Staple food market regulation in Algeria, what is the alternative policy? A CGE analysis for wheat

Wheat is the staple food of most Algerians. The wheat market regulation policy is one of the most expensive for the government. Nevertheless, only a few studies were focused on the economic efficiency of these regulation policies, and even less on their impact on the population economic welfare (Bencharif and Rastoin. 2006; Sassi. 2007; Djermoun. 2009; Chehat. 2010). The fact is that this very qualitative literature is unable to meet the needs of the impact regulation breadth, whether at the macro or at the micro level. Unlike other countries where many studies focused on qualitative studies to analyse regulation policies, taking in consideration partial equilibrium models. Using this type of models under-estimates the effects of a possible regulation policy on economy in general, while wheat as a widely-consumed product in Ageria, is directly linked to the rest of the economy. The computable general equilibrium models are the most suitable to our case study correspondingly. Based on this context, the main objective of this article is to analyse the market deregulation impacts on the households welfare in Algeria. This test scenario is completely contrary to the existing policy supporting the wheat price using consumption subsidies. That would imply a pricing system change in the form of a total interior consumption price liberalisation. This type of change will inevitably have an impact on the consumption model, on the food security and on the household’s welfare. In order to build our model, we first analysed the wheat market in Algeria, which allows us to consider its specificities, then we made the social accounting matrix for the Algerian economy in 2009. To the best of our knowledge, this matrix is the most complete and the most detailed for such a recent year for Algeria since it includes 22 sectors, the agriculture is divided in various products, including the wheat one. It covers two factors of production: labour and capital, as well as two catego...