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Qatar’s food security revolution in the wake of Gulf crisis

Qatar is making strides in its local agriculture and dairy production sector, and is set to attain food self-sufficiency in the coming years. Other than local production it has adopted an indirect approach to its foreign agricultural investment and increased domestic production of some food products.

Qatar

News Desk |

In June 2017, Saudi Arabia, the United Arab Emirates, Egypt and Bahrain severed diplomatic, trade and transportation ties with Qatar over alleged support to Islamist groups. At the time, Qatar was almost entirely reliant on imported food, with most of it transported through Saudi Arabia and the United Arab Emirates.

The threat of heightened food insecurity encouraged Doha to re-prioritize efforts to increase agricultural production. It has managed to become self-sufficient in milk and poultry production and is aiming to decrease its reliance on foreign fruit and vegetable supplies. Despite having limited arable land and water supplies, however, Qatar is adamant to make further developments in the agricultural industry.

How Qatar Revamped its Food Security Strategy?

An import-reliant Qatar prior to the blockade set out to revamp its food security strategy to focus more on boosting its local agriculture production. The strategy also includes high-level agricultural and food-import investments aimed at maintaining a food self-sufficient country.

The Qatari Ministry of Municipality and Environment (MME) had entered into agreements with a number of national companies to implement projects in the field of agriculture, fisheries and livestock for owners of Qatari farms.

Australia was a key part of its food security strategy. Its Australian subsidiary, Hassad Australia, owned approximately 300,000 hectares of agricultural land across five Australian states.

The ministry aims to reach 70% of self-sufficiency of vegetable growth by 2023. It is reported that the Ministry has set out to boost agricultural production through establishment of 1400 farms covering 45000 acres of land by 2022. Moreover, through a hydroponic technology, the production of soil-intensive vegetables and fruits will be introduced to protect its scarce water resources.

In addition to local production projects, the Qatari government is also investing in agriculture-friendly countries having suitable climate and resources. The sovereign wealth fund of the country, also known as the Qatar Investment Authority (QIA) has ventured in to various agriculture markets through Hassad Foods; established in 2008, the investment arm focused on food security of the country.

Hassad Food owns four Qatari farms that produce various grasses and alfalfa (fodder) for animals; it is unlikely that cereal crops will be grown for human consumption in Qatar. To protect against that weakness, Hassad Food acquired a stake in Sunrise Foods International, a large distributor of cereals and oil seeds. It is negotiating a strategic agreement whereby the company will export food to Qatar in the event of food shortages.

Read more: The Transactional Partnership of the US and Qatar

Hassad Food has established a local marketing and agricultural services entity, Mahaseel, to extend support to the private agricultural sector and thus contribute to the nation’s self-sufficiency. More than 110 local productive farms have registered via Mahaseel’s website to benefit from the company’s marketing and agricultural services. To top it up, Hassad also extended financial and technical support to the newly established Anaam or Qatar Livestock Society as part of efforts to bridge the gap between the local production and demand.

Over the last decade, Hassad Food directly leased or purchased foreign agricultural land to produce cereal crops. Australia was a key part of its food security strategy. Its Australian subsidiary, Hassad Australia, owned approximately 300,000 hectares of agricultural land across five Australian states. It used that land to breed sheep and grow cereal crops.

Qatar will however continue to depend on international markets to supply it with cereals, such as wheat, maize, millet and sorghum, because those crops are particularly difficult to cultivate in Qatar, as they require large land holdings and access to copious amounts of water. In 2017, less than 300 hectares of land was used to grow cereals for human consumption and irrigated agriculture used four times the country’s renewable water resources.

Qatar Airways, the national carrier of the Gulf state is reportedly scheduled to buy five Boeing 777 freighters and a large-cabin aircraft from Gulfstream Aerospace.

To boost its local agriculture growth, Qatari dairy industry imported thousands of dairy cows in 2017 that has drastically increased production to meet domestic demand for milk. Prior to the imposition of the trade embargo, most of Qatar’s milk was trucked across the Saudi Arabian land border. The local dairy company, Baladna, was only able to produce enough milk to meet 20 per cent of domestic demand. It now produces enough to export surplus milk to Afghanistan, Yemen and Oman.

