Saudi Arabia and others have oil but not enough water or farmland. So they're buying land from poorer nations. The Tabuk plain in the northwest of the country, close to Jordan, gets an average of just 2 inches of rain a year. Yet it is a prairie of wheat fields. Fortunes are being made here. The biggest farm — covering nearly 90,000 acres, or eight Manhattans — is run by the Tabuk Agricultural Development Company (TADCO). Its irrigation pumps extract up to a million acre-feet of water each year from beneath the sands. By the 1990s, with $85 billion invested, Saudi Arabia was one of the world’s largest wheat exporters. The wheat crop was vastly subsidized. Money was no object. The government paid its farmers five times the international price for wheat — not just for the wheat the nation wanted, but for any wheat the farmers cared to produce. Riyadh charged nothing for the water pumped from beneath the desert, and virtually nothing for the fuel needed to pump it. This deluge of largesse generated full granaries but staggering inefficiency, not least in the use of water. Every ton of wheat required between 3,000 and 6,000 tons of water — three to six times the global average.
Near the capital, Riyadhis the world’s largest dairy farm. At the heart of the Al Safi farm are six giant sheds, where 30,000 Holstein cows from Europe produce around 42 million gallons of milk a year, sold under the Danone brand. To keep their udders productive, the cows are cooled by a constantly circulating mist of water. Surrounding the sheds are 7,400 acres of fields, where dozens of movable irrigation units called central pivots, each up to a third of a mile long, irrigate alfalfa, sorghum, and hay destined for the cows’ feedlots. This too takes prodigious amounts of water, pumped from more than a mile below the sand. Not far away, Almarai, a food conglomerate also owned by the Saudi royal family, has five dairy farms with 36,000 cows.
The desert farms are magnificent monuments to unsustainable agriculture. The Saudis thought they had water to waste. In the late 1970s, when pumping started, the sandstone rocks contained around 400 million acre-feet of water, enough to fill Lake Erie. The water had percolated underground during the last ice age, when Arabia was wet. So it was not being replaced. It was fossil water — and like Saudi oil, once it is gone it will be gone for good. And that time is now coming. In recent years, the Saudis have been pumping up the underground reserves of water at a rate of 16 million acre-feet a year. Hydrologists estimate that only a fifth of the reserve remains, and it could be gone before the decade is out. The emptying of water reserves is making food production at home impossible.
In 2008, the Saudi government announced it would end wheat subsidies, with the aim of phasing out all production by 2016. Instead, it would import wheat. The enormous cowsheds would be kept but their water needs reduced by feeding the animals on foreign fodder. Just as the Saudis abandoned their goal of food self-sufficiency came the first world food-price spike and the Saudis key grain suppliers started banning exports to protect their home consumers. Finding it impossible to feed itself, and losing faith in global markets to provide future food, unwilling to be reliant on the vagaries of the international food markets, Saudi Arabia came up with another plan: Buy up farmland in foreign countries. A sign of the power of Saudi land grabbers can be seen by how the UN Food and Agriculture Organization’s director general, the Senegalese diplomat Jacques Diouf who was on record a couple of years before as condemning international land grabbing as “neo-colonialism.” awarding the king, Saudi Arabia’s land-grabber-in-chief, his organization’s Agricola Medal “in recognition of his support for improving world food security.” It was an ignominious retreat for the world’s top food official.
Prince Sultan Al Kabeer, proceeded to buy a 48-year lease to grow wheat on 22,000 irrigated acres on the banks of the Nile, north of Khartoum in Sudan. Saudi Arabia is the world’s second-largest importer of rice. Securing rice supplies had become a key concern of the Saudis, since India and Pakistan cut rice exports in 2008. The majority of its land grabs have been to grow rice. TADCO boss Mohammed al-Rajhi signed up local chiefs in the Philippine island of the mainly Muslim island of Mindanao for a scheme to plant rice, pineapples, bananas, and corn on up to 190,000 acres of communally owned land . The national government was in favor, and so too was the leader of the liberation movement, the Moro Islamic Liberation Front. Far from opposing foreign land grabs, he backed the deal “because it is coming from our Muslim brothers.”
The Bin Laden Group led a consortium to grow rice on more than a million acres in the Indonesian province of Papua, that is presently on hold. At one swoop, it gave the Saudis a third of the Merauke Integrated Food and Energy Estate, a $5 billion megaproject being developed by the Indonesian government. The Bin Laden Group is also behind a scheme to grow rice in Africa. The other main backer is Sheikh Saleh Kamel, a veteran Saudi billionaire who runs a satellite TV group. The AgroGlobe project aims to produce 7 million tons of rice a year within seven years on 1.7 million acres of irrigated land in the West African Muslim states of Mali, Senegal, Sudan, Mauritania, and Niger, as well as in northern Nigeria.
