Although almost 25% of the population is engaged in agriculture (including subsistence farming), only 3% of Algeria's land is cultivated. The soil is poor and subject to erosion, and the water supply is generally irregular and insufficient; about one-quarter of northern Algeria is completely unproductive. Agriculture contributed 10% to GDP in 2001, down from 13% in 1999.
Before independence, European-owned agriculture accounted for about two-thirds of vegetable production and employed about 800,000 farm laborers, 700,000 of them Muslims. Most Muslim-owned farms were small—10 hectares (25 acres) or less—and were located mainly in marginal areas on the interior plains and on mountain slopes. The Muslim sector, comprising the bulk of the agricultural population, accounted for only one-third of vegetable production but nearly all the livestock raising.
Within six months after independence was declared, at least half the European-owned land had been vacated. Algerian peasants soon began to work on these abandoned farms under a self-management system. During the 1960s, the government established more than 2,300 state farms on expropriated French landholdings; by the end of the decade, these farms accounted for two-thirds of total agricultural production and employed about 500,000 workers. In July 1971, President Boumedienne announced an agrarian program providing for the breakup of large Algerian-owned farms and their reorganization into cooperatives. The first stage of the plan, the registration of land ownership, began in March 1972. In the second stage, many absentee landlords were forced to hand over part of their land to the state. By July 1973, of a total of five million hectares (12.4 million acres) of public land, one million hectares (2.5 million acres) of cultivable land had been redistributed to 54,000 families of landless peasants ( fellahin ), and 1,348 cooperatives had been created. By 1980, the number of cooperatives had increased to about 6,000; in the early 1980s, however, the government split large cooperatives into smaller units to improve efficiency. In 1982–83, about 450,000 hectares (1.1 million acres) of land previously nationalized were returned to private ownership, mostly in plots of 10 hectares (25 acres) or less. In 1987, a further breakup of large state-owned farms into private cooperatives was implemented. Long-term leases of land to cooperatives were begun. Farmers were given autonomy in production and investment decisions, including the right to keep profits. The National Union of Algerian Peasants, established in March 1973, played a leading role in the land reform program and has about 1,200,000 members. By 1995, most of the cooperatives had been dispersed because of internal disputes and land was divided into individual plots. The government does not officially endorse this development, which compels farmers to sell their output on the black market. The Ministry of Agriculture is considering land privatization as a way to stimulate private investment.
Government policy aims at increased use of fertilizers and improved seeds, conversion of vineyards to the production of cereals and other staple foods, and achievement of self-sufficiency in food production. The main agricultural products continue to be wheat, barley, pulses, fresh vegetables, dates, table and wine grapes, figs, olives, and citrus. Grain and pulse production varies significantly and depends upon the frequency and amount of rainfall during the growing season. Estimated agricultural output in 1999 included 1,100,000 tons of wheat; 410,000 tons of barley; 996,000 tons of potatoes; 955,000 tons of tomatoes; 307,000 tons of oranges; 78,000 tons of grapes; and 428,000 tons of dates. In 2001, nearly 6.6 million tons of cereals were imported, including 4.5 million tons of wheat. The total cost for imported cereals was nearly $996 million. Modest agricultural productivity growth along with rapid population increase makes Algeria one of the world's largest agricultural import markets; imports of food and agricultural products amount to about $2.8 billion per year.