The prospects of the Customs Union Agreement and prospected accession to the European Union by 2003/04 has opened new horizons for further agricultural and rural development in Cyprus. The first major step has already been done in 1998 with the abolishment of tariff rates for agricultural products and most other commodities. Traditionally, agriculture was one of the most important sectors in the country's economy. In 1960 agriculture was providing employment to 40 % of the economically active population and had a share to the GDP of around 20 %. Exports of agricultural products accounted for about 50 %, while almost all agricultural inputs had to be imported. In the 70's the contribution of the sector to the GDP dropped and had a share of around 5.7 % in 1995. Nonetheless agriculture is still a way of life for a significant segment of the population, providing employment for 11.6 % of the working population and food not only for the islands' population but also for a fast growing number of tourists and supplies the raw materials to agro-industries. Therefore the agricultural sector deserves special attention in the integration and harmonisation process of Cyprus and the Cypriot economy into the EU:
The proceeding harmonisation and political adjustments of the Cypriot agriculture with the Common Agricultural Policy (CAP) of the European Union is having a great impact on the domestic agricultural market and the export market of Cyprus. Because of limited supply and demand in the economic market of small islands the export market plays an important roll in the Cypriot economy. Since 1960 the value of domestic exports of goods has grown by more then ten times. This growth was the result of increases in exports of both agricultural and industrial products, with a share of 32 % for raw agricultural products and a considerable amount of industrial products of an agricultural origin, such as processed fruit and vegetable.
The structural analysis shows the deficits of the Cypriot agriculture and compares it with those in other mediterrean countries.
The structural analysis looks at:
These factors are compared to the equivalent structural development factors of the EU member countries. To determine the structural development problems of Cyprus it is necessary to analyse the interior development of the Cypriot agriculture, including the regional disparities.
Crucial endogenous development factors are:
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