c -f
Report No. 274a-TUN FILE. CO T The Economic Development REPORT DESK of Tunisia WITHlN ONE WEEK
Public Disclosure Authorized Volume 1: Annex-Agriculture December 27, 1974 EMENA Region Country Programs Department II Not for Public Use Public Disclosure Authorized Public Disclosure Authorized
Document of the International Bank for Reconstruction and Development Public Disclosure Authorized International Development Association
This report was prepared for official use only by the Bank Group. It may not be published, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibility for the accuracy or completeness of the report. CURRENCY EQUIVALENTS
Currency Unit = Dinar = 1000 millimes
With effect from 1955
US $1.00 = 0.42 Dinar Dinar 1.00 = US $2.381
With effect from September 28, 1964
US $1.00 - 0.52 Dinar Dinar 1.00 - US $1.90
With effect from December 20, 1971
US $1.00 - 0.48 Dinar Dinar 1.00 = US $2.08
With effect from February 1973
US $1.00 = 0.44 Dinar Dinar 1.00 = US $2.27
UNITS AND WEIGHTS AND MEASURES: METRIC
British/U.S. Equivalents
1 m = 3.28 ft. 1 m ton - 0.981 g. ton 1.1 US sh. ton 1 m 2 = 10.76 sq.ft. 1 kg 2.2 lb. 1 km = 0.62 mi. 1 litre = 0.22 ga. 1 km2 = 0.386 sq.mi. = 0.26 US liq. gallon 1 hectare = 2.5 acres 1 m3 = 1.31 cubic yards
FISCAL E:AR January 1 - December 31 THE ECONOMIC DEVELOPMENT OF TUNISIA
TABLE OF CONTENTS
ANNEX I
AGRICULTURE
Page No.
10. THE ROLE AND PERFORMANCE OF AGRICULTURE IN THE 1960'S
A. The Place of Agriculture ...... 1 B. Recent Production Performance ...... 5 C. The Factors of Production ...... 8 D. Imports and Exports ...... 11 E. Agricultural Prices and Incomes ...... 12
11. THE POTENTIAL FOR GROWTH
A. Overall Demand Prospects ...... 17 B. Overall Production Prospects ...... 21 C. Some Individual Commodities ...... 27 (i) Wheat and Barley ...... 27 (ii) Olive Oil ...... 38 (iii) Livestock ...... 47 (iv) Wine ...... 50 (v) Other Commodities ...... 52 (vi) Vegetables ...... 52 (vii) Citrus ...... 53 (viii) Fish ...... 54
D. Labor and Capital Implications ...... 55
12. THE ROLE OF GOVERNMENT IN AGRICULTURE
A. Government Institutions ...... 60 B. Public Investment Policies ...... 64...... (i) General ...... 64 (ii) Irrigation ...... 68
C. Land Tenure ...... 75 (i) State-Owned Lands ...... 76 (ii) Privately Farmed Lands ...... 79 (iii) The Collectively-Owned Lands ...... Al
D. Price and Mlarketing Policies ...... 82 E. Policies for Private Investment and Credit ...... 85 (i) Short-Term Credit in Kind Campaign ...... 89 (ii) A Proposed Integrated Credit Structure ...... 90 TABLE OF CONTENTS (CONT'T)
Page No.
F. Agricultural Education, Research and Extension ..... 94 (i) Education ...... 94 (ii) Research ...... 96 (iii) Agricultural Extension ...... 97
ANNEX I
LIST OF MAPS
Map No.
10518 Rainfall and Irrigated Areas . 10519 Soil Suitability for Crops . 10004 Location of Main Crops, I . 10005 Location of Main Crops, II .
LIST OF GRAPUS
Graph No. Page No.
10.1 Agricultural Output, In Value - Cereals ...... 15 10.2 Agricultural Output, In Value - Other Products 16 11.1 Tunisia - Areas of Bread Wheat and Durum in Hectares, 1949-1969 .31 11.2 Average Yields in Quintals Per Hectare of Bread Wheat and Durum, 1949-1969 .32 11.3 Production of Bread Wheat and Durum in 1000 Quintals, 1949-1969 ...... 33 11.4 Olive Oil Production Since 1949/1950 ...... 43 12.1 Organization of the Ministry of Agriculture ...... 100 10. THE ROLE AND PERFORUANCE OF AGRICULTURE IN THE 1960'S
A. The'Place of Agriculture
10.1 Tunisia is less predominantly an agricultural country than some of its neighbors. In terms of GDP, employment, exports and investments, the farm sector is less important than in Morocco or Turkey, while in some aspects, it ranks below Algeria (share of employment) or Spain (share of exports). Table 10.1 shows this in some detail. The relatively minor importance of the agricultural sector is not a bad sign in itself. On the contrary, an inverse correlation can be observed between a country's per capita income and its dependence on agriculture. In the case of Tunisia however, with a per capita income roughly comparable with that of the other Maghreb countries, it is more a reflection of smaller natural endowments for agriculture and, possibly, less exploitation of these resources.
10.2 Climatic conditions are such that a wide variety of rainfed crops and pastures is only possible in the northern quarter of the country, where average rainfall is over 400 mm; but even there, fluctuations around the average are extremely large, and make agriculture a hazardous enterprise, with a succession of dry years (1967 till 1969) followed by years in which crops and soils are washed away by prolonged rains (1969 and 1973). In ad- dition, part of the north is mountainous, and soils in the plains are not uniformly good. A further quarter of the country has a rainfall of 200- 400 mm which supports a rainfed agriculture combining low-density raising of sheep and goats, tree crops (predominantly olives, also almonds), and cereals under marginal conditions. Finally, in the southern half of the country, where average rainfall is below 200 mm, several oases permit the cultivation of vegetables and date palms. Outside these oases centers of activity, some extensive grazing and olive production occur in the 150-200 mm zone. Chapter 11 discusses the resource base and the further possibilities in each of the regions mentioned.
10.3 As in most Mediterranean countries, the Tunisian farmer has striven to offset the deficiency and unreliability of rainfall by the careful manage- ment of water. There is a long tradition of irrigation through private wells and, since 1950, of dam and reservoir systems. Hiere again, Tunisia has not been very lucky. Some of its water resources have a high salt content, in particular some catchment areas in the north and most of the recently explored groundwater reserves in the south; much of the irrigable land is in areas that have already a relatively high rainfall; some soils in the planned expansion of the Mejerda are of mediocre quality; low average winter temperatures and strong winds put Tunisia at a disadvantage in comparison with countries like Morocco in the highly remunerative export of irrigated off-season vegetables. These reasons alone reduce the effectiveness of most irrigation works; in addition, because of other constraints (such as land tenure problems and in- adequate extension services) the considerable investments in irrigation works during the last 10-15 years have not yet had a significant impact on output. At present the total irrigated acreage is sonme 80,000 ha, out of a total cul- tivated acreage of 4.2 million ha. The total area of Tunisia is 16.4 million ha. The problems of the irrigated areas are discussed in Chapter-12. TABLE 10.1: AGRICULTURE'S 2 RDLE IN THE EOONOMY OF TUNISIA
AND SELECTED MEDITERRANEAN COUNTRIES
Tunisia Algeria Spain Morocco Turkey Average Average Average Average Average 1962-64 1970-72 1967-69 1967-69 1969-70 1969
Approximate Value of Agriculture Output (US$ Million) 360 550 6,000 8 2 0 /e 2,300
Percentage of Agriculture in GDA 21 18 13 16 28 31
Agriculture Labor Force as Percentage of Total Labor Force n.a. 50 61/e 31 70 70
Agriculture Exports as Percentage of Total Exports 59 34 18 40 58 75
Food Imports as Percentage of Total Imports 18/d 23 18 17 23 5
Balance o,f Agriculture Trade, /c (US$ Million) +1O/d -16 -2 -210 +14o +365
Gross Fixed Asset Formation in Agri- culture as Percentage of Total 21 13 16/f 10 25 13
/a Including Forestry and Fishing. / Value Added at Factor Cost, in 1966 Prices / Agrialture Exports minus Food Imports. Data do not permit to show Agriculture Exports minus Imports of all Agriculture Raw Materials and Agriculture Inputs. /d Average 1965-67 /p 1969 only. _ Public Investment only; but Private Investment was recorded minimal.
Sources: For Tunisia - Derived from various publications of the Ministry of Planning. For Algeria - IBRD Economic Mission Report 1971. For Morocco - IBRD Economic Mission Report 1971. For Spain - IBRD Economic Mission Report 1971. For Turkey - IBRD Economic Mission Report 1971. 10.4 During the 1960's the share of agriculture in GDP declined (Table 10.1). After stagnating from 1962 to 1970 1/, production made a jump in 1971 and again in 1972; despite damaging floods in April 1973, the 1973 crop was again above the trend. In the discussion of the performance of agricuLture in the 1960s, reference is made to analysis of trends rather than to a com- parison of output levels from year to year. Indeed, fluctuations around the trend are large, in particular because of excessive variations in yields (as much as 300 percent for grains and 1,000 percent for olive production) due, directly in the case of cereals, to variations in rainfall. The prime victim of these output fluctuations is obviously the farmer himself, as they are likely to affect his real income to the extent that opposite changes in farm- gate prices do not occur, or are not relevant. Cases in point are:
(a) Farmers producing for subsistence rather than for the market.
(b) Producers of crops of which the price is not determined by domestic demand and supply, but set by the authorities (wheat) or dependent on export markets (olive oil).
(c) For a livestock farmer, a year of low rainfall means no weight increase of his animals, and a reduction of his production po- tential of coming years because of a reduction in the herd (high mortality, forced selling at rock bottom prices, as in 1967).
(d) Modern farmers use more purchased inputs (fuel, fertilizer, pesticides) than traditional farmers 2/. Because the amount spent on these tends to be stable in the short run, the fluc- tuations in net value of output (their income) are larger than those in gross value of output (their production).
10.6 The effects for the rest of the economy are also serious. Since half of the population lives on the land and contributes less than one fifth to the national product, the average per capita agricultural income is far below that in the rest of the economy (about US$80 versus about US$400). Al- though the average farmer thus spends little on the products of the other sectors, a 25 percent change in agricultural GDP may mean for the other sec- tors a change of at least 5 percent in demand for their products, without counting the indirect effects. The effects of these sudden changes in buying power tend to be concentrated in certain regions, such as Sfax, where olive production is predominant, and may hit particular sectors, such as transporta- tion, suppliers of agricultural equipment or producers of current consumer goods.
1/ 1962 is chosen, rather than a prior date, because (a) statistics are reportedly more accurate as from that date, (b) prior to 1962 a large part of agricultural production was produced by foreigners, and (c) the period since 1962 corresponds with the one studied by the Tunisian authorities, in the "Retrospectives 1962-1972."
2/ On the average, purchased inputs as a proportion of gross value of output does probably not exceed 20%, but for the large cereal producers it may be as much as 40-50%. - 4 -
Table 10.2: ANNUAL CHANGES IN AGRICULTURE OUTPUT (1962-1972) IN CONSTANT 1966 PRICES
1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972
- +39.4 -1h.0 +14.4 -10.8 -10.5 +16.3 - 9.1 + 6.2 +24.7 +31.6
Source: Derived from Ministry of Planning figures, as revised in April 1974. - 5-
B. Recent Production Performance
10.6 On the basis of the latest revised figures 1/ average real growth in the value of aggregate output for the period 1962-1970 was close to 1.5 percent (using the least square method). Just how much the year-to-year changes have fluctuated around this average is shown in Table 10.2.. This table also shows how much the trend can change by adding or subtracting a year or two at the beginning or at the end of the period considered, even when applying the least squares method.
10.7 In 1962 the planning authorities published 1971 production targets for agriculture. At the time, these appeared plausible. It is now clear that they were too optimistic. The following table compares some production targets and actual results in 1971, a year of better than average weather.
Table 10.3: TARGETS FOR AGRICULTURE IN THE 1960's AND ACTUAL PERFORMANCE
Target Actual 1971 1971
Cereal Production ('000 tons) 1,116 8.50 - of which Durum Wheat ('000 tons) 665 460 Pulses Production ('000 tons) 134 130 Vegetables Production ('000 tons) 777 714 Mutton Production ('000 tons, live weight) 35 40 Beef Production ('000 tons, live weight) 33 28 Sheep Herd ('000 female units) 2,320 1,850
Target Actual 1961-71 1961-71
Olive Trees Planted ('000 ha) 335 300 Other Fruit Trees Planted ('000 ha) 105 80
Sources: Targets - "Perspectives Decennales de Developpement 1962-1971," Secretariat d'Etat au Plan et aux Finances. Actual - Ministere du Plan.
The discrepancy between targets and actual performance is even more st,riking if expressed in planned and actual increases, rather than absolute levels. For example, the production of Durum wheat was planned to increase from 363,000 t. (average 1955-59) to 665,000 t (in 1971); the actual increase was only 100,000 t. It would be wrong to attach too much significance to the absolute level of output or growth rates for several reasons. The agricultural sector has an important subsistence element, the production of which is diffi- cult to ascertain, although considerable progress has been made in estimating
1/ Statistical Appendix, Table 2.7. - 6 -
cereal harvests, which has subsequently invalidated some previous data. The arbitrary method of estirmating livestock production by estimating slaught- erings but ignoring herd changes imposes further caution.
10.8 The principal reasons why output has stagnated are the following:
(a) Climatic conditions. During the 1960's spring and fall rains were on average 30 to 40 percent less than during the 1950's. While the effect of rainfall is most obvious for cereals and olives, it is probably even more significant for livestock and for the groundwater level, which is important for well irrigation (Chapter 11, Cereals and Livestock).
(b) The departure of foreign farm-operators. The departure of tech- nical and management expertise resulted in temporary disorganiza- tion of, in particular, grain and wine production.
(c) The effort to bring farms into cooperatives. The growth and termination of the cooperative movement are discussed in Chapter 2. Its disruptive effects were mainly felt in the livestock sector.
(d) Lower than expected returns from investments. Since independ- ence, Tunisia has made heavy public investments in agriculture, in particular in reforestation and erosion control, and in irri- gation. By their nature, the former have not yet had a signif- icant impact on output; other constraints, such as tenure prob- lems and inadequate extension services, have kept down irrigated production. Olive trees planted at the beginning of the dec- ade will only come into full production in the coming years.
10.9 The above factors have not in the same way and to the same degree affected the output of individual commodities. The relative importance of cereals and animal products has changed somewhat, more as a result of these factors than because of changes in consumption patterns.
Table 10.4: COMPOSITION OF AGRICULTURAL PRODUCTION (in % of gross output, valued at 1966 prices)
Average Average 1962-63 1969-70
Cereals 28 20 Olives 7 7 Other tree crops 18 16 Vegetables 14 17 Meat and eggs 22 29 Other 11 11 Total 100 100 - 7 -
The graphs at the end of this Chapter show the actual behavior of the output of each commodity group. Some salient features are briefly indicated in the following paragraphs. Chapter 11 discusses the potential for further growth of each major commodity.
10.10 The acreage of cereals has not changed much, and the recent gains in output are due to better yields. These in turn are mainly due to favor- able weather, and to a less extent to the introduction, since 1968, of HYV. A study for the period 1945-1969 shows a high correlation between timely and sufficient rainfall and grain yields. This explains why the trend in average grain output (but probably also the performance of livestock and tree crop subsectors) was disappointing. The extensive methods of cultivation of the large farms, which produce the bulk of output, are the basic reason for the low average yield. Moreover, much of the land under crops would be better for livestock production. Low-density farming of good land should be penalized by, for example, a tax on production potential. This could raise average yields considerably and discourage owners from leaving land fallow. If it were not for the protected prices, 1/ the acreage under cereals would be much smaller. This would also be the case if the small farmers could be assured of a regular supply of grains at low prices. Most of them prefer not to run risks and to grow cereals for their own needs under marginal conditions.
10.11 The acreage under fruit trees increased by some 30 percent during the 1960's. Olives remain predominant both in terms of acreage and value; they also remain the most important export crop. Fluctuations in output are very big. The largest crop in history occurred in 1971/72, while the11972/73 crop was also above average. The acreage under almond trees is increasing fast, the market outlook is quite favorable and net value added per hectare of almond trees is on average double or triple that of olive trees. Citrus is the second most important tree crop. Production in Cap Bon has gone down in recent years because of a fall in available irrigation water following a fall in the groundwater table. It is not certain yet whether this fall is due to the lower rainfall of the 1960's and therefore temporary, or whether it is a result of over-exploitation of groundwater resources. Date produc- tion, which is for agronomic reasons concentrated into relatively small areas on either side of the Chott, has remained stable. New plantations have been started, but are not yet in production. The market for the Tunisian date ex- ports is very favorable. Production is, however, very sensitive to uncontrol- lable factors; rain in September can destroy the entire crop. Wine production has also decreased sharply over the decade, because of a reduction of|outlets and lack of know-how. Lately the short- and long-term export prospects have improved considerably, and production is being resumed.
10.12 The acreage under vegetables has increased considerably in the last few years, but for most of the 1960's it remained virtually unchanged! despite the considerable effort made in irrigation. The main vegetables are peppers, potatoes, tomatoes, and watermelons. Only a small share is exported as early vegetables. Although Tunisia has only limited possibilities in the exlport
1/ Until the recent price increase, following the massive grain import by the USSR, Tunisian prices were consistently above world market prices. - 8 - market for early vegetables, it appears that inadequate use is being made of these limited possibilities. Recent trials with strawberries, asparagus and flowers seem encouraging. The main problem seems to be the absence of an effective market organization that would emphasize quality and centralize marketing efforts abroad, and the lack of adequate extension services.
10.13 The performance of the livestockc subsector during the last 10 years is not quite clear, but seems disappointing. During the years of enforced cooperativization which coincided with a series of droughts, slaughterings increased considerably, as did uncontrolled exports of herds to Algeria and Libya. It is reported that the sheep herd declined from 1.6 million in 1962 to 1.2 million in 1968, but recovered to 1.85 million in 1972. The same thing happened with cattle, althoughi recovery has not been as quick. The increased demand for livestock products has sharply increased prices, which are now two or three tir,mes as highi as in 1969-70. Two factors seem to be responsible: (a) prices in 1969 were abnormally low because of an increase in the slaughtering rate; (b) demand has increased rapidly because of the per capita income gains of the urban population and the growth of tourism.
C. The Factors of Production
10.14 The degradation of cultivable land, due to heavy rains, occasional sandstorms, and the disappearance of the vegetation cover in a number of places, has been slightly slowed down by reforestation and erosion control. Actually, althouglh the total acreage of agricultural land has remained un- changed, its production potential has increased considerably because of a doubling of the irrigable area which permits high value crops and double cropping, and important plantings of olive and other fruit trees (over 400,000 ha). Because of constraints discussed later, the investment in irrigation and the newly planted trees (olive trees start producing significantly only after 10 to 15 years, and almond trees and citrus after 5 to 10 years) have not so far had much impact on output. During the 1962-71 period, some D 190 million, representing two-thirds of the total investment in agriculture, was spent to increase or maintain soil productivity. With heavy migration from the rural areas, the agricultural, labor force has probably fallen over the decade, but what is not clear is the trend in under-employment and unemploy- ment. A recent shortage of farm laborers due to exceptionally high production levels has increased their bargaining position, and led to an increase in wages above the minimum level of 0.6 Dinar per day, improving the relative income position of a large part of the agricultural population.
10.15 The capital base increased considerably during the 1960's, far more through public than private investment initiative. Table 10.5 summarizes the investment effort and shows that irrigation has absorbed some 40 percent of public investment (Government Budget and Foreign Aid) and forestation and erosion control 35 percent. Bank credit has mainly taken the form of lending to the cooperatives; only D 12 million of it was private borrowing. Over half of self-financed investment was in machinery and a further quarter in tree -9-
Table 10.5: GRDSS INVESTMENT IN AGRICULTURE, 1962-1971 (in millions of Dinars)
DESTINATIDN Governmnit Foreignav Bank Self Budget Aid Credit Financing Total
Forestation and Erosion 52 16 - - 69 Control
Irrigatibn 63 16 1 1 81
livestock and Fodder 3 3 2 3 11 Production
Machinery and Equipment 2 2 8 31 43
Planting Olive and Other 15 3 8 16 42 Fruit Trees
Research and Extension 12 10 - - 23
Fisheries 1 - - 4 5
Other - - 3 1 4
Total 1h8 51 23 55 278
a/ Outside Government Budget.
Source: "Les Investissements dans l'Agriculture," Ministry of Agriculture, March 1972. - 10 - planting. The figures given in the table are gross and therefore do not re- flect depreciation; net investments must have been considerably smaller. For example, in 1961 there were 2,700 tractors less than 6 years old, for which replacement needs can be estimated at 400 units a year; imports during 1962-71 averaged 900 units per year. Investment or disinvestment due to changes in herd size is not included in the statistics.
10.16 On average, the actual value of investment represented 80 percent of the initial objective. In physical terms, the shortfall was greater. Moreover, the actual distribution of investment, by headings, was not the same as the planned distribution (see Table 10.6).
Table 10.6: PLANNED AND ACTUAL INVESTMENTS IN AGRICULTURE, 1962-71 (in millions of Dinars)
Planned Actual Actual as % 1962-71 1962-71 of Planned
Forestation, Erosion Control 55 69 126% Irrigation 113 81 71% Livestock & Fodder Production 48 11 22% Machinery and Equipment 63 43 69% Planting Olive and Other Fruit Trees 32 42 130% Research and Extension 28 23 83% Fisheries 5 5 108% Other 7 4 65%
Total 351 278 80%
Source: "Les Investissements dans l'Agriculture", Ministry of Agriculture, March 1972.
10.17 The use of current inputs hardly increased during the 1960's. Ac- cording to the Ministry of Plan, the total cost of inputs (in constant 1966 prices) fluctuated between D 17 and D 19 million during 1962-70, i.e. around 15 percent of the value of total farm output. Until 1970 expenditure on seeds and fuel remained virtually constant, while there was no clear upward trend in the use of fertilizer or of feed concentrates. Since then, input use seems to have intensified. 1/ Fertilizer use increased sharply in 1971 and 1972, and is now at a level comparable withi that in Morocco and Algeria. Comparing figures with Spain, a country with roughly similar natural endowments, would indicate that possibilities of increased use are very good.
1/ Statistical Appendix, Table 7.6. - 11 -
Table 10.7: FERTILIZER USE Iii 1970/71
N P 0 K 0 Total Arable land /a 2 5 2
(------in thousand tons------(million ha) kg/ha
Tunisia 15.5 28.0 5.0 48.5 4.5 11 Morocco 38.0 44.5 15.5 88.0 7.9 11 Algeria 40.0 52.6 26.0 118.6 6.8 17 Spain 540.1 428.6 206.0 1174.7 20.6 57
/a Including land under permanent crops.
Source: Compiled from FAO Production Yearbook 1971.
D. Imports and Exports
10.18 While agricultural exports represent a large share of total exports (34 percent, average 1964-71), they are only a small proportion of total farm output, possibly of the order of 15-20 percent. 1/ For some individuatl com- modities the proportion is much higher--some 60 percent of wine production, 60 percent of olive oil, nearly 40 percent of citrus, 2/ and virtually all esparto grass after transformation. The proportion of the output of most other agricultural commodities, including most vegetables, exported is; on the average less than 10 percent. The major part of food consumption is locally produced. The share of imported food in total consumption is current- ly of the order of 20-25 percent. Some of the imports cannot be prodtLced under Tunisian conditions in any case (coffee, tea, spices, etc.), but: for certain other products, net imports are substantial 3/ -- wheat 45 percent, sugar over 90 percent, meat 15 percent, dairy products 50-60 percent, edible oil 5-10 percent, 4/ tobacco 50 percent.
10.19 A major consequence of the very moderate growth and fluctuations in output has been the reversal of the agricultural trade balance in recent years. Until 1967, exports exceeded imports by some D 8-15 million annually.1 Since then, net imports of the same order of magnitude have been common. The ex- ceptional olive crop of 1971 hardly brought exports up to imports.
1/ A comparison between the value of exports and the value of grossloutput shows a proportien of 30-35%. But output is valued at farm gate prices and exports at FOB prices, so that comparison is not valid.
2/ Averages over the period 1966-71.
3/ Estimates based on 1969-71 production and trade figures.
4/ Based on the following average 1969-71 figures: olive oil production 65,000 tons, of which exported 40,000 tons; imports of other edible oils 45,000 tons. - 12 -
10.20 The value of exports in current prices remained roughly the same during the 1960's. In real terms it declined somewhat. The composition has substantially changed, however: cereals have all but vanished and wine dti minished considerably; on the other hand exports of fruits, fish and animal products have increased; despite the extreme fluctuations in output, olive oil continued to be by far the main export. Imports increased sharply--from D 20-25 million in the early 1960's to around D 40 million at the end of the decade. Cereals and edible oil accounted for most of this rise, followed more recently by dairy products, meat and sugar. Details of exports and -im- ports of agricultural commodities are given in Statistical Annex Tables 7.4 and 7.5 and changes in composition of agricultural trade, in the table below.
