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Series name change: The IFPRI Egypt Strategy Support Program (EgSSP) Working Paper series has been renamed the
Middle East and North Africa Regional Program Working Paper series beginning with report #05. The numbering for this
series will continue from the EgSSP series.
REGIONAL PROGRAM | WORKING PAPER 05 | January 2018
The Role of Agriculture and
Agro-Processing for
Development in Jordan
Jose Luis Figueroa, Mai Mahmoud, and Clemens Breisinger
ii
TABLE OF CONTENTS
Abstract .................................................................................................................................................. iii
1. Introduction ....................................................................................................................................... 1
2. Population, geography, and the role of refugees .............................................................................. 2
3. Agriculture and the agro-processing industry in Jordan.................................................................... 5
Agriculture and agro-processing for employment creation ............................................................ 8
Productivity and structural change in agriculture ......................................................................... 10
4. The role of agriculture and agro-processing for households employment and welfare ................. 13
5. The future of agricultural and agro-processing development in Jordan ......................................... 19
6. Summary and Conclusion ................................................................................................................ 20
References ............................................................................................................................................ 21
LIST OF TABLES
Table 3.1. Selected aspects of the structure of the Jordanian economy................................................ 6
Table 4.1. Demographic characteristics of households in Jordan, 2013 .............................................. 16
Table 4.2. Logistic regression for predicting sector of economic participation of household, 2013 ... 18
LIST OF FIGURES
Figure 2.1. Distribution of total population in Jordan, by governorate .................................................. 3
Figure 2.2. Rural population trends in Jordan between 2000 and 2016 – size and growth (left) and as
percent of total population (right) .......................................................................................... 3
Figure 2.3. Jordan governmental map .................................................................................................... 4
Figure 2.4. Rural and urban populations by governorate, percentage share ......................................... 4
Figure 2.5. Refugees in Jordan in 2015 – number (in thousands) (left) and as a percentage share of
total population (right), by governorate ................................................................................. 5
Figure 3.1. Jordan – annual value-added growth in the agricultural sector, 1985 to 2016 ................... 6
Figure 3.2. Jordanian economy, value-added by sector, 1970 to 2015 .................................................. 7
Figure 3.3. Employment in agriculture and agro-processing in Jordan as percentage share of all
employed (left) and total employed in agriculture (in thousands) (right), 2002 to 2013 ....... 8
Figure 3.4. Total working age individuals employed in livestock husbandry (left) and in crop
production (right) in Jordan by citizenship, 1999 to 2015 ...................................................... 9
Figure 3.5. Employment in Jordan by sector in rural and urban areas, 2002 to 2013 ......................... 10
Figure 3.6. Employment in agriculture in Jordan by governorate, 2002 to 2013. ................................ 10
Figure 3.7. Agriculture labor productivity in Jordan, 2000 to 2015 ...................................................... 11
Figure 3.8. Yields of selected crops in Jordan, 1961 to 2013 ................................................................ 11
Figure 3.9. Composition of total crop output in Jordan, by category of crop share, 1961 to 2014 ..... 12
Figure 3.10. Fruits (left) and vegetables (right) yield comparisons: Jordan, Egypt, Lebanon, and
Tunisia, 1961-2013 ................................................................................................................ 13
Figure 4.1. Jordanian households with members employed in specific sectors of employment, 2002
to 2013 ................................................................................................................................... 14
Figure 4.2. Share of Jordanian households that depend on agriculture (left) and agro-processing
(right) by governorate, 2002 and 2013 ................................................................................. 15
Figure 4.3. Female-headed households in 2002 and 2013, by rural/urban ......................................... 17
iii
ABSTRACT
This paper aims to support the implementation of the strategic development plans of Jordan by
analyzing the role of agriculture and farmers in the Jordanian economy, the role that productivity
and structural change can play for fostering agricultural growth, and the role agro-processing may
play in Jordan’s economic development. We argue that the development of the agro-processing
sector often has stronger backward and forward linkages with the agricultural sector than other
sectors and, thus, plays an important role for rural transformation. To further promote rural
transformation for economic development and job creation, our findings suggest that Jordan’s
agricultural sector should continue its path of transition towards higher value agricultural production
and agro-processing. Our findings suggest that farm households can benefit from participating in
agro-processing activities as households moving out of agriculture into this sector are less likely to
be poor. There also is still scope for improving agricultural productivity, especially for fruits, and for
the expansion of greenhouse production and adoption of high value and high water-use efficiency
crops. Most importantly, incentivizing the expansion of agro-processing industries in rural areas to
serve domestic and export markets should be pursued.
1
1. INTRODUCTION
As is the case for most countries in the Middle East and North Africa region, Jordan’s economy and
people have been heavily affected by the repercussions of conflict and instability in the region. The
civil war in Syria has resulted in a sharp increase in the number of refugees fleeing to Jordan, making
Jordan the host of one of the largest populations of registered refugees in the world (Economic
Policy Council 2017). The national census of 2015 estimates that 1.3 million of the 2.9 million foreign
nationals residing in Jordan are refugees (DOS 2015). In addition, instability and conflict has affected
tourism, foreign direct investment, and exports. Tourism, the second-largest employer, has suffered
a fall in the number of visitors and, consequently, a decline in revenue growth since 2013 (MOTA
statistical newsletters). The flow of foreign direct investment slowed down between 2008 and 2012,
affected by the double burden of the global economic downturn and regional instability. Exports
have also been negatively affected by instability in Syria, which was a major route for agriculture
exports, and Iraq, which used to absorb a large share of Jordan's manufacturing exports.
As an additional factor, the regular supply of low-priced natural gas from Egypt, which used
to provide around 80 percent of Jordan's electricity needs, was sharply interrupted by the Egyptian
revolution in 2011. Jordanian authorities had to fill the gap with more costly purchases of oil on
world markets, adding approximately $6 billion to public spending as of March 2015 (USAID 2015).
As a result, Jordan's public debt has increased substantially since 2012. After succeeding in
decreasing its debt-to-GDP ratio from an all-time high of 220 percent in 1990 to 65 percent in 2008,
this ratio had risen to 95 percent in 2016 (Economic Policy Council 2017).
As a result, economic growth has slowed, youth unemployment has increased, and food
security has deteriorated. The economy's annual growth dropped from an average of 6.5 percent
between 2000 and 2009 to 2.5 percent between 2010 and 2016. Youth unemployment increased
from an already high starting point to reach 34 percent in 2016. Food security declined between
2012 and 2014, particularly in terms of food availability, only starting to recover in 2015 (EIU Food
Security Index 2017).
