Renewable water resources in the Arabian Peninsula are estimated at just 85 cubic meters per person per year, well below the 1,000 cubic meters threshold identified by the United Nations (UN) as an indicator of water scarcity. And in order to meet the demands of residents, countries in the region continue to draw water from the non-renewable underground aquifer system.
Despite the scarcity of water, the resource is persistently misused, a misuse which is sometimes driven by policy. In Saudi Arabia, for example, water is provided to citizens at the low price of 0.10 Saudi Riyal (SAR) per cubic meter ($0.03/ cubic meter ) for up to 503 cubic meters. For comparison, residents of New York City charged on the basis of metered consumption pay $1.35/ cubic meter . And while officials are discussing the possibility of raising these low rates, these prices will continue to encourage a rate of per capita water consumption that is actually far above the international average. Consequently, a recent study using NASA satellite data indicates these aquifers are being depleted at an alarming rate, classifying the Arabian aquifer system as one of the most stressed in the world.
The limited nature of water resources means that most parts of the Peninsula are unsuitable for food production. According to the UN Food and Agriculture Organization (FAO), less than two percent of land in the Arabian Peninsula is arable, leaving little room for agricultural expansion using traditional cultivation methods.
Although the region’s capacity to produce its own food has not increased in recent years, its population has. In the past 10 years alone, the peninsular population grew by 21 million people, or 40 percent. And this trend is projected to continue, with another 21 million people expected by 2030, which will bring the total to 96 million.
This combination of water scarcity and an expanding population is creating a disconcertingly perfect storm. The Peninsula is almost entirely dependent on food imports. Data indicates that countries in the region meet 100 percent of their wheat and rice demand, and 84 percent of beef demand, via imports. This means that these countries are food price-takers, and susceptible to price fluctuations elsewhere. And while the rise of the region’s food prices generally do not outpace the global average, they do grow more quickly than those of other high-income countries like the United States (US), United Kingdom (UK), and Germany.
Arabian Peninsula countries were reminded of their vulnerability to externalities during the 2007/08 commodities crisis that sent staple food prices soaring. These price increases helped instigate riots throughout the Middle East. Within the wealthier GCC, where governments could afford to react by hiking public sector wages and spending, the effect of the crisis was largely limited to pushing up inflation. While this helped keep the peace, it came at great expense to governments and highlighted that a sustainable solution is necessary.
Attempts at Achieving Food Security
The region’s dependence on other countries for food is nothing new, and for decades, its governments have been trying to find ways to mitigate the potential negative consequences of this reality.
In the 1980s and 1990s, Saudi Arabia heavily subsidized domestic wheat production in the hopes of eventually producing enough wheat to be self-sufficient. However, it has recently become apparent the extent to which wheat cultivation is draining the country’s precious water resources, and as a result the program is now being phased out. That program is being replaced by a three-pronged approach to food affordability: acquisitions of arable land abroad, food subsidies, and investments in agricultural technology. Other GCC countries have enacted similar policies.
Following the creation of the King Abdullah Initiative for Agricultural Investment Abroad in 2009, Saudi Arabia also began to formally encourage members of the private sector to lease or purchase agricultural land abroad and send any resulting produce back to the region. Target crops include wheat, barley, corn, rice, sugar, and oilseeds, while target countries include Ethiopia, Sudan, Turkey, Ukraine, and Brazil. Investors in the UAE, Bahrain, Kuwait, and Qatar have since followed suit. The purchase of foreign arable land is a complex, controversial, and oftentimes non-transparent process, and for those reasons, this piece will focus on other methods regional governments are employing in their quest for food security.
As mentioned, GCC countries introduced food subsidies following the global commodities crisis of 2007/08. Governments helped cover the cost of staples such as rice, flour, and sugar as the crisis unfolded, but continued to maintain these costly subsidies in the years that followed. The ongoing global slump in oil prices is encouraging regional officials to review their subsidy policies (particularly energy-related subsidies), but it remains unclear how food subsidies play into governments’ long-term visions of regional food security.
