Arabs invest little in agriculture

ANBA | 20 MAy 2013
Medium_alfalfa_bales

by Alexandre Rocha, special envoy*
[email protected]

Khartoum – Although food safety is a question that much concerns the Arab world nowadays, funds turned to agricultural production in the region are low. According to the president of the General Union of Chambers of Commerce, Industry and Agriculture for Arab Countries, Adnan Kassar, the sector represents less than 1% of investment made by the countries of the Middle East and North Africa.

Financing is one of the central problems

 “It is necessary to redesign the agriculture of the Arab world,” said Kassar, on opening a conference on the theme in Khartoum, Sudan, on Monday (20). He pointed out that the growth of food prices and the risk of lack of supply in the region helped precipitate the Arab Spring, a series of protests that shook the region in 2011, and had negative impacts on social development, on employment levels and on fighting poverty.

According to the executive, the number of people considered malnourished in the region climbed from 13 to 25 million in 20 years. “One of the most sensitive questions in the region is the food price hikes due to climate and environment conditions and the lack of policies for the sector,” he pointed out. He added that of the 22 Arab countries, 13 had negative agricultural development in recent years.

“[Food safety] is an expression that I have heard being repeated for over 40 years without seeing any progress, with production dropping and greater imports,” he said. “Is there a solution to this matter,” he asked.

Many of the Arab nations have arid climates, little water and, at the same time, growing populations, which creates great dependence on foreign products and vulnerability to oscillation on the international market. To guarantee food safety, the Arab world should invest US$ 114 billion in 30 years, according to Ibrahim Khalifa Al-Khalifa, of the Arab Centre for Training and Entrepreneurship and Investment, an organisation connected to the United Nations Industrial Development Organisation (Unido) and the government of Bahrain.

Sudan, different from other regions, has great fertile areas, water supplied by the Nile and its tributaries, the White Nile and the Blue Nile, and people to work in the field. “They are all the elements necessary to develop agriculture,” said Kassar. Although the activity is very important to the country, it is way beyond the country’s potential and there is much land available.

According to Ahmed Abdel Latif, from Sudanese fertilizer group CTC, Sudan heads the list of countries in cultivated area, there are 46 million hectares to be explored, but productivity is low. As examples of development in the area, he mentioned Brazil. “Brazil has increased its productivity four times [in the last decades],” he said. “If Sudan manages to reach 20% to 40% of that, it would be enough to guarantee food safety in the Arab world,” he added.

Breadbasket?

Presenting Sudan as an appropriate site to receive investment and mobilize the private sector of Arab nations is the objective of the conference, which ends on Tuesday (21). The country, however, has difficulties to access credit due to international sanctions. “How can we invest in these projects without financial capacity,” asked Sudanese businessman Ali Abarsi.

An assistant to Sudanese president Omar Al-Bashir, whose brainchild the conference is, Nafie Ali Nafie, stated that “international financial institutions do not cooperate with us”, as, according to him, they are controlled by great international powers.

But it is not only the sanctions that get in the way. The country has problems with exchange rate volatility, inflation and currency depreciation. The Sudanese, however, recently released a new investment law and bet on its attraction potential. “We must remove obstacles to attraction to Arab capital,” pointed out the president of the Federation of Sudanese Businessmen, Saud Elbireir.

Despite the difficulties, several Arab companies already operate on the Sudanese territory. Some of them presented their enterprises at the conference. This was the case with GLB, of agricultural investment, which showed its alfafa production project for the feeding of animal herds in Saudi Arabia and in the United Arab Emirates. The first phase of the agreement forecasts production of 40,000 tonnes in 2014, rising to 750,000 in 2018. Apart from natural resources, the company pointed out the proximity between Sudan and the other side of the Red Sea.

In the same line, Abdulaziz Al-Babtain, the managing director of Nadec, an agricultural company and a large food factory, said that the company chose Sudan to expand production. “The food safety problem is an opportunity for us, it is a US$ 50 billion market,” he pointed out.

Also speaking about successful experiences were the representative of dairy Al-Safi and of poultry producer Ommat, both Saudi. Hussein Bahri, the president of the latter, provided a series of clues to those interested in investing in the country, like financial and moral incentives to employees, training and respect to the local culture.

*Translated by Mark Ament
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