Organic Farming and Sustainable Agriculture Practices
Organic Farming and Sustainable Agriculture Practices
Business Model Description
Invest in the development of businesses producing organic agricultural and sustainable farming products
Expected Impact
Sustainable agricultural practices help boost agricultural revenue and alleviate poverty, while contributing to the conservation of agricultural lands and the environment.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Tunisia: North-West
- Tunisia: Centre-East
- Tunisia: Centre-West
Sector Classification
Food and Beverage
Development need
Tunisia has limited natural resources of water, soil, and fisheries and is also highly exposed to climate change, hindering food security. Degradation of land and water resources, desertification and loss of biodiversity, inappropriate use of pesticides and fertilizers, and lack of modernization prevent increased added value with significant consequences on livelihoods. (1,2)
Policy priority
The 5-Year Development Plan (2016-2020) and National Climate Change Adaptation Plan are intended to boost agriculture's contribution to Tunisia's growth by increasing agricultural activity's adaptability and bolstering food security. (3,4) Stimulus programs are also suggested for agriculture since they employ 14.4% of the workforce and provide up to 10.1% of GDP (5).
Gender inequalities and marginalization
Rural women and youth constitute the most vulnerable segment of farmers (6). Rural women contribute in various ways to their families' income, in addition to household chores, activities are primarily underpaid. Rural women often encounter difficulties due to societal norms and gender-based prejudice, complicating their access to markets and services (3).
Investment opportunities introduction
In the first 11 months of 2021, 475.1 million TND (USD 164 million) of private agricultural investments were made, which shows a 26.5% increase compared to the same period of the previous year (7). Moreover, recent investment-related legislation places a premium on investor rights and provides incentives to attract investment.
Key bottlenecks introduction
COVID-19 had severe consequences on agriculture, including input supply disruptions, challenges in vital sectors, marketing and supply disruptions, logistical issues, and border closures (8). Structural restrictions affect agriculture, including poorly organized value chains, restricted access to funding, and severe water scarcity paired with low soil fertility (3).
Food and Agriculture
Development needs
With the largest organic area in Africa, Tunisia is the second largest exporter and the only African nation with EU organic equivalency (8). Tunisia currently produces about 40% of the world's organic olive oil (9). However, agricultural challenges include reduced yields, a degrading environment, and rising food prices, which highlight the need for sustainable practices (10).
Policy priority
Tunisia was one of the first African countries to encourage organic farming, beginning in the 1990s (11). Tunisia has an Ecological Organic Agriculture policy, organic production standards, strong government support for EOA, and a well-developed National Organic Agriculture Movement. Necessary measures have been set, such as adopting sustainable agricultural methods (12).
Investment opportunities introduction
Tunisia is Africa's second-largest exporter of organic products, with 2987 organic farmers exporting 66% of their output (14). The most popular organic export products are olive oil, dates, almonds, oranges, dried fruits, honey, aromatic and medicinal herbs, and various wines and spirits (15).
Key bottlenecks introduction
Foreign investors cannot buy agricultural land, but they may get long-term leases from the Ministry of Agriculture on public land. Additionally, the sector has the issue of ensuring that organic product sales continue to satisfy the demands of evolving consumer behavior (15).
Agricultural Products
Pipeline Opportunity
Organic Farming and Sustainable Agriculture Practices
Invest in the development of businesses producing organic agricultural and sustainable farming products
Business Case
Market Size and Environment
USD 100 million - USD 1 billion
Tunisian organic exports approached 201 million EUR (USD 228 million), making the country the leading exporter of organic products in Africa. Most Tunisian organic production is sold outside the country (15).
The global market reached more than 100 billion EUR (113 billion USD) in 2021. The pandemic profoundly impacted the industry: Consumers are turning to organic foods as they look closely at personal health, wellness, and nutrition (15).
Indicative Return
15% - 20%
Experts in the region point to a return on investment of around 15-20%.
Investment Timeframe
Short Term (0–5 years)
The payback period depends on the types of crops, on average between 3-5 years.