Facing these economic challenges, the government of Jordan has introduced substantial
reforms aiming at increasing GDP growth to 5 percent starting from 2018, with a target of 10
percent growth in the agriculture sector alone. Related to these national development goals, the
Ministry of Agriculture in 2016 launched the second National Strategy for Agricultural Development
(NSAD) for the period 2016 to 2025 in an attempt to align national development efforts under
Jordan Vision 2025.1 The introduction of NSAD 2016-2025 coincided with the inauguration of the
National Strategy for Food Security (NSFS) 2016-2025 in recognition of the synergies involved in the
implementation of both strategies. The key goals of NSAD include increasing agriculture's share of
GDP by at least 17 percent, increasing agriculture's share of exports by 33 percent, and increasing
irrigation efficiency by expanding the area of land irrigated by drip irrigation (Ministry of Agriculture
2016). The Economic Growth Plan 2018-2022 also emphasizes agriculture as a major growth engine.
This paper aims to support the implementation of the Economic Growth Plan, the NSAD and
the NSFS by analyzing the roles:
1 The first National Strategy for Agricultural Development (NSAD) 2002 – 2010 was introduced to contextualize sustainable
agricultural and rural development in an integrated socio-economic framework. The strategy highlighted some of the main
constraints to agriculture development in Jordan, such as declining agricultural resources, weak market linkages, and a lack
of comprehensive agricultural development planning.
2
a) Of agriculture and farmers in the Jordanian economy,
b) That productivity and structural change can play in fostering agricultural growth, and
c) That agro-processing2 may play in economic development in Jordan. This last point implies
that the focus of the analyses is on the broader concept of rural transformation, rather than
agricultural transformation only (FAO 2017; Breisinger and Diao 2008; World Bank 2008).
In this context, we argue that the development of the agro-processing sector often has
stronger backward and forward linkages with the agricultural sector than do other sectors and, thus,
plays an important role in rural transformation. For example, a food processing plant located in a
rural area close to the producers may buy fruits and vegetables from local farmers, thereby adding
value and often quality to the local product, which is an important backward linkage. In addition,
economic activities around agro-processing, including packaging, retailing, and marketing, also add
value and generate jobs, which are important forward linkages.
This paper follows previous analyses for two country case-studies in the MENA region, Egypt
and Tunisia, in examining the role of agriculture and agro-processing in Jordan's path towards
economic development (Nin Pratt et al. forthcoming). Section 2 describes the geographic
distribution of Jordan's population and highlights the role of refugees in the economy. Section 3
depicts the role of agriculture and agro-processing in Jordan's economy and in employment creation
and then examines changes in agriculture productivity and in the structure of agriculture production
over time. Section 4 provides a household-level analysis of the role of agriculture in employment and
welfare. Section 5 discusses the future of agriculture in Jordan. Section 6 concludes with a summary
of key findings.
2. POPULATION, GEOGRAPHY, AND THE ROLE OF REFUGEES
In order to understand how agriculture and agro-processing can help foster economic growth and
improved welfare, we first present the geographic distribution of the population and highlight the
role of refugees.
The majority of the Jordanian population, 84 percent, lives in urban areas. The capital,
Amman, alone houses 42 percent of the population, while Irbid and Zarqa house 19 and 14 percent,
respectively (Figure 2.1). The percentage of the population living in rural areas has been decreasing
over time, dropping from 20 percent in 2000 to 16 percent in 2016, although the rural population
continues to grow, if slowly, with an annual growth rate of 1.8 percent in 2016 (Figure 2.2).
Geographically, the highest concentration of rural villages is in the fertile northwest corner of Jordan
and in the Jordan Valley in the governorates of Balqa, Jerash, and Madaba. However, the
governorates of Mafraq, Karak, and Ma'an have the highest share of their populations residing in
rural areas at more than 30 percent (Figure 2.4).
2 Agro-processing industry refers to the subset of manufacturing that processes raw materials and intermediate products
derived from the agricultural sector. Agro-processing industries transform products originating from agriculture, forestry and
fisheries. For the purpose of the present analysis, we follow the UN International Standard Industrial Classification of All
Economic Activities (ISIC) which classifies agro-industrial production from different manufacturing sectors: 3.1 Manufacture
of Food, Beverages and Tobacco; 3.2 Textile, Wearing Apparel and Leather Industries; 3.3 Manufacture of Wood and Wood
Products, Including Furniture; 3.4 Manufacture of Paper and Paper products, Printing and Publishing; 3.5.5 Manufacture of
rubber products. (Source: FAO: http://www.fao.org/docrep/w5800e/w5800e12.htm).
3
Figure 2.1. Distribution of total population in Jordan, by governorate
Source: Author's calculation based on National Census 2015
Figure 2.2. Rural population trends in Jordan between 2000 and 2016 – size and growth (left) and
as percent of total population (right)
Source: Author's calculations based on World Development Indicators (2017)
Ecologically, Jordan can be divided into three distinct ecological zones. The first is the Jordan
Valley (the lowlands) which represents a narrow strip located below the mean sea level, stretching
from the north-west to south-west. The second is the western highlands which hosts most of
Jordan's main population centers, and is distinguished by relatively high rainfall. Finally, the third
zone is the arid and semi-arid land referred to as Badia, which comprises more than 75 percent of
the total land area. Agriculture in Badia takes the form of livestock systems and some cultivation
that relies on groundwater irrigation.
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Total population, thousands
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Rural population (in millions)
Rural population growth (annual %), RHS
0
5
10
15
20
25
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
percent of total population
4
Figure 2.3. Jordan governmental map
Source: Jordan Ministry of Planning and International Cooperation website
Figure 2.4. Rural and urban populations by governorate, percentage share
Source: Author's calculations based on National Census 2015
The distribution of refugees among Jordan's governorates, according to the 2015 census,
shows an interesting pattern (Figure 2.5). While Amman, Irbid, and Zarqa host the highest number of
refugees, the percentage of refugees as a share of the total population is highest in Mafraq
0%
20%
40%
60%
80%
100%
Rural population Urban population
5
(36 percent) and Jerash (22 percent), followed by Irbid, Zarqa, and Amman. In particular, rural
communities in the border governorate of Mafraq have been a major destination for Syrian
refugees. At the same time, it is noted that about one-fifth of Jordan's "poverty pockets" are located
in Mafraq governorate; whereas, in general, the incidence of poverty in Jordan is higher in rural
areas (19 percent) than in urban areas (10 percent) (FAO 2014). As we will discuss in the
employment section of this paper, refugees make up a large share of the agricultural workforce.
Figure 2.5. Refugees in Jordan in 2015 – number (in thousands) (left) and as a percentage share of
total population (right), by governorate
Source: Author's calculations based on National Census 2015
3. AGRICULTURE AND THE AGRO-PROCESSING INDUSTRY IN JORDAN
Since the mid-1990s, agriculture has been part of the structural reforms under the Agricultural
Structural Adjustment Program (ASTAP) and the Agriculture Structural Adjustment Loan (ASAL) by
the World Bank. These structural reforms aimed at minimizing distortions and ensuring a balance
between the use of natural resources for agricultural and non-agricultural uses. However, the
implementation of these reforms has yielded mixed results. While some reforms have improved the
efficiency of markets through lifting price controls and liberalizing external trade, it has also been
argued that at least part of the decline in agriculture growth in the late 1990s (Figure 3.1) was
attributed to the structural adjustment program (UN 2007). A major drawback was that improved
horticulture export potentials were not fully captured in the reform programs due to inadequate
attention to market intelligence and trade promotion (World Bank 2003).
