Ensuring Long-Term Food

Security in the GCC

Sep 2019

Ensuring Long-Term Food Security in the GCC

I. The Global Perspective

• Challenges and Prospects

• Increasing Food Demand

• Global Food Crises

II. GCC Food Security Challenges

• Main Challenges

• General Macro Conditions

• FS Country Rankings

• Food Security Indicators

III. Addressing GCC FS Challenges

A: Country Level Initiatives

(Strategic Framework)

A: Country Level Initiatives

• Optimizing Local Production

• Agri Investment Abroad

• Logistics and Distribution

B: GCC Level Initiatives

• GCC Coordination

• Logistics Networks

III. Concluding Remarks

33

Procedure 60% more food

(population 9 bn by 2050)

Beyond and adequate nutrition

Preserve sensitive eco systems

Increase agricultural productivity

More and better investments in

the agri-food

Observe cross sectoral linkages

Resources sufficient but not

available when needed

Adapt lifestyles and consumption

Global Food SecurityChallenges and Prospects

The Challenges: The Prospects:

4

Population reaching over 9

billion by 2050 and income

grows even faster

Total per capita energy (calorie

intake ) stabilizes at around 3000

cal/day

Meat consumption and

production outpacing all other

commodities

Global Food SecuritySignificant Future Food Demand

Key variables 2005/2007 2050

Population (million)- UN 2010 Revision 6,584 9,306

kcal/person/day 2,772 3,070

Global (Kcal/year) 6.66 x 10 15 1.04 x 10 16

Cereals, food (kg/capita) 158 160

Global (tons/year) 1.04 x 10 9 1.49 x 10 9

Cereals, all uses (kg/capita) 314 330

Global (tons/year) 2.07 x 10 9 3.07 x 10 9

Meat, food (kg/capita) 38.7 49.4

Global (tons/year) 2.55 x 10 10 8 4.60 x 10 8

Oil crops (oil. equiv.), Food (kg/cap) 12.1 16.2

Global (tons/year) 7.97 x 10 7 1.51 x 10 8

Oil crops (oil. equiv.), all uses (kg/cap) 21.9 30.5

Global (tons/year) 1.44 x 10 8 2.84 x 10 8

Cereals, production (million tons) 2,068 3,009

Meat, production (million tons) 258 455

Cereal yields (tons/ha; rice paddy) 3.3 4.3

Arable land area (million ha) 1,592 1,661

5

Global Food Security Recurring Global Food Crisis

Prices instability on both nominal and real

terms

High Food prices with food crisis during

the periods :

•1973

•1996

•2007

•2011

More crisis in the future ?? Source:

Adapted from UNCTAD, 2

FAO Food Price Index in Nominal and Real Time

* The real price index is the nominal price index deflated by the World Bank manufactures unit value index (MUV)

Source: FAO Stats

Nominal Price Index

Real*

GCC Food SecurityMain Challenges

Local Production

limitation

• Scarce and unsuitable

natural resources

(especially water )

• Few agriculture sectors

with comparative

advantages

High Import

Dependence

• 70-80% of GCC food

requirements through

imports

• Food imports bill at

relatively high level

Global Food Markets

Risks

• Recurring global food

crisis (2008, 2011)

• Fluctuating and rising

food prices

• Long term risks

Logistics and

Distribution

• Logistics and food supply

chains characterized by:

Distribution problems

Relatively costly

Low efficiency

Food Consumption

Patterns

• Substantial demand

growth

• Food waste relatively

high (30%)

• Problems in relation

to nutrition and health

areas

GCC Countries: Benchmarking of GeneralCountry Macro Conditions

Indicator KSA UAE Qatar Oman Kuwait Bahrain

Total Area (Ha) 214,969 8,360 1,143 30,950 1,782 77.1

population (2016) 31,787 8,810 2613 4,414 4,411 1,314

population growth

(%) (2005-2015)

2.90 7.82 10.41 5.18 5.19 4.60

GDP (2016) (USD Mn) 646,438 365,882 152,469 66,293 110,899 31,458

GDP/capita 20,337 41,530 58,330 15,019 25,141 22,096

GCC countries have similar economic structure,

and are generally classified (by UN, World Bank)

as high-income countries .The income factor, is of

special significance to food security (the access/

affordability dimensions).

