Algeria is experiencing a multifaceted crisis, one of the most serious since the North African country gained independence in 1962. This crisis has hit one of the major crops in Algeria, the simple potato, which is a vital part of the Algerian diet, damaging the people of Algeria and its economy alike.

What is the significance of the potato to Algeria?

In Algeria, the simple potato makes up a large percentage of the everyday meal for Algerians, the carbohydrate being imported mainly from the Netherlands, through the TNCs of ZPC and Agrico. Algeria itself has tried to enhance potato production locally, but the climate and several factors have limited the process, meaning the country still heavily relies on its imports from the Netherlands. Despite the large dependence on imports, Algeria’s potatoes are still a major crop in the nation, and is used in traditional foods such as tagine or chtitha batata, causing an even harder hardship due to the crisis.

How has a crisis occurred?

The crisis itself in Algeria stemmed from product shortages, which can be traced back to both mismanagement of the water supply within Algeria, causing an ongoing crisis of itself. This was enhanced by the nation’s harsh climate and the reduction of cultivable land by 50% due to the lack of storage facilities, meaning a lower yield could be harvested, damaging the reduced supply even further. This not only caused food shortages within Algeria for potato-based products, but also badly damaged the country’s economy, as Algeria also exported potato-based products to Western nations such as France. As a result, the nation’s Balance of Payments^[i] value decreased, meaning the government struggled with its funding, causing further social and economic problems.

State officials said the local farmers had themselves to blame for the price increases, saying the farmers were stockholding the produce, to manipulate the market and the nation’s prices. Others blamed retailers and speculators, who also had a plentiful supply whilst the nation suffered, to gain wealth and value, growing wealthy on the backs of citizens.

This led to the overdue crisis, where the cost of living increased, due to higher prices for essentials due to a lower supply of goods. For perspective, a kilogram of potatoes endured a sharp increase in price from 60 dinars (equivalent to $0.43) to 140 dinars (equivalent to $1.00), meaning the people of Algeria were using a larger portion of their income on food, leaving less disposable income, leading to lower material living standards in the country. The hit to the humble potato was taken hard, especially considering the monthly minimum wage in Algeria was less than 20,000 dinars (equivalent to $144.00). This means that for the poorest citizens, one hour of work isn’t enough to afford a kilogram of potatoes, one of the most basic and essential goods for Algerian households, leading to further social consequences like malnutrition, food shortages and even starvation, showcasing the extent of the crisis and its effect on the people and economy alike.

What was the significance of the crisis?

This crisis alongside Algeria relying on imports to feed 70% of the nation (in 2021) meant Algeria was in an unfortunate situation, and the potato crisis wasn’t the only product shortage, it was only the most significant. For instance, the milk shortages also strained the cost of living, as Algeria become more reliant and less independent, it struggled under these crises, leaving the nation in economic hardship and in need of saving.

The crisis exacerbated the problems for an already struggling Algeria, which had been in a recession the year prior and had been worsened by the global pandemic and lack of aid. Families had been hit with a decision by the cash-strapped state to eliminate subsidies for basic food and energy products, which amounts to over $17 billion per year, meaning the people have struggled on their own. The crisis itself had crippled Algeria, and it had become a symbol of the nation's deteriorating economic situation, stirring up anger within modest households and increasing the risk of protests.

How has the government dealt with the crisis?

The government itself has attempted to regulate the crisis by establishing a direct state-controlled sales operation of potatoes at a fixed price, being 50 dinars per kilo (equivalent to $0.37) and said it would begin urgent importing of the staple. This may be less than the average price before the crisis occurred to incentivise spending and promote economic growth, and further reduces the dependence on imports from the Netherlands and shows a vital step in the right direction for the cost-of-living problem. The government regulations have also led to a greater provision of these products, preventing shortages in the future, and allowing for the nation even to gain surpluses and export some of the produce, leading the nation to economic stability.

Footnotes:          

[i] Balance of Payments-A set of accounts showing the transactions conducted between residents of a country and the rest of the world.

Bibliography:

The "Potato Crisis" At The Heart Of Algeria's Imploding Economy - Worldcrunch

‘Potato Crisis’ symbolizes Algeria's struggling economy (freshplaza.com)