0
50
100
150
200
250
300
350
400
450
Amman
Balqa
Zarqa
Madaba
Irbid
Mafraq
Jerash
Ajloun
Karak
Tafielah
Ma'an
Aqaba
Refugees, thousands
0%
5%
10%
15%
20%
25%
30%
35%
40%
Amman
Balqa
Zarqa
Madaba
Irbid
Mafraq
Jerash
Ajloun
Karak
Tafielah
Ma'an
Aqaba
Refugees as share of total population
6
Figure 3.1. Jordan – annual value-added growth in the agricultural sector, 1985 to 2016
Source: World Development Indicators (2017)
Table 3.1. Selected aspects of the structure of the Jordanian economy
Share in
GDP
Share in
Ag GDP or
agro-
processing
GDP
Share in
total
employ-
ment
Share in
exports
Export
intensity*
Share in
imports
Import
intensity**
Agriculture
4.5
100.0
1.7
8.6
24.8
5.9
17.7
Crops
2.6
57.8
1.1
5.3
27.3
5.5
27.2
Vegetables
1.3
27.8
0.5
2.1
21.7
0.1
0.7
Fruits
0.5
11.7
0.2
0.9
22.1
0.0
1.4
Other crops
0.8
18.3
0.3
2.4
39.6
5.4
58.8
Livestock & Fishery
1.9
42.2
0.6
3.4
21.7
0.4
3.1
Livestock
0.8
17.6
0.3
1.5
21.7
0.3
5.2
Poultry
1.1
24.3
0.4
1.8
21.5
0.1
1.2
Fishery
0.0
0.4
0.0
0.0
33.8
0.0
8.5
Agro-processing
12.5
100.0
13.6
20.3
23.2
18.3
20.7
Agri-food
7.4
59.5
8.0
12.5
26.7
6.7
15.3
Textile
0.1
1.0
0.1
2.1
21.1
2.5
23.4
Carpeting
0.1
1.2
0.2
0.3
62.3
Clothing
3.6
29.1
4.0
3.1
17.1
5.6
26.1
Leather
0.0
0.2
0.0
0.1
92.6
Footwear
0.1
0.8
0.1
0.2
31.8
0.0
8.8
Wood
0.1
1.0
0.1
0.9
49.5
1.8
64.7
Furniture
0.4
3.2
0.4
0.7
36.4
1.3
51.6
Paper
0.5
4.1
0.6
0.8
11.9
0.1
0.9
Other industry
19.0
n/a
20.0
33.0
22.8
39.6
11.9
Services
64.0
n/a
64.7
38.1
9.2
1.8
0.5
Total non-agricultural
95.5
n/a
98.3
91.4
14.1
59.8
14.0
Total
100.0
n/a
100.0
100.0
14.7
100.0
14.2
Source: Social Accounting Matrix (2006)
* Export intensity is the share of exported goods and services to total domestic output. Numbers higher than 100 can be
explained by re-exports.
** Import intensity is the share of imported goods and services relative to domestic consumption.
-40
-30
-20
-10
0
10
20
30
40
50
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
Agriculture, value added
(annual % growth)
GDP growth (annual %)
7
The agricultural sector in Jordan accounts for 4.5 percent of the country’s GDP with
vegetables representing almost a third of total agriculture value-added (Table 3.1). One quarter of
total agricultural exports are vegetables and fruits, which are mainly exported to other countries in
the MENA region (Economist Intelligence Unit 2015). In contrast, other crops (excluding vegetables
and fruits) constitute the highest share of agricultural imports, making up 91 percent of all
agricultural products imported. The share of imports made up by vegetables and fruits is negligible.
Looking at the export and import intensities for agriculture reveals that the sector is more export-
oriented than import-oriented: 23 percent of all agricultural products are exported, with a higher
export intensity for vegetables and fruits at 40 percent. Furthermore, despite its relatively low share
of the national economy, agriculture has almost doubled its contribution to GDP between 2000 and
2015 from 2.3 to 4.2 percent (Figure 3.2), driven by increase in domestic demand. The agriculture
sector has displayed promising growth rates over the past few years, with a compound annual
growth rate of 12 percent between 2010 and 2015.
Despite the recent increase in the contribution of agriculture to Jordan’s economy (Figure
3.2) the share of the economy made up by agriculture in 1970 was almost three times that of 2015
with 11.6 and 4.2 percentage shares, respectively. Thus, the importance of agriculture to Jordan’s
economy is significantly less now than it was four decades ago, suggesting that the Jordanian
economy has been going through a process of structural transformation (Nin Pratt et al.
forthcoming). The loss of value in the agricultural sector has been accompanied by a parallel growth
of industry. As shown in Figure 3.2, between 1970 to 2015 the share of the economy made up by the
industrial sector grew around 57 percent, while the share made up by the services sector remained
practically unchanged.
Figure 3.2. Jordanian economy, value-added by sector, 1970 to 2015
Source: Author’s calculation based on World Development Indicators (2017)
Within the industrial sector and strongly related to agriculture, the agro-processing sector
plays a significant role. As shown in Table 3.1, about 12.5 percent of total value-added in the
economy is due to activities in the agro-processing sector, with 60 percent of this contribution due
to agri-food activities. The agro-processing sector also accounts for 20 percent of total exports, with
an intensity of 23.2 percent. The importance of the sector can also be observed by the share of total
employment in the economy being in agro-processing, which at 13.6 percent is more than seven
times larger than the share of employment in agriculture.
11.6 7.9 7.7
2.3 3.1 3.4 4.2
19.0 24.1 26.2
25.5 28.6 30.7 29.6
69.4 68.0 66.0 72.1 68.3 65.9 66.2
0
20
40
60
80
100
1970 1980 1990 2000 2005 2010 2015
Agriculture, value
added (% of GDP)
Industry, value
added (% of GDP)
Services, etc., value
added (% of GDP)
8
Agriculture and agro-processing for employment creation
The role of the agriculture sector for employment has been decreasing, but remains important for
migrant laborers. As shown in Figure 3.3, the share of employment in agriculture has decreased from
3.8 percent in 2002 to 1.9 percent in 2013. This decrease came together with an increase in the
relative importance of industry and services – an increase of 4.8 points in industry and a marginal 0.8
points for services. However, while the share of Jordanians working in agriculture has gone down,
many refugees are employed in the sector. According to Department of Statistics, non-Jordanians
constitute the majority of labor in agriculture – about 85 percent of livestock workers and 92 percent
of crop labor in 2015 were non-Jordanians (Figure 3.4). Permanent employment is far more
important than seasonal and casual employment. At the same time, employment in crops has been
decreasing between 2013 and 2015, years during which Jordan experienced a large influx of
refugees.