Despite some relative differences, the GCC

countries share many important common

economic and social conditions. The similarities

include all being oil-based economies, similar

consumption culture and pattern, relatively poor

agricultural production resource base ,and all

countries characterized by relatively high

dependence on food imports.

GCC Countries: Benchmarking of GeneralCountry Macro Conditions

GCC: Related-Food Security Indicators

Indicator KSA UAE Qatar Oman Kuwait Bahrain

Commodity self-sufficiency

Cereals (totals)% 12.8 2.5 0.2 3.1 5.1 0.0

Meat (total) % 49.4 14.3 12.4 45.7 34.5 22.0

Food commodity imports ($/mn) 11,704.60 4,846.60 1,729.70 1,723.10 2,230.40 1521.1

Food import/ capita ($) 368 550 662 390 528 1068

Food security index (EIU)

Score (out of 100) 71 70.9 73.3 73.9 74.6 67.8

Rank (out of 113 countries) 32 33 29 28 26 41

9

Addressing GCC FS Challenges Food System and Strategic Framework

Restructuring of the Agricultural Sector

Global Investment and Trade

National Food Strategic Reserve

Logistics and Food Distribution Channels

Food Demand and Consumption Management

Policies

Institutional and Management Aspects

An Efficient KSA Food System: Manage and co-ordinate the different components of

KSA strategic food security framework

Cover food security needs at the national, as well as the

regional levels

Maintain short-and long-term stability and risk

resilience

Form and mobilize public and private resources and

partnerships

Food Security Strategic Framework:

Although varying among GCC, overall

serious agricultural resources constraints

(specially water)

Comparative/ competitive advantages

(efficiency) should guide selection and

development of agricultural sub-sectors

and industries

Development should not be limited to

farming/production, but should extend to

the entire value chain of agribusiness

commodities and industries

Addressing GCC FS ChallengesOptimizing Domestic Production

Indicator KSA UAE Qatar Oman Kuwait

Cultivated Area (000 Ha) 4,192 77 14 154 16Cultivated Area/capita 0.14 0.01 0.01 0.04 0

Agricultural GDP ($/mn) 17,321 2,945 282 1,316 630Agri GDP capita ($) 545 340 108 298 143

An important strategy to overcoming

domestic natural resources constriction

and leveraging relative abundant financial

resources

Although protentional beneficial to both

investing and host countries, appropriate

strategies and performance are crucial

(land grapping, environmental impacts,

labor issues, etc.)

Need for responsible investment across all

of the agricultural supply chains

Addressing GCC FS ChallengesAgricultural Investment Abroad

Examples include different models by the

private sector, public companies, and

partnership with international agribusiness

A leading and an important investment mode is

that of “ Food-security-oriented” companies.

Examples; GCC Food-Security oriented

companies

12

GCC Food Security Ranking

Source: EIU, 2018

*Ranking out of 113 countries

Country

Overall Food Security Dimension

Rankin

g

Score /

100

AFFORDABILI

TY RANK

Score

/ 100

AVAILABILIT

Y RANK

Score /

100

QUALITY

AND SAFETY

RANK

Score /

100

NATURAL

RESOURCES &

RESILIENCE

RANK

Qatar 22 76.5 2 92.9 46 62.8 31 73 93

Kuwait 28 74.8 7 84 38 67.5 35 71.7 83

Oman 29 74.4 33 73.1 22 76.4 34 71.8 107

UAE 31 72.5 4 87 50 61.2 43 67.7 113

KSA 32 72.4 27 77.3 35 68.8 40 69.9 107

Bahrain 41 67.8 25 78.3 47 62.7 61 55.5 109

13

Selected Food Security-Oriented Agribusiness Companies in the GCC Region

Area/Aspect SALIC (KSA) AL-Dahra (UAE) Hassad (Qatar) Oman Food (Oman) Al - Mawashi (Kuwait)Company Overview

