My book Oil for Food has now been published as paperback by Oxford University Press with an updated preface.
On Amazon UK it is available here.
In the US it will be published in March.
TROPICAL AGRICULTURE AS “LAST FRONTIER”?
Food Import Needs of the Middle East and North Africa, Ecological Risks and New Dimensions of South-South Cooperation with Africa, Latin America and South-East Asia
Barcelona, 29-30 January 2015
The Middle East and North Africa (MENA) is one of the most water-stressed regions in the world and its largest net-importer of cereals. Affordable food imports are crucial for its future food security. Countries with tropical agriculture like Brazil are playing an increasing role in MENA food supplies. Apart from policy options to sustainably intensify regional agricultural production, trade will play a crucial role for MENA economies to achieve food security.
Given the environmental value and sensitivity of tropical ecosystems sustainable intensification in countries like Brazil, Sub-Saharan Africa and South-East Asia is crucial. For this reason, King’s College London (KCL), the OCP Policy Center, the Barcelona Centre for International Affairs (CIDOB), the Getulyo Vargas Foundation and Wageningen University organized a conference on “Tropical Agriculture as ‘Last Frontier’? Food Import Needs of the Middle East and North Africa, Ecological Risks and New Dimensions of South-South Cooperation with Africa, Latin America and South-East Asia”.
The conference was held on 29-30 January 2015 at the Barcelona Center for International Affairs (CIDOB). It provided an interdisciplinary perspective on how …. (for more)
Germany’s largest weekly Die Zeit has run a feature on the lack of economic sustainability of ISIS that has also been translated into English. It quotes my earlier policy brief of October: How Long Will ISIS Last Economically? and shares its conclusion that the ISIS economy is based on looting and far from self-sustaining.
Meanwhile the UN has estimated that ISIS had revenues from ransoms of $35-45 million in 2013. Revenues from such ransoms have likely decreased as I have argued, as Western journalists and aid workers have been deterred from traveling to the region and local hostages fetch lower prices.
The Die Zeit feature in fact points out that hostage taking has increasingly targeted the local population. Prices for local hostages ($20k-50k) are considerably below those for western hostages ($3-5mn).
In October David Cohen, under secretary for terrorism and financial intelligence at the US Treasury Department, estimated the ISIS income from oil at $1mn per day with a declining tendency. He also saw the revenues from ransoms reduced at $20 mn in 2014.
Cracks of ISIS’ Ponzi scheme of looting have already started to appear. Prices for meat, eggs and vegetables have doubled and tripled in some cases. Defections of senior ISIS officials have been partly attributed to economic problems of the organization.
ISIS tried a publicity stunt when it announced its intention to introduce its own currency based on gold, silver and copper (sic) coins. Even if it managed to loot enough precious metals to issue such a currency it would likely face Gresham’s Law and the challenges of maintaining realistic exchange rates within a bimetallic currency, not to mention a tri-metallic one.
Yet ISIS is not the only organization with economic problems in Iraq: The government in Baghdad faces severe funding shortages as oil prices have declined while it needs to ramp up expenditure to rebuild its military capacities (if they ever existed given 50k “ghost soldiers” who only existed on payrolls).
The Iraqi government also continuously grapples with corruption: The Grain board chief was sacked because of a spoiled rice shipment, only to be replaced by his predecessor who took kick backs in 2009.
The Journal of Peasant Studies has published a review of Oil for Food by Max Ajl of Cornell University who approaches the topic from a critical world system view.
Ajl likes the historic parts and the analysis of agro lobbies and profit motivations behind food security strategies, but he would have liked to see much more categorical conclusions, which I am afraid I cannot give. There is no either/ or: Clientelistic lobbying geo-strategic considerations and genuine food security concerns are all part of the mix that I have encountered.