Figure 3.3. Employment in agriculture and agro-processing in Jordan as percentage share of all
employed (left) and total employed in agriculture (in thousands) (right), 2002 to 2013
Sources: Authors’ calculation based on HEIS (left); Authors’ calculation based on Department of Statistics, Jordan (right).
This may partly explain the different patterns that emerge from the data of the Household
Expenditure and Income Survey (HEIS) and those from the Department of Statistics. The slowdown
in the contribution of the agriculture sector to employment can also be observed in absolute terms
(Figure 3.3 right) – after a peak in 2007 of 300,000 workers, employment in the sector declined
sharply so that by 2015 the sector employed only 100,000 workers.
Employment in agro-processing has also declined over the past ten years according to the
HEIS (Figure 3.3 left). It is important to note, however, that HEIS mainly surveys Jordanian
households and may omit refugees that work in the agro-processing industry.
0
2
4
6
8
10
12
2002 2006 2008 2010 2013
percent of all employed
Agriculture
Agro-processing
Ag + Ag Proc.
0
50
100
150
200
250
300
350
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Employed in agriuculture, thousands
9
Figure 3.4. Total working age individuals employed in livestock husbandry (left) and in crop
production (right) in Jordan by citizenship, 1999 to 2015
Source: Author's calculation based on Department of Statistics Jordan
As in most countries, the role of agriculture in employment in Jordan is more important in
rural than in urban areas. In 2015 the share of agriculture in total employment was 5.0 percent in
rural areas and 1.3 percent in urban areas. Moreover, both areas experienced a decline in the share
of those employed working in agriculture from 7.5 to 5.0 percent in rural areas and from 3.0 to 1.3
percent in urban areas between 2002 to 2015 (Figure 3.5). Over the same period there was also a
significant drop in the share of those employed working in agriculture across all governorates in the
country (Figure 3.6). On average, Jordanian governorates experienced a 55 percent drop in share of
employment in agriculture, with this loss being higher for Tafilah and Zarqa at 80 and 70 percent,
respectively, and lower for Mafraq and Aqaba at 38 and 40 percent, respectively. However, between
2010 and 2013, five of the 12 governorates experienced a reversal of this trend, especially in Aqaba
where the share of those employed working in agriculture grew by a factor of four in comparison
with 2010. Moreover, except for Balqa, the governorates that did not experience an increase in
agricultural employment are those that host the majority of Syrian refugees. One possible
explanation for the agricultural employment trends in these governorates is that refugees took up
employment in agriculture.
Some interesting patterns are observed when looking at trends in employment in the agro-
processing sector over time. Although the role of agro-processing is less relevant over time (2002-
2013), in urban areas, employment in agro-processing is higher than in rural areas over the same
period (Figure 3.5). This suggest that the agro-processing sector has contributed to structural change
by creating jobs in higher-value activities.
0
2,500
5,000
7,500
10,000
12,500
15,000
1999 Jordanians
1999 Non-Jordanians
2002 Jordanians
2002 Non-Jordanians
2007 Jordanians
2007 Non-Jordanians
2009 Jordanians
2009 Non-Jordanians
2011 Jordanians
2011 Non-Jordanians
2013 Jordanians
2013 Non-Jordanians
2015 Jordanians
2015 Non-Jordanians
Permanent employees
Seasonal employees
Casual labor
0
5000
10000
15000
20000
25000
30000
1999 Jordanians
1999 Non-Jordanians
2002 Jordanians
2002 Non-Jordanians
2007 Jordanians
2007 Non-Jordanians
2009 Jordanians
2009 Non-Jordanians
2011 Jordanians
2011 Non-Jordanians
2013 Jordanians
2013 Non-Jordanians
2015 Jordanians
2015 Non-Jordanians
Permanent employees
Seasonal employees
10
Figure 3.5. Employment in Jordan by sector in rural and urban areas, 2002 to 2013
Source: Author’s calculation based on Department of Statistics of Jordan
Figure 3.6. Employment in agriculture in Jordan by governorate, 2002 to 2013.
Source: Author’s calculation based on Department of Statistics of Jordan
Productivity and structural change in agriculture
As shown, the share of agriculture in the Jordan economy is low but has been increasing over the
past few years. At the same time, employment in agriculture has declined, which means that
productivity in the agricultural sector has increased or agricultural growth was driven by structural
change within the sector. Here we examine the drivers of agricultural growth by looking at labor
productivity, yields, and characteristics of structural change.
Labor productivity
Figure 3.7 shows that labor productivity in the agricultural sector has been steadily increasing since
2000. Agricultural value-added per worker in 2000 was approximately USD 3,000 (at constant 2010
prices), but USD 8,000 15 years later, representing an increase of 166 percent. The performance of
the Jordanian agriculture sector is above the average of medium income countries (MIC) and
superior to that observed in other MENA countries with a similar level of development, like Egypt. In
0
2
4
6
8
10
12
Rural Urban Rural Urban Rural Urban Rural Urban Rural Urban
2002 2006 2008 2010 2013
% of employment
Agriculture
Agro-processing
Other manufacturing
Services
0
2
4
6
8
10
12
% of employment in agriculture
2002
2006
2008
2010
2013
11
2013, the average value-added per worker for MICs was about USD 2,000, while it was USD 5,000 in
Egypt, in contrast with almost USD 7,000 in Jordan.
Figure 3.7. Agriculture labor productivity in Jordan, 2000 to 2015
Source: Author’s calculation based on World Development Indicators (2017), and Department of Statistics Jordan
These trends are in line with the analysis by Nin-Pratt et al. (forthcoming) that shows the
comparative advantage of agriculture for 23 countries in the MENA region. Together with Egypt and
Tunisia, Jordan is one of the few countries in the region with a clear advantage in agriculture,
especially regarding agriculture exports. Moreover, Jordan is the top performer – only surpassed by
Lebanon – in terms of labor productivity and labor productivity growth in the MENA region.
Yields
Figure 3.8. Yields of selected crops in Jordan, 1961 to 2013
Source: Author’s calculation based on FAO Stat.
0
50
100
150
200
250
300
350
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Employment in Agriculture (in thousands), RHS
Agriculture value added per worker (constant 2010 US$)
0
10,000
20,000
30,000
40,000
50,000
1961 1968 1975 1982 1989 1996 2003 2010
kg per hectare
Citrus Fruit
Fruit excl Melons
Roots and Tubers
Vegetables & Melons
12
Structural change in agriculture
Jordan has experienced significant structural change in the agriculture sector of the economy,
generally moving from lower value crops, like cereals, to higher value crops, like fruits and
vegetables. Figure 3.9 shows the changes in crop shares of agricultural output for the period 1961 to
2014. The crop mix in Jordan overall since 1961 has significantly changed towards vegetable-
oriented production. In 2014, vegetable production accounted for 70 percent of total crop output in
the country, followed by 12 percent for fruit production. The largest increase in the share of crop
production is observed for roots and tubers, whose production in 1961 represented only one
percent of total output, but accounted for about 8 percent of output in 2014. In contrast, and as
mentioned above, the relative importance of cereals for the agriculture sector is very low in
comparison with 1961 when 20 percent of total output was given by cereals. This pushes Jordan to
import practically all the wheat and other cereals consumed in the country (Economic Policy Council
2017).
