Algarve's Agriculture Booms: €811 Million Annual Value and Surprising Growth in Avocado and Citrus

Algarve's Agriculture Hits €811 Million in Gross Value Added

The Gross Value Added (GVA) of agriculture in the Algarve reached €811 million in 2023, making the primary sector account for 4% of the region's GVA, compared to 2.4% nationally. This indicates that the Algarve is more specialized in agriculture than the national average, with a weight 46% higher.

These surprising data were revealed on Thursday, August 28, during the presentation of the study "Economic Assessment of Algarve Agriculture" in Lagoa, commissioned by the Regional Coordination and Development Commission (CCDR) and conducted by Sandra Primitivo's team at Ernst & Young. The study aims to reinforce agriculture as a strategic asset for the region and highlight the role of public policies in enhancing sector sustainability.

Despite tourism being the dominant economic sector, agriculture has been recovering importance, with a 6.4% growth in the primary sector's weight between 2014 and 2023. During the pandemic, when tourism halted, agricultural GVA grew, demonstrating resilience and helping mitigate economic decline.

Key Crops and Their Economic Impact

Citrus fruits occupy nearly half (47.3%) of the agricultural area in the Algarve, equivalent to 16,384 hectares, followed by nuts, mainly carob (14.6%, 5,071 hectares), and subtropical fruits, mostly avocado (7.2%, 2,500 hectares).

In terms of production value, citrus leads with €181 million in 2023, but avocado is a close second at €95 million, followed by carob at €60 million. The relative weight of citrus has decreased from 48% in 2019 to 35% in 2023, while avocado's share rose to 18%, and carob's to 12%.

Productivity and Growth Trends

Avocado is by far the most productive crop, yielding €35,216 per hectare, followed by tangerine (€18,236/ha), orange (€10,635/ha), and carob (€4,742/ha). Avocado has seen the strongest growth in production and area, driven by high national and international demand.

Citrus and subtropical fruits have registered the highest growth rates over the past decade. Exports of agricultural and food industry goods are dominated by citrus, which nearly doubled in value from 2017 to 2023, representing 70-80% of total Algarve exports.

Challenges and Future Prospects

Challenges include irrigation restrictions, water scarcity with an expected 5-35% decrease in precipitation, and labor shortages. Possible solutions involve building the Foupana and Alportel dams and connecting Alqueva water to the western Algarve.

José Macário Correia of the Portuguese Farmers' Confederation highlighted that 15,000 of the 18,000 agricultural workers in the Algarve are Asian, emphasizing their crucial role and the need for better housing and conditions.

The study underscores agriculture's role as an economic stabilizer during adverse periods and its contribution to diversifying the economy, with 52% of the €811 million GVA impact staying in the Algarve through related industries and commerce.

A second phase of the study is planned to deepen these findings, with CCDR Algarve president José Apolinário noting the sector's resilience, modernization, and innovation.