Morocco says no funding threat to key farm reforms

By Amena Bakr and Zakia Abdennebi

SKHIRAT, Morocco (Reuters) - Morocco has the resources to press ahead with farm sector reform, even if many foreign investors are unwilling to commit for now, industry officials said.

Foreign investment in the north African country had fallen by a third in September compared to a year earlier, according to government figures, as the global banking crisis made investors loath to venture into new markets,

Morocco has said it needs to muster 150 billion dirhams to upgrade and diversify agriculture, which suffers from droughts and poor yields.

A 10-year farm reform drive seeks to replace cereals, which account for 75 percent of Morocco's arable land of 7.5 million hectares, with more lucrative crops such as olives and boost food exports as trade barriers fall.

Gulf Arab investors should be ideal partners for the plan as their countries need to secure food supplies after prices rose sharply.

Yet big inward investment deals have been largely absent.

At a two-day conference near the Moroccan capital Rabat, local officials sought to convince Gulf investors that heavy bureaucracy and complex land ownership rules, long seen as decisive obstacles, are a thing of the past.

The charm offensive has worked in some cases -- Saudi Arabia's Tabuk Agriculture Development Co. said it planned to invest about $10 million in Moroccan olive farming early next year. It started looking at opportunities in Morocco in 2008.