Abu Dhabi, 2 July, 2008 - Gulf Arab oil producer Abu Dhabi plans to develop over 70,000 acres of farmland in Africa's largest country Sudan as the first step in a broader strategy to secure food supplies amid rising prices. Mohammed al-Suwaidi, acting director general of the Abu Dhabi Fund for Development, told Reuters that food security was now a priority for the government of the desert emirate and his organisation was also seeking agricultural projects elsewhere.
"Food security is not just an issue for Abu Dhabi emirate or the United Arab Emirates. Recently, it has become a hot issue everywhere," he said in an interview.
"The effect of the recent oil price boom had a major effect on the price of raw commodities. Global warming has an effect on commodities. The time may come when, even if you have the money, acquiring some commodities will not be an easy task."
Poor harvests, low grain stocks and rising demand have propelled global food prices, sparking protests, strikes and violence in Africa, South America, Asia and the Middle East.
Gulf Arab countries, flush with petrodollars, have not seen unrest, but inflation has risen to record or near record highs, sparking fears of shortages in a desert region where low rainfall and lack of arable land mean heavy reliance on imports.
A UAE study last month urged diversification of the country's sources of food imports to hedge against any crisis. The UAE relies on imports of rice as well as other basic commodities such as flour, meat, tea, coffee and oil.
Saudi Arabia moved in May to create facilities to stockpile basic staples and said it would increase global investments to ensure food security. Traders said it was seeking to grow rice in Thailand. Bahrain is also making plans to stockpile food.
SUDAN PROJECT
The farm in Sudan will grow alfalfa, which is used as animal feed, while soil studies were being carried out to decide on other crops. Corn, beans and potatoes are the prime candidates.
"Alfalfa comprises more than half of the feed for dairy cows so the dairy sector is threatened in a big way if we consider the recent increase and we expect it to continue," he said.
"If we take this crop... in 2007 it increased in the UAE from under 1,000 dirhams ($272) a tonne to some 1,600 dirhams."
Rising crop prices are in themselves a major incentive to launch agricultural projects and the Abu Dhabi Fund for Development will partner with UAE private sector investors in Sudan, aiming to generate profits as well as securing food.
Soil and climate studies will be complete in three or four months and the project will be launched in three phases, Suwaidi said.
All the crops produced will be exported to the UAE and more capital would be ploughed into the project later on.
Suwaidi said the Abu Dhabi Fund for Development was looking at other countries and crops but was not ready to announce them.
"This will not be the last project," he said.
"Rice is a commodity that affects Emirati society and there is a shortage in this commodity. We are studying other projects that could produce rice for us but so far these are only studies no more no less. There is nothing concrete."
UAE food imports stood at 52.3 billion UAE dirhams ($14.24 billion) last year.
"This is a priority for the Abu Dhabi government," he said.
"This problem began several years ago but the West has started taking an interest because it started knocking on their doors... Let us not be very pessimistic but this issue will not be resolved for a few years."