Sat. Sep 19th, 2020

Supporting Farmers

Algeria to open farming concessions to foreigners

3 min read

ALGIERS (Reuters) – Algeria plans to offer foreign investors concessions for farm land for the first time, according to an official document, as the oil producer seeks to boost food output and reduce reliance on imports.

FILE PHOTO: A man feeds cows in a farm in Tipaza, Algeria April 21, 2018. Picture taken April 21, 2018. REUTERS/Ramzi Boudina/File Photo

Under the plan, which is expected to be discussed by the cabinet this week before being submitted to parliament, any foreign investor would need to work in partnership with the state or a private Algerian firm, the document seen by Reuters said.

Algeria, a member of Organization of the Petroleum Exporting Countries, has been encouraging farmers with incentives such as low interest loans in a bid cut the state’s $50 billion annual bill for food and other imports.

Cows are seen in a farm in Tipaza, Algeria April 21, 2018. Picture taken April 21, 2018. REUTERS/Ramzi Boudina

The government relies on oil exports for about 60 percent of its revenues, which are only now starting to recover after a crash in crude prices from above $100 a barrel in 2014 to below $30 in 2016.

“Agricultural concessions will also be open to foreigners,” the government said in the document on the initiative.
The document did not give details about what areas of farmland would be offered or say how concessions would be granted. An official said details would be outlined in separate legislation.

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Foreign investors have long complained about bureaucratic red tape and other hurdles to investment in Algeria, a nation of 41 million people.
In 2010, Algeria approved a law allowing private firms to lease state-owned farmland for 40 years. The private firms were allowed to enter partnerships with foreigners, but the foreign investors were not allowed to directly hold a concession.

That initiative failed to provide a major agricultural boost. Prime Minister Ahmed Ouyahia said this year that 3 million hectares from that scheme were still undeveloped and he promised more steps to improve the situation.
Algeria, one of the world’s largest grain importers, bought 8.4 million tonnes of cereals in 2017 at a cost of $1.7 billion.
The government aims to boost wheat output to 5.3 million tonnes by 2022 from 3.5 million tonnes in 2017. It also wants to double production of potatoes, milk, meat and other products in the next four years.
As part of its effort to boost agriculture, the government plans to expand areas under irrigation to 2 million hectares in 2019 from 1.3 million hectares now with new dams, helping offset the reliance of farms on unpredictable rainfall.

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