RESTRICTED FILE CurO?RESTRNReport No. AF-39a
Public Disclosure Authorized This report was prepared for use within the Bank and its affiliated organizations. They do not accept responsibility for its accuracy or completeness. The report may not be published nor may it be quoted as representing their views.
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION Public Disclosure Authorized
REVIEW OF 1965 - 1968 DEVELOPMENT PLAN
TUNISIA
VOLUME III
Agriculture Public Disclosure Authorized
November 26, 1965 Public Disclosure Authorized
Africa Department CURRENCY EQUIVALENTS
Prior to September 1964 U. S. $ a . 420 Dinars Since September 1965 U. S. $ = . 525 Dinars A G R I C U L T U R E
Table of Contents Page
A. The Central Issues 1
B. The Main Agricultural Regions 2
C. The Plan for Agriculture 4
The Investment Program 5
Finance 7
Production Targets and Prospects 8
Export Prospects 12
Import Prospects 14
Employment Objectives 14
D. Institutional and Policy Implications 14
Administrative Set-up 15
Organization of Cooperatives 15
Credit Organization 17
Training and Education 17
Price Policy 18
E. Development Projects and Programs 19
Statistical Annex:-
A. Production - Main Agricultural Crops - tons
B. Production - Main Agricultural Crops - millions of dinars.
C. Agricultural Investments by Sector of Activities - Four Year Plan.
D. Exports of Animal and Vegetal Products
E. Imports of Animal and Vegetal Products
F. Investments by Sector of Activities - For Integrated Projects in North and Central Tunisia I. AGRICULTURE
A. The Central Issues
1. Agriculture is the most important single economic sector in Tunisia, accounting for about a quarter of GDP. Moreover, industrial activity in the country is largely based on agricultural products, and fully two-thirds of exports originate in agriculture. Its importance to employment is even greater, with 56% of the labor force occupied in agriculture and fisheries, plus a further 3.4% in agricultural processing. Inevitably, at the present stage of development, this sector also acts as the main residual source of employment for manpower which other sectors are unable to absorb. Partly, be- cause of this there is much under-employment in this sector.
2. If the production and employment targets of the Four Year Plan for the non-agricultural sectors can be achieved, agriculture would have to absorb only a small part of the projected increase in the total labor force between now and 1968, permitting some reduction in the relative importance of agricultural employment. A significant reduction in the contribution of agriculture to GDP is also foreseen from 25% to 20% by 1968. Nevertheless, to achieve the total growth rates in employment and output projected by the Plan, the agricultural sector must turn in a strong performance in the years ahead.
Table 1. Agriculture in the National Economy
Targets 1960 1961 1962 1963 1964 1968
Total gross domestic product (factor cost - million dinars - 1960) 286,100 310,800 320,800 333,500 357,900 455,500*
of which agriculture 75,900 86,700 79,900 85,600 88,500 92,400*
Total gross domestic capital formation (million current dinars) 59,488 68,308 76,112 88,557 103,200 n.a.
of which agriculture 11,248 12,033 16,822 20,120 23,100 37,500
Total employment (1,000 persons) 1,119 1,220 1,330
of which agriculture 647 680 699
* Rural households excluded. 3 There is undoubtedly a considerable potential for expanding output both for domestic consumption and for export of non-traditioral commodities. However, this depends primarily on increasing the productivity of land already uinder cultivaticr;, because the possibilities for bringing new land into culti- ration are comparatively small, and new irrigation possibilities are also limited. To aciiieve the necessary improvements in productivity, implies a major effort, and one which cannot be successful without making important changes in the present structure of agriculture in Tunisia.
4. The structure of agriculture is, in fact, the major determinant of the structure of the whole economy. The contrast between the traditional and the modern farming sector - covering about a third of the sown area in 1963 - are not only great in terms of organization, they are equally great geo- graphically. Independence and nationalization, brought to an end the division between Tunisians and colonists but the basic division of the econcmy remains. A major objective of the development effort is therefore to achieve a greater degree of national integration through internal integration within the agri- cultural sector.
5. This means that in addition to the requirements for investment and current inputs, there are technical and organizational requirements of a very difficult character. iNot only must technical manpower, both high and low, be rebuilt to previous levels, it must be increased. Furthermore, key institu- tions such as the National Agricultural Bank must be adapted to their new functions. The whole process of agrarian reform must, and is, being organized from center to ground level.
6. In this context, the choice of investments will present increasingly difficult problems, temptations and risks. An appropriate balance has to be struck between economic and social considerations, between the advantages of investments promising quick returns and the new long-term investments, such as forestry, soil conservation development and tree-planting.
7. These problems of choice are further complicated by the vicissitudes of the external sector. Export prospects are not very favorable for the tradi- tional agricultural exports which Tunisia can provide, mainly because the bulk of export output can no longer be geared to one special market, at favorable terms, as in the past. To diversify both the range of exports and the markets is no easy task for trade policy.
B. The Main Agricultural Regions
8. Tunisia enjoys a typical MIediterranean climate where hot and dry summers alternate with cool or mild humid winters. Its agriculture is typical of that of Northwest Africa. In the most humid area, cereals, vineyards, tree crops and livestock are the main resources; in the arid and semi-arid region, extensive grazing and cereal growing, together with broadly-spaced olive groves characterize the economy; and in the desert, only nomadic grazing is found. Where irrigation water is available, vegetables, fruit trees (including date palm) and alfalfa facilitate the transition to a cash econcny among traditional farmers. - 3 -
9. Of the total area of 16 million hectares mentioned in the Plan, i/ 43 percent is unproductive land and 57 percent is agriculturally productive area (SAU). / Of the 9 million hectares of SAU, 10 percent is forest, 40 per- cent is range and esparto grass and 50 percent is arable land and tree crops. Of the 4.5 million hectares of arable lando 44 percent is cereals, 29 percent is fallow, 22 percent tree crops and 5 percent other crops.
10. With a mild climate and precipitation between 400 and 600 mm, the region of Tunis and Cap Bon is the richest in the country. Most soils are of good quality. The region is the most dynamic in Tunisia, and supports a dense rural population, some of it traditionally trained to use irrigation; there was a previous settlement of small but active foreign farmers. The irrigated area is large (45,000 hectares) and cash industrial crops are important (35,000 hectares of vineyards). Tunis is, of course, the most important market for the region. Production is diversified and high-value crops such as citrus (12,000 hectares) and vegetables (20,000 hectares) provide a large percentage of the output. A major problem of the area is the salinity of irrigation water in the low Medjerda valley. The main public investments in this region include the extension of the low Medjerda valley (CMVVM), the completion of three middle-sized dams in the Cap Bon and drilling in El Haouria region. Private investments are foreseen for supplemented irrigation works and other facilities required to increase dairy and vegetable production. Marketing and transpor- tation services will have to be improved by the use of so-called "service co- operatives." (Cooperatives de service).
11. The plains and rolling lands of NJorthern Tunisia, along the M4edjerda valley and the hills along the Tell, are typical cereal growing areas. Rain- fall (400 to 600 mm) is highly variable but is suitable for relatively inten- sive annual cropping; soils are often subject to erosion under the present land-use system. Mechanized farming, established mainly by European colons, covers about half a million hectares; about 1-1/2 million hectares are culti- vated by traditional methods, with average yields of 400 to 500 kg. per ha and an extensive livestock system based on fallow and stubbles. Livestock raising hardly features in the modern sector. The employment situation in this region is poor, due to the periodic nature of cereal produiction. Modernization of traditional agriculture is hampered by the land tenure system, the size of the plots, insufficient training of the farmers and lack of capital. Mechani- zation alone makes it possible to prepare the soil, seed at the right time, and plough the land in summer. The Government is now developing new systems of farming, the Cooperative Production Units (UCP) and the Service Cooperatives which are being discussed at a later stage in this chapter. 12. The mountainous area of Kroumirie and Mogods, largely covered by forest, is the watershed of the Medjerda River and has valuable forest resources, while the drier Tell Mountains are partly cultivated or covered with "maquis" and pine woods. The population is poor and underemployed, living off live- stock and forest production. Tree planting has been successful in the Mogods and forestry could be more productive; forest grazing will become a useful re- source if well managed. The upper Medjerda valley and those of its tribu- taries are now the object of a careful water resource survey undertaken by AID.
