Food crisis: Gulf nations to invest abroad in farming

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Food crisis: Gulf nations to invest abroad in farming
Commodity Online
ABUDHABI : It seems that oil rich Middle East nations finally began to face the realities of core issues such as food shortages that continued to affect common man around the world.

Faced with a scarcity of fertile land, water shortages and surging world food prices, wealthy Arab states in the Gulf are seeking to secure their food supplies by investing in agriculture abroad.

Saudi Arabia and the United Arab Emirates, the top food importers among Arab countries in the Gulf, are now looking to Asia and Africa as opportunities for agricultural investments.

UAE, which imports around 85 percent of its food, on Monday, expressed its desire to diversify its sources of food supplies in Kazakhstan.

Rapid growth fuelled by record oil revenues has triggered a huge influx of expatriates in the Gulf, steadily boosting populations and stretching the ability to meet demand for mostly imported foodstuffs.

The total population of the six members of the Gulf Cooperation Council, Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE, rose from around 30 million in 2000 to more than 35 million in 2006, according to GCC statistics.

Although these nations have huge oil reserves they are among the world's poorest in natural water resources and arable land, just two percent of the vast Saudi desert kingdom and one percent of the UAE.

GCC food imports cost 10 billion dollars in 2007 with Saudi Arabia, with a population of about 24 million, remains the largest food importer.

Amid surging food prices and a fear of shortages caused by export bans from major crop-producing countries, GCC states now want food lifelines. For Saudi Arabia investing in agriculture abroad marks a shift from its own costly crop self-sufficiency scheme.

A number of GCC countries are looking at establishing agricultural ventures in nearby countries such as Sudan for this food security and as a cheaper alternative to domestic production.

One reported UAE project to develop more than 70,000 acres (28,328 hectares) of arable land in Sudan is in line with this strategy. Africa's largest country has abundant water resources including the Nile River, the world's longest.

But Sudanese agriculture remains massively underdeveloped, although it employs 80 percent of the workforce, with much of the population reliant on subsistence agriculture.

Egypt and Pakistan have also been targeted by Saudi Arabia and the UAE for food projects. Both Muslim countries have large expatriate communities in the Gulf that send home huge amounts of money annually.

In Pakistan, the UAE is considering buying more than 100,000 acres of farmland worth 500 million dollars, press reports said. But agricultural exporters including Egypt and Pakistan recently imposed export bans on certain crops after riots triggered by food shortages at home.