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Food security - Algeria boosting self-sufficiency in agricultural products

Friday, 08 April 2011 21:25

In a bid to halt rising commodity prices and boost self-sufficiency, Algeria has introduced a number of new projects to improve the country’s food security – including irrigation projects, tax benefits for local producers and support for private sector initiatives – which are increasingly meeting with success, Global Arab Network reports according to OBG.

The government is aiming to discourage imports and raise local production to help boost self-sufficiency and limit the country’s vulnerability to external commodity shocks. To help limit imports, the administration has been increasing Customs duties, with the 2010 budget raising taxes on wheat imported by private firms. In late 2010 the government decided to reintroduce duties on 36 agricultural and agro-alimentary products imported from the EU that had been suspended as part of Algeria’s association agreement with the bloc, though some duties on food imports were again suspended temporarily in response to rioting over food prices in early January.

The food riots emphasised the delicacy of pursuing such a policy, as President Abdelaziz Bouteflika seeks to strike a balance between improving national food security and affordable prices, but imports are nonetheless declining. For example, while the country is the world’s fourth-largest importer of wheat, purchases from abroad are falling. According to data from the Algerian Customs service’s National Centre for Information and Statistics, in 2010 the country imported 5.23m tonnes of wheat, down 8.5% from 2009’s 5.72m tonnes. The decline in the value of imports was even larger at 31.7%, thanks to lower prices, with imports having declined from $1.83bn in 2009 to $1.25bn in 2010. In January and February 2011 the country reportedly bought 1.85m tonnes of wheat – most of it from Algeria’s main supplier, France – to secure supplies for the year ahead.

Cereal imports fell from around $5.4bn in 2009 to $5.2bn in 2010, according to Rachid Benaissa, the minister for agriculture and rural development. While this may seem to bode ill for the country’s available supply given the fact that the domestic 2009/10 cereals harvest fell to 4.6m tonnes from 6.2m tonnes the previous year due to drought, there are a number of projects under way to increase domestic crop production. One measure being taken to boost local production is the expansion of irrigation systems. The government plans to increase the irrigated surface area – which accounts for just 5% of Algerian agricultural land but contributes around 40% of the total value of agricultural production – from around 400,000 ha to 1m ha by 2015.

As part of this endeavour the National Irrigation and Drainage Office announced a project in late February 2011 that will see the irrigation of around 9000 ha of land in the El Esnam plain in the Bouira province and the Sahel valley in the Bouira and Bejaia provinces using water from the nearby Tilesdit and Tichy Hafta dams. With the launch expected in early summer, the project is projected to create 8300 jobs and boost annual agricultural production from the area fourfold, from around 30,000 tonnes per year to more than 120,000 tonnes.

The milk and dairy product segments are also being targeted for increased output under the drive for improved food security. Local production currently stands at just 1.3bn litres, well behind the annual consumption of around 3.3bn litres. To get closer to meeting demand, the 2011 budget offers tax exemptions to milk producers. Government-backed projects also aim to improve productivity and efficiency in the sector through training programmes.

In February the country’s Technical Institute for Livestock Farming signed an agreement with French organisation Bretagne International, an association that promotes international development of companies in Brittany, to provide training for farmers in rearing cows and producing milk in the provinces of Blida, Relizane and Souk Akhras. The project also aims to encourage cooperation between Algerian and French businesses. Benaissa told the press in December that the country imported 24,000 cows in 2010, up 60% on 2009 figures.

Domestic sugar production is also set to receive a boost following the announcement of plans by local company La Belle and France’s Cristal Union to open a sugar refinery. The €70m development will be located in Ouled Moussa in the Boumerdes province. Cristal Union is to take a 35% stake in the project, which will have an initial annual capacity of 350,000 tonnes. This will double to 700,000 tonnes after four years, by which time a second unit will have been completed. The installation will be the country’s fifth sugar refinery. Domestic firm Cevital, which is reported to have a market share of 80%, currently dominates the local sugar market. The country imported around 1m tonnes of raw sugar in 2010, at a cost of around $495m.

The government is also supporting private sector efforts to improve performance in the agricultural sector. In December 2010 Benaissa gave his backing to the launch by Algeria’s Benamor Group of a network aimed at encouraging interaction between wheat farmers and flour millers. The intention of the project is to improve the quality of wheat produced domestically. The network is based on a similar one in the tomato industry, which, according to Benamor statistics, helped increase annual productivity from 15 tonnes per ha to 60 tonnes.

Should the government initiatives bear fruit, then the increased domestic production will go a long way to reducing the dependency on imports, buffering the country’s economy from external commodity shocks and increasing the efficiency of the local agricultural sector. This, in turn, should help keep prices lower and shelves stocked.

Global Arab Network

This article is published in partnership with Oxford Business Group

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Last Updated on Friday, 08 April 2011 21:34

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