Gulf states show interest in Thai farms

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Struggling to cope with soaring food and fuel prices, Thai rice farmers are swapping diesel-fuelled tractors for water buffalo, the beasts used for ploughing the paddy fields for centuries. (Reuters, July 19, 2008)

Reuters | Monday June 8 2009

  • Gulf Arab states interested in Thai livestock, rice farms
  • Deals likely to be at government-to-government level
  • Private investors would need Thai partner

By Amena Bakr

DUBAI, June 8 (Reuters) - A number of Gulf states have expressed interest in livestock and rice farming in Thailand to secure food supplies, a Thai official said on Monday.

Food security has topped the policy agenda in the Gulf Arab region following rampant inflation last year that underscored its dependence on imports and prompted countries to buy land in developing nations.

"Gulf countries have shown interest in investing in farms for livestock and rice production in Thailand," Pilun Fupapol, consul of Thailand's commercial section in the United Arab Emirates, told Reuters.

He added that these deals are most likely to be on a government-to-government level as Thailand does not allow foreigners to own land.

"Either it will be a government-to-government deal, which will involve the investing party to lease the land on a long term basis, or (in the case of a private investor) find a local partner," Fupapol told Reuters.

Thailand, the world's biggest rice exporter, exported 10 million tonnes in 2008 and will sell an estimated 8.0 million to 8.5 million tonnes this year, according to the Thai Rice Exporters Association.

"Thailand is a good place for Gulf countries to invest in because it's been a major agriculture player for a long time and farmers know how to maximise output of the crop," Fupapol said.

For the time being, no specific details of plans for farm deals have been released by the Thai government, he added.

"I still don't have any details on these deals and the countries involved could be Saudi Arabia, Bahrain, Qatar or the UAE," he said.

Among recent deals involving farming, Pakistan has this year offered Gulf investors 6 million acres (2.4 million hectares) of farmland to develop, but it will require outsiders to share half of their crop with local growers.

Emirates Investment Group, a private-sector investment company based in Sharjah, the third-largest emirate of the UAE, said in April it was acquiring farmland in Pakistan to export more food to the Gulf region.

Saudi Arabia, the world's largest oil exporter, approved the setting up a firm in April with capital of 3 billion riyals ($800 million) to invest in farming and animal production projects.

"This trend of offshore farming will continue as Gulf countries continue to seek ways to secure future food supplies," Fupapol said. "And Thailand might be the next target on the list." (Editing by Anthony Barker)
Original source: Reuters
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