“Indeed, he could and should have stated much more clearly that food security is a discourse which is mobilized in the region and elsewhere for ends having little to do with securing food: namely, the distribution of state rents to social elites in ways which would otherwise be difficult to publicly justify. Still, it is to Woertz’s credit that he has done such a skilled job of amassing and synthesizing a tremendous pile of historical and contemporary evidence – even if, upon surveying it, the reader comes to far less ambivalent conclusions about the real interests behind notions of ‘food security’ in the Gulf than the author does himself.”
I have just returned from the Atlantic Dialogues conference 2014 that has been organized by the German Marshall Fund and the OCP Policy Center.
In terms of food security issues it was quite interesting, that considerable know-how transfer is taking place between Brazil and Sub-Saharan Africa and that Morocco tries to position itself as fertilizer provider of choice to both agricultural regions. (On this issue also see my recent article in Third World Quarterly about Mining Strategies in the MENA).
The Atlantic Dialogues conference is in its third year now and adds a south-south dimension to the notion of Atlantic Space. This year a conference volume has been published that can be downloaded here.
The following conclusions can be drawn for the transatlantic trade in commodities:
Romain Calvary has written a very interesting article about Midroc, Saudi billionaire Al Amoudi’s Ethiopian business conglomerate.
“Les investissements saoudiens dans la Corne de l’Afrique : l’exemple de Mohamed Al Amoudi, homme d’affaires saoudien en Ethiopie” has been published in Confluences Méditerranée, 2014/3 (N° 90)
It contains an interesting description of his background as a son of a trader from the Hadramaut who migrated to Jeddah at the end of the 1940s, shortly after Al Amoudi was born in Ethiopia to his Ethiopian mother. Al Amoudi would only join his father in Jeddah in 1965, where he built his fortune in construction and the refining business.
From the 1990s onwards he built his Ethiopian business empire, which he merged in 1996 under the umbrella of Midroc. It is noteworthy that in 1990 he did not yet have Ethiopian citizenship according to the article.
Another interesting take home point is that as part of his participation in Ethiopian politics Al Amoudi takes positions that are rather unusual for a Saudi. He discreetly finances Ethiopian churches in the USA and has lent his support to the construction of the Ethiopian Millennium Dam, which is opposed by Egypt and Saudi Arabia.
In February 2013 the Saudi royal and deputy defense minister Khalid Bin Sultan even went so far to say, “There are fingers messing with water resources of Sudan and Egypt which are rooted in the mind and body of Ethiopia. They do not forsake an opportunity to harm Arabs without taking advantage of it…”
A new CIDOB briefing note of mine deals with some food security issues in Iraq:
· ISIS is not a mere terror organization, but an insurgency that follows a classic “Clear, Hold, Build” strategy. The aim is state building as the very name ISIS suggests. Holding territory implies provision of services to the governed population such as food, energy and water.
· Oil is the most important revenue stream for ISIS followed by various forms of looting, local taxation, extortion and ransom. Not for nothing ISIS has been likened to a mafia gang. Foreign inflows have also played a role, but have not been as dominant as often assumed.
· Energy infrastructure cuts across territories. Rebels in control of oil and gas fields have sold energy to the Assad regime, which has been in control of the gas grid and power stations. ISIS has been no exception.
· Syria’s oil industry was already ailing before civil war erupted. The more lucrative fields in the south and north of Iraq on the other hand will likely remain out of ISIS’s control.
· Gulf donors have been described as “angel investors” for jihadist groups in Syria who provided the seed financing for their domestic operations. During 2012 and 2013 Gulf countries poured hundreds of millions into the Syrian civil war, often in competition with each other. While it is unlikely that Gulf governments have ever funded ISIS directly, it has benefitted indirectly from this spending spree when fighters who had originally been with other groups joined it and brought their experience and weapons with them.
· Iraq entertains the largest public food program in the world. The Public Distribution System absorbs about a fifth of government revenues and provides basic foodstuffs to more than half of the population in most provinces. ISIS regards dams and food distribution infrastructure like wheat silos as strategic assets. Like refineries and oil installations it has targeted them specifically and has taken a keen interest in taking them over intact.
