Alfalfa, Wheat and Water in Saudi Arabia

Courtesy of Robin Willoughby  of Chatham House in London I have come across this interesting study about the water consumption of different crops in Saudi Arabia.

It was conducted by researchers of King Saud University on a research farm of King Abdul-Aziz University in Hoda Al-Sham in the Makkah area.

Like this earlier article in Al-Eqtisadiyah that is referencing a study of King Saud University it finds that alfalfa cultivation needs about four times more water on any given piece of land than wheat.

The wheat phase-out of the government has thus led to increased water consumption if farmers switched to alfalfa. In off-the cuff estimates some farmers put the  water consumption of alfalfa even at five times higher and above in the hot summer months as I write in Oil for Food on pp. 87-88.

The increased water consumption is mainly due to all year round cultivation of alfalfa (which is essentially not uprooted, but only cut to let it grow again), while wheat is only cultivated 4 months in the winter. In addition, alfalfa plants also need about 20% more water than wheat:

The Evapotranspiration (ET) figures for wheat on p. 199 of the study and for alfalfa on p. 201 show this clearly:

Wheat: Period planted: 120 days, average ET per day: 3.87 mm, total ET over the year: 498,2 mm
Alfalfa: Period planted: 363 days, average ET per day 4.94mm, total ET over the year: 1922, 50 mm

Thus the increased water consumption of alfalfa according to this study is mainly due to all year long cultivation, but also due to an ET that is 20% higher than wheat. If Saudi Arabia really wants to save water, it will need to address alfalfa production and the continuous expansion of its dairy industry that requires it as feedstock.

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.

Chicken and Sheep Prices up in Saudi Arabia

The Saudi Minister of Agriculture Fahd Balghunaim expects meat and chicken prices to remain on elevated levels due to the rise in feedstock costs.

He encouraged Saudi consumers to switch from overpriced local sheep varieties to imported ones from Australia or Somalia and argued that quality differences between them were rather perceived than real.

Self-sufficiency in chicken production stays at 45 percent. A massive expansion program is planned. Like dairy production and unlike wheat which is being phased out until 2016, chicken production is slated for expansion.

Antibiotics are a common phenomenon in chicken production globally but seems to be frowned upon in Saudi Arabia, at least in theory. The Minister said:“I swear by Allah that our chickens are hormone and antibiotics free.”

Saudi Milk Production: Expansion and Feedstock Worries

Saudi dairy giant Almarai, which has farms with 135,000 cows is concerned about rising feed prices, especially corn and soybeans.

It plans further expansion, even though the Saudi dairy industry has been attacked by a motion of the Majlis al-Shoura for its high water needs in the past.

This could lead to an increased interest in outsourcing water intensive production of green fodder like alfalfa. Almarai already acquired an Argentinian farm earlier this year.

Vitamin D, Sunlight, and Lamborghinis: A Different Kind of Food Security Problem in the Gulf

Some time ago Abdul Rahman Al Sultan quipped in an op-ed in  ‘ Al-Ru’ya al-Iqtisadiyya that listening to GCC politicians he would have  the feeling he was living in “Bangladesh or Chad”.  After all there was enough food and Gulf countries had the money to buy it on world markets albeit possibly at a higher price he argued.

There seem to be indeed more pressing food security issues in the Gulf than the hypothetical war or crises situations that politicians plan for when debating food security.

These problems stem from an abundance of calories, not lack thereof. The Gulf countries have one of the highest obesity and diabetes rates per capita in the world (around a third and 13 percent respectively) as Alpen Capital pointed out in a report in 2011.

Weight loss surgeries are on the rise. “Because of my weight, I could not sit in the car of my dreams. Now I feel my Lamborghini is approaching,” said one patient in the UAE after undergoing bariatric operation.

There is clearly a need to improve diets in the Gulf by awareness campaigns and taxing unhealthy fast food.

Sweetened beverages and fast food have also been blamed for calcium and Vitamin D deficiencies, beside lacking exposure to sunlight.

Vitamin D deficiency is gender specific. It reaches 70 percent among Saudi women and 40 percent among Saudi male as an article in Nature recently found out.

Beside increased exposure to sunlight it could be treated by increased consumption of dairy products and drinks instead of sweetened beverages. More fish and dairy consumption would also tackle the calcium deficiency and the increased occurrence of osteoporosis.

The food security challenge in the Gulf often has unexpected angles and solutions to it might be found on a less geo-strategic plane than is often assumed.

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.