Algeria expands efforts to draw investments in agriculture

Sunday 07/05/2017
Gaining strength. A farmer harvests cauliflower at a field in Tipaza in western Algiers. (Reuters)

Tunis - Algeria’s agricultural sec­tor, which has struggled to recover from dec­ades of French coloni­alism and Soviet-style management, is gaining strength thanks to foreign investment.
“Without this production, $30 billion would go to pay for food imports ever year,” Minister of Ag­riculture, Rural Development and Fisheries Abdessalam Chelghoum said in April.
“We are now at a new stage of our farming development,” said Chelghoum. “We are encouraging and backing in our plans, greater concessions and the development of big farms.”
Algeria’s influential daily El Wa­tan dubbed 2016 “the year of big concessions” due to the number of agricultural permits granted to foreign investors, particularly from the United States, China and France. Those investments had begun taking root in 2015 in Alge­ria’s southern and central highland areas, where there is a relative abundance of large, state-owned farm land and irrigable water.
To encourage investment, the state is offering considerable tax incentives, including free long-term leases for farmland, to foreign investors and their local counter­parts. In return, the government expects increased domestic har­vest production to reduce the need for food imports.
As part of the efforts, the gov­ernment plans to double grain out­put to 7 million tonnes by 2019 and make the country self-reliant on durum wheat.
One joint project between the American International Agricul­tural Group and Lacheb Group, a private Algerian agricultural firm, is planned for El Bayadh, 520km south-west of Algiers, where 1,500 hectares of land will be developed to produce wheat and fodder.
Cows will also be bred for milk and meat.
Chelghoum said the El Baydah project was “huge,” adding that there are “other similar farms spe­cialised in fodder, grain and olive oil in Saida and Mascara regions.”
“Today, we have a new version of agriculture. It is agribusiness with integrated projects and high added value that will help Algeria resolve the issue of dependency on imports for certain products,” Chelghoum said.
Without expanding its big farm model, Algeria’s agricultural sec­tor is likely to continue yielding low results.
The current ratio of farmed land is 0.2 hectare per person and fre­quent periods of drought threaten the country’s grain production. Up to 70% of the areas where grain is grown receive only 450 millime­tres of annual rainfall, resulting in a relatively low yield of 700-1,500 kilograms per hectare.
Government officials and ex­perts said climate change has ex­acerbated the problem.
“It is possible to cover three-quarters of domestic needs of grain by cutting lands farmed in grain by 50% while investing more and better in big farms to increase performance to reach a yielding of more than [500 kilograms] per hectare,” said Akli Moussouni, an Algerian agronomist.
In Algeria, private companies play a bigger role in the agricul­tural sector than in other major industries, which are mostly con­trolled by the state. Agriculture has also grown more quickly than other industries in recent years, even with fewer subsidies from the state.
“Today, farming is more than 99% controlled by the private sector, ei­ther on lands owned by individuals or families or state lands under the terms of concessions,” said former agriculture minister rachid benaissa, who is a farming expert by training.
The industry accounts for 10% of the country’s gdp and grew at an av­erage rate of 13.7% From 2009-16, of­ficial figures indicated.
“Agriculture is benefiting from stable support, which is bolstering its potential by giving it the legal framework and a clear strategy up to 2020,” benaissa said.
The recent surge in agricultural activity is a big step forward for al­geria, which saw farmers uprooted from their land mainly during 1957- 61 when french colonisers attempt­ed to isolate independence fighters from the population in the country­side.
After achieving independence, authorities seized most of the coun­try’s farmland and embraced a sovi­et-socialist management style in the agricultural sector.
In the early 1980s, algeria tried to remedy the failures of the command economy by turning most of its land over to the private sector. However, in 1992, civil war between the army and radical islamists caused a mass exodus from algeria’s rural to urban areas, devastating the agricultural industry.
While efforts to improve the farm­ing sector have been made in the past 15 years, algeria is still unable to feed its growing population without foreign investment.
Indeed, the estimated value of algeria’s food imports sky-rocketed during this period, jumping from $2 billion in the early 2000s to $10 bil­lion in the five years leading up to 2016.
Algeria is one of the few coun­tries in the middle east and north africa with a growing birth rate. Its average birth rate per woman of childbearing age rose to 3.1 Children in the last 15 years from 1.9 In the two decades before 1999 after the country shelved its family planning programme under the pressures of islamists who were part of the coali­tion government at the time.
Algeria’s population is expect­ed to increase from 40 million to 50 million by 2025 if this trend continues.