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Saudis told to invest in food production ventures abroad

DAMMAM - The Asharqia Chamber in the Eastern Province has sent a circular to all businessmen in the region to invest in agriculture projects overseas following a government directive that the private business sector should undertake agricultural production ventures abroad.

"The objective is to achieve long-term food security for Saudi Arabia and secure a continuous supply of food to the Kingdom at low and fair prices," said Adnan A. Al-Naeim, Secretary General of the Asharqia Chamber in the Eastern Province.

He said that in addition to Saudi businessmen investing in food production ventures, such as rice planting and fisheries projects, the government is also negotiating on a bilateral basis with foreign countries to secure a food supply. According to Naeim, negotiations for the joint venture production of rice and other staple grains are currently underway between Saudi investors and their overseas counterparts in Pakistan, India, Sudan, Turkey, Kazakhstan, and Asian countries, such as, Thailand, Indonesia, and the Philippines. "Some joint venture projects are in their initial stages, but certainly collaborations are moving," he said.

Increasing costs in food production inputs, strategic problems in water supply, and speculative purchases of staple food have led to the decision by the government that by the end of 2015, the Kingdom will depend entirely on cereal imports. Last year, Saudi Arabia imported 960,000 tons of rice, making it the world's sixth biggest rice importer, according to US Department of Agriculture data.

Other GCC countries are also facing the same food security problem. Countries like Bahrain, which has no agricultural production, is now negotiating with the Philippine government and individual Filipino investors to establish long-term food production ventures.

A memorandum of agreement was also signed between the Bahrain Chamber of Commerce and Industry and the Philippine Chamber of Commerce and Industry to jointly pursue food production collaboration between Bahraini businessmen and investors and their Filipino counterparts.

Bahrain, for example, is investing $12 million in an aquaculture project in Davao, Philippines. Investments in fresh water fishery projects are also being considered in many parts of the Philippines, which have huge potential for fish production ventures.

Saudi Arabia has already launched a major food security initiative, in cooperation with the International Fund for Agricultural Development (IFAD), that has identified Lebanon, Yemen, Algeria, Senegal, Sudan, Morocco, Bosnia and Mauritania as countries to be covered under the initiative, which will secure food supplies and promote international peace and cooperation.

King Abdullah, Custodian of the Two Holy Mosques, has also agreed, as a food security measure, to meet the costs, estimated at $2.5 million, of the upcoming World Summit on Food Security to be held at the Food Agricultural Organization (FAO) headquarters in Rome from Nov. 16 to 18, according to an FAO announcement.

The summit was called by FAO to reverse the downward trend of investments in agriculture and return to the 1980 level of 17 percent of Official Development Assistance (ODA) with a view to eradicating hunger, which now affects one billion persons, and to double food production for a world population set to reach nine billion in 2050.

Heads of state and government of members of FAO and the UN are expected to attend the summit.

By Joe Avancena

© The Saudi Gazette 2009