EUMED Agpol Annual Meeting Istambul 9 12 may

EU-MED Agpol Annual Meeting Istambul 9 -12 may 2005 CHARACTERIZATION OF AGRICULTURAL AND AGRO-INDUSTRIAL SECTORS IN TUNISIA (Case of olive oil sector (D 4)) Dr. Boubaker KARRAY bkarray@yahoo. fr Istambul 10 may 2005

Plan • Olive oil sector in Tunisia: Structure, development strategies and performances. • Main determining factors of olive oil sector performances

Contribution in EU-MED Agpol project 1. Elaboration Report concerning the characterization of Tunisian agricultural and agroindustrial sectors. (achieved work) , English text is under revision. 2. Application of the DELPHI method for an estimated potential of Tunisian olive-oil production and exportation (2005).

Olive oil sector in Tunisia 1990/02 269 000 farms 740 000 Tons of olives 1600 oil mills 148 000 Tons of olive oil Traditional (35%) NOO (70%) Modern (65%) Private exporters 107 (30%) Export (71%) Local market (29%)

• The majority of farms are private, small and familial (which is the same case in Europe) (Public firms, production cooperative unity, streamlining and production company, plots technicians and private farms • The olive trees are concentrated in the arid and semi_arid regions (73%), conducted in full (81%), in dry (99%) and planted with different density.

• An industrial chain containing *1600 oil-mills (having a theoretical capacity of 30 000 tons per 24 hours * 10 companies of pumas oil extraction : theoretical capacity of 2000 tons per day, * 7 refining unities of alimentary oil : total capacity of 900 tons per day, * 24 conditioning unities : a capacity of 115 0000 tons, * Many soap factories, coal mining and other companies for naval and small scale construction.

• A consumption structure of alimentary oil composed of 73. 5 % of grain oil. The consumption person and per year is of 23 kg in average with a significant differences between the regions • A quite diversified range of institutions and a determining role by the government concerning olive growing sector with an increasing incitation for private operators in olive production and in the collection and exports of olive oil (ONH, DGPA, DGPDIA, IO, DGFE, APIA, API, CEPEX, FORODEX, FAMEX, UTAP et CC).

Olive oil role in Tunisia • • 33, 7% of cultivated lands, 57% of agricultural farms 20% of agricultural employment 13% of the agricultural production value 11% of agro – industrial production 43 % of industrial export receipts Valorization of marginal lands

International position of Tunisia • 16. 1% of world surface (2 nd position after Spain) • 6% of world plantation number (7 th position after Spain, Italy, Greece, Turkey, Morocco and Syria) • Tunisia is the 4 th world producer (6%), and exporter (11. 5%) of olive oil (1997 -01) • 9. 8% of olive oil world market (1997 -01) • 12. 5% of European market, 16% of Italian market and 22. 7% of Spanish market (1997 -01)

History of agricultural politics 1956 -62 Decolonization of agriculture First liberalization attempts 1962 -69 Collectivization period State capitalism Since 1970 Return of liberal politics Politic of structural adjustment PSA and (P. A. S. A. ) in 1986 Since 1990 Tunisian adherence to GATT Association agreements with the European Union

Olive growing politics since the first socioeconomic plan (1962 -64) • An absolute priority to olive oil exportation and grain oil importation. * Reduce the chronic deficit of alimentary commercial balance sheet. * To preserve the buying capacity of the most poor social layers and satisfy their needs of food oil.

Olive growing politics since 1987 • Suppression of the monopoly of (NOO) concerning the collection and marketing in 1994. • Privatization of one part of olive growing lands • Signature of Uruguay round Agreements and the Association with the European Union. • Elimination of export taxation (1, 5%) • The implementation of a program concerning the streamlining of olive growing industry and promotion of packaging. • Promotion of organic olive oil production. • Creation of FSDO, Council, Committee etc…

Structure Functioning Performance • • • Emergence of a new category of technician farmers Emergence of new organic mode of production and intensive system Creation of new oil mills, extension of the trituration and storage capacity, modernization and reorganization of oil mills. Creation of packaging unities Emergence of new operators: 107 private olive oil exporters Emergence of specialized shops for the sale of olive oil Creation of coordination structures • • Product availability in retail commerce with different prices Emergence of Tunisian trade Mark Development of consultation and coordination between the concerned institutions for the development of the sector a greater implication of the profession in the elaboration of research and development programs Emergence of new integration mode of farmers : EZZAYATINE company of Sfax. • • Production and exportation increase and positive result of the commercial balance in absolute term. Regression of olive oil position in the world market and particularly in the EU (speed loss regarding competitors).

