Recent attempts by Persian Gulf countries to invest in farmlands abroad to counter soaring inflation and guarantee long-term food security could prove to be a win-win situation in the short term for both the oil-rich region and its investment-hungry neighbors, but continued high oil prices may neutralize the gains in the long-run, say experts.
A new joint strategy for agricultural investment will be launched by the GCC soon, it was announced in Bahrain yesterday.
The Arabian Peninsula is currently flooded with petrodollars, giving the Gulf Arabs a wide array of investment options abroad. But while these countries are winners in the oil market, they are losers in the food market. As a result, the Gulf Arabs - with Saudi Arabia at the fore - are pursuing a strategy to buy their food security through overseas agribusiness investment.
The Saudi government announced that it would co-ordinate with local private-sector companies and invest in strategic agricultural interests in key producer countries such as Brazil, Ukraine, Thailand and India, guaranteeing for itself supplies of cereals, meat and vegetables. It is already in advanced negotiations with Thai investors and a deal on rice farms in Thailand is likely before the end of the year.
The Kingdom of Saudi Arabia is in talks with Sudan and other countries to grow grains to meet its strategic food needs.
Saudi Arabia has unveiled plans to develop large-scale overseas agricultural projects to secure food supplies, revealing that Riyadh is in discussions with Ukraine, Pakistan, Sudan, Turkey and Egypt.
Bahrain wants to invest in rice farmland in the Philippines, the world's top importer of the grain, in a move to boost food security as global food supplies become increasingly expensive, traders said on Wednesday.
To break the runaway inflation that is fuelled by high food costs, Gulf rulers have a new strategy: they are buying unused agricultural land in poor countries like Pakistan, Thailand and Sudan, and becoming large-scale farmers.
The Thai Farmers Association called on concerned agencies yesterday to look into land occupation by foreign businessmen, which has made many of the country's rice farmers landless.
Farmers and activists have opposed a plan for a business consortium from Saudi Arabia to invest in rice farming in Thailand. The scheme is said to be the creation of former prime minister Thaksin Shinawatra. Farmers fear they could lose their livelihood and rice farming could be held hostage by foreign investors.
Egypt, Jordan and Kuwait are among the Arab countries who invest in agriculture in Suda. Also there are some private Saudi investors working in this field in the country.
Pakistan’s agriculture sector has the potential to cater to the food requirements of the GCC region, which spends over $200 billion on farm imports.
|
Down on the farm, Saudi Arabia has a $9.8bn hole to fill
|
|
Iran to expand overseas farming to 2mln hectares by 2029
|
|
Avon Pension Fund to invest a further £150m in natural capital
|
|
Carbon Assets unveils $144m Jigawa wetland project
|