1/ Total area of the country according to the UN Statistical Yearbook is 12.5 million hectares. SAU: Surface Agricole Utile. - 4 -
There are also projects for establishing triple-purpose dams north of Souk El Ehemis to sweeten the Medjerda water in summer, to increase water supply for Tunis, and to create two or three irrigation perimeters in the Medjerda valley.
13. The Sahel region, extending all along the Tunisian coast from Cap Bon to Zarsis, has reached quite a remarkable degree of development considering the limitations of soil and the dry climate (200 to 300 mm per year. There are more than 18 million olive trees, sometimes interplanted with almond, around Sousse, Sfax and Zarzis. Coastal cases are found from north of Gabes to Ben Gardane. The rest of the region is either under rainfed cereals or is grazing land without much prssibility of improvement except through irrigation, which is difficult due to limited water economics which, moreover, often have a high degree of salinity. Population is dense along the coast and in the cases. Good marketing possibilities exist in this area. Development is linked to a fuller use of underground and Cued Nebana waters for high value crops (aspara- gus, early tomatoes and vegetables, fruit trees, bananas) and forage crops to supply a limited dairy industry near the main tourist centers and to supplement animal feeding. The rejuvenation of the old olive trees, the uprooting of un- productive palm trees, and the reorganization of the coastal oases have been started very recently with good chances of success.
lb. Central Tunisia, south of the "Dorsale," is arid or semi-arid, with no permanent river; it is a vast steppe used primarily as grazing land for several million sheep in spite of the climatic irregularity which causes heavy losses in the flock, Olive planting is growing rapidly but at the expense of the best grazing land and without a corresponding decrease in the number of animalsO A large area under alfa (esparto) grass supplies the Kasserine paper factory0 The Nebana Dam will bring about 5,000 hectares under irrigation with- in the next 4 years. Salinity problems are acute in most of the permanently irrigated areas around Kairouan. The possibilities of further development are limited, but intelligent integration of grazing, planted and irrigated lands would not only increase production and labor opportunities but also regularize animal production, the basis of the local economy. The Government is now increasing the utilization of underground water through deep well drilling. A new farm structure, whereby the peasants are grouped in the "cooperatives de polyculture," is being set up to exploit both the grazing land and the irri- gated area,
15. In the desertic south, there are limited possibilities of organizing and extending the inland orses, in particular by planting more Deglat Ennour dates. The availability of water points (drinking water) remains the main bottleneck for making use of the vegetation for grazing camels and goats, Deep well drilling is an expensive undertaking in this area. For the next few years, efforts will go toward improving present production in the oases.
C. The Plan for Agriculture - Cbjectives and Prospects i6. Although scme shift in emphasis has been introduced, the objectives of the Four-Year Plan are essentially the same as those expressed in the Ten- - 5 -
Year Perspectives. 2/ For 1960 to 1968, an annual growth rate of 2.8 percent (value added) had been planned. 9/ Official estimates put the growth during 1961-64 at 2,4 percent, I/ but the mission believes a more realistic estimate - based on production of the major commodities - would be that agriculture moved sideways during the pre-plan period (see Table A). It should be remembered that Tunisia is a small country and most crops are grown under rainfed condi- tions; the influence of changes in weather conditions from year to year have a tremendous effect on production, often much larger than the use of improved techniques.
17. The Four-Year Plan gives priority to reducing imports by increased output of traditionally produced commodities for the internal market (cereals, 'Livestock, vegetables, forages) and the production of raw products for industry (fruit, vegetables, sugar beets). It also provides for a limited export expansion of processed commodities (vegetables, oil and fruits). Most invest- ments planned in irrigation and plantation will only lead to an increase in production of exportable commodities after the plan period,
The Investment Program
18. The dinars 150 million scheduled for agricultural investment in 1965-68 accounts for approximately a third of the total investment during the period. This one-third share is lower than the 40 percent planned for the pre- plan period, but projected investments are significantly higher than the actual level reached during the 1962-64 period. The difficulties that retarded progress are being overcome. Tunisian officials had had very limited experience in preparing projects for appraisal; they have now gained this experience and know how better to use "tied aid." In the past, the Government was still testing agricultural structures suitable for accelerating development; these have now been substantially agreed upon. And, finally, the lack of experienced technicians and farm managers was actingand would continue to act as a brake on the whole program; a dynamic educational and training program is now begin- ning to fill this gap, in the meantime expatriate technical assistance will strongly be needed.
19. The distribution of planned investment is as follows:
Hydraulic works 33.0% Arable farming rainfed area (including some rural housing) 18.5% Tree planting 12.5% Soil conservation 10.5% Livestock production 7.0% Forestry 6.5% Fisheries 1.5% Education, research, studies 10.5% 100%
1/ These were discussed in IBRD Report No. AF8a, Restricted, April 11, 1963.
g/ According to the revised national accounts figure for 1960, this rate would be 2.4 percent.
3 At factor cost and constant 1960 prices. 20. Of the main sectors of investment, institutional investments are relatively high, but justifiably so. There is no question of the need to ex- tend the applied research program (2.4 million dinars), to improve extension services (dinars 5. million), and to prepare an inventory of resources. The program for local and regional studies (dinars 8 million) might be too ambitious, and it could be linked more closely to the equipment program. In view of the need for trained people in agriculture, the expenditures on education and training are fully justified. Foreign assistance is needed in research and in teaching,
21. Half of the investment in irrigation and drainage (dinars 25 million) is intended to complete or carry on already initiated projects such as Nebana, Lower Medjerda Valley. Another dinars 12 million is for financing new private wells and digging new deep wells in central and eastern Tunisia. Returns from these investments are expected to be very rapid, and the mission suggests that both actions be accelerated as much as possible. About dinars 13 million are intended for starting long-term projects in Upper Medjerda and Ickheul areas and for protecting towns in central Tunisia. Given the long gestation period of major irrigation works, a start will have to be made in the short-term, if and when their economic justification is proved. For the time being, most of the large projects foreseen are not sufficiently well-known to determine their priority. Part of this prcgram will thus have to be reappraised in a year or two. 22. Investments in arable farming in northern Tunisia include mainly the purchase of agricultural equipment (dinars 16 million) 1/ farm buildings (dinars 4 million), and rural housing (dinars 8 million). The limited investment in farm building will enable the existing substantial stock of modern farms to be used more fully. The program of rural housing (dinars 8 million) could per- haps be postponed or reduced by stimulating the farmers in the cooperatives to insist on building their own houses. 23. Fruit tree planting, one of the most successful undertakings daring the pre-plan period, will require expenditures of dinars 8,5 million for agri- cultural equipment and dinars 10 million for seedlings and trce e-tablistn:ent during the Plan period. Plantings of about 250,000 hectares (190,000 in central Tunisia) will bring the total area under fruit crops to l.4 million hectares in 1968. Such an increase seems justified because in several areas no alternative land use can provide comparable incomes: pasture in central Tunisia gives low return with the present production system, and in the north there are alarming decreases in soil fertility. Because of the marketing situation, the 5.5O0 hectares vineyard plantation program has already been cancelled. Citrls, palm trees, and apricots give high yields under irrigation, but as will e discussed later on, marketing problems might be damaging to the whole program unless suitable agreements can be concluded with importing countries,
/ As mentioned earlier, mechanization is required to solve the problems of timing involved in efficient farming under permitting climatic conditions. - 7 -
24. Although it might, at first sight, appear that investments in soil conservation are too large for a country with limited financial resources, the program has been carefully prepared. Works will be undertaken mainly in the north, to slow the progressive degradation of cultivated land, and on grazing and tree-planted lands in the center which would give relatively rapid returns. Since the program is based on the establishment of cooperatives, progress here is the key factor. With three-fourths of investment consisting of labor costs, the program will have an immediate effect on employment. The same can be said for forestry, with investments involving a little less than a million hectares of forest. The investments are intended to upgrade present resources and to plant 20,000 hectares of fast growing species for local industries.
25. Livestock will benefit from direct investment (improving pasture, importing animals, erecting stables) as well as from the increased production of fodder in irrigated areas and in northern Tunisia. Although the production program has been very carefully designed, it is running behind schedule; thus the phasing of investment in livestock importation and pasture improvement may have to be reconsidered.
