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Hamid Aït Amara and Bernard Founou-Tchuigoua

In countries with high population to land ratios, industry has a fundamental role to play in the creation of the conditions necessary for progress in agriculture. Industry helps promote growth at several levels. On the one hand, it provides the material, mechanical and chemical means to modernize the techniques used in stock-rearing and crop-growing. But through the employment it creates' it also determines, directly or indirectly, the number of agriculturally active workers, the productivity of the peasants' labour, their income level and, ultimately, the overall agricultural demand for consumer and capital goods. Industry is the basis for the growth of an internal market, an indispensable element in the dynamic of development in which agricultural demand is a fundamental factor. In Algeria, the farmers have very substantially improved their marginal income, more by employing the manpower resources of rural households and raising the price of agricultural products than by increasing the productivity of labour. The state, striving to intensify agriculture, has laid great stress on farming equipment, tractors' harvesters, crop treatment and irrigation techniques. This progress in equipment was supposed to promote the adoption and diffusion of new, more intensive production methods and to improve crop yields.

This increase in the capital provided by industry, however, was not by itself a sufficient factor in agricultural progress. Research in agronomy and the training and education system were not adequate to ensure renewal of production methods and improvement in the technical expertise of the peasants.

Despite amelioration of the level of farm equipment, stock-rearing and crop-growing methods have barely evolved and yields have increased only slightly. The relative costs of mechanization and other agricultural investment, in view of the productivity of the land, limit the use of more intensive techniques, methods of cultivation, fertilizers, weed killers, selected seeds, and so on.

In this context, extensive systems have shown themselves to be more profitable for those enterprises that gear their production to this market than systems that make more use of modern production methods, at least in low to medium rainfall areas. The relative stagnation of yields results in a tendency towards more land and resources being used for stock-rearing. This process is underpinned by a price system favourable to animal products and the high revenues expressing the associated demand. As a result, the price policy in force over the last decade to stimulate base production, wheat, milk, and vegetables, has proved powerless to reverse the tendencies observed in the structure of production.

Furthermore, it has not been possible to draw the full benefit from the conditions created by industrialization because of the system of property and labour. Structural reforms aimed at changing the size of farms and the way work is organized have only marginally affected private sector land, which has remained outside the process of agricultural modernization.

The global dynamic of employment has been sufficient to orient surplus rural labour towards activities outside agriculture in the 1970-85 period. Having access to mixed employment and income, the great majority of small peasants have stayed on the land. But now that the rate of economic growth has slowed, it seems that the question of a development process fuelled by a dynamic of internal accumulation is once again on the agenda.

Export earnings have suffered a severe decline since 1986, dropping from $13,000 million in 1983 to $7,000 million in 1987, from which debt interest and capital repayments of $4.000 million a year had to be found. There has been a sharp decline in investment, especially in the public works and buildings industry, and this has slowed economic growth. Employment has contracted seriously. Unemployment, rising fast, will probably reach about 20% of the active population by the start of the 1990s. Following the early 1980s, the brakes applied to the growth of the industrial sector now make it essential that all or part of those additional fractions of the active rural population who will not find work elsewhere remain engaged in agriculture. In other words a return to the situation prevailing during the 1960s before the industrialization plans took off.

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