· ISIS now controls up to 40% of Iraqi wheat production. However, half of Iraq’s wheat supplies are imports, so ISIS’s share of domestic production only is equivalent to about 20% of overall supplies.
· The economic base of ISIS is a Ponzi scheme of looting that is in constant need of expansion. Yet there are signs that expansion is becoming more arduous. The early easy phase of looting is over.
The International Journal of Middle East Studies (IJMES) and the Journal of Natural Resources Policy Research (JNRPR) have published reviews of Oil for Food by Pete W. Moore and Erika Weinthal respectively.
Both reviews are positive, main suggestions relate to:
a) better clarification of the two main driving forces of Gulf agricultural policies: self-sufficiency concerns and patronage politics
b) more extensive discussion of resource curse theories and Dutch disease phenomena
c) richer analysis of agricultural policies in Syria against the backdrop of the drought of the 2000s, misguided water management and rural neglect in the decade before the civil war
Thanks for reading the book and these very helpful suggestions!
Syria is in fact one of my regrets and it would have deserved more discussion, indeed. Raymond Hinnebusch’s edited volume about Syrian agriculture in the 2000s escaped my attention while writing and Francesca de Châtel’s excellent article in Middle Eastern Studies was not yet published.
In later publications I have dealt with Syria more extensively while spending some time at the American University of Beirut. During the 1990s I studied in Syria and worked there as a tourguide, getting to know the country and its people. What’s happening there right now is truly saddening and one can only hope that Syria’s shameful tragedy will end soon. With a rural population share of 40 percent sustainable policies of rural development would need to be an important aspect of any reconstruction effort.
Three new books have been published about food security in the Middle East and North Africa: Jane Harrigan’s The Political Economy of Arab Food Sovereignty (Palgrave Macmillan, 2014), Food Security in the Middle East, edited by Zahra Babar and Suzi Mirgani (Hurst, 2014) and The Politics of Food Security: Asian and Middle Eastern Strategies, edited by Sara Bazoobandi (Gerlach Press, 2014).
Bazoobandi`s book has emanated out of a conference at the Middle East Institute at the National University of Singapore and compares food security strategies in the MENA with Asian countries like South Korea and China. My own article in the volume is about this topic, others deal with urban agriculture, Japan, and modern food systems in the Asia-Pacific. Particularly interesting is an article about Iranian food security by Nikolay Kozhanov who served as attaché at the Russian embassy in Tehran between 2006 and 2009.
Babars’s and Mirgani’s book entails a number of conceptual studies about the impact of supermarkets on food systems, obesity, Gulf agro-investments in Ethiopia or my own article about historic food regimes and the MENA as well as a variety of case studies about countries like Yemen, Iran, Egypt, Lebanon and Jordan. The book is the outcome of one of the superb workshops and collective research efforts at the Center for International and Regional Studies (CIRS) at the Georgetown University in Qatar.
Like Food Security in the Middle East, Jane Harrigan’s book The Political Economy of Arab Food Sovereignty provides an excellent analysis of food security challenges in the MENA. By coining the term “macro food sovereignty” Harrigan describes multiple efforts of MENA governments to gain direct access and political control over food supplies, if necessary by disregarding market rationalities and economic efficiency. Macro food sovereignty is thus different from trade-based approaches to food security as advised by international bodies like the World Bank. It is also different from the original meaning of the term “food sovereignty” that has focused on the micro level and has been used by advocacy groups like La Via Campesina to call for farmers’ control over their livelihoods and production decisions.
Harrigan provides a rich variety of data and does a great job in analyzing the development discourse about MENA food security. She goes beyond domestic agriculture and foreign agro-investments and embeds her analysis of food security in the broader context of economic development, income distribution and food accessibility. Like in her earlier writings her approach is refreshingly unorthodox and challenges prevalent development paradigms.
