Saudi Arabia is stepping up its investments in local agriculture and farming projects abroad at a time when the coronavirus pandemic prompts some nations to review how they feed their people.
Following the Covid-19 outbreak, the kingdom introduced two initiatives worth SAR2.5bn ($665m) to support farmers and facilitate food imports, said Muneer Alsahali, general manager of the Agricultural Development Fund.
That takes the fund’s budget to SAR5.5bn this year, which is almost triple 2019’s amount and includes more money for overseas investments.
Ever since food crises a decade ago, Gulf nations like Saudi Arabia – which import most of their food – have been working to boost domestic output and investing in farming abroad. Those plans are being accelerated as the pandemic disrupts supply chains around the world and stirs memories of previous food-price spikes in wealthy but parched states.
“Following the Covid-19 outbreak, the kingdom introduced two initiatives worth $665m to support farmers and facilitate food imports.”
Out of the initiatives introduced since March, SAR2bn will go toward bank guarantees for importers of crops like rice, soybeans, corn and sugar, Alsahali said.
About SAR300m will reach local farmers. Before the virus outbreak, the fund’s budget had already risen about 60 per cent from a year earlier, including allocating SAR1bn for overseas investment.
Other Saudi ministries and departments are having their budgets cut as the crash in oil prices forces the kingdom to reduce spending.
“We are lucky that we had the food strategy approved before the crisis and there’s good coordination among government agencies involved in food security,” Alsahali said in an interview this week, adding that so far there have been no major food issues. “This has helped us.”
Food security is one of the goals of Vision 2030, Crown Prince Mohammed bin Salman’s blueprint for reforming the Saudi economy. The overseas funding offers low-interest loans for companies that grow crops including alfalfa, wheat, barley, sugar, rice and corn and which send at least half of the output to Saudi Arabia.
Investors choose from a list of 10 countries for each crop, including in Africa, the Black Sea area and Latin America, and can make their own recommendations.
Increasing home production of fruit and vegetables is one of the kingdom’s top priorities, and the nation aims to boost output of tomatoes and cucumbers by 50 per cent this year. The country, much of which is a desert, is encouraging growers to use hydroponics, a technology that uses 90 per cent less water than traditional farming methods. To do that, it’s offering loans that cover a larger share of capital investments.