An interesting article in Arab News, explains some facets of Saudi Arabia’s current agricultural policy.
The state-owned Agricultural Development Fund has launched a seven-point initiative that includes the establishment of an agricultural information center, water conservation in irrigation, the outsourcing of wheat and fodder production, marketing infrastructure for vegetables, fruits and fish, cooperative insurance for livestock sector, especially poultry and a cattle breeding company.
Minister of Agriculture Balghunaim complains that expansion of vegetables and poultry production has lagged behind. While self-sufficiency in eggs has been achieved, the ratio for poultry is only 42 percent for vegetables 85 percent. The Syrian civil war has led to supply disruptions from a traditional supplier, but they can be sourced elsewhere, for example from Morocco in the case of tomatoes as the minister explained.
The UK government has not granted permission to Shell to pay outstanding debt it owes to Iran in food and pharmaceuticals.
Shell owes Iran $2.3 billion on earlier oil deals and has an interest to repay this debt to maintain good relations with the OPEC producer.
As financial sanctions prevent payment in cash Shell sorted out possible barter deals with British pharmaceutical company GSK and global grain trader Cargill. Iran is already trading part of its oil in barter deals with Pakistan or against non-convertible Rupees in the the case of India.
Food has been exempted from Iranian sanction regimes, yet Iran switched from the US to Australia as a major supplier at the height of the hostage crisis in 1979 out of fear of US food boycotts as I outline in chapter 4 of Oil for Food.
As a result of droughts Iran has increasingly resorted to food imports in recent years, also from the US of all things. This happened despite efforts at self-sufficiency, particularly in wheat.
While Iran managed to increase wheat production in the 2000s, this happened at the expense of other food items like vegetables and meat that witnessed an import boom.
Self-sufficiency remains elusive and the country continues to e dependent on grain imports, which it regards as a strategic liability in light of the current sanction regime.
Saudi Arabia has seen a number of new initiatives that aim to use water more efficiently.
Degremont, the water-treatment unit of Suez Environnement (SEV) has won a $52 million contract. It will desalinate brackish groundwater to produce drinking water for 3,000 households in the Riyadh area that have been hitherto supplied by water trucks.
As water tables sink and one has to drill deeper and deeper into aquifers, desalination is not only needed for sea water but also for increasingly brackish groundwater. As far as such water is used for agriculture there is a direct trade-off between water security and the demands of subsidized food production.
In another development, the Precision Agriculture Research Chair (PARC) of King Saud University (KSU) is implementing a research project funded by King Abdulaziz City for Science and Technology (KACST) under the National Plan for Science and Technology (NPST). The goal is to use water, fertilizer and pesticides more efficiently with the help of drip irrigation and precision farming.
On two pilot farms in Haradh and Al-Kharj water savings for wheat amount to 30 percent and for alfalfa to 20 percent. While this is laudable it has to be kept in mind that even then water consumption of the two crops is prodigious, particularly for alfalfa which can be planted year round and needs about five times more water than wheat.
Water efficiency gains are not an alternative to reduce these crops and focus on more value added crops like vegetables that can be grown in green houses. This is the focus of a third project of PARC on the “Use of saline water for tomato production in hydroponic green houses”.
The UAE has launched a new aquaponics projects with the help of the Khalifa Fund. It combines tilapia aquaculture with vegetable hydroponics by using the waste of the fish as fertilizer.
While wheat production is being phased out in Saudi Arabia there are growth areas in Gulf agriculture, like organic farming and indoor vegetables.
The Gulf also solidifies its position as a major fertilizer producer for global agricultural markets. This is not only true for nitrogen based fertilizer like ammonia and urea that is gained from natural gas, but also for the Al-Jalamid phosphate project, which has started to produce and aims at a 10 percent market share of globally traded Diammonium Phosphate (DAP) fertilizer.
Phosphates are now the focus of Saudi Arabia’s largest mining company Maaden and make up 60 percent of its value according to a research report of Al Rajhi Capital.
On a global level it needs to be noted that the Middle East holds the vast majority of global phosphorus/ phosphates reserves. Fears of a ‘peak phosphate’ by as early as the 2030s have been overblown after the massive upgrade of the Moroccan reserve base, first by the International Fertilizer Development Center and then by the US Geological Survey. Morocco now holds over three quarters of global phosphorus reserves according to the new estimates.
Like Jordan, which also holds considerable reserves, Morocco has been offered GCC membership in the wake of the Arab spring. While this was about politically strengthening Arab monarchies, it is conceivable that Middle Eastern countries might use their fertilizer production in the future to foster relations with agricultural producer countries and improve their food supply security.
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.
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.”