 10:22

    And of course who are the “farmers” with the capital to carry out this kind of export-oriented agrobusiness… people like the Zniber family (and other beneficiaries of the confiscation of European-owned land in the 1960s) and the royal family (and notably the king himself, as the largest landowner in the country.)

  2. […] Tax exemptions in themselves cost about as much as the Budget deficit – about 33 Bn in 2012, but they stir government policies in the targeted sectors for different tax credits, exemptions and moratoriums. But, it is quite difficult to argue a reasonable case for some of these, unless political calculations are considered as well. The agricultural sector is pampered beyond reason (there are tax exemptions as well as direct subsidies) with official talking points arguing the very existence of the generous moratorium is of social value. It is as though the 120-odd Bn dirhams are evenly distributed among Moroccan farmers, when it really…. […]

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