Finance
26, Finance for the agriculbural investments w;ill have to be provided for about 90 percent by the Government, either directly (exploitation of water resources, research, education, services) or indirectly through medium and long-term loans via the agricultural bank, About 60 percent of the investments should give its first, though usually not its full, anrnual returns during the period; the other 40 percent are aimed at reversing the deterioration of soil fertility, thus preparing the wœay for future increases in production.
27. Short-term finance requirements for farm operations are not included in tlhe above figures; they are expected to increase more or less in proportion to the development of cooperatives; in 1968, the U.C.P.ts 1/in the north nay require more than dinars 11 milliono For the full investment program, credit needs in 1963 are likely to be in the order of dinars 15-20 million2 About 30 percent of the inputs to be paid for with this credit will have to be brought in from the outside (nitrogenous fertilizers, gas, oil, spare parts, part of the seeds, pesticides).
28, Direct public investmenit going into infrastructure and for programs of study will amount to approximately dinars 70 million at current prices; on- farm investment will amount to about dinars 80 million. Since the private sector is clearly unable to finance this effort on its own the Govermnent is undertaking an assistance program of subsidies and medium and long-term loans.2/
1/ Production Cooperatives called UCP.
2/ Based on Loi No. 63-17 of May 27, 1963; and a series of decrees and "arretes" (decision of application) from the Minister of Agriculture, passed on 12 March, 1964., and known as a whole as "State Inducement to Agricultural Development." - 8 -
This program is limited to farmers who are planning investments in the right direction and under State supervision. For long-term projects, 15-20 year loans are available for tree planting, soil conservation work, pasture improve- ment, well drilling and farm buildings; related subsidies vary from an 80 per- cent coveragefor range improvement in the center to 15 percent for the establishment of wells in cooperatives. Medium-term credit is available for 50-90 percent of expenditures for machinery and livestock, tree planting under irrigation, wind breaks, maintenance and repairs. Interest rates vary from 1.5 percent for long-term loans for cooperatives to 5 percent for medium-term loans for machinery. Working capital inputs are supported through short-term credit, and cash grants. Fuel used for agricultural purposes is tax-free. Nitrate fertilizers and pesticides are exernpt of customs duties (since 1961) anid supported by a subsidy-loan program; 10 percent subsidy-70 percent loan for individual farmers, and 40 percent-50 percent for cooperatives. Improved seeds for cereals and grain legumes are subsidized 15 percent; seeds to establish pastures in the north are sold at half price and in the center are free.
29. This financing system is probably too complicated and elaborate to be fully understood by the farmers and the cooperative members. Simplification may be desirable and, at any rate, there is a great need for an information campaign aimed at explaining to the farmers the benefits they can expect from the various decrees. Close State supervision to decide who is eligible and to check on expenditures is required as well. The Government intends to revise the program as soon as the financing of agricultural development would become more self-sufficient.
30, In summary, the investment plan is generally well-balanced and its basic objectives appear to be sound, although more than four years might be needed to reach some of these targets. Most of the investments are in the North, where the agricultural and industrial potential is greatest. However, important labor intensive investments in the arid and semi-arid zone are also foreseen; they should allow not only a higher and more sustained production, but also a slowing down of rural irmigration toward the north. The Plan, on the whole, mTakes allowance for the fact that changes take time, as does the reorientation of production toward export commodities.
Production Targets and Prospects
31. The Plan targets are generally ambitious for cereals and livestock, but are reasonable otherwise. Below, they are discussed commodity by commodity.
Cereals account for 25-30 percent of gross agricultural product. There has been no definite production trend since 1957; and during the last few years Tunisia has been a net wheat importer. Part of the hard wheat out- put, which accounts for 80 percent of wheat production, is exported. The Plan expects wheat production in 1968 to cover not only the increase in consumption during the Plan period but also to maintain exports of hard wheat and eliminate imports of soft wheat. This would seem too ambitious. Production of cereals would have to grow by almost 11 percent a year, when comparing 1968 with the 1960-64 average basis, according to the Ministry of Agriculture figures mentioned in the Plan; the Plan, however, incorporates implicitly a lower - 9 -
annual rate of increase of some 7 percent as shatin in the table below. This would be accompanied by a change in land use and some shift of area cultivated under hard wheat into soft wheat.
Cereal Production
Ministry of Agriculture Planning Agency
Average Plan Target Average Plan Target Unit 1960-64 (1968) 1960-64 (1968) Hard wheat ton 335 538 446 633 Soft wheat ton 76 227 99 214 Barley ton 146 285 223 287
Total value of production* million dinars 19.6 36.1 26.6 39.7
* At 1960 prices - Hard wheat 42 D/ton; soft wheat 34.5 D/ton and barley 20 D/ton.
32. In spite of good results obtained in a number of UCP's, even the increase in wheat production projected implicitly in the Plan is not likely to be realized in the period 1965-1968. The Plan figures are based on yields in newly established modernized areas, reaching their full potential during the plan period, but it wqill take considerably longer than this for the new farming methods to take hold, particularly since the modernization program is likely to slow down during 1965 and 1966, Very tentatively, it appears possible to improve the production on about 400,000 hectares in the Northern area which would include about 100,000 hectares of hard wheat, 25,000 hectares of soft wheat and 300000 hectares of barley. Allowing for small increases in production in other parts of the country, production increases can be estimated roughly at 65,000 tons of hard wheat, 25,000 tons of soft wheat and 30,000 tons of barley, over 1960-64 average. This would represent an increase in aggregate production of cereals, valued at 1960 prices, of 2 to 3 percent per annum.
33. Assuming that consumption of cereals will increase at some 2 percent annually, this behavior of production would imply the need to import 250,000 tons of soft wheat in 1968, if exports of hard wheat are to be maintained at the present level of 120,000 tons. In case this export target is not attainable due to problems of competition of other suppliers or to PL 480 arrangements, the import requirements would be correspondingly recuced. - 10 -
34. Vegetable production has risen some 6 percent per year since 1956 and probablynow represent overDlpercent of agricultural production. A substantial increase in production is projected for 1968, as a result of the irrigation program - vegetables are to cover a third of the new land - and from a moderate increase in yields. These targets appear feasible and could perhaps be ex- ceeded under a determined improvement program. The commoditiesO targets in Table 4 indicate the expected production for the main crops; vegetable produc- tion can be easily adjusted to market conditions.
Table 4. Vegetables
Area (hectares) Production (tons) Present Target 1968 Present Target 1965
Potatoes 1,900 4,200 23,400 67,200 Tomatoes 7,000 7,500 9h,900 140,000 Pepper 4,840 5,240 47,960 64,700 Artichokes 920 2,800 7,4oo 28,000 Peas 1,500 3,000 6,750 18,000 Melons and Watermelons 9,700 10,000 1/ 97,000 120,000 Other Vegetables 95,200 11,000 92,000 165,000
35. Production o~f tree crops has been increasing and the rate of growth is expected to increase during the coming years,, The targets are based on plantings made previously, with Imown acreages: and the yield estimates are generally reasonable.
Table 5. Tree Crops
Area (hectares) Production (tons) Present Target 1968 Present Target 1968
Olive (oil) 9800oo0 1,060,000 385,000 450,000 Olive (table) 3,80o 8,300 4,4oo 6,600 Citrus 10,000 13,000 82,000 140,000 ( 1,800,000 1,800,000 Vineyard ( 51,800 57,200 hl of wine hl of wine 15,000 15,000 T table-grapes T table-grapes Almonds 64,900 175,000 12,000 13,600 Figs 13,100 23,300 12,000 13,000 Palms - - 41,500 39,500 Apricots 11,500 22,600 15,000 40,500 Others* 7,750 17,600 23,500 47,500
* Peaches, Apples, Pears, Plums, Pistachio.
1/ Of which 4,000 hectares will be under irrigation. Source: Four-Year Plan. - 11 -
36. Citrus production has increased by almost 30 percent since 1956/57. Acreage is estimated to increase from the 10,000 hectares to present to 13,000 hectares by 1968 and 19,000 hectares by 1971. Production should rise from 82,000 to 140,000 tons betwTeen 1964 and 1968. Twenty thousand tons of this in- crease will be derived from new plantings and the remainder from more use of fertilizers and irrigation. The yields target is rather high but could be reached with good management. Since plan estimates for domestic consumption seems to be on the high side, citrus surpluses available for exports may possibly be above the 60,000 tons projected in the Plan.
