SA, Saudi co-operate on food security

MoneyBiz (South Africa) | 24 February 2009

Neels Blom and Hopewell Radebe

Saudi Arabia intends investing in farming in SA, the Saudi commerce and industry minister, Abdulla Ahmed Zeinal Ali Reza, told a joint economic commission on Monday.

Saudi Arabia’s investment would be a long-term prospect and could involve importing produce from SA and exporting skills to SA.

Trade and Industry Minister Mandisi Mpahlwa said SA and Saudi Arabia had a shared concern over food security, which created opportunities for them.

“SA needs to look at exploiting certain needs in the Saudi market, and should perhaps grow certain agricultural products that are in demand in that country,” he said.

Reza said Saudi Arabia looked at Africa not only as a place where products could be harvested, but as a partner in the fight for food security. He said Saudi farmers had managed to establish special techniques for growing more maize per hectare, and that Saudi had much to offer the world in the agricultural sector.

“We have so far received great interest from African countries,” he said.

SA has been a net food importer since about 2000 and the country’s agricultural capacity is under strain to meet its transformation objectives.

Farmers in SA are also under strain to remain competitive as a growing number of its trading partners raise subsidies.

Last month, Argentina announced it would stop wheat exports because of its own food security concerns.

That means SA has to find new sources of wheat on the world market to supplement its own production, which fell after poor seasons in Western Cape and Free State.

Commercial farmers’ union AgriSA’s executive director Hans van der Merwe said yesterday that the agricultural sector needed investment, but in infrastructure development and in adding value to produce.

He said such investment would help the entry of land-reform beneficiaries into commercial agriculture.

SA’s land and agrarian reform programme is behind schedule and emerging farmers have thus far failed to add significantly to agricultural production. Van der Merwe said the global financial and food-price crises meant there would be increased pressure on rural areas and agricultural production, particularly since many more people would have to rely on subsistence farming to survive.

It is not clear yet whether any envisaged Saudi investment would involve land. The agriculture and land affairs department has not yet been notified of the Saudi intentions.

The chief director for bilateral economic relations in the trade and industry department, Victor Mashabela, said SA would be one of 40 countries identified by Saudi Arabia to establish joint ventures between its agribusiness sector and local farmers or industry.

The idea was to expand Saudi Arabia’s food security because of that country’s arid climate conditions and the threat posed by the climate change.

Mashabela said Saudi Arabia had developed agricultural technology that could improve the efficiency of land use that would increase productivity.

“They believe that by sharing the technology and encouraging joint agricultural business ventures, this will also go a long way towards guaranteeing their food security concerns.”

Mashabela said the two ministers would establish a political platform over the next months that would enable businesses to share experience and technology and to explore business ventures.

“We are still at the initial stages of the discussions and the details will be available as the negotiations progresses.”

He said if the two countries benefited, the platform was likely to be expanded into the Southern African Development Community.

SA’s exports to Saudi Arabia have almost doubled since 2003, from R1,256bn to R2,4bn in 2007, while imports from Saudi Arabia rose from R15,054bn in 2003 to R25,3bn in 2007.

Areas identified as being of interest in the SA-Saudi bilateral relationship included agricultural processing, construction, fishing, chemicals, boat building, metals and allied industries, electronics and information technology, mining and capital equipment, the trade and industry department said. With Sapa
Original source: Moneybiz (South Africa)

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