OFFICE ALGERIEN INTERPROFESSIONNEL DES CEREALES OFFICE ALGERIEN INTERPROFESSIONNEL DES CEREALES (OAIC) Grains Production in Algeria: Current Situation and Outlook London 9 June 2015

OFFICE ALGERIEN INTERPROFESSIONNEL DES CEREALES (OAIC)

Grains Production

in Algeria: 

Current Situation and Outlook

London 9 June 2015

24th IGC Conference

Socio‐economic indicators for the agricultural sector

The potential of agricultural land in Algeria

The grains sector

Main grain output indicator trends

Economic regulatory measures for grains production

Imports

The OAIC’s intervention within the sector

Prospects and development measures

Communication Plan

 Total agricultural area (TAA): 43 million hectares of which 8.5_million hectares is usable agricultural area (UAA), which includes 1.1 million hectares of irrigated land;

 Agriculture contributes 9,8% to the Gross Domestic Product (GDP);

 Average growth rate of agriculture between 2009 and 2014 was 11%;

 Number of farms: 1,209,528 holdings;

 Number of jobs: more than 2.5 million;

Socio‐economic indicators for  the agricultural sector

 Value of agricultural output: AD2,761 billion (equivalent to 35 billion US dollars);

 Food supply: National production meets 72% of the country’s food requirements;

 Total population as at 1 January 2015: 39.5 million inhabitants.

Usable agricultural area (UAA) = 8,5 million hectares, of which:

2 million hectares or 23% of the UAA receive more than 600 mm of rainfall per year, thus allowing intensive farming without irrigation provided the rainfall is evenly distributed.

3.3 million hectares or 39% of the UAA is made up of land located in agro-climatic areas that receive 400 to 600 mm of rainfall p.a., thus allowing arboriculture, grains crop and dry fodder production.

3.2 million hectares, or 38% of the UAA is located in areas where rainfall is below 400 mm p.a., making farming in these areas a high risk activity.

The potential of agricultural land in Algeria

77% of the UAA is located in adverse agro-climatic areas where water remains a major constraint and a limiting factor for agricultural production.

Drought is an inescapable component of the Algerian climate.

Rainfall (mm)

> 600 mm 400‐600 mm 300‐400 mm

Drought is the main climatic constraint for grains  farming

Intensive grains farming has become challenging due to

insufficient, irregular rainfall that is unevenly distributed over

time and space.

This is compounded by climatic vagaries such as: frost,

hailstorms,

high temperature,

hot winds (sirocco).

The 300 ‐ 400 mm isopluvial band covers 45% of the grains growing area; this area is made up of inland plains and highlands and is prone to drought (from east to west).

To the north of this line (>400 mm), rain‐fed grain farming is less prone to drought but output varies greatly due to poor rainfall distribution.

South of the high plains and below 300 mm rainfall, soil is arid, drought is  a permanent feature and it is impossible to consider farming without  irrigation.

The grains sector is one of the main agricultural  sectors in Algeria.

Grain‐based products have a strategic place in the  food system and in the national economy.

The grains sector

A great number of players (grain producers, seed propagators, seed producers, seed collectors, hauliers, storage agencies, input vendors, processors, manufactured product retailers).

Importance of the grains industry

The grains sector is characterised by :

Grains acreage

3.4 million hectares are sown annually and 2.5 million hectares are left fallow (together these equate to 70% of the 8.5_million hectares of usable agricultural area).

Value of agricultural production

372,000 (or 31%) of the 1.2 million farms in Algeria are grains farms;

675,000 jobs;

Grains production is valued at AD214.6 billion i.e. more than 8% of the total agricultural output value;

This sector has an average annual growth of 20.5% (2009‐13).

Makes up the main part of the food ration Consumption level = 222 kg/person/year;

60% of the calorific intake and 80% of the protein intake;

Change in the consumption pattern of the population from durum‐based flatbread to soft wheat‐based baguettes;

Given the fact this consumption pattern is now prevalent, the cost of wheat has a direct impact on the minimum nutritional threshold of the poorest population segment;

World market share It represents 39% of the total value of food imports and is mainly made up of soft wheat imports (a direct result of baguette consumption becoming more commonplace).

Main grain output indicator trends

Change in the area planted to grains since the  2008/2009 crop year: 3.6% increase in the total sown area;

59% of the area planted to wheat (durum and soft) 

38% of the area planted to barley and 3% to oats. 

Change in the sown area, per crop, since 2008/2009 Durum wheat: +12% ; Soft wheat: +4.7% Oats: +10% Barley: ‐4.7%.

Regulatory seed use

Strong increase in the area sown with regulatory  seeds, of which 90% are certified seeds.

784,000

1,140,000

1,450,000 1,670,000 1,650,000

2,150,000

Change in the grains area sown with regulatory seeds (in hectares) 

Change in the area sown to grains using  regulatory seeds, per crop

36%

56%

63%

70%

74,7%

33%

41%

51%

57%

49,71%

9

13

18

24%                        

21,11%

0 10 20 30 40 50 60 70 80

2008/2009

2009/2010

2010/2011

2011/2012

2012/2013

Orge

Blé tendre

Blé dur

Barley

Soft wheat

Hard wheat

Change in grains output Steep annual variation in output, strongly dependent on  climatic conditions.

4.5 million tons                             2010 4.2 million tons                             2011  5.1 million tons                             2012 4.9 million tons                             2013 3.4 million tons                             2014

 ‐

 1,000,000

 2,000,000

 3,000,000

 4,000,000

 5,000,000

 6,000,000

 7,000,000

1, 99 1

1, 99 2

1, 99 3

1, 99 4

1, 99 5

1, 99 6

1, 99 7

1, 99 8

1, 99 9

2, 00 0

2, 00 1

2, 00 2

2, 00 3

2, 00 4

2, 00 5

2, 00 6

2, 00 7

2, 00 8

2, 00 9

2, 01 0

2, 01 1

2, 01 2

2, 01 3

2, 01 4

Change in grains output (in tons)

Production…

Average national yield

Blé dur

Blétendre

Orge

Avoine

18

16

15

12

Average national yield (quintals/hectare)  Average over 2010‐2014

Blé dur Blétendre Orge Avoine

Peaks of 50 to 70 quintals/ha are recorded by high‐performance  producers

The 50 Club

Durum wheat

Soft wheat

Durum wheat

Barley

Oats

Soft wheat Barley Oats

Economic regulatory measures  for grains production

Durum wheat 45,000 DA/ton

Soft wheat 35,000 DA/ton

Barley 25,000 DA/ton

Farmgate price in line with international market

Improved credit facilities provided by an agricultural bank that  covers seasonal credits, working credits and investment credits

Credit

Seed propagation premium

Oats collection premium

Oats maintenance premium

Support for seed milling tools

Fertiliser purchase and usage

Storage infrastructure support (producers and seed agencies)

Rebate on grains crop insurance premiums (hailstorm  and fire)

Support premiums

Support for grains producers who subscribe to an  irrigation programme for the enhancement of grains  production

Purchase of irrigation equipment Shared borehole digging Pumping equipment (under lease) Irrigation water mid‐way storage infrastructure support

OAIC is in charge of grains market regulation and supply in  Algeria

In order to meet the domestic market grains requirements,  OAIC needs to resort to importations in order to supplement  national production

Yearly imports by OAIC are particularly dependent on :

Meeting national requirements National production collection levels The international grains market situation

Imports

Change in grains imports (in tons) 

Soft wheat accounts for 70%  of grains import