1. Establishment Nov-11 1995 2008 2012 1973

2. Ownership Public company under PIFPrivate limited liability

companygovernment company government company Public shareholding company

3. Company Capital USD 800 Million NA USD 3 Billion USD 650 Million USD 71 Million

Strategic Orientation

1. VisionTo be a world-class food

security focused agribusiness investment company.”

to partner with governmental and commercial entities in

realizing strategic

To be a successful strategic investor in the global food

and agriculture value chains.

To be the recognized leader for promoting strategic investments in the food sector domestically and

internationally

For AlMawashi to become the biggest and most proficient

company specialized in livestock transport & trading in the world

during the next 10 years

2. MissionTo build a world-class food

security focused agribusiness investment company by:

to grow into a sustainable agricultural and food products provider and partner, ensuring supply sufficiency, high quality

of farming and production operations

To identify and invest in attractive assets in the global

food and agriculture value chains, and build a strong

portfolio

Invest in food projects individually and in

partnership with various strategic investors inside

and outside Oman

§ “Achieve shareholders

expectations through proper

employment of our human

resources and functionality to

exceed our customer’s

expectations and enhance

food security”

Business description

1. Main Lines of Business

Farming, livestock, processing, packaging,

arrogation and sourcing, logistic and supply chain,

infrastructure.

specializing in the cultivation, production and trading of animal feed and essential human food commodities

(grains, meet, vegetables, oil, etc.)

producing animal feed, fruits and vegetables, dates,

poultry, and sheep. Trading and distributing

Red meat, Poultry, Dairy, Grains and Fisheries

provides all kinds of fresh, chilled, frozen, and processed halal meat

2. Value Chain Involvement

Across the entire value chain: input provision, farming, aggregation, processing,

distribution and trade

operates across the entire supply chain from farming,

processing to logistics

operates across the entire supply chain from farming,

processing to logistics

The company aspires to work across all the supply

chain.

operates across the entire supply chain from farming, processing to

logistics

3. Products Range12 products are selected based on their strategic

importance:

production and trading of animal feed and essential human food commodities

production and trading of animal feed, fruits and

vegetables, dates, poultry, sheep, grains and sugar

Red meat, Poultry, Dairy, Grains and Fisheries

Live animals, fresh & frozen meat

An efficient logistic systems is curricle for

ensuring adequate food security

Although with some variation in Arab/GCC

countries, logistic is a serious constraint

(higher costs, and longer time for

operations)

A holistic view of the entire logistics is

needed network , covering all of domestic

supply chains (port, in-land transport,

storage, and other logistics)

Addressing GCC FS Challenges

Need for Efficient Logistics

Source: World Bank, 2014

*Arab countries include four GCC countries (KSA, Bahrain, Qatar, and Oman)

Ensuring Long-Term Food Security in the GCC

GCC Level Initiatives

In addition to GCC country initiatives,

there is wide scope of GCC cooperation and

coordination (in agricultural investments,

trade, logistics and distribution, etc.)

Expanding economic and trade agreements

and framework provide substantial space

and opportunities to help in GCC food

security efforts. Areas for special place to be

explored:

• GCC Regional food Reserves

• GCC Intra-trade

• Unifying consumer food standards and

specifications

Ensuring Long-Term Food Security in the GCCConcluding Remarks

Food Security is a challenge of increasing

importance globally and for the GCC in

particular

Many options to address the FS challenge

at both country level, as well as GCC

regional level

FS is about the appropriate policies and

strategies (not agricultural resources only).

Example: Singapore ranked No one, yet

it import 90% of its food

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