TRIPOLI, LIBYA — Libya, on the north coast of Africa, can produce only a small part of the food its population needs. Years of instability have meant a series of challenges for the wheat supply chain that supplies most of the diet of the country’s people.

The United States does not have diplomatic representation in Libya, but in 2020, the US Department of Agriculture’s Foreign Agricultural Service (FAS) office in Morocco prepared a report looking at the prospects for US exports to the country. 

“The nation is characterized by an unstable government, conflict, opaque regulations, petroleum revenues, an underperforming agricultural sector, and about $3 billion worth of agricultural imports from around the world every year,” the FAS said. “Libya faces economic instability, reflected in erratic GDP growth.”

Agriculture makes up 1.3% of Libya’s GDP, but the ongoing civil war, worsening climate conditions, and limited arable land has led to a decline in production, the FAS said. 

“Domestic agricultural production only met 25% of national demand in 2018, resulting in a strong reliance on imported agricultural products and processed foods to meet its needs,” the FAS said. “The continuation of conflict in Libya will be a major factor in the country’s future economic trends. Libya poses unique opportunities and challenges for US agricultural exports.”

The International Grains Council (IGC) in its Aug. 18 Grain Market Report forecast Libya’s 2022-23 wheat production at 100,000 tonnes, a prediction unrevised from the previous month’s report and unchanged from 2021-22.

The country’s imports of wheat are put at 1.3 million tonnes in 2022-23, a forecast unchanged from the previous month and from the previous year’s imports. Imports of barley in 2022-23 are forecast at 500,000 tonnes, an unrevised figure, which is down from 900,000 the year before.

The United Nations Food and Agriculture Organization (FAO), in a Global Information and Early Warning System Country Brief, dated Aug. 16, said that “harvesting of the 2022 winter grain crops concluded in July, harvesting of small quantities of spring‑sown millet is being finalized.”

“Overall rainfall amounts in the main producing areas along the coast were satisfactory and cereal crop production in 2022 is estimated at a slightly below‑average level of 209,000 tonnes, unchanged from the previous year,” the FAO said. “Following the ceasefire agreement in October 2020, the security situation in the country has improved, facilitating farmers’ access to the fields, but the risk of military clashes remains. Farmers report that power cuts and high prices of inputs, including seeds, water, fuel and machinery, continue to constrain their ability to cultivate land.”

The FAO explained that agricultural production also is constrained by the landscape, pointing out that only about 12% of the total area of 15.4 million hectares is arable.

“Although 470,000 hectares are suitable for irrigation, only some 240,000 hectares are currently irrigated due to concerns over the depletion of underground water,” the FAO said. “Cereals are cultivated in the coastal regions, where rainfed production or cropping with supplementary irrigation is possible, and in some arid areas in the south under full irrigation.

“The country relies heavily on imports (up to 90%) to cover its cereal consumption requirements (mostly wheat for human consumption and barley for feed). Between 2016 and 2020, the country sourced over 30% of its wheat imports from Ukraine, and 20% from the Russian Federation.”

The FAO also noted that almost 65% of total maize imports of 650,000 tonnes and 50% of total barley imports of 1 million tonnes originated from Ukraine, making the country vulnerable to disruptions in shipments from the Black Sea region.

Economic woes, political instability

Libya’s economy depends on the production of oil. 

“After a contraction of over 20% year-on-year in 2020, the World Bank estimated that the Libyan economy grew by over 30% in 2021, driven by strengthening global oil prices and improved political stability,” the FAO said. “Despite elevated international crude oil prices benefiting the economy that is reliant on exports of hydrocarbons, disruptions to oil production and security tensions following the delay of national elections in December 2021 make predictions of economic growth in 2022 unreliable.”

The Geneva, Switzerland-based humanitarian initiative REACH published an in-depth report, “Breaking Down the Chain: Understanding the Supply of Wheat and Bread in Libya,” in 2020. It starts by explaining that “almost a decade of instability and conflict has placed considerable strain on market systems for key commodities in Libya, including the bread and wheat flour supply chain.” 

“Alongside this, the country is experiencing a monetary and fiscal crisis,” REACH added, also highlighting the effects of the pandemic. REACH also stressed the importance of bread in the diet, and, therefore, to political stability, in Libya, as in the whole of the Middle East and North Africa region. The report is based on a series of interviews with “key informants” in the grain supply and processing chain. 

“The supply chain seems to have remained largely functional and bread is generally available for consumers,” they concluded. “However, the growing role of the private sector, combined with disruptions to supply and the lowered capacity of key supply chain actors, has caused several vulnerabilities within the market system.” 

The subsidy system has become irregular and inefficient, but despite the strain put on the supply chain by COVID-19, REACH found that it remained functional. 

“The supply of wheat continues to flow (uninterrupted) and bread remains largely available to consumers, even if prices have increased,” REACH said. 

Small milling sector

Workers in the milling sector interviewed by REACH told the researchers that the estimated 20 functioning mills in Libya are spread around the country. They perceived the private sector’s role as growing, in step with growing reliance on privately imported and milled wheat. 

Public sector mills are owned by Tripoli-based Matahan, run by the western authorities and NMC, which is based in Benghazi, but operates mills in different parts of the country, including seven in the east — four milling wheat grain and three specialized in feed. 

Matahan, the National Mills and Feed Joint Stock Co., said it operates a chain of up to 20 mills and factories, providing more than two-thirds of the area of Libya with its various products: flour and semolina of both types or pasta in all its forms, in addition to the production of various types of animal feed.

“Bread and wheat flour are staple food items for Libyan households,” REACH said. “Wheat flour and wheat-derived products are heavily consumed in Libya and often used in the preparation of a multitude of local traditional dishes, making wheat flour an integral commodity in the Libyan diet and food security.” 

REACH puts the proportion of the food consumed in Libya that is based on wheat at around 80%. 

“Wheat flour is one of the five food items subsidized by the Price Stability Fund in the country,” the report said.

In 2018, Libya went through a “bread crisis.” 

“This period was characterized by severe shortages of wheat flour, the closure of many bakeries and inflated prices of bread and flour, causing hardship for consumers and undermining the country’s food security,” REACH said. “This crisis, compounded by ongoing liquidity issues and fuel shortages, continued until November 2018.” 

Flour and wheat generally have been available to consumers since the crisis ended, REACH said.

“That said, wheat flour accessibility and affordability can be hindered by multiple barriers, jeopardizing the well-being and food security of households in Libya, including price instability, movement restrictions impeding access to shops and markets, and insufficient and sporadic supply of subsidies,” REACH noted.