Qatar imported all the milk it needed. But then neighboring Saudi Arabia and its regional allies declared they would blockade Qatar over disputes that included claims that Qatar supported Islamist factions such as the Muslim Brotherhood.

A Story of Qatar’s Resilience

Overall, Qatar has adapted to the sanctions imposed more than two years ago by Saudi Arabia, the United Arab Emirates, Bahrain and Egypt. Its Gulf neighbors infuriated by what they alleged was funding for extremist groups and support for Arab Spring movements, had directly impacted Qatari economy and flagship brands such as Qatar Airways and Qatar Petroleum.

The country relies heavily on liquefied natural gas, which accounts for about 85 percent of its total exports. Those massive LNG exports, including production joint ventures with ExxonMobil and Royal Dutch Shell, have continued unobstructed despite attempts of blockade. In January, Qatar, which also produces only 600,000 barrels a day of oil, quit the Organization of the Petroleum Exporting Countries, or OPEC, in its attempt to focus primarily on its strength i.e. Natural Gas.

Read more: Qatar’s friendly suit: Promises to provide the UAE with its share of LNG

Although the US President Donald J. Trump had tweeted shown support to Saudi-led axis over Qatar blockade, things have changed greatly in favor of Qatar since. Earlier this month Qatar’s Emir, Sheikh Tamim Bin Hamad al-Thani, met the president at the White House and discussed investments, circumventing the blockade in a rare break in U.S. support for Riyadh.

Both countries have reportedly signed numerous trade and military deals including five commercial agreements on the visit of the Emir. Qatar Airways, the national carrier of the Gulf state is reportedly scheduled to buy five Boeing 777 freighters and a large-cabin aircraft from Gulfstream Aerospace. It also plans to power its Boeing aircrafts with General Electric Co jet engines- all US-based companies.

Qatari Emir, Al-Thani told reporters that the country had planned to double its economic partnership with the US, which at present stands at $185 million.

Moreover, the White House has also reported several military agreements between the two states. It is reported that Qatar has planned to spend a whopping $85 billion on US weapons, aircrafts, and other commercial deals. The Qatari Defense Ministry is expected to finalize a Raytheon missile defense system deal which is deemed imperative for Qatar in its hostile neighborhood.

Qatar has allocated QR 5 billion over the next five years to develop the current fleet of 400 buses in the public transport industry to a network of 2,000 buses for 2022.

Chevron Phillips Chemical and Qatar Petroleum have also signed an agreement on Tuesday to develop an $8 billion petrochemical plant along the U.S. Gulf Coast, it is the second pact between the companies to build such plants in the last few weeks. Known as the U.S. Gulf Coast II Petrochemical Project, it is expected to include a 2,000 kilotons per year (KTA) ethylene cracker and two 1,000 KTA polyethylene units for the production of hard plastics.

The US LNG production and export has faced major loss since the trade war as a result of the Chinese pulling out from the US LNG exports. Being the largest LNG importer in the world, China is seeking to invest into LNG rich markets to resolve its chronic air pollution problem. Despite being the fifth largest exporter of LNG, US still relies on LNG imports from other countries, primarily for two reasons; pipeline bottleneck issues and the 1920 Merchant Marine Act that restricts it to use its own domestically produced LNG. Qatar is planning to construct four-LNG trains for its exports to the US and is actively providing China with LNG for its domestic use and production.

Qatar’s Economy Stronger than Ever

Qatar has “successfully absorbed the shocks” despite a drop in oil prices from 2014 to 2016 and the Saudi-led boycott imposed in June 2017, the International Monetary Fund said in its spring assessment. Qatar’s inflation-adjusted GDP growth is estimated at 2.2 percent, up from 1.6 percent in 2017, the report said.

Read more: Qatar among world’s top competitive economies

The next World Cup, which is scheduled to take place in Qatar in 2022, is an exemplary effort of the nation to thrive irrespective of the hostile region the country exists in. Qatar has allocated QR 5 billion over the next five years to develop the current fleet of 400 buses in the public transport industry to a network of 2,000 buses for 2022. By some estimates, the World Cup is going to cost Qatar approximately $220 billion.

This is about 60 times the $3.5 billion that South Africa spent on the 2010 FIFA World Cup. The budget for football pitches and facilities is worth around six billion dollars. In addition to that amount and for further development across the country, there are other infrastructure investments which will be used for the World Cup.

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