A net food importer, Tunisia has about 5 million hectares of arable land, with only 6% of that under irrigation. Prime agricultural land is in the northern and coastal regions, where some large, government-owned farms are located, but most of Tunisia's farms are fewer than 5 hectares.
Agricultural policy. Agriculture is included in Tunisia's liberalization and privatization program, but the government continues to set prices for some commodities, such as wheat, sugar and milk.
Because wheat and wheat products are dietary staples, the Office of Cereals sets prices for wheat at the farm gate, for flour and for bread. But prices for pastry flour and related products are not controlled.
Other food and agricultural prices also are controlled at the retail level, where the government provides consumer subsidies for the differences between domestic and international prices. Because Tunisia's policies are designed to favor exports, the government encourages production of high quality agricultural products to target lucrative markets in the European Union.
Farmers receive support through a number of domestic programs. These include support prices, supervised and soft credit, tax rebates, administrative services, financial aid for weather related crop losses and rescheduled loan repayments in cases of drought.
In 1991, the government began to restructure state owned farms by creating agricultural companies to lease to the private sector. The aim was to move toward a market orientation and reduce government expenses. As of the end of 1994, the government had created 66 agricultural development companies covering about 39,000 hectares, and 19 new ones covering some 13,000 hectares were in the process of creation.
Implementation of the last measures in the Agricultural Sector Adjustment Program was completed in 1994. These measures included removal of subsidies on fertilizers and herbicides and restructuring of two government agencies dealing with energy and livestock.
Investment funds mainly have been targeted at irrigation projects, farm machinery and planting of fruit trees. The government, under the eighth five-year plan, continues its emphasis on soil conservation, desertification and development of water and forest resources. There are also several programs directed toward protecting the environment.
Large-scale actions undertaken since 1987 include implementation of a 10-year plan for water mobilization through construction of 21 large dams, 200 hillside stream dams and 1,000 hillside lakes.
Flour milling. Tunisia has 21 flour mills. Average daily capacity is 428 tonnes, in a range of 120 to 850 tonnes per day. Eight mills have a daily capacity between 501 and 850 tonnes, five grind between 301 and 500 tonnes, and eight range from 120 to 300 tonnes.
Only three mills grind non-durum wheat exclusively, while 14 are exclusively semolina mills and the remaining 14 grind wheat and durum. This breakdown is reflected in Tunisia's average annual flour usage; about 49% of flour consumed is for bread, about 45% is consumed as semolina, and 6% is used as pastry.
Overall, annual flour production has tended to increase. Flour production in 1992 was 609,000 tonnes, with semolina at 481,000; in 1995 flour production was estimated at 652,000 tonnes, with semolina at 525,000, increases of 7% and 9%, respectively.
In quality terms, bread flour typically is produced at a 78% extraction specification, while pastry flour is produced at a 71% rate. Only 20% of the market is home use, with the remainder bakery use, and predominant packaging is 50-kilogram cotton bags.
The Office of Cereals is responsible for nearly all wheat importing. Millers may import only a small amount, typically about 50,000 tonnes a year, for toll milling and subsequent export.
Tunisia is a price sensitive wheat buyer and took advantage of U.S. and E.U. export subsidies when they were offered. With the virtual end of subsidies in the past year, Tunisia turned to other suppliers, and 60% of 1995-96 wheat imports came from Eastern Europe.
About 75% of grain imports arrives at the port of La Goulette, where the Office of Cereals controls the facilities. Domestically, the Office of Cereals sets transportation costs for wheat and flour to assure uniform shipping costs for each mill, regardless of distances. Wheat and flour are shipped by rail and truck.
The Tunisian Millers Association represents the country's flour mills. In 1993, Tunisian millers and their association, along with counterparts in Morocco and Algeria, organized the Maghreb District of the Association of Operative Millers. The process of receiving an official charter continues.
Livestock and feed. Livestock production in Tunisia consistently has lagged behind consumption requirements, and the country relies on imports to satisfy its needs. The U.S. and E.U. are primary suppliers of meat and dairy products. In 1994, beef imports made up 13.9% of total consumption, and milk imports were about 26%.
Nonetheless, production of meat, poultry and dairy products in Tunisia continues to increase. In 1994, red meat production increased by about 9%, eggs by 8.4% and milk by 6.4% from the previous year's levels.
Tunisia's poultry industry relies on barley and imported maize. The U.S. is the primary maize supplier based on credit guarantees, but price relationships between barley and maize tend to dictate the percentage of each used.
Trade. Since it became a member of GATT in 1990, Tunisia has begun to lower its tariff rates on imported goods. Tariffs on agricultural product imports vary between 15% for products such as sugar to 43% for high value products such as meat, pastry, processed products and soybean meal and other feed ingredients. Tariffs on grain, including wheat, barley and maize, are 17%.
In 1994, Tunisia passed a new law recognizing the principle of free trade. Tunisia also ratified the General Agreement on Tariffs and Trade in early 1995.
Subsequently, Tunisia has taken steps, including application of consolidated tariff rates approved under the GATT, to protect its agricultural sector during a transition period. During this transition period, some products, including pasta and pastries, will be subject to import licenses.