Booming Gulf looks abroad for food needs

A win-win situation?
Experts say the agriculture investments, if done well, could be a win-win situation. The Gulf gets greater food security, while poorer developing countries benefit from added jobs and improved technology.

But there are concerns, too.

The head of the U.N. Food and Agriculture Organization, Jacques Diouf, has warned that foreign land acquisition and long-term leasing schemes, if done poorly, risk "creating a neocolonial pact ... and unacceptable work conditions for agricultural workers."

Even so, some countries are seeking out investment.

Pakistan, already a key source of labor for the Gulf, has been among the most active. This spring, Islamabad helped organize a road show in Dubai aimed at boosting investment in predominantly Muslim Pakistan's agriculture and dairy industry.

Huma Fakhar, managing partner at MAP Services Group, a market research and trade consultancy which sponsored the event, said Pakistan was a logical choice for Gulf investment.

"We provide the human capital and the raw materials, and they provide the financial capital and technical know-how," she said.

Fakhar said an investor from Abu Dhabi, whom she declined to name, bought 40,000 acres of farmland in southwestern Pakistan's Baluchistan province last year. Two UAE private equity firms, Emirates Investments Group and Abraaj Capital, have also expressed interest in investing directly in Pakistani agriculture, she said.

Emirates Investments did not respond to requests for comment, and Abraaj declined to discuss the matter.

"We are interested in the sector. That's all we can really say," Abraaj spokesman James Cordahi said.

Not all the investments involve direct purchases of land.

Merowe Dam to be a source of power
Gulf nations, along with the Chinese government, have poured hundreds of millions of dollars into a massive hydroelectric project in northern Sudan. The Merowe Dam on the Nile is being built mainly to produce electricity, much of which is slated for agricultural uses such as irrigation and groundwater extraction.

Abu Dhabi, Kuwait, Saudi Arabia, Qatar, Oman and a Kuwait-based pan-Arab fund have all provided loan financing for the project, while China has pledged the majority of the loans for power lines and related substations.

The investment appears to be paying off.

The Abu Dhabi Fund for Development, a government body that has provided $200 million in loans for the dam, is among a number of Gulf entities that have since taken a direct stake in Sudanese agriculture.

The fund did not respond to repeated interview requests about its plan to plant alfalfa for livestock and possibly other crops on 70,000 acres of Sudanese farmland. Officials have said the project is part of a broader effort to lock in food supplies for the emirate, the largest and richest of the seven comprising the UAE.

Similar deals a priority
Southeast Asia is eager to forge similar deals. The 10-nation Association of Southeast Asian Nations said during a recent meeting of finance ministers in Dubai that food security and agriculture investment were a priority for the bloc.

"I think investment in that area is a sure bet," ASEAN Secretary-General Surin Pitsuwan told The Associated Press after the meeting. "Rather than being at the receiving end of the finished products, I think you can go downstream into the production. You know, you can acquire farmland, you can invest, you can bring in new technologies with the resources that the Gulf has."

Still, doubts remain.

"It's not just about investing in just one farm, but about developing a whole sector," Woertz said. "The (Gulf) guys are not farmers. Why not leave that to the specialists?"

Najieb Khoory, who has coaxed crops out of the desert here for over two decades, agrees.

"If there is any major problem, the first thing that (producing) country will do is to stop that export," said Khoory, the Mirak company co-owner and managing director. "Of course it's risky."

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