37. Olive production represents 10-15 percent of gross agricultural pro- duct, but output varies tremendously from year to year. lHowever, production has increased by almost 50 percent in the last 10 years having reached D 15 million in 1964; targets for 1968 are based on plantings already carried out. The increase in domestic consumption of olive oil forecast for 1968 might be on the high side. Surpluses available for export might be higher than the targets foreseen in the Plan, which emphasizes the need to make a special effort to increase olive oil exports.
38. Since 1958, vineyard production has fluctuated between 1.5 and 1.9 million hectolitres of wffine. The acreage has not increased since independence. Considering that the bulk of wine production goes to export and that export prospects are extremely poor, there is good reason to consider a rapid shift to other crops on vineyard land. A first step in this direction should be to re- place vineyards on the land which can be irrigated, for instance, the relatively flat lands in the Cap Bon and Grombalia area, where underground water is avail- able. Uprooting programs should preferably be tied with irrigation and plan- tation programs. About 5,000 hectares could probably be shifted from wine to irrigated vegetables and fruit trees.
39. The problem of reconversion under rainfed conditions is more diffi- cult. Carobs and olives could be grown to replace vineyards. However, if' Tunisia has to export the bulk of the wine at world prices, it is likely that production in most of the present vineyards will become uneconomic. Conse- quently, there is an urgent need to study the economy of wine production in the main agricultural region of Tunisia and to undertake the surveys needed before any major uprooting program is started. Of course, the efforts to find new markets and to reach agreement with France have to be pursued as well.
40. Although statistics must be treated with caution, livestock production is undoubtedly of very great importance to the Tunisian economy. A good guess is that livestock products account for perhaps 20 percent of agricultural out- put. There has been a slight increase in dairy products, but no overall trend is noticeable due to the large variation in production based on weather. The present number of animals and their expected increase according to the Plan are:
Present Planned 1968
Dairy cows 7,000 21,270 Local cattle 210,000 140,000 Improved local cattle - 157,000 Sheep 1,460,000 1,762,000 Goats 250,000 250,000 - 12 -
This increase in number and quality of animals should allow an increase in output of 40 percent for milk and 33 percent for meat. Gross output from cattle under these assumptions should increase from dinars 11.0 million to dinars 16.8 million. However, these assumptions appear to be highly optimistic.
41. The elaborate program of importation and cross breeding is not likely to be fully carried out. The increase in forage needed for the program is not likely to become available as planned. And, the cross breeding program is already experiencing delays and difficulties. No substantial changes in the farmers' attitude toward improved livestock breeding techniques is notice- able, with the exception of some farners in the lower Medjerda valley and in some of the production cooperatives. Although the investment program is well oriented, most of its achievements will, therefore, not be felt during the Plan period. It would be advisable to concentrate action in a few areas, mainly the production and services cooperatives where fodder is more readily avail- able. Also, by-products, particularly from the sugar beet industry, could help meet the feeding requirements of an improved herd.
Export Prospects
42. Tunisian products used to find a preferential market in France, but this situation has changed radically when the economic convention with France broke down in mid-1964, Tunisia managed generally - and with the notable exception of wine - to maintain her export volume, due in part to the devaluation. However, for the future,export prospects, particularly for animal and vegetable products, would improve greatly if suitable new arrange- ments with France or rather for most of the products involved with the Euro- pean Economic Community could be arrived at. Negotiations are now proceeding with the EEC; also, discussions have opened with other countries of the Magreb.
43. Although agricultural products account for about two-thirds of the total value of exports, (see Table D), Tunisia is only a marginal exporter except for olive oil. Tunisia must, therefore, pay special attention to price and quality, and to making its products well-known under its own trade- mark0 On the whole, the necessary efforts in this direction are being made. The search for new markets has already paid off for some commodities. Thus, of the 43,000 tons of citrus marketed between October 1964 and April 1965, 19 percent shipped to new markets, particularly in Eastern Europe; most tomato concentrates have found a market in Iraq.
44. The objective for cereals, as mentioned, is to maintain hard wheat exports at the same level and eliminate imports of soft wheat almost completely. Hard wheat commands a premium over soft wheat on the world market. Although some erosion of the hard wheat price can be expected, Tunisian hard wheat is well-known in some importing countries and its quality makes it easy to export at world prices. Internal prices for hard wheat have been above the world price for the last two years, with the Government making up the difference, and this situation probably will continue. Given the production prospects, if imports of soft wheat can reach 250,000 tons in 196B, there would be surpluses of hard wheat amounting to between CO,OOO tons and 150,000 tnns, depending on climatic conditions. - 13 -
45. According to the plan, citrus exports are to increase from 40,000 to 60,000 tons in 1968. Tunisian oranges appear to have a favorable market in France; this market took most of the 1964 crop despite a duty of 20 percent levied since October 196h. However, in February 1965, the EEC agreed to impose a compensatory tax on imports of fruit and vegetables from third countries, thus favoring Community producers. Since Algeria still enjoys preferential access, and Greece, a substantial exporter, is an associate member of EEC, the implication would seem to be a worsening of Tunisia's position. FAO commodity projections indicate a very delicate balance betwzeen supply and demand of citrus by 1970. Tunisian costs of production appear to be competitive. But the in- creased output from large-scale plantings may, over the long-run, increase downward pressure on prices. Present production of 82,000 tons is to be brought to 185,000 tons by 1971, and to 410,000 tons by 1978. If exports are to rise anyw¢here in this proportion, it would seem that they could be disposed of only through a lowering of export prices. The possibility of disposing of this additional production in the fruit juice market is worth exploring.
46. With regard to olive oil the mission expects that production will reach an average level of about 50,000 tons during the period 1965-1968 possibly reaching the 100,000 ton plan target in the final year. Exports of olive oil could amount to some 50,000 tons by 1968, which is the maximum allowed under present arrangements to be eligible for PL 480 soya oil imports. In order to satisfy domestic consumption, 10,000 tons of soya oil would have to be imported. During the period 1960-64 average exports amounted to 40,000 tons per year. This high level of exports could only be reached through a rundown of stocks by 40,000 tons over this period. The increase in exports envisaged over the next years will have to be supplied by higher production (average 1960-64: 65,000 tons per annum) and by partly substituting domestic consumption of olive oil by imported soya oil. Export receipts will be relatively lower as Tunisian olive oil will have to face the EEC tariff of 17 percent (formerly 9 percent) in its main market, France. The outlook for the more distant future is dis- quieting. Production of olive oil is expected to increase substantially in the years to come and will be over 100,000 tons by 1971 and may be even over 200,000 tons by 1985. Tunisia is the second largest world exporter for this product and the increasing availabilities for exports that are bound to accom- pany such an expansion in output, will depress average export prices. The out- look on the world market is not very favorable because olive oil is a high- priced oil with popular appeal in countries which normally nroduce a substantial part of their own requirements. Furthermore, within the Mediterranean area, consumers are getting accustomed to cheaper substitute oils, particularly soya bean oil made available under PL 480. Tunisia could maintain a level of exports of some 50,000 tons for the rest of the decade, but the much higher levels projected for the 1970's may entail price reductions and a close control of the export volume.
47. Wine accounted for about 19 percent of export value in 1963 and 16 percent in 1964, which compares with 19 percent and 21 percent for olive oil, in the same years. The present situation, however, is nothing short of tragic: the 1964 harvest, estimated at more than 2 million hectoliters, has not been sold; most of it is still in storage, while the new 1965 crop is being harvested. Tunisia has been completely dependent on the French Market for its wine exports; at present, Algerian and Moroccan wines are in a privileged position on the French market, As it seems probable that in future Tunisian wine will have to be sold at world market prices, which are about half the French preferential - 14 - price, export earnings will go down considerably and may amount to only D 4 million (or less than 6 percent of total export earnings) even when they will be kept at the 1960-64 level of 1.8 million hectoliters.
