The food and agriculture sector must respond to changing and complex consumer demands – a challenge that is reaping pioneering and innovative ideas
The past few years have been marked by many challenges, and scientists, technicians and farmers have been very enthusiastic about creating innovative mechanisms and techniques in various sectors. Therefore, many pioneering and innovative ideas have emerged aimed at overcoming the financial, social, economic and environmental challenges that have affected sectors, governments, companies and individuals.
The food and agricultural system is influenced by the forces that shape the world’s economy: globalisation of markets, advances in technology, new delivery systems and modern science. Driven by these and other factors, the food and agriculture sector operates in a highly competitive marketplace that must continuously respond to changing consumer demands for high-quality, nutritious and convenient food and agricultural products.
The Arab Authority for Agricultural Investment and Development is an international institution that includes in its membership 22 Arab countries. It was established in 1976 as an independent Arab financial institution that aims to contribute to achieving Arab food security through the establishment of agricultural production and food processing projects and multi-development programmes.
AAAID has 46 years of experience in the field of investment and agricultural development in its member states. During this period, its paid-up capital grew to $731 million. AAAID’s investments are distributed among four main sectors. These include the agricultural industrial sector at 49.70%, the animal production sector at 24.53%, the plant production sector at 22.24% and the agricultural services sector at 3.53%. In light of the investment opportunities and relative advantages in Arab states, AAAID’s investments are distributed geographically across several states.
AAAID, while working in a challenging environment, continues to operate in line with its strategic plan for agricultural investments for 2021 to 2025. This plan aims to invest in new agricultural projects and rehabilitate and expand programmes for some existing companies. By the end of 2021, AAAID had invested in 53 affiliated companies and projects with total investments of $662 million. These companies produce basic commodities and crops: such as cereal, grains, vegetable oils, sugar, meat, dairy and fodder, and created more than 115,000 jobs.
The strategic plan also involves financing revolving loan programmes for small- and medium-scale farmers in the member states with an entire full package programme from land preparation, providing production inputs to harvesting and product marketing. The technical support and educational guidance along with the latest technologies has resulted in a massive increase in agricultural production by more than 150%. This has also resulted in doubling the annual cultivated land area. We take pride in knowing that this initiative has benefited more than 432,000 farmers.
In addition to the value of existing companies that stand at $662 million as of 2021, AAAID has co-funded projects worth around $39.5 million. The total value of AAAID as a corporation was $1.4 billion at the end of 2021. Moreover, AAAID’s loan portfolio is worth $125.2 million, and the corporate guarantees to its companies by the end of 2021 were worth $23 million.
During 2021, AAAID set its focus on implementing 11 applied research programmes in a number of Arab countries with the aim of domiciling new varieties of field crops and introducing modern agricultural technologies. During that time, we studied and evaluated 116 opportunities.
AAAID continues to analyse its agribusiness portfolio in its member states on a regular basis with a view to implementing restructuring and expansion programmes where appropriate, supporting diversification of activities by providing capital and resources, and enabling them to exploit their capabilities to the fullest extent possible.
Covering the basics
In mid 2022, AAAID launched an initiative to cover the deficit in basic food commodities in the Arab world, namely grains, sugar, dairy products, vegetable oils, meat and legumes, estimated at about $42 billion. The initiative included a comprehensive presentation of a proposal to cover the deficit in the wheat crop, whose investment cost was estimated at about $32 billion as a strategic crop and an urgent priority, and AAAID is currently promoting this initiative to governments, finance companies and potential investors.
Last but not the least, AAAID aspires to build ties of cooperation by partnering with relevant authorities and institutions concerned with achieving Arab food and water security, sustainable agriculture and rural development – and in cases where emergency and humanitarian aid is necessary.