Despite its importance in reducing food dependency, agriculture is underfunded

Tunisian farmers face lack of financing, which hampers their efforts to increase production, while international crises confirm that the agricultural sector will be crucial in food security for low-income countries because it could make them avoid fluctuations in the world food market and the interruption of production chains resulting from wars and epidemics.

Recently, Mohamed Rjaibia, a member of the Tunisian Union of Agriculture and Fisheries (UTAP), said that the lack of funding for the agricultural sector is hampering attempts to develop the sector and increase production given the high costs of fertilizers, inputs and energy, noting that 500,000 farmers provide food for the country, 85% of whom are small farmers, considering that their inability to access sources of finance is hampering development of the sector in the absence of a government strategy for financing agriculture.

Rjaibia added that 50,000 farmers are deprived of bank loans, due to their inability to repay loans that banks refuse to reschedule despite the restructuring of 3 public banks in 2015 and the injection of around 700 million dinars into their crates. He also added: “Farmers in Tunisia produce food and do not produce wealth due to their low financial capacities, which explains the high poverty rates among the rural population, which represents a third of the population”.

And for good reason, the lack of funding hinders the development of agriculture, which is the most important source of income for the rural population in the absence of non-agricultural activities in rural areas, while the difficulty of accessing to financial services pushes the population to leave the activity or resort to microfinance which grants loans at very high interest rates.

Despite the difficulties, the agricultural sector has withstood the economic and social crises that the country has experienced since 2011, as well as in recent years marked by the devastating repercussions of the pandemic, the sector has remained almost the only sector, which has continued to be active and achieve positive figures with a growth rate of more than 3%.

Official data indicates that more than 50% of agricultural investments are made with private financing, which makes the scarcity of financing one of the most important obstacles in the sector, especially as the increase in production requires multiple lines of financing.

Data from the Agricultural Investment Promotion Agency revealed that agricultural investment fell by about 20 percent in the first quarter of this year compared to the same period last year. Until the end of last March, 1,658 investments worth 312.7 million dinars were declared, against 2,134 worth 407.7 million dinars during the same period, thus registering a drop of 22.3% in number and 23.3% in value.

It should be noted that agriculture occupies a key position in the Tunisian economy, with a contribution of 9% to the gross domestic product while representing between 9 and 10% of total annual exports, knowing that it attracts 8% of the total investment and employs 15% of the country’s workforce. UTAP estimates indicate that the number of working households in the sector is around 580,000, with a total number of individuals of around 3 million people.

The failure of government policies vis-à-vis agriculture has been accentuated with the pandemic and then the war in Ukraine, when the sector is already suffering from drought. Najla Bouden’s government has drawn up a plan that will continue until the end of this year to secure wheat stocks to meet the food security challenge.

According to informed sources, an official document showed that Tunisia’s cereal purchases for the rest of this year will amount to 1.185 million tonnes, bringing its total cereal import requirement in 2022 to 2.68 million. tons. The purchases include 600,000 tons of common wheat, 100,000 tons of durum wheat and 485,000 tons of barley. Tunisia, which is suffering from a major financial crisis, has been hit hard by the rise in world wheat prices following the war in Ukraine.

Economy Minister Samir Saied recently said that the impact of rising grain and oil prices on Tunisia’s budget would be just under $1.7 billion this year. The value of Tunisia’s cereal imports in 2022 is estimated at around one billion dollars.

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