A committee of Saudi Arabia’s advisory Shura Council has urged the grains authority to secure wheat supplies through long-term agreements with exporting nations, in anticipation of a 30 per cent drop in the harvest.
The committee attributed the expected decline to the government’s plan to abandon wheat farming but did not elaborate.
Saudi Arabia is giving up a 30-year program to grow its own wheat that had achieved self-sufficiency but depleted the desert kingdom’s water resources.
The water, services and public utilities committee, which also deals with agricultural issues at the Shura Council, made the recommendation in response to an annual report by the Grain Silos and Flour Mills Organization (GSFMO), it said.
GSFMO started in September importing wheat through tenders after the government decided to cut wheat production by 12.5 per cent per year.
“(GSFMO’s) report was clear and transparent especially on what relates to the strategic stocks of wheat and the decline in local production to the rate of 30 per cent from the previous year,” the committee said in a statement faxed to Reuters.
Saudi Arabia produced 2.3 million tonnes of wheat in 2008, according to the U. S. Department of Agriculture.
FASTER THAN EXPECTED
Some producers say a surge in input costs last year and the lower price paid by the government for locally produced wheat compared to the international price has pushed local producers to abandon wheat farming faster than the government anticipated.
Officials at GSFMO could not immediately comment on the committee’s response.
Shura Council members have not yet voted for the recommendation, a spokesman said.
Shura members are appointed by the king and they propose laws that are not binding for the cabinet to approve. It has become a forum for debate in recent years.
Two officials with direct knowledge of wheat-related issues told Reuters that GSFMO faces pressure to build up strategic stocks of wheat after local producers reduced planted areas by some 30 per cent at the start of the current season.
The Shura committee said: “All indicators forewarn that the next (farming) season will be just like this year’s.”
“It is essential for GSFMO to work on concluding long-term agreements with countries from which we export wheat in order to ensure the availability of quantities that cover the kingdom’s needs,” it added.
GSFMO’s head Waleed al-Khariji told Saudi daily al-Hayat that Saudi Arabia needs a minimum of 2.6 million tonnes of wheat per year and plans to import 700,000 tonnes of wheat by August to add to the 470,000 tonnes it has imported since September, 2008.
Khariji also said domestic wheat production would be eliminated “within a maximum period of eight years,” hinting apparently that authorities may speed up the process.