Business appetites whetted ahead of land reform

Business appetites whetted ahead of land reform

Algeria Interface, november 11, 2002

Wealthy businessmen are already buying up farmers’ land use ahead of reform plans that will introduce private land ownership.

Tipaza, 17/11/02 – « This time, I know, the state will sell the land, » says agronomist Mustapha Lemouchi. He has a theory on the issue of Algeria’s farmland. « A few years ago those who claimed they were against privatisation were only playing for time until they buyers themselves. And now they are! »

Mustapha is standing in brilliant autumn sunshine between two rows of fruit trees. He knows what he is talking about. In the autogestion socialist regime of post-Independence Algeria he was in charge of two self-administered areas of farmland in the Mitidja Plain to the southwest of Algiers. Then, in 1987, a new law introduced collective farms, known by the acronym of EAC.

« Until then prices were centrally administered and we were told what kind of crops to grow. We weren’t allowed to keep calves over six months, a state farm took charge of them from then on. I was the first to disregard the law to ensure that the employees were paid their salaries, » he recalls.

Farming prosperous
The 1987 law entitled farmers to usufruct rights over publicly-owned land in return for rent threw. Mustapha has benefited and now has a 16-hectare orchard with two former colleagues.

His land lies at the western tip of the Mitidja Plain. It stretches two kilometres west from the Sahel foothills where the tomb of Berber King Juba II lies. It was a fertile vineyard under French rule, but when Mustapha and his partner Ahmed took it over there was not a tree left standing. Now there are peach, orange and pear trees. The farming business is slowly but surely prospering.

With land becoming lucrative growing numbers of smallholders have been selling their usufruct deeds – so much so that the Minister of Agriculture publicly called them to order in July 2002, stressing that deals could not be considered as sales because the land was inalienable property of the state.

“Not everybody does as well as us,” says Mustapha. “We had to bore to a depth of 94 meters for water for irrigation. The farmers who were here before us didn’t bother. Some leased the land by the season then spent their time playing dominoes at the local café.” Such neglect is one way in which property changes hand. At nearby Attatba a group of smallholders leased a huge hangar-like barn to a horse-trader, who refused to give it back. They took the matter to court but were told by the judge that he was awarding the land to the horse-trader because he actually made use of it.

Fast buck
The 1987 law only entitles farmers to the use not ownership of land. It does however grant them ownership of infrastructure and improvements. Which has prompted entrepreneurs with an eye out for a fast buck to move in buying up homesteads, stables and buildings. They then rent land out by the year or buy up the year’s produce in advance. In this way they have bought into collectively farmed domains. It is in this guise that the privatisation of agriculture is now underway in the fertile Mitidja Plain and elsewhere.

Mohamed Larbèche is the local official responsible for agriculture at the nearby village of Sidi-Rached. His office is a gloomy place and he prefers to talk with local farmers in the local cafe. He says that he has heard that wealthy businessman, Djillali Mehri, director of Pepsi-Cola Algeria, has bought shares of coveted land along the coast in the vicinity of the prestigious state-owned luxury resort, the Club des Pins.

Mustapha Lemouchi, too, asserts that many big businessmen from the town of Blida have bought up whole farms. They use their connections to get round the law. “One industrialist was officially confirmed as a farmer by the local wali [prefect] so that he could step in and take over from a genuine farmer who had relinquished his rights,” says Mustapha.

Ways round the law
Faced with the growing informal trade in deeds and usufruct entitlements this year, the Agriculture and Finance Ministries issued an order spelling out the provisions of the 1987 law. Anyone buying a share in a farm must be a farmer, must be approved by other members of the farming collective and must not enjoy the use of land in any other farm. The aim is to prevent land from being concentrated in the hands of big landowners.

But everybody knows there are ways round the law. One way of ensuring ownership of a piece of land when the state gets round to selling it is to make a deal with a farmer who enjoys use of the land in question. He signs over usufruct and in return for an advance payment. It is a legally binding procedure, says Mohamed Larbèche.

The state has not in fact said it will sell land. The current draft of a bill that the government is due to examine says only that it will be cede land to those farming it on a 90-year lease. Yet it also enables small farmers to sell their shares in a collectively farmed domain to any inward investor whether or not he belongs to the agricultural community.

To all intents and purposes, therefore, everybody believes the state is getting ready to sell off land. Mustapha and Ahmed have decided to buy the land they are currently farming when the state gets round to selling it. “We even hope to buy land should any local farmers decide to sell their shares,” adds Mustapha.

Property rights serve as collateral for farmers seeking bank loans. The Algerian Rural Development Bank (BADR) for example will not lend sums for major investments, only for small planting schemes, says Mustapha.

This point of view is offset by a recent development. Two years ago the government launched a multi-million dollar Agricultural Development Plan (PNDA). Says Mustapha: “We put in place our irrigation system thanks to the PNDA. We bought water distribution kits and the local government farming office at Tipaza paid our supplier.”

Mustapha recently came to see Mohamed about an efficient irrigation system for his orchards. If Mohamed’s assessment of the project is favourable the PNDA will put up the money. Mustapha and Ahmed will not have to part with a penny. The PNDA has brought considerable improvement for minimum cost. It remains to be seen whether privatisation will do likewise.

El Kadi Ihsane