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Saudi Arabia
Modern Agriculture
Pastoral nomadism
declined as a result of several political and economic forces.
Sedenterization was a means of imposing political control over
various tribal groupings in the Arabian Peninsula. New legal structures
such as the 1968 Public Lands Distribution Ordinance created novel
land relations and spurred the dissolution of the beduin way of
life. The establishment of an activist modern state provided incentives
for large numbers of Saudi citizens to enter the regular, wage-based,
or urban commercial employment. Moreover, modern technology and
new transport networks undermined the primitive services that
the beduin offered the rest of the economy.
Until the 1970s, sedentary agriculture saw few changes and declined
in the face of foreign imports, urban drift, and lack of investment.
The use of modern inputs remained relatively limited. Introduction
of mechanical pumping in certain areas led to a modest level of
commercial production, usually in locations close to urban centers.
Nevertheless, regional distribution of agricultural activity remained
relatively unchanged, as did the average holding size and patterns
of cultivation.
During the late 1970s and early 1980s, the government undertook
a multifaceted program to modernize and commercialize agriculture.
Indirect support involved substantial expenditures on infrastructure,
which included electricity supply, irrigation, drainage, secondary
road systems, and other transportation facilities for distributing
and marketing produce. Land distribution was also an integral
part of the program. The 1968 Public Lands Distribution Ordinance
allocated 5 to 100 hectares of fallow land to individuals at no
cost, up to 400 hectares to companies and organizations, and a
limit of 4,000 hectares for special projects. The beneficiaries
were required to develop a minimum of 25 percent of the land within
a set period of time (usually two to five years); thereafter,
full ownership was transferred. In FY 1989, the total area distributed
stood at more than 1.5 million hectares. Of this total area 7,273
special agricultural projects accounted for just under 860,000
hectares, or 56.5 percent; 67,686 individuals received just under
400,000 hectares or 26.3 percent; 17 agricultural companies received
slightly over 260,000 hectares, or 17.2 percent. Judging from
these statistics, the average fallow land plot given to individuals
was 5.9 hectares, 118 hectares to projects, and 15,375 hectares
to companies, the latter being well over the limit of 400 hectares
specified in the original plans.
The government also mobilized substantial financial resources
to support the raising of crops and livestock during the 1970s
and 1980s. The main institutions involved were the Ministry of
Agriculture and Water, the Saudi Arabian Agricultural Bank (SAAB)
and the Grain Silos and Flour Mills Organization (GSFMO). SAAB
provided interest-free loans to farmers; during FY 1989, for example,
26.6 percent of loans were for well drilling and casing, 23 percent
for agricultural projects, and the balance for the purchase of
farm machinery, pumps, and irrigation equipment. SAAB also provided
subsidies for buying other capital inputs.
GSFMO implemented the official procurement program, purchasing
locally produced wheat and barley at guaranteed prices for domestic
sales and exports. The procurement price was steadily reduced
during the 1980s because of massive overproduction and for budgetary
reasons, but it was substantially higher than international prices.
By the late 1980s, the procurement price for wheat, for example,
was three times the international price. Although quantity restrictions
were implemented to limit procurement, pressures from a growing
farm lobby led to ceiling-price waivers. Moreover, the government
encountered considerable fraud with imports being passed off as
domestic production. To control this situation, the government
has granted import monopolies for some agricultural products to
the GSFMO, while procurement and import subsidies on certain crops
have been shifted to encourage a more diversified production program.
Finally, agricultural and water authorities provided massive subsidies
in the form of low-cost desalinated water, and electric companies
were required to supply power at reduced charges.
The program prompted a huge response from the private sector,
with average annual growth rates well above those programmed.
These growth rates were underpinned by a rapid increase in land
brought under cultivation and agricultural production (see table
9, Appendix). Private investments went mainly into expanding the
area planted for wheat. Between 1983 and 1990, the average annual
increase of new land brought under wheat cultivation rose by 14
percent. A 35 percent increase in yields per ton during this period
further boosted wheat output; total production rose from 1.4 million
tons per year in FY 1983 to 3.5 million tons in FY 1989. Other
food grains also benefited from private investment. For example,
output growth rates for sorghum and barley accelerated even faster
than wheat during the 1980s, although the overall amount produced
was much smaller. During the 1980s, farmers also experimented
with new varieties of vegetables and fruits but with only modest
success. More traditional crops, like onions and dates, did not
fare as well and their output declined or remained flat.
In the 1970s, increasing incomes in urban areas stimulated the
demand for meat and dairy products, but by the early 1980s government
programs were only partially successful in increasing domestic
production. Beduin continued to raise a large number of sheep
and goats. Payments for increased flocks, however, had not resulted
in a proportionate increase of animals for slaughter. Some commercial
feedlots for sheep and cattle had been established as well as
a few modern ranches, but by the early 1980s much of the meat
consumed was imported. Although the meat supply was still largely
imported in the early 1990s, domestic production of meat had grown
by 33 percent between 1984 and 1990, from 101,000 tons to 134,000
tons. This increase, however, masked the dominant role of traditional
farms in supplying meat. Although new projects accounted for some
of the rapid growth during the 1980s, a sharp decline of roughly
74 percent in beef stock production by specialized projects during
1989 resulted in only a 15 percent fall in meat output. This reversal
also highlighted the problems in introducing modern commercial
livestock-rearing techniques to the kingdom.
Commercial poultry farms, however, greatly benefited from government
incentives and grew rapidly during the 1980s. Chickens were usually
raised in controlled climatic conditions. Despite the doubling
of output, as a result of the rapid rise in chicken consumption,
which had become a major staple of the Saudi diet, domestic production
constituted less than half of total demand. Egg production also
increased rapidly during the 1980s. The numbers of broiler chickens
increased from 143 million in 1984 to 270 million in 1990, while
production of eggs increased from 1,852 million in 1984 to 2,059
million in 1990.
Fishing, however, was an underdeveloped aspect of the Saudi economy
despite the abundance of fish and shellfish in coastal waters.
The major reasons for the small size of this sector were the limited
demand for fish and the comparative lack of fish marketing and
processing facilities. Iraqi actions in releasing oil into the
Persian Gulf during the Persian Gulf War caused appreciable damage
to fish and wildlife in the gulf. Data concerning postwar catches
were not available in late 1992, but in 1989 the Food and Agriculture
Organization of the United Nations estimated Saudi Arabia's total
catch at more than 53,000 tons.
Data as of December 1992
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