48. Exports of fresh and canned fruit and vegetables are expected to in- crease. As long as the fresh products are of the early type, they should not be too difficult to absorb; they should sell well in Western Europe, consid- ering the expanding incomes there, although the higher tariff barrier will make the export position harder, unless an agreement is reached with the EEC. Although there may be additional short-run difficulties due to high processing costs, which affects Tunisiafs competitive position, in the long-run markets for this item could be developed. Import Prospects
10. There was little significant change in agricultural imports during the pre-plan except for an increase in soya oil, sugar and wood in 1964; wheat imports decreased only because 1961 imports were large due to the very bad year for agriculture (see Table E). By 1968, sugar production is expected to keep pace with demand, keeping imports constant at around 80,000 tons. Imports of coffee, tea and spices are expected to rise by 25 percent. Dairy products and wood imports are expected to stay at the san level, 50. As discussed elsewhere, the missicn has different esuimates -or the three main products. Soft wheat imports will probably increase. TA;vresttDck products imports will most probably rise, mainly for meat, and domestic prices are excec-ed to rise also. Sugar production might Lnerease at a slower rate than foreseen, (but it is impossible to foresee the value Of sugar imports in view of sharp price changes). hployment Objectives 51. Of the target increase of 110,000 new jobs in the period for the whole econony, the Plan projects only 20,000 in agriculture. If non-agricultural employment can be raised at the rate this implies (4 percent annually in the four year period), agricultural employment would decline from 56 percent of the labor force in 1964 to 52 percent in 1968 - a significant decline. The major employment objective in agriculture is not that of new job creation, but rather reducing under-employment. Here the target is to increase the average number of days worked per man by over 15 percent - from 130 days per year at present to 150 per year by 1968a This is the equivalent of over 100,000 new jobs at the lower level of activity, and constitutes a major undertaking. 52. This employment policy will only be possible if the entire investment program for the next four years is carried out. The most important single contribution is expected to come from the Farm Cooperative Development project in the north. Its contribution to employment will, however, not be sufficient to reach the overall target, and its impact will be felt in the north of the country only. If Tunisian development is to be reasonably balanced, more jobs will also be needed in the center and south of the country; otherwise, there may be excessive migration to the big cities. In this respect, the project for central Tunisia is of also great importance. D. Institutional and Policy Implications 53. To provide the dynamic force needed for agricultural development, Tunisia began in 1961 to plan, establish and supervise new farming structures 1 in the form of production and servicing cooperatives. 11UCP production units have been established on 115,000 hectares and are proving successful on the whole, despite initial difficulties in establishment, management and financing. - 15 -
New agricultural schools and training centers have been set up to provide the cooperatives with managerial expertise; agricultural credit funds have been set apart for their establishment; marketing structures are being improved. Officials are struggling to build up statistical services which might provide the planners with more accurate data on which to base pro- jections and to judge past accomplishments.
Administrative Set-up
54. The Sub-Secretariat of Agriculture has a departmental set-up which appears suited to its purposes, and there are qualified Tunisian officers in senior positions. There is a shortage of professional skills, however, even counting the help being received from foreign advisors. Most of the project preparatory work has to be made by consulting firms, with often limited supervision from Tunisian officials; this aspect of administration needs strengthening. Field activities have had to be concentrated on priority projects - as they should under the circumstances - because of the lack of field officers. Furthermore, many young extension workers have not yet much experience in the job. The programs for erecting cooperatives will call for a rapidly increased number of field officers during the establishmnent period, i.e., three to five years. Since the size of the country makes numerous field visits from the center possible, senior officials in Tunis could and should take supervising responsibility for specific projects. On the other hand, the multiplication of "Offices" for administering State lands during the last five years creates difficult problems of administration. Of the more impor- tant ones, two are in the north, the Office des Terres Domaniales, respon- sible for more than 600,000 hectares of the best farmland, and the Office de la Basse Vallee de la Medjerda (CMVVM); three are in the center and south, the Office de l'Enfida, Office des Souassis, and Office de Sidi Bou Zid, managing about 400,000 hectares. Each of these offices has its own staff, equipment, housing and storage facilities. These offices were not very successful in carrying out the development program during the pre-plan. They have mostly limited their activities to carrying out mechanical cultivation, keeping the production at its previous level (this does not apply to OMVVM), and planting olive trees. A reconsideration of the present structure, role and responsibilities of the Office would be advisable at this stage.
Crganization of Cooperatives
.55. Eventually, cooperative societies will constitute the basic structure of Tunisian agriculture at all levels. The purpose of production cooperatives is to regroup small traditional farms into viable units under modern manage- ment; the purpose of servicing cooperatives is to organize purchasing and marketing for farmers who keep exploiting their individual plots.
56. UCP production units, all in northern Tunisia, are societies of owners who pool their land resources, sometimes including a nucleus of State land, and share the profits. The pay-off comes from the use of modern cropping techniques. For each day of work, each cooperator receives an advance on his cooperative profits, based on current wages in the region. The UCP are run by a committee or board whose president is elected; adminis- trative management is under the responsibility of a hired manager. Technical supervision is provided by agricultural monitors. The number of cooperatcrs - 16 - is based on family incomes per year, which should reach dinars 225 when the unit is fully productive. At present there are 147 UCP, farming 114,000 hectares; and all members of the regional cooperatives (URG) which help in bookkeeping, marketing, etc. The Neo Destour Party provides "motivation" and l"general guidance" to the UCP while the agricultural engineer gives technical advice.
57. The polycultural cooperatives in central Tunisia group a number of farmers who are exploiting the same grazing and eventually irrigated lands. Olive trees remain privately owned, as well as livestock. These cooperatives, part production and part servicing, exploit about 280,000 hectares.
58. Servicing cooperatives for the most part are oriented toward organ- izing the supply of inputs and the marketing of production for the medium and large farmers. Some of the more recent ones are to regroup and organize small farmers who have activities in common, such as irrigation (aCvw), vegetable growing (Cap Bon) or olive growing (Cooperatives du Schel). An existing cooperative (CCAT) 1/ created several years ago with several local agencies and storage facilities, is organizing the marketing of cereals and pulses and has been distributing fertilizer and seeds to the small farmers and to the cooperatives. Reimbursement is made when farm products are sold by the cooperatives.
59. During the Plan period, about 700 production cooperatives are to be set up in northern Tunisia, together with about 30 to 50 servicing co- operatives in the rainfed area. Also, a million hectares in central Tunisia are exploited by 100 new polycultural cooperatives. Irrigation cooperatives would cover all the newly irrigated perimeter; and an undetermined number of servicing cooperatives will be created, particularly in the Schel and the Cap Bon areas.
6o. The mission was impressed by the quality of the work done in some of the UCP. The approach taken by the Government for modeBrnizing the tradi- tional sector is original and stimulating, especially now that action is being taken in a number of fields to improve further the effectiveness of the cooperative movement. The mission believes that such action is vital for the success of the program; the following fields should have particular priority:
- acceleration of preparatory studies and other preliminary work necessary for the creation of the cooperatives;
- greater effectiveness of technical and administrative super- vision;
- better timing and supervision of the credit distribution;
- organization of foremen training in specific activities;
- and last, but not least, the creation of incentives for stimulating productivity.
j CCAT Cooperative Centrale des Agriculteurs de Tunisie. - 17 -
61. The mission recongizes that the Government role in promoting and guiding cooperatives is a decisive dynamic factor, but all efforts should be made to minimize Government direct involvement in cooperative management once they have shown their ability to organize themselves.
62. There have been unexpected delays during 1965 in the establishment of cooperatives in northern and central Tunisia. For instance, new UCPts will cover only 70,000 hectares as against the 1200000 planned; in 1966, the program wi11 probably not reach the target of 130,000 hectares. During the two coming years, new UCP's will most probably not cover more than 170,000 to 180,000 hectares. This reduction is quite reasonable, and serves to point out the need for great flexibility in the timing of the cooperative program in view of the many administrative and organizational problems in- volved.
Credit Organization
63. As the farm cooperatives are unable to finance themselves, the whole of their current operating expenses wrill have to be financed through institutional credit. Also, it should be recognized that the repayment capacity of the cooperatives is extremely vulnerable to fluctuations in production or prices, especially during the first year of their existence.
