Accounting for 75% of calories consumed in Algeria, the country is dependent on the availability of cereals to meet domestic demand of 7m tonnes a year. The development of this segment has thus been made a top priority under the Agricultural and Rural Renewal Policy (Politique du Renouveau agricole et rural, PRAR), to boost both local production and reduce reliance on imported cereals in the face of rising global prices.
GREATER INVESTMENT: A large improvement in cereal output has been registered since the implementation of the PRAR in 2008, increasing from an annual average of 2.9m tonnes between 2000 and 2008 to 6.1m tonnes in 2009 and 4.2m tonnes in 2011. This can mostly be attributed to good weather, efforts to modernise the sector and increased investment. “Favourable weather conditions have allowed local cereal production to double. This needs to be combined with the progress made on the part of farmers, who are increasingly willing to adopt more sophisticated production methods,” Foued Chehat, director at the National Agricultural Research Institute of Algeria, told OBG.
In recent years, heightened investment among the government and private investors has led to the adoption of modern production techniques. In addition, fertilised land increased from 456,000 ha in December 2010 to 490,000 ha in December 2011 and irrigated land expanded by 99% between 1999 and 2011. The national agricultural strategy aims to push irrigated land up from 1.1m ha in 2012 to 1.6m ha by 2014.
INPUTS & RESEARCH: The Cereal Trade Association (Office Algerien Interprofessionnel des Cereales, OAIC) has invested €98.95m over the past three years to boost equipment stocks and aid the mechanisation of the sector. The national press agency reported in July that the OAIC had acquired a total of 1250 combine harvesters, 350 tractors and more than 1000 seed drills, which should help to promote access to machinery and enhance national output.
The volume of certified seeds rose 16% year-on-year from 130,000 tonnes to 150,000 tonnes in 2011. According to Chehat seed is available but research is needed.
“We need to boost cereal varieties by investing more in research, especially wheat,” he said. Algeria is collaborating with the International Centre for Agricultural Research in Dry Areas to develop joint research programmes to boost wheat and barley varieties.
IMPORTS: Cereal imports weigh heavily on Algeria’s food bill. Data from Conseil national de l’information statistique (CNIS) highlights that, out of a total of $9.75bn in 2011, cereal imports accounted for $4.03bn, up from $1.98bn in 2010. Wheat and durum are the dominant imported cereals with 7.42m tonnes imported in 2011, a year-on-year growth of 41.5%, triggered by the unrest in neighbouring Tunisia in early 2011.
Boosting domestic cereal production is a top priority, especially in the wake of increasing cereal price volatility following a decline in production among major exporting countries. The government currently subsidises the price of imported grain, and in May 2011, the Ministry of Agriculture suspended the tax on private durum imports. More recently, the authorities announced that starting from September and until August 2013 imports of corn and soybean will be exempt from Customs duties and value-added tax.
However, the country is still reliant on imported grain to meet domestic demand. Poor harvests in key producing countries such at the US and Russia, hit by severe droughts in 2011, have also caused prices to rise, particularly for wheat, corn and soybean.
Better access to land and financing is expected to aid cereal production in the medium to long term. The picture is further improved given that farmers are set to adopt more modern production techniques. Harvest by the end of 2012 is forecast to reach 5.2m tonnes, down from the initial prediction of 5.6m tonnes, attributed largely to the drought in the west part of the country. Wheat and durum imports are nonetheless expected to slow down in 2012, which according to data from the CNIS, fell by almost 35% between January and August 2012 compared to the same period in 2011.
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