Algeria to open up farmland to foreign investors
Reuters | 31 May 2013
An Algerian farmer harvests a potato field in Khemisti, 60 km (37 miles) west of Algiers, April 19, 2009. REUTERS/Louafi Larbi
By Hamid Ould Ahmed
ALGIERS (Reuters) - Algeria is to open up its farming sector to foreign investors for the first time to try to help cut food imports and also diversify its economy, which is heavily dependent on oil and gas exports, the head of a government agency said.
Kamel Chadi, chairman of SGP-Proda, a holding company for animal production, said 16 pilot farms focused on grains, vegetables, fruit trees and cattle breeding would be on offer via tender to investors.
"This tender is intended for both Algerian private investors and foreigners," Chadi said. "The invitation stipulates creating joint ventures for managing and operating farms. The land is not for sale," Chadi said.
Agriculture in OPEC member Algeria has been largely closed to foreign investment. Algerian law requires that foreigners partner with Algerian firms and limits any stake they take in an investment project to 49 percent.
But the government has pledged reforms to cut dependence on oil and gas, which account for about 97 percent of total exports. Volatile oil prices have forced the country to look for alternative sources of revenue and to attract foreign capital.
Algeria's food imports account for about 20 percent of an estimated $45 billion annual import bill.
Main food imports include wheat, barley, milk and meat due to insufficient domestic production in the country, which has a population of 37 million.
It has begun providing financial incentives for farmers, including interest-free loans, also as way to create jobs.
The head of Algeria's farmers union, Mohamed Alioui, said earlier this month the government would launch its first commercial maize production next season. The country currently imports almost all its maize requirements.
Chadi said the winning bidders for the farmland tender would sign contracts that stipulate mainly modernising the farms through introducing new equipment.
"Partnership could bring something new and help create the necessary conditions for development," Chadi said.
The areas on offer are set to be sowed with cereal and vegetables such as potatoes, an essential ingredient in Algerian cooking.
Each farm is between 100 and 500 hectares and they are located in central, western and eastern provinces.
Some of the farms will be devoted to producing fruit, including olives, apples and dates.
Foreign investors would also help develop breeding activities for poultry, dairy cattle and also beekeeping, Chadi said.
"We are optimistic agriculture will play a leading role in our economy."
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