Assessment Of The Economic Incentive Policy

Abstract

As the threat to food security continues to grow, governments have sought to reduce the food gap by employing available policy tools. This study aims to assess Algeria's economic incentive policy by focusing on exchange rate and agricultural subsidy policies during the period 2001–2023. Using the Autoregressive Distributed Lag (ARDL) model, the estimation results indicate the absence of a long-term cointegration relationship among the variables. This implies that the level of the food gap in Algeria is not significantly affected by changes in either the exchange rate or agricultural subsidy values. This is attributed to the low elasticity of local supply and the reliance on natural resources in the agricultural production process. Therefore, governments must activate economic incentive policies through the development of an early warning system and the introduction of agricultural policies that enhance local supply.