64. Short-term and equipment credits are distributed by the Banque Nationale Agricole (BNA) which operates in a number of economic sectors, The BNA's record of loan operations appears to be reasonably good; but to become a more efficient channel for meeting the future increased needs of agricultural credit, the Bank needs some quantitative as well as qualitative strengthening of its agricultural section. It needs a few highly qualified agriculturalists both at headquarters and in the field, and it needs training as well as augmentation of its field staff. Also, the possibility of using the large existing marketing cooperatives such as CCTA for extending crop loans to the farmers should be investigated.
Training and Education
65. As most traditional farmers have no formal agricultural training, the role of extension workers is crucial for carrying out the development program. This is well understood by the Government, whose plans to increase agricultural education are described in some detail in Section V, Education, paras. 44 to 47. - 18 - 66. With an education program that is developing in the right direction, the longer-term prospect for personnel are reasonably bright. Over the short-term, the greatest gap will be for field agronomists and animal husbandry experts on one hand, and for qualified managers and specialists at the cooperative level (mechanics, herdsmen, irrigators, horticulturalists, and others). 1/ Particular attention should be paid to creating an efficient on-farm training program for cooperators; also technical assistance from out- side will be needed for supervision and organization of in-service training during the Plan period. This is particularly needed as young "agents" freshly out of the "colleges" mentioned above have to be trained and oriented for at least one or two years before being able to directly advise the cooperators. The quality and efficiency of the agents will likely be more important during the Plan period than their quantity, as the school output is about sufficient to fill the posts to be created.
Price Policy
67. Government price regulation is quite extensive; the prime objectives being to protect the consumer against inflation and to stabilize farmer in- comes. Retail prices of basic foodstuffs, such as couscous, flour and ali- mentary pastes, have been fixed at the same level for the last two or three years. Fixed producor prices exist for cereals, hard wheat, soft wheat and barley, for cotton and for pulses; with the Government being the sole buyer through the "Office des Cereales." This office fixes prices and fully guarantees the cooperatives which carry out the actual market operations on its behalf. The silos for storage belong to the cooperatives and the former t 'Socifth de Prevoyance"l have been used as buying and selling centers.
68. With cereal prices being stabilized for several years, during a period when other prices were rising, the price incentive for cereal pro- duction which existed before independence has now disappeared to a large extent. The intended shift in the production of hard and soft wheat will not take place if the existing premium of 20 percent for hard wheat over soft wheat dinars 4.2 against dinars 3.5 for 100 kg. is maintained. Except per- haps for pulses, whose prices have been fixed to foster their cultivation, no real price policy has yet been defined in relation to food crops.
69. For olive oil, floor prices are established (180 mnper kg. "extra") by the "Office de l'Huile d'Olive," but there has been only a little need for floor-price buying. With the high fluctuations in yearly production, the "office" plays more of a stabilizing role through the use of reserve stocks.
1/ An important role in training mechanics and drivers is already being played by the efficient "Office de Motoculture," which has a training program in connection with carrying out its maintenance functions for the cooperatives. - 19 -
70. Prices to the local processing industries are fixed by government arbitration between producers and processers when the volume of the harvest can be estimated. This applies to sugar beets, tomatoes, pepper, apricots. For meat, arbitration prices apply only for the consumption supply to Tunis, where a monopoly dispenses some 25-30 percent of the national total (the recent price trend indicates a rising shortage of meat on the domestic market). The price of fresh butter, which more than doubled in a year while large supplies were imported at low cost, should favorably affect milk production, but prices could probably have been stabilized at a lower level through a compensation system.
71. Producer prices for wine were fixed on the basis of French prices, which at present are more than twice world market prices; this basis is no longer realistic and will have to be reconsidered.
72. Producer price policy might be used more extensively as an instrument for reorienting production in the modern sector. But there are drawbacks, such as the dominance of climatic factors in rainfed areas. All in all, government policies to subsidize inputs might be a better method for promoting production than the fixation of commodity prices at a higher level.
E. Development projects and Programs
73. Most of the agricultural projects in the Four-Year Plan have been reviewed by an FA0 project identification mission which has visited Tunisia in November 1964; whenever possible, tentative estimates of the prospective rate of return were calnulated. 2/
74. These projects belong to two categories. First, the projects mainly intended for developing single activities such as irrigation, forests, fisheries. These are relatively simple to prepare and execute, mostly involving infrastructure for developing State lands. Farmers' participation is, of course, needed to use this infrastructure but on a limited scale. Second, the integrated development projects (northern and central Tunisia) which together contain the largest part of investment contemplated for arable farming, livestock improvement, fruit tree plantation, soil conservation and a small share of irrigation investments.
75. Integrated projects in northern, central and southern Tunisia involve a large number of farmers who are expected to carry out several farm development activities financed by medium and long-term loans through the BNA. These projects raise serious problems of organization and call for close governmental supervision. The main projects are reviewed below.
/ Report of the FAO project identification mission in Tunisia. Confidential - FAQ Jan. 1965. - 20 -
Farm Cooperative Development in Northern Tunisia
76. This project aims at remodeling the agricultural structure on 800,000 hectares in the richest agricultural area and to overcome the obstacles to development raised by the lack of know-how and capital in the traditional sector as well as by the land tenure system existing in the region. Related technical improvement will include: changes in crop rotation and cropping pattern, mechanization, fruit tree plantation, soil conservation practices, livestock improvement, irrigation (see Table F). Production cooperatives (UCP), many of them including a nucleus of State land, are intended to cover 550,000 hectares, while servicing cooperatives will serve about 250,000 hectares. 77. When these investments reach their full return, yearly gross production is expected to reach Dinars 37 million, while with the present structure, the production would be Dinars 12 million. Preliminary calculations suggest that the project would have a favorable economic return.
78. During the plan period, approximately Dinars 37 million will be needed to finance the project (excluding ruralJ housing), of which about Dinars 20 million is in foreign currencies (for pesticides, fertilizer, etc.). Operating expenses, not including labor, have been estimated at Dinars 11 million during the fourth year. As explained earlier, credit would finance all operations. 79. The program of work appears generally sound, with careful technical studies having been made for each cooperative. Further investigation on the needs for nitrogenous fertilizer and mechanization might be necessary. The main difficulties, however, are of an organizational and supervisory nature. There is need to speed up land tenure survey, the preparation of land use maps, and information campaigns aimed at obtaining the support of the farmers. Earlier in this chapter it was already noted that the neecd for technical supervision can not be fully met by the technicians locally available. There- fore, it is essential for Tunisia, as an essential part of the project, to obtain technical assistance in various fields: supervision of the units, training for machinery utilization and maintenance, farmer training, agricultural credit distribution. 80. As mentioned earlier, some delays are already taking place, in the execution of the program. It is expected that creation of UCP's in 1965 and 1966 will not include more than 170,000 to 180,000 hectares as against the 250,000 hectares foreseen in the plan. Already some 200,000 hectares of land has been organized in production cooperatives in recent years. It is essential that the work relative to the further development of these lands be given first priority. The success of the program as a whole would be in great danger if this were to be neglected because of a desire to move too rapidly in new areas. For this reason and because of the size and complexity of the program for the plan period as such, some of the investments contem- plated between 1965 and 1968 will probably have to be delkyed for some years. - 21 -
Integrated Development Scheme for Central Tunisia.
81. The establishment of polycultural cooperatives, regrouping farmers and livestock awners interested in the exploitation of one large area (5,000 to 10,000 hectares) is the basis for developing the steppes of Central Tunisia. As water resources are very scarce, irrigation of small perimeters is intenided ma.Lnly to supply the population with fresh food and to produce forage crops for feeding the animals grazing on the range land during the period of food shortage; fruit trees wil1 be the main cash crops on irrigated land (pistaccio, apricots) and on dry land (olive, almonds). IXechanization wiJl be liiaited to the minimum, and most pasture improvement and tree planting will be with hand labor. There are still large areas of light soils which can be planted under olive or pistaccio and it has been shown that, with suppleme.ntary feeding during certain seasons, the localtreed of cows and sheep can be made more productive. While the technical actions foreseen are based on limited experience, their value has been confirmed during the last two or three years on an FAO/UNSF experimental pre- gram carried out on two research farms.
