David Blumberg, ‎CEO, Blumberg Grain Middle East & Africa: Interview

Interview: David Blumberg

To what extent does post-harvest infrastructure impact agricultural productivity?

DAVID BLUMBERG: With post-harvest losses in Algeria estimated at up to 40%, adequate infrastructure can play a vital role in helping to minimise crop loss. Furthermore, due to the current lack of adequate storage, deterioration of the physical product will often result in a diminished baking quality of grain, which can be so severe as to deem it unmarketable to the consumer.

Blumberg Grain has identified the need for as much as 2m tonnes of new storage for grains in Algeria and will embark on a first-phase project with the government to provide 500,000 tonnes of storage via the construction of 100 horizontal, modular warehouses. According to KPMG, the direct financial impact of the first phase will be as high as $59.5m, with an additional indirect impact of $26.5m saved by replacing imported grains with domestic wheat.

Outside of improving supply chain infrastructure, what other measures are needed?

BLUMBERG: Introducing primary processing prior to storage would properly condition the crop for a better shelf life, especially for perishable goods like fruits and vegetables, which require cold storage and need to go through a series of primary processes, like washing, drying and cooling to remove field heat. One could further enhance cold storage by utilising controlled atmosphere technology to alter the environment in which the produce is being stored.

Additionally, we believe that it is crucial to work on the following topics within the value chain. First, it is important to look to improve seeds by mobilising agronomic research to develop local varieties, while at the same time introducing new high-yield varieties. Second, crop management can be improved using more suitable mechanisation to increase crop efficiency and worker comfort. Third, inputs can be improved by following environmental best practices and increasing the use of organic fertilisation and plant protection products, while avoiding harmful chemicals, water and soil pollution. Lastly, the use of supplementary irrigation will help mitigate the combined effects of drought and climate change, which are particularly noticeable in the west of the country.

The above measures should be taken together and considered as one technology package, which will be most effective if introduced to farmers at an early stage of production. Research and development, coupled with practical experience and the transfer of knowledge and technological savvy from specialised international companies, are other measures that would help to improve food security in Algeria.

Which other staple foods offer investment potential in the country’s agricultural sector?

BLUMBERG: Milk and dairy, although a highly competitive industry involving many stakeholders, offer significant investment potential since domestic production covers only 30% of national consumption. There is, therefore, a very large space to expand domestic production while reducing imports. Potatoes are another important product, with potential for value chain improvement across controlled atmosphere storage, conservation, processing and export.

What are the main challenges facing international investors with an interest in Algerian agriculture?

BLUMBERG: At present, the investment law requiring an ownership split of 51:49 in favour of the local partner is the most substantial issue facing the international investor. However, we understand that the regulation has been moved to a different code within the law, which may make it easier to modify in the future. Such a modification or elimination would certainly be beneficial to investors. The government may also consider a special exemption for non-extractive industries and operations that do not affect national security.