Desert blooms: Initiatives to green the desert will boost agricultural production

With demand for agricultural produce growing strongly, both from domestic demand and the rising export sector, Egypt is reinvigorating its major desert development projects. Efforts to “green” areas of desert and convert it for agricultural use date back many years. For instance, work on bringing water to Tahrir province located north-west of Cairo was started in the 1950s under President Gamal Abdel Nasser, with mixed results. Efforts were stepped up by President Anwar Sadat, who issued a call to “invade the desert” as part of a “second green revolution”.

Interest in agricultural development in desert areas has intensified due to growing pressure on Egypt’s food supply and traditional farming regions, particularly the Nile Delta. Rising demand and food prices are also making desert agriculture, by its nature more capital-intensive, more attractive to private investors.

TOSHKA PROJECT: One of the country’s biggest agricultural projects is Toshka, also known as the “New Valley”, in the Western Desert, to the west of Lake Nasser. Of the 226,800 ha, only a small proportion has so far been cultivated since the scheme was initiated in 1997. In 2005 the world’s largest pumping station – at the time named after President Hosni Mubarak – was opened in Lake Nasser to serve Toshka.

The pumping station cost LE1.48bn ($247.7m) and has a capacity of 1.2m cu metres per hour. The station feeds into the Sheikh Zayed Canal, which stretches some 51 km and was completed in 2010. The canal is the central water supply system for Toshka, but the Ministry for Water Resources and Irrigation (MWRI) estimates that ground water resources accessed through hundreds of wells can provide an extra 2.5bn cu metres to the station annually.

Toshka was conceived as a “second Nile Valley” both to supply Egypt’s growing population with food, and to create employment and new settlements in the south of the country, taking some pressure off Lower Egypt while developing an under-populated and strategically important part of the country’s land. It was also designed as a zone for export-oriented farming, with the intention of attracting major Egyptian and foreign agribusiness investors.

Toshka arouses scepticism in some quarters, largely because of the great distances between it and major population centres and export gateways – it is around 1000 km from Cairo. This makes transport costs rather high, and the remoteness also means that it can be hard to attract workers to relocate, particularly the skilled labour that modern farming requires.

In addition, press reports have also suggested that engineering assessments could have been more thorough, and that the wide range of temperatures in the area – from the freezing winter nights to 50-degree days during the summer, make construction difficult and habitation undesirable.

INVESTMENT PLANS: Several state-owned firms have set up in Toshka, however, including some military farms. Likewise, Al Ahram Beverages, the Egyptian subsidiary of Dutch brewery Heineken, is understood to have large barley farming interests in East Oweinat, adjacent to Toshka and also in the “New Valley” area.

Those writing off Toshka may have spoken too soon. In May 2012 the UAE-based agribusiness Al Thaherah announced that it would be investing up to $3bn in Egypt, including a massive chicken farm project in the region. The company plans to develop 20,000 acres (8094 ha) per year for five years to create the country’s second-largest poultry farm, as well as an industrial processing plant for the animals.

In June 2011 the government signed a contract with Kingdom Agricultural Development Company (KADCO), owned by Saudi Arabia’s Prince Al Waleed bin Talal, for the development of 25,000 feddans (10,500 ha) worth a total of LE5m ($836,850) at Toshka. KADCO will purchase 10,000 feddans (4200 ha), and administer the other 15,000 (6300 ha) through a usufruct system. Prince Al Waleed had bid for land at Toshka during the Mubarak era, but had encountered legal obstructions, and the successful 2011 deal was seen as a sign that Egypt is serious about attracting investment to the region.

The MWRI identifies a range of advantages of Toshka for agricultural investment, particularly installed infrastructure, including major irrigation canals, and the region’s climate, which is suited to ripening fruit quickly, meaning they can go to markets in Europe earlier in the year than crops from competing countries. According to the ministry, crops suited to Toshka’s environment include grapes, green beans, corn, barely, wheat, strawberries, peanuts, palm trees and citrus fruits, as well as clover for livestock feed.

SINAI: In 1986 the Ministry of Agriculture and Land Reclamation marked 250,000 feddans (105,000 ha) in the Sinai for agricultural development, to be irrigated by the Nile’s Damietta branch. Within three years the projected area for reclamation had risen to 400,000 feddans (168,000 ha) in what is called the North Sinai Agricultural Development Project (NSADP).

In February 2012 the MWRI announced it had completed 94.4% of the infrastructure for the NSADP, including irrigation canals, pumping stations and bridges. At the heart of the project is the Al Salam Canal, running from Damietta to the Suez Canal, which led to the reclamation of 220,000 feddans (92,400 ha). This linked with the Al Sheikh Gaber Al Sabah Canal in 1997, taking water to the barren north of Sinai.

According to Richard Tutwiler, a research professor and director of the Desert Development Centre at the American University of Cairo (AUC), Sinai agricultural development has met expectations to a greater extent than Toshka – as it is somewhat less ambitious, being smaller and much closer to population and export centres. Medium-sized investors in particular have been drawn to the region. However, while the project is certainly a success and a feat of engineering, there is a perception that Sinai is still not achieving its potential as an agricultural area.

One factor that has held the region back is land ownership. Due to the security and cultural sensitivity of the peninsula, those not native to the Sinai are prevented from owning land – the maximum permitted is a 99-year “right-to-use” lease. Lack of ownership rights on land that can be used as collateral makes it difficult for companies based in the Sinai to obtain bank loans, or to list on the stock exchange.

SINAI REFORM: Things may be about to change, however. In the wake of the revolution, the government has outlined a number of major schemes, known as nationalistic projects, as part of its programme of economic revival. Reports suggest that the NSADP may be designated as one, which would allow outsiders to own land within it. Certainly, the interim administration has stepped up construction work on the zone, as well as promotion to investors.

As with Toshka, the aim of the NSADP is to boost agricultural production through new, modern farms and to resettle people from the densely populated Nile Delta, as well as bring development to one of the poorer areas of the country. There is a degree of political rationale behind the greening and populating of the Sinai, which Egypt reclaimed from Israel in 1982, having fought three wars on the peninsula.

NEW THINKING: The desert projects naturally require not only irrigation and roads, but considerable investment in agricultural technology. “We need to think of smart agricultural solutions,” said Hans van der Beek, a counsellor for the Dutch Ministry of Economic Affairs, Agriculture and Innovation at the Dutch Embassy in Cairo. “Solutions that are more intensive but use less water, like soil-less cultivation methods that recycle water. This technology exists and works.”

Water is precious, and care must be taken not to deplete the water table and lakes in both Toshka and NSADP. Soils, particularly in the Sinai, tend to be fairly saline and thus only suited to certain crops; ensuring that the right breeds are used will be critical to success. Intercropping between winter and summer crops, for example barley and potatoes, is being used in the region already, and can help optimise yields.

The AUC’s Desert Development Centre can play a role in the desert projects, though it has tended to focus on small-scale farms. It was founded in 1979 and has played a low-key but important role in agricultural research and development. Its activities are largely in horticulture rather than field crops, and include water management, advising farmers on crop development, and social work in rural areas.

In its desert agriculture projects as much as anywhere else, the capital and knowledge and technology transfer that foreign investment brings could accelerate development. Some major players are already establishing themselves. Schemes such as Toshka and NSADP are ambitious, and face obvious challenges. Experience shows that they are not overnight successes, and infrastructure and a favourable investment climate must be in place for them to take off. But the fundamentals of growing domestic demand, a need to boost export earnings and constraints on old land make greening the deserts a realistic, and some would say essential, project.

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The Report: Egypt 2012

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