Morocco suspends VAT for agricultural production tools

The Moroccan government adopted a decree canceling the value-added tax on agriculture inputs in a bid to lower food prices.

The measure is in line with government efforts to curb inflation for farm produce after food inflation soared 20.1% in February.

The VAT exemption covers production equipment and other products used to maintain plants in good conditions.

Both the agriculture minister and the association of Moroccan fruits and vegetables producers (APEFEL) said the high prices in the Moroccan market were due to higher production costs notably those of fertilizers and pesticides.

Speaking to MPs this week, APEFEL representatives said ammonia and phosphates-based fertilizers saw prices rise 466% and 61% respectively, which was in turn repercussed on consumer prices.

This trend has not spared plastic (+30%), tomato plants (+5%), adhesives (+5%) and black strings (+60%). In addition to agricultural inputs, rising transport and energy costs have also had a significant impact on production costs, according to farmers.

Concerning tomatoes whose production was hit by a cold snap leading to higher prices, production cost rose from up to 623 dirhams per hectare to 778 dirhams per hectares, they said.