In what ways was the fund able to support its clients during the pandemic to ensure the continuation of agricultural activities and to contribute to the food security of Saudi Arabia?
During this pandemic, ADF announced it was launching three initiatives with an allocation of SAR2.5 billion in line with other National Development Fund subsidiaries to ensure the continuation for agricultural activities and to contribute toward food security in Saudi Arabia. To ensure ample food supply to the Kingdom, ADF introduced the Funding Import of Agricultural Products for the Food Security Strategy, with an allocation of SAR2 billion in a combination of direct and indirect loans through commercial banks. This funding would assist companies with imports to meet the food security demand on essential crops such as rice, sugar, soybean, and corn. ADF also took proactive measures by allocating SAR150 million for loan rescheduling to assist SMEs and ease their burden in meeting their monthly repayments. ADF also allocated SAR300 million for working capital loans to assist specialized projects in ensuring the sustainability of their projects. This initiative also aims to save jobs and ensure the sustainability of food supplies. This initiative comes within the framework of the urgent initiatives approved by the Saudi government to address the impact of COVID-19 and mitigate the economic impact on the private sector and its economic activities, and in line with the Saudi Arabia's National Development Fund (NDF) declarations.
How has your outlook on food security changed during the pandemic?
Measures put in place to prevent or slow the spread of COVID-19 are disrupting the functioning of food supply chains. Limits on the mobility of people across borders and lockdowns are contributing to food shortages despite solid supplies of staple crops and favorable production crops. The Food Security Strategy, which was the result of institutional work that the Ministry of Environment, Water, and Agriculture (MEWA) started more than four years ago following the food crisis in Saudi Arabia in 2008, is reaping its fruits during the current crisis. With the cooperation of MEWA and the enablers from both private sectors and government-related companies such as SALIC and SAGO, ADF and other institutions have been working more aggressively to raise production and improve marketing efficiency. In light of COVID-19, ensuring that the food system is more sustainable and resilient is now an even more urgent priority. MEWA has begun refining the strategies in recent years to combine more targeted overseas investments with the development of technology-backed production at home, particularly for vegetables, fruit, and fish to ensure self-sustainability without affecting scarce natural resources such as water. The consistent supplies of the targeted crops and sensitive crops have become top priority. Emphasis has also been placed on strengthening the logistics and value chain through various program to ensure these crops reach consumers. In addition, MEWA has also built up strategic food reserves and invested in mills, logistics, and production facilities. To further improve this, MEWA and the relevant agencies will need to step up in terms of: financing local and external production and the supply chain; the funding of the agricultural sector to support sustainable rural agricultural development and crop composition according to the relative competitive advantage of the regions; and encouraging the use of modern techniques and practices to conserve natural resources and improve agricultural productivity through distinctive partnerships with cooperatives, the private sector, and research centers. Today, the Kingdom has one of the largest storage capacities in the Middle East for wheat and flour, with more than 3.3 million tons. The Kingdom possess trustworthy food supply chains capable of daily production that can satisfy consumers even at international standards.
How is the ADF positioning itself in regard to Saudi Vision 2030 goals?
It is critical for us as a country that we have one vision. In agriculture, we have two major focuses: food security and overall sector development. We support food security with the help of the Ministry of Agriculture and MEWA. We also launched other programs such as the Rural Development Program. Through this program, we provide loans for small farmers, thus creating jobs in the rural areas of Saudi Arabia. As Saudi Arabia is a huge country, with diverse climates from one area to another, we agreed with the ministry to develop the competitive advantage of each region depending on what each is best at. This development strategy is vital for food security. Currently, we are self-sufficient in some products such as eggs and dates. We are also in a good position for poultry and dairy in general; however, we still have some challenges regarding water, so ADF's role in the new food security strategy envisioned in the vision is to provide loans for infrastructure.
What projects do you fund to promote and encourage better usage of water?
One of our strategies over the last two years has been giving incentives for people to transfer to technology to monitor their water usage. One way to use technology to save water is through using hydroponic greenhouses, which can save up to 90% of the water consumption needed. This will help the farm to produce more while using less water. This type of technology is not just for the greenhouses but all activities, including poultry and aquaculture. By using new technology, one can help save natural resources, either water or land, and increase productivity. All of this contributes to the country's food security. Additionally, these technologies will help with sustainability, because you are using resources more efficiently. Technology improves every year, and agriculture, like any other industry, is adopting new technology. We see great technology being used in greenhouses and in irrigation systems, which helps small farmers save water as well. In terms of irrigation systems, there are many different systems employing different technologies. As such, we have new products for irrigation systems as well. These products will have a huge impact on sustainability in the agriculture business.
Are there programs specific to Saudi Arabia for agriculture?
There are two different strategies we have devised with MEWA: The National Water Strategy and The National Agriculture Strategy. Each one has different stakeholders. The water strategy involves the farmer, the ADF, and all the people. Meanwhile, the agriculture strategy involves the farmer and industry, because you are turning agricultural products into food at the end of the day. You also need the FDA, commercial banks, and traders because you need products from outside. We have continuous support to achieve these strategies. In the agriculture strategy, we try to find products that are suited to our climate. We a great advantage in poultry farms and greenhouses because of our climate. We also have an aquaculture advantage in the fishery business because we have long been developing the sector. As for food security, because some products do not fit our climate, we decided to support Saudi businessmen to invest in nearby countries depending on the products offered. This will help both with food security and sustainability.
How will the ADF transform agricultural production in Saudi Arabia?
It takes more than funding to change the people and the culture to adopt new technology. Especially in talking to small farmers in rural areas, it might be a challenge to change them. But we work closely with other organizations to promote best practices in agriculture. The ministry has an initiative called the Saudi Gap in agriculture about how to produce and grow products the best way in Saudi Arabia. This initiative will help farmers to implement more technology; from our end, we will provide increased funding. This is an incentive to change but still, it is not easy. However, if we create good examples, people will follow. We also need help from universities all around the country to promote best practices in agriculture using technology.