Tag Archives: sector
Algeria To Open Up Farming Sector To Foreign Investors
REUTERS Friday 31 May 2013 Last Update 30 May 2013 11:57 pm ALGIERS: Algeria is to open up its farming sector to foreign investors for the first time to try to help cut food imports and also diversify its economy, which is heavily dependent on oil and gas exports, the head of a government agency said. Kamel Chadi, chairman of SGP-Proda, a holding company for animal production, said 16 pilot farms focused on grains, vegetables, fruit trees and cattle breeding would be on offer via tender to investors. “This tender is intended for both Algerian private investors and foreigners,” Chadi said. “The invitation stipulates creating joint ventures for managing and operating farms. The land is not for sale,” Chadi said. Agriculture in Algeria has been largely closed to foreign investment. Algerian law requires that foreigners partner with Algerian firms and limits any stake they take in an investment project to 49 percent. But the government has pledged reforms to cut dependence on oil and gas, which account for about 97 percent of total exports. Volatile oil prices have forced the country to look for alternative sources of revenue and to attract foreign capital. Algeria’s food imports account for about 20 percent of an estimated $ 45 billion annual import bill. Main food imports include wheat, barley, milk and meat due to insufficient domestic production in the country, which has a population of 37 million. It has begun providing financial incentives for farmers, including interest-free loans, also as way to create jobs. The head of Algeria’s farmers union, Mohamed Alioui, said earlier this month the government would launch its first commercial maize production next season. The country currently imports almost all its maize requirements. Chadi said the winning bidders for the farmland tender would sign contracts that stipulate mainly modernizing the farms through introducing new equipment. “Partnership could bring something new and help create the necessary conditions for development,” Chadi said. The areas on offer are set to be sowed with cereal and vegetables such as potatoes, an essential ingredient in Algerian cooking. Each farm is between 100 and 500 hectares and they are located in central, western and eastern provinces. Some of the farms will be devoted to producing fruit, including olives, apples and dates. Foreign investors would also help develop breeding activities for poultry, dairy cattle and also beekeeping, Chadi said. “We are optimistic agriculture will play a leading role in our economy.” Continue reading
Crop Price Falls May Not Hurt Ag Sector Until 2014
09:34 May 31, 2013 Crop price falls may not hurt ag sector until 2014 The US agriculture sector may yet suffer from a drop in corn prices, potentially to $4 a bushel, thanks to the prospect for a stronger harvest this year, but the impact may not be felt until 2014, Macquarie said. The bank, which two weeks ago cut its corn prices forecasts, and pegged Chicago futures falling to average $4.50 a bushel in the last quarter of 2013, said that a trip to the US Midwest had only “reinforced” its bearish outlook for prices. “We met with key industry players and came away with a sense of optimism about yield prospects for the new crop,” Macquarie analyst Chris Gadd said. “Overall, farmers were optimistic that they would reap a big, if delayed, crop later this year. If true, this could lead to corn prices falling to $4 a bushel.” ‘Concern comes a year from now’ However, many of the dents from low prices to the broader agribusiness sector – albeit not to dairy and livestock farmers, set to enjoy depressed feed bills – will not be felt until next year. In part this is down to the methodology for crop insurance which – in being set largely according to February prices, and for the next harvest guaranteeing corn farmers $5.70 a bushel – will only for the 2014 crop take a hit from the lower prices looking likely ahead. “The concern only comes one year from now,” Mr Gadd said. With the next crop insurance price potentially “in the $4-a-bushel range”, while farmers in high-yield areas “will continue to be comfortable”, growers “with high rental costs, or farms which get much lower yields such as in the marginal producer states, will fell a “more negative” impact. ‘Real concerns’ For the broader agriculture sector, conversations with fertilizer dealers suggest that a drop in corn prices below $4 a bushel would prompt a “rethink in application rates”. “Such a price would most affect those farmers with high variable costs due to high land rent costs,” Mr Gadd said. Meanwhile, for farm equipment dealers, there is the extra concern of the ending at the close of 2013 of a tax perk for farmers on depreciation of machinery. “Farmers have been buying new equipment not just for the strong income/cash positions they are in, but also because of tax reasons,” he said. “Many we spoke with indicated if bonus depreciation goes away there would be no need to buy new equipment for an extend period of time. “As a result, there are real concerns that equipment sales could suffer in 2014 – and particularly so should corn prices fall off.” Market debate The comments come amid a reassessment of the prosperity of the agriculture sector, in the US and elsewhere, with the prospect of strong world harvests this year of many crops – potentially depressing prices below cost of production for many growers. Some US machinery groups, such as Deere & Co and Titan Machinery, have revealed disappointing results, although it is difficult at the moment to distinguish pressure from the prospect of weaker crop prospects from that caused by a historically late sowing season. US farmers had planted 86% of their corn as of Sunday, below the average of 90% by then, while soybean seeding were 44% completed, behind the typical 61% and the slowest since 1996. Meanwhile, the US farmland market has also shown some signs of slowdown, with prices reported to be declining in Wisconsin and Wyoming. agrimoney Continue reading
EU Urges Investment Drive In African Farm Sector
Wed Apr 10, 2013 10:03am EDT * Farm chief calls on EU business to boost investments * Europe keen to match rising interest from China , Brazil * Investments must respect local land rights, Ciolos says BRUSSELS, April 10 (Reuters) – European companies must invest more in Africa’s agricultural sector to keep pace with growing interest from countries such as China and Brazil , the bloc’s top farm official said on Wednesday. Home to a quarter of the world’s fertile land but only 10 percent of global agricultural output, the potential for growth in Africa’s farming sector is clear, EU farm commissioner Dacian Ciolos said. But poor transport and storage infrastructure are among the factors holding back growth in the sector, which not only threatens the continent’s food security, but also presents an opportunity for private investment from Europe and elsewhere. “This shows the importance for the European Union to be present in the food security debate and not turn its back on Africa, just as other parts of the world become more and more interested,” Ciolos told a workshop in Brussels on African farm investment. Greater private investment in African agriculture would also help fill the gap created by declining European public support for the sector, which has fallen by half since the 1980s, Ciolos said. “Agriculture has been side-lined in favour of other political and economic priorities, despite the challenge of global hunger,” he said. Rising global food demand in recent years has driven an increase in large-scale land investments in sub-Saharan Africa by foreign companies, which have been accused of “land-grabbing” with the help of compliant African officials. Ciolos said governments and companies had a shared responsibility to ensure that any investment respected the rights of local communities to access land, and urged a focus on investing in small farmers which account for 70 percent of total output. (Reporting by Georgina MacDougall; Editing by Charlie Dunmore and Helen Massy-Beresford) Continue reading
