Saudis Seek to Invest in Sudan Farm Sector
Arab News
04 January 2006
A group of Saudi farmers will leave for Sudan on Jan. 31 on a four-day visit to explore the possibility of investing in that country’s agricultural sector.
“ We are willing to invest up to $ 100 million for setting up a joint stock company provided we own the land and not lease it. ” Turki Faisal Al Rasheed, president of Golden Grass, Inc. told Arab News. Dr. Fahad Al-Sultan, secretary general of the Council of Saudi Chambers of Commerce and Industry will be the leader of the delegation.
Asked why the Saudi farmers would like to invest in Sudan when the Saudi Government was providing incentives to then, he said the high cost of diesel oil was having an adverse impact on the agricultural production. “The price of diesel has shot up from 8 halalas to 40 halalas per liter during the last seven years,” Al Rasheed said, adding that the price hike has an adverse impact on the Saudi agriculture. Also, the government is discouraging the production of water-intensive crops.
“At one time, 85 percent of our peanut production was earmark for exports. Now under the World Trade Organization (WTO) rules, export items are not eligible for subsidies. This has left farmers with no option but to scale down their production or quit the market,” he observed.
Al-Turki blamed the Saudi negotiating team for keeping the farmers in the dark about the implications of joining the WTO. “There was no transparency on the government side as far as the farming community in concerned. If Saudi Arabia became a member of the WTO, it is not because of the negotiating team, but due to the political clout of our leadership and the initiative of King Abdullah”.
With the Kingdom having formally acceded to the WTO, agricultural subsidies are to be gradually reduced by 13.3 percent over a 10 year period. The Kingdom has also pledged to reduce its overall support for agriculture under a long-term plan to minimize any adverse impact on the agricultural sector.
The tariff levels for the rest will remain unchanged for now. However, the Kingdom has agreed that it would not maintain any export subsidies on agricultural products.
The downturn on the farm front began when the government launched its program of gradual reduction of subsidies for the production of water-intensive crops like wheat, alfalfa, peanuts, etc.