Figure 3.9. Composition of total crop output in Jordan, by category of crop share, 1961 to 2014
Source: Author’s calculation based on FAO Stat.
In support of these structural changes, Jordan has successfully increased its yields of major
crops, particularly vegetables. A comparison of Jordan's yield of fruits and vegetables from 1961 to
2013 with yields from Egypt, Lebanon and Tunisia, shows mixed results (Figure 3.10). For fruits,
Egypt demonstrates a better performance overall, while Jordan shows high yield fluctuations over
this period. This shows that, despite of the growth in fruits yields since early 1980s, there is still
room for improving crop productivity. For vegetable yields, Jordan has successfully increased its
productivity since the early 1990s, surpassing the average yields realized in Egypt, Lebanon, and
Tunisia.
0%
20%
40%
60%
80%
100%
1961 1970 1980 1990 2000 2010 2011 2012 2013 2014
Cereals
Citrus Fruit
Coarse Grain
Fruit excl Melons
Oilcrops Primary
Pulses
Roots and Tubers
Treenuts
Vegetables & Melons
13
Figure 3.10. Fruits (left) and vegetables (right) yield comparisons: Jordan, Egypt, Lebanon, and
Tunisia, 1961-2013
Source: Author’s calculation based on FAO Stat.
4. THE ROLE OF AGRICULTURE AND AGRO-PROCESSING FOR
HOUSEHOLDS EMPLOYMENT AND WELFARE
As suggested by these analyses, the agricultural and agro-processing sectors of Jordan have
undergone significant change over past decades. To further explore how these developments have
played out at the household level and to shed light on the changing characteristics of Jordanian
families participating in agricultural and agro-processing activities, we analyze the social,
demographic, and economic characteristics of Jordanian households over time. This analysis at
household level is to gain a better understanding of the kind of households that tend to remain in
agriculture and what kind may move away to other sectors. Although our analysis does not intend to
provide a causal interpretation, the analysis of household characteristics associated with the
decision to remain in agriculture can help to understand how the transformation process has been
affected by households’ involvement in different sectors, and at the same time, which specific
household characteristics are associated with this process.
As observed in other countries, the transformation process does not occur simultaneously
for all households. Typically households start moving out from agriculture depending on how well
“equipped” they are to benefit from opportunities in other sectors. For example, some jobs in the
industrial and service sectors require skills that demand higher levels of education. In such cases, it is
expected that households with higher levels of education would move away from agriculture more
quickly than less educated households. Moreover, the transformation process does not occur at the
same time for all family members, precisely for the same reasons that make some households move
away to other sectors and others remain in agriculture. To pick up these nuances in our analysis, we
categorized households according to the number of members who work in different sectors, with a
focus on agriculture and agro-processing. Previous analyses in other countries have analyzed the
transformation process using similar categorizations. For example, El-Enbaby et al. (2016) compare
households in Egypt where all members work in agriculture with households where some members
are in other sectors, and define these as “mixed households”. Examples outside the MENA region
include Diao et al. (2017) and Owusu, Abdulai, and Abdul-Rahman (2011).
0
5,000
10,000
15,000
20,000
25,000
1961
1965
1969
1973
1977
1981
1985
1989
1993
1997
2001
2005
2009
2013
Fruit yield, kg/ha
Egypt
Jordan
Lebanon
Tunisia
0
10,000
20,000
30,000
40,000
50,000
1961
1965
1969
1973
1977
1981
1985
1989
1993
1997
2001
2005
2009
2013
Vegetable yield, kg/ha
Egypt
Jordan
Lebanon
Tunisia
14
For the analysis of Jordanians households, we used the following definition of households:
1. Agricultural households have at least one member aged 15 or above whose main
occupation is working in agriculture;
2. Agro-processing households have at least one member aged 15 or above whose main
occupation is in agro-processing activities; and
3. Other households are those in which no members are found in agriculture or agro-
processing. This type refers to households working in services, or industry or manufacturing,
excluding agro-processing.
To assess changes over time, we analyze data from five rounds of the Jordanian Household
Expenditure and Income Survey (HEIS): 2002, 2006, 2008, 2010, and 2013 (OAMDI 2014a; 2014b;
2014c; 2014d; 2017). The HEIS is representative of households at national and governorate levels
and contains detailed information on household labor, demographic, and socioeconomic
characteristics. We present results for rural and urban areas and for all Jordanian governorates.
Figure 4.1. Jordanian households with members employed in specific sectors of employment, 2002
to 2013
Source: Author’s calculation based on HEIS.
Note: Households have at least one member employed in sector in question. A single household may have members
employed in more than one sector.
The share of households in agriculture, which was already relatively low in 2002,
experienced a modest decline between 2002 and 2013 (Figure 4.1). In 2002 about four percent of
households in Jordan had at least one member in agriculture, in contrast with 1.8 percent in 2013.
Agro-processing has been more important for employment generation as can be seen from a higher
share of agro-processing households in the country. Nonetheless, the importance of the sector has
also been decreasing following the trend observed for agricultural households: the share of agro-
processing households went from 6.7 percent in 2002 to 4.7 percent by 2013.
These numbers contrast with the share of unemployed households where no single member
reported being employed. Not only the share of unemployed households is large for all years, but
also it has increased in the same period from 16.7 to 21.2 percent.
On the other hand, the non-agricultural sectors have not absorbed workers coming from
agriculture or agro-processing, as the share of “other-sector” households have remained relatively
stable in the same reference period at around three-quarters of all households. This suggests that
people moving out of agriculture often do not find formal employment in other sectors. Further, it
seems that the observed growth of the agro-processing sector described earlier, either relies on
0 10 20 30 40 50 60 70 80
2013
2010
2008
2006
2002
percent of households
Unemployed
Other sector
Agriculture or
agro-processing
Agro-processing
Agriculture
15
increases in labor productivity, e.g., through the use of more machines, or on the employment of
non-Jordanians workers who are not reflected in national official surveys like the HEIS. This might
explain the low share of agricultural households in national household surveys too.
At the governorate level, the HEIS results show that the share of households with at least
one member in agriculture and agro-processing in most governorates has declined, but this decline
is not uniform across governorates (Figure 4.2). Only two governorates experienced gains in the
share of households in agriculture between 2002 and 2013. In this period, the share of households
with members working in agriculture in Mafraq went from 2.7 to 4.2 percent, a 54 percent increase.