Table 10.8: COMPOSITION OF AGRICULTURAL TRADE
Exports Imports Average Average Average Average 1960-62 1969-71 1960-62 1969-71 m0 Do % m.D. % m.D. % m.Do %
Livestock products 0.9 3 2,1 6 1.6 7 5.6 13 Fish 0.3 1 0.9 3 - - 001 ° Cereals 3X3 11 0.5 1 9.8 45 15.3 37 Fruits and vegetables 3.3 11 6.6 20 1.2 6 1.3 3 Edible oils and fats /a 9.6 31 14.7 44 0.3 1 7.6 18 Wine 7.7 25 3.1 9 - - ° ° Food industry products 3.2 10 3.8 11 0.8 4 0.9 2 Sugar - - - - 3.1 14 4.8 12
Spices, coffee, tea, etc. - - - - 2.5 12 3.1 8 Other 2.5 8 .1.9 6 2.4 11 2.8 7
Total 30.8 100 33.6 100 21.7 100 041o5 100
/a Exports of "edible oils and fats" consist solely of olive oil, while imports under this category consist of oils and fats other than olive oil0
Source: Ministry of Planning0
E. Agricultural Prices and Incomes
10.21 Domestic terms of trade moved slightly in favor of farmers during the 1960's. A comparison between national account figures in constant and current prices show that the implicit price index for agricultural GDP in- creased until 1969 somewhat parallel with that of total GDP, but rose faster in 1970 and 1971. (Table 10.9),
10.22 Table 7.3 (Statistical Annex) shows in detail how wholesale prices of individual farm products have moved. The overall index rose by an average. 3.8 percent per year between 1962 and 1972. The prices of livestock products more than doubled, and those of many other crops rose by over 50 percent. - 13 -
Only the prices of cereals, pulses and forest products increased by less than one quarter. In contrast, the prices of fuel and seeds remained more or less stable; the average fertilizer price increased from D 17 per ton (average 1962-64) to D 25 per ton (average 1969-71). Since purchased inputs represent only 15-20 percent of gross production value, and their u4e is concentrated on the large cereal farms, input prices are important for only a minority of farmers. The rise of agricultural prices has been a leading factor in the rise of the general cost of living. The overall cost of living index stood at 141 in February 1972 (1962 = 100) and its food component at 151.
10.23 The main cause of the rise in farm prices should be sought in the lag of output behind demand, in particular in the case of meat in recent years, but also for fruits and vegetables. World price movements have exerte,d some effect, particularly in the cases of olive oil and meat. Formerly, rellatively stable prices, as for wheat and sugar beet, reflect government price flixing, although at levels that were well above world market prices, until very re- cently.
Table 10.9: PRICE INDICES IN AGRICULTURE
GDP Cost of Living Agric. Total General GDP GDP Food Index
1962 100.0 100.0 100.0 100.0 1963 108.9 105.3 101.7 102.7 1964 104.6 107.6 106.9 107.0 1965 110.7 118.0 115.2 114.1 1966 112.1 120.0 119.3 118.5 1967 120.0 125.0 123.0 122.0 1968 122.4 125.9 125.9 125.0 1969 129.1 130.1 132.6 130.2 1970 142.9 134.6 134.5 131.6 1971 146.7 142.1 148.4 139.1 1972 142.9 143.7 151.9 142.0
10.24 The inadequacy of the data on active agricultural population, em- ployment and underemployment makes any precise study of the development of agricultural income impossible. As was seen in Chapter 4, the active'agri- cultural population fell by about 10 percent during the 1960s as a result of the departure of foreigners and internal and external migrations. ItIwould appear that, for its part, total agricultural population remained more or less static. On these bases, with an average rate of growth of agricultural output in the 1960s of about 1.5 percent, per capita output must have risen slightly, say by 2.0-2.5 percent. This is not a bad result, considering (a) the unfavorable rainfall during most of the period, (b) the sudden departure of technical and managerial know-how, (c) the loss of some privilegedloutlets, and (d) the crisis in agrarian structures.
10.25 However, the average farm income does not reflect the circumstances of the mass of farmers, for discrepancies within the sector are large; just how large is difficult to determine because of the lack of information on developments in land tenure. The last census was in 1961. Since then, it is - 14 -
assumed that the basic characteristics of the sector have changed little, except that the former foreign property is now under govenrment control. Of the estimated 320,000 private farmers, over 130,000, or 41 percent, cultivate 300)000 ha, or 7 percent of private farm land, i.e. on the average 2-1/2 ha per farm. Depending on the location, such farms can yield incomes that may or may not be adequate--the happy few in an irrigation area can make as much as D 600-700; for most, the figure is only about D 70 or less, excluding the value of on-farm consumption.
I 0l 2 6 In contrast, the acreage cultivated by the 400 largest private farmers is also 300,000 ha, i.e. an average of 750 ha per farm. Admittedly, value added per hectare can be expected to be smaller than on the small farms. Even if it were only half, 1/ a 750 ha farm could still yield a value added up to D 10,000 p.a.
1/ That large farms yield less income per hectare than small farms in the Tunisian case (unlike the situation in e.g., Spain), is not a consequence of location; indeed, the larger farms tend to be in the more favorable north. The main reason lies in the fact that most large farms are operated far less intensively. Reasons for this and examples are given in Chapter 11 (Cereals). - 15 -
Graph. 10. 1
AGRICULTURAL OUTPUT, IN MILLIONS OF DINARS (CONSTANT 1966 PRICES)
CEREALS
42.3
31.3
MEAT AND EGGS
30 - 29.3
1971 1972 1968 1969 1970 1960 1966 1967 1962 1963 1964
World Ban,k-8505 - 16 -
Graph. 10.2
AGRICULTURAL OUTPUT, IN MILLIONS OF DINARS (CONSTANT 1966 PRICES)
OTHER PRODUCTS 30 l_
1_ 0! 11_2. 1 1.5 1 2.7 1_ 0 10.9C
VEGETABLES
2C ~~~~~~~~~~~~~~~~~~~~~~~1 1 1 182, 2. 201 149 15.7 7.1 16.2 16 0 167 14 140 13. _
TREECROPS
55 1
50i / \ ___ i3
1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1573
Wold Bank- 8506 - 17 -
11. THE POTENTIAL FOR GROWTH
11.1 The way agriculture will develop in the years ahead depends on several factors, of which the principal are:
- trends in domestic and export demand;
- the scope for further expansion of production;
- the role of the State in encouraging this expansion.
In this chapter the first two of these factors are discussed, first in global terms, then in some more detail by major commodities. The role of the State is studied in Chapter 12.
A. Overall Demand Prospects
11.2 The domestic market is predominant--15-20 percent of output is exported. It must be expected that in the future, output will also be pre- dominantly determined by domestic demand, i.e. by the growth of population, per capita income and, to a minor extent, of tourism. The projections of the Fourth Plan are based on the expectation that GDP will grow by 7.6 percent p.a. up to 1981, consumer expenditure by 7.7 percent p.a. and per capita con- sumer expenditure by 5.5 percent.
11.3 At the present stage of development there is no widespread mal- nutrition, and a given rise in average incomes will therefore yield a less than proportionate increase in per capita demand for food. This would be particularly true for people already in the higher income groups, and less so for the poorer groups. One could assume an average income elasticity of demand for food varying between 0.3 and 0.6 given the income distribution assumption. With a faster rate of growth of population or of national income, the total demand for food would increase more rapidly. For a given rate of growth of total consumers' expenditure, therefore, total demand for food can grow at rates differing by at least 50 percent, the higher rates being asso- ciated with high population growth and/or more or less even distribution of increments of total income.
11.4 The rate of growth of total demand for food is not a very meaning- ful concept, and demand projections for particular kinds of food are more use- ful for planners and policy makers. The effective income elasticity for such foods as meat, fruits and some vegetables may well be 1.0 or more, which means that the total demand for these foods can be expected, on the basis of the above assumptions, to grow by at least 7.7 percent p.a. On the otherlextreme, the coefficients for food grains and edible oils rather than olive oil are probably close to zero, or even negative, and the total demand for these foods would only grow in proportion to population. While it is possible to project demand for groups of commodities on the basis of population and per capita income growth, it is impossible to project demand for individual co=mo- dities within each group, e.g. poultry and beef, because the quantities demanded within each group will very much depend on price relationships, which are unpredictable.
11.5 In most cases, the production targets of the Fourth Plan have been set without the support of a consistent set of projections of domestic demand: with the present statistical base it is not possible to do any better. Food balance sheets over several years would be a prerequisite. An overall con- sumption survey was carried out in 1965; this sort of exercise is very useful, but it is too expensive to carry out every year and does not yield the same information as a properly constructed balance sheet system. In the future, the latter should therefore be considered a priority.
11.6 In 1971, FAO published demand and supply projections on a world wide basis. 1/ The broad scope of this effort necessarily implied some simpl- ifications. For Tunisia, they are based on (a) the consumption survey of 1965, (b) a population growth of 2.8 percent p.a. for the period 1970-1980--it is pointed out that the recent population projections give a birth rate below this figure (cf. Chapter III), and (c) two assumptions for growth of per capita consumer's expenditure: 3.4 percent and 2.7 percent. The results using the higher per capita expenditure assumption are shown in Table 11.1. A major limitation is that the totals show only human consumption. Requirements for feed (in the case of cereals), industrial use (in the case of barley), or seed are not mentioned.
11.7 The projections raise the following questions:
(a) The projected growth of poultry consumption seems small, especially if as is to be expected, its price declines relative to the prices of other meat;
(b) Between 1975 and 1980 total per capita calorie intake is projected to remain stable at 2,330 cal/day. Although there is no malnutrition, a modest increase is to be expected at this level. This remark would even more apply to the protein intake, which is also expected to remain stable at 70 gr/day.
11.8 With the exception of olive oil, Tunisia is a marginal supplier of the commodities it exports. The following figures illustrate this. It can- not therefore influence prices in the export markets by manipulating its own supply.
1/ FAO Commodity Projections 1970-1980, Rome, 1971. - 19 -
T7ABLE 11.1 PROJECTION. OF PER CAPITA AND TOTAL CONST-1rPTIONT, BY FAOa/ (In Kg/Year And 1000's Metric Tons)
Per Capita/ Total /c 1965 1970 1976 1980 X 1970 1976 1980 Durum Wheat ) 124.7 128.9 135.1 124.4 555 652 781 826 Soft Wheat) Barley 15.0 12.0 12.0 12.0 65 59 69 81 Other Cereals 2.0 2.0 3.0 3.0 24 15 Total Cereals 142.4 1)43.5 150.1 139.8 634 726 867 928
Potatoes 11.0 10.6 11.4 12.3 49 54 66 82 Vegetables 72.8 70.2 75.5 81.0 324 355 436 538 Fruit 51.4 49.2 53.9 58.9 229 249 311 391
Olive Oil Other Fats and Oils Total Fats and Oils 11.5 11.0 12.0 12.9 51 56 69 86
Mutton and Lamb 4.3 4.9 5.7 6.7 19 25 33 45 Beef and Veal 3.6 4.5 5.1 5.9 16 23 30 39 Other Meat 4.7 4.4 5.1 5.0 21 23 29 40 Fish 4.3 7.1 9.5 12.8 19 36 55 85 Total }eat and Fish 16.9 21.1 25.5 31.4 75 107 147 209
Hilk/d 42.5 40.8 45.7 52.7 190 200 265 350 Eggs 2.2 2.8 3.3 3.9 10 14 19 26 Sugar Products 15.7 19.2 20.6 22.2 70 97 119 147 Calories/day ?153 2195 2336 2330 Proteins, gr/day 63 65 69 70 Wine 3.4 3.1 3.6 4.2 15 16 21 28
/a -5A0, Agricultural Commodity Projections, 1970-1980, Rome 1971. /f Projections for 1975 and 1980 are FAO's so-called "high" estimates, based on a projected annual growth of 3.4 percent in per capita expend.itures, during 1970-1980
/c On the basis of the following population figures:
1965 4,451,000 1975 5,781,000 1970 5,060,o00 1980 6,637,000 /d Includes milk equivalent of cheese. - 20 -
Table 11.2: AGRICULTURAL EXPORTS BY TUNISIA AND OTHER MEDITERRANEAN COUNTRIES
(Average 1965-70)
Tunisia Algeria Morocco Spain Italy Greece Turkey Israel
Olive Oil /a ('000 t) 31.9 4.3 10.7 84.3 -73.7/b 12.4 12.2 0.2 Citrus /c ('000 t) 40.1 167.5 ]& 485.1 1,235.5 523.0 144.3 49.8 474.7 Dates /d ('000 t) 3.4 20.8 /g 0.1 - - - - 0.1 Wine /e ('000 hl) 884 8,250 /g 1,252 2,600 2,927 749 52 20 Fruits and Vegetables /e (US$ million) 15.0 n.a. 159 /g 363 598 102 131 /g 120 Total Agr. Exports (US$ million) 59 n.a. 240 /g 639 1,035 310 442 /g 153
/a Total world exports 185,000 t (av. 1965-69), all from Mediterranean countries. /b Net imports, based on gross imports of 88,000 t and gross exports of 14,300 t. Ic Total world exports 4,760 thousand tons (av. 1965-69). /d Total world exports 350,000 t (average 1965-69) of which Iraq 280,000 t. /e Total world exports 26 million hl (av. 1965-69). If Gross exports. /g Average 1965-69 instead of 1965-70.
3ource: FAO, Trade Yearbook 1971.
11.9 The demand for several of Tunisia's traditional exports has been grow- ing rapidly. Over the six-year period 1965-1970, the volume of world imports of olive oil increased by over 40 percent, that of citrus by 20 percent, of wine by 50 percent, of dates by 15 percent; no figure is available for off- season vegetables, but the export demand for these must also have increased by over 20 percent. On the other hand, world imports of wheat did not increase over this period, but have developed rapidly since, probably temporarily. With the exception of esparto grass, the long-term demand prospects of most of these commodities look quite favorable. This would notably be the case for olive oil, citrus, wine, off-season vegetables, dates and almonds. The main question is whether Tunisia can produce these commodities at competitive prices, and, for off-season fruits and vegetables, at the right moment. It should not be overlooked in the case of olive oil and wine (and wheat for that matter), that current world prices are high for temporary reasons, and must be expected to come down in the medium-term.
11.10 The exportable output of some commodities is moreover kept down by sharply rising domestic demand and/or because of production constraints (fish, - 21 -
meat, some off-season vegetables). A favorable element is that for some exports, like oranges and dates, the Tunisian quality commands a premium on the export market; this factor may to a certain extent offset a somewhat high- er price.
11.11 Much depends on the future course of wages in Tunisia relative to those in competing countries. This is particularly important for such labor- intensive and difficult to mechanize crops as olives, fruits and vegetables. Wages are already somewhat above those in Morocco, but still well below those of Spanish and Italian farm workers and fishermen.
11.12 Tourism has been rapidly increasing in recent years and is expected to grow further. While the demand of tourists for food can be expected to grow substantially, it will remain a small proportion of total domestic de- mand. Forecasts by the Ministry of the Plan put tourist demand in 1976 for meat and fish at 5,300 t, which is 3-4 percent of total projected domestic demand. For eggs the proportion would be around 5 percent, for fruits, vege- tables and dairy products 1-2 percent; for commodities like cereals, sugar and oil less than 1 percent. Still, problems may arise because tourist demand is concentrated in time and place; in particular, supply problems may arise in the south, where production is small. Lately some hotel owners have taken the initiative in small-scale poultry operations. Several other commodities that could be locally produced are being imported, at the expense of potential foreign exchange earnings from tourism.
B. Overall Production Prospects
11.13 There are considerable regional variations in natural resources such as soil quality, rainfall and other water resources, terrain and climate. Out of the total land area of 15.6 million ha, about half is used for some kind of agriculture. The reason that the other half is not used has little to do with soil quality; lack of water is the only absolute constraint. About 2.5 million ha is under sparse natural vegetation on which extensive and sea- sonal livestock grazing is marginally possible. A further 1.2 million ha is classified as forest, but is in large part under shrubs or alfa. Only 4.0 mil- lion ha can support regular rainfed cultivation. The growing population pressure has pushed the frontier of rainfed cultivation to its limit. With the excep- tion of an area of 400,000 ha in the Northwest of the country where cultiva- tion is hampered by the terrain rather than by inadequate water, and with the further exception of the oases (total area 10,000 ha) and the olive tree plan- tations in the Sfax area, the cultivated area corresponds roughly with the part of the country which lies north of the Mahdia-Kairouan-Kasserine line.
11.14 The average annual precipitation amounts to some 33 billion m 3 , of which 90 percent evaporates, either directly or through vegetation. Most of the remainder is available for human or industrial water supply or irrigation. The human and industrial needs are projected to reach 0.6 billion m3 by the year 2000, and some 2 billion m3 could thus be used for irrigation, virtually all of it in the northern quarter of the country, where it could possIbly ir- - 22 -
rigate some 200,000 ha 1/. Substantial further water resources may be tapped from the north Sahara groundwater reserves, at present being explored, which may enable a further 10,000 ha to be irrigated. A severe limitation is presented by the relatively high salt content of much of the run-off water in the north 2/ and the groundwater reserves in the south 3/, which limits their use to a small number of crops and/or imposes strict drainage requirements; in the north this problem can to some extent be solved by mixing water of various degrees of salinity.
11.15 Average winter temperatures along the coast are comparable to those of the coastal zones of northern Morocco, above those of the Mediterranean regions of Spain, Italy and Turkey, but well below those of the Canary Is- lands and the Souss Valley in Morocco. However, variations around the aver- age are wider in Tunisia; more important, strong cold winds are quite common, and reduce the effective temperature by as much as 2°-3°. Night frosts occur in most of the areas over 30-50 km from the coast. Temperature in these regions is critical for off-season vegetables and citrus, and precludes several other crops.
11.16 Present cultivation practices and possible improvements have been the subject of numerous studies and surveys. Many of the suggestions are being carried out, others are still in the experimental stage, while others need further research. The following paragraphs briefly review major possible developments according to region and rainfall. The south, with an average annual rainfall of less than 200 mm, covers some 8 million ha 4/, roughly south of the line Gafsa-Sfax. The center, bounded on the north by a line roughly 50 km north of Kasserine-Kairouan-Mahdia, covers approximately 4 m ha; rainfall is between 200 and 400 mm. The north, covering some 4 million ha, has a rainfall of over 400 mm, rising as high as 800 mm in the mountains of the extreme northwest.
11.17 Most of the rainfed vegetation in the south is sparse and seasonal, thus allowing only extensive grazing of less demanding animals such as goats and camels, and sheep under marginal conditions. In the dry season herds are walked up north or remain in the oases. The possibility of increasing fodder supply through drought-resistant plants or grasses seems limited. One of the ways to increase the carrying capacity of the rangeland is to organize fodder reserves for drier than average years around drinking places. There are plans for this, but so far it is not clear how it would be organized, who would fi- nance it and how it could be ensured that the total herd did not increase
1/ The present area under irrigation in the north is some 60,000 ha, plus some 15-20,000 ha under irrigation in the center and south.
2/ Up to 3 gr./litre.
3/ Up to 6 gr./litre.
4/ Roughly two-thirds of this area has a rainfall of less than 100 mm, hard- ly any vegetation and hardly any population. - 23 -
beyond carrying capacity. A further possible way to increase income from livestock would be to concentrate on breeding, and then sell the young ani- mals for fattening in the more favorable center or north. Again, this idea needs further study. Its implementation would require a-radical change in the outlook of herd owners, for whom herd size appears to be a matter of prestige, and who seem to prefer to increase their herds to the maximum, at the risk of having to sell off a large part at very low prices in years of low fodder supply.
11.18 In the somewhat less dry and more temporate zones along the coast, there exist some olive plantations. Trees are planted far apart (24m x 24m) and yields per hectare are low. Under current cost conditions it would not pay to expand their acreage; even the harvesting of existing plantations has recently become problematic because of rising wages and insufficient labor.
11.19 Despite the low rainfall in this area, damage by water erosion is substantial. A program, partly financed by WFP, to construct thousands of small dams ("jessours") to reduce the damage and preserve some water in the small plots (often not more than one-tenth of a ha) so as to grow some barley or two or three fruit trees, was begun in 1968, but seems to be no more than a rather expensive device for creating employment. The effect on production seems negligible, and the erosion it prevents would not have done much harm anyway. It is estimated that the desert encroaches at an annual rate of 10,000 ha into the grazing areas. Measures are under study and conferences on this subject are being held. So far it seems that the costs involved and the small number of people affected do not warrant a special effort, except to protect the natural vegetation from human beings and animals. In Algeria, which has the same problem, the authorities intend to construct a screen or to plant vegetation by using groundwater reserves. The cost is not known, but must be high. A similar solution could be examined by the Tunisians, as the North Sahara groundwater reserve stretches also under the areas in question.
11.20 The groundwater reserve, under preliminary exploration by a INESCO team during 1968-72 1/, offers the most obvious scope for agricultural devel- opment in the south. According to the preliminary calculations, some addi- tional 9,000 ha could benefit from a sustained water supply along the coast around Gabes, the island of Djerba, the Zarzis peninsula and the oases of Kebili, Tozeur and Nefta. The mineral content of the water, which varies from 2 to 6 per mille, may limit the choice of crops, and makes a good drainage system essential. In Chenchou, near Gabes (mineral content 2-3 per mille) a 200 ha development produces satisfactory yields (90 t/ha) of lucerne and Sudan grass. In Zarzis and Guellala (mineral content 5-6 per mile) lulcerne also grows well (70 t/ha). Asparagus is rather insensitive to salinity and
1/ UNESCO: Etude des Ressources en Eau du Sahara Septentrional, Paris 1972. - 24 -
does well in those places (4 t/ha). Trials for irrigated olive cultivation are planned by SONMIVAS 1/.
11.21 The newly discovered groundwater reserves will be further investig- ated during the 1973-76 Plan in the framework of the so-called Water Master Plan for the South (Plan Directeur des Eaux du Sud). This study would also cover the existing irrigation in the oases (10-15,000 ha). The existing cul- tivation practices in the oases leave much to be desired; some sources claim that as much as 50 percent of the available water is wasted and that product- ivity could increase in the same proportion. Possibilities are a) thinniag and improving date palms in the inland oases, b) replacing wheat by fodder for livestock fattening, and c) vegetable cultivation for tourism.
11.22 It seems unlikely, however, that measures of this kind can appreci- ably slow down migration from the land in these areas. Admittedly, the scarce resource base outside the irrigated areas has never allowed a dense farming population. In the last five years or so, a large number of men have departed for Libya, Western Europe and Tunis. Even if they come back, and many may do so in the hope of setting up small businesses or to work in the tourist industry, virtually none will be willing to go back to the harsh farm- ing life. This problem is not unique for this part of Tunisia, but applies also to other regions and countries. In many of the southern villages over half of the adult male population is abroad. Emigration could well increase as the proportion of women who have had some schooling increases; married couples, rather than single men, would then depart, and not return.
11.23 The conditions for rainfed cultivation in the center are better, though still limited. The western part is mountainous and infertile but for some of the valleys. Towards the east the terrain levels off. Extensive livestock grazing (sheep and goats; no cattle except in irrigation areas) and, in the coastal area, tree crops (mostly olives, and increasingly, almonds) are predominant. Some 300,000 ha are sown with cereals (mostly wheat, also barley) under marginal conditions, virtually all for on-farm consumption. There are also large alfalfa fields. Major possibilities lie in livestock. Under a program, partially financed by WFP, a start has been made on 60,000 ha, with drought-resistant fodder crops such as cactus inermis, atriplex, accacia, and imported grasses. This will allow the creation of fodder
1/ Societe Nationale de Mise en Valeur du Sud, a semi-governmental company. This company could play a major role in the exploitation of the ground- water. So far its activities are limited to the Governorate of Medenine, where it exploits, (either directly or through a subsidiary "Sahara Comfort", a state-owned agro-combinate in Zarsis (5,000 ha olive trees), two farms for the cultivation of asparagus and lucerne and fattening of sheep, and a few hotels. "Sahara Comfort" is the sole supplier of food to personnel working at the oil forages in the Tunisian Sahara. SONMIVAS has made a study of how to develop small-scale irrigation through the creation of numerous private wells. - 25 - reserves to maintain herds in dry years 1/, and at the same time give protec- tion against wind erosion. The area that could benefit from these measures could run into several hundred thousand hectares, thus increasing the average carrying capacity considerably 2/.
11.24 In the Center, olive trees have shown little response to fertilizers; regrafting for higher priced table olives is only possible in the north, and the economic viability of new plantings is marginal. 3/ However, production may be expected to increase as young trees mature (see below). A major expan- sion of other tree crops, in particular almonds and, to a lesser exten't, pis- tachios, is under way. Through private initiative in the Sfax region and the program undertaken by WFP in the Kasserine area, large scale plantings are taking place or planned. Olive trees and almond trees require or tolerate the same natural conditions, except that almond trees do not survive a succession of very dry years; in the Central Zone, the following considerations make almond trees considerably more attractive:
(a) Almond trees start producing after four years, and reach ful.l production after 10 years; olive trees start after ten years and reach full production at 20.
(b) On the other hand, almond trees need to be replaced after 25 years, while olive trees need to be replaced or regenerated only after 60-70 years.
(c) Labor cost per hectare (70 trees) for almond trees is roughly the same as for olive trees (20 trees/ha), approximately 30D/ha.
(d) The gross output of almonds is 140D/ha, based on a yield of 5 kg/tree and a price of 400m/kg; the gross average output of olives is 55D/ha, based on 40 kg/tree and 70m/kg.
11.25 Some 300,000 ha are sown with wheat and barley. Conditions are marginal and yields low and, in some years non-existent. To conserve water, land is left fallow one and/or two years, during which it is used for grazing and thus receives natural fertilizer. It would not be worthwhile, as in the north, to replace the fallow by a legume. HYV do not do well because of
1/ In the two excessive dry years, 1960 and 1961, the sheep and goat' herd reportedly declined by more than 50%.
