Sunday, September 23, 2007

Saudi style

Saudi Arabia, a major agricultural force? well, they did increase their agricultural production from 264 million $ in 1970 to 10.2 billion $ in 2005. They are self sufficient in wheat, almost self sufficient in fruits and vegetables and they export eggs. They also export some vegetables, such as tomatoes, carrots etc...

But at what cost? The $ cost first: 100 billion $ in 30 years. The cost of producing wheat in Saudi is 4 times the international price.

Then water: Saudi Arabia used between 1980 and 1999 300 billion cubic meters of water equivalent to the flow of the Nile for 6 years, 85% of it from non-renewable deep water aquifers. Farmers report that they had to dig 100 meters deeper every year in search of water.

These sacrifices of $ and resources may have been understandable if they were aimed at improving the lot of farmers and at building strategic resources. However there are reports to indicate that the whole Saudi agricultural adventure was a way to launder money from governmental coffers into the pockets of minor princes in the House of Saud and of tribal leaders in order to ensure their allegiance. Apparently the system works as follows: a high ranking member of the ruling elite declares his interest in farming. Land is donated to him, and facilities (long term no interest loans that no one ever pays back) are provided. Workers are hired (Asia) and made to slave on the land. State of the art equipment is imported from the US. The produce is then bought at subsidized prices by the Sate. Beats given the princes pocket money.

And one more thing: whatever Saudi exports costs more to produce than the price it fetches, not only in $ but also in water: To produce one ton of wheat requires 1000 tons of water, which should be more precious than food in Saudi Arabia.

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