Harrigan and I had our differences regarding the extent of Gulf agro-investments and a widespread implementation gap of announced projects. My reading of press reports and some earlier entries in the Land Matrix database certainly would be more skeptical. Some of the mentioned examples like the Qatari investments in Kenya or UAE based Abraaj Capital’s investments in Pakistan have never gotten off the ground. In the current version of the Land Matrix they are in fact categorized as failed. There also have not been specific land for oil deals, although land for infrastructure deals have been proposed.
But when reading Harrigan’s book I also find considerable agreement, for example about the need to favor joint equity projects and contract farming over fully owned plantation projects that are much more likely to alienate local populations. We also seem to be in broad agreement that preemptive displacements can be serious threats and that improved social safety nets need to be part and parcel of food security policies in the MENA. In sum this is a great addition to the growing body of literature about food security in the Middle East that is particularly helpful in linking it to the broader development debate.
“Last year, Al Amoudi, whom most Ethiopians call the Sheikh, exported a million tons of rice, about seventy pounds for every Saudi citizen.” This is the remarkable claim of Frederick Kaufman in an article in Harper’s Magazine about the agro-investment of the Saudi billionaire in Ethiopia’s Gambela province.
Mr. Kaufman calls it “the great grain robbery” and alludes to the namesake event in 1972 when the Soviet Union appeared as a large buyer of US grains for its livestock program, bidding up prices to the ire of American consumers.
To put it into perspective: one pound of rice gives about five servings, so 70 pounds make 350 servings. Every Saudi eats a bowl of Ethiopian rice each day according to Mr. Kaufman!
Saudi Arabia imported 1.3 million tons of rice in the trade year 2013/14 according to the US Department of Agriculture and does not have domestic production. This would mean that Ethiopia accounted for the large majority of Saudi rice consumption. As rice constitutes 11 per cent of the calorie intake of Saudis according to the FAO it would also mean that Ethiopia has provided almost a tenth of Saudi Arabia’s dietary needs! An astonishing feat for a country that was the largest food aid recipients of the World Food Program (WFP) in 2012. If true, it would be alarming.
Alas, it does not show in the trade statistics. The PSD database of the US Department of Agriculture has no record of Ethiopian rice exports whatsoever. The COMTRADE based Trade Map database of the International Trade Center not really: In 2012 it reports Ethiopian rice sales of $4,000 to Saudi Arabia out of total exports of $5,000. That is virtually nothing.
Mr. Kaufman does not share the source for his 1 million ton claim. Unfortunately for him, almost three quarters of Saudi rice imports come from India and another 10 percent from Pakistan according to the Trade Map statistics. South Asia is where basmati rice is mainly grown, which the Saudis prefer over the sticky white rice that is grown in South-East Asia and the US. This preference is also why Al Amoudi has tried to introduce basmati cultivation in Ethiopia with the help of Pakistani experts and foremen.
Cereal yields in Ethiopia are around 2 tons per hectare according to the World Bank, on the higher end compared with most other African countries, but considerably below Thailand (3.1 tons) the US (5.9 tons) or Vietnam (5.5 tons). As Al Amoudi has just started his project and is introducing a new crop it is unlikely that he can produce very much above the national average. This would mean that the production of 1 million tons of rice in Ethiopia would require 500,000 hectares of land.
Al Amoudi has a lease for 10,000 hectares. Mr. Kaufman does not tell us from where Al Amoudi might have gotten the other 490,000 hectares. Not to mention that Al Amoudi has considerable production problems and it is unclear at this stage whether his project will succeed.
Mr. Kaufman also does not share with us how Al Amoudi managed to get 1 million tons of rice out of Gambela, a remote province with poor infrastructure and far away from any port. The Indian investor Karuturi who launched farming operations in Gambela as well and is now in serious economic trouble mulled exporting cereals with barges via South Sudan, a very unlikely scenario given the current civil war there. Mr. Kaufman himself describes dirt roads that start right after the airport in Gambela; he also speaks of “pilot rice paddies” without suggesting how one would be able to produce 1 million tons of rice with such limited operations.
