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Making food secure

By Ezdhar Ibrahim Ali
October 2011

Model agricultural city launched
90% of the country's food requirements are met by imports. The country's limited storage areas and packaging facilities increase its difficulty in obtaining a diverse mix of import as a result of which there are fluctuations in supply and price rise. The issue of food security has therefore been identified as an extremely important national priority and it is in this context that the agricultural city concept evolved.

Mohamed bin Ahmed Al-Obaidly, Chairman of the Qatar Chamber of Commerce and Industry 's ( QCCI ) Agriculture and Environment Committee, says the rea­son investors shy away from the agricultural sector is the difficulty of market­ing agricultural products and the high costs involved, compared to imports. He highlighted that the committee had put forth the idea of setting up a model Ag­ricultural City at the fifth annual consultative meeting with Prime Minister HE Sheikh Jassem bin Hamad bin Jabor Al-Thani.

The Agricultural City concept came out of studies done by the Agriculture and Environment Committee. The City was planned with the aim of ensuring food security in Qatar while caring for the environment. It also aims to market the Agricultural City as a tourist destination and create a number of agricul­tural-related industries. The idea was approved and is now in the early stages of development.

This was in context to the comprehensive development and building of a ro­bust and productive economy based on agriculture, industry, education, health and recycling investments while moving away from reliance on finite natural re­sources, construction and real estate, which are features of a primary economy.

In an exclusive interview with Qatar Today, he speaks about the challenges of this huge initiative.

What are the principal challenges fac­ing the agricultural sector in Qatar, and the reasons why it contributes to such a small share of GDP?

There are several factors behind the agri­culture sector's tiny contribution to GDP, which in 2010 was just QR534 million, or 0.04%. These include Qatar's harsh climate and high temperatures, which limit the growing season to short periods of the year, and the lack of rivers and lakes combined with low levels of rainfall. The upshot of all this is that Qatar ends up producing either crops that are tolerant of extreme heat and drought, such as date palms, or certain kinds of fruit, vegetables and flowers that can be expensively cultivated in greenhouses or polyhouses. The alternative is to make ag­ricultural investments abroad in countries where they have the necessary elements for such investment, such as Africa and some Asian countries, especially in view of ris­ing world prices for food commodities. Ag­riculture in Qatar also suffers from a lack of specialisation, which is one of the main problems for the sector.

Does investing in Arab countries for agricultural purposes make business sense?

Investing in Arab countries is not a profit­able investment. It is not just because of the political tensions. There's also the bureauc­racy, formalities, and investment laws that are centuries out of date, and the immatu­rity of the executive branches in Arab coun­tries. It is time the Arab states got their act together. The investments that have been made in other foreign countries are already yielding results, though they were made later than those in the Arab countries.

What solutions is the committee sug­gesting to address the obstacles faced by the agriculture sector?

The first solution the committee has pro­posed is specialisation. We're looking at ways of making the best use of the existing situation and non-independent farms. We can move them away from activities they're engaged in at present that have nothing to do with farming, although they give the same return, towards focusing on a single category of vegetables that can be marketed in a scientific way. This won't happen with­out expertise and resources being available. This comes under domestic food security in the event of any crisis occurring in the countries where we have invested.

There are a number of other challenges to which the Agriculture Committee could also give some thought, such as the reluc­tance of young people to work in the agri­cultural sector for social reasons, and the low level of private sector investment in farming, as well as the lack of local invest­ment in the agricultural sector.

Is it necessary to establish an agricul­tural bank in Qatar to finance agricul­tural investments?

I don't believe there is any necessity to set up an agricultural bank in Qatar at present since Qatar Development Bank (QDB) currently plays this role. Setting up an ag­ricultural bank isn't a simple process. It would require billions of riyals' worth of agricultural projects to justify the scale of investment, unless the bank expanded its operations to include international invest­ments and financing, in which case it would become economically viable and fit the phi­losophy of specialised agricultural banks in other countries with vast expanses of agri­cultural land.

Is it true that Qatari banks are reluc­tant to finance agricultural projects and investors in the agriculture sector?

Financing is a thorny issue, and we can't blame the farmers for that. The commer­cial banks aren't interested in agricultural finance because they feel profit margins are small and risks are high. We will be raising farmers' and investors' financing problems again with QDB, whose role it is to deal with them. Farmers complain about QDB's maximum financing limit of QR1 million, which is inadequate for the purposes of ag­ricultural projects. I do hope any farmers with specific complaints will come to the Agriculture and Environment Commit­tee at QCCI , as we welcome all complaints and for our part will investigate them thor­oughly and try to resolve them.

