Improving Agricultural Market Performance:
Creation and Development of Market Institutions
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As has become evident, Tunisia has quite a range of market institutions which facilitate the
implementation of its agricultural price support measures and regulations such as subsidized
inputs, guaranteed minimum prices, and direct market intervention. For example;
 UTAP has the ability to directly intervene in the market in collaboration with the Inter-
Professional Agricultural Associations and private sector in order to balance supply
and demand of the market, guarantee reasonable prices for the farmers, and ensure
regulatory stock (i.e. control and location of stock per governorate).
 SOTUMAG manages the largest wholesale market of Tunisia, where the country’s
circuits of agri-food distribution are consolidated and unified through monitoring and
regulatory enforcement mechanisms. SOTUMAG’s mandate also concerns diffusion of
the standard for prices of products.
 Marketing boards have a relatively strong market interference power, as they can
negotiate this price freely, thereby guaranteeing a certain minimum price (i.e. ONH) or
buy common wheat and durum at prices set by the Government while selling domestic
and imported cereals at fixed prices to processing facilities (i.e. OC).
These existing agricultural market institutions in Tunisia have responded to (some of) these
three most urgent challenges. UTAP, for instance, has implemented a pilot project for the
creation of distribution cooperatives to bypass the ever growing number of traders and
intermediaries, enabling small-scale farmers to sell their products directly to the market. In
this context, another example from UTAP is relevant. This example concerns the Kairouan
Governorate, where a private cereals cooperative has been developed under the supervision of
UTAP. After three years, this co-operation made a net profit of about US$107,000 while state-
owned cooperatives lost profit. This can be attributed to the collaboration, trust among
farmers, collectively purchase of inputs, and harmonization and standardization of agricultural
production. It remains politically challenging, however, to give up power of state-owned
cooperatives to private-led cooperatives.
Though not one of the six selected agricultural market institutions, a good practice in this
context is an initiative of one of the line Ministries involved in agricultural market systems (i.e.
Ministry of Investment, Development, and International Cooperation), which has been
developed in collaboration with the World Bank. The program looks to connect small-scale
farmers with markets while simultaneously creating jobs, valorizing what is produced local,
and ensuring reliable prices to small-scale farmers. This is done by developing coordination
institutions (or “units of transformation”) and private-sector cooperatives to transform
commodities locally and hence add value in the rural areas. However, distribution to markets
remains an issue due to lack of infrastructure and legal issues arise as a change of law is
required to transfer public investment to the private cooperatives.
Some of the priorities of Tunisia’s post-revolution agriculture and fisheries development plan
2016-2020 concern addressing the fragmentation of the sector, the creation of new
mechanisms to exploit agricultural land, and improving governance practices by means of (the
creation of new) professional and civil-society organizations and coordination mechanisms,214
which could include the creation of new market institutions.
214 WTO (2016), Tunisia Trade Policy Review Report by the Government, Geneva: World Trade Organization.