The other governorate registering an increase in the share of households working in agriculture is
Al-Aqaba, but the results should be taken with caution due to missing information in 2002. The
remaining ten governorates saw varying declines in agricultural households ranging from 88 percent
in Tafilah to 17 percent in Amman. The share of households in agro-processing activities also
decreased for most governorates. Again, only in Mafraq is a positive increase observed from 5.2 to
7.5 percent of households. The largest loss in agro-processing households took place in Aqaba and
the smallest in Ajloun, with 71.0 and 1.8 percent, respectively.
Figure 4.2. Share of Jordanian households that depend on agriculture (left) and agro-processing
(right) by governorate, 2002 and 2013
Source: Author’s calculation based on HEIS
Which factors are associated with the move of households out of agriculture and agro-
processing in Jordan? Table 4.1 presents demographic and economic indicators for the household
types. Households in agriculture and agro-processing tend to be older and less educated. In both
rural and urban areas, heads of agricultural and agro-processing households are on average older
than heads of households employed in other sectors than agriculture or agroprocessing (“Other”
households). Further, household heads working in industry, services or manufacturing show higher
educational levels. This might be the result of these households having younger members, since, as
in other countries in the region, educational attainment has been increasing in Jordan, resulting in
higher education levels for younger generations. For example, less than one percent of rural
households in agriculture or agro-processing have a head with higher education in contrast with
almost 15 percent of “Other” households. In urban areas, a similar pattern is observed, although the
educational gap between agro-processing households and households in other sectors is less
pronounced. There is also a higher level of education among urban households than rural ones.
0
2
4
6
8
10
12
14
16
Households in agriuclture, %
2002
2013
0
2
4
6
8
10
12
14
16
Households in agro
-processing, %
2002
2013
16
Table 4.1. Demographic characteristics of households in Jordan, 2013
Rural
Urban
Agri-
cultural
Ag-pro-
cessing
Other
Unem-
ployed
Agri-
cultural
Ag-pro-
cessing
Other
Unem-
ployed
Age of head, years (mean)
49.2
53.1
46.4
55.9
45.3
50.3
47.0
57.1
Age of spouse, years (mean)
42.0
45.4
39.8
45.8
40.4
43.9
40.2
48.3
Household size (mean)
6.0
6.3
5.6
4.5
6.1
5.5
5.4
4.0
Household members per room (mean)
1.6
1.6
1.5
1.3
2.0
1.5
1.5
1.1
Income earners (mean)
2.2
2.9
2.4
1.8
2.7
3.0
2.6
1.7
Disposable annual income, JOD
(mean)
8,188
8,408
9,132
5,414
9,442
8,502
10,088
6,361
Poor households (%)
39.5
26.3
17.0
23.9
33.3
15.4
14.9
15.3
Male-headed household (%)
93.0
78.4
90.5
69.8
91.4
91.3
92.0
68.2
Head is literate (%)
78.1
69.5
88.6
66.1
94.5
92.8
95.4
82.3
Spouse is literate (%)
75.7
78.2
87.2
72.3
89.1
94.1
94.3
87.8
Head is Jordanian (%)
92.7
97.3
97.9
96.9
93.0
90.8
93.9
89.3
Education of head (%)
None
36.5
31.8
18.8
44.9
22.5
13.4
11.1
29.4
Primary
45.8
48.0
51.7
42.5
58.6
59.0
44.2
36.1
Secondary
16.8
19.0
15.0
6.7
13.5
7.1
14.3
9.4
Post-secondary
0.9
1.1
14.4
5.9
5.4
20.4
30.4
25.1
Education of spouse (%)
None
31.3
32.1
18.9
40.6
28.8
12.2
9.3
20.1
Primary
46.9
40.7
43.4
44.8
45.3
47.3
39.2
44.0
Secondary
11.3
11.9
11.7
6.1
15.9
13.0
16.8
20.0
Post-secondary
10.6
15.3
26.0
8.5
9.9
27.4
34.7
15.9
Maximum education level in household (%)
None
2.9
0.0
0.7
14.5
0.0
0.0
0.8
14.1
Primary
44.4
43.3
30.4
46.4
47.7
33.2
26.1
35.2
Secondary
32.4
29.8
21.8
19.7
27.5
20.7
19.5
15.6
Post-secondary
20.2
26.8
47.1
19.4
24.8
46.0
53.5
35.2
Source: Author’s calculation based on HEIS
Note the higher level of education among spouses vis-à-vis household heads. Within
household types, the education of the spouse is higher than the level of education of the head. This
is probably due to the fact that spouses are on average younger than household heads. On the other
hand, the education of other members of the household is associated with participation in
agricultural activities. Looking at the maximum level of education of any member for all household
types reveals that higher levels of education are found among non-agricultural households.
Agricultural labor is associated with a higher incidence of poverty levels as measured by
income, being higher among rural households. The share of poor households, i.e., those in the
lowest two deciles of household annual expenditures, is always higher among agricultural
households and seems to decrease as households rely less or not at all on agriculture. For example,
in rural areas, 40 percent of household in agriculture are poor, in comparison with 26 and 17 percent
of households involved in agro-processing and in other activities, respectively. Although households
in urban areas are generally less poor, the same pattern is observed – the group of households
relying less on agriculture shows a lower incidence of poverty: about 33 percent of agricultural
households are poor while the share among non-agricultural households is 15 percent. Although not
shown in Table 4.1, the disadvantage of agricultural households in terms of poverty is observed even
when comparing these households with unemployed households.
17
Although the analysis does not permit disentangling the causes of the observed higher
poverty shares among agricultural households, it is possible to observe that some characteristics,
which are typically associated with poverty, are more prevalent among these households. For
example, in rural areas the percentage of households headed by non-Jordanians is highest among
agricultural households at about 7 percent. As poverty is more prevalent in rural areas and the
agricultural sector relies mostly on non-Jordanians, it is likely that the agricultural sector is absorbing
a large percentage of the low-skilled non-Jordanian labor force.
On the other hand, the role of women in the transformation process can be seen in the
higher share of households engaged in agro-processing that are led by women. In 2013, one in every
five rural households engaged in agro-processing were headed by women. The percentage of
households headed by women has been increasing over time (Figure 4.3). In rural areas, agro-
processing households led by women went up from 4.0 to 21.6 percent between 2002 and 2013.
However, the opposite trend is seen in urban areas – the share of households led by women in agro-
processing decreased by 56 percent from 20.0 to 8.7 percent.
Figure 4.3. Female-headed households in 2002 and 2013, by rural/urban
Source: Author’s calculation based on HEIS
This descriptive analysis provides an initial overview of how the employment of households
is distributed according to different characteristics. However, to explore to which extent these
characteristics are correlated with the decision of households to participate in agricultural or other
economic activities, we carried out a multivariate regression analysis taking household employment
type as the dependent variable. We run four models using the following dependent variables:
1) Household in agriculture; 2) Household in agro-processing; 3) Household in agriculture or agro-
processing; and 3) Household employed in other sectors. The results are presented in Table 4.2.