We recently sent out 2,000 question­naires to businessmen, investors and farmers about the agricultural sector and only 20 investors replied, most of them members of the Agriculture and Environ­ment Committee, which shows how little interest there is among investors.

Which organisation is responsible for preparing a full study of the Agriculture City project?

The Agricultural City idea is still only at the beginning of its journey. We have done some studies that need to be taken further. There are specialist studies being under­taken by the Agriculture and Environment Committee, Ministries of Environment, Municipality and Urban Planning; busi­nessmen and specialists in the agricultural field, looking at all the problems associated with the project to put in place a sophisti­cated mechanism to safeguard the rights of new and existing farmers and consumers. It will be discussed at future meetings of the committee to find the best ways of realis­ing the concept. There will be consultation with the relevant official bodies. There is a whole value-chain from production to processing to exports that is being formu­lated.

Will QCCI be directly responsible for the project?

The project is a joint venture and decisions will be made by the higher authorities. QCCI cannot implement it on its own, but will have a big hand in working for the success of the project, as it is its own brainchild.

Have you carried out any studies to identify a site for Agriculture City? And what conditions will the site have to meet?

We have done some research to try and des­ignate land where the city can be set up close to the ports and the industrial area, and al­though it will be difficult to balance all these requirements, it will nevertheless need ac­cess to transport links. It will use high-tech polyhouses to create model farms for veg­etables, ornamental trees and certain fruits and crops for daily consumption that don't need vast amounts of space, and will run on renewable energy. Agriculture City will also engage in livestock rearing and fish farming, and will have markets for the distribution of produce. There will be storage facilities on site so as to avoid having to transport per­ishable produce elsewhere, with the aim of getting it safely to consumers in accordance with health and safety requirements. We are also looking at setting up food processing plants in collaboration with global brands to produce - what in international terms will be - Qatari products.

How will this enormous project be financed?

The project will have its own foundation set-up. As we said, it's a national joint-venture (JV) between the public and pri­vate sectors, with the state as the main stakeholder - since the return will be seen in the long term, in the form of food secu­rity - and it will be based on the principle of active partnership between the private and public sectors. Agriculture City will benefit from foreign investment in technology, the founding of research and development cen­tres and the hybridisation of agricultural products on behalf of the State of Qatar.

How long do you think it will take for the concept to materialise and see the light of day?

Internationally, several organisations have indicated a desire to invest and get involved in developing food processing services and technology for power generation and poly­houses. I wouldn't like to put an exact time on it, but I hope the idea will be implement­ed soon.

Will the project run separately with Hassad Food Company's work in this area, or in cooperation with it?

The project will be complementary to Has­sad's investments to ensure food security, and we will draw on its broad expertise in agricultural investment and the practicali­ties of land reclamation. The company is an active partner and we hope its partici­pation will contribute to the success of the project.

Will Mawashi (Qatar Meat and Live­stock Company) be merging with the project, or will it operate in parallel to meet shortfalls in demand for meat and meat products?

Mawashi shares the concept with us and is represented on the Agriculture and Envi­ronment Committee, but Hassad is now in the process of taking over Mawashi, which will become just a distributor of Hassad's output.

What about the existing farms? How will they be involved?

The project will not replace farms currently in production. They will complement it and benefit from the technology used by the project, which will itself gain advantage from the locations of such farms.

Qatar has very little water resourc­es. How will you tackle this water shortage?

The project will make use of technology to desalinate seawater using renewable ener­gy, and recycle sewage water, which will in turn increase the fertility of the soil.

Do you think technology can solve all the problems of the agriculture sector?

The main problem faced by the agricultural sector in Qatar is the salinity of its soil and water. It can't produce enough food, or even any worthwhile supplement, so most of the food we consume comes from abroad. There is therefore no alternative but to use tech­nology and modern methods of cultivation to diversify sources of supply and water.

A firm called Aquiess claims to have the technology to generate rains. What do you think of it, and would you make use of it in the Agriculture City project?

I have no idea about the scheme. We wouldn't want it to be tested here unless it is proved successful in other countries. We don't want any hype, but although there has been no suggestion of using it in the Agricul­ture City project, as artificial rain-making is normally done on huge farms covering vast, open areas, Qatar would of course benefit if the technology is successful in making the weather less harsh, especially in the summer.

© Qatar Today 2011

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