Source: Oxfordbusinessgroup.com, september 2018
An increase in domestic agricultural production has moved Algeria closer to achieving its goal of food self-sufficiency, with officials predicting the country could halt the import of agricultural products within three years.
Algeria produced a record 6.1m tonnes of cereal throughout the 2017/18 agricultural season, which ran from July to the end of June. This constituted a 74% increase on the previous season’s harvest of 3.5m tonnes, Abdelkader Bouazghi, the minister of agriculture, rural development and fisheries, announced in early September.
The large output marks an early realisation of the country’s goal of producing 5.3m tonnes of the crop by 2022 and was complemented by strong vegetable harvests. Domestic production of chickpeas totalled 34,000 tonnes over 2017/18, up from 12,300 in 2001, while annual output of lentils increased from 458 tonnes to 30,000 tonnes over the period.
The country’s food import bill declined slightly in the first eight months of the year, falling from $5.90bn to $5.89bn, according to the National Centre for Transmissions and Customs Information System.
In January 2018 Bouazghi said that, at the time, Algeria was meeting around 70% of local demand for food products. The minister said that if such a level was maintained, the country could halt the import of agricultural products within three years.
The increase in production has also coincided with a jump in agricultural export earnings. Ali Bey Nasri, the president of the National Association of Algerian Exporters, told an industry conference in late September that the value of agricultural exports had increased by 50% year-on-year in the first seven months of 2018. He predicted year-end exports to reach $75m-80m, against $57m in 2017.
Government strategy targets domestic agriculture growth
The increase in production comes amid an estimated AD2.5trn (€18.2bn) in government investment over the past two decades, as officials look to agriculture as a key sector in its quest to boost non-oil GDP.
According to Bouazghi, by early 2018 the sector made up some 13% of GDP and accounted for 10.8% of the working population. Under the government’s New Growth Model, released in mid-2016, officials aim for an average annual growth rate of 6.5% for the sector between 2020 and 2030.
To meet these goals, incentives have been launched to encourage farmers to increase production, including low interest loans and free vaccinations for livestock. In addition, the state has agreed to compensate exporters for 50% of the cost of freight, transit and other Customs procedures to encourage the sector’s role in balancing the country’s trade deficit.
The success of this past year’s grain harvest has also been attributed in part to government efforts in planting 3.4m ha of grain, which helped boost productivity per ha from 1.5 tonnes in 2016/17 to 1.9 tonnes.
Irrigation programmes key to future water security
Another factor that has been integral to the recent expansion of agricultural production is the availability of water: irrigated land in Algeria currently amounts to around 1.3m ha, and the Ministry of Agriculture has announced plans to increase this figure to 2m ha by 2021.
“Five new dams and their respective transfer capacities have started operations in 2017 in order to support this strategy,” Arezki Berraki, director-general of the National Agency of Dams and Transfers, told OBG. The five dams, all in different provinces, have a combined retention capacity of 500m cu metres.
“Management of water resources has been a key priority for Algeria and the country has now reached full capacity to improve irrigation in more wilayas (provinces),” he added.
As of September 2018 there were 80 large-scale dams operating in Algeria, of which 36 have been built since 2000, and an additional five are currently under construction, ahead of completion in 2020. Further down the line, the government aims to bring the total number of dams to 139 by 2030, increasing the country’s combined water storage capacity to approximately 12bn cu metres.
Foreign investment seen as key to future growth
While state support has had a positive impact on improving yields in recent times, some industry figures believe the most effective way to address certain barriers facing domestic producers, such as access to finance, machinery and expertise, is through encouraging greater participation from foreign investors.
Public construction company Cosider, the fourth largest in Africa, launched its subsidiary Cosider Agrico in May 2017 to promote and invest in Algerian agriculture. The company is currently constructing and landscaping four large-yield agriculture projects, the first to become operational by the start of 2019.
“Oleiculture [the production of olives], durum wheat and cattle feed represent high potential but yet untapped segments in Algeria,” Bencheikh Belkacemi, CEO of Cosider Agrico, told OBG. “Companies need more leverage to truly boost national production, therefore, we are open to working in partnership with national and foreign investors.”
