17/11/2009
Food Security Plan Heralds a New Era in Saudi Agricultural Sector
By
Shamsul Huda
IN a fresh move, Saudi Arabia has adopted a new initiative to start producing a number of major agricultural products in foreign countries in order to save its most precious commodity—water-- under the food security program which mainly aims to encourage Kingdom's businessmen to consider investing abroad.
Businessmen and experts have described the program as a new era in the Saudi agricultural sector and unanimously supported it saying that there is no alternative to this initiative to reduce the consumption of water in the country. Although this program is in its infancy, they are hopeful of overall success of this program, but this success, they say, will mostly rely on full government support and its capability of influencing favorable terms and conditions for Saudi companies in foreign countries in which Kingdom's businessmen are now trying to invest for the cultivation of agricultural products which will be brought to the Kingdom.
Saudi Commerce and Economic Review interviewed a number of local business leaders and experts to seek their opinions on the food security program with the objective of supporting Saudi firms to take their decisions on their foreign investments.
Timely Initiative
"We must be careful and cautious before getting involved in investing overseas", observed Mr Tawfiq S. Al Rammah, President of the Al Khobar-based Al Rammah Holding Company, which has long been engaged in fish farming in the Kingdom and other foodstuff businesses. It is a new and timely idea undertaken by the government to encourage Saudi companies to go abroad for the production of agricultural commodities, he said adding that the success of this idea will depend on government support and on Saudi Arabia's relations on both trade and political fronts with foreign countries which are targeted by Saudi investors.
Mr Tawfiq S. Al Rammah
Mr. Al Rammah, who recently accompanied a high-level Saudi agricultural trade mission to Philippines, gave his practical experience in negotiations with his Filipino counterparts for possible investments there. "We are highly impressed with their offer of vast farming lands, plenty of water resources and available work force, but their terms and conditions have discouraged us badly," said Mr. Al Rammah, a member of the Saudi-Filipino Council.
The major inhibiting condition imposed by the Philippines government is that local producers of agricultural commodities particularly rice will not be allowed to export more than 20 percent of their products. Saudi investors found this condition unfavorable owing to the fact that prices of rice in the local market are cheaper than international markets.
Mr. Al Rammah, who is also a member of the Agriculture and Fisheries Committee of Asharqia Chamber, urged concerned authorities of the Saudi government to initiate negotiations through diplomatic channels in order to ease these terms and conditions and other security related issues for the Saudi investors. "It is only the government that can ensure safety and security and negotiate favorable terms and conditions for profitable farming by Saudi companies abroad", he said.
While talking about the major shift of the Saudi Agricultural Ministry on the foreign investments away from the local production, Mr. Al Rammah pointed out that it is due to consumption of huge quantity of water by the agricultural sector. "Our Agricultural sector consumes over 70 percent of the total water production and it has drastically depleted water levels in many parts of the country," he noted.
Misuse of Water
But he is very much concerned about the misuse of water, which he said, could be reduced significantly if proper awareness campaigns are undertaken by the government as well as by the social organizations. "There are lot of leakages seen rampantly in water supply pipes and there is also excessive use of water noticed in parks, gardens and agricultural fields, he said adding that this misuse of water must be stamped out in order to protect the flora and fauna in the country.
Saudi Arabia has made remarkable progress in fish farming, said Mr. Al Rammah, whose company has long been producing different kinds of fish, mainly tilapia, in its farm located at Al Awamiyyah in the Eastern Province. "Our fish farm is the oldest in the Kingdom built over an area of 40,000 square meters," he added.
According to statistics from the Ministry of Agriculture, Saudi Arabia's fish production in farms rose to over 15,586 tons in 2007, as compared to 15,531 tons in the previous year. In 2005, fish cultivation in farms was around 14,375 tons, followed by 11,172 tons in 2004 and 11,859 tons in 2003.
Kingdom's total fish production including fish catch in Arabian Gulf, Red Sea and in international waters and cultivation in private farms accounted for 81,069 tons in 2007. This compared to 67,300 tons in 2003, 66,591 tons in 2004, 74,785 tons in 2005 and 81,069 tons in 2006. There is bright potential for more shrimp catch and farming in both Arabian Gulf and Red sea waters, said Mr. Al Rammah.
But shrimp farming is only allowed in the Red Sea and not in the Arabian Gulf. When asked, Mr. Al Rammah, said that the reasons for this decision are unknown. He urged concerned authority to consider shrimp farming in the Arabian Gulf.
Fish Catch & Production: 2003-'07
Year
Prod. in farms
Catch in Int'l waters
Catch in Arabian Gulf
Catch in Red Sea
Total
2003
11,859
895
33,380
21,166
67,300
2004
11,172
10
34,961
20,448
66,591
2005
14,375
0
37,096
23,314
74,785
2006
15,531
0
42,038
23,435
81,004
2007
15,586
10
42,038
23,435
81,069
Remarkable Progress in Agriculture
Agricultural production in Saudi Arabia has reached nearly 10 million tons, making a remarkable progress. According to Agricultural Statistical Year Book published recently by the Ministry of Agriculture, the total output of agricultural products including various kinds of cereal crops, vegetables, fodder and fruits rose to 9.83 million tons in 2007. This shows a new peak in the production of agricultural produces when it compared to 9.1 million tons in 2003, followed by 9.7 million tons in 2004, 9.6 million tons in 2005 and 9.5 million tons in 2006.
This success in the Saudi agricultural sector was achieved despite a significant decline in the cultivable land following a government decision to discourage farmers in the production of water-intensive crops like wheat and barley. Although total production was up, cultivated land for these products went down to 1.07 million hectares in 2007, as compared to 1.21 million hectares in 2003. In 2006, total cultivated land was also 1.07 million hectares, but total production was 9.59 million tons, which was less by 0.24 million tons as compared to the output of 2007.This significant progress in the Saudi agricultural sector was possible due to massive participation of private sector companies in the production of various kinds of agricultural products with the use of latest technology and government's agricultural policies which have been aimed at encouraging farmers by providing them with soft and interest-free loans, distributing farm land and purchasing products from farmers at subsidized prices.
Saudi Agricultural Production: 2003-'07
(area in hectares, production in tons)
Products
2003
