The continuing growth of the Saudi Arabian livestock market has encouraged farmers and livestock producers to expand their production of fodder crops and increase the importation of feed grains, such as barley.
As demand for meat and meat products increases, consequently the need to hike production of animal feeds is also growing. There has been an unprecedented high demand for livestock products due to the steady growth of the Kingdom's population, plus the over three million pilgrims and transit visitors who enter the country annually.
These demands, coupled with the requirement of sacrificial meat during religious occasions, have convinced livestock producers and farmers to increase their acreage for the production of animal feeds, such as alfalfa.
Despite the current water conservation program of the government that has affected the production of alfalfa and other fodder crops that require high usage of non-renewable aquifer water, farmers have been trying their best to increase their production of local animal feeds.
In 2003, total production of alfalfa, according to the latest official statistics of the Ministry of Agriculture and Water, amounted to 1,787,124 tons, which was produced in 131,721 hectares. These figures are higher than the 2002 alfalfa production of 1,737,944 tons, which were harvested from 130,758 hectares.
There is no official available figure released by the Ministry of Agriculture and Water for the year 2004 production of alfalfa and the corresponding hectares. Industry sources said, however, that production in 2004 is expected to surpass the output in the previous years.
Riyadh region remains the biggest producers of alfalfa crop, followed by Qassim, Al Jouf, Tabuk, and Hail. The Riyadh region produced 776,043 tons of alfalfa in 2003, which were harvested from 54,459 hectares.
Prior to the government's imposition of the water conservation program, which affected animal feeds productivity of farmers, the year 1999 was the boom period for the production of alfalfa with total output of 2,178,460 tons and harvested from 161,140 hectares.
Looking at the overall production of all fodder crops in the Kingdom, the trend has been on the downward movement due to the strict implementation of the government program on water conservation. Since 1999, the land for fodder crops has been decreasing: from 250,705 hectares in 1999 to 204,757 hectares in 2003. In term of fodder crops production, the decline was from 3,600,648 tons in 1999 to 2,651,993 tons in 2003.
The decline in the production of all fodder crops, however, has not affected the livestock industry as importation of feed grains increased. Also, the production of other fodder crops, other than the traditional ones, is also on the rise. In 2003, for example, the Kingdom produced 864,869 tons of other fodder crops, which were harvested from 73,036 hectares.
Although the production of local fodder crops, such as alfalfa, has remained steady to meet the demand of local livestock producers, the importation of feed grains, such as barley has also been increasing. This has developed despite the reduction of the government subsidy on the importation of barley. In June last year, the Ministry of Commerce issued a circular to local barley importers informing them of the fixing of government subsidy on imported barley to not less than SR.150 or $40 per metric ton regardless of the prevailing international barley market price. The current subsidy level of $66 per metric ton is now in place.
Saudi Arabia is considered the world's single largest consumer of barley, which is mostly used as feed for the Kingdom's sheep, goats and camels. For years, Saudi livestock farmers, having tested other substitute feeds, still consider barley the most economical and effective animal feed.
Importation of barley is expected to rise as the government has withdrawn its supports for the local production of barley. "While no clear signals have been provided about the likelihood of future subsidies, it is more likely that imports will tend towards the higher rather than lower levels in the future," said Mr. Ahmed Al Sani, General Manager of United Feed Company, during his address at the Grains Week 2005 Conference in Brisbane, Australia in April this year.
United Feed Company is a major importer of feed barley from Australia, EU and other East European countries, Russia, Canada and Turkey. Saudi Arabia imports about 5.5 million tons of feed barley annually, although official government statistics place this volume lower. The latest official barley import figures was 4,040,743 tons for the year 2003, which was valued at over SR 2.495 billion.
The biggest supplier was Ukraine, which exported to the Kingdom 1,116,871 tons valued at SR 695,769,000. The other top exporters of barley to the Kingdom in 2003 were as follows: Germany (789,640 tons), Russia (673,556 tons), France (547,759 tons), Holland (323,176 tons), Australia (74,213 tons), Switzerland (70,560 tons), Sweden (59,110 tons), Syria (53,580 tons), United Kingdom (51,373 tons), Finland (49,742 tons), Kazakhstan (48,356 tons), Romania (24,450 tons), and Yemen (237 tons). Other exporting countries supplied the Kingdom with 158,118 tons. The Grain Silos and Flour Mills Organization (GSFMO) has played a key role in stabilizing agricultural and animal resources development in the Kingdom by maintaining strategic stockpile of wheat sufficient to meet contingencies for six-month period.
The GSFMO silos have storage capacity of 2.38 million tons. The flourmills produce wheat flour, bran, and animal feeds. In year 2002, for example, the flourmills produced 1.52 million tons of flour, 557 thousand tons of bran, and 69 thousand tons of animal feeds. During the same period, GSFMO purchased from local producers 2.14 million tons of wheat and 130,400 tons of barley.
The government is determined to support the local livestock industry, which has stabilized supply and demand for dairy and associated products, by providing all the incentives that would ensure steady animal feed requirements of livestock producers. Importers of feed grains, like barley, are given access to the world market. Local producers of wheat, barley and other fodder products still receive government support through corrective agricultural policies by providing farmers with direct subsidies needed to attain and ensure self-sufficiencies for both livestock and feeds producers.
© Saudi Commerce and Economic Review 2005
