The Almarai Company has decided to stop the cultivation of fodder for animals and import it from abroad instead owing to the scarcity of water sources in the Kingdom.
Abdul Rahman Al-Fadhli, CEO of Almarai, said the company currently imports 100 percent of the animal feed to produce milk. Almarai is also developing an operational plan to stop the local cultivation of fodder and cover the entire needs of the domestic market by importing all products.
“Almarai is the first dairy company in Saudi Arabia which has started importing feed from abroad where the company has invested in Argentina, the United States and several European countries,” Al-Fadhli said.
Almarai has recently received the first shipment of feed estimated at 39 thousand tons coming from farms owned by the company in Argentina.
According to a recent scientific study 96 percent of water consumption in the dairy sector is provided for the cultivation of fodder, while this percentage can be provided through a plan to import feed from abroad. The study that was conducted by Saudi researchers in cooperation with specialized US companies estimated that the amount of water consumed in the dairy sector accounts for about 3.1 percent of the total consumption of the agricultural sector which consumes 16 billion cubic meters a year.
Meanwhile, the Saudi government has decided to invest in agricultural development abroad and strengthen Saudi Arabia’s position in this regard. Experts claim that the project, entitled the King Abdullah Initiative for Saudi Agricultural Investment Abroad will help secure national food security.
Dr. Riyadh Abu Mansour, an economic expert and CEO of Al-Belad Company for Investments said, “Several Saudi food firms had invested in Sudan, Lebanon, Syria and Egypt but the bad political situation of these countries had forced Saudi investors to look for other alternatives. Pakistan is one of these options especially as there are many Saudi agricultural investments which have seen successful results during the last ten years.”
Speaking to Arab News, he said “About 25 percent of Saudi agriculture firms have also started investing in Australia to import wheat, while there are other local firms which are interested in investing more in EU countries.”
Until six years ago, the Kingdom’s policy makers advocated self sufficiency for its local wheat cultivation, as well as some other products such as milk, meat and eggs. However, as it became clear that levels of subsidies required for farmers and limited water resources were making domestic wheat production unviable, the government decided to gradually wind down operations and opt instead to meet their wheat requirements through imports.
The Kingdom is expected to phase out domestic wheat production completely by 2016 as farmers are encouraged to shift their focus toward alternative crops. At the same time, wheat imports are increasing rapidly as the government looks to bridge the widening gap between falling domestic production and rising demand. Saudi Arabia is expected to import 1.96 million tones of wheat for human consumption within the period 2012 to 2014, according to estimates of the local office of the US Department of agriculture.
“Agriculture investments abroad depend on buying a large area of land in countries which have natural sources to develop an agriculture industry. Therefore, the best way to ensure food security is to invest in those countries through buying agriculture lands,” Dr. Naser Al-Boqami told Arab News.
A number of Saudi companies decided early to invest in Sudan as is evident from the recent acquisition of agricultural lands covering an area of approximately 4,000 acres in Sudan’s northern region by four Saudi companies to raise various crops. The region has so far attracted 32 investment projects from the Arabian Gulf countries, covering an approximate area of 14 million acres, all located in the upper areas of the river Nile.