Identifier
Created
Classification
Origin
08TRIPOLI554
2008-07-09 16:12:00
UNCLASSIFIED
Embassy Tripoli
Cable title:  

LIBYAN MEASURES TO CHECK RISING FOOD COSTS AND ACQUIRE

Tags:  ECON EINV EAGR EAID ETRD PGOV LY 
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P R 091612Z JUL 08
FM AMEMBASSY TRIPOLI
TO SECSTATE WASHDC PRIORITY 3666
INFO DEPT OF AGRICULTURE USD FAS WASHINGTON DC
DEPT OF COMMERCE WASHINGTON DC
AMEMBASSY CAIRO 
AMEMBASSY RABAT 
AMEMBASSY TUNIS 
AMEMBASSY ALGIERS 
AMEMBASSY TRIPOLI
UNCLAS TRIPOLI 000554 


E.O. 12958: N/A
TAGS: ECON EINV EAGR EAID ETRD PGOV LY
SUBJECT: LIBYAN MEASURES TO CHECK RISING FOOD COSTS AND ACQUIRE
'VIRTUAL WATER'

REF: TRIPOLI 438, STATE 39410


UNCLAS TRIPOLI 000554


E.O. 12958: N/A
TAGS: ECON EINV EAGR EAID ETRD PGOV LY
SUBJECT: LIBYAN MEASURES TO CHECK RISING FOOD COSTS AND ACQUIRE
'VIRTUAL WATER'

REF: TRIPOLI 438, STATE 39410



1. (U) On July 7th, the Political/Economic Assistants met with
the Resident Representative of the Food and Agriculture
Organization of the United Nations (FAO),Dr. Saad Elmedani
Ahmed. According to Dr. Ahmed, the Libyan government (GOL) has
generally taken prudent steps to protect Libyans from the
worldwide foodstuffs shortages by continuing subsidization of
essential staples while reducing fees and taxes on the import
and distribution of food supplies in general.


2. (U) According to Dr. Ahmed, the General People's Committee
for Economy, Trade and Investment has recently taken steps to
mitigate the effects of worldwide increases in food prices by
boosting the purchasing power of ordinary citizens. These
include: production, consumption, and import service tax
exemptions for basic commodities; production tax exemptions for
locally-produced products used in the production of other goods;
production and consumption tax exemptions of production and
operation tools; a 75% fee reduction for laboratory analysis of
imported goods; a 50% reduction of fees for handling, storage
and port processing of imported produce; and the establishment
of a fund to achieve an equilibrium between prices and the
average citizens' incomes to maintain their purchasing power and
protect Libya's consumer economy from international prices
fluctuations.


3. (U) Dr. Ahmed also mentioned Libyan efforts to use "virtual
water" as a solution to its agricultural problems. He described
"virtual water" as a mechanism by which water-poor states can
achieve water and food security by purchasing water-intensive
agricultural commodities from water-rich states that produce a
natural surplus of these products. Libya is developing
partnerships with countries like Mali and Sudan in the field of
virtual water trade; Libya invests in irrigated agriculture in
those countries in exchange for the right to purchase all of the
crops produced in those areas in which Libya has invested. The
produce is then bought by the GOL at a below-market price,
offsetting the initial investment costs. According to Dr.
Ahmed, the scheme benefits both countries: Libya gets
water-rich, high-quality agricultural products for its market
and Sudan and Mali are able to provide employment and a steady
export market to more farmers.

GODFREY