Saudi Arabia Reaps Ethiopia’s Harvest
Saudi Arabia has reaped the first rice harvest from farmland it purchased in Ethiopia. Presented to King Abdullah this March, the harvest marks the first output of a controversial ‘outsourcing’ strategy, whereby Saudi investors purchase land overseas to produce food for Saudi consumers, bypassing local economies and the global food market.
The approach is gaining credence in the Gulf. An arid climate and prohibitively expensive irrigation costs mean the region imports 60 per cent of its food. When food prices soar, such as the tripling of rice, wheat and corn costs experienced last year, Saudi Arabia becomes food insecure. Owning more farmland, even if overseas, gives it greater control over both the production and price of food.
The strategy is portrayed by the Saudi leadership as benign. Saudi Arabia manages the agricultural production and human resources. It is not, therefore, exploiting cheap local labour. Neither is it profiteering in the global food market from higher agricultural yield, since produce is flown back for Saudi consumption. Yet a closer look at the countries being approached by Saudi investors shows a preference for weak or unstable states with low taxation, minimal bureaucracy and insufficient capital to grow food on the land (and thus a willingness to sell land to those that can, for less than it is probably worth).
Nations visited by Saudi officials include Sudan, Kazakhstan, the Philippines, Ukraine and South Africa. In the case of Sudan, Hail Agricultural Development Company (HADCO) will invest as much as $45 million, cultivating wheat over 10,000 hectares, and the Sudanese Government are putting a further 780,000 hectares up ‘for sale’. All the while, Sudan fails to provide food for its own population, and is one of the largest recipients of aid from the UN World Food Programme.
Sudan is not the only poor country courting such investment. Cambodia is currently in talks with Kuwait and Qatar about a similar scheme. Hun Sen, the Cambodian Prime Minister, rejects criticisms that he is selling his peoples wares: ‘I think the Gulf can become our rice market,’ he claims. Yet the Gulf is interested in cheap land, not local produce, so talk of a ‘market’ seems confused. Simple payment for land could be of benefit to Cambodia’s development, of course, but Sen’s track record for receiving foreign investment is not too encouraging. Millions of dollars were paid to the Cambodian Government to secure oil drilling rights but have yet to appear on its balance sheet, according to NGO Global Witness.
For the people of Sudan, Cambodia and other nations in the Gulf’s sights, the new colonialism could begin impacting the most primary of commodities, and what payments are made will go to governments, not to the wider economies, serving only to reward leaders for their failure to till the land themselves.