Production-Exportation d’huile d’olive Source: INS + DGPA

EXPORT DESTNATION 62 -64 65 -68 69 -72 73 -76 77 -81 82 -86 87 -91 92 -96 97 -01 45 36 61 63 63 52 73 106 125 ONH 45 36 61 63 63 52 73 102, 7 61 Privés 0 0 0 0 3, 3 64 dont Italie 14 8 19 40 42 28 53 59 87, 6 Espagne 0 0 10 0 7 27 21 Autres[1] 10. 5 9 20 12. 5 12 15. 5 9. 3 7. 8 11, 4 Total Ces exportations sont assurées à 98% en vrac Source: INS

Commercial balance Exp OLIVE OIL (E) période V (MD) Imp GRAIN OIL (I) %EXPA %EXPT V (MD) %IMPA %IMPT E-I I/E MD % 1990 106, 9 48, 415 3, 462 53, 2 11, 974 1, 102 53, 7 50 1991 266, 8 55, 364 7, 808 56, 1 18, 044 1, 171 210, 7 21 1992 138, 5 41, 282 3, 875 52, 4 13, 771 0, 921 86, 1 38 1993 177, 3 44, 425 4, 715 65, 59 15, 688 1, 063 111, 71 37 1994 305, 3 55, 318 6, 500 91, 6 16, 875 1, 378 213, 7 30 1995 216, 7 46, 905 4, 189 111 13, 473 1, 487 105, 7 51 1996 117, 1 33, 070 2, 180 112, 57 18, 588 1, 501 4, 53 96 1997 288, 45 48, 430 4, 692 99, 6 13, 033 1, 133 188, 85 35 1998 213, 3 38, 874 3, 272 140, 2 17, 470 1, 477 73, 1 66 1999 382, 7 54, 145 5, 493 126, 73 18, 890 1, 258 255, 97 33 2000 263, 99 42, 023 3, 298 110, 1 14, 072 0, 938 153, 89 42 2001 200, 27 29, 626 2, 099 126 13, 598 0, 920 74, 27 63 2002 55, 76 10, 011 0, 572 151, 5 13, 255 1, 121 -95, 74 272

Tunisian position in European market

Part de marché Source: Commission européenne

Huile d’olive vierge lampante Huile d’olive vierge extra Source: Commission européenne

Quality structure of UE import 5. 1% 21% 4. 1% 38% Source: Commission européenne

Main determining factors of olive oil sector performances

Olive-growing farms Olive-tree Alternate cultivation Production alternating Mills Intra and intra annual price instability Planning difficulty of picking Lack of means of transport Natural environment Insufficiency and rain irregularity High utilization cost of the local market Weak ability of price negotiation by small olive-growers Weak olive return per tree progress, supposed to be less demanding 2. Weak efforts in the modernization of olive-growing heritage Weak olive return per hectare MCO Local market little developed Quite intense competitiveness and instability of international price Olive-growers behavior Regression of Tunisian olive oil position in the world market Continuous increase of production price inputs (mechanization, workforce and transport) Weak revenue per hectare Insufficiency of agricultural credits allocated to the olive-growers 1. Limitation to cultivation Instability of olive oil price Direct sale to oleifactors in the production place and with cheap prices Increase of olive production cost Olive-growers behavior Small olive oil world market Revenue instability Increase of olive oil production cost Lack of profits caused by non-quality Access difficulty to agricultural credits for the small farmers Unavailability of financial means Under exploitation of trituration capacity : Weak production The know-how of olive-growers Weak competitive capacity of Tunisian exporters Stall weak capacity of Tunisian exporters to elaborate and implement marketing strategies Increase of olive factors Management, formation and vulgarization are not in accordance with the importance of olive growing in the country Exporters

MCO: Exchange regime 1. Normal regime Huile d’olive équivalent tarifaire 1995 (Euros/T) Équivalent tarifaire 2000 (Euros/T) Prix de déclenchement (Euros/T) vierge lampante 1532 1226 1361 vierge non lampante 1556 1245 1682 raffinée 1682 1346 1101 Source: Commission européenne 2. Association agreement : Contingent 56 mille tons ? 3. TPA regime: 65% of total import from SMC

Prélèvements aux importations d’huile d’olive vierge lampante originaire de la Tunisie (OCM) Adh. Grèce Adh. Espagne + Portugal GATT Contingent 46 MT Contingent 56 MT Source: Commission européenne

Import in TPA 1992 -00 88 700 tons 65% of total UE import from SMC Source: Commission européenne

An innovation strategy concerning olive oil sector • Restructuring of olive growing forest • Adoption of new technologies, • Product differentiation, • Olive oil bio, AOP, IGP and STG, • Elaboration of marketing plans and strategies • Reinforce partnership agreements

Thank you for your attention