June 2, 2008 / 1:07 AM / 9 years ago

Algerian farmers struggle to exploit price boom

SETIF, Algeria (Reuters) - High world grain prices should make this a golden age for Algerian wheat farmers, but a legacy of mismanagement means the former Mediterranean farming superpower is struggling to regain its lost agricultural glory.

<p>A farmer inspects a stalk of wheat at a farm near Setif, 300 km (186 miles) east of Algiers in this picture taken May 11, 2008. High world grain prices should make this a golden age for Algerian wheat farmers, but a legacy of mismanagement means the former Mediterranean farming superpower is struggling to regain its lost agricultural glory. REUTERS/Louafi Larbi</p>

Erratic rainfall is a perennial threat and weeks of drought this year will likely hit cereals output in a country that is already one of Africa’s top food importers.

But it is administrative and policy flaws that pose the bigger menace, say farmers.

They complain of a lack of financial support despite well-intentioned government efforts to reverse a history of neglect and a debilitating reliance on oil and gas in the north African country.

Farming provides work for around 25 percent of those of working age in the 33 million-strong population, and accounts for about 10 percent of the OPEC member’s $110 billion gross domestic product.

But agricultural productivity is low with Algeria harvesting less wheat than Egypt on three times as much land.

Farmer Achour Slimani stands in a parched wheat field of stunted plantings and echoes a complaint common among his peers.

“The banks refuse to provide loans to farmers. They support importers and industrialists, but never farmers,” said Slimani, part-owner of a 134-hectare (330-acre) field in Ouled Yellis near Setif town at the centre of the main wheat plains.

“You can’t build agriculture without an efficient banking system,” he said.

In a major policy speech in February, President Abdelaziz Bouteflika said Algeria should devote more land to food, including cereals, more land should be irrigated and greater efforts made to prevent desertification.

But he did not directly address one of the main constraints cited by cereals farmers -- access to loans. Inflexible credit means farmers cannot invest and banks often cite lack of title as a reason to refuse loans, farmers say.

The issue is critical because 62 percent of farmed land is private smallholdings where farmers usually lack title to the assets that would qualify as collateral, official figures show.

The remainder is state land, managed in many cases by private farmers under long-term concessions.

“We have cultivated wheat since the Romans, but a majority of farmers don’t have title to property,” said Lahcene Lamri, secretary general of the Setif chamber of agriculture.

EXODUS TO THE CITIES

For decades, farmers tilling some of Africa’s richest land were the pillars of Algeria’s economy and, at independence from France, accounted for 63 percent of export revenues.

But the departure of the French in 1962 triggered a decline, with the loss of foreign managers and skilled labor compounded by the advent of a command economy featuring fixed salaries for farmers and effective state ownership of farms.

Hydrocarbons took over as the economy’s mainstay and the government began to favor heavy industry over farming, a humiliating reversal for a sector with a proud history as a regional breadbasket dating back to Roman times.

Today, energy accounts for more than 95 percent of export earnings.

Farming suffered further damage in the 1990s when political violence triggered an exodus to the cities by rural families fleeing fighting between the army and Islamist armed groups.

As a result Algeria, one of the biggest purchasers of wheat on the international market, imports around 5 million tonnes of cereals annually to fill shortfalls in the domestic crop, forking out $1.5 billion per year for foreign-grown cereals.

Algeria’s productivity is below that of its neighbors, harvesting 4.3 million tonnes of cereals in 2007 on cultivable cereals land of 3 million hectares, official figures show.

In comparison, Egypt produced more than 7 million tonnes in 2007 on just 1.1 million hectares, and Morocco harvested 9 million tonnes on 5.5 million hectares in 2006.

HEAVY BUREAUCRACY

Cereals farmers say heavy bureaucracy, bad quality of seed corns and expensive pesticides hinder their work.

To be recognized as a farmer, individuals have to lodge a request with the local chamber of agriculture, which can take months to issue the official card that allows them to do business.

Since many farmers are illiterate, navigating the paperwork is a challenge, as is dealing with banks, which can also require extensive form-filling.

But improvements in other sectors, such as fruit and vegetables, show farming is far from a lost cause.

Since 2001 vegetable, wine and date output has grown and provided new jobs.

In April, the government indicated the time had come to give a boost to cereals output, announcing it would buy some local wheat at prices close to those in the international markets.

Implementation, however, has been patchy.

“Speech is one thing, and reality is another thing. To be included in the government plan, you must own a large surface area. The problem is that 80 percent of wheat lands are less than five hectares,” agriculture analyst Lyes Kahouadji said.

Farmers must own at least 10 hectares to be considered for the price support, he added.

Messaoud Benouari, chairman of the Setif chamber of agriculture, told Reuters: “Nothing has come yet from the capital Algiers. How and when will this decision be enforced? We don’t know.”

(For full Reuters Africa coverage and to have your say on the top issues, visit: africa.reuters.com/ )

Editing by William Maclean and Jon Boyle

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