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FILE Curo?Restrnreport No 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 The report may not be published nor may it be quoted as representing their views.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.
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