How safe are Gulf region's food supplies?
ABU DHABI // Unrest in Tunisia and Algeria coupled with continued instability in global food markets have highlighted just how seriously governments in the Middle East and North Africa need to take the issue of food security.
Access to affordable food has been seriously affected in recent months by a run of bad weather and poor harvests in major food producers around the world, and food prices are still rising.
The scarcity of water and reliance on imported foods make the region particularly vulnerable to food supply shocks. The Mena region imports more than half its food - the most in the world, according to the World Bank.
In the Gulf, with its limited domestic agriculture and rapidly increasing population, that figure rises to at least 60 per cent. In the UAE, estimates for imported food are as high as 85 per cent.
The Mena region's challenge is further exacerbated by water scarcity. Agriculture contributes to 12 per cent of the region's economy but uses 89 per cent of its water resources, according to the US-based International Food Policy Research Institute (Ifpri).
Much of the region has limited arable land and water supply, and many countries fall below the United Nations standard for water poverty - a renewable supply of 1,000 cubic metres of water per person per year.
"The region is naturally vulnerable simply because we don't produce what we eat, particularly in the GCC," said George Atalla, a Cairo-based agriculture strategist at Booz & Company. "This also increases how vulnerable we are to global supply trends and disruptions."
Recent natural disasters - including flooding in Australia and Pakistan, and wildfires in Russia - have pushed food prices up worldwide.
Because markets are so interdependent, the effect of extreme weather events "can now transpire and propagate to domestic markets much quicker than before," according to the UN's Food and Agricultural Organisation (FAO).
The FAO also predicts that global food production will have to increase by 70 per cent to meet rising demand by 2050. By then, the Mena population is expected to have risen from more than 400 million to nearly 700 million.
The FAO's food price index - which incorporates the average prices of meat, dairy products, cereals, cooking oil, fats and sugar - was up 25 per cent in December from the same month in 2009.
To combat rising prices, Mena countries maintain high subsidies on oil and food, but some experts worry that governments are not doing enough to ensure these subsidies help those who need it most.
"I'm hoping we can see some significant reforms, food security-related reforms," said Clemens Breisinger, a senior research fellow in development strategy and governance for Ifpri.
"Right now, it's based on an indirect system of subsidies. These systems are not well targeted to food-insecure and poor people."
Mr Atalla said not all countries in the region could afford to subsidise staples as much, or for as long, but in the current climate he doubted governments would reduce subsidies.
"There's a strong commitment everywhere to make sure subsidies are well targeted," he said. "But governments can't subsidise everything, and when you have increasing inflation, the portion spent on food is increased and disposable income is reduced. Families will be in a more precarious economic position."
Experts say better long-term solutions for the Mena region involve natural resource management, more diversified economies, an emphasis on education and greater investment in agriculture.
While some countries, including the UAE, are testing the viability of offshore contract farming for growing and importing strategic crops, domestic initiatives may prove to be more effective.
"In countries where there is agriculture potential, public investments, especially in smallholder farming, make sense," Mr Breisinger said.
Mr Atalla also said governments should aim to stockpile strategic crops, allowing them to control the price while also reducing the time it takes to get food to market.
Private and public sector partnerships could also play a key role. Initiatives are under way in two Mena countries, including one in the GCC, to provide government incentives - free land, for example - for companies to operate food storage facilities.
"The role of government is to ensure food security, but at the end of the day the government is not in the business of production. The private sector is the one producing the food," Mr Atalla said.
"A lot of countries have been trying new ideas and ways to solve this problem, but the jury is still out on whether any of these is effective. "But what is known is that food security policies are needed that ensure that food is available, affordable, nutritious and safe for consumption."
Food security: country by country
Massive wildfires and severe drought last year destroyed a quarter of the country’s grain harvest. The government announced an embargo on grain exports last August to stabilise food prices. This has had a big impact on the world market, as Russia is one of the biggest producers of wheat, barley and rye.
Last year’s devastating floods around the low-lying areas of the Indus River destroyed the most fertile growing areas, damaging millions of acres of sugar cane, cotton and rice fields. Pakistan is the world’s third-largest supplier of rice, and most of the country’s stored grains, including wheat, were also ruined.
Unexpectedly high rainfall late last year in western India led to crop damage and an onion shortage. The effect was felt in the Middle East after the government curbed exports to fight domestic price rises. Sharp increases in the prices of sugar and pulses pushed food price inflation to 20 per cent early this year, according to a report by the World Bank.
First came the locusts, then came the floods. Although early last year weather patterns looked promising for crops, locusts and recent floods have all but wiped them out. The floods have also affected the supply of meat exports. Queensland, one of the worst hit states, accounts for 45 per cent of Australia’s meat exports. The country accounts for 11 per cent of total global food exports, according to the UN’s Food and Agricultural Organisation.
Heavy rains and volcanic ash destroyed crops and hindered distribution of rice and chillis. It prompted the government to launch a “grow your own chillis” campaign, while scrambling to control the price of rice by banning exports.
Continuing dry weather at the beginning of this year has led to fears that the estimated global food deficit this year will be higher than expected. Lack of rainfall and above normal temperatures have affected corn and soybeans, of which Argentina is the third-largest producer. Its soybean output is expected to drop by 13 per cent this year.
Laos and Cambodia
Delayed and erratic rainfall has led both governments to decrease their forecast output of grains, especially rice, for this year. Poor harvests are expected to prevent either country from increasing or maintaining current export levels.
A wet spring pushed last year’s wheat harvest down by 15 per cent. The next planting was also affected by the cool weather, with frost destroying plants before they could mature. Canada is the world’s second-largest wheat and grain exporter. Heavy snowfall this winter has raised fears of more flooding in the spring.
Last year’s dry weather hit more than four million hectares of farmland, with the key wheat-growing province of Shandong now facing its worst drought in at least 40 years. This has forced the government to hand out millions of dollars in financial support to wheat farmers in northern and southern China. Grants, in the form of pesticides and seeds, are expected to be handed out before planting begins next month.
Updated: January 25, 2011 04:00 AM