Manama, Bahrain (UPI) May 27, 2010
The scramble by Saudi Arabia and the Persian Gulf states to secure strategic food supplies by buying up vast tracts of farmland in Africa and Asia won't be enough to stave off a surge of food imports over the next decade, a Saudi bank report says.
"The era of cheap food is over," NCB Capital, the investment arm of Saudi Arabia's National Commercial Bank, declared in the report issued several weeks ago.
The wholesale investment in arable land in Sudan, Tanzania, Kenya, Ethiopia and other African states won't prevent the level of food imports of the six Gulf Cooperation Council states -- Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates -- from rising sharply over the next decade.
The NCBC report urged the GCC states to boost domestic food production through sustainable agriculture to head off an eventual crisis caused by a dramatic surge in the global demand for food that will push prices ever upward.
It said that the Saudis at least are providing financial incentives to expand the use of new crop technologies, water management and new types of seeds that require less water.
Riyadh's 2010 budget allocates $12.3 billion to the agriculture and water sectors, a 31 percent increase over 2009. New desalination plants are also planned.
Even so, NCBC noted, "food inflation represents a potentially considerable social-economic risk which the authorities are poorly equipped to deal with."
As populations expand while the amount of farmland and water supply shrinks, resource wars are expected to erupt across the Middle East and Africa in the decades ahead.
"Unchecked land-grabbing carries with it the seeds of conflict, environmental disaster, political and social change, and hunger on an unprecedented scale," Le Monde Diplomatique warned in February.
Apart from soaring food prices, the GCC states will be further troubled by "the rising demand for biofuels and climate change," NCBC stressed.
Changes in weather patterns will reduce food production in some of the planet's main food-exporting states, such as the United States, Canada, Europe and Southeast Asia as well as reduce water supply.
It noted that prices for maize and similar crops have soared because of the demand for biofuels and farmers, particularly in the United States, are switching from growing wheat and rice to cultivating feedstocks.
The U.N. Food and Agriculture Organization recently estimated that 75 percent of the additional 40 million tons of maize grown worldwide in 2007 was taken up by plants producing ethanol for fuel.
Food production in Africa is expected to shrink by around 20 percent over the next four decades unless major policy changes to counter these problems are initiated now, said a recent study by the International Food Policy Research Institute in Washington.
The dependence of the GGC members on food imports is already high, particularly concerning basic foodstuffs such as rice, barley and maize.
Imports accounted for 92-100 percent of consumption in the gulf, while for milk and dairy products the figure is 77 percent.
Saudi Arabia and its gulf partners turned to the large-scale purchase or long-term leasing of farmland in Africa and further afield in Pakistan and Turkey, because they failed to devote sufficient resources to agriculture in the 1970s and 1980s.
The institute estimated that Saudi Arabia and the United Arab Emirates, the main buyers of African land, have acquired some 6 million acres worldwide, largely in Sudan, Pakistan and Indonesia. Other estimates are much higher.
The report said that additional purchases by the Saudi government and private investors are under way with Egypt, Ethiopia, South Africa, Kazakhstan, Australia and Brazil.
Eventually, the report pointed out, these countries will have to curtail the export of food grown on their farmland because they will have to feed their own swelling populations rather than someone else's.
The land-buying spree by the Arab states is likely to continue as desertification worsens.
Wadid Erian, a soil expert with the Arab Center for the Study of Arid Zones and Dry Land in Cairo, said desertification is advancing swiftly "and our response needs to match the pace
"The question we need to be asking is whether using (African) land is a sustainable, long-term solution We expect that if climate change and desertification continue at this pace, in the next five years we won't have enough food to supply demand."
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