Foreign investors have inked a range of new deals that should help cut the country’s food import bill in the coming years
29 March 2017
Efforts to raise output and deepen modernisation in Algeria's agriculture sector are gaining traction through a combination of government initiatives and private sector capital.
Foreign investors have inked a range of new deals that should help cut the country’s food import bill in the coming years.
In January the prospect of a joint venture between local dairy firm Tifra Lait and the American International Agriculture Group was floated, with the aim of increasing agriculture output by 22,000 tonnes of cereal, 105 tonnes of cattle feed, 190m litres of milk and 20,000 tonnes of red meat per year.
Various projects being considered under the potential agreement would be located across 25,000 ha of land in the southern wilaya (province) of Adrar at a total cost of around €281.4m.
At the end of February international media also reported that the Ministry of Agriculture, Rural Development and Fisheries (Ministère de l’Agriculture, du Développement Rural et de la Pêchem, MADRP) was inviting expressions of interest to invest in 28 pilot farms engaged in arable and livestock farming. In accordance with Algerian investment law, winning bidders will hold a minority stake in the farms capped at 49%.
Stakeholders’ moves to attract foreign investment dovetail with government efforts to reduce the country’s reliance on food imports.
The Felaha 2019 programme, launched by the MADRP in June 2016, aims to cut Algeria’s food import bill from around $9.3bn in 2015 to $2bn by 2019 by improving domestic output through a combination of irrigation and mechanisation.
Felaha 2019 plans to irrigate up to 2m ha of land by 2019, spurring 5% annual growth to achieve a production value of AD4.3bn (€36.6m). In the process, some 1.5m jobs will be created – 400,000 of which will be in the fisheries segment – with another 80,000 positions to be safeguarded.
On the mechanisation front, the programme’s targets include one combine harvester for every 300 ha, up from the current one per 400 ha; and an increase in the number of tractors from one for every 100 ha to one per 70 ha. These measures will supplement an existing subsidy that finances a tractor produced in Algeria for up to 30% of its price.
Last year saw some progress, as the value of imported foodstuffs declined by 11.7% to $8.2bn. The decrease was led by drops in cereals (-20.6%) and milk products (-15.8%), according to figures from the Ministry of Finance.
Agricultural output in Algeria is sensitive to climatic variables – particularly cereal, which is largely rain-fed.
Grain planting during the winter of 2016/17 was negatively impacted by precipitation levels, which were roughly 20% of the norm in September and October, according to the UN Food and Agriculture Organisation (FAO). This followed a lacklustre cereal harvest in 2016, down 19% on the previous year and 23% below the 2011-15 average at around 3.3m tonnes.
To combat this, Algeria is exploring the use of modern farming techniques to secure consistent production levels.
Significant headway has already been achieved in terms of water management. According to the Ministry of Water Resources, the volume of water mobilised for agriculture at the end of January reached 7bn cu metres, equivalent to 70% of the national total and up from just 2bn cu metres in 1999. As a result, the proportion of agricultural land that is irrigated has risen from 4% to 15% over the period, reaching 1.26m ha.
As of last year, the ministry reported that water-saving systems were in place across 600,000 ha of agricultural land, compared to 90,000 ha in 1999.
Another programme, launched early last year, is focused on improving wheat and legume yields through better water and fertiliser management and the introduction of new vegetal material. The project, which is being pursued under the Joint FAO/International Atomic Energy Agency Programme of Nuclear Techniques in Food and Agriculture, involves ongoing field trials on wheat and legumes at the Institute of Agronomic Research of Algeria.
The programme is also experimenting with the use neutron probes and isotopic chemical fertilisers to monitor soil salinity, enhance soil fertility and boost efficiency in pursuit of “smart” agricultural practices.
Umberto Torresan, managing director of DuPont Algeria – a US-based company that has shown an interest in Algeria since the 1990s, with a focus on technology-driven agricultural solutions – told OBG he believes development of such technologies would be a game-changer for Algerian agriculture.
“Through wireless remote sensors and thermo-imagery that provide data about soil composition, irrigation, temperature and historical weather patterns, farmers could optimise their land management and potentially triple their harvests,” he said. “With the use of more technology and data like this, Algeria would be able not only to secure its food prosperity, but also to export a large part of its output.”
© Oxford Business Group 2017