The Senegalese government is keen. “We are offering Saudi Arabia 400,000 hectares of farmland,” a senior official said in late 2010. Most of the land is on the banks of the River Senegal, which will provide the water for irrigation in an arid land. Contracts say that 70 percent of the rice would be destined for Saudi mouths, and only 30 percent for locals. So this is a water grab as well as a land grab. The government says existing rice farmers there “have no problems with these lease deals.” But traditional farmers do object, and local cattle herders will lose vital dry-season pastures near the river.
One assessment at the end of 2009 found that Saudi Arabia and the other Gulf states were responsible for a third of the land purchased, leased, or under offer to foreigners by poorer countries. The Kuwaiti government has followed the Saudis in doing deals to grow rice in Southeast Asian countries such as the Philippines, Burma, Laos and Cambodia. The United Arab Emirates' private equity company, Dubai-based Abraaj Capital, said in 2008 that it had acquired 800,000 acres of “barren” farmland to grow rice and wheat in the Pakistani provinces of Punjab, Sindh, and Baluchistan. Others securing land in the Punjab, Pakistan’s breadbasket, included the Emirates Investment Group, a private group in Sharjah, and Abu Dhabi-based Al Qudra Holding. If even a fraction of this goes ahead, the implications could be grim for small Pakistani farmers, most of whom are sharecropping tenants of feudal families with vast landholdings who dominate Pakistani politics as well as the military. They will lose control of their plots of land and will probably not even find regular work as laborers on the new mechanized farms. UAE officials also said its companies had acquired 700,000 acres of Sudan, paying virtually nothing, on condition only that they invest.
But the most dramatic dealing has been from the tiny island state of Qatar. It is super-rich, even by Gulf standards. Nobody knows quite where the state’s wealth ends and the emir’s wealth begins. For now, they amount to the same thing. In 2011, it was the world’s largest investor in overseas real estate. Much of that was spent in cities. In London alone, it spent billions buying the upscale department store Harrods and the vacated U.S. embassy in Grosvenor Square, while redeveloping the billion-dollar Chelsea Barracks site and building Europe’s tallest tower, the “shard of glass” near London Bridge. It also owns almost half of the Canary Wharf financial district.But the most dramatic dealing has been from the tiny island state of Qatar. The emir’s vehicle for farm grabs is a company called Hassad Food. It is the agricultural arm of the Qatar Investment Authority and thus effectively the property of the emir. It has done deals for land in Vietnam, Cambodia, Uzbekistan, Senegal, Kenya, Argentina, Ukraine and Turkey. It has set up partnerships with cattle ranches in Tajikistan and bought 370,000 acres of sheep ranches across three states of Australia. In Brazil, it is developing a 25-million-ton-a-year sugar scheme and a poultry project that will supply most of Qatar’s chicken and eggs. Hassad says it has secured 250,000 acres in the Philippines to grow rice.
Indonesia’s agriculture minister Suswono went wooing Gulf states in 2010, offering 19 million acres of “sleeping land” for agribusiness investment. The veteran chief minister of Sarawak, the Borneo province of Malaysia, was looking for Gulf investment in his “Halal hub,” 190,000 acres of former rainforest. He got a promise of a billion dollars from Perigon Advisory, an investment fund based in Bahrain.
In 2010, Gulf money was paying for Sudan to bring in Egyptians to revamp its large but dilapidated Gezira irrigation project — originally built by the British in the 1920s. Gezira grows cotton, sorghum, wheat, and groundnuts across 2.5 million acres of rich alluvial soil close to where the Blue and White Niles join. Weeks later, Khartoum and Islamabad were in discussions about shipping in Pakistanis to work the new farms.
The Pharos Financial Group, a Dubai-based hedge fund, is paying up to $100 million for Bruce Rastetter, an American pig farmer to start transforming part of Tanzania into a replica of the American Midwest. The plan is to take a 99-year lease on three huge refugee camps in southwest Tanzania that have housed refugees from the brutal conflicts in central Africa, including the Rwanda massacres of 1994. By late 2011, the Tanzanian government had emptied the first camp, the 60,000-acre Lugufu camp, which had been home to 100,000 people. Rastetter’s, Agrisol, would soon be growing corn and soy and raising poultry, initially for sale within Tanzania. Pharos promises worker training, community development funds, and a system to buy produce from outgrowers, but the heart of the scheme will be a vast expanse of commercialized, high-tech agriculture — Iowa in Tanzania.
While the Western media concentrated on the politics of reform, many on the streets were protesting as much about bread prices as corruption. They were waving baguettes as they marched into Cairo’s Tahrir Squar. In Yemen, they turned on their leaders brandishing chapatis. Saudi Arabia increased food subsidies twice. Kuwait promised fourteen months of free food rations. Bahrain simply handed out cash as the people rioted against the ruling Al Khalifa royal family. The politics of food is now a serious issue for the princes of petroleum. And land-grabbing right now seems like their only salvation.