Ticket Size
USD 500,000 - USD 1 million
Market Risks & Scale Obstacles
Market - Volatile
Business - Supply Chain Constraints
Capital - CapEx Intensive
Impact Case
Sustainable Development Need
Despite its significance, Tunisian agriculture has many difficulties, including decreased yields, soil degradation, salinization of aquifers, increasing food costs, and insufficient irrigation water availability. As a result, sustainable farming methods are critical for the sector's growth (9).
Concerns about food security, loss of competitive advantages of agricultural products, and the sector's role in the national economy have been heightened by the COVID-19 pandemic (18).
Tunisia is categorized as a water-scarce nation and one of the Mediterranean basin's most vulnerable to climate change threats. National policies and future development plans must prioritize the development of resource-efficient, sustainable agriculture (19).
Gender & Marginalisation
In Tunisia, 35% of women reside in rural regions. Agriculture continues to be the primary source of employment for rural women (18). Women outnumber men in agricultural professions, accounting for 70% of Tunisian agricultural labor (20).
Women earn about 50% less than men and lack social protection and access to adequate healthcare, with only 33% of them covered, while juggling caregiving duties (18). The pandemic has exacerbated poverty and vulnerability, as well as revenue declines for farmers and agribusinesses (20).
With the COVID-19 crisis, female smallholder farmers were impoverished due to the closure of food stalls and the lack of customers. Most farmers rely on their own crops and livestock. However, the lockdown forced many women farmers to sell their livestock to provide for their families (18).
Expected Development Outcome
Organic farming utilizes fewer pesticides than conventional agriculture, reduces soil erosion, and reduces nitrate leaching into groundwater and surface water (21). These advantages are also crucial for environmental protection and continued agricultural usage of lands.
Sustainable farming methods protect the environment and avoid pollution, which helps to maintain the land healthy and replenished, which is critical given the growing population and need for food.
Gender & Marginalisation
Organic certifications are considered a way to recognize rural women's labor. They are intended to restore gender equality on farms where women formerly worked, and men earned the revenue (22).
When combined with fair trade, organic agriculture is likely to affect the status of female farm workers, who are the most vulnerable link in the chain (22).
Primary SDGs addressed
2.4.1 Proportion of agricultural area under productive and sustainable agriculture
2.3.2 Average income of small-scale food producers, by sex and indigenous status
2.a.1 The agriculture orientation index for government expenditures
12.2.1 Material footprint, material footprint per capita, and material footprint per GDP
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Indirectly impacted stakeholders
Public sector
Outcome Risks
Most organic farms' transportation is industrialized, resulting in a high carbon footprint (16).
Inefficient control mechanisms and improper certification systems may lead to fraud and mislabelling.
Gender inequality and/or marginalization risk: If the gender component is overlooked, the sector may abuse inexpensive female labor, worsening women's already precarious situation.
Impact Risks
Organic and sustainable farming is strongly dependent on external factors such as soil character, weather conditions and availability of water resources.
The positive impact may not endure since the producers might stop their organic production activities at any point and switch back to non-organic commercial produce.
Impact Classification
What
Positive results are likely to include environmental preservation, extended use of healthier agricultural areas, greater high-value exports, higher family incomes, and job opportunities.
Who
Farmers who are underserved as a result of their heavy reliance on inefficient conventional methods, export-oriented firms specializing in organic agriculture
Risk
Farmers who are underserved as a result of their heavy reliance on inefficient conventional methods, export-oriented firms specializing in organic agriculture
Impact Thesis
Sustainable agricultural practices help boost agricultural revenue and alleviate poverty, while contributing to the conservation of agricultural lands and the environment.
Enabling Environment
Policy Environment
Organic agriculture is a component of Tunisia 2020's plan, with the establishment of five organic farming pilot zones and the development of bio-tourism clusters in each of the country's 24 governorates to promote the industry and boost exports.
The Ministry of Agriculture published a fifteen-year strategy to enhance the sector in 2015, and each governorate has a local Directorate-General branch in Tunis (23).
