Both public and private sector investors in the Gulf are also looking at ways to improve local food supplies, by investing in a range of outlets from arable farm land in the Sudan, Algeria and Pakistan to introduce new technology to enhance the local production of foodstuffs and grains, livestock, poultry and fish.
Globalisation has taken yet another twist with some Middle Eastern countries deciding to grow their crops in other countries.
The Dubai-based think-tank Gulf Research Centre, in its food inflation report released last month, noted that agriculture production in the six-member Gulf Cooperation Council’s (GCC) countries is on the decline, and its exposure to unstable global food supplies would increase in the future. It called on the GCC to develop links with countries rich in arable land.
The UAE and its food-importing neighbours are “particularly vulnerable” to spiralling costs and should make significant investments in “contract farming” in Africa and Asia, says the UN’s Gulf food chief, Dr Kayan Jaff.
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.
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.
The Government is considering the purchase of farmland worth US$500 million (Dh1.8 billion) in Pakistan as part of a strategy to lower food import costs.
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.
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.
Talks aimed at acquiring large agricultural plots of land in Pakistan were not expected to yield results any time soon, a senior Pakistani government official has said.
Dubai-based Abraaj Capital, one of the Middle East’s largest private equity companies, has been quietly buying farmland in Pakistan as part of plans by the United Arab Emirates to increase food security and to damp inflation.
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