2/ Under present conditions one ha of rangeland supports about 2 sheep or goats; 1 ha of cactus inermis can sustain 8-10 animals, and atripllex 5-7 animals.
3/ The results are based on assumptions about long-term prices of olive oil, and development of labor costs. The appreciable rise in the price of vegetable oils has probably improved the prospects, and under the Fourth Plan, substantial new plantings are scheduled (10,000 ha). - 26 - insufficient rainfall. Economically, these lands would be better under fodder, or possibly tree crops, for the market. Tradition and distrust of the market economy may be reasons why farmers are reluctant to give up cereal cultivation, and to buy their grain. Relatively high grain prices also play a role.
11.26 The irrigation areas in the central zone are small and scattered (see map), fed either by groundwater or gravity. The irrigation infrastruc- ture is underutilized, particularly in the areas created and operated by the state. The causes for this vary--in the Nebhana region less than one-fifth of the area's 5,000 ha is currently cropped with off-season vegetables for which the project was meant, mainly because of land tenure problems (see Chapter 12); elsewhere, e.g. in Sbiba, where tenure problems have been solved, the difficulty seems to be unfamiliarity with irrigation techniques, despite a recent, relatively serious extension effort. In the inland irrigation areas the best possibilities probably lie in fodder production for lamb fat- tening. Several farmers are doing this already, while about 100 more have requested credit for this purpose. It is reported that some 60 lambs can be fattened on one hectare.
11.27 The government is undertaking a study of the water resources of Central Tunisia with a view to establishing a water master plan for this region. At the moment the possibilities for expanding the irrigation area seem limited. Much more can be expected from a better utilization of existing infrastructure. The proposed Bank project for irrigation rehabilitation aims at accomplishing this in the Nebhana area, and other projects, including the proposed Central Tunisia rural development project, plan to achieve this in other parts of the region.
11.28 While rainfall in the north is above 400 mm, a small part of this zone, northwest of the line Bizerte-Beja-Djendouba, has an average rainfall of 600-1500 mm, comparable to that of mountainous areas of Western Europe. Some of the mountains of Kroumierie and Mogods are covered by cork oak or other species, but overexploitation by past generations has left many of the hillsides bare and unprotected against regularly occurring torrential rains, with the result of floods downstream (e.g., spring 1973) and the rapid silt- ing up of irrigation reservoirs.
11.29 It has been suggested that much of the 1)69 million spent on soil and water conservation and reforestation during 1962-1971 has been ineffective be- cause of inadequate execution and insufficient protection against the impact of man and goats, so that irrigation reservoirs are silting up at a speed that will greatly reduce their utility in 10-20 years. Erosion and the related prob- lems of siltation, high salinity and the threat of recurrent floods is creat- ing serious problems for irrigation in this area. A detailed evaluation of these works is therefore essential before further irrigation works are under- taken. Important studies are in progress and no further commitments to addi- tional irrigation infrastructure should be undertaken before their conclusion. - 27 -
11.30 Agriculture in the north is varied and more intensive (in terms of output per ha) than in the rest of the country. 1/ More than three-quarters of soft and hard wheat production and the greater part of barley, olives and vegetables are grown in the north, as well as all citrus, wine and some minor crops such as tobacco and sugarbeet. Virtually all cattle and a large part of the sheep and goats are raised in this area. Most of these activities could be expanded. The humid northwestern area is particularly suited for the permanent grazing of livestock (cattle, sheep) but it is still little used for this purpose, mainly because of insufficient know-how and the communal ownership of land. The fertile Sedjenane valley is the subject of a detailed study of a livestock project which could be followed by others.
11.31 Most experts agree, and it has been demonstrated in practice, that with present technology there is no reason to continue to follow the tradition- al two year cereal-fallow rotation in areas where rainfall is above 400 mm. By replacing the fallow by legume cultivation, the supply of fodder could be dramatically increased, while at the same time the cereal yield would be in- creased through improved soil fertility. The further spread of high yielding varieties will also help to raise average grain yields. Most progress has so far been made in soft wheat, but recently some high yielding local varieties of hard wheat have been developed, while varieties of barley are under study.
11.32 The north encompasses most of the country's irrigable land. The irrigable surface is spread over a dozen or so sub-areas (perimeters), of which the largest are in the lower Mejerda Valley (to the west and the north of Tunis) and part of the Cap Bon peninsula. About half of the area already provided with the requisite infrastructure continues to be cultivated under rainfed con- ditions (Chapter 12). Obviously, gross output from this irrigable area could be raised substantially, say from a present D 75/ha (cereals) to D 500 dinars/ha (vegetables). There is also scope for increasing production on the land already irrigated, where average gross output is now of the order of D 300/ha.
C. Some Individual Commodities
(i) Wheat and Barley
11.33 On the basis of data from the National Cereal Board (Office!National des Cereales) the supply-demand situation for durum and bread wheat would have developed as shown in Table 11.3. The figures for production and consumption should be read with some caution, as they include estimates of production con- sumed on the farm and that part of commercial production which does not go through official channels, a qualification which may also explain the substan- tial fluctuations in total consumption, reaching as much as 15 percent, from one year to the other. Be that as it may, the table probably gives alclear picture of the trend in the various elements determining supply and demand. The following points are to be noted:
1/ With the exception of the oases and otherwise irrigated areas. 1' 1. 3: 28. T3: 37PPLI .AiD 3 DJfAN' i08 IT-CL
(Tan TCCq0on
100 1961J-cr-1962 10.93 1'.64 1965 .1966 Durumn Wheat
ProductiorL 3,0 202 [321 5?? 35( i21 300t Im onts - 38 - - - - - Ex.orts 133 33 37 13° 9, 1 L 1 Thonge Brn Stooks (43) (.i3) 66 Li (1'o) 10 (o3'
Total ivae lab 1it + 259 243 21 c 3!9 3`9 327 '
Said Idnuiremerts 7_ :jl 8I 873 75 63 53 Ourman Consumption 189 18! 1'7 296 2e3 29 .33
Brreadi 'W7neat Production 79 I2 7? 125 c^ ' '9 I.mports ?217 519' 325 210 1013 19.L 22r' Exports - - - - 1 :7ihnge in Stocks (19) 72 (30) 2. a ( ) (1 3 Cnotali '.v la'.,il.i.tnr 315 ` 39 437 306 222 2O 267
Seed Requirements 1 I 10 10 16 13 15 Oumrni Consumption 305 L81 427 296 205 255
Durum anr Bread Wheat Pr^duction :39 242 393 654 4n31 52] 319 imports 217 557 325 210 11 1°i' Li Exr.orts 33; 33 37 1>' 1]4 9 et Timports 73 521 288 71 (_ 3 l 1'-3 i-ut Chan.ee ill -tocks (62) 29 26 7G 1;{3) 1- 5 (97) Tot:-! .ivailability 573a 737 655 '655 591 575 57 3eer Imequirements 8C 79 91 93 92 76 i3 Human Consumrntion 4931 658 36 562 9o9 399 506
1067 1968 19659 19 7 0 1971 19-72 19768/ Durum WEheat Production 280 31)0 220 300 4300 578 Lmports 14 86 111 lo 6o' 27 Fxports 1 1 - 1 - - Onange in Stocks (3)) 13 (I) 36 (4) -
Total Availability 333 382 332 369 464 _ 625
Seedl Recuirements 59 59 56 83 70 59 u_man Consump`iton 273 323 27S 289 393' 53'6
Fread .]heat ProduCtion 5iJ 73 8 : 5r 2'3 Import3 333 2-2 330 317 .0 98 Exo arts - 1 - , - - 2hange in Otooks 21. 12 L) 1j 1 _ _ 2otali. v..aUbl i j 33Q _ 2i9 L 32
Seed :ecuirements 12 15 - Y2y Human Ionsumition 321 267 902 3 18 356 421
Dirwi and Bread ,hfneat
Production 330 383 3()02 452 3 P" 92i; Imports 318 308 4L39 433 26O2 125 Exports 1 2 - 5 Net Imnort 317 306 44? 428 26C 1-25 iet ih.nge in Stocks (I9) 25 (3, 9
-otal lvailability 906 663 7364152 B1 8 - 9
Seed hequirements 71 7i 7 1r27 1 37i 'Huoan lonsumntion a95 5Cf(l 98 707 75C 9°67
Soource: Oif3.ce dae j4reales, Comwtes ies ources et _,'ois dU 3l a/ Projected by 8i.:sistr voAgriculture.oP - 29 -
(a) The production of the predominant durum wheat has fluctuated excessively around a static trend. In contrast, the output of bread wheat, while also subject to severe fluctuations, shows a clear upward trend since the mid 1960's. The total domestic wheat supply may show a slight upward trend.
(b) Total wheat consumption increased by 2.7 percent p.a. 1/ over the period 1960-71, most of the increase being in durum wheat.
(c) The opposing trends in the domestic supply of and demand for durum wheat have led to a reversal of the trade position. Until 1966, a substantial part of the crop was exported; since then, there have been regular imports. On the other hand, throughout the 1960's, Tunisia imported large quantities of bread wheat, in particular, in years when both the durum and bread wheat crop were poor, as for example, in 1961 and the late 1960's. In these years, the degree of self-sufficiency for all wheat dropped close to or below 60 percent. Earlier in the dec- ade, in good crop years like 1963 and 1965, self-sufficiency reached nearly 100 percent, but even the recent favorable crops, as in 1971 and 1972, have not checked the tendency to become more and more dependent on imports. It has not im- posed a serious foreign exchange burden as virtually all imports were made under favorable PL480 arrangements.
11.34 Wheat is a staple of Tunisian diet. Out of total expenditure on food, a quarter (in the cities) to a third (in the countryside) is spent on cereals, which provide half to two-thirds of total calorie intake. The aver- age per capita consumption of durum is of the order of 60 kg/year, and that of bread wheat of 80 kg/year, bringing per capita cereal consumption to about 150 kg. Human consumption of other cereals (rice, maize, barley) is negligible. With rising incomes, per capita cereal consumption is likely to increase some- what further 2/ before it starts declining as consumers shift to highZer value foods. In the meantime, within the cereal group there is likely to be a further shift away from maize and barley, solely consumed by the poorest rural inhab- itants, and from durum to bread wheat; the latter shift would run couhter to the recent trend, but would be the result of rapid urbanization; durum wheat is principally consumed in the countryside in the form of such prepariations as "couscous", 3/ while bread grain is still predominantly consumed by the urban
1/ Least squares method.
2/ The Office de Cereales estimates that income elasticity of deman3 for food grains is now at 0.2, while the 1965-68 Household Survey calculated coefficients of 0.4 for the cities, 0.5 for small towns and 0.8 for rural areas.
3/ The per capita consumption of durum is reportedly among the highest in the world. - 30 - population, although more and more accepted in the countryside. Including the effect of population growth, the total consumption of soft wheat may grow by some 4 percent p.a., and of hard wheat by 3 percent.
11.35 In the past, Tunisia's exports of durum wheat enjoyed preferential access to the French market, at prices well above world market prices. 1/ The crop failures in 1972 and 1973 in the USSR and the consequent massive imports pushed up world market prices to over $100/t in early 1973. At these levels, Tunisian wheat could compete on the export market without preferences. It must be expected, however, that prices will again drop to pre-1973 levels as North American land reserves are brought back into production or output of the USSR returns to normal. Therefore, even if an exportable surplus de- veloped, which is far from being the case at present, sustained grain exports cannot be expected at current prices. Also, the prospects for continued PL480 imports being doubtful, a policy of exports of higher priced durum against imports of bread wheat 2/ would not be economic, as the price dif- ferential between durum and bread wheat is not big enough to cover the trans- port and handling costs which such a policy would impose.
11.36 Graphs 1, 2 and 3 show the acreage, yield, and output of durum and bread wheat. The figures originate from the National Grain Board. A sample survey organized in 1972 by the INS showed the National Grain Board figures for both acreage and yield to be underestimated. The data, therefore, in- dicate trends rather than absolute levels. Large-scale mechanized cultivation of both durum and bread wheat before 1960 occurred mainly in the North. Rural population pressure pushed the agricultural frontier southwards 3/ and land previously under permanent pasture or barley was sown with wheat, mostly du- rum. During the 1960's total acreage declined, mostly in the center, where marginal land was taken out of durum and planted with olive and other fruit trees. 4/
11.37 The yields of bread wheat are generally higher than those of durum (Table 11.5). The yields were considerably lower in the 1960s than in the 1950s, because of the abnormal frequency of dry years in the 1960s. It has
1/ In 1966/67, for example, the Tunisian producer price was $84/ton, while producer prices in USA, Canada, Argentina-stood at $46-50/ton.
2/ Similar to that for olive oil and other edible oils.
3/ In 1890, the population of the center was estimated at 80,000. It is now about 700,000.
4/ This was the result of deliberate decisions by planners at that time to temporarily forego a low output from this land in favor of higher output at the time the trees would come into full bearing 15 to 20 years later. - 31 -
Graph. 11.1 TUNISIA - AREAS OF BREAD WHEAT AND DURUM IN HECTARES, 1949-1969
1200 ______
11 OC
2000 _ DUR_MDUR EAD W EH T ____
900 __ _
800
700
600 *_-___
500 Bank850
400
300__ _ _
BREAD WHEAT 200 - A02 ___
100 _ -~~~~~~~~~~~~ _~10
10
1949 1951 1953 1955 1957 1959 1961 1963 1965 1967 1969
Source: University of Minnesota, on the basis of data from the National Grain Board World Bank-8504 - 32 -
Graph. 11. 2 AVERAGE YIELDS IN QUINTALS PER HECTARE OF BREAD WHEAT AND DURUM, 1949-1969
12.0
11.0
10.0
BREAD VVHEAT
9.0
w 8.04 4 4
I- 6. w
7.0 _ _ _ _
0.0
1 .0 _ _
-50
1949 1951 1953 1955 1957 1959 1961 1963 1965 1967 1969
Source: University of Minnesota, on the basis of data from the National Cereal Board VWorld Bank-8503 - 33 -
Graph . 11. 3 PRODUCTION OF BREAD WHEAT AND DURUM IN 1000 QUINTALS 1949-1969 600 10
5000
DURUM
4000 J0 C/) -j z a
C 0
Z 3000 ___ _ _ z 0
0 0
200 ______e
00
1949 1951 1953 1955 1957 1959 1961 1963 1965 1967 11969
Source: University of Minnesota, on the basis of data from the National Cereal Board World Bank-8502 - 34 - been clearly demonstrated 1/ that there is a close correlation between yields and total rainfall. The correlation is particularly close if the timing of the rainfall is taken into account 2/. (See Table 11.5).
11.38 The changes in rainfall may explain fluctuations in yield, but not the low average yields compared with neighboring countries.
Table 11.4: AVERAGE WHEAT YIELDS IN TUNISIA AND NEIGHBORING COUNTRIES (qx/ha)
Average Average Average 1948-'52 1961-'65 1967-'71
Tunisia 4.9 4.4 5.0 Algeria 6.2 6.4 6.7 Morocco 6.1 8.5 10.2 Spain 8.7 10.5 13.0 Turkey 10.0 10.8 12.3
Source: FAO, Production Yearbook 1971, Rome 1972.
One of the reasons is simply that, despite the reduction in acreage in the center, there is still a large area under wheat that has marginal rainfall as well as marginal soil; this tends to pull the national average down. Another reason is that many of the large producers in the north do not have the incen- tive or the know-how to raise the average yield. This applies to the state controlled production cooperatives and agro-combinats. For example, on a 2,000 ha farm near Mateur, with an average rainfall of 600 mm, the crop rota- tion is wheat-fallow; there is no fertilizer, no weed control, and the average yield is 4 to 5 qx/ha. The net income from wheat is about 5D/ha, from the grazing of sheep on fallow 12D/ha 3/, giving a total net income 17,000 D/year (= US$40,000). The owner comes only on Saturday from Tunis to supervise his manager and only for a few days at harvest time. Machinery is rented and only the manager and some temporary laborers are employed. This case is not repre- sentative of all large producers, but not uncommon.
1/ Russel B. Gregg, Agricultural Credit in Tunisia, USAID/Tunis, 1967, on the basis of earlier work by L. Dutcher: "Pluviometrie et Stabilite de la Production", Terre de Tunisie, January 1958.
2/ Gaied Belgacem, L'influence de la pluviometrie sur la production cereal- iere dans le nord de la Tunisie, 1972. According to this study, autumn rains in the 1960s were on average 41% below those of the 1950s. For spring rains, the difference was 29%.
3/ Although wheat gives a lower income than fallow, cultivation is necessary to maintain land in reasonable condition. - 35 -
TABLE 1165: RAINFFALL AND WHK4T YIELDS IN NORTHERN TUNISIA
FROM 1945 - 1969
Rainfall In mm Yields In gl/ha Fall 3pring Durum Wheat Bread Wheat
1945 - 46 65,7 127,2 5,7 10,1
1946 - 147 73,8 45,4 4,2 8,6
19147 - 48 86,2 114,5 3,3 6,2
1948 - 49 158,5 160,2 6,0 11,6
1949- 50 85,4 215,8 6,3 11,14
19505 - 51 138,14 66,7 3,8 8,1
1951 - 52 185,3 1.40,9 7,3 12,3
1952 - 53 152,0 182,2 6,1 11,5
1953 - 54 233,5 178,2 6,1 10,4
1954 - 55 87,4 130,7 4,7 6,2
1955 - 56 237,3 103,7 4,7 7,4 1956 - 57 142,6 130,5 4,4 7,4
1957 - 58 274,6 90,6 5,1 8,o
1958 - 59 264,3 225,1 4,9 7,6
1959 - 60 137,1 161,2 4,4 6,9
1960 - 61 41,8 54,8 3,0 4,8
1961 - 62 140,7 102,4 4,9 7,6
1962 - 63 155,5 134,0 7,1 11,4
1963 - 64 141,0 95,1 5,2 6,6
1964 - 65 144,4 88,4 6,1 8,7
1965 - 66 106,1 167,4 5,2 4,2
1966 - 67 113,7 91,3 5,0 3,5
1967 - 68 81,9 74,5 4,5 5,6
1968 - 69 42,7 104,9 3,9 5,6
Source: Gaied Belgacem, L 1influence de la pluviometrie sur la production cerealiere dans le nord de la Tunisie, 1972. - 36 -
11.39 A glimpse of what would be possible instead is provided by an ex- perimental livestock farm in the same area, which is also producing 200 ha of wheat. In a few years, wheat yields have been raised to 37qx/ha. Instead of leaving the land fallow, a wheat-beets-legumes-fodder rotation is followed. The higher wheat yields are explained by fertilizer use, weed control 1/, im- proved rotation and high yielding varieties. Gross income is 10OD/ha; net income 25D/ha. In addition, several times as much employment is provided, despite the highly mechanized cultivation methods. The question is, of course, how to move from the first towards the second situation. Since the landowner, even if he wished, would not have the technical know-how to imitate his neighbor's example, he must be given an incentive to transfer responsibility (or possibly ownership) to somebody who has the necessary knowledge. Such an incentive could be provided by a tax on production potential. The salaries of the managers of state controlled farms should be related to both gross and net output per ha.
11.40 Under a USAID-financed program, the use of the so-called M4exican varieties of bread wheat rapidly increased in the first three years after their introduction in 1967; results in 1970/71 were, however, disappointing as a result of bad quality seed, and interest tapered off. Another reason given for lessened interest is that the new varieties are much more demand- ing with respect to soil preparation, fertilizer, and weed control than the traditional varieties. In 1971, a locally developed improved variety of durum wheat was introduced.
Table 11.6: IMPROVED WHEAT VARIETIES
Year Bread Wheat Durum Wheat Yield qx/ha
1967/68 800 ha - 23 - 1968/69 11,700 ha - 15 - 1969/70 53,500 ha - 20 - 1970/71 100,100 ha - 13 - 1971/72 56,500 ha 3,500 ha 17 n.a. 1972/73 70,000 ha 55,000 ha n.a. n.a. 1973/74 /a 130,000 ha 60,000 ha 18 16 1974/75 /a 140,000 ha 80,000 ha 18 17 1975/76 /a 150,000 ha 100,000 ha 19 17
/a Planned.
Source: Office Nationale des Cereales.
1/ This is essential if fallow is replaced by a fodder crop. This farm has also developed a method to recover land infested with oxalis. It is es- timated that some 50,000 ha of the best land in the North is covered by oxalis. - 37 -
11.41 As shown in Table 11.6 there are plans to double the acreage under the improved varieties during the current Plan. In order to bring this about, ONC plans to intensify its extension effort, to lower the price and improve the distribution of fertilizer, to provide credit to enable farmers to buy weed control equipment and to provide small farmers with credit in kind. 1/ These efforts will only bear on the north. By 1976, 50 percent of the acreage under bread wheat and 13 percent of the project acreage under durum would be cultivated with the new varieties. The plans for durum wheat, which is pre- dominantly grown by small farmers, are of much more limited scope than those for bread wheat. Thus the so-called modern sector, that is, the large farms, often owned by absentee landlords, will be virtually the sole beneficiaries. In other countries( Mexico, Morocco, Turkey, Ethiopia), small labor-intensive farms have successfully adopted the new varieties.
11.42 The authorities are aware that much of the acreage under cereals in the center and the south would be better under fodder or tree crops, and they envisage a general reduction in cereal acreage in those areas, and a shift from wheat to barley in the north (see Table 11.7). No mention is made, however, of the measures to bring about these changes. Also, although barley yields are less sensitive to fluctuations of rainfall, they are on the average not above those of durum wheat, 2/ while the price of barley is well below that of wheat. 3/
Table 11.7: PROJECTED CEREAL ACREAGES IN 1976 AND COMIPARISON WITH 1972 ('000 ha)
North Central South Tunisia 1972 1976 1972 1976 1972 1976
Durum Wheat 560 480 400 300 960 780
Bread Wheat 160 200 110 100 270 300
Barley 135 180 300 250 435 430
Total 855 860 810 650 1,665 1,510
The reduction in durum acreage on the one hand, and the expected rise in con- sumption of domestically produced durum on the other, imply an expected rise
1/ This last measure is very much a token effort and will, if it works, affect no more than 60,000 ha in the "traditional" sector.
2/ There may be something wrong with the data here, because in other Mediterranean countries barley yields are up to 20% above wheat yields.
3/ Since 1967 barley 2.8D/ql, bread wheat 4.2D/ql and durum wheat 4.8D/21. - 38 -
in yield to 7.4 qx/ha by 1976.. This seems optimistic; since 1950 (and probably before) average national yields have never exceeded 5 qx/ha in any year; the average for the 1960's was below 4 qx/ha and, for the 1950's, below 5 qx/ha. Even considering the projected, but unlikely, reduction in acreage in the center and south, where yields rarely exceed 2 qx/ha, the figure remains high, only 1963 and 1972 having shown yields of 7 qx/ha in the north. Much is expected from the HYV, whose yields should reach 17 qx/ha; this may be justified, al- though these varieties were introduced only two years ago. Much more doubtful is the projected yield of 7.4 qx/ha for the ordinary varieties by 1976. Such a level is undoubtedly possible, but to reach it within a few years would require: a) extraordinary effort in terms of production incentives of the type discussed above, and b) a device to aid small producers to benefit from the available technical innovations.
11.43 Similar remarks would apply to bread wheat, for which an average yield of 11.5 qx/ha is expected by 1976, except that the new varieties have been tested for several years, and there are relatively few small farmers cultivating bread wheat. No new varieties of barley adapted to Tunisian conditions have been tested yet; still, average yields are expected to in- crease from below 6 qx/ha to 10 qx/ha by 1976. Only a small part of this average increase could result from the projected acreage reduction in the center/south.
11.44 In surunary, the country has a potential for important wheat yield increases, especially in the north. In the long term, a doubling of yields seems quite within the bounds of possibility. Assuming that self-sufficiency remains the objective, and given the expected limited growth in demand, this could mean that possibly a third of the acreage presently under wheat could be freed for other uses. While labor requirements per ha would rise by some 10-20 percent, overall labor requirements would fall, possibly by as much as a quarter. Given the already high degree of mechanization of the commercial farms, capital requirements per ha would rise only marginally and the total capital use in wheat cultivation might also fall by at least a quarter. Ob- viously the demand for short term capital would grow considerably, as the higher yields would mainly result from the increased use of current inputs (seeds, fertilizer, pesticides). The pace at which these higher yields could be achieved would greatly depend on the availability of these inputs and of short-term credit to finance them. This should, however, not pose a major problem. Neither should the necessary research and extension input pose in- surmountable problems, as considerable local research experience is already available, and extension is facilitated by the fact that the large wheat growers are relatively few. Participation of the small producers in this process of technical innovation may appear more difficult, and will require political will and a concentrated effort.
