Arab countries import half the food they consume, a fact highlighted by crises between 2008 and 2012, and continuing price volatility – coupled with instability due to climate change interacting with geopolitical and other developments. All this has emphasized the precariousness of the region’s food systems and heightened the risks of dependence on world markets. Of course, the latter provide opportunities as well as threats, but the bad side gets prominence when a vital and emotional issue such as nutrition is involved.
Jordan is a case in point: for example, the value of the Kingdom’s cereal imports last year rose to around JD437 million from JD382 million in 2013; of the latest year’s figures, wheat imports amounted to 1.2 million tons worth JD256 million, compared to 788,000 tons costing JD134 million in 2013. A partial explanation for the rise in import quantities is the continuing influx of Syrian refugees, but what exacerbates matters is that they, along with Jordanians and all others residing in the country, benefit from a government subsidy. Under it, a kilogram of bread is sold for JD0.16, while it actually costs state coffers JD0.45. (The government sells flour to bakeries at JD36 per ton, but its real cost is around JD305; and the overall value of the flour subsidy is currently around JD260 million annually.) What complicates all this further is that Jordan imports over 96% of its wheat needs, as domestic production can cover only a small part of demand. Though basic supply security for this and other staples is more or less assured in the short term – Jordan’s current strategic reserve of grain covers over 10 months worth of consumption – the food security policy inherent in the subsidy and the cost of holding the reserve is expensive.
Discussing Food Matters
Such issues were among talking points of a conference in Barcelona this January in which I was a panelist. Entitled “Tropical Agriculture as ‘Last Frontier’?”, the gathering (convened at the Spanish think-tank CIDOB by them and King's College London, the OCP Policy Center and Wageningen University) looked in particular at food security of MENA and new dimensions of co-operation between our region and Africa, Latin America and Southeast Asia.
One topic participants at the event explored was how differences in natural-resource endowment and investment capital between regions can lead to mutually beneficial production and trade. In that respect, there is a particular fit between MENA and the neighboring region of Sub-Saharan Africa (SSA), as outlined in a presentation to the conference on “Reconciling food and water security objectives of MENA and SSA” by Timothy Williams, director for Africa of the International Water Management Institute. Williams made the point that attainment of food security is ranked high by governments in SSA as well as MENA, but for very different reasons. For example, regarding water, the two regions present a big contrast. Internal renewable water resources (IRWR) are acutely in short supply in MENA: per capita availability is a very low 84m3/year in the Arabian Peninsula, though with a figure of 274m3, North Africa is somewhat wetter. This contrasts markedly with a mean of 4,143m3/year in SSA and a global average of 5,996m3 per annum. Across MENA, declining aquifer levels and extraction of non-renewable groundwater pose growing risks to food production, a situation compounded by a paucity of arable land.
Williams notes that, by contrast, “SSA is blessed with ample land and water resources and diverse agro-ecosystems” with nearly 236 million hectares cultivated there in 2013. However, he quickly adds that only 7.7 million hectares were equipped for irrigation, about 3.3% of the cultivated area. According to Williams, average agricultural water withdrawals in SSA are 1.3% of IRWR and groundwater use is less than 20% of renewable supplies. Despite this abundance of land and water resources, food security remains a major challenge as one in four people is malnourished. A main reason for this, he notes, is that “decades of low investment in agriculture” have led to low agricultural productivity and rural incomes, which further limit access to food. “Against this backdrop,” he concludes, “the need for investment to develop and use the abundant land and water resources to improve food and nutrition security, reduce poverty and create employment without ecosystems degradation has never been greater.”
Eyeing Up Collaboration
This raises the possibility of collaboration to satisfy the food- and water-security objectives of both MENA and SSA. For some Arab states with limited options to increase nutritional self-sufficiency due to scarcity of water and arable land, but possessing surplus investable capital, one path to greater food security is investment in production of foodstuffs in parts of SSA, where the natural resources are available and capital is needed to improve agricultural productivity. Mutually beneficial production and trade can occur under these circumstances; but, though such South-South cooperation may help meet regional food import needs, in reality, as Williams himself notes, many issues including hydrological effects of expanding some types of production, poor policies, weak institutional and legal frameworks, and a bad business environment in the investment-receiving country, can negatively influence and even thwart collaboration.
In any case, for many reasons, it is no longer possible in most developing countries to achieve food security by creating massive barriers to the import of staples while subsidizing their local production in order to depend entirely on it. Though that might give rise to short-run feel-good sentiments, this model of protection and import substitution won’t work in a majority of cases. However, the other extreme is also not a sound idea, and a country that bases its nutrition largely on imports and allows its agri-food sector to wither is asking for trouble – embracing this kind of globalization is tricky.
Yet, for all its pitfalls, the global market in agricultural products contains many opportunities. To give one recent example, the EU’s 2014 ban on certain business activities with Russia presents an opportunity to Egypt, among other Arab states. It has been calculated by the Cairo think-tank the Egyptian Center for Economic Studies that if Egypt’s producers capture just 10% of the banned European agri-food exports to Russia (worth €5.1 billion) they would be able to increase their sales of these commodities to the Russians by 196% to reach €792 million. Unlike Jordan’s and other MENA or SSA economies, Egypt’s agri-food sector is still strong. Yet the Egyptians, like practically everybody else in Africa and the Middle East, have suffered from bad plans and poor policies, not least when it comes to food security.