2020 Cyprus Country Report

Over 50% of agricultural exports go the
EU, followed by other European countries, the
Middle East and Asia. Although unlikely that
Cyprus’ agricultural sector will ever regain its
high-performing levels of the 1960s, when it
contributed 20% to the GDP, there is no doubt
that its economic significance is steadily growing.
The value of agricultural production plunged
during the 2012-2014 economic crisis but picked
up again in 2015 and grew by an impressive 12%
over the next two years. In 2017, the value of agricultural
production exceeded pre-crisis levels,
reaching nearly €740 million, accounting for
2.1% of GDP compared to 1.8% in 2014. Niche
crops and traditional products unique to Cyprus
are leading the way in this revival, with exports of
halloumi alone showing a strong upward swing
over the past decade.
HOME OF HALLOUMI
Halloumi is one of the country’s most unique
trademarks worldwide. The value and quantities
of halloumi shipped around the world has grown
every year, and currently totals over 30 million
kilos worth more than €200 million a year and
is exported to over 40 countries. With the popularity
of halloumi rising and more markets steadily
being opened, producers predict that exports
could reach over €300 million by 2023.
To protect the heritage of the cheese, the name
‘halloumi’ is now registered in the European
Union as a Community Collective Trade Mark.
Cyprus also retains the trademark in a number
of other countries, including the US. It holds
this classification in Jordan, and the Ministry of
Commerce is in the process of registering it in
other Middle Eastern countries. Cyprus is also
working towards achieving the classification of
halloumi as an EU PDO, which could further
boost the brand appeal of the product.
Identified as a key agricultural product and
export, the government is investing €35 million
to increase production of sheep and goat milk
from which halloumi is traditionally made. The
number of sheep and goats is to be increased by
35,000, boosting milk production from three to
14 million cubic litres a year by the end of 2020.
Grants of €20,000 are available under an EU programme
for first-time farmers aged between 18
and 40 who raise these animals, in a bid to attract
educated young people back into agriculture.
Today, the production of the famous squeaky
cheese is associated as much with high-tech labs
as it is with a rustic lifestyle, with many boutique
producers also making organic versions to cater
to discerning market demands.
The conservation
and sustainable
management of our
natural and biological
resources is of paramount
importance for the
overall well-being of
our environment and
our citizens. In Cyprus,
the preservation of our
natural environment
has been set as
our top priority, for
environmental, social,
economic, and ethical
reasons. Recently, Cyprus
has approved the National
Biodiversity Strategy and
the Action Plan 2020-
2030, which includes
a broad framework of
objectives aiming to
address the threats to
biodiversity and a series
of measures to meet
these objectives, with a
budget exceeding €22
million. There is no
doubt that the future
holds many challenges.
Protecting nature and
the environment is a
prerequisite for building
viable societies that
address the needs of
their citizens. No form
of development can
be sustainable, if the
natural wealth of our
country is sacrificed for
short term benefits.
Costas Kadis
Minister of Agriculture,
Rural Development
and Environment
CORONA IMPACT
The coronavirus pandemic has had a significant
impact on global trade and in Cyprus it has affected
multiple sectors. Agriculture has felt the
crunch and the government has rolled out measures
to help struggling farmers. With a virtually
non-existent tourism sector at the moment, there
is a complete loss of demand from restaurants
and hotels forcing farmers who had exclusive
cooperation with catering companies to dump
much of their produce. Farmers are losing out big
time as they have already invested in cultivation
based on previous orders by suppliers, who are
now buying only a fraction of the orders placed
earlier in the year.
The pandemic lockdown has coincided with
the harvest of many crops and the sharp drop in
demand is proving devastating for many. Also
the blanket commercial flight ban has hit hard as
there are virtually no planes flying fresh produce
abroad. Other affected groups include sheep and
goat breeders due to reduced demand and a lower
price of meat, vegetable and herb growers, as well
as florists and producers who sell their products
at public markets. So far, top exports like halloumi
and potatoes have not been adversely affected
by the Covid-19 pandemic
In March 2020, additional support for farmers
came from free water supply from governmental
water works, but farmers are demanding more
substantial support, such as electricity-use subsidies,
to ensure the sector survives this difficult
time. In May 2020, Cyprus approved an additional
€4.6 million in support funds to ensure farmers
can continue to produce safe and quality products.
Part of this financing will be covered by a
redistribution of European co-financed resources
taking advantage of the CAP provisions. Another
boost came in June 2020, with the European
Commission approving a €1.8 million scheme to
support farmers and address the liquidity needs
of agricultural holdings to help them continue
their activities during and after the coronavirus
outbreak.
SUCCESS IN NICHE CROPS
Due to its small size, Cyprus cannot compete
with countries that produce huge volumes at low
cost, but what the country can excel at is quality,
organic farming, bioproduction and superfoods.
The decades-old success of the famous Cyprus
potato provides a good example of what can be
achieved by combining quality produce with
strong marketing campaigns in key markets.
The delicious flavour and quality, as well as their
early harvest, make Cypriot potatoes one of the
island’s most important agricultural export prod-
Sector Profile
Country Report CYPRUS 2020 51