(ii) Olive Oil
11.45 Vegetable oil, either domestically produced olive oil or imported other edible oils, is a staple in the Tunisian diet, and virtually the only source of fat intake; the consumption of animal fat, such as butter, is - 39 -
negligible except for tourists. 1/ Per capita consumption of all edible oils is currently some 12 kg. This figure has continued to increase, but t'he share of olive oil has sharply declined because of: a) the decline in world prices of other vegetable oils, such as soybean and palm during the 1960's, and b) the policy of importing these cheaper oils and exporting the more expensive olive oil. Under this policy two types of oil are marketed--a mixed oil and a pure olive oil. The proportion of olive oil in the mixed oil has been gradually reduced from 50 percent to 10 percent. The National Oil Bureau (Office National de l'lluile) has a monopoly of all foreign and domestic trade in vegetable oils, and has thus the authority to implement this policy through price setting. Currently the retail prices are:
(a) first quality pure olive oil 400 m/liter (b) mixed oil 180 m/liter
The price ratio was thus 2.2:1. 2/
11.46 Total oil consumption is currently some 60,000 t., of which a third is olive oil: two-thirds of the latter are consumed pure and one-third is mixed with other oils. Taking account of the expected growth of per capita consumption 3/ and population, total domestic consumption could grow by some 4 percent p.a. during the next decade or so. How much of this will be olive oil will depend on the price relationship between pure olive oil and mixed oil. This in turn will depend on export demand. As indicated earlier, Tunisia is the second most important exporter of olive oil after Spain. Table 11.8 shows that Italy, besides being the largest producer, is also by far the largest importer. Assuming that the price ratio between olive oil and substitute oils will not exceed 2:1, olive oil is likely to keep most of its market, although urbanization and culinary changes may gradually affect demand adversely. Taking into account population growth, one may expect the demand for olive oil to hold its own in countries like Italy, France, USA, and possibly increase with rising incomes in Spain, Turkey and North Africa.
11.47 Because of the labor-intensive nature of olive cultivation, Italy and Spain find it more and more difficult to keep orchards in production. The search for mechanical harvesting methods has been going on for years, but none
1/ Butter consumption by tourists is estimated at 300 tons.
2/ In major consuming countries, like France, it has been observed that olive oil can command a price 100-150% higher than the next most;expen- sive substitute oil.
3/ FAO projects for the period up to 1980 an annual per capita increase of 1.7%. The increase in vegetable oil prices since 1973 will change the price ratios and could result in an increased internal demand for olive oil. - 40 - of the methods developed, such as trunk vibrators or chemicals, has proved satisfactory so far; their operation is subject to several constraints (flat terrain, one rather than three trunks, toxicity of chemicals). In Spain, both the cost of seasonal labor and low picking productivity (low yields per tree in many areas) are making olive cultivation a marginal occupation, although recent abnormally high export prices have helped to keep it going. In Italy, olive oil production has been artificially maintained since the mid 1960s by massive producer support from the Common Market agricultural fund. 1/ How long this will go on is an open question. Mechanized harvesting is difficult because most of the orchards are on slopes.
Table 11.8: STRUCTURE OF WORLD OLIVE OIL PRODUCTION AND TRADE (in '000 tons; average 1967-70)
Production Exports Imports
Italy 502 15 104 Spain 397 101 - Greece 205 19 - Turkey 103 12 /a - TUNISIA 60 28 - Morocco 43 12 - France 3 4 18 U.S.A. - - 27 Brazil - - 11 Other 164 29 60
World Total 1,477 220 220
/a Average 1967-69.
Sources: FAO, Production Yearbook 1971, Rome 1972. FAO, Trade Yearbook 197.1, Rome 1972.
11.48 The short- and medium-term prospects for Tunisian exports appear thus quite favorable. Labor costs are well below those in Spain 2/, and a given increase in labor cost can be more easily absorbed by Tunisian growers than by their Spanish counterparts, many of whom are already marginal. But will Tunisian olive oil remain competitive with other oils? Because of the
1/ Producers received US$1,250/t, while the consumer price corresponded to $750/t.
2/ As an average over the last few years, the ratio between the daily wage of a picker and the producer price of a kg of olives is about 17 in Tunisia (850 m per day and 50 m/kg), and about 50 in Spain (350 pesetas/ day and 7 pesetas/kg). - 41 -
large regional variations in tree density and yields, and the extreme fluctua- tions in olive yield/ha from one year to the other, the following cost calcu- lation for an average year and an average region should be read with caution. Such a calculation would present itself as follows (750 kg of olives per ha, oil yield 20 percent):
Cultivation costs 19.0 D/ha Harvesting costs 7.5 D/ha Managing costs 1.5 D/ha Subtotal 28.0 D/ha = 37.3 m/kg
Processing costs 1/ 11.0 m/kg Total, per kg of olives 48.3 m/kg Total, per kg of oil 242 m/kg
Since 1969 prices have been close to 300 m/kg for medium quality, and between 300 and 350 for first quality, and the FOB export price between 1967'and 1971 was about 360 m/kg (= US$700-750 per ton). At first sight, there therefore appears to be ample scope for absorbing rising labor costs. It should be observed, however, that labor accounts for about three quarters of total cost. A rise in labor cost of 20 percent would therefore make the further exploita- tion of many orchards uneconomic, in particular in the center and south.
11.49 The first signs of (seasonal) labor shortage have been felt already in the recent years of heavy crops. As more and more male laborers have emigrated, the price of labor, particularly of seasonal labor, has gone up rapidly, and may be expected to continue to do so. One way to counter the effect of the rise in wages of male laborers might be a change in harvesting practices. Customarily, harvesting is done by groups of eight to ten people, four or five men up in the trees shaking the branches, and four or five women or children picking the olives from the ground. It has so far been considered unacceptable for women to take over the role of the men in the trees. In Sardinia, where a similar situation existed in the 1950s, olive production went down dramatically until, under the pressure of economic forces, women took over the role of men. The extension services could make an effort to make similar changes acceptable to Tunisian harvesters, to avoid a production decline in some areas affected by labor shortage. For this to happen would be regrettable in view of the favorable marketing prospects over the next 10-15 years.
11.50 Olive oil production has two outstanding features. Olive ¢rees are among the few crops that produce under semi-arid conditions of average rainfall as low as 150-200 mm, while they can survive successive years of
1/ As an average over the last few years, the ratio between the daily wage of a picker and the producer price of a kg of olives is about 17 in Tunisia (850 m per day and 50 m/kg), and about 50 in Spain (350 pesetas/ day and 7 pesetas/kg). - 42 - severe drought. On the other hand, olive production is notorious for its fluctuations. The underlying causes are not fully known, but some of the reasons are the rainfall in the 18 months preceding the harvest, a two-year cycle, a 7-9 year cycle, and production patterns proper to each tree. Even in a small country like Tunisia, a good year in one region may be a bad one elsewhere. Within the Mediterranean basin a low crop in one country is often offset by a good one in another. Graph 5 shows Tunisian production since 1950.
11.51 Although olive production is practiced throughout Tunisia north of 14edenine, it is heavily concentrated in 3 zones: Sfax, the Sahel and the Mejerda Valley. 1/ In Sfax it is the predominant crop, 80 percent of the so- called "useful agricultural area" ("surface agricole utile") being under olive trees. Cultivation practices vary--in the north, tree density is normally 100-130 trees/ha, often intercropped with vineyards or annual crops. Towards the south tree density declines and, in the Sfax region, tree density is 17-20 trees/ha, without intercropping. In all regions, olive trees are often mixed with other fruit trees, such as almond or pistachio trees. W4ith the current age structure of trees, the "normal" oil yield/ha is 220 kg in the Mlejerda Valley, 200 kg in the Sahel and 130 in Sfax. 2/ Under the various development plans of the 1960s, a huge planting program was carried out, of which the first effects will be felt during the 1970s; during the 1980s these trees will come into full production. This will considerably change the age pyramid of olive plantations.
11.52 A survey of land utilization in 1971 and 1972 estimated the number of olive trees at about 52 million, occupying an acreage of some 1,242,000 ha. 3/ Of these:
(a) 21 percent were classified as "very young", i.e., less than 10 years;
(b) 27 percent were between 10 and 20 years and in early produc- tion;
(c) 45 percent were adult trees, in full production;
(d) 7 percent were old, over 70 years, with declining years.
1/ Roughly corresponding with the governorates of Sfax, Sousse and Tunis/ South.
2/ Under irrigation, yields are about 400 kg/ha.
3/ On a large part of this acreage, in the north olive trees are inter- planted with vineyard or annual crops. This may be the cause of the relatively low yields per tree in the north. - 43 -
Graph. 11.4
OLIVE OIL PRODUCTION SINCE 1949/50
170 5/65/467
150 O e i d ' ed k
130 ______
V) 110 _ _ _ 2 0
0 z
Zo 0
30I
70
1949/50 51/52 53/54 55/56 57/58 59/60 61/62 63/64 65/66 67/68 69/70 71/72
Source: Office Nationale de I'Huile WVorld Bank-8501 - [4 -
TABLE 11.9: INVENTORY OF OLIVE PLANTATION, 1972
No. Numbers of Trees (I500) Gouvernorats Trees Very Per Ha. Young Young ALdults Old Total Tunis (108) 1,700 2,300 2,800 200 7,000 Bizerte (133) 435 500 575 220 1,730 Deja (100) 1,375 1,300 705 90 3,470 Jendouba (100) 550 560 630 60 1,800 Le Kef ( 92) 500 510 1,200 190 2,400 INabeul (100) 635 1,110 1,900 355 4,000
Total North (103) 5,195 6,230 7,810 1,115 20,400
Sousse ( 60) 1,670 2,655 7,225 1,720 13,270 Kairouan ( 38) 54O 1,635 1,060 155 3,390 Kasserine ( 35) 275 635 600 20 1,530
Total Centre ( 52) 2,485 4,925 8,885 1,895 18,190
Sfax ( 21) 850 1,350 hL,240 160 6,600 Gabes ( 17) 100 120 O30 50 700 Gafsa ( 18) 1,350 875 1,100 175 3,500 Medenine ( 18) 750 500 1,200 250 2,700
Total South ( 19) 3,050 2,8) 6,9700 635 13,500
Grand Total ( 4o) 10,730 14,050 23,665 3,645 52,090
No. Acreage ('000 ha.) Trees Very Gouvernorats Per Ha. Young Youn Adults Old Total Tunis (108) 16.00 21.00 26.co 2.00 65.oo Bizerte (133) 3.30 3.75 4.30 1.65 13.00 Deja (100) 14.00 13.00 7.00 1.00 35.00 Jendouba (1)0) 5.50 5.60 6.30 o.60 18.00 Le Kef ( 92) 5.00 5.50 13.50 2.00 2S.00 Nabeul (100) 6.25 11.00 19.00 3.75 49.00
Total North (103) 50.05 59.85 76.10 1l.oo 197.00 Sousse ( 60) 28.00 44d.o0 120.00 28.00 220.00 Kairouan ( 38) 14.00 L3.00 27.50 3.50 88.oo Kasserine ( 35) 7.50 18.00 17.00 0.50 43.00 Total Centre ( 52) 49.50 105.00 164.00 32.00 351.00 Sfax ( 21) 40.00 63.00 200.00 7.00 310.00 Gabes ( 17) 6.00 7.00 25.00 2.00 40.00 Gafsa ( 18) 75.00 48.5o 61.00 9.50 194.00 Nedenine ( 18) 42.00 28.00 66.00 14.00 150.00 Total South ( 19) 163.00 146.50 352.00 32.50 694.O0
Grand Total ( 40) 262.55 311.35 592.60 75.50 1,24°.00
Source: National Oil Bureau. - 45 -
TABLE 11.10: OLIVE CIL, PP.ODUTION PIRGUECTS
1 9 7 2 1 9 7 6 Total S Of TotaL % Of Govern orates ka/tree kg/ha In Tons Total kg/tree kg/ha In 'ons Total Tunis 2,150 235 8,712 3,2 2,950 317 114,279 10,9 aizerte 1,1470 196 1,371 1,3 1,900 264 2,11)4 1,6 Bej n 1,720 172 2,7402 2,2 2,420J 2149 4, 4!87 3,4 Jendouba 1, 5 60 1)6 14,83 1,3 2,130 224 2, 4G8 1,9 Le Kef 1,750 159 2,710 2,, i,400 130 2,2:L3 1,7 Nabeeul 2,230 22° 5,86 5 2,510 257 7,1440 5,7 Sousse 3,100 183 29,273 27,5 3, 230 195 32, 5OL 2)4,9 Kaireuan O),02c 114 7,866 7, 4L,500 173 10o,00 7,7 sKasserine 3,910 139 3,623 3,LiI 4,240 155 4,497 3,,4 Sfax 5,1490 118 27,398 25,3 5,670 121 30,677 23,5 Gabes 3,880 67 1,9°6 l,o 14,050 73 2,251 1,7 Gafsa 14,980 91 8,O89 7,6 5,220 94 10, 7tJ6 8,,2 Medenine 3,760 68 5,927 5,5 3,820 69 6,971 5,14
Iotal 3,260 136 106, J5- 100 3,554 1148 1 30,730 100
1 IQ 8 1 Lotal % Of Governorates kg/tree kg/ha In Tons Total
Trunis 4,58n 50U 27, 70L4 14,7 izher t 2,8°0 3,-3 3,932 2,1 Beja 3,9410 398 9,9147 5,3 Jendouba 3,310 353 4,941 2,6 Le Kef 1,400 1314 2,279 1,2 K.!abeul 3,050 311 10,571 5,6 Sousse 3,640 223 41,015 21,8 Kaireuan 5,04.0 198 14,685 7,8 Kasserine 4,920 177 6,200) 3,3 Sfax 6,550 1141 39,414 20,9 Gabes 4,390 81 2,741 1,5 Gafsa 5,870 107 15,943 8,5 Medenine 3,950 73 8,710 4,7
Total 4,300 189 188,082 100 a/ Figures showin concern "normal" production. Total actual production was 183,000 tons.
Source: National Oil Bureau - 46 -
As more of the younger trees come into production or into full production, only partially offset by the falling yields of the older trees, average pro- duction can be expected to increase by some 6.5 percent p.a. between now and 1985. Normal production in 1976 could be expected to be 131,000 tons; in 1981, 188,000 tons; and in 1985, 240,000 tons. "Normal" production in 1972 would have been 106,000, but actual production was a record 183,000 tons. From Table 11.10 it can be seen that the fastest increase is expected in the north, 1/ while the share of the center 2/ in total output is expected to decline from 63 percent in 1972 to 51 percent in 1981, although output there would still grow by 4.5 percent p.a.
11.53 A further source of growth lies in the rejuvenation of old trees (over 70 years), discussed above. Just how much this could contribute would depend on the speed with which the rejuvenation methods are applied. The re- generation of old olive trees can bring output per tree back to its normal level and eliminate the need for replanting, which is expensive because of the 10-15 year non-bearing period of young trees. Two systems have been dev- eloped by the Research Center for Tree Crops (Station de Recherche pour l'Oleiculture et l'Arboriculture) in Sfax, one for old trees that are still producing reasonably well, another for trees that hardly produce any more. The cost and the slight temporary drop in output are offset by the sale of the wood cut from the old tree (usually used to make charcoal, but with the possi- bilities for the furniture industry). The tree owner acquires a new adult tree with 50 years of production ahead of it. In the coming years both sys- tems will be applied on 5,000 ha of state-owned land; they have not yet been applied to privately-owned trees, and a special effort seems warranted. The nationwide proportion of old trees suitable for regeneration is 7 percent, and increasing. 3/ Some further gain in oil production could be achieved through a rise in the extraction rate. The oil content can vary considerably from one year to the other, being lower in years of good crop, when olives have a higher water content. With the newest processing equipment, it is possible to increase extraction rates, possibly from the current average of 20 percent to 23-25 percent.
11.54 A long-term increase in output as a result of new plantings is un- likely. In the past most plantings were made on the so-called M4orgharsa sys- tem, whereby the landowner gave a second person the right to plant, at the latter's cost, a certain acreage; as trees came into production, the owner gave the planter half of the land. Only in the south would there still be land for this purpose, but low yields and rising labor costs would make most planters think twice before embarking on new planting. In the more favorable center, not much suitable land is left, and what is still available is more likely to be planted with the more remunerative almond trees, fodder, pistachio
1/ For this purpose, the Governorates of Tunis, Bizerte, Beja and Jendouba, Nabeul and Le Kef.
2/ Governorates of Sousse, Kairouan, Kasserine, Sfax.
3/ 3.6 m trees out of 52 m. - 47 - trees, and atriplex. In the north new plantings must be considered unlikely for much the same reasons as in the center. The grafting of olive oil trees with table olives would be a better possibility there, and is envisaged under the Fourth Plan. Lastly, a possible development of olive tree cultivation under irrigation must be mentioned. Some experiments are underway or planned (in Zarzis). Under proper drainage conditions, olive trees have proved to be resistant to relatively high salinity, so that it might be possible to utilize the ground water reserves of the south in this way. Low growing trees, planted in hedges, would lend themselves to mechanical harvesting. This method, which is applied in Italy, merits study.
11.55 The labor implications of the expected growth in output are Limited to harvesting and trimming, as cultivation costs are the same for young or adult plantations. Trimming should be done every other year after the tenth year; a trimmer can trim 8 trees a day. During the next 10 years, the number of trees to be trimmed should increase from 41 to 52 million, which should increase employment by 50,000 man-days a year. Harvesting employment would increase more or less proportionally with output, say at 6 percent p.a. A group of 10 men, women and children harvest 900 kg/day and more, in good crop years. With "normal" production of olives increasing by 45,000 tons a year, harvesting employment would increase by 50,000 days a year, half men and half women. The harvest season stretches from November until January or February, depending on the site. In most other forms of agriculture the seasona'l labor peak is from spring to fall.
11.56 Farm capital requirements for the expected increased output are negligible. The cost of rejuvenation of old trees is small (5 D/ha in Sfax, 20 D/ha in the north). Irrigated olive cultivation would require substantial investments per ha (of the order of 1,000 D/ha), but for the foreseeable fu- ture this practice will not be applied on more than a few hundred ha. The major investment requirement is for additional crushing facilities for which six new factories are planned in the north.
(iii) Livestock
11.57 Although the data for the livestock sub-sector are very unretliable, the course of prices and imports (Chapter 10) indicate that supply hasi lagged increasingly behind demand over the last few years. Two factors appealr to be responsible:
(a) Rising incomes; although the per capita consumption of livestock products in the urban centers is already well above the average for the country (13 kg/year), as is also the consumption of fish, most of the increase in demand is taking place in the big cities; and
(b) The supply of meat has been lagging for two reasons. At the time of the program for intensive cooperativization in 1968-69, many farmers preferred to sell their stock at low prices, rather than bring it to the cooperative; large numbers of animals are said to have been smuggled into Algeria at that time. Expressed in female units, it is - 48 -
estimated that in 1969 the sheep herd was 1.4 million head, against 1.6 million in 1962; a similar reduction in the number of cattle took place for cattle. Low rainfall during the 1960s aggravated the reduction. Secondly, since 1969, continued favorable weather conditions have enabled farmers to rebuild their herds, and they have thus kept supplies from the market. It is estimated, for example, that from 1969 till early 1972, the sheep herd rose from 1.4 million head to 1.85 million head. Recovery of the cattle herd was slower, because of the longer reproduction cycle.
11.58 At present prices, the demand for both meat and milk can be expected to grow by 4-5% per annum but, despite their past increase, retail prices are still low compared with those in Western Europe. The current exports of sheep to Libya may diminish because of increased Libyan production 1/, so that more animals may become available for the domestic market. An increase of total effective demand by some 3-4% p.a., is not unlikely, and would imply a per capita consumption growth of 0.5-1.5%.
11.59 The Fourth Plan forecasts a rise in the per capita consumption of meat from 13 kg to 15 kg per year by 1976. This seems high, even assuming constant prices. On this basis, total consumption in 1976 would be 90,000 tons net, or 150,000 tons liveweight. Imports would be 10,000 tons. Consump- tion in 1972 was estimated at 59,000 tons, of which 3,000 tons was imported. Table 11.11 shows consumption forecasts by type of meat, as well as for eggs and milk.
Table 11.11: PRODUCTION OF LIVESTOCK PRODUCTS, 1972 AND TARGETS FOR 1976 ('000 tons net)
1972 1976 Plan
Beef 19.0 26.3 Mutton 21.6 29.7 Poultry Meat 12.6 17.7 Other Meat 6.2 7.0
Total Meat 59.4 /a 80.2 /c
Eggs 240 million units 275 million units Milk 138 lb n.a.
/a Includes 3,000 tons imports. /b Total consumption is estimated at 260,000 tons, of which 120,000 tons imported. /c Total requirements would be 50,000 tons.
Source: Ministere du Plan, Preparation du IV Plan, February 1, 1973.
1/ Reportedly, a considerable amount of sheep fattening takes place in the oil producing region, where groundwater is used for alfalfa production. - 49 -
11.60 The targets for poultry could reasonably be set higher. Poultry production in 1972 was estimated at 12,600 tons net; the Plan figure for 1976 is 17,200 tons. The experience of countries like Spain and Italy shows that the rapid increase in the supply of poultry can be brought about by a few entrepreneurs operating large-scale units 1/; the necessary technology can easily be imported. The favorable feed ratio for poultry allows prices to be lower than for other meats. The Ministry of Agriculture estimates that the share of poultry in total meat consumption will increase from about 20% to nearly 30%, but those is not high, particularly for a country without pork consumption. The planned poultry production would require some 100,000 to 120,000 tons of feed for poultry meat 2/, most of which would probably have to be imported because of the expected deficit in food grains. The PLan fore- casts some shift from wheat to barley, but this seems hardly plausible with current price relationships. Production possibilities for maize are slight, and so are those for other poultry feed, with the possible exception of alfalfa pellets, the production of which is planned in the Chen Chou project.
11.61 There is undoubtedly a considerable scope for an increase oE both rainfed and irrigated fodder production. The main possibilities would be:
(a) cultivation of drought resistant fodder crops and grasses in the semi-arid center, along the lines of the current WFP project; 3/
(b) improvement of natural pastures in the northwest, as envisaged under the proposed Sedjenane project;
(c) replacement of the fallow year in grain cultivation by fodder or legumes in areas with rainfall over 400 mm;
(d) cultivation of alfalfa in irrigated areas, particularly where the water quality does not permit crops of higher value to be grown. This is already done on a small scale near Gabes (Chen Chou), Djerba, and in the Kasserine area. An expansion of the Chen Chou project from 200 ha to 800 ha is foreseen in the next few years and, in view of the saliniLty of the groundwater reserves there and elsewhere in the south, it may be expected that a large part of the area irrigated with this water (9-12,000 ha) will be cultivated with alfalfa;
1/ Tunisia already has several such units, operating quite successfully.
2/ The Plan target for egg production (275 million) would require a further 70,000 to 80,000 tons of feed (Mission estimates).
3/ An in-depth study of pasture improvement possibilities has been made by H.N. Le Hlouerou and published in Principles, methodes et techniiques d'amelioration pastorale et fourragere en Tunisie, FAO, Rome 1969. - 50 -
(e) feeding of sugar beet tops and pulp. Sugar beet is grown on some 2,000 ha, producing some 20,000 to 30,000 tons of fodder so far largely unused;
(f) establishment of fodder reserves in the arid and semi-arid zones. Although this would not represent an additional source of feed, it could effectively raise livestock production by preventing loss of weight animals; and
(g) strengthening of veterinary services and upgrading of local breeds (as was done in the Ferme Fretissa in Mateur). This does not increase the fodder supply, but improves its utiliza- tion.
11.62 While the additional feed supply from all these sources is difficult to quantify, a doubling or tripling appears possible. However, it is one thing to have agronomic potential, but quite another to take advantage of it. The need to grow fodder crops and to produce concentrates depends, obviously, on the availability of fodder from pastures, and this changes from year to year and discourages potential producers. 1/ The transport of fodder is prohibitively expensive, which would make it desirable to take young animals from the traditional grazing areas in the center and the south to the places of fodder production for fattening. This would involve a change in current practices and would require a considerable organizational and financial effort, as would the creation of feed reserves. For all these reasons, it seems doubtful that the feed supply will reach the objectives envisaged for 1976 by the Ministry of Agriculture as follows:
millions of feed units
1972 1976
Fodder Crops 226 560
Concentrates 193 480
Roughage 1,920 1,770
(iv) Wine
11.63 Wine has been and can again become an important export. During 1960-64 it represented over a quarter of all agricultural exports, but its share has since dropped to 10-15%. The traditional outlet for Tunisian wine was France, where it was mixed with low quality domestic wines in order to arrive at a commercially acceptable alcohol content. Before 1964, the yearly export to France reached 1.4 million hl, but then the market all but closed, except in 1967 and 1968, when 250,000 hl was allowed under the import quota,
1/ A government guaranteed price for fodder would undoubtedly be an incent- ive for producers, but it is likely to present a huge financial problem. - 51 -
and in 1969, when the quota was raised to 500,000 hl. Since 1969, however, the market has been closed because the EEC Common Agricultural Policy (CAP) for wine prohibits mixing with wine from outside EEC.
11.64 This prohibition has drastically reduced export revenues from the product in the short run. In the long run, however, it may have substantial beneficial effects, since there is now a strong incentive to sell Tunisian wine, virtually unknown before to consumers, under its own label as a medium to high quality wine at higher prices than before. 1/ Recent years have seen a substantial growth in European demand for medium quality wine, while there is only a limited scope for increased production in Italy and France. The entry of wine under Tunisian label into the EEC was considerably aided by a temporary 10% drop in output in Italy, France, and Spain in 1972, and, in some countries (France, Germany, Poland), Tunisian wine now appears to be well established. Tunisia has an advantage over other countries exporting wine to the EEC insofar as its exports pay only 60% of the EEC import duty (currently 10 units of account per hl). At the same time, the African market is expanding fast, although prices are less remunerative than in Europe (US$9 per hl of 12 degrees, against US$17 in the EEC). The "Office du Vin" thinks that Tunisia could supply some 0.3-0.4 million hl of the total African market of 1.5 million. Finally, the local market is also growing by some 5-10% p.a., largely because of the changing consumption habits of the Tunisian people and only to a slight extent because of consumption by tourists.
