The Algerian agriculture industry is projected to register a CAGR of 2.4% during the forecast period (2021-2026). In March 2020, the Algerian President announced a ban (temporary suspension) on the export of any strategic product such as food or medicine, until the end of the pandemic in order to preserve strategic reserves. Algerian Government Officials report that Algeria has sufficient food stocks to meet domestic food demand through the beginning of 2021. Food demand has surged for semolina, and flour mainly since the beginning of the COVID-19 outbreak. The Ministry of Agriculture has also opened points of sale to sell agricultural produce at reasonable prices to control the prices on the market during the pandemic.
The government policies and programs to increase domestic production, privatization of the seed sector, and investment in agricultural infrastructure are the major drivers of the growth of the market studied.
Agriculture in Algeria is mostly affected by drought. Thus, the country is unable to meet the domestic demands. Hence, the import of crops plays a major role in the sector. The Algerian government and its Ministry of Agriculture are continuously striving to reduce the imports and increase the domestic production of the crops that are in demand.
Key Market Trends
Increasing Investment in Agricultural Infrastructure
According to the United States Department of Agriculture, the agricultural sector in Algeria accounted for 12% of the country’s GDP in 2016 and employs about 20% of the Algerian population. The highest share in the economy’s performance led the government to consider the agricultural sector a priority sector. The government put huge efforts to attract foreign and domestic investments, to reduce the country’s reliance on imports. As a part of its effort to boost the agricultural sector, the government is offering incentives on taxes, including farming concessions, and free long-term leases of farmland to foreign investors and local counterparts. Owing to such favorable legislative policies, many private agricultural firms are coming forward to invest in the agricultural sector. Algeria mainly relies on imports of agricultural products, mainly due to its weak domestic output, but owing to such infrastructure improvements, huge investments, and modernization of distribution channels and retail stores, there is huge potential in the agricultural sector.
Increased Production of Fruits Dominates the Market
According to the Food and Agriculture Organization, The fruits such as watermelon, Oranges, Dates, Grapes, and Apples were the majorly grown fruit varieties in the country among others in 2019. Accordingly, the watermelon accounted for 31.2% of production among primary fruits and Orange accounted for 75.7% of production among citrus varieties. Due to the reduction in production, the consumption of fresh and processed varieties of oranges has also reduced over the past few years. In order to reduce the reliance on imports, the Algerian government is offering incentives on taxes, including farming concessions, and free long-term leases of farmland to foreign investors, as well as local counterparts. The country has been revolutionizing its technology sector in the field of agriculture, by adopting soil-less farming. Farmers are adopting hydroponic techniques to increase vegetable production. Hence all these factors contribute towards increased production of fruits in the country.
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