SR 9billion payout to benefit farming, retail sectorsArab News 27 August 1996
Riyadh—An estimated 40,000 Saudi farmers will start receiving the first installment of SR 9 billion from the branch offices of the Saudi Arabian Monetary Agency (SAMA) in the Kingdom starting from Aug. 31.
Giving this information to Arab News,
Turki Faisal Al-Rasheed, president of
Golden Grass, Inc., a Saudi agricultural firm, said the total amount of dues to the farmers –SR 9 billion—has been divided into three installments of SR 3 billion each, of which the first installment falls due on Aug. 31. The remaining two installments will be paid out on Sept. 1, 1997 and '98 respectively.
The farmers were distributed convertible promissory notes, or 'shahadah', last year indicating the date of encashment. Thanking the Saudi government for its gesture to the farmers, Al-Rasheed said it will go a long way in giving a much-needed boost to the farming community.
The impact of this cash infusion into the economy, he said, will be felt all the way from Wadi Dawasir in the Central province to Tabuk up north. "What this means is that each farmer will receive, on an average, SR 230,000. Such a sizeable cash infusion into the economy will have a multiplier effect. It will not only help the agricultural sector but also the retail sector, as it will give a new lift to their spending power. "He pointed out that it will also relieve pressure on the farmers, since each payment is preceded by the agricultural certificate promising payment on a due date." So instead of making direct payment, they could transfer the agricultural certificate to the suppliers of fertilizer, such as Sabic, or diesel oil, like petromin."
Al-Rasheed said the mode of payment adopted in the case of farmers could open new business opportunities for the private sector without building up the monetary pressure. "For instance, the contractors could receive promissory notes stating a fixed date for the payment of their dues. This will keep things moving while minimizing pressure on the government budget."
Referring to this future plans, Al-Rasheed said Golden Grass is in the process of setting up a peanut butter farm estimated to cost around SR 15 million at their facility in Hail. The Saudi Industrial Development Fund is studying their proposal and is expected to take an early decision on their loan application.
The proposed peanut butter plant is part of the firm's import substitution program. Currently, the Kingdom imports 2,500 tons of peanut annually. Since Golden Grass has its own peanut farm production of peanut butter is deemed to be a logical step in this direction. There is at present only one peanut butter plant in the Kingdom.
