http://www.msnbc.msn.com/id/27753969/
Booming Gulf looks abroad for food needs
There are simply too many mouths to feed and not enough water
Najieb Khoory, Mirak's co-owner and Managing Director points out to an
image of one of their strawberry's farm on the computer screen at their office
in Fruit and Vegetable Market in Dubai, United Arab Emirates.
View related photos
Kamran Jebreili / AP
updated 5:33 p.m. ET Nov. 16, 2008
NAHEL, United Arab Emirates - In the dunes around this sun-scorched desert
village, where camels still plod along dusty roads an hour south of Dubai's
skyscrapers, they're making the wasteland bloom.
Row upon row of bell peppers grow plump in a temperature-controlled greenhouse.
Lilies and roses bud nearby, and strawberries are on their way, all thanks to
sophisticated water-saving irrigation.
Yet even high-tech establishments like the Mirak Agricultural Services farms
here and elsewhere in this riverless country will never feed the region's
rapidly growing population. It's that realization that is persuading wealthy
Gulf Arabs to look far beyond their shores for more fertile acreage - tens of
thousands of acres, in some cases.
Too many mouths, not enough water
There are simply too many mouths to feed and not enough water. Lush urban
landscaping and ambitious agricultural projects here and in Saudi Arabia -
which once spent so much on farm subsidies that it exported surplus wheat - are
quickly draining aquifers, including some that are millennia old and cannot be
refilled.
"It's like oil," said Julia Bucknall, a World Bank researcher who has written
about the region's water use. "It's essentially a nonrenewable resource."
That stark reality - and rising food prices - is sending the region's leaders
scrambling to lock up even more long-term food supplies abroad. And where once
the region was content to spend its petrodollars on food sold on the open
market, Gulf nations now are quietly scouring the globe for rich farmland to
rent or buy outright.
The prime ministers of Qatar and Kuwait traveled separately to Cambodia this
year to discuss securing paddy land for rice-growing. UAE President Sheik
Khalifa bin Zayed Al Nahyan visited Kazakhstan in central Asia, where
agricultural investments were likewise high on the agenda.
Dubai World, a sprawling conglomerate controlled by that emirate's government,
last month said it was creating a new subsidiary targeting global investments
in a wide range of commodities, including food.
Plans are also accelerating in the private sector.
Overseas investments to grow food
The Saudi Binladin Group, for example, is considering investing more than $4
billion to grow food in Indonesia, said Salim Segaf al-Jufri, the Indonesian
ambassador to Saudi Arabia. Under the proposed project, the company would
produce basmati rice in Sulawesi, Papua and western Java.
Most such talks are continuing in private. Of those companies that could be
reached for comment, none made officials available to discuss their investments
in detail.
That may be because many of the deals are being hatched in volatile countries,
such as Pakistan and Sudan, that have serious domestic food concerns of their
own. The idea of shipping off homegrown crops to feed rich foreigners could
stir dissent.
"These are countries that come with a lot of political baggage," said Eckart
Woertz, program manager for economics at the Gulf Research Center, which
estimates the Gulf's conventional water resources will be gone within three
decades. "People riot when they don't get food."
A win-win situation?
Experts say the agriculture investments, if done well, could be a win-win
situation. The Gulf gets greater food security, while poorer developing
countries benefit from added jobs and improved technology.
But there are concerns, too.
The head of the U.N. Food and Agriculture Organization, Jacques Diouf, has
warned that foreign land acquisition and long-term leasing schemes, if done
poorly, risk "creating a neocolonial pact ... and unacceptable work conditions
for agricultural workers."
Even so, some countries are seeking out investment.
Pakistan, already a key source of labor for the Gulf, has been among the most
active. This spring, Islamabad helped organize a road show in Dubai aimed at
boosting investment in predominantly Muslim Pakistan's agriculture and dairy
industry.
Huma Fakhar, managing partner at MAP Services Group, a market research and
trade consultancy which sponsored the event, said Pakistan was a logical choice
for Gulf investment.
"We provide the human capital and the raw materials, and they provide the
financial capital and technical know-how," she said.
Fakhar said an investor from Abu Dhabi, whom she declined to name, bought
40,000 acres of farmland in southwestern Pakistan's Baluchistan province last
year. Two UAE private equity firms, Emirates Investments Group and Abraaj
Capital, have also expressed interest in investing directly in Pakistani
agriculture, she said
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