Economists call for reassessment of Kingdom’s wheat production

Updated 19 November 2012

Economists call for reassessment of Kingdom’s wheat production

JEDDAH: The decision to stop wheat cultivation completely by 2016 and import the country’s requirements will create a dependence on imported food and threaten the food security of the Kingdom, top economists warned on Saturday.
Economists have asked the government to reassess its decision to limit the production of wheat and look at water rationing and the use of irrigation systems in order to continue wheat production.
Economist, Habib Allah Al-Turkustani, said the importation of wheat is expected to increase annually by 5 percent and would represent a dependence on imported food. He said wheat is a strategic commodity and too important to be subject to economic considerations.
He said most countries seek to increase local production of basic goods and aim to achieve food security. He said the decision should have been made to limit the production of berseem, a clover crop, instead of wheat. It takes five times more water to produce the same quantity of berseem as wheat. It takes only four months to harvest wheat, during which rain may fall, reducing the need to irrigate.
Al-Turkustani said: “One hectare of berseem requires 35,000 cubic meters of water. The same crop of wheat requires only 7,000 cubic meters. He called for the government to study ground water in Saudi Arabia. “Drought may affect the volume of production worldwide which can affect securing the required wheat quantities. Some countries dependent on imported wheat, have faced difficulty securing their requirements in the last two years.”
Esam Khalifa, a member of the Saudi Economic Association, agrees with Al-Turkustani. He said the country currently imports 1.9 million tons of wheat and produces 1 million ton domestically, with domestic production reducing by 12.5 percent annually. He estimates the cost to import two million tons is SR 2.5 billion. This cost is likely to increase by 5 percent by the year 2016 and the country’s wheat import bill would reach SR 4 billion. Khalifa said rationing consumption could save large quantities of water. “Ration water in car washes, expand on the use of treated water in agriculture and industry, reduce crops that consume large quantities of water like berseem, and exploit rainwater collected in dams, are just some ways to save water,” he said. “The use of water-saving irrigation systems should also be explored.” Importing the country’s requirement of wheat would require the building of larger silos, he added. Economist, Abdullah Al-Ghamdi, said he did not understand why a wheat producing country like Saudi Arabia would import wheat instead. In the 70s and 80s the country produced about 4 million tons of wheat annually. “Diary projects consume massive quantities of water. Producing a 1 liter of diary products requires 4 to 5 liters of water,” he added.
The Grain Silos and Flour Mills Organization said it has the capacity to provide the Kingdom with its wheat requirement through the importation market.

Green light for crown prince-led Saudi privatization program

Updated 25 April 2018

Green light for crown prince-led Saudi privatization program

  • The Privatization Program is one of 12 key elements of the Saudi Arabia’s Vision 2030
  • The program is aimed at increasing job opportunities for Saudi nationals

RIYADH: Saudi Arabia’s Council of Economic and Development Affairs on Tuesday approved the Privatization Program that is one of 12 key elements of the Kingdom’s Vision 2030. 

The program is aimed at increasing job opportunities for Saudi nationals, attracting the latest technologies and innovations, and supporting economic development.

It encourages both local and foreign investment in order to enhance the role of the private sector, with government entities adopting a regulatory and supervisory role. The aim is to increase the private sector’s contribution to GDP from 40 percent to 65 percent by 2030. 

The program will aim to reach its objectives through encouraging the private sector to invest in establishing new schools, universities and health centers, while the government pursues its organizational and supervisory role in health and education.

The privatization program aims to benefit from previous success stories, with the private sector’s collaboration in the development of infrastructure, and its involvement on a large scale in sectors such as energy, water, transport, telecommunications, petrochemicals and finance.

The program sets out a series of objectives in three areas: Developing a general legal framework for policies related to privatization; establishing organizational foundations and dedicated institutions to execute the policies; and setting a timescale for their delivery. 

The Council of Economic and Development Affairs is headed by Crown Prince Mohammed bin Salman.