GCC governments are beginning to show an interest in higher-tech solutions for their agricultural woes. In 2011, Qatar enacted its National Food Security Programme, which highlighted the role that technology such as greenhouses and hydroponics would play in the country’s agricultural future. In Oman, farmers are receiving subsidies to allow them to adopt irrigation systems and use greenhouses. And in 2014, the UAE hosted the first ever Global Forum for Innovations in Agriculture as a “showcase of sustainable agriculture solutions” — an annual event at which the Sheikh Zayed Prize for Pioneering Innovation in Agriculture is awarded.
Agtech Meets Arabia
Amid the varied and expanding field of agricultural technologies, those most relevant to the Arabian Peninsula seek to grow food amid limited water access and arable land. One prime example of this type of technology are saltwater greenhouses.
Seawater Greenhouses build upon traditional greenhouse agriculture to overcome constraints in arid regions. These structures utilize saltwater to both cool the temperature of the greenhouse, and to provide condensed freshwater to plants. It utilizes what is widely available in GCC countries—saltwater and cheap land—to make up for what is not—freshwater and a favorable climate.
Nearly two decades ago Charlie Paton, the founder of Seawater Greenhouse, was approached by Emirati representatives about developing his technology in the Gulf country. And in 2000, a pilot saltwater greenhouse in the UAE was built in collaboration with the Emirates Centre for Strategic Studies and Research. Subsequently, representatives from the Sultan Qaboos University in Oman approached Paton, and in 2004 he built another greenhouse with funding from that government. Despite the successful construction of the two pilot projects, and significant excitement about the technology, neither is used for commercial purposes and the firm has yet to achieve major commercial success.
More recently, in Qatar, the saltwater greenhouse concept has been taken several steps further. Developers of the Sahara Forest Project are attempting to construct a high-tech agricultural ecosystem—one that combines Paton’s technology with solar power systems and hydroponics, ultimately producing both solar energy and food. The first Sahara Forest Project was operational by December 2012. The pilot, which was erected with the intention of being run as a research facility and showcase, has successfully grown vegetables and achieved impressive yields. The project website claims that with 60 hectares of greenhouses, the Sahara Forest Project could displace the country’s annual imports of cucumber, pepper, tomato, and eggplant.
The Sahara Forest Project has also been gathering international praise and press from several publications, ranging from National Geographic to the Financial Times and The Economist.
Is Agricultural Technology Really the Solution?
In order to be successful, agricultural technologies need to be cost-competitive, sustainable, and commercially feasible. And at least for now, while initial costs of such projects remain high, they need consistent public support in terms of investment and policy.
While some high-tech projects have made declarations about their economic viability, there is very little data to support these claims. In order to be feasible, these solutions need to be profitable and cost-competitive with imports. As Charlie Paton of Seawater Greenhouse noted, “There’s no point growing tomatoes that cost 10 times as much as the ones you can buy in Carrefour.”
Some evidence suggests that greenhouses generally have an economic (and yield) advantage over open cultivation in the Arabian Peninsula. Disadvantages associated with greenhouse cultivation include higher upfront capital cost, as well as recurring capital costs, as certain components of the structures—specifically those made of polyethylene—only last for two to three years in dry and dusty conditions. Despite these recurring costs, greenhouses have the potential to pay for themselves. According to the International Center for Agricultural Research in the Dry Areas (ICARDA) capital costs were typically recovered by producers within three to four seasons.
For saltwater greenhouses in particular, the lack of existing commercial operations means there is limited information on the economics of these systems. According to Seawater Greenhouse, the average cost for its flagship product is $140/ square meter. To be commercially viable, a greenhouse would typically need to be two hectares (20,000 cubic meters) or larger, suggesting that initial capital costs for such a greenhouse would run around $2.8 million. However, the company is working on creating cheaper systems, which may cost just $50/ cubic meter.
For the more ambitious Sahara Forest Project, the integration of several different forms of cutting-edge technology such as solar power contributed to its higher construction costs. While original estimates put the project cost at $5.3 million, at least one news report suggests the final cost was closer to $7.5 million. It is important to note that the pilot project consisted of just 600 square meters (0.06 hectares) of saltwater-cooled greenhouses, which is smaller than a commercial operation would be.
