Complex Made Simple

After oil price drop, Algeria tries to boost food crops

OPEC member Algeria is still highly dependent on energy revenues that supply 95 percent of its exports and 60 percent of the state budget.

SIDI RACHED, Algeria, June 8 (Reuters) – At Ahmed Bekhi’s cereal farm outside Algiers, there are clear signs of Algeria’s campaign to increase food production to help curb billions of dollars in imports and offset a sharp fall in world oil prices.

New irrigation lines are in the works and wells have appeared to compliment a steady flow of government supplies of seeds, fertilizer and pesticides. But in an economy emerging from decades of centralised control, farmers complain they are bumping up against restrictive state bureaucracy.

OPEC member Algeria is still highly dependent on energy revenues that supply 95 percent of its exports and 60 percent of the state budget. With oil prices down by half over the past 12 months, the North African state is feeling the pinch.

The country has around $180 billion in foreign currency reserves to ward off any crisis, but Algeria’s state spends about $60 billion a year on imports for everything from cars to medicines, and it is looking to reduce this sum.

Food stuffs represent 20 percent of the value of imports.

Traditionally one of the world’s largest grain importers, Algeria has identified agriculture as an area where it can do more to boost domestic production, and has speeded up a reform programme aimed at bolstering its harvests.

Low rainfall this year already means grain production is forecast to be flat at 3.4 million tonnes, highlighting the slow progress in increasing irrigation to lift crop yields.

Sidi Rached, an agricultural region 70 km (45 miles) west of the capital Algiers, shows the task ahead. Government aid appears plentiful, but state paperwork is hobbling progress in a sector that lacks modern technologies and is shackled to the whims of the rainy seasons.

Promised disbursements are slow and even simple procedures can get snarled by rigid officialdom, the farmers say.

Bekhi’s farm is one of the few to benefit already from an irrigation programme, with a government-built damn and a network of private wells helping develop the area.

“We are happy with government support, but sometimes there are delays in opening the valves. This is the kind of bureaucracy from local authorities we face,” said Bekhi, standing in the middle of a 24-hectare (60-acre) wheat field.

(Reporting by Hamid Ould Ahmed; Editing by Crispian Balmer)