Table 11.12: DEMAND PROJECTION FOR TUNISIANq WINE, 1973-1976
Low Assumption High Assumption ------in '000 hl ------
Africa 300 400 EEC 200 400 Poland 50 50 Other 100 170 Domestic market 250 330 Net stocks increase 10% 100 150 Total 1,000 1,500
Source: Office du Vin.
11.65 Unfortunately, it seems hardly likely that production can meet even the low estimate of demand. The departure of the European wine producers in 1964 deprived Tunisia of know-how. For this reason, and because of the absence of remunerative outlets for wine, vineyards were neglected and yields fell. Some of the vineyard acreage was entirely abandoned and is now beyond
1/ Under the provisions of the CAP, non-Community wines have to respect the so-called reference price, which is set above the internal Common Market price; this gives an extra incentive to aim at the market for medium to high quality wine. - 52 -
recuperation. Output in 1972 was 800,000 hl from about 29,000 ha. To increase output and improve quality, the new Plan envisages uprooting and replanting 1,000 ha per year, rising to 2,000 ha per year from 1976 onwards. The pace of this program appears to be determined by the availability of planting material. The fact that 80% of the acreage is land under state control (OTD) may facilitate implementation. As new vines only come into full production four to six years after planting, production is bound to fall further before it starts climbing again. Another problem that arises with the shift from exporting in bulk to exporting in bottles is the inadequacy of facilities and know-how for bottling. The construction of a bottling plant is, however, planned, while a course in wine technology - organized in Tunisia by FAO - has been arranged for late 1973.
(v) Other Commodities
11.66 The four commodities or groups of commodities discussed above (cereals, olive oil, livestock, and wine) account for some 70-80% of the value of total agricultural output. The following paragraphs mention briefly the most salient points about some other products.
(vi) Vegetables
11.67 While Tunisian climate does not allow large exports of vegetables, what small possibilities exist are not fully utilized. Winter temperatures away from the coast frequently drop below freezing point, while at the coast average winter temperatures compare unfavorably with such places as the Souss Valley in Morocco or the Canary Islands. Yet high expectations are based on the highly remunerative export market for out-of-season produce ("primeurs"). How tight the timing for such produce is may be illustrated by asparagus, currently grown in and near Djerba. In an average year, the export season is the three weeks preceding the 10-15 of April; before that date the market is quite lucrative 1/ and produce is flown daily to Europe; after, prices drop considerably because European supplies become available. However, asparagus does not grow below 140C, and in 1972 and 1973 the spring export season lasted less than a week, so that this type of cultivation is most hazardous. Another example is tomatoes, by far the most important single vegetable. In April, tomatoes sell at 200-300 millimes/kg in Tunis and can bring the equivalent of 350-400 millimes in Western Europe. By May 1, the price drops to about 100 millimes/kg, and after mid-June the tomato paste factory buys at the government-supported price of 18 millimes/kg. 2/ The quantities that sell between April and mid-June are minimal, however, and come from small sheltered areas in Cap Bon. A further vegetable in this
1/ In 1973, sales were contracted at the equivalent of 1,000 millimes/kg in Germany and Holland, of which 400 millimes would return to the pro- ducer. His cost price would be 280 millimes/kg, which with a yield of 3.5 tons/ha gives a net benefit of D 420/ha.
2/ In 1972, tomato paste was exported to France at D 200/ton, of which the Tunisian Treasury paid D 80/ton. - 53 -
group is artichoke. Up to the end of March, the producer price is 100 millimes/ kg. but it then drops to 30-40 millimes/kg. The average cost of production is about 50 millimes/kg. Because of insufficient material for early planting, only 20'%of total Tunisian production is exported. France allows Tuntisia an import quota of 5,000 tons per year, but exports normally do not exceed 1,000- 2,000 tons. It is likely that exports of vegetables will remain small, 1/ and projections showing sudden large export increases, as in Tunisian planning documents, should be viewed with some skepticism.
11.68 Certain improvements are, however, possible:
(a) the irrigation area of the Nebhana project has certain climatic advantages. So far, only 700 ha out of a project area of 5,000 ha is producing "primeurs", mainly because of the agrarian structures;
(b) the introduction of greenhouses and black plastic to increase the soil temperature can advance the growing season by several weeks; experience in the German-Tunisian project in Khorba 'is promising, and several farmers in the Nebhana have also foutnd it profitable to introduce these simple plastic structures; and
(c) for several years, a Belgian technical assistance project in the Lower Medjerda Valley 2/ has been demonstrating that results can be improved by good planting material and timely planting, both of which require credit and extension services.
(vii) Citrus
11.69 Citrus is the second most important tree crop, after olives. During the 1960s, the gross value added averaged D 4 million a year, i.e., some 4-5% of total agricultural value added. About half of the crop (mainly oranges, also mandarins) is exported. Compared with those of other Mediterranean producers, such as Spain, Morocco, and Israel, Tunisia's exports are negligi- ble, but there is a marked preference for Tunisian varieties, particularly "Maltaises", which would enable Tunisia to obtain a greater share of'the European markets if the water problem did not make it difficult to expand production. Indeed, during the last few years, output has dropped as a result of production difficulties. For climatic reasons, most of the groves (about 8,000 ha) are situated in the Cap Bon peninsula 3/ and irrigated from wells. Lately, however, the water level has dropped, and water has become insufficient.
1/ Less than D 1 million on the average, 1965-71.
2/ Station Experimentale Maraichere.
3/ Production in other regions (with the possible exception of Nebhana) is liable to suffer from frost or from a too high salt content of irrigation water. The latter aspect is under study and there are indications that this problem can be overcome through adequate drainage. - 54 -
This, and neglect of treatment against diseases, have led to falling yields. The Government is studying the steps to be taken to prevent a further decline in citrus cultivation in Cap Bon ("Projet de Sauvegarde des Agrumes") and to increase the acreage.
(viii) Fish
11.70 Fish is an important source of protein in the Tunisian diet. Cur- rent per capita consumption is about 6 kg p.a., i.e., half as much as per capita meat consumption. Catches have not kept up with sharply growing demand (in turn linked to rising meat prices), however, and the price of fish has doubled in the last three years. While it is generally accepted that the Mediterranean is overfished and that there is little scope for overall in- creases in the catch, Tunisia's yield (expressed as tons per square km) is among the lowest in the Mediterranean: 0.3 tons per sq km, against more than 2 tons for Spain and Italy, and between 1 and 2 tons for Algeria, Morocco, Israel, and Egypt. 1/ This is due partly to unsatisfactory techniques and lack of equipment, but also to the emigration of many fishermen to Sicily in the late 1960's. Measures are being taken on three fronts: An important research and training effort is being made, with the assistance of an FAO program; boat construction is receiving new impetus under a project, partly financed by IBRD, and emigrant fishermen are encouraged to return by means of a program of investment subsidies. 2/
11.71 An agreement with Italy allows 140 Italian trawlers to fish in Tunisia's reserved zone ('eaux reservees"), and one of the objectives of the measures is to double the Tunisian trawler fleet (currently 120 boats) so that this agreement can be ended. At current prices, investment in fishing, especially in trawling, appears attractive. A trawler costs about D 60,000, employs 15 men, and catches about 150 tons at a landed price of 200-250 millimes/kg, i.e., a gross annual production of D 30,000-38,000. Coastal fishing is somewhat less attractive. A small boat (five men) costs about D 6,000 and catches about 10 tons; because these bring a more preferred type of fish, the current landed price is about 350-400 millimes/kg.
11.72 There appear to be good possibilities for fish farming, particularly for shrimp and mullet, in the many lagoons and shallow waters along the coast. It is not yet clear, however, who will exploit these possibilities or how they can be promoted. One way might be to grant a concession to the Office National de la Peche (ONP) for a period of 5 to 10 years, during which ONP would train individual fish farmers, who eventually would become owners. During the period of cooperativization, ONP acted as a large service coopera- tive, constructed infrastructure, ran a credit program for boat purchases and handled wholesale and retail marketing. Since then, its activities have been
1/ Source: La Peche Maritime, 20-1-73; data concern 1963-65.
2/ Own money, 10%; subsidy, 15%; loan, 75% at 6% interest, over 8-12 years. - 55 -
in production (trawlers) and marketing. Out of a national production of 30,000 tons in 1972, ONP produced 7,000 tons, and it marketed an additional 3,000 tons.
D. Labor and Capital Implications
11.73 In the last five to ten years, the growth of the rural labor force has been drained off by emigration and growing employmenit in the non-farmi sectors. Nevertheless, substantial unemployment and underemployment remained. Since 1970 the situation has changed, but how far and how permanently is not clear. The new confidence in the private sector has resuscitated activity and, together with the excellent harvests of 1971-1972, has played a major role in tightening the labor market. The fact that some employers, in some areas, now find it hard to recruit laborers at the minimum wage, when only a few years ago there was an ample supply at well below that level, indicates that rural unemployment has been reduced. This does not mean that it has disappeared, as there are apparently many people who would prefer to remain idle than to do the kind of work which is offered at the present wages. Much more serious, because of its proportions, is seasonal unemployment. Most rainfed farm activities take place in the fall and in the spring, with the major exception of the olive harvest (November through January or February, depending on the size of the crop). Less than two-thirds of the time of those classified as active farm population is actually spent in farm work.
11.74 It is uncertain whether the factors which have recently reduced rural unemployment and underemployment will continue to operate so in the future. In particular, emigration possibilities are uncertain. On the other hand, the growth of the rural population of working age can be rather reliably put at 2.5-3.0% p.a. It is therefore quite possible that rural employment will again become a major problem, for which a solution will be soughit in agri- cultural expansion. Under these circumstances, future Government policies affecting investment, marketing, or land tenure should take more account of the employment aspects (both structural and seasonal) than in the past. This does not mean that employment should be created for employment's sake, that erosion control should be carried out without weighing costs against benefits, or that irrigation works should be constructed without regard to costs or of the marketing of the crops to be produced. Employment is one obvious object- ive of agricultural policy, to be weighed against others like output, trade balance, and regional development. 1/
11.75 The development of production potential discussed earlier in this chapter involves considerable additional employment. Labor requirements by
1/ In measuring, e.g., mechanized grain farming against labor intensive cropping by small farmers, the former method might show, at equaliyields, a higher value added in actual farmgate prices; but if,output were valued at international market prices, and labor and capital at their opportunity cost, the comparison might possibly be in favor of the latter method. - 56 - crop are roughly known (cf. Table 11.13). But any attempt to quantify the labor absorptive capacity of possible production expansion runs into at least three problems:
(a) uncertainty about the time horizon; e.g., irrigated olive production has proved to be successful in Italy, but has not been undertaken on any great scale in Tunisia; the same applies to pasture improvement along Australian lines;
(b) uncertainty about the scope, e.g., the planting of spineless cactus and atriplex in the center under the WIFP project is showing positive results, but it is not known how much land can and should be planted; and
(c) uncertainty about future government policy; e.g., on importance of rainfed areas, expanded extension service and improvement in productivity quality and marketing.
11.76 Just to illustrate the magnitudes involved, however, a calculation has been attempted of labor requirements in four areas of activity: (a) dev- elopment of the groundwater reserves in the South, (b) a fuller utilization of existing irrigation infrastructure, (c) a continuation of WFP activities in the Center, and (d) the expected increase in productivity of existing olive trees.
(a) the UNESCO study on water resources in the Northern Sahara indicates that the irrigated area can be expanded by at least 9,000 ha. Cultivation of this area with alfalfa (probably the most appropriate crop) would require some 300,000 mandays; as this labor would be concentrated in the period April-September, it would be reasonable to use a factor of only 150 days per year in estimating the additional labor force required: 2,000 manyears.
(b) Out of a total of 110,000 ha irrigable, only 70,000 ha produce irrigated crops, the remainder, mainly in the North, being used for rainfed cropping. If one estimates present labor use in these 40,000 ha at 100 mandays/ha (mechanized grain production) and assumes that half of this acreage would be cultivated with tree crops (table olives, peaches, apricots) and the other half under an average truck crop rotation, the additional labor re- quirements would amount to some 7 million mandays, reason- ably well spread over the year. Using a conversion factor of 240 days/year, this would mean some 30,000 additional jobs.
(c) Planting of spineless cactus and atriplex in Central Tunisia can still be expanded over vast areas that have little or no alternative use. Just how much acreage would be involved is not known, but figures of 200,000-300,000 ha have been - 57 -
TABLE 11.13: LABOR REQUIR3MENTS FOR CROP PRDDUCT:IDN (mandays/ha)
January- April- July- October- March June September December Total
Rainfed Crops
Wheat, traditional variety 0.9 0.5 6.o 0.6 8.0
Barley, traditional variety - 0.3 6.6 0.6 7.5
Wheat, Mexican 1.1 7.5 2.2 1.2 12.0 Horsebeans 12.7 1.9 1.0 4.3 20.0 Chiclcpeas 0.3 11.0 3.6 1.0 16.0 Sulla for Silage 3.7 2.2 1.0 8.6 15.5 Spineless cactus n.a. n.a. n.a. n.a. 15.0 Atriplex n.a. n.a. n.a. n.a. 7.0 Olives for Oil 22.1 0.2 0.7 26.5 49.4 Table Olives 25.0 0.4 0.2 36.3 61.8 Almonds 9.0 0.7 25.1 9.2 44.0 Wine Grapes 19.6 11.0 22.0 12.4 65.0 Table Grapes 23.6 14.0 47.0 15.4 100.0
Irrigated Crops
Wheat 7.5 16.0 - 15.5 39.0 Berseem 13.3 4.4 1.6 11.5 30.9 Alfalfa 2.3 12.6 17.3 2.2 34.3 Tomatoes 33.0 70.0 118.0 - 221.0 Artichokes / 49.0 10.0 63.0 55.0 177.0 Truck Crops v 51.0 6h.0 64.0 51.0 230.0 Citrus 76.0 42.0 19.0 20.0 157.0 Apricots 3.8 133.7 7.8 9.7 155.0 Peaches 23.8 73.5 43.5 4.8 145.6 Olives for Oil 24.0 3.8 7.0 32.0 66.8 Table Olives 30.0 4.0 4.0 113.0 151.0
2/ Second year.
2 Average ration
Source : Unpublished material by OMVVM. Data refer to North Tunisia. Figures for cactus inermus and atriplex are mission estimates and refer to Central Tunisia. - 58 -
mentioned. In addition to the labor involved in planting such areas, regular exploitation could run into 2-3 million mandays, spread over the year, i.e., in the order of 10,000 manyears.
(d) As mentioned in Part C (ii), the coming to maturity of olive trees planted in the 1960s will increase employment in olive production, in particular in the North, in the next 10 years by a total of 500,000 mandays for trimming and an equal quantity for harvesting. Taking into account that harvesting is concentrated in the period December-February and that part of the work is done by children, a conversion factor as low as 120 days/year would appear in order, i.e., 8,000 jobs.
Taken together, these four areas of expanded production alone would amount to employment for some 50,000 additional people, mostly in the North. Another 20-25,000 jobs could result from a number of other categories of unused potential discussed in this chapter, such as: replacing the fallow year in the grain rotation cycle (cf Part C (i)) could require as much as 7,000 manyears; a fuller use of the limited possibilities in the field of off-sea- son export products (cf Part C (vi)) - another 4,000 manyears; doubling of the trawler fleet and other possibilities in fishing (cf Part C (viii)) could provide employment for 2,000 men; an expansion of intensive diary and beef production, along the lines demonstrated in the Ferme Fretissa, could, on the basis of, say, 100,000 head of cattle, provide jobs for some 3,000- 4,000 people; a reduction in the maximum farm size in the Medjerda irrigation area, as suggested in the following chapter, could provide a livelihood for some 2-3,000 families, say, 4-6,000 jobs.
11.77 It should be noted that the additional employment generated would not necessarily be taken by unemployed, or newcomers on the labor market, but would in several instances result in reduced underemployment -- and hence in higher productivity and incomes -- of the existing agricultural labor force. Also, a number of actions might result in only little or no additional employment. Cases in point are improvement in traditional livestock produc- tion, wider use of the high yielding wheat varieties leading to a reduction in acreage; transfer of state-owned lands to private farmers might even lead to a reduction in employment. At any rate, even if the indicated employrmient creation were higher, say 100,000 jobs, and could be realized in the relative- ly short-term, say 10 years, they would still be outstripped by the natural growth in the male rural labor force, whiclh is now in the order of 15-20,000 people a year.
11.78 Efforts to estimate the amount of capital required to realize the production potentials indicated above run into similar uncertainties. The capital costs per hectare or unit of output of different lines of production are approximately known, but the scope and speed of development are not. In many cases, output could be rapidly increased with relatively little outlay, e.g., in the existing irrigation areas where output increases depend mainly on such factors as land tenure, extension and short-term credit, combined with minor investments to complete or repair the existing infrastructure; another example is tree crops, where output is likely to increase as the result of - 59 - past investments. Therefore the poor increniental capital/output ratio of the past should not be a yardstick for the years immediately ahead. Research in some other Mediterranean countries shows that over a longer period, the ICOR for agriculture (corrected for changes in the labor force and livestock herd) was of the order of 2.5-4.0. 1/ There is no reason to suppose a substantially different ratio for Tunisia in the longer-term. Assuming a growth in agri- cultural output of at least 3% p.a. and at most 6% p.a., capital needs would range from a minimum of US$30 million to as much as US$90 million p.a.. 2/ In comparison, capital expenditure for agriculture during the current four year Plan is expected to average nearly US$100 million per year.
11.79 Some general observations may be made on the nature of future invest- ments:
(a) most of them have a long amortization period: irrigation infrastructure, fishing boats and processing facilities need financing periods of over 10 years; machinery, breeding stock, tree crops, and improved pastures require financing for 5-10 years; so far, meclium and long-tenn credit hiave represented a small proportion of total agricultural lending.
(b) with the exception of infrastructure and state-owned land, most investments would have to be made by individual farmers, and thus self-financed from their own savings or bank credit, so that public fiinancing would be needed solely for the pur- poses mentioned and for the subsidies paid on private invest- ment under FOSDA arrangements.
1/ Based on an OECD study published in 1970 in Zeitschrift Nationaloekonomie by M. Tracy and E.P. Riezebos, under the title "Capital Output Ratios in Agriculture and Problems in their Use." As the title suggests, the study cautions against an indiscriminate use of the ICOR concept in agriculture.
2/ Based on an average 1970-72 output value of US$360 million. - 60 -
12. THE ROLE OF GOVEPRMENT IN AGRICULTURE
12.1 Government has a crucial role to play in exploiting the production potential outlined in the previous section. It can influence development in the following principal ways:
(a) policies for public investment;
(b) land tenure and distribution policies;
(c) price and marketing policies;
(d) policies and incentives for private investment, including credit policies;
(e) government services such as research, education, and extension.
In addition, the Government is a participant in the production process itself, as it controls some 800,000 ha of the best farmland and directly or indirectly owns a number of large farms.
12.2 The national objectives and public policies for the agricultural sector are laid down in the Fourth Development Plan. The Plan aims at a sectoral growth rate of 6.2 percent per annum over the average value added during the Third Plan period (1969-1972). However, when the 1976 target is compared to the actual output of 1972, which was an unusual year due to the combination of a good cereal and a bumper olive crop, then the average annual growth rate for the Plan period is -2.1 percent. Emphasis is placed on directly productive investments and a higher level of investments is expected from the private sector, the need for an increase in the productivity of past investments is stressed especially in irrigation and more resources are allo- cated to the production of animal protein, fruits and vegetables and to current inputs and credit for private farmers. At the same time the Plan allocates the largest share of public investments in agriculture to the irrigation sub- sector with a heavy emphasis on new infrastructure works. A considerable effort will be needed to implement successfully the proposed policies in the areas of pricing, credit, land tenure and Government services.
A. Government Institutions
12.3 Under the Minister and two Secretary Generals, the Ministry of Agriculture consists currently of 12 Directorates ("Directions"):
- Crop and Livestock Production
- Water and Soil Resources
- Large Hydraulic Operations - 61 -
Planning, Economic Analysis and Project Evaluation Financing, Credit and International Cooperation
Land Tenure and Legal Affairs
Forestry and Soil Conservation
Rural Engineering, including Development of Groundwater Resources
Extension, Research, and Agriculture Education
Fisheries
Veterinary Services
- Administration
12.4 A number of semi-autonomous organizations are charged with a parti- cular activity for whiclh in most other countries the central administration would bear responsibility. Subject to some central Government auditing, these organizations are autonomous in financial and management matters; in some cases private interests are represented on the administrative level, while in others the entity acts entirely as a private firm. Most are called "Office," best translated as "Board" or "Bureau".
12.5 Offices exist for cereals, edible oils, wine, fish, and livestock and pastures but not for fruits and vegetables. 1/ The first three 2/ are principally marketing organizations, as they have the marketing monopoly of the commodities concerned, but lately they were also charged with such tasks as extension and channeling credit. The Livestock and Pastures Board 3/ has a broader responsibility which includes production, extension and import-export regulation of livestock and animal feed. Other semi-public entities are in charge of a particular type of activity. The "Office de Mise en Valeur de la Vallee de la Medjerda," (OtIVVI) is responsible for carrying out the irri- gation development of the Lower Medjerda Valley (90,000 ha), constructing canals, providing drainage, carrying out land consolidation and its own land reform program. It also manages the public lands in the area and has its own extension and marketing services. Recently, other regional irrigation author- ities were set up for the smaller Nebhana and Laklhmes areas, and still others
1/ There exists a loosely structured organization, Groupement Intepr- professionel des Agrumes et Primeurs which was established to cpordinate marketing efforts of producers of citrus and early vegetables, but has shown, so far, little activity and authority. Mid-1973, this organization was split up in two, one for fruits, the other for vegetables. 2/ Office des Cereales; Office de l'Huile; Office du Vin.
3/ Office de l'Elevage et des Paturages. - 62 -
are planned. The "Office des Terres Domaniales" is the agency in control of the former foreign-owned land. The roughly 800,000 ha under its control is farmed either by production cooperatives 1/ or state farms, 2/ or put at the disposal of experimental farms. A substantial part is leased or scheduled for sale. The ONIIVM manages some 100,000 ha of public lands.
12.6 Several semi-autonomous entities are input related: the "Cooperative Centrale des Semences et des Plantes Selectionnees" provides most of the improved cereal seeds; the "Societe Nationale de la Protection des Vegetaux" carries out much of the plant protection activities, and the "Cooperative Centrale des Grandes Cultures" plays a major role in the trade and distribu- tion of fertilizer.
12.7 Over time, the work of the various entities has changed. The National Cereals Board or the National Oil Board have seen their functions extended from the purely commercial sphere to involvement in production, such as providing extention services and credit. The National Fishing Company, 3/ on the other hand, which was for some time in charge of setting up fishing cooperatives and marketing all fish has since narrowed its functions to oper- ating its own fleet and marketing (principally) its own catch. In general, the period of expansion of cooperatives saw an increase in the responsibilities of the various agencies, but these have been partly relinquished since 1969. The agencies entrusted with a purely marketing role are somewhat reluctant, and in any event less qualified, to take on such tasks as extension or channel- ing of credit to small farmers as it increases their operating costs. It also makes it more difficult to judge the financial soundness of their operations although two separate accounts could be maintained: a production account and an account covering development activities.
12.8 The existence of so many separate entities parallel to the central administration has obviously led to administrative complexity, conflicts, and fragmentation of authority, e.g.:
- the Medjerda Valley Authority carries out its own Land Reform Law independently of the general Land Reform Laws being implemented by the Ministry's Directorate of Land Tenure Affairs;
- one experimental cattle farm is operated by the Livestock and Pastures Agency, while another of the same type is under the responsibility of the Lower Medjerda Authority; and
- in the development of a small groundwater irrigation area for the production of lucerne, half a dozen agencies were
1/ Unites Cooperatives de Production. 2/ Agro-Combinats. 3/ Office National de Peche. - 63 -
reportedly involved; this is also the case in other projects, and leads to frustration and despair of Tunisian and foreign aid staff alike.
12.9 Consistently, the answer to the queries about the purpose and wisdom of setting up so many separate entities is that there is no overlap and that the relevant part of the central administration is responsible for policy decisions and the Office is in charge of the execution. A further answer is that the autonomous character of the Office allows it greater flexibility and efficiency than would be possible in the cumbersome and slow central administration. As to the first answer, the division of labor may sound plausible in theory, but in practice, in many instances, so little authority is left to the central authorities and so much authority entrusted or acquired by the Office, that there is hardly any scope left for the neces- sary policy coordination at the central level. This is probably the main reason why it has been difficult to make a fairly detailed agricultural poli- cy statement establishing priorities and consistent targets. In the present situation, each Office makes its own plans and sets its own goals and promotes them independently or through its counterpart in the central administration. The result is that coordination of various objectives between offices is diffi- cult to insure.
12.10 The second argument undoubtedly contains some truth since the bureaucratic process in the central government is actually slow. Minor decisions need to be referred to several echelons, sometimes up to the Ministerial level. The Offices are smaller, most provide their own budget, and this gives them some latitude in taking and implementing decisions with- out undue delay. Delegation of responsibility to an Office makes life there- fore easier, but it should be realized that it may improve bureaucratic efficiency only in the short run, as too much delegation to too many clifferent entities may quickly become counterproductive.
