Food on the Table

Qatar

Economic News

22 Jul 2010
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The issue of food security has lately been making headlines in Qatar as the country considers its supply options for the future.



Speaking at a seminar in Doha on the global food crisis, United Nations Secretary General Ban Ki-moon said food security was a critical issue and would become even more so in the immediate future.



"The situation is expected to get worse as the global population increases, as climate change accelerates, as fuel prices fluctuate and as the financial crisis continues to unfold," he said on November 30.



Qatar's government is well aware of the potential risks to food security outlined by Ban. Only 28,000 hectares of Qatar's 1m-hectare landmass are considered arable, and this portion is shrinking rapidly as salinity levels in the groundwater rise and increasing desertification takes hold, according to a study by the Qatar Science and Technology Park (QSTP).



As the amount of land under the plough falls, so Qatar's need for imported agricultural products grows. Current estimates show that around 90% of Qatar's food requirements are met through imports.



In order to secure its future food needs, Qatar has been investigating opportunities to invest in the agriculture sectors of a number of countries across Africa and Asia, the latest being Kenya.



According to local media reports, Qatar is seeking to lease 40,000 hectares of land in the Tana River delta region in the north of Kenya for crop production. News of the plan came after Kenyan President Mwai Kibaki returned from a visit to Qatar at the end of November.



Isaiah Kabira, spokesman for the Kenyan president, said the leased land, which is owned by the state, would be used to grow fruit and vegetables.



For Qatar's part, it has offered to provide loans of up to $3.5bn to the Kenyan government to build a new deepwater port at Lamu, close to where Doha is hoping to lease land. According to a statement issued on December 1 by President Kibaki's office, Qatar's ruler, Sheikh Hamad bin Khalifa Al Thani, said his government was "keen on the Lamu project as it sought to diversify its international investment portfolio."



If it goes ahead, the Kenyan venture will not be Qatar's first foray into agriculture in other countries.



In May, Cambodia's deputy prime minister, Hor Namhong, announced Phnom Penh and Doha were close to signing an agreement that would see Qatar invest $200m in his country's agriculture sector, in return for which Qatar would secure purchasing options on yields from the crops.



Similarly, in early September, local media reported that Qatar and Vietnam had established a $1bn joint fund to invest in a number of sectors including agriculture, with the Qatar Investment Authority (QIA) to provide 90% of the fund's equity.



Phung The Long, Hanoi's ambassador to Doha, said both animal breeding and crop projects were being discussed. "We like to have cooperation in this field. Qatar can provide the finance to grow food grains in our land and these can be exported to Qatar," he said.



Qatar has also invested in meat production in Pakistan and, in a deal stuck in July, agreed to set up a joint company in Sudan to fund grain-growing ventures.



Though Qatar's investments may ensure food security, physical security for the projects could be another issue.



According to Eckart Woertz, programme manager for economics at the Gulf Research Centre, investing in the agriculture sectors of some of these countries could entail a risk for Qatar and other Gulf states looking to secure their own food supplies, especially if their presence is seen as a threat to local access.



"These are countries that come with a lot of political baggage," Woertz told the Associated Press news agency on November 30. "People riot when they don't get food."



Another to sound a note of caution was Lennart Bage, president of the International Fund for Agricultural Development (IFAD). Bage told local media on December 1 that Gulf states making agricultural investments in Asia and Africa must safeguard the interests of local communities or else they risk setting off a backlash.



"The important thing is to have the right approach because in many countries, speaking generally, there is a need for investment in agriculture," he said. "If the investments are done in a way that benefits the local population, then it's a win-win situation."



By providing funding for other projects, such as the port in Kenya, it appears that Qatar is more than aware of the delicate balance that must be maintained and is working to contribute further to the economies in which it is investing, rather than just reaping what it sows.

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