Water has become the number one concern for the Kingdom of Saudi Arabia. In formulating its agricultural policy, the need to limit water usage runs through all its policies. The government has long realised that the drain the agriculture sector has been placing on the country’s finite and limited water resources is unsustainable. In 2009 Mohammed Al Saud, the deputy minister of water and electricity, told Global Water Intelligence, a publication that provides analysis on the international water industry, “There is a conflict of interest between agriculture and water. If you want to develop agriculture it will be on the shoulders of water, and if you want to preserve water it will affect agriculture.” Since then, the Saudi government has been treading a fine line, trying to find the right balance between the demands of a strategically important agricultural sector and the precious remains of its non-renewable water resources.

Preservation Efforts

The Kingdom’s water resources are currently in a worrying situation. The renewable water resources per person in Saudi Arabia have fallen from a level above 800 cu metres in 1970 to 240 cu metres in 2010, illustrating that the country is now experiencing extreme water scarcity, according to a paper by Walid Abderrahman, a professor of water resources at the King Fahd University of Petroleum and Minerals, titled “Sustainable Water and Food Security and Wastewater Reuse”. Furthermore, the country’s water resources are continuing to deplete at a rapid rate.

The Saq Aquifer located in the north-west of the country, which accounts for more than half of all groundwater withdrawals from major aquifer systems in the Kingdom, is experiencing a precipitous decline in its reserves. According to a 2008 study carried out by the Abunayyan Trading Corporation and BRGM (Bureau de Recherches Géologiques et Minières), approximately 71% of groundwater reserves in the aquifer will have been depleted by 2055, meaning there’s a finite timeline before the reserve runs dry.

The government, therefore, is working to reduce water consumption within the country. According to estimates by Booz and Company, a management consulting firm, Saudi Arabian water use is 950 cu metres per capita each year, compared to a world average of 500 cu metres per capita. The biggest culprit is the agricultural sector. According to Abderrahman, agricultural water consumption hit 15bn cu metres in 2009 out of a total consumption of 18.7bn cu metres (15.1bn cu metres of which came from non-renewable groundwater). The government is working on a strategy to implement targets for sustainable development and water use. A draft paper produced by the Ministry of Agriculture (MoA) in 2011, which is now being aligned with studies in the Ministry of Water and Electricity, recommended a reduction in water consumption in the sector of as much as 50% by 2030. The paper suggests a low estimate of 10.4bn cu metres in consumption by 2030 (a 7.1bn-cu-metre annual saving on 2004 levels) and a high estimate of 8.7bn cu metres (an 8.8bn-cu-metre annual saving on 2004).

The government is looking at a number of ways to achieve this. The headline strategy, announced in 2008, is to completely cease wheat production by 2016. In the early 1990s, the Kingdom produced more than 4m tonnes of wheat per year, gaining self-sufficiency and even exporting to the region. However, with the economic returns of water usage on wheat standing at just SR0.34-0.53 ($0.09-0.14) per cu metre, the value of government subsidies that supported this production were debatable. Indeed, with a global average water footprint of approximately 1830 cu metres per tonne, according to a study by M Mekonnen and A Hoekstra, wheat is a significant drain on the Kingdom’s already limited water resources.

Reduction Efforts

To this end, the country has already begun the process of rapidly decreasing the volume of its wheat production. In 2010 the area used for growing wheat was 219,505 ha, producing 1.35m tonnes of the cereal. This is a significant decrease since 2006 when 468,271 ha of cultivated land were producing 2.63m tonnes of wheat. However, the 2010 figure represents only a slight increase on the 1.15m tonnes of wheat produced domestically in 2009. Indeed, the country has found it difficult to stick rigidly to government decree 335, which calls for the gradual elimination of wheat production through a 12.5% annual reduction. The Saudi government will continue the wheat subsidy through a guaranteed purchase price of $266.67 per tonne until 2016.