12.11 A factor that has undoubtedly contributed to the creation of semi- public entities concerns the remuneration of their officials. In theory, the Offices have the same salary structure as the central administration, but in practice the salaries paid by the Offices are higher, either because staff are appointed at a grade higher than they would be entitled to in the central administration, or because of more generous fringe benefits. This has led to a favorable climate for creating more Offices and to a "brain drain" threat to the central administration.
12.12 Reform of the Offices is essential. Depending on the nature of the Office, either of the following steps could be taken:
(a) increase central Administration control over the Offices, not only instituting a more effective check of the accounts,, but also by making the Offices a subordinate and executive arm of the relevant Directorate in the Ministry; and at the. same time equalize salaries; or - 64 -
(b) privatize the Offices entirely, by gradually increasing the participation of private farms 1/ (and possibly of consumers) and abolishing the monopoly position of the marketing Offices.
12.13 In addition to the Government Land Agency and the Lower Medjerda Authority that control some 730,000 and 90,000 ha respectively, a number of farming enterprises are owned or controlled by the State. The largest are STIL, 2/ engaged in dairy production and processing, canning, date production (also tourism); SFT, 3/ dairy production and vegetables; Societe Ellouhoum, through its livestock fattening operations; and SONH1IVAS, 4/ asparagus, olive, and mutton production in the Governorate farms under bilateral aid programs. In addition, the State operates several large pilot projects within the frame- work of bilateral aid programs.
12.14 Two further public entities with responsibility in agriculture are the Agricultural Division of the Ministry of Planning and National Institute for Statistics (INS). The Agricultural Division of the Ministry is responsible for reviewing the various programs prepared by the Mlinistry of Agriculture and integrating them into the National Developrmient Plan. It also supervises the work of the INS in the field of agricultural statistics. While product- related Offices produce their own figures, as do some Directors of the Ministry of Agriculture, INS's work in this field has so far been limited to a 1970 nationwide survey of soil occupation, a 1971 survey of citrus production, and a detailed sample survey of cereal production in 1972, each of which is to be repeated annually. The INS officials intend, despite their limited staff, to collect and prepare statistics of livestock production and agricul- tural employment which are the presently weak spots in agricultural statistics.
B. Public Investment Policies
(i) General
12.15 For at least two reasons, there seems to be considerable scope for public investment in agriculture:
(a) the natural obstacles facing agricultural development can often be overcome only by public action in such directions as reforestation, erosion control, and the storage and distribution of surface water; and (b) the limited resources of the great majority of farmers do not allow them to finance, through savings or bank credit, such on-farm investments as the planting of trees or fodder crops, construction of drainage facilities and herd improvement.
1/ Except for the "Union Nationale des Agriculteurs," which is in principle open to all farmers of all specialties, but in practice is a lobby for the large grain producers, there are hardly any professional organizations that represent farmer interests. 2/ Societe Tunisienne des Industries Laiteres. 3/ Societe des Fermes Tunisiennes. 4/ Societe Nationale pour la Mise en Valeur du Sud. - 65 -
Yet, as stated earlier, while there is scope for some additional public investment, more and quicker agricultural growth could be obtained by measures other than massive public investr,ment and outlays for large infrastructure proj- ects. Marketing of agricultural produce is greatly facilitated by a satisfac- tory road system while storage and marketing facilities do not call for further important public investment. In addition, the maximum utilization of existing irrigation equipment should take priority over any new projects.
12.16 During the past decade considerable public investments have been made in agriculture with little result; the current 1973-76 Plan shows again sizable budget allocations. During 1962-73, a total of D 199 million of public funds 1/ was invested, i.e., D 20 million per year on average. For the 1973-76 period, an amount of D 89 million, 2/ is budgeted, i.e., D 22 million which, due to currency depreciation, may be slightly less in real terms than during 1962-71. Programs for agricultural investment in the cur- rent Plan were initiated by a number of subcommissions comprising staff of the Ministry of Agriculture and the various Offices, and submitted first to BPDA and then to the Ministry of Planning, the final decision being made by the Council of Ministers. The projects proposed are in many cases not more than promising ideas, giving only a brief hint as to their economic viability. Detailed preparation of each project has still to be completed and, in theory, this should be subject to the appraisal of the Ministry of Planning before the necessary funds are released. Once the various investment programs have been approved by the Council of Ministers, their economic justification tends to be taken for granted.
12.17 The authorities recognize the desirability of improving project preparation and adopting stricter investment criteria. The recently created National Center for Agricultural Studies, attached to the Ministry, should help to fill a gap in this respect. 3/ However, for the Center to prepare high priority projects will require a clear and explicit policy framework for key projects, an assessment of general objectives, the existence of con- sistent and realistic physical targets, and coordinating planned investments with the necessary complementary policies. This ideal framework has seldom been achieved and it is difficult to see how it could be established given the present division of responsibility betwqeen central government agencies and semi-autonomous entities.
12.18 The 1973-1976 investment program (Table 12.1) shows a number of changes in emphasis reflecting the lessons of the past:
1/ Including D 51 million foreign aid. 2/ Including D 22 million foreign aid. 3/ One can have, however, reservations about its autonomous status. - 66 -
(a) the excessive attention given to livestock and fish production reflects the government's concern with the shortage and rising prices of these commodities. During 1962-71, actual public investment in these areas was 3% of the total public effort, versus 15% budgeted for 1973-76; 1/
(b) it is proposed to double investment and to increase current spending substantially in extension and agricultural education, a fact that no doubt indicates a realization that the extension effort up to now has been insufficient.
12.19 The sharp reduction for reforestation and erosion control seems to reflect a reversal of past policy and a reduction in the number of workers available for use on these projects, which were partly designed to create employment. The Rapports des Sous-Comites Foret et CES (Retrospective 1962-71, February 1972) indicate, for example, that "Eighty percent of reforestation was with eucalyptus, of which most have died because of unsuitable soils, climate, or insects" (page 11). "Population density in the forest areas has not permitted effective protection of new plantings against livestock damage" (page 13). The Rapports also indicate that during 1962-71 reforestation provided 59 million mandays of work, distributed as follows (page 18):
Million mandays Million mandays
1962-64 15.0 1968 6.7 1965 6.5 1969 6.2 1966 8.2 1970 5.6 1967 7.3 1971 3.6
The same tone is taken in the comments concerning erosion control. Thus, for example, it is stated that "the local population has no interest in erosion control and often sees the control works as inconvenient" (page 11). Further, "out of 2 million hectares planned to be worked during 1962-71, work was done on only 0.7 million ha" (page 6). Finally, during 1962-71 erosion control provided 51 million mandays of work, distributed as follows:
Million mandays Million mandays
1962-64 25.0 1968 3.1 1965 5.9 1969 2.8 - 1966 4.6 1970 2.4 1967 6.0 1971 1.2
1/ During 1962-71, the actual investment in livestock and fisheries was only 22% of the amount budgeted. Table 12.1: PUBLIC AND PI¢VATE INVESTMENT DURING 1973-76 a/ (in million Dinar)
PUBLIC INVESTMENT PRIVATE INVESTMENT Government Foreign Bank Self- Adjusted 1/ Type of Investment Budaet Aid Total Credit financing Total Total Total-
Reforestation 8.3 2.1 10.4 0.4 - 0.4 10.7 Soil Conservation 3.2 1.9 5.1 0.5 - 0.5 5.6 Subtotal 11.5 3.9 15.4 0.9 - 0.9 16.3 16.3
Public Irrigation Areas 32.1 2.8 34.9 - - 34.9 Drainage Works 1.1 - 1.1 - - - 1.1 Private Irrigation Facilities 1.2 o.6 1.8 3.5 0.9 4.4 6.1 Other 0.2 - 0.2 - - - 0.2 Subtotal 34.5 3.5 38.0 3.5 0.9 4.4 42,4 47.3
Livestock 6.8 4.8 11.6 13.7 4.3 18.0 29.6 29.7 Farm Equipment 0.3 - 0.3 7.8 15.3 23.1 23.3 23.3
Tree Crops - 6.2 6.2 12.9 2.2 15.1 21.4 21.3
Fi-sheries 0.3 1.0 1.3 8.1 1.3 9.4 10.7 11.9
Extension 4.3 1.7 6.o - - - 6.o
Research 1.4 0.2 1.6 - - - 1.6
Studies b/ 7.7 0.6 8.3 - _ _ 8.3 9.7
Project operation - - - - - 9.6 Fishing ports ------7.1 Flooding _ _ . 1.5
Subtotal 66.8 21.9 88.7 46.9 24.1 71.0 177.7 159.5
i/ " Public" and "Private" refer to the source of finance and not to the private or public nature of the investing agency.
_/ Including 5.0 million Dinar for hydraulic studies. 1/ Final version of the Plan Source: Ministry of Agriculture, "Previsions des Investissements 1973-76,' March 1973. - 68 -
(ii) Irrigation
12.20 The continued emsphasis on irrigation investment (over half of the total) 1/ runs counter to what would be expected when considering past achieve- ments and the unused production potential of existing, fully constructed areas. The situation warrants an examination of the pros and cons of past experience and of the underlying reasons for the present underutilization.
12.21 On the basis of available water resources and land of acceptable terrain conditions, some 200,000 ha are suitable for irrigation. Of this, some 65,000 ha were irrigable 2/ at the time of Independence, mostly by ground- water. Since then, the irrigable area has reached about 110,000 ha due to large hydraulic works carried out by the State. The expenditure involved during the period 1962-71 was D 80.6 million, of which D 62.8 million was financed by Government budget, D 15.7 million from foreign aid, and the remaining D 2.1 million from private sources. Construction of irrigation infrastructure thus absorbed nearly 40% of the public investment effort in agriculture. The results have been disappointing. In 1962, the value of irrigation production was estimated at D 20 million. Ten years later, it had reached only D 28 million. 3/ What are the causes?
12.22 It was pointed out earlier that, because of poor water quality and less than optimal soils in certain regions, and the location of many irriga- tion areas in the high rainfall zone of the North or in the frost-risk zone of the Center, the potential incremental benefit from irrigation is limited and that, even under optimal conditions of execution and use, many irrigation projects offer marginal returns on investments. This, however, is only a par- tial answer to the question.
12.23 The main problem is underutilization of the irrigable area. This can be expressed in two ways--in terms of quantity of water used and in terms of the ratio between irrigated and irrigable acreage. According to the follow- ing table, only a quarter of the water available from the large storage dams, only half of that from drillings, but nearly all water available from other sources, is used. This indicates that less of the available water is used in the Public Irrigation Areas 4/ than in the private areas. It is estimated 5/ that the unused water from the large storage dams alone represents a produc- tion loss of D 10 million per year and a loss in employment of 25,000 man-years.
1/ Some D 47 million out of a total planned budget of D 89 million to be financed by public funds and foreign aid. Source: BPDA, March 1973.
2/ According to the terminology used in Tunisia, "irrigable" means that water is available at the boundary of the plot. In some instances on-farm irrigation investments have not been made, or made only in part.
3/ Both figures in 1966 prices. 4/ Perimetres Publics Irrigues, PPI. 5/ S.F. Postma, op. cit. - 69 -
The ratio between irrigated and irrigable acreage shows similar indications of underutilization. Out of a total irrigable acreage in the PPI of 44,600 ha, only 21,600 ha, or 48% is actually irrigated. In the private areas (in- cluding some state-controlled land), the percentage would be 77%, and the average for both private and public areas, 66%.
Table 12.2: USE OF AVAILABLE WATER, 1972 (in million cubic meters)
Available Used Used/Available
Large Dams 191.2 46.7 24% Small Dams 7.7 6.8 88% Deep Wells 191.6 96.0 50% Pumping from Rivers 41.3 40.8 99% Artesian Wells 17.4 16.8 96% Shallow Wells 75.5 74.8 99% Treated Sewerage 4.8 4.8 100%
Total 529.5 286.7 54%
Source: Ministry of Agriculture, BPDA, as quoted in S.F. Postma, Rapport sur l'Irrigation en Tunisie, Ministere du Plan 1973.
12.24 There are several explanations for this underutilization. In some areas farmers lack experience with irrigated crops and the extension effort to overcome this problem is insufficient. A more serious problem appears to be that the new irrigation infrastructure is put in place where irrigation was already being practised using traditional methods, and farmers refuse to pay for water from the public system and even go so far, as in the Nebhana area, as to destroy water valves and meters. Small farmers have limited access to credit and material inputs, while larger farmers suffer from a shortage of skilled labor. Management of the irrigation areas is uns:atisfac- tory. Insufficient public attention has often been paid to adequate on-farm development and maintenance of irrigation and drainage works. This situation is reflected in increasing salinity of the Medjerda Valley soils, with the result that farmers are irrigating less or even introducing a fallow period into the rotation. Moreover, in many areas, the supply of irrigation water falls short of the minimum required.
12.25 The major cause, however, remains the land tenure situation. Two sharply different problems exist in this respect, one occurring in the Lower Medjerda Valley, the other in most of the other PPIs. For historical reasons, land tenure in the Medjerda Valley was dominated by numerous large holdings owned mostly by expatriates. In 1958, a law was promulgated limiting indi- vidual farmers in the Mledjerda Valley to holdings of 50 ha of irrigable land. While the law, in principle, was applicable to Tunisians and foreigners alike, actual implementation affected virtually only foreign-owned property, 1/ some of which was distributed in 3 to 12 ha plots to veterans and landless laborers,
1/ Eventually, all foreign owners left their holdings. - 70 - the remainder being kept under state control. holdings larger thian 40 lia represent 6% of all holdings and 40% of irrigable land. MAost of the land in this category, consisting of farms with an average size of about 100 ha, is State land under direct government management or leased to private individuals and corporations. On the other hand, 30% of farms are less than 4 ha and occupy 6% of the irrigable area (Table 12.3).
12.26 The 1958 law has only partially been enforced. The beneficiaries of the land distribution program are still awaiting titles to their land, land consolidation has only begun, the 50 ha ownership limitation has not been applied to Tunisian landowners, farmer contributions toward public irrigation investment have not been collected, and the clause requiring effective irri- gation of at least two-thirds of irrigable land on each holding has not been applied. Moreover, it appears that the legal ownership ceiling exceeds by far the land area which individual farmers can operate while making full use of irrigation facilities. Depending on soil type, cropping pattern, and cropping intensity, this area would appear to range from 4 to 20 ha; closer to 5 ha in the case of vegetable cultivation allowing multiple cropping, and nearer to 20 ha in the case of tree crops and in areas with heavy soils. Indeed, the results of the survey show a close inverse relationship between farm size and the degree of use of the irrigable area. Table 12.3 shows the relationship on the basis of the figures shown in between farm size and percentage irriga- tion.
Table 12.3: DISTRIBUTION OF IRRIGABLE AND IRRIGATED ACREAGE ACCORDING TO FARM SIZE
Category of Number of Irrigable Irrigated Degree of Farm Size Farm Size Farms Acreage Acreage Irrigation (ha) (%) (%) (ha) (ha) (%)
1 - 1.5 8 107 1 92 79 86 2 1.5- 2.4 10 126 2 233 184 78 3 2.5- 3.9 11 140 3 445 301 68 4 4.0- 5.9 22 274 11 1,407 782 55 5 6.0- 9.9 29 364 20 2,592 1,235 48 6 10.0-19.9 10 122 12 1,503 687 46 7 20.0-29.9 3 36 6 824 415 59 8 30.0-39.9 1.5 17 4 558 157 29 9 40.0+ 5.5 54 41 5,283 1,777 34
Total 100 1,240 100 12,937 5,617 43
Source: OINVVM, Unpublished survey covering some 65% of the Irrigated Area in the Lower Medjerda Valley.
12.27 To resolve these problems, the following measures should be consid- ered: - 71 -
(a) application of the Lower Medjerda land reform law,
(b) amendment of the law to reduce the maximum landholding from 50 to 20 ha, or less, depending on the most suitable cropping patterns 1/, and
(c) provision of a strong incentive for landowners to maximize use of the irrigation potential; this could take the form of a general land tax based on the production potential of the land.
Clearly, the application of these measures will necessitate an important political decision.
12.28 In the PPIs other than the Medjerda, the land tenure problem largely responsible for underutilization of irrigable land is the delay in implementing the 1963 land reform law, amended in 1971. The law provides for a maximum and minimum size of each holding, determined by such factors as population pressure and soil quality. Maximum sizes are in the order of 3 to 10 ha, minimum sizes a quarter thereof. Those with holdings of less than half of the minimum will have to give up their land, 2/ those with holdings larger than half of the minimum enlarging to the maximum size. The law which does not apply to the Medjerda Valley, should be seen as a courageous attempt to rationalize land use in the PPI and to create more viable farms. Implementa- tion is so far running well behind the three-year schedule initially established. Reasons are that (1) there is not enough land available to allow the compul- sory enlargement, (2) there is some opposition from farmers having land in excess of the maximum, 3/ and (3) the Ministry of Agriculture's directorate responsible for land reform implementation does not have sufficient resources to meet the demand for its services.
12.29 The utility of speeding up the implementation is strikingly exempli- fied by the comparison of two small irrigation areas, Bou Youssef I and II, near Nabeul. In neither one nas tile 1971 law been applied, but in the first
1/ This measure would not only allow to enlarge minifundia in the medjerda area to become viable units, but might also help to solve the problems in the other irrigation areas. See below. 2/ In return, they will have the choice of compensation equal to the market value of their land, or exchange for five times as much land in the rainfed area outside the PPI. The owners of these small parcels are mostly part- time farmers or absentees. 3/ In most of the areas affected by this law, such as Cap Bon and Nebhana, there are relatively few farmers in this situation, since their holdings are generally not much above the maximum. - 72 -
one a provisional allocation took place in 1968, old holding limits dis- appeared, and new ones were fixed accordingly to the layout of irrigation canals and pipes. The degree of utilization is satisfactory but would pro- bably increase still further with the implementation of the law. In Bou Youssef II, also entirely equipped for irrigationi, utilization is quite low. The reasons are that (1) the old property limits still exist and therefore do not correspond with the layout of the infrastructure, and (2) pending application of the law, farmers are uncertain as to how long they will still exercise rights over their holdings and therefore are unwilling to undertake major improvements.
12.30 In this situation, it would seem fair to conclude that improved use of existing irrigation infrastructure hinges to a large extent on a rapid implementation of the law. A possible way to help to overcome at least the first of the three constraints mentioned above (lack of land for enlargement) would be to change the existing legislation and to make the provisions of the 1971 law also apply to the Medjerda Valley. By reducing the official 50 ha ceiling to, say, an average of 10 ha, the degree of utilization in the Medjerda would increase drastically. At the same time, this would create room for far- mers (possibly as many as 2,000-3,000) from PPIs outside the Medjerda. This, in turn, would facilitate implementation of the law in these other PPIs.
12.31 As long as these land tenure issues are not settled, questions are bound to arise about the wisdom of going ahead with new schemes, as similar problems are foreseeable in most other areas. There are apparently two schools of thought here. One argues that unsatisfactory use of existing installations is a temporary problem that will be solved by the time new schemes become operational. Therefore, no valuable time should be lost in mobilizing as much of the country's water resources as possible; an additional argument would be that allowing construction equipment and specialized man- power to be idle could not be justified. The other opinion is that the returns from irrigation projects, even under optimal conditions of execution and ex- ploitation, are too low 1/ and benefit too few people to justify the priority given to this type of investment.
1/ As stated earlier, the generally low return from irrigation in Tunisia is due to natural factors, quite apart from the problems of an institu- tional nature, discussed in the foregoing paragraphs. One of the natural factors is that most irrigation areas happen to be in the higher rainfall areas, thereby reducing the incremental benefits from irrigation. Even in these circumstances, it should be observed, though, that irrigation ensures a much greater regularity in production than can be expected under rainfed conditions in these areas. This regularity represents an important benefit, for the farmer as well as for the economy as a whole, that is often not taken into account in the cost/benefit analysis because it is hard to quantify. - 73 -
12.32 The preparation and implementation procedures for irrigation con- struction are efficiently handled by the major agency involved, the Director- ate for Hydraulic Works, which has as a result a larger capacity to absorb available capital than agencies in other high priorities areas. This has resulted in a bias in favor of irrigation development supported by both exter- nal aid and domestic public investment. The problem is further complicated by the fact that completion of complementary distribution and drainage systems, on-farm development, changes in the land holding pattern, changes in crop patterns, provision of credit and external services necessary to ensure effi- cient land and water utilization have seldom been adequately provided for. This has led to the need for important measures to complete and rehabilitate existing public investments in irrigation.
12.33 It is against this background that the rather formidable investment program for irrigation infrastructure during the Fourth Development Plan must be evaluated. The Plan shows the objectives in the irrigation subsector in the following order, presumably indicating priority ranking:
(a) full utilization in the existing public irrigation perimeters of the irrigation resources already mobilized;
(b) completion of on-going projects and starts on a few new projects;
(c) realization of emergency programs to protect irrigation agriculture in the Cap Bon and oases regions; and
(d) parallel to the above, a continued program of prospection of groundwater resources and the formulation of regional water master plans.
The planned investments are presented as follows:
D Million
Irrigation Rehabilitation 4.4 Completion of On-going Projects 19.7 Starts on New Projects 11.0 Shallow Wells Program 6.1 Surveys and Studies 5.4 Flood Damage Repairs 2.8
Total 49.4 12.34 The above breakdown of irrigation investments shows planned'av- erage annual investment in new irrigation works of D 9.2 million over the period 1973-76, compared with D 6.7 million in 1962-71. Moreover, the D 11 million to be invested in new projects during the Fourth Plan period is only - 74 - a fraction of the new projects planned, the total investment cost of which is estimated at D 57 million spread over 9 years. In addition, the bulk of what is termed completion of on-going projects, D 12.6 out of a total of D 19.7 million, can also be considered as new projects as it concerns either new phases of existing projects, as in the case of the Lower Medjerda, or entirely new development, as in the case of the Bou IIeurtma project now under consideration. It would appear therefore that the rate of construction of new irrigation works will be substantially accelerated during the Fourth Plan.
12.35 The most efficient utilization of the limited irrigation resources should be carefully studied in the framework of the three regional water master plans. The Water Master Plan for Northern Tunisia has been developed with the assistance of IBRD. The study, carried out by consultants, has been completed in June 1974. A preliminary review of an earlier version of the water master plan study suggests that only the growth in urban water needs by 1980 necessitates immediate action to mobilize additional water resources. A master plan for the use of water resources in the South is to be prepared by consultants, financed by bilateral aid, on the basis of a four-year study executed by UNESCO (UNDP financing) of the groundwater resources of the Algerian and Tunisian Sahara. A similar regional master plan for Central Tunisia is still in outline form. It is to be carried out during the plan period and will be centered on the construction of a multi-purpose dam near Sidi Saad on the Zeroud River.
12.36 In the light of past experience, efforts in the irrigation sector should concentrate on (1) an increase in agricultural productivity of invest- ments in areas currently under irrigation; (2) the removal of obstacles that stand in the way of bringing the currently irrigable areas into full produc- tion. The highest priority, based on the highest expected payoff of such measures, should go to providing complementary on-farm investments and an adequate level of inputs and services to the areas currently under irrigation. The greatest need is for agricultural extension and credit, especially for the small farmers. Supervised credit schemes for small farmers would meet this need. The experimental supervised credit project in the public irriga- tion area at Sbiba (Central Tunisia) has been established to explore the pro- mise held by this approach. Also important is an adequate supply of fertili- zers, plant material and mechanical services, on the one hand, and marketing services on the other. At the farm level, collection centers should be estab- lished, equipped for sorting, grading and packing operations. To rationalize the distribution system, the feasibility should be considered of additional regional wholesale markets, as the ones in existence cannot adequately serve all of the outlying production and consumption centers.
12.37 The timetable presented in the Fourth Plan for completing land reform on the existing perimeters appears rather optimistic. Since this is the main bottleneck for bringing about intensive production in most of the areas where public investments have already been completed, these areas should be given priority for land survey, farm consolidation and land registration. Wherever possible, consideration should be given to alternative solutions which could be ad hoc arrangements undertaken by the farmers themselves pend- ing final consolidation procedures or a partial but accelerated consolidation - 75 - procedure with an adaptation of the water distribution network. In some cases, issuance of provisional land titles should be possible, thus facilitating access to mortgage credit.
12.38 The main criterion for any project should be its economic justifica- tion. Execution of any new projects considered now, or expenditures that would lead to commitments for future projects, should be contingent on evidence of a higher rate of return than the expenditures necessary for the two priority activities referred to above. A possible exception, on social as well as eco- nomic grounds, would be water resource development in the context of the Water Master Plan for Southern Tunisia. This would take into account the relative backwardness of the region.
12.39 A point to be noted is that the people who benefit are bearing an inadequate share of the cost of construction, maintenance and operation of the irrigation infrastructures. According to the 1958 law on land reform in the Medjerda Valley, farmers have to contribute to the cost of the irri- gation in the form of a levy payable over 10 years at 4% interest; beneficia- ries of land distribution repay over 20 years without interest. The exact amount depends on such factors as soil quality and professional experience of the farmer and would vary between one-third and one-half of the total cost. Farmers holding over 50 ha would pay in land, those with farms between 4 and 50 ha in either land or cash, and those with farms between 2 and 4 ha in cash; smaller farmers would be exempt. In practice, the only farmers that paid their share were the expatriate settlers (by 1963, they had contributed 4,500 ha) and some communities farming "habous" lands. Also in the other areas, contributions to the investment cases are due (in the order of D 600-700 per ha). How successful collection will be remains to be seen, particularly in areas that were already irrigated from private wells before the new infra- structure was constructed.
