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Support to Agriculture in Tunisia

The Tunisian agricultural policy has focused traditionally on maximizing production by intensifying the use of inputs such as chemical supplies and fertilizers, seeds and improved varieties, or on improving irrigation and water infrastructure. Thus, agricultural activities were planned according to national guidelines and objectives of food self-sufficiency by supporting agriculture production prices and subsidizing most agricultural inputs (AFDB 2012). Before the Tunisian revolution, the deepening of trade liberalization was always accompanied by severe supervision by interprofessional groups to limit competition and improve market efficiency (Elloumi 2006). However, pricing of agri-food products is no longer under the control of the interprofessional organizations but is determined by market forces. These organizations’ roles have been limited to the coordination between the different stakeholders, such as producers and exporters.

The Nominal Protection Coefficient for Producers (NPCp) is the ratio between the average price received by domestic producers for their products at the farm gate (including payment per ton of current output) and the border price that they would receive if the product were freely traded according to international market conditions. An NPCp greater than 1 means that the producers of the commodity are protected by border measures influencing prices (OECD 2011).

FAOSTAT and INS data have been used to compute NPCp. Table 12.4 presents the NPCp of beef, poultry meat and bread wheat. We have chosen these products given their importance in the Tunisian market.

In general terms, the changes in NPCp over the period considered show a diminution of protection for these three basic food products. This fact can be explained by a gradual trend toward more neutral support to producers in the framework of more liberalized markets, which leads to a reduction of tariff protection.

Table 12.4 Nominal Protection Coefficient for Producers—Tunisia

Year

1

2

3

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Bovine meat

0.73

0.63

0.55

0.56

0.59

0.48

0.56

0.49

0.54

0.53

0.50

0.53

0.53

0.53

0.49

Average

0.61

0.52

0.52

Poultry meat

1.27

1.32

1.23

1.03

1.24

1.42

1.18

1.02

1.07

1.06

0.72

1.05

0.85

0.82

0.90

Average

1.24

1.15

0.87

Soft wheat

2.25

2.47

2.17

1.91

1.59

1.66

1.63

1.73

1.44

1.04

1.20

1.71

1.31

1.06

0.93

Average

2.08

1.50

1.24

Source: Authors' elaboration, based on Food and Agriculture Organization of the United Nations (FAO, 2016) and INS data

The evolution of NPCp for beef over a period of15 years (1998-2012) shows that domestic producers were not protected by government measures affecting prices. In addition, the average nominal protection coefficient of poultry meat decreased to less than 1. It dropped from 1.15 during the second period (2003-2007) to 0.87 during the third period (2008-2012). Regarding soft wheat, the protection factor is always greater than 1 with the exception of the last year in that period, reflecting the importance of this product in domestic agricultural policies. However, a downward trend since 1998 is noticeable. More generally, cereals continue to receive substantial attention within the support policies and take advantage of financial support at the expense of other sectors such as beef and poultry meat.

In this sense, an additional liberalization of agri-food trade raises a question about its impact on Tunisian local markets and on food security. The debate is whether additional trade liberalization can enhance food security via the increment of exports. In this context, it is fundamental to analyze the evolution of the economic competiveness of the Tunisian agricultural sector since Tunisia has become a member of the free trade European-Mediterranean area. Such an analysis may help policy makers to study the impact of the DCFTA based on previous experiences.

 
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