By Allyn Gaestel
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| Saudi Arabia, North-West of Riyadh (Photo: Baptiste Marcel) |
In order to guarantee food security for the population, Saudi Arabia’s government has turned to land acquisition, commonly referred to as “land grabbing” in East Africa. The King Abdullah Initiative for Saudi Agricultural Investment Abroad is a government program that provides financing and credit for companies to invest in international agriculture for Saudi Arabia.
To be considered for Saudi investment, countries must be politically stable, have useful natural resources for agriculture, tax relaxation on agricultural exports, anti-corruption laws, and low-cost labor.
Contracts must be long-term, and Saudi Arabia must have the decision-making power on what crops are produced.
The Initiative investigated potential partner countries and found Ethiopia to be a viable candidate. The first Ethiopian harvest arrived in Saudi Arabia this year.
The relationship between investors and host countries can be problematic depending on the food situation in the host countries. Ethiopia, for example, has faced long-term food insecurity. Currently 6.2 million Ethiopians are threatened by malnutrition and hunger, according to the World Food Programme.
Olivier De Schutter, United Nations Special Rapporteur on the right to food, spoke earlier this year on the emerging land acquisition trend. “Investment contracts should prioritize the development needs of the local population,” he said. De Schutter sees a potential for a mutually beneficial relationship between investing nations and their host countries only if a set of principles guiding such relationships is put in place.
“Arrangements under which the foreign investor provides access to credit and to improved technologies for contract farming, or obtains the possibility to buy at predefined prices a portion of the crops, produced may be preferable to long-term leases of land or land purchases.” Currently there is little international monitoring of programs like the King Abdullah Initiative for Saudi Agricultural Investment Abroad.
De Schutter further explained the complexity of the situation and the likely possibility of exploitation to MediaGlobal. “The countries targeted by such large-scale land investment are caught in a scissor. It requires very fine tuning and good management to reap benefits for the local population in general,” he said.
The most likely outcome of such agreements will be a loss of essential farmland without benefit to the local population. Even if the investors agree to put a portion of their harvest to market in their host countries—hypothetically contributing to food security for host counties—such contributions could disrupt local markets and undermine local farmers’ businesses by flooding the market with cheaper goods produced by agribusiness instead of small-scale farms.
Yet De Schutter recognizes the advantages the program provides to Saudi Arabia. “Such large-scale land acquisitions are certainly a way to shield Saudi Arabia from the risks associated for net food importing countries with increasingly volatile and unreliable international markets for agricultural commodities,” he told MediaGlobal.
Devlin Kuyek is a researcher for GRAIN, an international agricultural advocacy group. GRAIN finds the entire concept of large-scale international agribusiness to be problematic.
Instead GRAIN emphasizes the environmental and social benefits of small-scale farming. Kuyek told MediaGlobal, “Countries that need to import food can buy from farmers in other countries at fair prices and do not need to deal with multinational agribusiness or engage in foreign farmland grabs. Farmer’s organizations in Africa have been demanding fair and better access to markets for decades.”
Global food security presents complex problems for countries aiming to shield their populations from hunger. Saudi Arabia’s investment abroad is its answer to diminishing local crop yield. But Ethiopia’s domestic need for sufficient food supplies makes for a delicate balance between cooperation and exploitation.
