[dehai-news] The Financial Times: Saudis get first taste of foreign harvest

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From: Berhane Habtemariam (Berhane.Habtemariam@gmx.de)
Date: Thu Mar 05 2009 - 05:56:16 EST

Saudis get first taste of foreign harvest

By Javier Blas in London

Published: March 5 2009 02:00

Saudi Arabia has announced the arrival of the first food crop harvested in
Saudi-owned farms abroad, in a sign that the kingdom is moving faster than
expected to outsource agricultural production.

Rice, harvested in famine-hit Ethiopia by a group of Saudi investors, was
presented to King Abdullah recently and comes as other countries are still
in the early stages of investing in overseas farms.

The Ethiopian origin is likely to raise concerns about the trend to
outsource food production to poor African countries, some of which suffer
from chronic hunger.

In the past year the United Nations World Food Programme has helped to feed
11m people in Ethiopia, which has suffered crop failures and food
distribution problems.

Some analysts argue that foreign investment in agriculture, even if
earmarked for export, could ultimately help poor countries, providing them
with employment, infrastructure, access to agricultural technology and
export tax revenues.

However, western agriculture officials familiar with the Saudi plans say
they are sceptical that the kingdom's investment in food production overseas
will help poor countries such as Ethiopia.

Riyadh has also provided the most detailed account to date of food-security
plans known as the "King Abdullah initiative for Saudi agricultural
investment abroad".

Since the oil-rich kingdom announced last summer that it planned to grow
"strategic food commodities" overseas and phase out the waterintensive
production of domestic cereals, few details had emerged.

But in a note posted on its foreign affairs website, Riyadh has disclosed
that it will "provide credit facilities to Saudi investors in agriculture
abroad", with the focus on "countries with promising agricultural resources
and having encouraging government". It did not say how much money it would
make available in credits.

Hail Agricultural Development, a Saudi company, said last month that it
would invest in agricultural production in Sudan, with the government
providing 60 per cent of the funding.

The Jeddah-based Islamic Development Bank said this week that it was looking
at investments to support agriculture, including the production of rice to
be exported back to Saudi Arabia.

Saudi officials have so far visited Turkey, Ukraine, Egypt, Sudan,
Kazakhstan, the Philippines, Vietnam, Brazil, South Africa and Ethiopia,
while delegations from other countries, including Australia, have visited
Riyadh to discuss possible investments.

The investments "should be long-term through ownership or long-term
contracts", and Riyadh expects the "liberty of selecting the crops".

The pursuit of foreign farm investments is the clearest sign of how last
year's price spikes in commodities such as rice, wheat and corn, and the
global food crisis that ensued, are reshaping the politics of agriculture.

The move is not only a response to high prices, but also to the export
restrictions imposed by leading providers of commodities - including India,
Russia, Argentina and Vietnam. These exporters banned overseas sales to keep
their local markets well-supplied and some of the restrictions remain in


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