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02 December 2023

Arab nations urged to set up strategic cereal stock

The Arab World's combined food gap has widened to $19bn (GETTY IMAGES)

By Nadim Kawach

Arab countries need to invest in setting up strategic cereal stockpiles to ensure sufficient food for their citizens, said the Arab League's main agriculture body.

The Arab Organisation for Agricultural Development (AOAD) said lack of investments and poor farm policies have allied with low land exploitation and other factors to sharply boost the region's food imports and widen the combined Arab food gap to a record $19 billion (Dh70bn) in 2007.

AOAD Director-General Salim Allowzi said the private sector in the Arab World needs to step up investment in farming projects to cut the massive import bill, ensure enough farm products for the region and bolster food security.

Allowzi said he believed Arab nations have the potential to feed themselves. Sufficient investment in Sudan, the most fertile country in the region, could meet the region's needs of cereal and other basic food items.

"The Arab food gap is rapidly growing and only farming co-operation and integration among Arab nations could tackle this danger. There is an urgent need now to forge a common Arab agricultural policy and implement it fully if we want to tackle this gap, which peaked at $19bn in 2007," Allowzi told the Qatari Al Sharq Arabic language newspaper.

"We have prepared a study to be presented to Arab governments. It calls for setting up a joint strategic cereal stockpile or several stockpiles across the region to face any emergency. This will allow Arab countries to ensure enough food for their people and at the same time enable them to reach collective import deals at competitive prices. This move will allow us to deal with the food security threat."

Allowzi said such a policy should be implemented by both the public and private sectors in member states but stressed that regional governments must first end their political rifts, push ahead with economic reforms, and create the right climate for farming investment across the borders.

Despite efforts to cut imports, the surge in global food prices in 2007 and 2008 has widened the value of the Arab farm import bill and consequently aggravated the food gap, the difference between imports and exports. Figures by the Khartoum-based AOAD showed Arab states are heavily reliant on farm imports and the problem is underscored by their growing dependence on products that provide staple food, mainly wheat, rice and other cereals.

"It has become clear that the share of the farming sector in the total Arab investment has remained minimal despite the significance of this sector. There are indications that even in most arable areas, the size of both public and private investments have remained negligible," Allowzi said.

"Although there was a growth of about 6.3 per cent in the Arab agriculture sector in 2007, its contribution to the gross domestic product declined to about 6.2 per cent from 8.8 per cent. The workforce in the farming sector also dropped to 28.7 per cent from 32 per cent of the total Arab workforce.

"It is time for Arab governments to consider pumping more funds into the agricultural sector. There should be a co-ordination between public and private investments in this regard. The most important thing at this stage is that there is a growing need for forging a joint Arab farm investment strategy that will cover all sectors, including the infrastructure, crop, farm industries, services and production. This strategy has become more pressing at this stage of soaring global food prices and increasing Arab reliance on farm imports."

According to AOAD, only about 12 per cent of the estimated 550 million hectares arable land in the region is utilised because of instability in some members and lack of investment from the governments and the private sector.

"Even in that 12 per cent part, the farming efficiency does not exceed 60 per cent of the world efficiency level. This means the Arab World is facing a real problem not only of its low exploitation of available arable areas but of low efficiency in the cultivated land and its productivity," AOAD said.

Farm supply shortages have sharply boosted the Arab food import bill and turned the region into the world's largest food importer. Official statistics showed the incremental Arab food gap has exceeded $220bn over the past 15 years. A breakdown showed the Arab countries' farm import bill is underscored by their heavy reliance on cereal imports, which stood at about $7.2bn annually during 1999-2003 before swelling to nearly $9.4bn in 2004. It continued its climb to surpass $10bn each in the following three years. In volume, the Arab World's cereal imports slipped from about 47 million tonnes annually during 1999-2003 to 46.4 million tonnes in 2004 before surging to 55.7 million tonnes in 2005. It declined to 51.5 million tonnes in 2006 and was expected to have surged above 58 million tonnes in 2007.

In its annual report issued just before the end of 2008, AOAD warned of political and social consequences of the Arab countries' growing reliance on food imports.

"High food prices directly affect the ability of Arab citizens to obtain enough foodstuffs given the limited income in most member states," it said.

"Prices have steadily risen between 2002 and 2006 and are still recording sharp increases because of the rise in global food prices. Given the Arab region's heavy reliance on imports, this will have serious repercussions on food security in member states and will negatively affect regional stability."

Arab officials have repeatedly voiced concern about the agricultural gap and growing reliance on food imports, mainly from the US and other Western countries. Some officials considered such reliance as a risk to their security. According to AOAD and the Arab Fund for Economic and Social Development, most Arab nations are suffering from slackening farm exports and rapid growth in population, leading to a steady increase in imports of food products.

"I again call upon the Arab private sector to allocate more funds to set up joint agricultural projects in the region. I am convinced that if there is a real interest and seriousness by investors in the farming sector, then the whole Arab World needs of cereal, sugar, fodder and other essential foodstuffs could be met by Sudan alone," Allowzi said.