Turki Faisal Al Rasheed Speech at the International conference – Universidad De Palermo, Argentina 2010

Buenas Noches Señoras y Señores

Opening Remarks

First of all I wish to express my gratitude for participating in this very important International conference, titled Agribusiness: Opportunities between Argentina and the Middle East.

Organized by the distinguished Dean

of College of Business, Universidad De Palermo, Professor Gabriel Foglia. It is an honor for me to be here with all of you tonight..

Message to the Audience

Decision maker:

Agriculture can serve as a multi-function.  It can generate good revenue plus  a tool to alleviate poverty.

Businessmen:

Industrial Agriculture can be a profitable business financially and socially

Academics:

Critique my research about “Agriculture development strategies to enhance food security, alleviate poverty and promote economic growth”

Future Leaders (Students):

If you don’t know where you are going then it doesn’t matter going anywhere, you must write down your goals and be persistent to achieve them.

Agriculture Development Strategies (ADS ) to enhance food security, alleviate poverty and promote economic growth: Saudi Arabia Experience

Presented by:

Turki Faisal Al Rasheed

Chairman , Golden Grass, Inc. Riyadh  & enrolled in

Doctorate of Business Administration (DBA)

Liverpool Business School at LJMU, UK

Table of Contents

Introduction

Agriculture Development Strategies

Agriculture Development Strategies Examples

Business Opportunity

Theoretical Concepts for ADS

The Role of Agriculture

Food Security

Economic Growth

Saudi Government Challenges

Water Optimization

Corporate Social Responsibility (CSR)

Agriculture Foreign Investments

Agriculture Foreign Investments (Advantages & Disadvantages)

Saudi Government meeting the challenges

Saudi Strategic Commodities requirements

Saudi  Requirements from Target Countries

Laws Governing Agriculture Land Foreign Investment

Summary

Local and International  ADS Recommendation s

Conclusion for Saudi ADS

Learn to Plant your Goals

Visualize you Goals

Closing Remarks

Questions

Introduction

Scientist

•        There is a belief, held by many that ‘research’ is associated with activities that are remote from daily life and usually take place in a laboratory, carried out by scientists. This belief is partly correct in that research is the study  of problems through the use of scientific methods and principles.

•        There is a growing number of people outside laboratories who carry out research in order to produce and disseminate knowledge relevant to the business world.

Managers, consultants, academics and students

•        There is a belief, held by many that ‘research’ is associated with activities that are remote from daily life and usually take place in a laboratory, carried out by scientists. This belief is partly correct in that research is the study  of problems through the use of scientific methods and principles.

•        There is a growing number of people outside laboratories who carry out research in order to produce and disseminate knowledge relevant to the business world.

Agriculture Development Strategies (ADS)

  • An integrated system of plant and Animal production practices having a site-specific application that will, over the long term:
  • Satisfy human food and fiber needs
  • Enhance environmental quality and the natural base upon which the agricultural economy depends,
  • Make the most efficient use of nonrenewable resources and on-farm resources and integrate, where appropriate, natural biological cycles and controls,
  • Sustain the economic viability of farm operations,
  • Enhance the quality of life for farmers and society as a whole.
  • It correspond to what countries have tried to do to promote development objectives in agriculture.
  • Strategies symbolize the underlying body of beliefs on how the process of agricultural development is supposed to be done.

Agriculture Development Strategies (ADS)- (Examples)

  • The importance of understanding  environmental concerns as part of agricultural policy.
  • Involving local people in policy objective
  • Need new technologies to raise yields
  • Improve opportunities for agribusiness
  • Inform policy makers on ways to improve poverty, food security, and economic development.

  Message to Businessmen

Business Opportunity

  • The Agro-industrial sector is a very attractive areas, for investment cooperation benefiting  Argentina and the Middle East in light of the growing global demand for food.
  • Good opportunity  for Argentina and the Middle East can be a win –win  situation.
  • Rice, wheat, Barley, Corn , Soya Bean ,oil seeds, sugar, Animal feed, livestock and fisheries are the Strategic commodities  needed by Saudi Arabia and most Middle East countries.
  • Argentina’s diverse landscape ranging from the mountainous region of the Andes to the fertile plains of pampas a partnership in terms of agricultural investment  can be a good possibility.

 

 Message to Academics

Message to Students

Theoretical Concepts for ADS

  • Sustainable development: is a development that meets the needs of the present without compromising the ability of  the future generations to meet their needs (WCED 1987)
  • Corporate Social Responsibility (CSR) is a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis.
  • Stakeholder Theory is any group or individual who can offer or is affected by the achievement of the firm’s objectives.
  • Situational Agriculture Development Strategies an integrated system of plant and Animal production practices having a site-specific application.

