The history of Libya's agricultural development has been closely related, although inversely, to the development of its oil industry. In 1958, before the era of oil wealth, agriculture supplied over 26 percent of GDP, and Libya actually exported food. Although gross levels of agricultural production have remained relatively constant, increasing oil revenues have resulted in a decline in agriculture's overall share of national income. Thus, by 1962 agriculture was only responsible for 9 percent of GDP, and by 1978 this figure had tumbled to a mere 2 percent. Even more striking than the downward trend in agriculture's share of GDP was the rise in food imports. In 1977 the value of food imports was more than 37 times greater than it had been in 1958. Therefore, a large part of the rising oil wealth between 1960 and 1979 was spent on imported food products.
To some extent, these trends were neither surprising nor disturbing. Libya's comparatively strong agricultural position in 1958 masked an even greater level of general poverty. Agriculture during the 1950s was characterized by low levels of productivity and income. The advent of oil wealth provided many peasants with opportunities to engage in less exacting and more remunerative work in the urban areas, resulting in a huge rural migration to the cities. In addition, Libya is not well endowed with agricultural resources; over 94 percent of the land consists of agriculturally useless wasteland. The large number of people engaged in agriculture prior to 1960 reflected, therefore, not a thriving agricultural economy but merely the absence of attractive alternatives.
The number of peasants who gave up farming to look for jobs in the oil industry and in urban areas rose dramatically throughout the 1955-62 period. Another adverse effect on agricultural production occurred during the 1961-63 period, when the government offered its citizens long-term loans to purchase land from Italian settlers. This encouraged urban dwellers to purchase rural lands for recreational purposes rather than as productive farms, thereby inflating land values and contributing to a decline in production.
Since 1962 Libyan governments have paid more attention to agricultural development. The government has given inducements to absentee landlords to encourage them to put their lands to productive use and initiated high agricultural wage policies to stem the rural-to-urban flow of labor. These policies met with some success. Production levels began to rise slightly, and many foreign workers were attracted to the agricultural sector. Agricultural development became the cornerstone of the 1981-85 development plan, which attached high priority to funding the GMMR project, designed to bring water from the large desert oasis aquifers of Sarir and Al Kufrah. Agricultural credit was provided by the National Agricultural Bank, which in 1981 made almost 10,000 loans to farmers at an average of nearly LD1,500 each. The substantial amounts of funds made available by this bank may have been a major reason why so many Libyans--nearly 20 percent of the labor force in 1984--chose to remain in the agricultural sector.
Despite the greater attention to agriculture, however, in 1984 this sector only accounted for about 3.5 percent of GDP, and Libya still imported over 1 million metric tons of cereals (up from 612,000 metric tons in 1974). Also in 1984, the average index of food production per capita indicated a decline of 6 percent from the period 1974 to 1976. On the average, about 70 percent of Libya's food needs were met by imports during the mid-1980s.
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