Arab world needs $144bn to meet food needs

| 10/05/2010 | Reply

FOOD CONCERN: Food security became a major issue in the Arab world  since 2008 when food prices soared in the global market. (Getty  Images)Arab countries need to invest $144 billion in agriculture between now and 2030 to meet the demand for food for their growing populations, said an Arab official. Food security became a major issue in the Arab world since 2008 when food prices soared in the global market.

Arab states need to secure half of this amount from private investors to meet the demand of the combined population that is expected to reach 550 million in 2030, said Tareq Al Zadjali, director general of the Arab Organisation for Agriculture Development in an interview in Jeddah this week.

Al-Zadjali said the gap in the Arab world will reach $71 billion in 2030 and without encouraging business to increase investment it can’t be narrowed.

“The private investors need ready infrastructure and Arab countries need to develop that to attract them,” he added. “I don’t expect investors to build electricity stations, grains silos, and ports. This is the responsibility of governments.”

Al-Zadjali said these investments will allow for producing as much as 93 percent of the demand for grains within the Arab world; and 81 percent of the demand for sugar crops and 69 percent of that for oil seeds.

“I’m not expecting us to attract $144 billion in investments but if we attracted 75 percent of that sum then our plan will still work,” he added.

Food security became a major issue in the Arab world since 2008 when food prices soared in the global market. Many exporting nations gave priorities to feed their nations even as Arab countries had the money to buy from abroad, al-Zadjali said.

Since then Gulf countries such as Saudi Arabia and the United Arab Emirates developed plans to buy farms abroad in Asian and African countries to export food back home. Al-Zadjali wants to see more Arabs investing in agriculture within the Arab worlds’ borders.

African land grab not a cure to Arab food concerns

As desertification dries up farmland across the Arab world, the region’s governments cannot remedy concerns about food security solely by looking to Africa for agricultural production, a regional expert said.

Desertification threatens 20 percent of the already dry Middle East and North Africa, pushing many states to invest in African farmland to feed growing populations, said Wadid Erian of the Arab Centre for the Studies of Arid Zones and Dry Lands.

Dwindling arable land and mounting food insecurity could exacerbate existing conflicts and deter investment in a region where economic marginalisation has long driven unrest.

“Desertification is creeping fast and our response needs to match the pace,” Erian, who heads the centre’s Land Resources Studies Program, said in a recent interview.

“The question we need to be asking is whether using (African) land is a sustainable long-term solution,” he said.

Climate change, burgeoning populations and poor land management have contributed to accelerating desertification, exacerbating Arab countries’ food supply problems. Across Arab states and Africa, Erian said, investment worth at least $60 billion is needed to secure sufficient food supplies.

“We expect that if climate change and desertification continue at this pace, in the next five years, we will not have enough food to supply demand,” Erian said.

Desertification is expected to take a heavy toll in Egypt, the most populous Arab nation, where most of the country’s 77 million people are crammed into a strip of productive land along the banks of the Nile river and in its fertile delta.

Egypt, already the world’s largest wheat importer, is hoping that private firms signing farmland deals in Africa will ensure steady grain supplies when world markets spiral.

Countries such as Saudi Arabia, Qatar, Egypt, Libya, Syria and Jordan have invested heavily in Sudan, the region’s “bread basket” with its heavy rainfall.

But “land grabbing” in Africa, without ensuring local populations in the world’s hungriest continent reap any benefit, is not the sole long-term answer, Erian said.

There is a danger that such investment opportunities will obscure the need for clear policies and funding to combat desertification at home – and long-term plans for managing the situation, Erian said.

In a region where lushly irrigated golf courses coexist with sweeping deserts and chronic water shortages, a lack of environmental consciousness has made things worse.

Improving environmental management and investing in technology in the agriculture sector will boost investor confidence and attract desperately needed funding for desertification research, Erian said.

Yet costly investments, whose benefits may not be visible for years to come, are often left on the back burner in a region where many states cannot provide for citizens’ basic needs.

“An ounce of prevention is worth a pound of cure,” Erian said. “We cannot continue to deny the elephant in the room.”

Sources: Bloomberg/Reuters

Category: Agriculture, Finance & Investment, Saudi Arabia

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