The Role of Agriculture

 

  • Improve Food Security
  • Promote Economic Growth
  • Water Optimization
  • Government  Social Responsibility( CSR)
  • Employment/Poverty Reduction, depopulation rural areas

Food Security

 According to FAO Food Security means that food is available at all times; that all persons have means of access to it; that it is nutritionally adequate in terms of quantity, quality, and variety; and that is acceptable within the given culture.

  • The world as well as the World Bank have forgotten just how important food       and agriculture is. Currently the industrial world is operating at 60 to 70% of its     capacity unfortunately, agriculture, now operating at full capacity.
  • The number of malnourished people in the world rose to over 1 billion this year, up from 915m in 2008 (FAO). World Bank Economist reckons that the number of people living on less than $1.25 a day will rise by 89m this year.
  • Agriculture and food security have become “the core of the international agenda”, as the G8 called it.

Economic Growth

 Economic Development is a sustainable boost in the standard of living .  It implies an increase in the per capita income of every citizen.  It also leads to the creation of more    opportunities in the sectors of education, healthcare, employment  and the conservation of the environment.

Traditionally, agriculture economist consider that growth in the farm sector provides    food, raw materials, labor , capital, and foreign exchange necessary to finance subsequent growth in the rest of the  economy, while simultaneously growth in the rest of the economy, while simultaneously generating an additional demand of industrial goods and services.

Self Sufficiency, Improvement of Rural Incomes/Poverty Reductions, Minimize depopulation from rural areas, Employment, Food Security

Saudi Government Challenges

 •        Food shortages resulting soaring food prices raised questions about the long-term prospects for food security (2008 hike & Russia today).

•        Urban population growth VS

–       Rural depopulation ,

–       high unemployment,

–       environmental degradation,

–       reduction in arable land

•        Water Scarcity

 Water optimization

 Water scarcity in Saudi Arabia is one of the limiting factors to local food production. Cereal grains has to be imported to compensate for the water deficit. Water consumption at 29 billion cubic meters (BCM) of which 23 BCM consumed for Agricultural purposes, accounting to 87.5% of total water consumption (SAMA 2008) World Ave. 71% (yang 2003)

 

  • In GCC countries, particularly Saudi Arabia it was decided that, given impending water shortages, it will stop producing wheat by 2016.

 Corporate Social Responsibility (CSR)

 It is about capturing the whole sets of values, issues and process that companies must address in order to minimize  any harm resulting from their activities and to create economic (profit), social (people), and environmental (planet) value.

 It involves being clear about the company’s purpose and taking into account the needs of all the company’s stakeholders, customers, employees, business partners, governments, local communities, and the public.

 Message to Decision makers

 Agriculture Foreign Investment

 Saudi Arabia and the United Arab Emirates as ‘worldwide leaders in buying land in third-party countries’ with Bahrain, Egypt, Kuwait, Libya and Qatar also actively exercising their interests in acquiring foreign farmland on a large scale. World Bank 2009 plus  China and South Korea  and US investors.

  • African countries are the main focus , however Ethiopia has 13 million hungry people, Southeast Asia and South America are  seeing a rise in foreign-owned farmland.
  • The scale and nature of the investments has raised international concern.  The right to water is threatened  the locals while investors need to minimize irrigation cost.

Agriculture Foreign investment
Advantages and Disadvantages

 Disadvantages

•        Land degradation, water depletion , labor rights limitation  (FAO, 2009).

•        Force migration ,human rights principles , public interest,  lack of  consultation and compensation with the locals.

•        Trade bans , Grain exporters large and small imposed to keep food prices from rising at home .  i.e. Russia, Ukraine and India while Argentina increased export taxes sharply.

Advantages

•        Provide domestic benefits i.e.  capital inflows, employment, improved crop yields, and possibly infrastructure, technology transfer and increase in food supplies for the host country and for export.

•        Poverty reduction and sustainable development strategies in the host countries.

Saudi Government Meeting the Challenges

 

  • Saudi Arabia’s vision is to focus on facing the world food crisis by taking sustainable measures and securing food supplies for the  citizens and residents.
  • Establishment of a strategic reserve for basic food  commodities
  • such as wheat, rice, barley, corn, sugar, and livestock .
  • Identify countries targeted for agri-investment.
  • Explore ways of acquiring lands in targeted countries.
  • Agree with hosting countries on facilities given to the Saudi investors.
  • Improve local production by adopting new technologies
  • (GMO & water desalination by solar & nuclear energy).

Saudi Strategic Commodities Requirements

 Wheat needed 2.7 Million tons/year (2008). This represents 2.5% of the globally available wheat for export. Kingdom’s domestic harvest of hard wheat stood at 1.1 million tons this year (2009/2010). 16% percent above the 950,000 thousand tons produced in the year (2008/2009). Two  million tons of hard wheat needed to be imported before the start of the next harvest in the Kingdom.

