Algeria - Land Tenure and Reform

Land tenure and reform

The government emphasis on agriculture and the importance of irrigation in the 1990s is reminiscent of the role of agriculture in Algeria's preindependence era. European settlers then held most of the irrigated land and about one-half of the cultivated area. At independence, the newly installed government took over for its own use farms vacated by the French and other foreigners; the lands remained legally owned by the settlers, however. This arrangement lasted until October 1963, when the authorities decreed that all land abandoned by the colons would be owned by the state. By mid-1966 all remaining unoccupied properties had been nationalized and turned over to workers under a selfmanagement system. A small portion of farmland had been occupied by Algerians claiming to be previous owners, as well as by laborers who had worked for the colons. The authorities also gave some land as a reward to veterans of the War of Independence. Most of the expropriated 2.7 million hectares, however, were turned into state farms run by workers' committees, under a socialist sector that received almost all of the funds allocated to agriculture but that suffered from a cumbersome central government bureaucracy and lack of motivation.

Dissolution of the state farming sector was announced in 1971 by Boumediene, who introduced an agrarian reform program that called for breaking up large state-owned farms and redistributing them to landless peasants. The only condition with which these peasants had to comply was to join government-organized cooperatives, which would provide them with state loans, seed, fertilizers, and agricultural equipment. By early 1974, Boumediene's agrarian revolution (1974-78) had given ten hectares of private land to each of 60,000 peasants and had organized them into 6,000 agricultural cooperatives. Encouraged by the initial success of his agrarian reform, Boumediene inaugurated a new program to construct One Thousand Socialist Villages; in fact, its ultimate objective was to build 1,700 villages to house 140,000 farmers.

After Boumediene's death in 1978, this program ended, presumably because of the heavy financial losses it had incurred. Other contributing factors may have been the new government's concern over poor agricultural productivity, rising costly food imports, and the generally unsatisfactory performance of communal farms. Therefore the Bendjedid government decided to allocate more public funds to agricultural infrastructure, especially dam construction and water projects.

Serious reforms, which eventually reversed the policy of concentrating production in state-owned farms in favor of a system of private-sector management, started with the 1980-84 five-year plan. The government assigned approximately 700,000 hectares to private farmers, increasing the total private-sector area to 5 million hectares. At the same time, it liberalized the system for marketing agricultural products and gave incentives for intensive farming. Further reforms included the government's decision in 1987 to break up 3,400 state farms (about 700 hectares each) into privately owned farms averaging eighty hectares each. Because the right of ownership was permanent and transferable--provided the farm remained undivided to ensure adequate cultivation size--and the new owners were entitled to own all their equipment, this measure proved an effective incentive for individual farmers. The new system resulted in higher production as early as 1988.

Further proof of the authorities' concern with improving agricultural production to prepare the country for "life after oil" was found in the 1985-89 plan. The plan allocated higher percentages of public funds to the agricultural sector, especially water projects. Investment in such projects rose from 10 percent of the total budget in 1985 to 14.5 percent in 1990, and the government announced its intention to add 20,000 irrigated hectares a year.

Although as of 1993 Algeria was a net agricultural importer (total agricultural imports increased 45 percent in 1989 to US$3.1 billion), the government has made a special effort to ensure an affordable food supply for a rapidly growing population. As a result, it continued to control and subsidize the price of staples--bread, cooking oil, flour, milk, and sugar. The economic necessity of lowering food import costs, however, generated enough political support to allow relatively free markets in agriculture. An important step was the liberalization of the marketing of inputs and agricultural output. A 1988 decree allowed private farmers to purchase inputs from any suppliers they chose. As of April 1991, individuals and farm cooperatives could engage in wholesale trading in agricultural inputs; they were also authorized to import agricultural inputs at the official rate of exchange. Another law promulgated in 1991 deregulated land transactions and eliminated the municipalities' monopoly ownership of property reserves, making them available for public purchase.

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