Saudi Agro Lobby Strikes Back

Water guzzling wheat production in Saudi Arabia will not go without a fight. Apparently, agro-interests have brought the powerful Minister of Interior and Crown Prince Naif on board:

Wheat farming to be studied afresh

DHAHRAN – The Ministry of Interior and King Fahd University of Petroleum and Minerals (KFUPM) recently signed an agreement for the university to conduct a study on “providing the Kingdom’s need for wheat amid the scarcity of water resources”….

He said previous studies on the subject had not been adequate. Al-Sinani said he was confident the university would produce balanced results…

the ministerial committee was keen to carry out a study that would determine the exact effect this farming has on the country’s water resources. The Kingdom wants to grow wheat locally to achieve food security and to depend less on imports…

Al-Sinani said the Kingdom’s policy had previously focused on safeguarding water,  There are areas that have abundant groundwater but no population. He stressed that wheat is a strategic crop and discussions are taking place to grow it once again without affecting water reserves…..

Saudi Dairy Company Almarai Buys Argentine Firm

Saudi Arabia’s Almarai Co., the Gulf’s biggest dairy firm by market value, has acquired Argentine Fondomonte S.A. for $83 million.

Fondomonte has three farms totaling 12,306 hectares which focus on the production of corn and soy beans. Almarai is interested in securing feedstock for its dairy and poultry operations.

The deal is in line with recent trends: For real Gulf agro-investments rather take off in established food exporting countries like Brazil or Australia that have the infrastructure, the track record and the institutional set ups to actually deliver food supplies. Investments in developing countries like Sudan or Pakistan are more speculative in comparison and have been often rather announced than implemented.

Saudi Arabia stops Exports of Open Field Vegetables

Saudi Arabia is a net food importer, but some food stuffs it exports. Until 1996 it was a large wheat exporter, before it decided to stop them to save water. Since the decision in 2008 to phase out wheat production by 2016 it imports increasing quantities of the item.

Other stuff is still exported, like olives and cut flowers from Al Jawf or shrimps from Al Leith.

Exports of fresh milk products are important for the bottom line of dairy companies like Almarai and a motion of the Majlis Al Shoura in 2010 to ban them to save water was thwarted by the Minister of Agriculture Balghunaim who argued that dairy production in the Kingdom was not water intensive as it imported its barley feedstock (he conveniently overlooked the water consumption of running a dairy farm like drinking water and cleaning. Also considerable amounts of alfalfa feedstock are produced inside the country and alfalfa is even more water intensive than barley or wheat).

Now there is an attempt to phase out exports of open field vegetables, mainly potatoes, to neighboring GCC countries. It will be interesting to see how food export policies and domestic lobby interests will play out in the future.

Saudi Arabia Goes Eco, Too

Pesticides as a food security concern in Saudi Arabia:

“The Minister of Agriculture, Dr. Fahd Bin Abdul Rahman Balghunaim, announced the Ministry of Agriculture’s plans, to launch a campaign, to educate the average consumers on the health, environmental, and economic benefits of organic farming.”

“…..Peach in particular is sprayed with over 45 different pesticides. If you cannot find organic peaches, in lieu of it you can consume watermelon, pineapple, tangerines, oranges, grapefruits, bananas, and kiwis. Strawberries, grapes, tomatoes, celery, sweet bell peppers, lettuces and other leafy vegetable are all heavily contaminated with pesticides. Some of these produce have very thin skins or no skin at all, and no amount of washing can help discard these harmful chemicals. Hence, the solution to it is to buy organic products or look for other alternatives which have less or are free from harmful chemicals.”

Ukraine Minister of Foreign Affairs Woos Al Rajhi Group

Ukraine Foreign Minister Konstantin Grishchenko met Saudi businessman Suleiman Al-Rajhi, founder of Al-Rajhi International Co., in Riyadh and described Al Rajhi as ” the largest investor in Ukraine’s agricultural sector.” He said that Ukraine has recently softened regulations and made foreign land ownership easier in order to attract foreign investments.

Saudi National Prawn Company and Aquaculture Projects in Mauritania

The Saudi National Prawn Company (NPC) has eyed aquaculture projects in Mauritania of up to $1bn.

To this end it cooperates with the Islamic Corporation for the Development of the Private Sector (ICD), which is a subsidiary of the Islamic Development bank (IDB) in Jeddah, and Al-Rajhi International Investment Company (RAII).The Al Rajhi family in turn is a shareholder of NPC.

This is yet just an announcement and one could say that this is the obligatory one billion that such investment announcements like to quote in order to draw attention. But the already existing shrimp farming project of NPC in Al Leith in the south of Jeddah is indeed humungous.

NPC started with a small research unit in 1982 and launched experimental operations in 1987. Today it produces 15,000 tons of shrimps with 2,400 employees on an area of 250 square kilometers.

NPC is owned by the Al Rajhi and Al Sudairi families with the Japanese trading house Sojitz holding a minority stake. The project in the barren landscape of the sabkha salt marshes is the second largest shrimp farm in the world. Its importance was highlighted by King Abdullah who came to its inauguration, with a large reception hall being built on the premise for this purpose.

 

There are considerable expansion plans for aquafarming in Saudi Arabia and other Gulf states. NPC has also contemplated to expand on the other side of the red Sea coast in Sudan and East Africa.

What has that to do with Gulf food security? In reality not that much. Shrimps are not part of traditional diets. They are produced for export, mainly to Asia, but also to Europe, mainly London.

NPC experiments with planting algae to be used as fodder. But most of the feedstock is imported fishmeal. Like the large livestock industry, Saudi Arabia imports more than 40 percent of globally traded barley for its sheep and camels, aquafarming is crucially dependent on imported input factors.

Saltwater aquafarming has also less efficient protein conversion rates than herbivorous sweet water fish. Its food security effect would need to come from income generation in the pretty poor Saudi countryside of Al Leith or the hardly more affluent countryside of Mauritania.

Here the jury is still out. There is job creation, but  the land needs of aquaculture in Saudi Arabia are not without opponents. Parts of the local population have complained about excessive land allocation and they would like to see more benefits of the project for local communities or access to some of the facilities of the fully integrated site that has its own power station and super market.

To be fair, competing land uses in the barren sabkha salt marshes in the form of agriculture or tourism are limited, but such opposition hints to widespread discontent with land deals and a diffuse feeling in disadvantaged rural areas of being left behind by government policies.