The multivariate analysis confirms some of the observations found with the descriptive
analysis. For example, being poor is negatively associated with households not engaged in
agriculture and positively associated with agricultural activities (0.656 vs -0.372, respectively).
Interestingly, the association is negative for households in agro-processing (-0.282) suggesting the
potential of the sector for income generation and employment, especially in rural areas, where it is
more likely to find households in agro-processing and agriculture in comparison with urban areas.
0
5
10
15
20
25
30
35
Ag HH
Ag Pro HH
Other
Unemployed
Ag HH
Ag Pro HH
Other
Unemployed
Rural Urban
2002
2013
18
Table 4.2. Logistic regression for predicting sector of economic participation of household, 2013
Agriculture
Agro-
processing
Agriculture
& agro-
processing
Other
sectors
Poor1
0.656***
-0.282***
-0.00788
-0.372***
(0.0160)
(0.0126)
(0.0101)
(0.0123)
Urban2
-1.290***
-0.132***
-0.579***
0.449***
(0.0161)
(0.0137)
(0.0104)
(0.0126)
Number of income earners in household
0.655***
0.637***
0.683***
6.339***
(0.00828)
(0.00509)
(0.00468)
(0.0200)
One female income earner in household3
0.400***
0.467***
0.459***
-0.127***
(0.0197)
(0.0113)
(0.0101)
(0.0185)
Two or more female income earners in household3
0.378***
0.146***
0.214***
-6.374***
(0.0465)
(0.0278)
(0.0248)
(0.0622)
Head is between 35 and 49 years4
-0.252***
-0.0113
-0.112***
0.204***
(0.0237)
(0.0181)
(0.0145)
(0.0159)
Head is older than 50 years4
-0.365***
-0.0953***
-0.172***
-0.139***
(0.0300)
(0.0201)
(0.0167)
(0.0207)
Spouse is between 35 and 49 years4
0.410***
1.029***
0.851***
-0.652***
(0.0220)
(0.0160)
(0.0130)
(0.0146)
Spouse is older than 50 years4
0.621***
0.524***
0.465***
-0.280***
(0.0289)
(0.0191)
(0.0161)
(0.0202)
Head is male
0.560***
-0.253***
-0.0138
-0.0420**
(0.0309)
(0.0174)
(0.0156)
(0.0183)
Head has primary education5
-0.870***
-0.129***
-0.439***
-0.136***
(0.0196)
(0.0141)
(0.0117)
(0.0158)
Head has secondary education5
-0.902***
-0.796***
-0.894***
0.426***
(0.0274)
(0.0204)
(0.0167)
(0.0219)
Head has more than a secondary education5
-2.518***
-0.714***
-1.073***
0.491***
(0.0437)
(0.0187)
(0.0167)
(0.0218)
Maximum education level in household is primary5
1.180***
0.406***
2.058***
-0.416***
(0.0623)
(0.0131)
(0.0600)
(0.0331)
Max. ed. level in household is secondary5
1.203***
0.292***
1.990***
-0.284***
(0.0633)
(0.0136)
(0.0604)
(0.0342)
Max. ed. level in household is more than secondary.5
0.250***
1.457***
0.0849**
(0.0647)
(0.0606)
(0.0341)
Main source of household income is remittances6
1.038***
-1.010***
-0.0618***
-0.816***
(0.0255)
(0.0305)
(0.0187)
(0.0163)
Main source of income is business & other activities6
0.846***
-0.485***
-0.0789***
-0.445***
(0.0315)
(0.0256)
(0.0200)
(0.0169)
Head not employed
-1.375***
-0.216***
-0.523***
-0.251***
(0.0235)
(0.0132)
(0.0118)
(0.0167)
Head is Jordanian
-0.177***
-0.491***
-0.421***
0.595***
(0.0287)
(0.0172)
(0.0150)
(0.0176)
Constant
-4.893***
-3.512***
-4.409***
-3.865***
(0.0756)
(0.0354)
(0.0642)
(0.0441)
Observations
4,850
4,659
4,850
4,850
Source: Authors’ calculation based on HEIS.
Notes: Dummy variables for each governorate included in the analysis but coefficients not shown. Values in parentheses are
robust standard errors.
1 Poor defined as the 2 first deciles of per capita average expenditures; 2 Reference category is rural; 3 Reference category is
no female earners in the household; 4 Reference category is 15-34 years old; 5 Reference category is no education; and
6 Reference category is source of income from salaries and pensions.
19
Households are more likely to participate in agro-processing and agriculture when they have
more women contributing to income generation, highlighting the role of women for these
households. In contrast with households in other sectors, like services and industry, it is more likely
to find females earners among households in agriculture and agro-processing as suggested by the
positive association between the number of female earners and the households’ participation in
these sectors. The importance of women for the agro-processing sector is also evident, as seen in
the negative correlation of a household having a male head and agro-processing type (-0.253).
Households in agriculture are also less likely to rely on formal activities for income
generation. Compared to households whose main income source are salaries or pensions,
agricultural households are more likely to depend on remittances and income from business (1.038
and 0.846, respectively). Also, non-Jordanian households are more likely to be involved in
agricultural activities than Jordanian ones, as can be seen from the negative association between
having a Jordanian household head and agricultural type households (-0.177). The same relationship
is also seen for households in agro-processing (-0.491).
5. THE FUTURE OF AGRICULTURAL AND AGRO-PROCESSING
DEVELOPMENT IN JORDAN
These analyses highlight several opportunities and challenges that are important for the future
development of agriculture and agro-processing in Jordan.
Jordan has gone through several reforms that have contributed to make the agricultural
sector more productive and competitive. Agricultural marketing policies in Jordan comply with
World Trade Organization (WTO) regulations since the country's accession to the WTO in 2000.
Other agreements that had an impact on agricultural trade include the Great Free Trade Zone
between Arab countries which has gradually removed all custom duties among members between
1998 and 2005. Jordan also signed the Jordan-EU Association Agreement in 2000, which provides for
the establishment of a free trade area with exemption in custom duties on Jordanian exports of
agricultural products. Jordan has also signed several bilateral trade agreements with a number of
countries, such as USA and Singapore, since 2001. In particular, the Free Trade Agreement (FTA) with
USA has opened the door for a wide range of Jordanian agricultural products to enter the US market
with exemption or reduction of custom duties. However, the majority of Jordan's agricultural
exports, particularly horticultural products, are directed towards Arab countries, which – in contrast
to more sophisticated markets in the EU and USA – tend to have less strict quality and packaging
requirements (Sidahmed et al. 2012).
In addition to considering higher quality and higher value export markets, there is still scope
for improving productivity. Comparing Jordan's yields with those of Egypt, Lebanon, and Tunisia
shows that Jordan has the highest yields for vegetables, but relatively lower yields for fruits and
citrus fruits. Consolidation of fragmented lands, for instance, could lead to more diversification, use
of modern technologies, and the expansion of greenhouse production of vegetables for export.
