Improving Agricultural Market Performance:
Creation and Development of Market Institutions
112
On the other hand, the intervention of the Government of Tunisia its agri-food market remains
strong. This concerns fixing consumer prices (e.g. milk, bread, flour, oil, and sugar), margins for
the distribution circuits (e.g. rice, eggs, food preparations, fruits, and vegetables) as well as the
industrial cost price commodities such as salt and coffee. Tunisia’s agricultural policy remains
characterized by a relatively high level of protection through customs tariffs, price control
mechanisms, and other support measures. However, Tunisia’s market price support policies
may not be in full compliance with bilateral and multilateral agreements and may lead to a
sub-optimal allocation of resources, which, in turn, undermines the competitiveness of
Tunisia’s agricultural sector.215
Looking at Tunisia’s agricultural market intervention, it is mainly orientated on ensuring a
stable supply of staple products at reasonable prices for consumers through protectionist
trade barriers, price control mechanisms, subsidies, and direct market intervention through
market institutions as mentioned in Section 5.2.2. However, as these interventions have
proven to be costly (e.g. ONH and STS), ineffective and imposing a considerable administrative
burden,216 Tunisia is recommended to move to policies of direct income support. 217 Other
emerging countries such as Turkey, Mexico, and new EU Member Countries have moved away
from protectionist market support policies and adopted direct income support policies. A
transition towards direct income support policies requires a new market system and
institutional environment. This is where Tunisia’s agri-food market institutions continue to
play a role by improving the conditions and regulations of Tunisia’s agricultural and food
sector.
215 African Development Bank (2012), Economic Brief - Distortions to Agricultural Policy Incentives in Tunisia: A Preliminary
Analysis, pp. 5-11, Tunis: African Development Bank.
216 Ibid
217 Ibid