The Jordanian primary sector, which accounts for about 3% of GDP, is set to witness a slight slowdown in 2011. According to the EIU estimates, the sector would grow by 2.3% this year, down from a relatively higher growth of 2.9% in 2010.

Following protests against the difficult living conditions, the government announced within its economic package a direct support to the agricultural sector. The Prime Minister noted that the government turned to the social economic policies to protect citizens from market manipulation of food prices, saying the government would respond "immediately and firmly" to curb unjustified hikes in prices of basic commodities via the Supplies and Monitoring Department at the Ministry of Industry and Trade. The weight of food prices in Jordan's CPI is around 37%. According to the FAO, food prices are set to increase in 2011 but not to the levels of 2008.

The government also said it would work on boosting the contribution of the agriculture sector to the gross domestic product and would allocate US$ 42.4 million to support small farmers. In addition, it would continue subsidizing gas cylinders at an annual cost of US$ 141.4 million, as well as fodder, which would cost the treasury US$ 56.6 million. The measures include lowering by 1% the interest rate on loans worth US$ 14,144 or more extended by the Agricultural Credit Corporation.

An important move initiated by the Ministry of Agriculture in March 2011, in partnership with the private sector, was to adopt a new mechanism to regulate the export of fruit and vegetables. This was initiated after some foreign importers complained that Jordanian fruits and vegetables entering their countries have excessive levels of pesticides. The new mechanism involves compiling a "Golden List", meaning that only farmers and traders whose fruits and vegetables prove to be up to international standards would be given export permits.

The article above has been published as a part of Bank Audi`s The Jordan Economic Report, May 2011. It can be accessed via the internet at the following web address: http://www.banqueaudi.com.