Nonetheless, while it may take slightly longer than anticipated to phase out local production, the government is still firmly committed to that goal. The US Department of Agriculture’s Global Agricultural Information Network (GAIN) estimates that Saudi wheat production will fall by 9% to 1m tonnes in the 2012/13 growing season. With wheat consumption estimated at 2.9m tonnes for 2012/13, the country is becoming increasingly reliant on imports and the volatile international market to meet domestic demand.

Transition Period

The Grain Silo and Flour Mills Organisation (GSFMO) is the government body responsible for wheat imports through international tenders sent out to prospective suppliers. GAIN estimates that GSFMO wheat imports will reach 2.5m tonnes in the 2012/13 season, most of which will be at 14% or 12.5% protein content sourced in a number of markets, including the EU, US, Australia and Canada. The average purchase price for the 12.5% protein-content wheat in early 2012 was $320.44 per tonne.

This illustrates the financial burden of imports for the Saudi government, as they are priced almost $55 per tonne above the guaranteed purchase price for domestically produced wheat. Furthermore, with the volatility of pricing in the international market and intermittent supply constraints as a result of droughts, Saudi Arabia’s food security remains a significant challenge. The government is trying to mitigate such insecurity by building up strategic reserves; GSFMO has 12 silo complexes with a combined storage capacity of 2.5m tonnes. While GAIN estimates that the organisation’s wheat ending stock will have reduced by 20% in 2012/13 as a result of fewer imports, the policy is to maintain reserves that cover at least six months of domestic consumption. However, as domestic production continues to decrease, GSFMO is planning to increase stocks to cover a minimum of one year’s worth of domestic consumption by 2016. To this end, the organisation’s wheat storage capacity will increase to 3.5m tonnes by 2016, with a $149.3m contract to build a 120,000- tonne silo and flour mill at Jizan port.

Therefore, the government has taken great strides to overhaul the country’s wheat-producing infrastructure in a bid to reduce water consumption. However, this alone is unlikely to be enough. The country has also recognised it will have to reduce the domestic production of fodder and other cereals by creating incentives for the import of such farm inputs (see Overview and Analysis 2). The MoA has also embarked on a number of projects to bolster the efficient use of water for agricultural purposes, targeting everything from irrigation systems to wastewater reuse.

Alternative Means

One of the main drivers for this is the technical cooperation programme with the Food and Agriculture Organisation (FAO) of the UN, entitled “Improvement of Irrigation Water Management in the Kingdom of Saudi Arabia”. The programme aims to bolster national capacity, promote sustainability and develop the use of treated wastewater in irrigation through a number of pilot schemes. In the Riyadh region, the FAO is working with the National Directorate of Irrigation on the reuse of treated wastewater, which could be critical for the country. DC Krause, the general manager of the Project and Agriculture Service Company, an Egyptian agriculture consultancy firm, argues that treated sewage effluent is the way forward for the Kingdom, as reverse osmosis (or desalination) for irrigation is too costly. According to the Ministry of Water and Electricity, wastewater reuse was 241m cu metres in 2010, but the future potential is estimated at 1.7bn cu metres. The government aims to increase the use of treated wastewater in agriculture by 10% per year, according to the ninth development plan of the Ministry of Economy and Planning. According to the Saudi Water and Power Forum held in Jeddah in 2010, the wastewater reuse market could be worth $3.4bn between 2010 and 2016, making it the third largest in the world.

This could help reduce the country’s dependence on non-renewable groundwater resources. The government is also working with the FAO on a number of other projects to improve irrigation systems, as well as monitor losses through irrigation by carrying out an evaluation study of 1500 farms across the country. All this suggests the MoA is firmly committed to addressing the country’s water scarcity. Not only has the government embarked on a major overhaul of production and farming in the country, but it has also committed to a more efficient and less wasteful sector. Such measures are likely to ensure the future of water resources and the viability of agricultural production.