82. The project cost is modest in view of the size of the area: Dinars 25 million for developing more than 1.2 million hectares. This includes Dinars 4.5 million for deep well drilling and irrigation equipment, and the rest is for tree planting and maintenance, range equipment, water conservation work and livestock development. Most of the investment will be done by the farmers themselves, with the help of agricul- tural credit, and only about Dinars 6.8 million of foreign currency is needed. The type of investment and the required related activities are being defined for several Dilot zones by the FAO/UNSF Project set up for planning the development of Central Tunisia. The first pilot zone, El Aioun,-beitla, covers about 160,000 hectares and investments needed are estimated at Dinars 8.5 million, of which Dinars 3.8 mil- lion will be needed during the plan. The overall investment estimates are still very rough and will have to be further studied carefully for each pilot zone and the corresponding cooperatives de polyculture very preliminary estimates of the rate of return for El Aioun-Sbeitla indicate that it could reach 20 percent.
83. As with the production cooperatives in the North, discussed earlier, the program can be fully realized only with substantial technical assistance, Some delays are already being experienced and it will be difficult to com- plete the whole program during the plan period. On the other hand, it may be expected that well drilling will extend to a greater extent than scheduled. The investments included in the plan are possibly underestimated and could have a higher foreign content. - 22 -
Oases Development in Southern Tunisia
84. The program for deep well drilling and the extension of the oases has been changed since the Plan was begun and is limited to financing on- farm development programs through agricultural credit, to improving some of the irrigation networks and to constructing oases protection works. Creation of servicing cooperatives is a part of the project; they will be particularly concerned with water distribution and marketing.
85. The recent change in emphasis is auite reasonable considering the difficulty of exploiting these oases on a larger scale vithout changing the mentality of the farmers. Recently, meetings have been held with the responsible representatives of the farmers working in the oases., and their answer to the administration's proposal for improving their methods of production is encouraging. It might be that the provision of Dinars 3 million for investment in this sector would not be quite sufficient, especially during the last years of the plan.
86. The internal rate of return calculated by the FAG mission included the large hydraulic investments which are now postponed. It has been estimated, subject to further investigations, that the adjusted program could have a return higher than the 10 percent arrived at previously. This project will call for efficient supervision in developing new crops such as asparagus arriving at a more efficient use of irrigation water, and in organizing the replacement of unproductive palm trees by better varieties.
Private VWell Development
87. This program in the North, Cap Bon and other coastal zones is one of the most attractive of the projects proposed. Shallow wells are intended to provide irrigation to vegetables, forages, and fruit trees, where previously only cereals could be tilled, and their returns will be more rapid than for any other irrigation project. The productivity of both labor and soil will increase very rapidly. This program was hampered in past years because of insufficient knowledge of the ground-water resources and of insufficient facilities given to the farmers.
88. The project provides mainly for financing well drilling and irrigation equipment by medium-term loans and subsidies. It amounts to Dinars 5.4 million and should allow the irrigation of about 4,000 hectares. The well and drilling program can be started immediately wherever under- ground water resources are sufficiently well known. To prepare for further development, a precise knowledge of the underground water resources in other areas will be needed; corresponding surveys and field studies have been included in the project. The immediate returns on this project should make it particularly attractive for foreign aid. US/AID is already helping in well drilling in Cap Bon. - 23 -
894 Considering the foreseen economic and social interest of this project, more study of well types and equipment should be undertaken with a view to reducing investment cost per hectare. Enough funds should be made available to satisfy all farmers' requests for loans, as far as they can be su- pervised by the technical service. The hydrological survey, costing less than $1 million, could be considered either as a separate project or as part of the total project as defined here.
Surface Irri-ation Program.
90. This program includes several projects which should be judged on their own merits. The projects can be grouped in two categories: those for completion of schemes already started and those for the establishment of new schemes.
91. There is an unquestioned urgency to complete the ir- rigation projects already initiated. The Governmentts estimates of Dinars 20 million for this purpose is probably on the low side. Dinars 5 million are going to be invested in the OINVVM to continue the develoFment of the area from the main irrigation networks already existing. The completion of the Nebana Dam and the establishment of the main canal and of the irrigation networks is being partly financed by US/AID, and Dinars 12,5 million have still to be invested during the Four-Year Plane The completion of the dams on Oued Chiba, Oued Lakhmes and Oued Masri, as well as "Lacs Collinaires'", will cost approximately Dinars 3 million, and financing has been sought from the German aid program. A supplementary allocation of Dinars 4 million has been made to carry on the Ichkeul dam, already initiated with bilateral Russian help.
92. New dams and irrigation schemes are foreseen in Oued el Abid, Bir Mcherga, the Bou Heurtma and the Mellegue, the two last ones in Northwestern Tunisia. The Oued el Abid project was studied by the FAO identification mission, but engineering is not yet completed; cost was estimated at Dinars 1.2 million for infrastructure, with an internal rate of return of about 13 percent. For the other projects cost estimates are still very provisional. It is not sure whether, during the four-year period, the investment foreseen in the middle and high Medjerda Valley (Dinars 7 million) could be really executed, and only after the results of the studies underway with the help of US/AID are available can any judgment on feasibility be passed. However, any project which would include the distribution of sweet irrigation water to the low Medjerda - 24 -
Valley (OMVVLI) during the summer season should be studied with great attention, in view of the great problems of the present high salt content of the Ihiedjerda during this period.
Forestry Program.
93. There are several different projects for forest in- vestment, most of then leading to the developnrent of State land, administered by the Forestry Service. They include mainly reforestation works which are labor intensive (Dinars 5 million), protection and fencing of forest areas (Dinars 1.4 million), intensive tree planting (Dinars 1.4 million) and the preparation of a better use of present resources (Dinars 1.1 million). A reorientation of the plantation pro- gram toward pine planting instead of eucalyptus is now con- sidered to give more flexibility for using the raw material produced. Also, the plantation program in the arid zone has been postponed while an experimental program is under way.
94. There is a recognized need for limited reforestation and fuller exploitation of forest resources. The program aprears well prepared. There are no grave institutional bottlenecks, as the forestry service is very efficient and a comprehensive research program is underway. The service is able to handle all projects proposed, although it needs some increase in staffing.
Fisheries Investments.
95. Besides the investment for equipping ports and for training fishermen and specialists needed to be able to utilize modern equipment, it is intended to spend about Dinars 2.2 million for improving fishing equipment. This includes Dinars 1.3 million of foreign currencies.
96. The program includes the purchasing of 49 trawlers (Dinars 1.5 million), 500 fishing motor boats, 7 and 9 meters long (Dinars 0.5 million), and 432 motors (Dinars 9.12 mil- lion). The need for an increase in production for the internal market is evident and the targets proposed are modest. Never- theless, it may be necessary to adopt a different phasing in view of the lack of trained fishermen during the first part of the plan period. While the "Office National des Peches" (UNP) is now controlling most of production and marketing of fish, it had only a limited success for extending modern fishing methods, although technical assistance was available during the last years.
An Overall View.
97. On the whole, the projects included in the plan appear to be soundly conceived; they are geared to give early returns considering the limitations inposed by the environment. Although economic appraisals are not available for each of these projects, preliminary estimates of their economic return seem reasonable; but in many cases this has to be confirmed by further studies. The main tests for discrimi- nating among projects should be the state of preparation and the expected economic return of each project.
98. The importance of modernizing agriculture in the North and of multiplying private and deep wells and completing irrigation schemes already initiated should be stressed once more, including in particular, the livestock development aspects of these projects; under conditions of Enancial stringency these projects should have high priority. The limited financing needed for the oasis development and selected forestry projects should permit the fulfillment of these programs under almost any circumstances. On the other hand, the size of some of the projects anticipated might have to be reduced for practical rather than for financial reasons; for instance, it might well be that the whole program of coope- rative establishment, now lagging behind schedule, will not be completed, nor the basic studies needed to start building a dam in the upper Medjerda. To the extent this is the case, efforts should be made to speed up work on other projects, if this can be done efficiently.
99. There is every likelihood that the wheat deficit will continue during the plan period and will have to be met by imports,preferably again at concessionary terms through US PL 480. The shortage might be transitional and would disappear as soon as the structural and technical revolution in agriculture is completed. It could be considered as one of the strategic bottlenecks in the early implementation of development planning.
100. Important other strategic gaps exist. The shortage of technicians in agriculture may endanger achievement of the targets, especially in view of the heavy State guidance and supervision needed in the early stages of the cooperatives' establislhment, along with supervision and implementation of projects. The most basic task in this field, for which assist- ance could be requested, is to evaluate the need for manpower in the extension field; also, advice will be needed on how higher level technicians could be provisionally obtained from abroad and integrated in the Tunisian services.