  • Rice needed 1.0 Million tons/ year (2008). This represents 3.7% of the globally available for export.
  • Barley needed 6.3 Million tons/year (2008).  This represents 45% of the globally available barley for export.
  • Animal Feed total animal feed produce in Saudi Arabia is 3 Million tons/year and the total animal feed needed in Saudi Arabia is 14 Million tons/year.

Saudi  Requirements from Target Countries

 Natural resources (climate, fertile farm land, water availability).

  • Political, Social and Economic Stability
  • Stable legislative and administrative system
  • Free Market environment
  • Anti corruption laws and Transparency
  • Tax relaxation on agricultural inputs
  • Friendly relations with the Kingdom

Laws Governing Agriculture Land Foreign Investment

 

  • Domestic law: to regulate all investment in agricultural land /water in the host country
  • International investment contracts: are direct agreements between a foreign investor and the host government.
  • International investments agreements: As are treaties between states that provide investors from one state investing into the territory of the other state with special protections under international law.

Summary

 Agriculture is one of the most effective tools to promote growth and improve people’s standard of living.

  • To highlight the neglect of agricultural development, we take an example:  The World Bank lending in 1980 was 25% loan to agriculture project.  In the year 2000,   the number went down to 10% .  Moreover, the bank has lost almost half of its technical staff in the area of agriculture development.(Econ.2009)
  • Lack of investment in agriculture over decades has meant continuing low productivity and stagnant production in many developing countries.
  • Lack of investment has been identified as an important underlying cause of the recent food crisis and the difficulties developing countries encountered in dealing with it.
  • Agriculture investments should not be rejected in principle there are risk for the host developing country and they raise complex and controversial issues on economic, political, institutional, legal and ethical in relation to food security

Recommendations for Local ADS

 Crop per drop (the optimum usage of water management)

  • Adopt and encourage the usage of new technology – GMO, water desalination by solar or nuclear energy to achieve the maximum benefit.
  • Farming should be restricted to the amount of renewable water in Saudi Arabia

Recommendations for International ADS

 sustainability triple bottom line (society, economic and environmental).

  • creating a public company that is jointly owned by the public and the investors. The government can withdraw taxes from this public company provided the land is not leased to these companies but owned by the companies. A solution that will benefit for everybody the investors, host government, and local people .
  • Local settlers without official land ownership must be relocated and compensated by the host government .
  • Saudi government should create long-term contract with Saudi investors who invested abroad and provide them with cheap finance and barter trade agreement with them to guarantee the sustainable food supply in Saudi Arabia.
  • Saudi government should act as facilitator/protector  between Saudi investors and the host country.
  • Support Saudi investor to buy agriculture land in the host country
  • Support Saudi investor  to Joint venture with the existing local food company in the host country
  • Saudi government  form a strategic alliances or become a major shareholder  with global food giants company, These multinational companies offer enormous economies of scale, vertical integration, financing, research capabilities and global strategic alliances.
  • Saudi  investors should have full access to all investment rules and regulations  about target countries by King Abdullah initiatives . Decision must be base clear transparent information regarding the geography, political risk, rule of law and domestic economic and infrastructure conditions.

Conclusion for Saudi ADS

 Saudi local food production must be equivalent to the renewable water  ( 5-8 BCM).

  • Situational agriculture strategy  per region .
  • Clear agriculture development strategies for multi-functional purpose on the sustainability triple bottom line society, economic and environment.
  • Encourage Saudi private sector to partner with multinational (or local) companies specialized in agricultural investment, fish farming and animal husbandry due to their experience and knowledge.

Special Message to the Students

New  Leaders For Tomorrow Are Goal Oriented

Social Goals

Career Goals

Material Goals

Personal Relationship Goals

Personal Growth Goals

Recreational Goals

 Give Your Ultimate Goal a Visualized Picture

I like to fly like a falcon

Close to God

Freedom

Independent

Closing Remarks

 

  • Food security is not only about food. It is all about security,  chronic hunger threatens  individuals, governments, societies and borders.
  • Achieving food security needs policy and investment reforms on multiple dimensions.
  • Food security is the political  Aspect of agriculture development.
  • Central Governments must not give all the priority to urban areas but must balance it with rural development.
  • There is an urgent need to monitor the extent, nature and impacts of international investments and to catalogue best practices in law and policy to better inform both host and investing countries.
  • Governments are concerned that as population growth increases, high unemployment, environmental degradation, reductions in arable land combined with effects of urbanization, economic growth and food security may emerge as one of the key issues of this century

Happy to Receive you Questions

PRESENTATION Turki Faisal Speech at the International conference –  Universidad De Palermo, Argentina

PICTURES Agribusiness conference : Business opportunities with the Middle East

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