In case it has not become clear by now: Mr. Kaufman’s central claim of 1 million tons of Ethiopian rice exports to Saudi Arabia is certifiably bogus. Harper’s does not seem to have a fact-checking department, which is rather surprising for a magazine of that size.
Mr. Kaufman says hat “the terms of the deal have never been released.” This is not exactly true as the lease agreement of September 2009 was posted on a website of the Ethiopian government before taken offline in 2012. For convenience I post it here.
For a 50-year lease of 10,000 ha of land Saudi Star pays 300,000 Ethiopian Birr annually. This is currently equivalent to just $15,321 and the contract does not even make stipulations for inflation adjustment. Al Amoudi has announced that he intends to lease an additional 290,000 ha from the Ethiopian government, but so far 10,000 hectares is what he’s got, to the best of my knowledge.
So with $1.53 per hectare the lease terms are even better than the $7 of Mr. Kaufman’s estimate and considerably lower than the $1,250 per year and hectare that he mentions for Zambia. Zambia is a more mature agricultural market with export outlets towards South Africa, so its land prices should be higher, but Mr. Kaufman is right to wonder how such lease terms come about and whether political backroom deals might have something to do with it.
He has apparently been in the country, if only for a few days, he has met with decision makers and he has visited Al Amoudi’s Saudi Star project. There have been indeed problems on the project as the killing of Pakistani foremen has shown and Ethiopia’s strategy of Agricultural Development Led Industrialization (ADLI) has been accompanied by grievances and state led resettlements as I point out in Oil for Food.
Mr. Kaufman had a unique chance to tell us something about such problems at the crossroads of subsistence lifestyles, development ambitions, foreign direct investment, political conflict and influence trading. Unfortunately he didn’t. He chose to make bogus claims and tell us a land grab story that is sexy and sells. After all Saudis are authoritarian, religious fanatics who do not let their women drive. Isn’t it perfectly logical to add a neo-colonial land grab to that list? And isn’t that what the reader wants to hear? Including unverified rumors about Mr. Al Amoudi’s alcohol intake, Al Qaeda financing and predatory attitudes of his men?
When reading the article one cannot escape the impression that this is neither a story about Al Amoudi, nor about disenfranchised Ethiopians, but about the author himself – an intrepid Indiana Jones who takes the reader by the hand on a journalistic hit and run mission to the dark heart of Africa. To beef up his credentials, Orientalisms are dropped and suggestive language is used without serving any obvious analytical purpose.
Based on a second hand account he refers to locals who live “in picturesque villages, undisturbed by modernity”, all the while Gambela is increasingly affected by a rather modern civil war in neighboring South Sudan. Corresponding refugee flows are shortly mentioned in a footnote. At no point one gets an idea about the local population and how it has been affected by the Saudi Star project. Mr. Kaufman has apparently not interacted with them. Meanwhile he suggests that the Saudi Star compound with its white barracks and satellite dishes seems to belong to a “Bond villain.” Our hero has to face down “fat black beetles” that attempt to crawl in his bed while spending the night there, remarkably on the invitation of the men of the very “Bond villain.” (It also would appear to me that the villains in Bond movies usually have more assuming residences than white barracks).
Al Amoudi was born in Ethiopia to an Ethiopian mother and a Saudi father and later migrated to Saudi Arabia where he made his money. To call him a “billionaire from Ethiopia” obscures more than it illuminates and it would have been interesting to learn more about Saudi-Ethiopian relations and what role Al Amoudi plays in them. Instead, we jump from Alexander the Great’s quest for the Nile sources to Ethiopia “the khat capital of the world”, only to end up again with Al Amoudi, who is termed a “whisky drinking marauder”, like all the folks of international organizations who hang out at the bar of the Sheraton in Addis, which he owns.
In short, another piece of sensationalist journalism and a disservice to a more sober and credible discussion about land grabs and associated development challenges.