RP pitches investment opportunities to Saudi businessmen

Business World | Thursday, May 7, 2009 | MANILA, PHILIPPINES

BY NEIL JEROME C. MORALES, Reporter

THE GOVERNMENT yesterday proposed investment opportunities in the agriculture sector for Saudi Arabians to ensure the supply of agriculture commodities and develop idle government lands.

At the opening of the five-day agricultural trade mission between the Philippines and the Kingdom of Saudi Arabia, Agriculture Secretary Arthur C. Yap briefed potential investors on the local agriculture sector.

"The increase in consumption and demand is continuous despite the recession. A lot of these countries want to be food secure," Mr. Yap told reporters.

The country has as much as 1.9 million hectares of lands available for agriculture development, data from the Environment department showed. Mindanao alone has 171,000 hectares of land that can be prepared for agriculture ventures.

"Based on our analysis, many of these areas are suitable for crop production," Mr. Yap said.

In his speech, Saudi Agriculture Minister Fahad A. Balghunaim said "the substantial increase in food prices in 2007 and 2008 has managed to attract government in increasing agriculture production and productivity."

He said Saudi Arabia, which invested in its agriculture sector despite vast desert lands, is an exporter of shrimp and potato and is self-sufficient in dairy products.

"The government has decided to cut down production of wheat to reduce water being used in agriculture," Mr. Balghunaim said.

However, the Saudi government has allowed Saudi businessmen to invest in other countries to assure the country’s supply of agriculture commodities.

"Consolidating our countries’ competitive advantage will benefit both nations," Mr. Balghunaim added.

The government has proposed a memorandum of agreement with the Kingdon of Saudi Arabia for cooperation in agriculture ventures, research and development, and technology transfer.

The combined food bill of Middle East countries, including Saudi Arabia, rose by 25% to $20 billion in 2007 from $16 billion in 2006.

The Philippines earned $4 million and $1.3 million last year from exporting tuna and bananas — the country’s top two agriculture exports — to Saudi Arabia.

Mr. Yap offered investment opportunities in the local dairy industry, saying that "we are importing $500 million of milk products. This is an area where we need major investments."

The Philippines, which is only 1% self-sufficient in dairy output, increased its production slightly last year to 13.81 million liters from 13.43 million liters in 2007 and 12.79 million liters in 2006, data showed.

Mr. Yap said Saudi businessmen could also invest in the poultry sector as the Philippines, Singapore and Brunei Darussalam are the only southeast Asian countries free from the deadly avian influenza.

The agriculture sector, which accounts for a fifth of total domestic output, employs a third of the work force.

Next week, 23 US agriculture firms will meet with 70 local agriculture companies for possible trade opportunities.
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