High-value products, such as medicinal herbs and aromatic plants, also have good potential for
expansion, particularly in locations suitable for production (Sidahmed et al. 2012). Importantly,
these commodities possess high water use efficiency and have relatively high economic returns per
unit area in comparison with conventional crops.
The most important opportunity may be growth in agro-processing industries. The
combination of rapid urbanization and population growth leads to increased demand for processed
foods, which presents an opportunity for expanding agro-industry to meet this demand with local
20
production (Bereuter, Glickman, and Reardon 2016). The agribusiness sector also represents an
opportunity for attracting capital from both the domestic private sector and foreign direct
investment.
The major challenge facing agricultural growth in Jordan is limited water and land resources.
According to the Ministry of Agriculture, of a total land area of 89,000 km2, 10 percent of the
Kingdom's land is arable and only 2.7 percent is now being cultivated (approximately 2,000 km2).
Moreover, Jordan is ranked among the world's most water scarce countries, with a water deficit of
312 mcm (million m3) in 2013 (MWI 2013). There is some evidence that Jordan has made progress in
improving water efficiency due to the adoption of drip irrigation and related farming technologies,
especially in the Jordan Valley, where these improvements have led to higher productivity (Van den
Berg et al 2016). However, further efficiency gains are needed, as a large share of scarce water
resources is diverted to agriculture through the public irrigation system in the Jordan Valley as well
as the private underground scheme in the highlands (Molle, Venot, and Hassan 2008). In fact, the
share of agriculture land under irrigation has increased about 7 percent in 2001 to around
10 percent in 2014, whereas irrigation constituted about 53 percent of total water use in Jordan.
Rainfed agriculture is especially vulnerable to climate change, which could lead to changes in
farming systems (Al-Bakri et al. 2011). Climate change is expected to put pressure on rural
communities to build up their adaptive capacities. For example, the adoption of soil water
conservation is considered an important adaptation measure in order to increase available water to
crops. In addition, there is scope for improved marketing, as the agriculture sector also suffers from
weak linkages between production and marketing with an underdeveloped marketing information
system (UN 2007; GOPA 2014).
6. SUMMARY AND CONCLUSION
Jordan has been affected by ongoing conflicts in neighboring countries over the past years, which
resulted in slower economic growth and an increase in youth unemployment and food insecurity. In
response to these challenges, the Government of Jordan has set itself ambitious targets in the
country’s Economic Growth Plan, the National Strategy for Agricultural Development, and the
National Strategy for Food Security. In support of the implementation of these, the present paper
has analyzed the role of agriculture and farmers in the Jordanian economy, the role that productivity
and structural change can play for fostering agricultural growth, and the role agro-processing may
play for development in Jordan.
The role of agriculture has been increasing over the past years, albeit from very low levels.
Agricultural growth rates have started to pick up over the past years, which contributed to an
increase of agriculture’s share in GDP from 2.3 percent in 2000 to 4.2 percent in 2015. This growth
was mainly driven by increasing labor productivity and rising yields for some crops, particularly
vegetables. Structural changes within the sector have also contributed to growth by moving
agricultural production towards high value crops, such as fruits and vegetables. Yet, there is still a
potential for increasing agricultural growth, as foreseen in the agricultural development strategy, by
further structural change, further increasing productivity, and, perhaps most importantly, by
improving linkages between production and marketing. In addition to improving local markets,
Jordan can also capitalize on its free trade agreements with major partners, such as USA and the EU,
by targeting high quality production with stricter packaging requirements.
As one of the results of growing labor productivity, the share of households depending on
agriculture has been decreasing over time. Our household analysis shows that the young and the
21
educated households tend to move out of agriculture, whereas older and less well-educated
households tend to stay in agriculture. One way to promote innovation in agriculture and make farm
households better off would be to make the sector more attractive for educated youth. Our analysis
suggests that moving out of agriculture and into agro-processing can make people better off, as
households in agro-processing are less likely to be poor in comparison with other types of
households. In parallel, the role of migrant labor in agriculture appears to have been increasing,
particularly with the recent influx of Syrian refugees in Jordan. While more research is needed on the
role of migrant labor in agriculture, it is likely that these migrant laborers have filled a gap left by
Jordanians that migrated out of agriculture and to urban areas. This incoming non-Jordanian labor at
least sustained and potentially also supported growth in the agricultural sector.
While there is still potential for agricultural growth, the role of the agro-processing sector in
Jordan is more important and has higher potential for growth going forward. According to latest
available estimates, agro-processing activities make up 12.5 percent of GDP and make up an
estimated 13.6 percent of employment. Our analysis also suggests that women play an increasingly
important role for agro-processing, especially in rural areas, where about one in every five
households in agro-processing was headed by women. Therefore, in addition to the agro-processing
sector’s role for the rural economy, the sector can also play an important role for increasing
household incomes, women’s incomes, and potentially youth employment. Anecdotal evidence
suggests that agro-processing can be a more attractive employer for the country’s youth than
agriculture.
In sum, to further promote rural transformation for economic development and job
creation, Jordan should continue its path of transition towards higher value agricultural and agro-
processing production. There still also is scope for improving agricultural productivity, especially for
fruits, and for the expansion of greenhouse production and adoption of high value and high water
use efficiency crops, such as medicinal herbs and aromatic plants. Perhaps most importantly,
incentivizing the expansion of agro-processing industries in rural areas to serve domestic and export
markets should be considered.
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The Middle East and North Africa Regional Program is managed by the Egypt Strategy Support Program (EgSSP) of the
International Food Policy Research Institute (IFPRI). The research presented here was conducted as part of the CGIAR Research
Program on Policies, Institutions, and Markets (PIM), which is led by IFPRI. This publication has been prepared as an output of
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Copyright © 2018, Remains with the author(s). All rights reserved.
IFPRI is a CGIAR Research Center | A world free of hunger and malnutrition
About the Author(s)
Jose Luis Figueroa is an Associate Research Fellow for the Egypt Strategy Support Program in the
Development Strategy and Governance Division of IFPRI, based in Cairo. Mai Mahmoud is a Senior
Research Assistant in IFPRI’s Egypt Strategy Support Program, based in Cairo. Clemens Breisinger is
Program Leader and Senior Research Fellow in the Egypt Strategy Support Program in the Development
Strategy and Governance Division of IFPRI based in Cairo.
Acknowledgments
This report has been prepared as part of an agreement between IFPRI and the Food and Agriculture
Organization of the United Nations (FAO). The authors are grateful for constructive comments from the
FAO’s team at the Regional Office for the Near East and North Africa, particularly those from David Sedik
and Abdessalam Ould Ahmed. We also thank Nasredin Hag Elamin, the Representative for the FAO in
Jordan, for useful comments on the agricultural sector in Jordan. Responsibility for all errors and omissions
lies with the authors.
