When Cyprus achieved independence in 1960, the backbone of its economy was agriculture, mostly small farms, and sometimes even subsistence farms. During the 1960s, irrigation projects made possible vegetable and fruit exports; increasingly commercialized farming was able to meet the demands for meat, dairy products, and wine from the British and United Nations troops stationed on the island and from the growing number of tourists.
In the early 1970s, Cypriot farms, still overwhelmingly small owner-run units, furnished about 70 percent of commodity exports and employed about 95,000 people, or one-third of the island's economically active population. Given the expansion of the manufacturing and service sectors, however, agriculture's importance was declining, and in the first half of the 1970s its share of GDP amounted to 18 percent.
The de facto division of the island in 1974 left the Turkish Cypriot community in the north in possession of agricultural resources that produced about four-fifths of the citrus and cereal crops, two-thirds of the green fodder, and all of the tobacco. The south retained nearly all of the island's grapegrowing areas and deciduous fruit orchards. The south also possessed lands producing roughly three-fourths of the valuable potato crop and other vegetables (excluding carrots), half the island's olive trees, and two-thirds of its carob trees. In addition, the south retained two-thirds of the livestock population.
The Turkish occupation caused a large-scale uncoordinated exchange of the agricultural work force between the northern and southern zones. The resulting substantial agricultural unemployment was countered by government actions that included financial assistance on easy terms to farmers. By 1978 the number of persons working in agriculture in the government-controlled area amounted to about 47,000, or 23 percent of the working population. Thereafter, however, agriculture's portion of the work force declined to 20.7 percent in 1979 and 15.8 percent in 1987. Its contribution to the economy also declined; from 17.3 percent of GDP in 1976 to 10.7 percent in 1979 and 7.7 percent in 1988. This share was important to the south's economy, however, and in 1988 value added in agriculture, at constant 1985 prices, was C£112.7 million.
Agriculture's share of the national economy declined further in the 1990s, as the Greek Cypriot economy became even more dominated by the service sector. The island's favorable climate and its location near its leading market, Western Europe, however, meant that farming remains an important and stable part of the overall economy. Government irrigation projects, subsidies, and tax policies encouraged farming's existence, as did research in new crops and new varieties of ones already in cultivation.
The Ministry of Agriculture and Natural Resources oversaw efforts to improve agriculture, fishing, and forestry. Subordinate to this ministry and assisting it were, among others, the Agricultural Research Institute, the Veterinary Service, the Meteorological Service, the Department of Water Development, the Department of Forests, and the Department of Geological Survey.
In addition to macroeconomic considerations, the government encouraged agriculture because it provided rural employment, which maintained village life and relieved urban crowding. Small-scale agricultural activity prevented some regions from losing much of their population. Part-time agricultural work also permitted urban residents to keep in contact with their villages and gave them supplemental income.