12.40 In addition, farmers are paying for part of the cost (including 0 and M) through water charges. The price charged is 6-10 millimes per cubic meter, but the cost is in the order of 15-20 millimes per cubic meter or higher depending on the region and on what is and what is not included in the cost price calculation. Except for a preferential treatment of the smaller farmers (say below 4 ha), there is no apparent reason why the cost of irrigation should be borne by the general taxpayer rather than by the beneficiaries of the investment.
C. Land Tenure
12.41 Since Independence the Government has set itself the objective of changing the land tenure system in order to promote social equity and to increase production. The failure of the attempt at land reform and collec- tive organization of production in the 1960s was a chief reason for the stagnation of agriculture during this period, and the continuing uncertainty of tenure overhangs the future. To this must be added the problem of frag- mentation of holdings, which widens the gap between rich and poor. - 76 -
12.42 Four categories of land tenure may be distinguished:
- the public irrigation areas, wlhere large investments are lying idle or underutilized, partly because of land tenure problems;
- the state-held rainfed farms that were taken over from their former foreign owners. These lands were the first to be organized as cooperatives in the 1960s;
- the privately owned farms of the "traditional" sector, where land tenure problems are hampering the development of the country's most important agricultural resources; and
- the collectively owned lands, especially in central and southern Tunisia, where population pressure has rendered the traditional tenure system obsolete.
(i) State-Owned Lands
12.43 Over the period 1956-64 the State acquired more than one million ha by the purchase of foreign-owned lands and by the nationalization of "habous" lands. In 1961 the "Office des terres Domaniales" (OTD) was estab- lished to manage these lands and preside over their final distribution. These lands have become the core of the cooperative farm structure which at the time was intended eventually to include all private farms. After the repeal, in September 1969, of the decrees to cooperativize the entire agricultural sector, lands previously privately held were returned to private ownership and the question arose what to do with the remaining state-owned lands. An inventory and a review of the future role of these lands during the period 1970-72 led to a plan whereby some 126,000 ha would become state farms; 216,000 ha in the north and 135,000 ha in the center and south would remain as production coop- eratives; 76,000 ha would be allocated to demonstration, research and teaching purposes; and the remainder, 262,000 ha, would be sold to the private sector (Table 12.4). - 77 -
Table 12.4: LAIND UNER STATE 'IANAGEMENT, 1972 ( 000 l-a)
Office des Terres Domaniales (OTD) Agrocombinats 116.4 Cooperative Farms (in the North) 208.1 Cooperative Fanns (in the Center and South) 135.0 Government Pilot Farms 57.5 Institutions of Agriculture Research and Education 18.5 To be sold 191.0
Sub-Total (726.5)
Office de la lise en Valeur de la Vallee de la Sledjerda (0,VVN>i) A-rocombinats and other State Farns 10.0 Cooperative Farms (in the North) 8.1 Leascd to Private Sector 20.4 To be sold 50.5
Sub-Total (89.0)
TOTAL 815.5
12.44 State farms, also termed ;agrocombinatsl, while primarily intended for production, have also a demonstration function. They are on some of the best soils and have a good production potential. Since 1970, ex.nerience has shown that the main problem with the state farms is management. As with the production cooperatives, OTD still feels that it must exercise a high degree of centralized control over these farms, thus leaving little freedom to the manager. Careful consideration should be given to measures which would reduce administrative intervention and encourage initiative on the Dart of state farm managers, and reward such initiative through a system of incentive payments linked to farm performance.
12.45 The remaining cooperative farms are managed in the same way as state farms and consequently are cooperatives only in name. It is not clear what their future will be. The Government has stated its intention of gradually transferring decision-making power to the members of the cooperatives, who at present are little more than wage laborers. It seems probable that the cooperative farms will remain de facto state farms for several years to come.
12.46 The land earmarked for transfer to the private sector is admittedly inferior, and the main reason for its proposed transfer is that its low productivity hampers the efforts of the state farms to become economically viable. This land is to be disposed of in the following ways: 1/
1/ The disposition of state land is governed by Law No. 70/75 of Mlay 19, 1970. - 78 -
(a) by exchange for private land in public irrigation perimeters whose present ot*mers prefer not to shift to irrigated agriculture,
(b) by allocation through settlement schemes;
(c) by direct sale of entire farms to farmers grouped in a corporation or production cooperative; or
(d) by leasing to individuals pending final disposition.
Disposition through settlement schemes requires a number of parallel measures to be taken to ensure success. Short-term and medium-term credit mrust be supplied, as well as adequate extension services. Another necessity is to take steps to prevent the breaking up, by sale or inheritance, of the settlers' plots. While the Government has indicated its awareness of the need for these accompanying measures, it would clearly be preferable, given Tunisia's lack of experience in this area, for this type of land distribution to be first undertaken on a small scale to test its validity and the effectiveness of the support measures. Moreover, on grounds of both efficiency and equity, this land should only be allocated to individuals who will pledge, on penalty of dispos- session, to be full-time operators.
12.47 Not only is it virtually impossible to obtain relevant official information on the operations of the UCPs and agrocombinats, but unofficial information based on observations in the field is sometimes contradictory. The picture that emerges is roughly as follows:
(a) Technically, the enterprises are operating satisfactorily -- yields are comparable with those of large private farms and so are cultivation met'nods and machinery maintenancee
(D) Financially, the situation is less satisfactory, several of the UCPs and some agrocoinbinats are still suffering losses, despite the favorable weather conditions of the last few years. The reason most often cited is surplus of personnel, Darticularly office personnel. Although the situation in this respect seems to be better than some years ago, there is ample room for improvement. Ihile overstaffina is not necessarilv damaging in a situation of widespread unemployment, the employ- ment situation on these farms could be reviewed in the light of present labor market conditions.
12.48 A further look could be taken into the disposition of the state-owned lands, which is governed by legislation nassed in 1969 and 1970. Of a total area of some 315,000 ha in 1972, about 262,000 ha were to be transferred to the private sector by sale, allotment, exchange or lease. The remainder would continue to be operated as state or cooperative farms. If the sale and alloca- tion of land is to contribute to the growth of agricultural production, measures must be taken to ensure its efficient utilization (see above). - 79 -
Furthermore, precautions should be taken, in the interest of both efficiency and equity, to allot land only to those who will work it full-time. The Government has declared its intention to transfer the management of the cooper- ative farms, at present under direct State management, to the members but the Plan gives no indications of how and when this will be done.
(ii) Privately Farmed Lands
12.49 Private holdings are by far the most important category of ownership. Private farms occupy 4.5 million ha, as against 0.8 million ha of agricultural land held by the state. Even after the return, in 1969, to the doctrine of the coexistence of state, cooperative and private farms, a disproportionately high share of the Government's attention in terms of investment and technical services is still concentrated on the state and cooperative farms, even though most of the potential for agricultural growth lies in the private farmLs, especially in the "traditional" sector. How much of this potential will be realized depends in large measure on the resolution of two land tenure problems: (a) the absence of secure and registered land titles, and (2) the unrestricted fragmentation of holdings with its corollary of concentration of ownership.
12.50 Of the total productive area (agricultural, grazing and forest) of about 9 million ha, roughly 3 million ha have registered titles. The Land Registry Act of 1885, providing both for a complete cadastration and delivery of a clear title and for a somewhat less secure certificate of registration, led to the registration of some 2.5 million ha, virtually all in large owner- ship units in the north. This system of land registration was voluntary and served in the first place the interest of the European settlers, although in practice many Tunisian landowners made use of it. This system, which was somewhat simplified in 1965, is still available, but very little used because most of the large landowners who can afford its expenses have already taken advantage of it. For the benefit of the smaller landowners, a compul- sory land registration of lands not previously registered was establislhed in 1964. The cost is D 50 per ha, entirely borne by the State. After eight years, only thie governorate of Nabeul and part of the governorate of Sousse, totalling some 240,000 ha, have been covered. The time required to complete the coverage is estimated at at least 25 years. This would clearly be disappointing in the light of (1) the necessity of providing security of tenure in the public irriga- tion perimeters already in existence or under construction, (2) the dependence of efforts to provide more credit in the traditional sector on the availability of documentary evidence of tenure as security, and (3) the urgency to implement the land reform laws in the PPIs.
12.51 There are two ways in which land registration could be accelerated: (1) changing over from the present ground survey to the photogrammetrlIc method of preparing cadastral maps; and (2) the reactivation of the little-used "certificat possessoire" as a provisional document that would satisfy BNT requirements for mortgage loans. This certificate, introduced in 195'), is delivered by the regional authorities on evidence of uncoutested and continuous occupancy over a five-year period. However, if it is to be used on allarge scale, the proof required should be simplified by substituting as far as possible communal consensus for documentary evidence. - 80 -
12.52 The double process of the fragmentation of holdings on the one hand, and the concentration of ownership and control on the other, is a characteris- tic feature of land tenure system. The degree of fragmentation is indicated by the fact that the majority of farms are made up of between 2 and 10 plots, the average number of plots per ownership unit being 4 (Table 12.5). 1/ The largest farms are the most fragmented, with an average of 8.2 plots on farms of 100 ha or more, and the smallest farms the least, with an average of 3.8 plots on farms below 20 ha. These figures also provide an indication of the concentration that is taking place. The average plot size is 1.6 ha for farms smaller than 20 ha, 6.1 ha for farms between 20 and 100 ha, and 34.5 ha for farms larger than 100 ha.
12.53 The solution to the fragmentation problem, like that to the low productivity of the traditional sector, must be sought in a series of related measures which would include improved extension services, credit and marketing facilities for small farms together with increased security of tenure. Mea- sures to increase security of tenure should first focus on providing evidence adequate for agricultural credit needs, and leaving clear titles based on a complete cadastral survey to follow later. Such a survey is needed for the purpose of legislation aimed at (1) preventing fragmentation of ownership below a minimum unit, and (2) solving the problem of joint ownership. In anticipation of the completion of the cadastral survey and for implementation and testing in those areas which have been covered by the survey, there should be legisla- tion that would (1) prohibit the division through sale, gift or other transfer inter vivos of ownership units smaller than a minimum which could vary according to land use and from one region to another region; (2) prohibit the division of minimum units by inheritance and provide legal means for passing such units on to a single heir while assuring appropriate compensation to the other heirs. In addition, the courts should be permitted to assume the initiative after a given period and resolve conflicts between co-heirs by court order. The difficulty is to develop an approach that can be implemented. The first precondition, which will take time to meet, is an up-to-date land register. Even in those areas where there are recently registered titles, changes of ownership are often not recorded in the land register.
12.54 The problem of joint ownership may be solved in two ways: (1) by transforming the existing temporary situation into a permanent one, making these units indivisible and inalienable; this may be achieved through the existing laws dealing with the collectively-owned lands. Once the co- owners have lost their identifiable share in the land, the property could then be operated as a family corporation; (2) alternatively the state could systema- tically purchase or expropriate for subsequent sale under certain conditions jointly owned and undivided property, following the principle applied in the public irrigation perimeters to consolidate ownership units smaller than the legal minimum.
1/ The figures quoted are derived from a survey conducted in 1961/62 by the agricultural statistics service in the context of the World Agricultural Census. They are the latest available on the subject. - 81 -
(iii) The Collectively-Owned Lands
12.55 Some 2.1 million ha out of 9 million ha of productive land is owned collectively by tribal groups, called "farqa", mostly in the center and south. 1/ These are the remnants of a tenure system that in earlier centuries covered the entire country. Even now, the collective lands, which collsist entirely of extensive grazing lands, are continuously decreasing because of pressure to use the more suitable areas for cereals under individual tenure. The collective lands were in ecological equilibrium until increasing Population led to overgrazing and a disorderly increase in cereals production, with con- sequent deterioration of soil and vegetative resources and gradual extension of the desert into certain areas.
12.56 In 1971 the Government passed legislation intended to provide a definitive solution to the uncertainty surrounding the future of the collec- tively-owned lands. With the help of local boards ("Conseils de gest:Lon") it aims at transforming from collective to individual ownership those lands that are: (1) planted in tree crops either by the individuals concerned or by the State, a capital recovery charge being levied in the latter case, (2) suitable for tree crop planatations or for cereal production, or (3) within public irrigation perimeters. The total area that could thus be transformed into private holdings has been estimated at 1 million ha. The remaining 1.1 million ha is by implication only suitable for grazing and would remain under collective ownership and management. The Fourth Plan provides for allocation to private ownership, under the 1971 Law, of about 1 million ha of collectively-owned land, most of it in the steppe and desert regions of Central and Southern Tunisia. The fact that during the past two years only 66,000 ha have been allocated underscores the magnitude of the task ahead, even with the proposed simplified procedures. No indications of budgetary allocations and external financial and/or technical assistance to implement this program are provided.
12.57 A number of problems associated with the above procedure require attention: (1) In years of exceptionally favorable rainfall, as much as possible of the collective land is sown with cereals to provide subsistence during the intervening years. It should be clearly explained to those entitled to these lands that they are for grazing only, and that under no circumstances will individualized tenure be permitted. (2) In the land allocation procedure social equity considerations are not explicitly taken into account. As those putting forward claims on land for individualization are often the most powerful or the most enterprising among the population, they often claim more lland than their share in the collective ownership. These individuals may 'also hold their land for speculative purposes. Consideration should be given tb reducing as far as possible the scope for such inequities. (3) Given the smal size of the new holdings and the relatively low productivity achieved on these lands, the establishment of a legal minimum size for individual property, reinforced by measures to prevent division by inheritance, is essential. To make such
1/ The total area of collectively-owned lands including non-productive lands is about 6 million ha. - 82 - measures effective, the cadastral survey and title registration must be completed. If the progress of land allocation is to depend on the surveying capacity of the Topographical Service, which most likely will have to assign first priority to work on the public irrigation perimeters, then delays will inevitably occur. Other possibilities, as discussed above, are however available.
D. Price and Marketing Policies
12.58 Until 1970, prices of most commodities were regulated at varying stages of the marketing chain. Since then several liberalization measures have been introduced and trade in most commodities is free, except that the retailer's mark-up for all foods is subject to government control. Major commodities for which prices and marketing are still regulated are wheat, edible oils, and sugar. The producer price for wheat is, in principle, set each year, but changes are rare. Marketing of wheat is a government monopoly and so is trade in edible oils. Because of heavy reliance on exports (olive oil) and imports (other edible oils), producer and consumer prices are not set entirely without regard for world market conditions, as in the case of wheat. As in all beet- sugar producing countries, beet producers receive a price well above that corresponding to world sugar prices, but lower than the price in most other beet-sugar producing countries. Tunisia provides only a small proportion of its sugar consumption, and in terms of acreage and production value sugar beet is of secondary importance.
12.59 The most important issue concerns the price policy for wheat. Under this policy wheat production has for many years been greatly favored by Government-fixed prices at levels well above world market prices. The benefi- ciaries of the policy have been the relatively few large producers that account for the bulk of marketed output. To illustrate the amounts involved -- in the 1960s commercial wheat production was some 400,000 tons, for which produ- cers received some D35 million; as the farmgate prices, which have not risen since 1967, have been increased by 1 dinar per ton in 1974. Since 1962, the wheat price has increased by 16% but the buying power of the dinar has dropped by 50%. Gains, or potential gains, in productivity offset this gap: grain production has proven quite responsive to fertilizer and better cultivation methods, and new varieties permit considerable yield gains at small extra cost. World prices for cereals being particularly high at the present time, Tunisian domestic prices are relatively justified; however, it should be necessary to adjust them if world prices returned to normal in the near future. Since it might be politically difficult to lower the price, it is suggested to keep the price at its present level and to let inflation catch up to it. Such a policy was quite successfully pursued in Spain during the late 1960s; it led to higher yields, freed acreage for other crops, and brought prices more in line with international level. Consideration might also be given to abolishing the system of fixed prices and government monopoly in trading. Instead, a system of guaranteed prices could be introduced. - 83 -
Table 12.5: FRACMENTATION OF LAND OWNERSHIP
Number of Number of Ownership Units Ownership Plots Per % Of Total Size Class Ownership Unit n. In ("lass
ha.
0 - 20 1 85,8oo 32 2 - 5 132,500 49 6 - 10 34,300 13 11 and more 17,700 6 (270,300) (10()
20 - 100 1 8,300 16 2 - 5 24,000 48 6 - lo 11,000 22 11 and more 7,000ooM (50,300) (100)
Larger than 100 1 1,000 20 2- 5 2,200 4.3 6 -lo 900 11 11 and more 1,000 20 (5,100) (10o)
TOTAL 325,700
Surface area Number of Plots Average % Of Total % Of Total Size of ha. In Class n In Class Plot (ha).
407,000 24 85,800 3 4.7 889,000 52 404,000 38 2.2 267,000 16 254,000 25 1.0 144,000 8 294,000 29 0.5 (1,707,000) (100) (1,037,800) (100) (1.6)
301,000 16 8,300 3 36.3 880,000 47 78,600 26 11.2 424,000 23 84,000 28 5.0 261,000 14 132,300 43 2.0 (1,866,000) (100) (303,200) (100) (6.1)
331,000 23 1,000 2 331.0 625,000 43 7,300 17 85.6 240,000 17 7,200 17 33.3 252,000 17 26,500 64 9.5 (1,449,000) (100) (42,000) (100) (34.5)
5,022,000 1,383,000
Source: Rksultats de l1enaukte sur les structures agraires, 1961. Secretariat d'Etat au Plan et aux Finances, 1962 - 84 -
12.60 The large fluctuations in the supply and the price of meat presents another pressing issue. As in many Mediterranean countries, herd size is an indication of social status. In years of abundant rainfall and fodder, herds are allowed to grow and little of the overall weight increase reaches the market. After a year of average or below-average rainfall, herdsmen tend to hold on to their animals until a drastic weight loss occurs, rather than sell in the spring. By midsummer, the market becomes suddenly clogged with starving animals, and quality as well as prices drop. This problem obviously means a huge loss of resources, causes meat prices to be higher than necessary (except during droughts), and makes supply irregular.
12.61 A study should be made of practical methods, price incentives and appropriate taxes to keep herd sizes at or below the level compatible with the fodder supply in each region. Further, as the transport of fodder is very expensive, it would be desirable to take young animals from the traditional grazing areas in the center and the south to the places of fodder production for fattening. This would involve changes in current practices and would require a considerable organizational and financial effort. Yet another measure would consist of establishing fodder reserves in the arid and semi- arid regions. The need to do this has been recognized in the Fourth Plan, but the organizational and financial implications of the measure have not yet been defined. These various measures would be designed to reduce the fluctuation in fodder and meat supply; ways for increasing the overall availability are discussed in Chapter 11.
12.62 As indicated earlier, Tunisia's potential to produce off-season fruits and vegetables for the export market is limited. But these limited possibilities could be better used than has so far been the case, if there were centralized effort in the field of quality control and contracts with the major importers. The mission therefore suggests that an organizaton should be set up. Some of the main features of such an organization would be: (i) it would be administered jointly by the Government and the producers, (ii) it would have the export monopoly of certain commodities; 1/ (iii) it would have its own agents in the major importing countries, for market prospection and establishing contacts, and (iv) quality control of exports would be vigorously enforced. The absence of quality control has led in the past to several failures of otherwise promising ventures, e.g., in the export of flowers.
12.63 There are several elements present already that would facilitate setting up such an organization. In the Fourth Plan, the desirability of doing something in this field has been stated; FAO has expressed an interest in providing technical assistance; and there exist already some producer groups, one in the field of citrus and other fruits, another for vegetables,2/ that could represent producer interests in the export organization.
1/ Probably fresh and canned fruit and vegetables, citrus, possibly wine. Exports of olive oil could probably best be left with the National Oil Board, because of its considerable experience in this field. 2/ Groupement Interprofessionel des Agrumes et des Fruits; Groupement Interprofessional des Legumes. - 85 -
E. Policies for Private Investment and Credit
12.64 Private investment, at least recorded private 'investment, is quite small if compared with the public effort. The main government instrument for assisting private investment is the FOSDA program (Fonds Special pour le Developpment Agricole) whereby a proportion 1/ of the proposed investment is granted as a capital subsidy, and a loan 2/ is given for most of the remainder; the required down payment is typically 15% but may be as high as 45%. Until the Fourth Plan, the beneficiaries of th.e FOSDA program have been almost exclu- sively the large enterprises, including such quasi-public producers as SONMIVAS, STIL, and UCPs. Under the Fourth Plan these funds are to be reserved for small and medium scale farmers. The program is administered by the Banque Nationale de Tunisie (BNT), which also looks after some of the credit programs financed from external sources (USAID, WFP, and IBRD). Other than FOSDA, there are some 15 public or semi-public institutions in the field of agricultural credit: the two specialized agencies -- the "Banque Nationale de Tunisie" (BNT) and the "Caisses Locales de Credit Mutuel" (CLC4); a number of special-purpose government funds; and a number of semi-autonomous agencies, including special- ized marketing institutions. In addition, a minor role is played by private commercial banks, which only deal with a select number of well-established farmers.
1/ The proportion varies according to the type of investment, but is typically 10-20%.
2/ The terms of the loan vary as to repayment schedule and interest rate; the latter is generally well below commercial bank rates. - 86 -
Table 12.6: BANQUE NATIONALE DE TUNISIE
Agricultural Loans (Portfolio End of Year)
Comparative Figures for BNT and Other Banks
BNT Other Banks Total D'000 Percent D'O00 Percent D'OO0
1962 3,900 68.4 1,800 31.6 5,700 1963 3,800 77.5 1,100 22.5 4,900 1964 4,400 71.0 1,800 29.0 6,200 1965 6,600 88.0 900 12.0 7,500 1966 8,900 83.2 1,800 16.8 10,700 1967 10,000 62.9 5,900 37.1 15,900 1968 14,600 69.5 6,400 30.5 21,000 1969 19,900 91.7 1,800 8.3 21,700 1970 20,400 88.7 2,600 11.3 23,000 1971 (to June 30) 23,000 92.0 2,000 8.0 25,000
Source: BNT
12.65 Most important among the sources of agricultural credit is the BNT, created in 1959 to replace an array of institutions reflecting the dual struc- ture of pre-independence agriculture. While it had been the Government's intention to make BNT the driving force in agricultural development, the bank's legal status as a corporation, its statutory objectives and the mixed public-private composition of its shareholders soon led it to restrict credit to commercial farms only, so that small farmers who had neither the working capital nor the training for sucess in farming were ineligible for BNT loans. From 1963 all medium- and long-term farm lending was financed from state funds, notably the newly created FOSDA, leaving only short-term lending to be financed from BNT's own resources, supplemented when necessary by rediscount- ing at the Central Bank (BCT). BNT's role was clearly to look after the pri- vate agricultural sector, while the short-lived "Banque Cooperative" (1961- 1963) was to specialize in loans to cooperative farms through the newly estab- lished credit cooperatives (CLCM). After the "Banque Cooperative" was closed and its residual assets divided between STB and BNT, the latter became respon- sible for financing the bulk of the credit needs of the cooperative sector. This sector grew rapidly from 1964 until September 1969, when the reversal of government policy led to the dissolution of the production cooperatives made up from private farms.
12.66 The rise and decline of the cooperative sector is clearly reflected in the distribution by sector of BNT loans over the period 1964-69. Both in terms of number and amount of credits, cooperatives absorbed an increasing share of agricultural credit, the supply of which was increased by important injections of public funds. Thus total BNT lending rose from D4.2 million in 1964 to D10.8 million in 1969 (D13.6 million in 1968). The share of the - 87 - cooperative sector increased from 54% in 1964 to 89% in 1969. Loans to the private sector fell from D3.9 million in 1963 to D1.2 million in 1969. This trend was suddenly reversed in 1970, when new policies favoring the private farm sector took effect. The rapid growth of the BNT's agricultural lending during the period 1964-69, was made possible by government guarantees which removed virtually all risk from BNT's medium- and long-term lending to cooper- atives (mainly through FOSDA). An additional measure to cover BNT's losses sustained by defaults on agricultural loans was the creation in 1967 of the "Fonds Special de l'Amenagement Financier" (FOSAF).
12.67 The 1969-70 reorientation of public policy has led to an increase in public funds for subsidies and loans to private farmers. To the extent that these are made available through BNT they have increased medium-term lending to large and medium-size farmers. Short-term credits, mostly from BNT's own resources, supplemented by recent USAID and IBRD/IDA loans for medium-term credit, continue to be available only to the most creditworthy.
12.68 The credit needs of small farmers received some attention in the early 1960s when, acting on behalf of the Government, BNT continued a pro- gram of special working capital credits begun by one of its predecessors. As this program with its strong assistance element conflicted with BNT's policy it was discontinued in 1964. Besides this inherited program, during its early years BNT established 22 branch offices and 87 local sections which were intended to provide agricultural credit. They showed considera- ble promise, but were abandoned after the Ministry of Planning launched its own network of agricultural credit cooperatives, the CLCM, in 1963. After a period of confusion about coordination between BNT and CLCM an agreement was reached in 1965 wherby BNT was to assume responsibility for the control, reorganization and promotion of the CLCM, which by that time had run into serious financial difficulties.
