Tunisian cereals sector : an examination of production, prices, and some alternatives for the future

About 60 percent of Tunisia"s cereal production has been in durum, 10 percent in bread wheat, and most of the rest in barley. Yields of all three cereals have been low by world standards and highly variable from year-to-year. Tunisia is currently making significant progress in improving productivity in cereal output by adopting high yielding varieties of bread wheat. Demand and production from base year 1968 to 1972 and 1980 indicate that Tunisia will continue to be a net importer of cereals despite significant productivity gains over the period. Foreign exchange costs of these deficits will vary somewhat depending upon how land area is allocated among durum, bread wheat and barley. Internal prices for cereals in Tunisia have in general, fallen relative to prices for other commodities. However, these prices are still higher than those at which the cereals could be imported. Tunisia will face important price policy decisions as improved productivity begins to close the production-consumption gap. Lower prices for consumers would aid industrial development since cereals are the major wage good in the Tunisian economy. Yet, lower prices may choke off the incentive for higher productivity in cereal production.