The food industry and agriculture in Algeria: exploring economic connections using the input-output model

The objective of this paper is to analyze the structural interdependence of the agriculture sector and food industry in Algeria using the 2018 National Input-Output Table and the classical Input-Output linkage framework. The current study aims to analyze the interdependence between these two sectors in the context of the domestic production and evaluate their capacity to contribute to economic diversification in a country traditionally dependent on hydrocarbons. Results indicate that the food industry is a key sector as it is the only sector that reports above average backward and forward linkages. The agriculture, fishing, and forestry sector is predominantly forward in nature as it provides important intermediate inputs to the subsectors. The results and findings of this research verify that the agriculture-food industry relationship is beyond a sectoral relationship, but rather a strategic production chain and has consequences and implications for value added, employment, food security, and the process of domestic industrial deepening. As a result of these findings, the model of policy framework pertaining to economic diversification for Algeria must focus primarily on the agri-food sector with the implementation of policies that support technological advancements, improvement of the storage and logistics framework, local processing capabilities, and the development of regional supply chains. Establishing and strengthening these intersectoral relationships will improve the structural resilience of the productive sector in Algeria and curb the long-standing hydrocarbon dependence of the economy.