Turkish Cypriot Economy: Identifying and Analyzing Priority Agri-Food Value Chains

Abstract

Cyprus joined the European Union (EU) in 2004 as a de-facto divided island. The agriculture sector is an important driver for the Turkish Cypriot (TC) economy. The sector has significant linkages to other economic sectors, such as food processing and tourism. Manufacturing, which includes agri-food processing, produces predominantly dairy products and therefore relies heavily on domestic milk production. Agriculture also performs important social protection functions by providing income-generating activities for the rural population, thereby improving household consumption, food security, and the accumulation of durable assets. Improving agri-food value chain linkages can increase farm incomes, improve sustainability, and support the agriculture sector’s contribution to the economy. An analysis of value chains will help to identify business-to-business relationships that connect the chain, methods for increasing efficiency and profitability, and ways to enable businesses to increase productivity and add value. The report consists of three sections: a macro analysis focusing on competitiveness and comparative advantage analysis, a value chain analysis of the TCc halloumi/hellim subsector, and a value chain analysis of the TCc carob subsector. The latter two sections contain specific recommendations and actions to strengthen value chain competitiveness.