101. A manpower deficit also still exists in the area of project preparation in the appraisal of progress in project implementation which will require continued help from abroad. A shortage of technicians is also evident in research, both technical and economic. There is need for specialists to work within the framework of the Institut National de Recherche Agricole lTunisien (INRAT). It is also essential that cost/ benefit studies for single crops or rotations be carried out, - 26 - as there are very grave gaps in this work at present, e.g. for milk and fertilizers. In addition, foreign technical assist- ance needs to be provided the Banque Nationale Agricole in adjusting to its much heavier role in promoting agricultural development.
102. Tunisia is taking the right steps in adapting its education system to agricultural manpower needs. However, some foreign technical assistance might be required in edu- cational planning to carry forward the good start being made. TAM.E As ?UISIAs PDUCfl - MATh ICULTRAL C'0PS (thouand toe)
Coodity 19S5 17 57% 19?8 1959 1960 1961 1962 1963 1964
Bard What 291 332 366 U .360 201 321 463 328 Soft Wheat 104 145 132 124 06M42 79 72 107 82 Barley 81 156 185 282 236 136 %0 103 235 204 Citrus 68 66 65 73 78 96 93 63 88 r. MiTe Oil 22 90 50 132 32 125 35 45 89 95 Vine ('000 hl) 1,150 19300 1,600 1,950 1,644 1,s537 1*443 1,o86 1,985 2,18 1 pulvo ' 28 25 19 22 18 1S 14 25 29 33 Vget le- n.s. 71 77 96 91 106 15l 1%1A 132
I/ Bes Saurce: Ammaire statictique de la Tunisia. TABLE B: VALUE OF PRODUCTION B! MAJOR AURICULTURAL PRODUCTS. (millions of dinars) Constant 1960 Current dinars dinars 1960 Plan 1961 1962 1963 1964 1964 1968 Total Agriculture 90.8 98.2 94.5 104.2 113.7 103.5 126.8 of which* hard wheat of which: hard wheat 20.9 14.4 17.6 22.7 17.7 17.7 26.6 soft wheat 4.0 3.3 3.4 3.5 3.8 3.8 7.7 barley 4.9 3.8 4.3 5.2 4.7 4.7 5.7 citrus 2.4 3.5 3.4 3.3 3.1 3.0 4.3 wine gqpes .3 6.4 6.7 8.7 1 8.3 8.5 7.5 7.5 olives.i 6.4 17.7 8.1 11.4 14.9 14.6 15.9 raw wood 4.8 5.0 5.1 5.2 5.3 503 2.2 sugar beets ... 0.2 0.3 0.2 0.2 0.2 0.7 livestock products 20.8 23.9 21.4 20.9 30.4 22.7 28.92/ vegetables & other prod. 20.2 19.7 22.2 23.5 25.1 2 4.OV 27.6 1/ Mission estimate. 2/ Increases in the value of the herd estimated by the mission. 3/ Wine production 8.2 8.5 11.1 10.7 10.7 / Olive oil production 9.9 9. 7.6 23.4 7.1 13.3 18.0 16.7 20.6 Source: Service de Comptabilite la Nationale, Secretariat d'Etat au Plan et d l'Economic Nationale. TABIE 0: ACMU.TRAT I VEV TS BY SECR OI ACTIVIrII Foaur Year Plan - 000 Dinars - : veet.ents Cost SypeT of Financing _otal ~nIncluditions TSotal Percent Perent and LiOng-twu XSum-ten dirct financing Self-flnarcing Labor Forelgn CTrrcy credit credit by Govgrwient of firts Arable farming 28,0001/ 5 52 9,600 14,14O0 2,800 1,200 Tree planting 18,700 13 34 3l,800 - 4,000 2,900 Soil conservation 15,800 74 10 4,oO- 8,90D 2,900 Hydrutliue 50,000 27 30 _ _ 0,000 - Animal breading 10,300 17 29 3,805 2,100 3,s?7 600 Forestry 10,000 7 20 - -0000- Fiawi" 2.300 nza. 59 2,00 Sbustie, 8 ,000 _ n.a. _ 8,000 eisearch 7t,900 n I = - 7?900 Total 15S,000 I/ Including 8 M. dinars for rural housing Sources Four Bar Irmn. TABLE D; OF V=-22"%_M3T P El ~~~~ ~~Qua ititJAa a .,q000 tooM 04vu idl 3B.2 4o. 4 78.5 26.2 44.2 3.6 29.0 %4 wine 123.7 1314 128.1 330.8 L30.6 123.3 167.3 Q9.0 ^bext 07.3 99.7 70.2 . h 33. 28.9 116.2 92.3 C±tmw 36.6 38.9 W.6 37. Ia.8 38.0 30.8 .5 r-nt w 21 3.5 3.4 3.5 4.3 3.8 1.5 5.0 Prtaau- -d frit and v;. ) 5.S:3 6.5 93. 1 :.7 6b PrKere-fd na 3.3 1.1 23.4 36 3.1 2.4 2.4 Alfa 68.5 47.0 61.2 106.3 77.6 69.0 60.6 46.7 YVI3jIw3 t iLi on 1isarsDina" Total cxporls t;.2 6.h 5?.6 50.3 246.3 24e7 52.9 57.3 Arurta2. crd vewrtl :roO a A.7 42.3 4.4 32.6 20.8 32.9 35.6 36.9 okf udUchj =.aG ild 5.8 9.6 12.8 9.9 11.9 VI7.5 8.0 7.7 10.2 8.? YArd vihat 5.2 1.6 1.4 3.7 2.7 Citrus 1.6 1.9 1.8 1.8 2.2 !);ate 0,4 o.% 0.5 0.2 0.8 Presdr- ifrmii and 7±.. 09 4. 14 .6 22 Preserved t4silb 0.8 0.7 C6A.6 Other -= 5.1 8 3.3 3.9 31 sources SUtiatiquesdu Cource £xteriar. TABLFE Es IDPC%TS OF AUflrAL A1D VFX2TAL P1MJCTS IN TUISIA 1957 1958 1959 1960 1261 1962 1963 1964 *...... * 000nQutities 1 1,000 tcns Who 118.0 26.8 68.0 354.1 366.8 271.8 357.6 75.8 Coffee, tea and spices 8.2 6.4 7.4 6.6 7.9 7.4 9.1 7.8 Sugar 67.7 73.7 78.5 79.2 80.5 94.8 56.7 101.2 Dairy products 5.3 4.7 4.8 4.9 7.4 6.0 6.0 6.5 Tobacco 2.1 3.7 2.7 2.3 1.6 2.4 2.5 4.6 ...... *...... Valums : million DInars Total imports 63.3 64.8 64.2 80.0 8804 90.8 93.1 1108 Auinal and vegatal products 18.3 15.3 15.1 18.3 27.3 24.9 22.1 24.4 of which: Yheat 5.1 13.4 Il.0' 5.0 2.7 CofTee, tea and spices 244 2.6 2.6 2.9 3.0 Suvr- 3.1 2.7 2.8 3.0 7.4 Dairy prokacta 1.2 1.3 1.5 1.3 1.3 Too 0.8 0.5 0.9 Wood 1.0 1.4 Edible oil 1.9 21 2.0 1.9 3.3 0.3 0.3 0.4 3.3 2.0 C,orr~ Statistiquas du Ca-,=-oo Tztoriaur. TABLE 0t; PWfI!VTENTS BY SM-nRi OF ACTIVITIES For Integrated Projects in North and Central Tuaisia UCP Cooperatise Pblyculture Northern TunisA Central Tunisia! Superficy &)O,OCO hectares 1,200,000 (15,000 irrigated) iydraulic works 2.5 14.5 including wella Arable farming Equipment 13.2 l.4s Building 2.2 Ilural Houaing 0.3 8.0 - Tree Crop 4.5 9.0 Soll Conservation 9.3 6.5 Livestock I.;.2rY.'~1 ;.:t Lr_1.8 1.2 - Stables 1.1. Grazin.. - 2.0 1.0 * Astmrnates for CVentral Tunisla are ouch =ro aoproximate tha for .:rtliern Tunida.