Governments have two options for food security

22 March 2010
Ensuring that there is an ample supply of food in the country is the most important factor policymakers must consider when looking at food availability.

There are two key sourcing options available to governments to provide enough supply of food to their populations: domestic production and imports.

Along with these two options, there is a third, small but emerging alternative, called contract or offshore farming, which involves growing strategic reserves in another country and then importing the output.

Domestic food production
Policymakers have three ways to maximise their domestic food production - increase cultivated land area; enhance land productivity and yields; and introduce biotechnological advancements.

The amount of food that any country can produce domestically is directly related to the amount of cultivated land it has available, provided that crop yield remains constant. Countries cannot simply increase the amount of arable land without taking into consideration other important factors, including the availability of water.

For example, efforts to enlarge rice-growing areas in regions that have limited water will eventually fail, due to the unavailability of water or the extremely high cost of water desalination.

Governments can use incentive policies to increase the cultivation of strategic crops or provide cheap land for reclamation.

Increasing the yield or production per unit of area of a strategic commodity will directly increase the quantity of domestic production. This can be achieved through the introduction of higher-yielding strains, that require significant investment in research and development.

A wide range of advances in seed technology, from conventional plant breeding to genetically modified organisms (GMOs), has been able to reduce production costs and waste, mainly by increasing pest and drought resistance.

Although GMOs are still controversial, research and legislation over the next decade will likely dictate their long-term viability. Governments now, though, can consider amendments to laws regulating their use within their country.

If produce is exported, it is also important to ensure that major export markets accept GMO produce or produce grown next to GMO fields.

Food imports
Imports help meet consumption needs when gaps exist between domestic demand and supply, or when domestic production of a strategic commodity is not possible.

A reliance on imports will require governments to consider a logistical set-up with adequate offloading capabilities at ports and sufficient storage capacity.

Public and private sector food suppliers typically import strategic commodities mainly through long-standing agreements.

Long-standing partnerships are strategic in nature; they do not necessarily produce the most cost-effective solution, but are effective in providing governments with a reliable supply of food.

In times of supply shortages or other crises, policymakers can call on a supplier that has been a steady provider of food. - Information from Booz & Company

Investing Abroad
Saudi Arabia has created a company to support private sector investments in agriculture abroad. Saudi private firms have pledged to invest $1.3 billion (Dh4.7bn) in a variety of agricultural projects in Indonesia to secure access to rice. Saudi companies are also considering contract-farming investments in Ukraine, Sudan and Kazakhstan.

Qatar reportedly is seeking to lease 40,000 hectares of land in Kenya for crop production and has been in talks with Cambodia to invest $200 million in agriculture projects. Sudan and Qatar also announced the formation of a joint holding company to develop wheat, corn and oil seeds in Sudan.

By Shuchita Kapur

© Emirates Business 24/7 2010
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