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The Global Food Crisis: Middle Eastern Dimensions

06 Mar

In 2007 and 2008, a sharp rise in agricultural commodity and food prices triggered grave concerns about Food Security and increased poverty throughout the world. While the threat of a prolonged food-price shock receded with the weakening global economy in the second half of 2008 and a relaxation of export bans, many of the key factors causing volatility in food prices and availability remain in play and will require careful management if the world is to avoid future food-price shocks.

Read our previous posts on FOOD

The majority of Arab countries import 50% to 90% of their food requirements. As the world’s largest net importers of cereals, these countries are more exposed to severe swings in agricultural commodity prices. This vulnerability will probably be exacerbated in coming years by strong demographic growth, low agricultural productivity and their continuing dependence on global commodities markets.

Many causal factors regarding food insecurity differ among Arab countries, whether least-developeddeveloping or emerging. But they all have two key factors in common: they all face Food Security risks that rise to the threat of national security concerns; and they all face water scarcity severely constraining domestic food production.

Arab countries need to act urgently to improve Food Security. Projections of the Arab region’s food imbalance indicate that dependence on imports will increase by almost 64% over the next twenty years.

Just 18% of current world wheat production and 6% of world rice production is exported; the rest is consumed domestically. Such thin international cereal markets imply that small shifts in supply or demand will lead to large shifts in prices.

At the height of the recent shock some major wheat and rice exporting countries banned exports for fear of not being able to feed their people. These bans contributed to the rapid escalation of global market prices. The thinner the market, the sharper the fluctuation in international prices and the higher the likelihood of future price shocks.

Due to its small size, Qatar is particularly vulnerable to Food Security risks. Indeed, high and volatile food-import prices have been endemic in Qatar for many years, not just during the most recent regional food crisis.

In order to keep up with food demand, global agricultural-productivity growth needs to stay ahead of population growth. If not, demand will outpace supply and food prices will rise. Global food demand is very likely to accelerate in the near future with rising incomes and food consumption standards in China, India and numerous other rapid-growth economies. Furthermore, bio-fuels production mandates in a range of developed and developing countries are resulting in widespread land diversion from food production. Such upward pressures on prices are likely to be compounded by falling food output in countries and regions negatively affected by global warming and increasing water scarcity.

Gulf countries can take steps to increase food production at home, even with the constraints imposed by the limited availability of water and land. The incentives to invest in agriculture in the region are high: The World Bank estimates that for every 1% in agricultural growth, poverty is reduced by 2%.

Projections suggest that by 2050 renewable water will fall below 500 cubic meters per capita and arable land to 0.12 hectares per capita. Improved farming technologies can boost yields, which are currently only half of the average yield worldwide – a gap that is still growing.

Gulf countries could also manage their import exposure more actively by investing in infrastructure to produce, store, and transport food. Approximately 75% of the retail price of food is attributable to production, transportation, and marketing. This kind of investment could also allow some food importing countries with access to domestic petroleum to better arbitrage fuel and food prices.

Better water management will be critical in Middle Eastern agricultural productivity. Equally important is investment in agricultural research and development, which despite average rates of return of 36% in Middle East countries, receives less funding than in the rest of the world. Climate change, moreover, is likely to have a significant impact on domestic food production in Middle East countries, and research and development are urgently required to drive the next green revolution.

All of these regional characteristics bare special significance for Qatar, which depends on the majority of its food supply from the outside world. The Food Security challenges facing the Middle East are ever more acute for Qatar. Qatar’s future Food Security – and national security – depends on better water and energy development management, adoption of improved farm technologies and marketing, relevant regulation and legislation, and more comprehensive planning and policy development.

Qatar has been extremely proactive in addressing these issues through the creation of the Qatar National Food Security Programme.

The programme’s mission is to develop a comprehensive and sustainable long term solution to the challenges that the State of Qatar faces with regards to its Food Security. The objective is to increase and enhance domestic agricultural production and, in parallel, strengthening the security of food imports to alleviate the food supply deficit that Qatar faces. The QNFSP could also serve as a model to other dry land countries in the region and globally. The programme will present its findings to the State of Qatar in the form of a Master Plan that will be completed by the end of 2012.

The programme will implement the usage of solar energy to desalinate seawater, which will then be used for its agricultural production. It will also develop Research & Development centres, educational facilities, and introduce sound technologies that will enable Qatar to diversify its economy while preserving its natural resources to ultimately achieve Food Security.

To contact the Qatar National Food Security Programme, please click here

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Posted by on March 6, 2012 in Agriculture

 

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