Saudi moves mirror Arab food security issues
A report published recently in this paper on the Kingdom’s decision to stop producing wheat locally and depend on imports mirrors the regional issue of food security and the need to tackle it on that level.
The Kingdom is in effect canceling a three-decade long program to attain self-sufficiency in this strategic commodity, Waleed El-Khereji, head of the Grains and Silos Flour Management Organization (GSFMO), told Arab News.
Wheat has been used as a tool in various formats in world politics and Egypt, with its preferential purchase program with the US, remains a vivid example of this practice.
That political aspect was one of the main driving factors that pushed the Kingdom earlier in the 1980s to start this domestic program to avoid political pressures, making use of its financial resources to encourage farmers to grow wheat locally.
However, over time the main worry impacted that program on the ground water, which is formulated over a longer span of time, over decades and decades. And the decision was to start a gradual phase out program. In two years’ time, the Kingdom will stop purchasing domestically produced wheat and the following year, or in 2016, the country will be a net wheat importer.
Last year, for instance, wheat totaling 770,000 kg was bought from farmers and the figure is expected to cross 800,000 kg this year.
The Kingdom’s policy was not restricted only to wheat or to reduce gradually its local plantation and shifting to imports. Rather it falls within the broader headline of food security, which was adopting other measures like establishing a fund to help finance agriculture in other countries for some crops needed by the Saudi market. Some of the fruits of this program have started to flow already.
But what is happening in the Kingdom is more or less reflecting what is happening in most of the rest of the region.
The 2008 financial crisis, which turned economic, was accompanied by food crisis, where prices reached a record high and though they have declined since then, it is clear price fluctuations up and down seem to be the norm that could easily be repeated with dire consequences.
The Arab countries are divided into three segments as far as income is concerned — those with high income, middle income and and the poor. And though those in the middle and low income camps are more open to help, the problem remains even for those with good purchasing power.
That is why a more comprehensive and holistic approach is needed for the region as such because the challenges are the same facing different countries at different degrees given the growth of population, income and urbanization that lead one way — toward increased food consumption, wheat in particular.
The Arab world is known to be one of the highest regions in terms of population growth with an average rate of 1.9 percent against a world average of 1.2 percent.
Wheat and food generally involves water and the Arab region has a worrisome picture in this respect given the scarcity of fresh water in the region.
The stress of scarcity of fresh water for domestic production has been rising at an alarming rate and accordingly some figures show that the per capita rate has dropped by 75 percent since 1950.
To complicate matters further, almost two-thirds are border crossing water supplies. And the political dimension and disputes in the region add to make the picture gloomier.
In addition there are limited chances of expanding agriculture to boost domestic production within the region. Land expansion growth is put at 1.7 percent on average in the Arab world, against a world average of 2.3 percent expansion rate.
However, the brighter spot was Sudan, which in the decade between 1995 and 2005 registered a 6.7 percent expansion rate. But since then, part of the country has separated to establish the newest nation on earth called South Sudan. That in effect reduces Sudan’s ability to expand in utilizing arable land, though the country continues to be an important place in this regard.
This raises the issue of increasing productivity, which involves a host of issues. High on the list is the transportation as food supplies are going to be imported either from within the region or outside it. And with transportation other problems arise like fuel, storage and insurance.
Earlier this year, Riyadh hosted the third Arab economic summit, which discussed among many issues, increasing the capital for a number of pan Arab economic organizations and how to further improve the environment for the private sector to lead the way in the region’s economic activity.
That is a step in the right direction providing the needed political will and organization framework to make a breakthrough but still more push is needed to make things happen, not just paper recommendations.
- RIP: King Abdullah leaves behind profound legacy for the Saudi Economy
- Impetus from within: why the Arab World needs a very Arab 'Marshall Plan'
- 'Fiscal juggling': just how many economic priorities will Saudi Arabia's new King have to focus on?
- Despite Erdogan's 'harsh rhetoric', Turkish-Israeli is still booming
- UAE is best MidEast economy for attracting talent, index says