Tweet
The drive to increase agricultural output has motivated the government’s promulgation of a new roadmap for growth of key agriculture sectors with emphasis on private sector investment in commercial farming, increasing acreage under essential crops, especially cereals, and improving on existing practices such as supplemental irrigation and utilization of farm inputs, particularly fertilizers and seeds.
But even before the September 2020 unveiling of the 2020-2024 agricultural roadmap that is part of the national economic revival plan, investors in Algeria’s grain sector already were taking advantage of opportunities provided under the new Finance Law to establish business ventures in the wheat, corn, soybeans and oilseeds value chains.
Furthermore, the agricultural sector roadmap provides a conducive environment for foreign investors willing to invest in Algeria’s agriculture, including retaining the 2008 provision for the investors who lease government land to farm for 40 years. The National Office for Agricultural Land was created to regulate access to state-owned land, estimated to be more than 2.5 million hectares.
During the 2020-21 marketing year, an estimated 3.5 million hectares will be under cereals production compared to 3.2 million the previous marketing year.
International and local investors keen on Algeria’s grain sector can also rely on provisions in the Finance Law such as the business-friendly withholding tax rates, introduction of an e-filing system and the exempting of approved startups from professional activity tax, global income tax, and corporate income tax for at least 48 months.
Startups, including those in the sectors of wheat, soybean meal, corn, animal feed, pulses, agriculture equipment and grain storage facilities, will have an additional one-year extension of the exemption clause when their business permits come up for renewal as well as a VAT exemption and a reduced 5% customs duty rate on equipment acquired for investment ventures.
The Finance Law has exempted grain and feed products from the recent increase in VAT rates from 17% to 19%.
Currently, Algeria’s Ministry of Agriculture subsidizes 50% of the cost of equipment used in irrigation and is involved in promoting the use of fertilizers and certified seeds, widespread specialized mechanization and modern storage infrastructure such as the construction of new silos.
Government actions
More than five years ago, the government launched a new import and export licensing system that initially focused on agricultural commodities and goods originating from the European Union (EU). Some of Algeria’s key wheat, corn and barley suppliers include EU members France, Germany and Spain.
Additionally, the Ministry of Commerce has allowed automatic renewal of import licenses for essential commodities such as semolina and wheat to ensure constant market supply. It is estimated Algeria would consume more than 11 million tonnes of these commodities in 2020-21 and 11.2 million in 2021-22.
Elsewhere, the barley domestic resale price subsidy enacted in 2008 previously had been removed, thus reducing the role of Algeria’s state grains agency, OAIC, in the barley market. The agency previously had the mandate to buy, store and market domestic barley that is consumed mainly as a grain in animal feed, at a guaranteed support price for the sellers while selling the same barley to consumers such as mills and livestock producers at a set price. In the 2020-21 and 2021-22 marketing periods, Algeria’s barley consumption is estimated at 2 million tonnes and 2.05 million tonnes, respectively.
The new agriculture sector plan partly builds on the achievements of Algeria’s Public Investment Programme of 2015-19 that was aimed at enhancing the country’s output of key crops, stimulating rural development and attracting higher levels of private and foreign direct investment.
In the drive to ramp up grain production, Algeria is laying emphasis on improved irrigation, expansion of land under cultivation, enhancing yields per hectare and reduction of the country’s food import bill, especially for wheat, corn and oilseeds that dominate the list of imported food products.
But even before the September 2020 unveiling of the 2020-2024 agricultural roadmap that is part of the national economic revival plan, investors in Algeria’s grain sector already were taking advantage of opportunities provided under the new Finance Law to establish business ventures in the wheat, corn, soybeans and oilseeds value chains.
Furthermore, the agricultural sector roadmap provides a conducive environment for foreign investors willing to invest in Algeria’s agriculture, including retaining the 2008 provision for the investors who lease government land to farm for 40 years. The National Office for Agricultural Land was created to regulate access to state-owned land, estimated to be more than 2.5 million hectares.
During the 2020-21 marketing year, an estimated 3.5 million hectares will be under cereals production compared to 3.2 million the previous marketing year.
International and local investors keen on Algeria’s grain sector can also rely on provisions in the Finance Law such as the business-friendly withholding tax rates, introduction of an e-filing system and the exempting of approved startups from professional activity tax, global income tax, and corporate income tax for at least 48 months.
Startups, including those in the sectors of wheat, soybean meal, corn, animal feed, pulses, agriculture equipment and grain storage facilities, will have an additional one-year extension of the exemption clause when their business permits come up for renewal as well as a VAT exemption and a reduced 5% customs duty rate on equipment acquired for investment ventures.
The Finance Law has exempted grain and feed products from the recent increase in VAT rates from 17% to 19%.
Currently, Algeria’s Ministry of Agriculture subsidizes 50% of the cost of equipment used in irrigation and is involved in promoting the use of fertilizers and certified seeds, widespread specialized mechanization and modern storage infrastructure such as the construction of new silos.
Government actions
More than five years ago, the government launched a new import and export licensing system that initially focused on agricultural commodities and goods originating from the European Union (EU). Some of Algeria’s key wheat, corn and barley suppliers include EU members France, Germany and Spain.
Additionally, the Ministry of Commerce has allowed automatic renewal of import licenses for essential commodities such as semolina and wheat to ensure constant market supply. It is estimated Algeria would consume more than 11 million tonnes of these commodities in 2020-21 and 11.2 million in 2021-22.
Elsewhere, the barley domestic resale price subsidy enacted in 2008 previously had been removed, thus reducing the role of Algeria’s state grains agency, OAIC, in the barley market. The agency previously had the mandate to buy, store and market domestic barley that is consumed mainly as a grain in animal feed, at a guaranteed support price for the sellers while selling the same barley to consumers such as mills and livestock producers at a set price. In the 2020-21 and 2021-22 marketing periods, Algeria’s barley consumption is estimated at 2 million tonnes and 2.05 million tonnes, respectively.
The new agriculture sector plan partly builds on the achievements of Algeria’s Public Investment Programme of 2015-19 that was aimed at enhancing the country’s output of key crops, stimulating rural development and attracting higher levels of private and foreign direct investment.
In the drive to ramp up grain production, Algeria is laying emphasis on improved irrigation, expansion of land under cultivation, enhancing yields per hectare and reduction of the country’s food import bill, especially for wheat, corn and oilseeds that dominate the list of imported food products.
Commentaire