Monday, June 11, 2012

the Arab land-grab

Dr Fahd bin Abdulrahman Balghunaim, minister for agriculture for Saudi Arabia explains Saudi  oil keeps the world turning, but the Kingdom is thirsty for water. For years, the government subsidised domestic food production to feed its 25 million population - supporting the production of around 3 million tonnes of wheat per year, along with barley and other crops - but the costs of irrigation are spiralling and the Saudi natural water supply dwindling. The sweltering, sandy expanse of Saudi Arabia does not boast a comparative advantage in agriculture.

The food price spikes of 2007-8 hit the government coffers hard. To quash its impact on welfare, the state increased government salaries, subsidised a basket of basic products including rice and baby milk, and cut import tariffs on 180 basic commodities. But these were shock absorbers. A longer term strategy was also launched, known as the King Abdullah Initiative, which supports Saudi investment in foreign land, especially for the production of rice, wheat, barley, corn, sugar, green fodders, and animal resources.

He says : "Food you can import, but water is very different.... We decided to lower our reliance on locally produced wheat [to be phased out by 2016]. The government said it will phase out buying wheat from local producers and go towards importing wheat from abroad".

Saudi investors identified around 30 destination countries worldwide - from Kazakhstan and Turkey to the Philippines and Vietnam. But Africa - a short ride over the Gulf of Aden - is arguably the most attractive. Africa also has the highest potential for increasing food production globally  In May 2009, the Saudi king headed a ceremony to receive the first batch of rice grown in Ethiopia, where Saudi investors spent $100 million to grow wheat, barley and rice on land leased to them by the Ethiopian government.

When asked whether Saudi land investment is causing dispossession, food insecurity or conflict in Africa, Dr Balghunaim responded in no uncertain terms. "I honestly didn't hear any complaint coming out of Africa...I never heard of even a single displacement. Never, from reliable sources...I assure you there are none whatsoever"


Also see here for more on the Arab land-grab

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