Those behind the Sahara Forest Project suggest the scheme can be profitable, but do not provide any concrete data to support that hypothesis. In a 2015 interview with Fast Company, the CEO of the project admitted that costs were still unknown, and that the cucumbers produced from the pilot plant were more expensive than what a consumer might expect to pay. An FAO review of the pilot site suggests that if the project were to sustain early observed cucumber yields of 75 kilograms per square meter annually (competitive with yields found in European greenhouses), the venture could be profitable.
So how much food are these projects producing and can they actually contribute to food security? According to ICARDA, standard greenhouses have “high potential” to improve food security in the Arabian Peninsula, due to higher yields and more efficient water use. According to the Sahara Forest Project, in the first 10 months of operation in Qatar, the site produced almost 300,000 cucumbers. And although their aforementioned projections state that 60 hectares of greenhouse could displace the imports of several items of produce, such an undertaking at 1,000 times the size of the current pilot project would cost at the very least in the hundreds of millions of dollars.
Agricultural technology in the GCC still faces many challenges. Most of these are related to the failure to formalize, adopt, and institutionalize innovations. There is a lack of established agricultural research and development (R&D) procedures, official spending is insufficient and inconsistent, and there is very little available data on issues related to agricultural R&D in the region. While this final point means that it is difficult to be precise about spending, various organizations including the World Bank and the UN have repeatedly suggested that regional investment into agricultural R&D is very much inadequate.
Another major issue related to the failure to institutionalize agricultural technology is that spending on such innovations largely occurs on an ad hoc basis, rather than being pursuant to a specified R&D strategy. Funding for the Oman Seawater Greenhouse, for example, came via a grant from the Sultan himself. And while it covered the construction of the greenhouse and some preliminary studies, it did not support additional developments. Similarly, Saudi Arabia’s ninth development plan (2010-2014) states that the expansion of agricultural R&D is “a necessary condition for achieving sustainable agricultural development”, yet does not earmark any specific funds or set a precise target for agriculture R&D spending.
As outlined above, high initial costs and competition from imports mean that many forms of agricultural technology are too expensive for individual farmers. But public funding could help encourage wider adoption by farmers and other private sector businesses.
Overall, ag-tech projects have thus far failed to address food security in a meaningful way in the GCC region. But it will become increasingly important in the coming years for such countries to effectively realize and capitalize on the vast potential of such technologies.
The Way Forward
Given their lack of fresh water, arable land resources, and access to high-tech agricultural solutions, what should the GCC do to address increasing food insecurity? If the governments of the oil-rich states decide that ag-tech is the path to food security, then they should take time to develop a thoughtful agricultural strategy that will support the development of these technologies through sufficient funding for R&D. They should also encourage the private sector to adopt these innovations. In addition, any strategy and funding for agriculture must be transparent and consistent, rather than ad hoc in nature. In following this path, the GCC should seek to learn from other countries that have succeeded in becoming agricultural R&D powerhouses.
Similarly water-strapped Israel, for example, has had relative success in developing agriculture solutions for arid regions through its support of agriculture R&D. World Bank figures indicate that Israel’s R&D spending as a share of gross domestic product (GDP) was the highest of any country between 2000 and 2012 among countries for which data were available. Of the public R&D budget, five to 10 percent of this budget was spent on agricultural R&D specifically. By comparison, the US has spent 1.5 to three percent of its total R&D budget on agriculture. Thanks to this investment, Israel’s use of water has become consistently more efficient over time, with a 50 percent decline in total water usage per capita between 1970 and 2004. This efficiency growth has been partially attributed to innovations on water treatment and irrigation, including improvements in drip irrigation and the use of wastewater for agriculture. Other advancements have covered the development of new seed varieties and greenhouse monitoring.
Alternatively, governments in the GCC could take a step back from the promise of highly ambitious ventures, and invest more heavily in projects that are economically viable in their current form. Examples include improving irrigation channels and subsidizing the construction of traditional, more affordable greenhouses. While this work is unlikely to make the desert bloom, it can improve the livelihoods of farmers, help address domestic food security, and reduce the depletion of valuable resources.