12.69 While the number of CLCM increased from 14 in 1965 to 45 in 1971 (52 in 1969), with a total membership of more than 77,000, they remained under the tight control of the BNT, which restricted their activity to short-term loans of up to D500 for certain crops only (see Table 13.6). Apart from the size of credits, the conditions of CLCM lending are similar to those of BNT: a nine months term of 6% interest deducted in advance. In addition, borrowers must be CLCM shareholders, and pay a capital contri- bution of 1% on the amount of the loan. The performance record of the CLCM is rather disappointing, to a considerable extent for reasons outside their control. In the early years when still under the Ministry of Planning, poor management and accounting practices created the difficulties which in1 part led to the merger with BNT. Subsequently, during the cooperativization drive a number of production cooperatives became heavily indebted to the CLCM, while some farmers, when faced with integration into a production cooperative, refused to repay their debts. This situation was compounded by a three-year drought affecting even the repayment performance of those in good faith. In addition, a great deal of confusion prevailed as to the nature of thelCLCM's activity, many farmers considering it as a form of grant assistance, and not believing that the Government would press hard for recovery of the advances made. Finally, the dissolution of most production cooperatives in 1969 and 1970 caused a large number of defaults. While still in operation, the CLCM, now indebted to BNT, are controlled more tightly than ever, pending a long overdue reorganization. - 88 -
TABLE 12.7: CAISSES LOCALES DE CREDIT MIUTUEL, 1963-1971- (Anounts in DI'-"O)
Items 1965 1966 1967 1968 1969 1970 1971
Number of Caisses 2 14 28 41 49 52 45 45 Number of Eounder Members 2/ 7,651 22,303 32,292 36,450 37,088 - - Total Number of Members 2/ 14,701 34,089 53,046 63,548 70,631 77,690 77,688
Initial Capital -/ 44 133 215 268 293 - Total Capital - ) 186 338 472 633 707 735 Retentions of 1 per cent) 70 on loans - ) 30 50 69 105 _ 139 Number of Staff V 2/ - - - - 105 - 98 Deposits from clients 2 / 495 1,156 1,502 2,536 4,332 3,236 4,446 Debts to B.N.A. or B.T\T.2T - 80 730 194 1,66o - - State Grants V 290 290 290 290 290 290 290 Number of Loans Applied for 3/ - - - - 89,230 - 135,252 ,'Tumber of Toans Granted 3- - - - 66,3)40 - 102,866 Number of Loan Applications Refused3/ - - - - 22,890 - 32,029 Amount of oans Granted 3 _ 10,496 - 13,908 Amzount of,/Loans Repaid - -- - - 6,838 - 10,361 Amount of Loas Outstanding2 - _ _ - 3,658 - 3,546 Not Yet Due: Tndividuals ) 651 - ) 94 Co-Operatives ) 28 0 ) Overdue: Individuals ) 152 227 587 883 1,135 - 1,280 Co-Operatives ) 211 - 1,055
Contentious - 13 33 80 194 - 386 Rediscounted - - _ 803 - 31 lumber of Loans G ted During the Year 4/ - 14,882 19,129 14,811 10,990 17,236 8,536 Amount of Loans Gpnted During the Year 4 - 1,532 2,055 1,91.4 3,645 2,610 1,593
1/ Available statistics being fragmentary',and sometimes heterogeneous, the table is not complete ( - means figure missing). 2/ On 31 December of the year indicated0 3/ From inception 4/ From 1 January to 31 December of the year indicated.
Source: Banque Kationale de Tunisie, Division de controle, animation des agences et des C.L.C..ivI.; B.N.A. and B.N.T., Annual reports 1965 to 1970; Le credit a la petite exploitation agricole en Tunisie, TBPRD Consultants Report 1972. - 89 -
12.70 The agricultural credit situation facing the Government in 1969-70 was as follows. On the demand side, there were:
(a) Heavy requirements for medium-term credit by the large farms, which had suffered from credit rationing in the years of the cooperative experiment;
(b) equally heavy short-term credit requirements by both large and small farms, the number of the latter having increased dramatically after the dissolution of the production cooper- atives; and
(c) other medium-term credit requirements, mainly of small farmers whose needs have not hitherto been clearly assessed.
On the supply side, there were:
(a) Government funds, substantially enlarged from external sources to be channeled through BNT to meet the heavy medium-term needs of the larger farms;
(b) BNT with its own and supplementary resources to cover the short-term requirements of the larger farms; and
(c) the financially weak CLCM, operating under severe con- straints, facing the demand of small farmers for short- term credit.
In order to increase the resources available to assist agricultural production and to improve the incomes of small farmers, the Government took a number of steps to increase the volume of seasonal credit to small farmers which are described in the following paragraphs.
(i) Short-term Credit in Kind Campaign
12.71 This campaign is carried out by the Cereals Board 1/ and by the Development Authority for the Lower Mejerda Valley and other Public Irriga- tion Perimeters (OMVVM and PPI). 2/ The Cereals Board has 120 branch offices throughout the country to perform its principal function of grain marketing. Since 1970 this network has become increasingly used for the distribution of inputs in kind under the following programs:
(a) Emergency seed loans following years of poor harvest: these are termed loans, but the repayment record is estimated at between 15 and 40%;
1/ "Office des Cereales". 2/ "Office de Mise en Valeur de la Vallee de la Medjerda et des Perimetres Publics Irrigues". - 90 -
(b) improved seed is made available by exchanging it for the farmer's regular seed; for up to one ton the ex- change rate is 115 kg regular for 100 kg improved seed; for more than one ton the rate becomes 125 kg regular for 100 kg improved seed; regular credit is available for inputs in kind, including fertilizers, herbicides and animal feed concentrates; farmers pay 25% down in cash and 3% is charged for administrative costs. While intended for farmers with no access to regular credit, this program tends to favor the regular clients of the Cereals Board, i.e., the medium and large farmers who find these loans quite attractive compared with the regular BNT loans at 6%.
12.72 The OMVVM and PPI have run a program of interest-free short term loans providing inputs in kind since 1970. This program has been restricted to small farmers in public irrigation areas. The volume of lending has been considerably expanded in 1972-73 because of the deployment of field workers to ascertain the credit needs in collaboration with the regional services of the Ministry of Agriculture. The average rate of loan recovery is reported to be 40-50%, but only 10% in the Lower Mejerda area. So far annual budget appropriations have financed the deficits incurred by this program. However, given its admittedly temporary nature and the important increase in short- term credit requirements due to efforts to raise productivity in irrigation areas (such as the Bank financed irrigation rehabilitation project), the government can hardly be expected to continue underwriting this inefficient operation. In addition, three regional pilot projects for supervised credit have been carried out that focus on the small farmer's credit needs, one administered by OTD, another in Oued Meliz by the Ministry of Agriculture, and the third in Sbiba, carried out under contract by a foreign consulting firm.
(ii) A Proposed Integrated Credit Structure
12.73 One of the main features of the existing situation is the prolifer- ation of agricultural credit institutions. Together they represent a con- fusing array of objectives, criteria and ternms for lending. The time has come for the establishment of a unified ilnstitution that can handle all types of credit for all farmers. There is little doubt that only BNiT would qualify for this role, provided that it is prepared to broaden its, at present, pre- dominantly commercial approach so as to be able to meet the developmental and production needs of all segments of the agricultural sector.
12.74 There have been widespread complaints about the inconvenience of the highly centralized organization of BNT. Considerable gains, with no increase of risk, could be expected to result from the decentralization of decision- making except for the largest loans. In addition, the bank should be made more accessible to farmers by increasing the number of branch offices outside Tunis, at present 22. - 91 -
12.75 Public agricultural credit policy needs clarification to leave no confusion in the farmer's mind, between credit and direct subsidies. Credit should be handled by BNT, subsidies by the Government. This also implies that loans should carry realistic interest rates reflecting risk and operat- ing costs. The higher cost of small loans and of supervised credit should be covered by special rediscount privileges or by a special fund.
12.76 Government funding of agricultural credit also needs review. The bulk of the resources made available by the State has been channelled through special funds to BNT and earmarked for specific purposes, but virtually always lent at medium- or long-term. This has meant a bias in favor of medium- and large-scale farmers. The sources of these funds were not only the government budget, as in the case of FOSDA, but also the U.S. financed Development Loan Fund, and IBIR/IDA (through its 1971 credit). There appears to be an excellent case for using funds from such sources for the benefit of the large nunmber of small farmers rather than the rela- tively few creditworthy farmers. Loans to medium- and large-scale farmers should come from BNT''s own resources.
12.77 The inadequacy of the present credit system has been recogn'ized by Government but, in spite of a fair amount of discussion, the basic prob- lems have not been tackled. The former BDPA has proposed a useful approach to short-term credit which may contribute to solve the problem. The main features would be:
(a) Rehabilitation of the CLal and their full integration into BNT. A major effort would be made to recover as much as possible of the overdue loans. CLGI's nonrecoverable loans would be covered in part by their capital and reserves and in part by the State, which could consider this rescue operation as an ex-post subsidy to the CLCM for the high cost of lending to small farmers. The CLOI would become branch offices of the BNT, which would open additional offices to cover at least each delegation seat.
(b) Decentralization of BNT BNT would also decentralize its decision-making process by delegating to its regional offices (at the governorate level) the authority to decide on'all but the largest loan applications after consultation with the regional teclhnical services of the Ministry of Agriculture.
(c) Small farmer credit based on technical supervision and joint liability within local credit sections. The intensification of extension contact with small farmers would be esserntial. Ideally, all extension work would be done by Ministry of Agriculture staff. In the absence of an adequate regullar extension service, this function, at least in some areas, might have to be temporarily performed by BNT agriculturists. In principal, extension staff should not be involved in recov- ery of loans. An important factor in the success of small farmer credit would be the local credit sections. These would take the form of groups of between 10 and 50 farmers, - 92 -
preferably closely related or belonging to the same tribal fraction, but at any rate from the same locality. 1/ The mem- bers of this group would accept joint liability for honoring loan agreements with BNT to the extent that, if arrears ex- ceeded 5% of the total outstanding loans to the group, all members would become disqualified for new loans until the total arrears had been reduced to less than 5%. This would place the primary responsibility for ascertaining creditworth- iness and the responsible use of loan proceeds on the group itself, which would delegate one of their members as their official representative to the loan committee of the BNT branch office.
(d) A local loan committee and a local guarantee fund for small farm lending. Each BNT branch would establish a loan com- mittee consisting of the farmer representatives from the local credit sections, representatives of the extension service and local government, and the BNT branch manager. Their recommendation would serve as the basis for the final decision by the regional office. The committee's support of the loan application would constitute a commitment of the local guarantee fund. This fund, to be managed by BNT, would consist of a levy on the interest charged for the loan as the BNT contribution, which it would be able to pass on in part to the State through its rediscount privilege, and an initial endowment by the State. The local guarantee fund would enable BNT to recover non-repaid loans. This would not preclude legal action by BNT, which would have a lien on the farmer's assets ranking second to the Treasury"s. Loans recovered by legal action would naturally go into the guaran- tee fund. Once the fund had reached its maximum level (a per- centage of the amount of outstanding loans), further receipts from the interest levy would be used for local group activi- ties, such as a service cooperative, and to replenish the national credit guarantee fund (see below).
In BNT's earlier years, such local credit sections were an essential part of the bank's network. Each section was run by one of its members under the supervision of a BNT branch office manager, familiarizing the other members with loan conditions, helping to prepare loan applications and supervising the use of credit. This system was abandoned in 1963, despite the promise it had shown, when the Government created an independ- ent network of local agricultural credit societies, the CLCM. - 93 -
(e) A national guarantee fund. This fund would come to the aid of the local guarantee fund in cases where the latter's re- sources were inadequate, and would thus constitute an addi- tional guarantee for BNT lending. The national guarantee fund could consist of a government contribution which would be a percentage of total lending and, after some time, a share of the surpluses accruing to the local guarantee funds. If addi- tional resources were required they might come out of agricul- tural taxes.
(f) A national stabilization fund. The object of this fund would be to help farmers in financial difficulties as the result of bad harvests. Two related types of risk would not be covered by the fund: first, risk against whicii farmers can be insured, notably lhail and fire; second, major natural disasters such as widespread floods or prolonged droughts. In this case the Government would be expected to declare a partial debt mora- torium and provide special input subsidies. Such a distinction between different types of risk would put farmers on notice that only in exceptional cases can they count on Government help in their debt difficulties. The national stabilization fund would be managed by the Central Bank and would draw its resources from Government endowments and/or certain taxes.
12.78 This package was conceived as an attempt to reach the small farm- er unable to provide collateral acceptable to BNT. It would not preclude, however, individual loan applications from farmers with a credit rating that permits them to bypass the local credit section and its joint liability, but not the local guarantee fund. This would apply to both short-and medium-term credit. 12.79 Some of the above features, especially those imposing joint liabili- ty on the local agricultural credit sections, may at first be difficult to accept. However, unless Tunisia is willing to subsidize its small fiarmers ad infinitum, it must face the fact that, without some form of social pres- sure, the individual small farmer's guarantee for a loan is worthless. On the other hand, social and political realities are not yet such as to permit the concept of joint liability to be applied to any group the size of a CLCM. Certainly, a massive propaganda effort would be required to make this concept acceptable to farmers. The lack of alternatives will be the most formidable argument to win over the first few. Only effective implementation of the principle will prove the success of the approach and will set the exam- ple needed for others to follow. 1/
1/ Similar schemes involving supervised credit based on social pressure groups have reportedly been quite successful in Ethiopia, where they were first introduced in 1967 in the Chilalo and Wolamo agricultural development units. - 94 -
12.80 The Fourth Plan has adopted some features of the above package. It recognizes the crucial importance of agricultural credit and estimates that the planned investment and output require a trebling of the amount of short-term credit and'a doubling of medium- and long-term credit. The measures proposed to accomplish this are: (1) rationalizing the system of the mutual credit societies (CLCM); (2) encouraging BNT to expand its agricul- tural lending, especially short-term, from its own resources and through redis- count facilities; (3) limiting FOSDA financing to small and medium farms; (4) providing FOSDA with a decision-making body to determine how its funds are to be spent; (5) creating a government guarantee fund to insure against unrecovered debts; and (6) establishing a financial stabilization fund for debt consolidation in case of crop failure.
12.81 However, many basic shortcomings are not addressed in the Plan's proposals and notably, the factors underlying the widespread confusion between agricultural credit and subsidies. Another problem is the conti- nued absence of a vehicle for effective supervised credit, a vehicle that must be set in motion soon if the Plan's ambitious objectives for the supply of short-term credit and its utilization are to be met. Finally, there is the fundamental problem of the diffuse and disjointed array of institutions dealing with credit to farmers. The best solution for this problem would seem to be the concentration of all credit activities into a single special- ized agency for which the obvious candidate would be BNT.
F. Agricultural Education, Research and Extension
12.82 The performance of Tunisia's agricultural sector over the next decade will depend most importantly on success in developing agricultural education, research and extension. Having already invested heavily in pro- duction infrastructure, the country must now assure its productivity. The role of education will need to be (1) to build up the number of experienced farm managers, and (2) to supply adequately trained staff for the critically needed expansion of the extension and other government services functions. The role of agricultural research will be crucial in the development of "extendable" technological packages that will permit both the commercial and the subsistence subsectors to diversify and to intensify their produc- tion. Finally, the role of the extension service will be to assure the best possible use by both commercial and subsistence farmers of research, credit, and marketing information.
(i) Education
12.83 Agricultural education is entirely the responsibility of the Ministry of Agriculture. It takes place at four levels: (1) academic, (2) semi-academic, (3) secondary, and (4) vocational. At the academic level, agricultural education is provided at the National Agronomic Insti- tute 1/ where a 4-year course leads to the degree of "ingenieur agricole" and an additional 2-year graduate program, partly spent abroad, to the degree
1/ "Institut National Agronomique de Tunisie" (INAT). - 95 -
of "ingenieur agronome". Four specialized institutes (irrigation, engineer- ing, horticulture and forestry) provide a 2-year semi-academic curriculum leading to the administrative position of "adjoint technique". Secondiary agricultural education is provided by nine "lycees agricoles" (agriculltural high schools) with a 4-year program. Their graduates receive the adminis- trative rank of "agent technique" and constitute the middle-level cadre of the Ministry of Agriculture. Mobility between the above institutions is limited mostly to the acceptance of agricultural high school graduates by the specialized semi-academic institutes. Without exception, INAT is only accessible to graduates of the regular "lycees", whose students are of a higher caliber than those of the agricultural high schools. At the voca- tional level, 16 vocational agricultural training centers 1/ offer programs ranging from 2 to 4 years according to the kind of specialization. This type of education draws mostly on dropouts from the secondary schools and produces skilled farm laborers and mechanics.
12.84 The achievements in this field over the past decade have been quantitatively impressive. Actual investment reached 92% of the originally planned level, and the total output of higher and middle-level cadres was 72% of the planned level. The original 1962 target level for the training of specialized workers was more than trebled in subsequent plans, and actual performance surpassed even this figure by some 40%. The existing agricul- tural cadre is important. Next to some 700 agricultural graduates, there are about 4,600 middle-level technicians. In addition, some 27,000 individ- uals have received vocational training. Despite this performance, a niumber of basic questions can be raised as to its effectiveness. During the 1960s, agricultural education was almost exclusively directed at filling the staff- ing needs of the public sector, a high proportion of the new higher and middle-level graduates being absorbed in the central planning operations of the Ministry and the specialized agencies under its tutelage. The curricula have been too academic and theoretical in approach without adequate concern with the practical problems of commercial practice, farm management and further farner training.
12.85 At INAT, the highest priority should be given to a curriculum reform that would (1) raise the level of scientific training by a higher degree of specialization, and (2) impart knowledge on the basis of a problem- solving approach. 2/ The necessary changes in the relative emphasis on indi- vidual disciplines as well as in teaching methodology could not be achieved without the engagement of some foreign contract personnel as well as Tunisian graduates of the best institutions abroad. The recognition of appropriate levels of foreign degrees would greatly facilitate the latter. A curriculum
1/ "Centres de Formation Professionnelle Agricole" (CFPA). 2/ An eloquent argument for this can be found in a report by Professor Lee MIartin (University of Minnesota), who studied the INAT curriculum as a USAID consultant in 1972. - 96 -
revision on these lines would probably make the INAT graduate program, in its present form, redundant. Raising the quality of education at INAT would also have a favorable effect on the quality of students attracted, and would thus help to make a career in agriculture more highly regarded.
12.86 At the level of the agricultural high school the curriculum needs to be made more relevant to the future role of the graduates. This would require changes in the teacher corps as well as in the treatment of subjects taught to bring them into closer contact with the problems of farmers, especially small farmers. Much could be gained from a close association between the schools and the farms of the region in which they are located. A one-year training period on a farm might be useful; an effort should be made to attract future farmers to this type of education. The graduates finding employment in government service should be placed according to their specialized skills. To those graduates who show an interest in taking up farming in the private sector, the Government should give priority in land settlement schemes and/or in providing financial assistance.
12.87 The usefulness of the vocational training centers may be seriously questioned in the light of the extremely low percentage of their graduates that have found jobs. The unemployment rate among the graduates of the period 1968-72 is reported to be 70-80%. It appears that these centers ad- dress themselves to the wrong category of people, i.e., dropouts from second- ary schools who, having been oriented towards white-collar type employment by their primary school education, are for the most part incapable of adapt- ing themselves to agricultural employment. In many cases their interest in vocational agriculture training is motivated by despair in the absence of alternatives, or at best by the hope of acquiring a skill, such as that of mechanic, that will permit them to escape from the rural sector. .Potential employers show little interest in the graduates of the vocational training centers, whom they consider too costly to employ. The vocational training centers could provide a more important contribution if they were integrated into the overall extension program, for specific short practical training courses for interested farmers and extension workers. The nature of these courses would be determined in accordance with the particular needs of the region. The instruction farm "Saida" in the Lower Medjerda Valley may serve as an example of this kind of approach (see below).
(ii) Research
12.88 The bulk of agricultural research takes place at the National Institute of Agronomic Research (INRAT) 1/ and the specialized forestry and engineering institutes attached to it. An independent organization for basic and applied research in fisheries, the National Scientific and Technical Institute for Oceanography and Fishing (INSTOP), 2/ is located
1/ "Institut National de la Recherche Agronomique en Tunisie." 2/ "Institut National Scientifique et Technique de l'Oceanographie et de la Peche." - 97 -
at Salammbo, near Tunis. Its activities, supported by UNDP and IBRD, range from resource studies to extension work with fishermen. A limited amount of research is done by the staff of the agricultural college (ITAT) in conjunc- tion with its teaching activities. Some research is also carried out in the operational divisions of the Ministry of Agriculture. The Bureau of Agricul- tural Planning and Development (BPDA) 1/ has a near-monopoly of agricultural economics research. Some research is also conducted by the Water and Land Resources Directorate and by the Veterinary Research Division. INRAT is con- trolled by the Ministry of Agriculture and operates central laborator:ies in Tunis and a network of 16 experimental farms throughout the country. During the 1960s the scope of INRAT's research was considerably widened. In addition to the traditional fields of plant breeding, agronomy and plant pathology, mostly in connection with cereal and tree crops, important work was begun in the fields of irrigation, forage production and animal science. With the help of foreign technical assistance, the first steps were taken towards multidis- ciplinary work, notably in the search for cereal-forage rotations.
12.89 In the past, the organization of research on the basis of scientific disciplines has led to an overemphasis on basic research whichi is congenial to the scientific personnel, most of whom have received their graduate train- ing in France. There is an obvious need for a shift towards applied research into a limited number of key problems. This implies in the first place that research projects should be selected for their bearing on the actual problems of the farmer and processor, and on the development priorities of the Plan. The proposed "Conseil Superieur de la Recherche" could serve as a clearinghouse for research ideas from all sources, but it should pay particular attention to problems identified by the extension service and by farmers' organizations.
(iii) Agricultural Extension
12.90 A large number of agencies provide agricultural extension services. The only specialized extension agency is the Extension Division of the Agricul- tural Production Directorate in the Ministry of Agriculture. The three other divisions in this directorate, the Crop Production Division, the Crop Protec- tion Division and the Animal Production Division, also have extension respon- sibilities. In addition, OTD provides extension not only to the state and cooperative farms under its control but also, since 1970, to private farmers grouped in the so-called "cellules de rayonnement". OMVVI4 and PPI are res- ponsible for extension in the public irrigation perimeters. A number of commodity boards have also become engaged in agricultural extension such as the Cereals Board and the Livestock Board.
1/ "Bureau du Plan et du Developpement Agricole." - 98 -
12.91 The Extension Division of the Ministry of Agriculture has a central staff of 19 agriculturalists ("ingenieurs") and 6 assistants ("agents techni- ques") and a field staff of 35 agriculturalists and 264 assistants. Of the agriculturalists, 20 are foreigners assigned under various technical assistance arrangements. No figures of staff of the other divisions in the Ilinistry, of the various Boards and of other organizations that are engaged in full-time extension activities are available. The Ministry's extension services cover all agriculutral areas, but rather sparsely, with an average ratio of one agent to 1,200 farmers. The extension activities of the other agencies are generally organized along commodity lines, and their continuity and geo- graphic coverage vary. A special effort to reach medium- and small-size farmers has been made since 1969-70 in conjunction with programs to provide these farmers with production credit.
12.92 If agricultural extension is to play the key role assigned to it by the Fourth Plan, a number of decisive changes are required in its struc- ture, administration and programming. First, the extension service should be unified in its structure and in its operation within the Ministry of Agricul- ture. Each farmer should deal with a single extension agent who can advise him on his farming operations as a whole. If necessary, the agent may call in a specialist to deal with technical problems. The programming of extension activities would therefore have to be done regionally, taking into account the most important cropping patterns. A unified structure would facilitate the dissemination of information in the form most useful to farmers. It would also greatly facilitate the gathering of information about farmers' problems, to be utilized as an important input in the policy-making process (research, education, credit, marketing policies).
12.93 A major reason why tile extension service has yielded only limited results is the emphasis placed on theory during training. To remedy this, the authorities opened a Center in 1968 for the practical instruction of students and teachers at all agricultural school levels and of extension workers specialized in irrigated vegetable and fodder crops. The Center is located at Saida in the Lower Medjerda Valley, but attracts "stageaires" from all over the country.
12.94 The program consists of a two- to three-week cycle of intensive (six to eight "stagiaires" per instructor) on-the-job training. Currently the Center is training 350 students per year, most of whom remain in contact with the Center, either through its post-training program or through follow- up cycles. This type of activity, wliichi is hardly more expensive than the traditional theoretical type of training (D15 to D20 per week, per student, including board and lodging), fills the gap between research and effective education/extension. Expansion of this type of activity into other areas, such as livestock and tree crop production, deserves serious consideration. - 99 -
12.95 The Fourth Plan indicates that the present agricultural extension capacity will be enlarged in order to reach more medium and small size farms and that a formula will be developed for a package of extension, credit and other services to be concentrated on selected areas. But no indication is given how the agricultural extension proposals are to be realized in terms of specific programs, manpower requirements, training and institutional arrangements. There appears to be no changes envisaged in agriculture edu- cation and training objectives. In view of the limited capability of the public extension service for some years to come, the Government might con- sider encouraging legitimate and qualified private organizations to operate in an extension capacity and continue its vigourous support of existing proj- ects of this nature.
GraRh. 12.1 ORGANIZATION OF THE MINISTRY OF AGRICULTURE
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