Bahrain looking abroad for food security
In an effort to secure future food supplies for its future, the Bahraini government is looking to invest in farmland abroad, some as far off as the Philippines. Due to the severe limitations on its own agricultural resources, Bahrain is highly dependant on food and drink imports to meet the needs of its growing population. Despite generous government subsidies, domestic prices of basic foodstuffs are still rising due to ongoing shortages on the world market, leading to considerable social unrest.
Therefore, a number of regional governments have taken a new approach, looking to secure supplies by investing directly in land and agricultural production abroad. This is a trend that BMI expects will continue for some time, due to the Gulf states limited capacity to increase their own production and their need to sustain the rapid population growth upon which their continued economic growth is dependant.
Currently Bahrain imports an estimated 45,000 tonnes of rice per year, with the majority coming from India and Pakistan. Therefore, when the Indian government decided in March to ban non-basmati rice exports and to curb sales of the more expensive basmati variety, this led to widespread alarm. With Indian supplies not forthcoming, the Bahraini government has scrambled to secure imports from other sources. In early June it was reported that Thailand, which previously supplied only around 5% of the Kingdom's rice imports, had agreed to increase its supplies to Bahrain in 2008 and 2009.
Bahrain has now taken this approach one step further by investing directly in farmland in major rice-producing countries. The government has invited private companies to set up joint ventures to invest in farmland in Thailand, while the agriculture ministry has reportedly secured an agreement from its Filipino counterpart for Bahraini investment in the Philippines' agricultural sector. Given Bahrain's need for food supplies and the Philippines' need for foreign investment, such agreements are being presented as win-win deals.
Bahrain is not the only Gulf country taking this approach, with UAE and Saudi Arabia reportedly looking to establish similar deals or joint ventures.
Therefore, a number of regional governments have taken a new approach, looking to secure supplies by investing directly in land and agricultural production abroad. This is a trend that BMI expects will continue for some time, due to the Gulf states limited capacity to increase their own production and their need to sustain the rapid population growth upon which their continued economic growth is dependant.
Currently Bahrain imports an estimated 45,000 tonnes of rice per year, with the majority coming from India and Pakistan. Therefore, when the Indian government decided in March to ban non-basmati rice exports and to curb sales of the more expensive basmati variety, this led to widespread alarm. With Indian supplies not forthcoming, the Bahraini government has scrambled to secure imports from other sources. In early June it was reported that Thailand, which previously supplied only around 5% of the Kingdom's rice imports, had agreed to increase its supplies to Bahrain in 2008 and 2009.
Bahrain has now taken this approach one step further by investing directly in farmland in major rice-producing countries. The government has invited private companies to set up joint ventures to invest in farmland in Thailand, while the agriculture ministry has reportedly secured an agreement from its Filipino counterpart for Bahraini investment in the Philippines' agricultural sector. Given Bahrain's need for food supplies and the Philippines' need for foreign investment, such agreements are being presented as win-win deals.
Bahrain is not the only Gulf country taking this approach, with UAE and Saudi Arabia reportedly looking to establish similar deals or joint ventures.