Saudi Water Study Delays Agro Reform

“The country’s national agricultural strategy will be approved once a water studies report has been completed, according to Samir Qabbani, a member of the agricultural committee at the Riyadh Chamber of Commerce and Industry and an agricultural consultant.
The strategy was submitted to Custodian of the Two Holy Mosques for his approval. It is currently being studied by the Supreme Economic Council, according to a report published in a local newspaper on Friday.”

Meanwhile, the partial wheat phase-out has not decreased water consumption as farmers switch from wheat to even more water consuming alfalfa which is needed for the Kingdom’s expanding dairy industry.…..

Sukuks, Savola and Milk

Saudi food conglomerate Savola is issuing an Islamic bond (sukuk) with a maturity of  seven years.

Savola is the largest sugar refiner in the Middle East but also has a 36.5 percent stake in Saudi dairy producer Almarai.

Bloomberg Business Week recently ran a good profile on Almarai  and its founder and major shareholder Prince Sultan bin Mohammed bin Saud al-Kabeer. The story pointed to the importance of feedstock imports from Argentina.

It seems that the expansion plans of the Saudi dairy industry are backed up by financial prowess.

Saudi milk production rising amid water concerns

Saudi Arabia’s dairy industry is bucking the trend of agricultural downsizing: Wheat production is declining and will be phased-out by 2016 (if everything is going according to plans and rearguard fights of ago-lobbies notwithstanding).

Milk production however is rising and will grow 27.2 percent to 2.4mn tons by 2016/17.

A motion by the Saudi Majlis al-Shoura some time ago was opposed by the Ministry of Agriculture which tends to represent the water guzzling agro-industry, which is often in royal hands like the leading dairy producer Almarai.

The argument was that dairy production is not water intensive because it uses imported feedstock like barley. This of course conveniently overlooked the water consumption for green fodder (mainly alfalfa) and for raising the cattle itself (drinking water, cleaning the stables etc.).

Interests are vested and the phasing-out of wheat production will not mean a reduction of water consumption if dairy production and associated green fodder production keeps rising.