ADVOCACY: Investing in Arab food security
G20 Summit

ADVOCACY: Investing in Arab food security

By supporting small-scale farmers, providing access to financing and investing in agricultural development, AAAID is making a vital difference across the Arab world

As a result of the 1970s energy crisis and global food shortages, a motivational spark was ignited among Arab countries to unite together to consolidate joint Arab action. As a result, specialised Arab institutions and organisations were established, dedicated to counteracting the food gap and shortfall in providing basic products that ensure food security and self-sufficiency for Arab countries.

The Arab Authority for Agricultural Investment and Development (AAAID) was established in 1976 as the only pan-Arab financial institution with a paid-up capital of $721 million, and an independent legal entity to reinforce food security through mega agriculture and agro-industrial investments and development programmes favouring small farmers in its member countries. AAAID’s founders decided to establish its headquarters in Sudan, as it is considered to be the world’s food basket. AAAID focuses on producing and processing basic agricultural goods through establishing companies in partnership with other investors or promoting access to microfinance for small farmers and producers in Arab countries.

Coming together

The Arab world’s food gap recently reached about $33 billion, which calls for a substantial increase of investments in food security sectors in Arab countries. This matter drove AAAID to invest in numerous companies that focus on the production and provision of basic commodities across numerous Arab countries. Moreover, tangible food production levels were achieved by some countries, such as the Republic of Sudan, in which AAAID’s companies contributed with 75% of improved seed production and 52% of sugar production, while the Sultanate of Oman provided 80% of fertilised eggs, the United Arab Emirates with 23% of poultry meat and 33% of dairy and juice production, the Republic of Tunisia with 15% of the production of Futura oils, the Syrian Arab Republic with 20% of vegetable oils production, and the Arab Republic of Egypt with 8% of sugar production.

AAAID currently contributes to the capital of 55 existing and under-establishment companies in 12 Arab member countries, in which Sudan hosts 64% of AAAID’s total investments, followed by Egypt with 6%, UAE 5.5%, Oman 5.5%, Iraq 4%, Saudi Arabia 3% and 12% in the remaining member states, as per investment opportunities and relative advantages available to the region. AAAID’s new strategy will support delivering its mandate and food security priorities of member countries.

As a result of AAAID’s affiliate companies’ intensive engagement in various food productions and processing, such as dairy, meat, grains, sugar and oils, several sustainable models were created and implemented by AAAID with the aim of endorsing socio-economic development, increasing crop productivity and production, as well as contributing to environmental conservation; in which AAAID and its companies played a major part in producing biofuel and recycling agricultural waste. Additionally, AAAID also contributes to capacity building and skills improvement of the Arab workforce by organising training and programmes for graduates of agricultural universities and small farmers.

A green army

Because small-scale farmers are considered to be the green army of Arab countries, and the backbone of the agricultural system (in which 85% of food in Arab countries is produced by smallholder farmers), AAAID has developed financing programmes dedicated to assisting small-scale farmers in sustainably increasing production and improving productivity. For example, a revolving loans programme was initiated by AAAID to support this category by providing timely financing, in addition to agricultural extension and insurance, modern technologies, and facilitating access to the market.

Realising the important role played by small-scale farmers and producers in providing basic food products, the integrated programme initiated by AAAID was implemented under specified measures, such as encouraging small-scale farmers to form associations in order to benefit from the services provided by the programme, as well as achieve expanded commercial production and cooperating with research centres to raise awareness for farmers. In addition, the measures included extending credit lines in cooperation with financial institutions to finance small-scale farmers, marketing their farms’ production, and supporting female farmers by securing their access to financing.

Furthermore, focusing on small-scale farmers and producers has achieved significant and notable results, with the programme’s activities initiated in Sudan and greatly extended to Jordan, Mauritania and the United Republic of the Comoros. During 2013–2020, there was total funding of about $25.7 million (with an annual growth rate of about 45.1% and a net return of about $1.6 million). Meanwhile, the funded cultivated areas across Arab countries reached about 34,000 hectares, and 213,000 people have benefited from the programme, as direct and indirect job opportunities were available. In addition, farmers have achieved a notable increase of more than 155% in the productivity of a range of crops such as wheat and peanuts.

AAAID’s objective of enhancing food security in the Arab world was achieved, as its programmes have helped reduce the migration of young people from the countryside to the cities by ensuring optimal utilisation of natural agricultural resources. Up until 2020, AAAID had organised 18 development activities and programmes, and supported around 3,500 female farmers across its member states by financing their agricultural projects through various implemented initiatives.

As a joint Arab institution with a total cultivated area of 297 thousand hectares and industrial lands of around 8 million square metres, and 42 years of experience in the field of investment and agricultural development, AAAID has supported the two initiatives launched by Saudi Arabia, “Green Saudi Arabia” and “Green Middle East”, which aimed to plant about 40 billion trees across Middle Eastern countries in an attempt to help restore an area equivalent to 200 million hectares of degraded land and reduce global carbon rates by 2.5%. The initiatives’ objectives are fully aligned with AAAID’s aspiration to expand its cultivated lands in the Arab countries in order to provide basic food commodities and ensure food security in the Arab world. Being a pioneer in developing strategies for agricultural innovation, AAAID has also fostered the UAE’s initiative for agricultural innovation in climate by illustrating studies and research through cooperation and coordination with the public and private sectors in the same field, in order to achieve the initiative’s goal of reducing the repercussions of climate change and adapting to it.