The Five-Year Development Plan 2016-2020 includes food security, sustainable agriculture, and climate change resilience objectives. As agriculture is vulnerable to climate change, key measures such as sustainable agricultural methods have been set up (3).
Tunisia is executing its National Climate Change Adaptation Plan to improve agricultural adaptation, guarantee food security, safeguard the country's coast, and conserve its water resources (3).
Financial Environment
Financial incentives: The state offers incentives to operators that switch to organic farming: A 50% subsidy on materials related to organic farming equipment and tools, up to 500,000 TND (173,000 USD), and a 50% subsidy on the cost of organic agricultural regulation and certification (17).
Fiscal incentives: Customs and VAT on some inputs used in organics are suspended. (39) The sector benefits from a five-year investment premium and support for organic production equipment. Investment returns are tax deductible for 10 years. Imported goods are free from customs and taxes (17).
Other incentives: 30% of export turnover may be sold on the local market. Land transfer registration fees are refundable. Investments in climate-vulnerable areas (Gabes, Gafsa, Médenine, Tataouine, Tozeur) may get an 8% premium. This may go up to 25% for mining land conversion in Gafsa (17).
Regulatory Environment
Law No. 99-30 of 5 April 1999 on organic farming is the main law governing organic sector, along with seven ministerial specifications, twenty government decrees and other relevant documents (17).
The Investment Law n°2016-71 on September 30, 2016, allows for two bonus and incentive programs. Article 20 of provides for the first regime for national interest projects, while Article 19 provides for projects including direct investment activities.
The Investment Law n°2016-71 includes numerous fiscal benefits targeted to the organic industry, including a five-year investment premium and financial assistance for acquiring equipment required for organic production.
Government Decree 2017-389 defines projects of national interest as those contributing to a national economic priority (incl. agriculture) and satisfy one of the following criteria: investment of 50+ million dinars; creation of 500 new employment each year for three years.
Marketplace Participants
Private Sector
Producer organizations - Agricultural Development Groups (GDAs), Mutual Agricultural Services Companies (SMSAs) -. Firms: South Organic, Ennour, Agoul Bio, Kanzari Olive Oil, Kapoudia Biomass... Certification firms: Ecocert, Bioagrihelpers
Government
FIPA, APIA, Technical Center for Organic Agriculture, National Federation of Agri-food (FENAA-UTICA), Office of Public Lands, Directorate of Agricultural Production, General Directorate of Plant Health and Control of Agricultural Inputs, General Direction of the Organic Agriculture
Multilaterals
Food and Agricultural Organization (FAO), International Fund for Agricultural Development (IFAD), African Development Bank (AfDB), European Bank for Reconstruction and Development (EBRD), International Finance Corporation (IFC).
Non-Profit
Tunisian Union of Agriculture and Fisheries (UTAP), National Union of the Operators of the Tunisian Organic Sector (UNObio), Wallah We Can
Public-Private Partnership
Africa Agriculture and Trade Investment Fund (AATIF)
Target Locations
Tunisia: North-West
Tunisia: Centre-East
Tunisia: Centre-West
References
- (1) The Republic of Tunisia, 2021. Voluntary National Review 2021. https://sustainabledevelopment.un.org/content/documents/279442021_VNR_Report_Tunisia.pdf
- (2) The Republic of Tunisia, 2019. Voluntary National Review 2019. https://sustainabledevelopment.un.org/index.php?page=view&type=111&nr=23372&menu=35
- (3) Minister of Agriculture, Water Resources and Fisheries. FAO 35th Regional Conference for the Near East. https://www.fao.org/3/cb1226en/cb1226en.pdf
- (4) Republic of Tunisia, 2018. Economic Recovery Plan 2019-2020. http://www.cae.gov.tn/wp-content/uploads/2019/08/Plan-de-relance-V-Finale-12-oct.pdf
- (5) French Development Agency, 2021. North Africa Regional Strategy 2021-2025. https://www.afd.fr/sites/afd/files/2021-03-02-49-37/strategie-regionale-afrique-nord-2021-2025.pdf
- (6) FAO, 2021. FAO supports a new startup that facilitates market access for small farmers and Tunisian artisans. https://www.fao.org/neareast/news/view/en/c/1413975/
- (7) APIA, 2021. 475.1 Millions de dinars d'investissements agricoles privés durant les onze premiers mois de l'année 2021. http://www.apia.com.tn/actualites/detail/179
- (8) Stakeholder Consultations held in 2021.
