Food security challenges are real for GCC economies

By Dr R Seetharaman

  Across the world, 700mn people in 76 low- and middle-income countries are food insecure, and the situation could grow worse in the poorest countries according to the US Department of Agriculture.

The majority of undernourished people reside in developing countries and growing population and adverse climate changes are the key challenges impacting food security. The Food and Agriculture Organisation (FAO), UN, has highlighted in its research content “How to feed the world in 2050” that global food production would have to rise 70% by 2050 as the world population expands to 9.1bn from about 6.8bn in 2010. “Climate change is a challenge to food security and hence we should contribute to reducing carbon emissions, reduce loss of water resources and protect terrestrial and marine areas. This will also enable achievement of millennium development goal 2015 of ensuring environmental sustainability.”

In June 2014 the FAO price index, which measures monthly price changes for a basket of cereals, oilseeds, dairy, meat and sugar, was down 1.8 % when compared to May 2014. It was almost 2.8% below June 2013 as cereal prices fell on better crop prospects and reduced concern over disrupted shipments from Ukraine.

FAO estimates that globally 33 countries, including 26 countries in Africa, are in need of external assistance for food due to conflict, crop failures and high domestic food prices or a combination of them. FAO is closely monitoring the development of a possible El Niño event, which could have implications on global cereal production. Recent weather forecasts in India indicate that performance of monsoon in India so far this year has been dismal on account of El Nino effect. While prices have fallen recently, the volatility of food prices in recent years has prompted developing countries with high poverty and weak safety nets to respond by ratcheting up consumer food subsidies. The World Bank and the International Monetary Fund (IMF) have made a big push to urge countries to scrap subsidies on consumer food to ease pressure on government budgets and free up more funds for health and education spending.

Food security continues to be a challenge for the GCC with imported food accounting for 80-90% of all food consumed. The GCC is classified by FAO as suffering from absolute water scarcity. The GCC states are drawing water several times over their natural replenishment rates. As a result, water reserves are becoming saline and depleted. Agriculture, which generally uses groundwater, uses a lion’s share of total conventional water use. Increase in desalination is energy-intensive and hence the GCC should look for alternative energy sources to improve water efficiency. The GCC should invest in research and science and technology to lay a foundation for improved agricultural productivity, reduced waste and a healthier and safer food supply. The GCC should also diversify the sources of food imports.

Saudi Arabia is working on a new programme for agricultural investment in foreign countries that aims to encourage the private sector to provide them with its needs of grains. Saudi Arabia encourages investors by offering interest-free loans and strategic partnerships through the state-owned Saudi Agricultural and Livestock Investment Company (SALIC).

The UAE is reformulating policies and conducting research in support of the proper governance and management of the fisheries sector. The UAE has also been promoting technology investments for sustainable fisheries and aquaculture.

Kuwait has allocated farm lands for investors and companies for plantation, and breeding of livestock and fish. They are also using latest technologies to recycle water to be used for irrigation.

In April 2014, Oman signed an agreement with the Australian State of Victoria for collaboration on food production, besides getting its expertise in water management and for partnerships in agribusiness.

In 2014 the Qatar National Food Security Plan was formed and submitted for implementation. Qatar will be able to produce 40% of strategically-important food items locally within a period of 10 years as outlined in the Qatar National Food Security Plan.

The food security challenges for GCC are real and hence they are pursuing various initiatives to address this.

Dr R Seetharaman is Group CEO of Doha Bank. The views expressed are his own.