Economic Update

Published 29 Oct 2013

Faced with a rapidly expanding population, Bahrain is seeking investors to help strengthen its food production capabilities at home, while also acquiring land overseas for cultivation.

A lack of fresh water and an arid climate make farming difficult across the GCC, but Bahrain, which has a land area of 750 sq km, faces the added challenge of space constraints.

Officials have begun rolling out a number of strategies aimed at improving agricultural capacity, while also embarking on international partnerships to help increase food security. However, advanced technological solutions will likely be necessary to address the Kingdom’s unique farming challenges and maximise output.

Expanding production at home

A sizeable number of domestic initiatives, including a national drive to galvanise innovation across the sector, are being overseen by the National Institute for Agricultural Development (NIAD). Set up in 2010 by Princess Sabeeka bint Ibrahim Al Khalifa, the institute recently broke ground on a new agricultural “incubator” that will provide training and support to entrepreneurs in the industry.

The facility will complement existing NIAD initiatives, such as microfinance schemes through Edbaa Bank, Tamkeen and the Bahrain Development Bank, and encourage young Bahrainis – particularly the unemployed – to enter the sector.

With 35% of agricultural production based on modern techniques, according to government estimates, helping local farmers acquire new technology and methods is recognised as being pivotal in moving the industry forward. To this end, the NIAD is working with Bahrain Polytechnic to prepare a curriculum for an agricultural production degree programme.

The institute also spearheads efforts to increase collaboration among sector stakeholders. Recent initiatives include the launch of a biannual competition, with a cash prize, aimed at encouraging private companies to work alongside public officials on technology development and pilot programmes for the sector.

Bahrain has already begun reaping rewards in key segments targeted for development, particularly within the field of aquaculture. The Kingdom is fast becoming one of the top producers of native juvenile fish in the region. Early success has prompted officials to consider whether Bahrain could feasibly become self-sufficient in fish production. However, the industry would still need to triple its annual output to 15,000 tonnes to satisfy domestic demand, according to government studies.

Bahrain’s aquaculture research and development is based at the National Mariculture Center, which started out as a UN Food and Agriculture Organisation pilot project back in 1979. Ministry officials are now targeting public-private partnerships (PPPs) as a means of reducing the food trade deficit, which stands at around BD120m ($318m). According to the minister of municipalities affairs and urban planning, Jumaa bin Ahmed al Kaabi, the state expects to sign up to five agreements with private aquaculture companies by the end of March 2014.

International investments

Participation by the private sector is expected to expand more broadly across the industry. In late 2011 the state announced the establishment of the BD100m ($265m) Gedha Fund, a PPP financed jointly by the state’s Future Generations Reserve and the National Bank of Bahrain.

The fund will support the development of domestic agriculture companies, as well as seek to lease or purchase land outside the Kingdom that can be used for agricultural purposes, although specific investments have yet to be announced. The finance minister, Sheikh Ahmed bin Mohammed al Khalifa, when signing the initiative, voiced his hope that the fund would serve as “a model” for other PPPs within the sector.

Bahrain has already begun crossing borders to supplement its food supplies and, like Saudi Arabia, is working closely with the Republic of Sudan to achieve its aims. That country has leased Bahrain 100,000 acres of arable farming land for development, while the Kingdom is working to establish a National Company for Food Security, in conjunction with the private sector, to oversee future projects in the African nation.

Even with innovation driving up domestic output, land constraints and rising demand at home mean initiatives such as this will inevitably play an important part in supporting Bahrain’s bid to boost food production.