- (9) UNIDO, 2019. Tunisia's blossoming agribusiness sector. https://www.unido.org/stories/tunisias-blossoming-agribusiness-sector
- (10) IFAD. Tunisia. https://www.ifad.org/en/web/operations/w/country/tunisia
- (11) SWP, 2020. The Effects of a DCFTA with the EU on Tunisian Agriculture. https://www.swp-berlin.org/en/publication/tunisia-a-stable-countryside-for-a-stable-country/#en-d37675e1495
- (12) Minister of Agriculture, Water Resources and Fisheries. FAO 35th Regional Conference for the Near East. https://www.fao.org/3/cb1226en/cb1226en.pdf
- (13) Blom-Zandstra et al, 2017. Needs Assessment of the Agriculture in North-West Tunisia. https://edepot.wur.nl/444766
- (14) FIPA, 2019. Investing in Tunisia: The Opportunity to Come.
- (15) FIBL and IFOAM, 2020. The World of Organic Agriculture. https://www.fibl.org/fileadmin/documents/shop/1150-organic-world-2021.pdf
- (16) Environment Buddy, 2020. Pros and Cons of Organic Farming. https://www.environmentbuddy.com/farming/pros-and-cons-of-organic-farming/
- (17) Tunisian Institute of Strategic Studies, 2020. Measures protecting the agricultural sector and the proper functioning of the agri-food industry in the face of the COVID pandemic. http://www.onagri.nat.tn/uploads/Etudes/ites-covid19.pdf
- (18) Arab Reform Initiative, 2020. Tunisia: COVID-19 Increases Vulnerability of Rural Women. https://www.arab-reform.net/publication/tunisia-covid-19-increases-vulnerability-of-rural-women/
- (19) Managers, 2021. Les Startups agricoles en Tunisie: un domaine prometteur. https://managers.tn/2021/03/29/les-startups-agricoles-en-tunisie-un-domaine-prometteur/
- (20) ILO. Employment Intensive Investment Programme. Tunisia: Empowering women through the induced effects of investments for economic diversification. https://www.ilo.org/wcmsp5/groups/public/---ed_emp/documents/publication/wcms_675196.pdf
- (21) Britannica. Organic Farming. https://www.britannica.com/topic/organic-farming
- (22) Le Monde, 2021. Les Tunisiennes misent sur le bio pour se faire une place dans le monde de l’huile d’olive. https://www.lemonde.fr/afrique/article/2020/12/29/les-tunisiennes-misent-sur-le-bio-pour-se-faire-une-place-dans-le-monde-de-l-huile-d-olive_6064729_3212.html
- (23) Archyde, 2020. Tunisian women are betting on organic to find a place in the world of olive oil. https://www.archyde.com/tunisian-women-are-betting-on-organic-to-find-a-place-in-the-world-of-olive-oil/
- (24) Chiboub et al, 2015. Etat actuel et perspective de développement de l’agriculture biologique dans les zones du Nord-Ouest tunisien. Journal of New Sciences. https://www.jnsciences.org/agri-biotech/41-volume-special-conference-iabc-2015/207-etat-actuel-et-perspective-de-developpement-de-l-agriculture-biologique-dans-les-zones-du-nord-ouest-tunisien.html
- (25) Kapitalis, 2019. Extension sensible des superficies destinees a l'agriculture bio en Tunisie. http://kapitalis.com/tunisie/2019/09/22/extension-sensible-des-superficies-destinees-a-lagriculture-bio-en-tunisie/