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Government Programs
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Experts at Ministry of Agriculture and Water offices throughout the country offer vital technical support and advice to farmers. |
The progress made by the Saudi Arabian agricultural sector in recent years has been largely due to an array of government programs, including the provision of soft, interest-free loans and technical and support services. The agriculture sector has also benefitted from low-cost water, fuel and electricity, and duty-free imports of raw materials and machinery. Foreign joint-venture partners of Saudi individuals or companies are exempt from paying taxes for a period of up to 10 years.
The primary agency responsible for implementing agricultural policy is the Ministry of Agriculture and Water, which constructs and maintains irrigation and drainage networks, and provides research and extension assistance to farmers. Another supporting agency is the Saudi Arabian Agricultural Bank, which disburses subsidies and grants interest-free loans. Through the end of 1992, the bank had provided 7.06 billion U.S. dollars in such loans and grants to farmers and private sector companies to promote agricultural production. The Grain Silos and Flour Mills Organization was established in 1972 to purchase and store wheat, construct flour mills and produce animal feed to support the nationwide growth of agriculture. Between 1980 and 1992, the amount of domestic grain the organization purchased increased from 1.34 million tons to 3.86 million tons. In 1992, it produced an average of 5,400 tons of flour a day for domestic markets.
To encourage private investment in the agricultural sector, Saudi Arabia has allocated substantial financial resources for improving roads linking producing areas with consumer markets. The land distribution and reclamation program, which was introduced in 1968, aims at distributing fallow land free of charge, mostly in small plots, as a means of increasing the area under cultivation and encouraging crop and livestock production. The beneficiaries are required to develop a minimum of a quarter of the land surface within two to five years. Upon compliance, the full ownership of the land is transferred to the farmer.
Under the Fifth Development Plan (1990-94), allocations for the agricultural sector were increased to 3.84 billion dollars. The government continues to assist new farmers in implementing capital-intensive projects with special emphasis on diversification and greater efficiency. To raise farm productivity, the government also funds and supports research projects aimed at producing new food crops to increase harvest and develop plant strains with greater resistance to pests. These programs are conducted in cooperation between local farmers and scientists at agricultural research facilities at Saudi Arabian universities and colleges .
This agricultural transformation has altered the country's traditional diet, supplying a diversity of local foods unimaginable just a generation ago. Dates are no longer the vital staple for Saudi Arabians that they were in the past, although they still constitute an important supplementary food. Saudi Arabia has approximately nine million, or one-tenth, of the world's productive date palms. Date production grew to more than 543,000 tons in 1992. Much of this is used as international humanitarian aid. Several factories, including one in Al-Hasa, are dedicated entirely to the production of dates for foreign aid and send tens of thousands of tons of dates each year to relieve famine and food shortages in Arab, Islamic and other nations. A large portion of Saudi Arabia's wheat production is also provided as assistance to needy countries. At least 16 countries have directly benefitted from Saudi Arabia's food aid offered through the United Nations World Food Program. The Kingdom is second only to the United States in contributions to the program .
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