Jordan’s agri-food sector is an important source of income, employment, and exports and holds untapped potential. Around 25 percent of Jordan’s poor rely on agriculture for their income. Although primary agriculture contributes only 5.6 percent of GDP, when related value chain activities are counted, the broader agri-food sector contributes about 20-25 percent of GDP. Jordan’s average agriculture value-added as a share of GDP has risen from 3.5 percent in 2001–2010 to 4.8 percent in 2011–2018. Agricultural growth multipliers are generally estimated between 1.3 and 1.8 in developing countries, suggesting strong potential for investment in the agriculture sector to trigger wider economic growth. Currently, primary agriculture and the wider agri-food sector represent 3 percent and 14 percent of formal employment, respectively, masking a significant contribution to livelihoods through large numbers of informal employment opportunities. Increased investment in the agri-food sector can drive rural job creation both on-farm and all along the value chain, including processing, packaging, distribution, and related sectors such as services, input suppliers, transport, and communication. Jordan’s agri-food sector is facing three principal interlinked challenges: (i) ensuring food security in in the context of increasing exogenous shocks, (ii) worsening water scarcity and drought risk due to climate change and (iii) loss of competitiveness and export markets. Increasing exogenous shocks - rising food prices, post-covid economic recovery, and structural endogenous constraints – in tandem with limited domestic agricultural production and population growth pose a risk to Jordan’s food security. Climate change strongly impacts agriculture in Jordan through higher temperatures, decreased average precipitation, and increased variability in precipitation. This puts the productivity and resilience of both irrigated and rainfed agriculture at risk. The potential of Jordan’s agri-food sector has gone unrealized in recent years as a complex set of structural factors have driven declines in competitiveness for the local market and exports alike. Fresh fruit and vegetables offer major export opportunities but face challenges of (i) loss of key market access due to the Syrian and Iraqi civil wars and (ii) an inadequate enabling environment of public services. The World Bank’s agriculture program in Jordan seeks to address these challenges and consists of (1) technical assistance and analytical work related to building resilient food systems and improving the efficiency of agri-food value chains, and (2) operations with the objective to strengthen (i) climate resilience and sustainability and (ii) competitiveness and exports.
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