Nader Noureldeen* argues that Arab countries need to begin producing wheat instead of relying on imports Wheat, oil and sugar top Egypt's list of food imports. Wheat is a particularly vital commodity since it is the chief ingredient in bread -- the key starch component in the Arab diet. Since Arab countries produce only a small portion of their total consumption of wheat, their demand on this commodity largely determines its price in the international market. Yemen produces only 15 per cent of its wheat needs; Algeria, 32 per cent; Morocco, 40 per cent; Iraq, 44 per cent; Egypt, 55 per cent; and Sudan 62 per cent. Only two Arab countries have reached self-sufficiency and produce enough surplus for export. In Saudi Arabia, supply is 130 per cent higher than demand, while Syria produces 25 per cent more wheat than the needs of the local market. The largest wheat importers are Egypt, which buys 6-8 million tonnes per year on the international market, and Iraq imports four million tonnes. In September, the price of wheat on the international market ranged between $340 and $346 per tonne, compared with $163 to $200 during the same period last year. Several reasons combined to produce this remarkable rise. First, the area cultivated with wheat in Egypt decreased to 2.2 million feddans, compared with 3.1 feddans one year earlier. Iraq's production of wheat also declined remarkably due to war conditions. Meanwhile, wheat production in several major wheat exporters also decreased, namely by 10.5 per cent in Canada, 20 per cent in Australia, and by five million tonnes in Russia and Ukraine. US production of wheat also decreased marginally. At the same time, several Asian nations which had been self-sufficient for years began buying wheat on the international market, including densely populated India, Pakistan, Bangladesh and China. Another factor is the rumour spread by exporters that wheat is being used to produce bio-fuel. The rumour is, in fact, groundless and wheat is unlikely to be used for bio- fuel anytime in the near future. Indeed, the entire future of bio-fuel is in question because the production of one litre of bio-fuel (ethanol) can consume up to 3,000 litres of water. This, in a world which suffers from water scarcity and global warming. Other reasons lie in the fact that developing countries rushed to stock up on wheat following rumours of international shortages. Egypt bought 550,000 tonnes in September, India purchased over 800,000 tonnes, while Iraq ordered 900,000 tonnes. Moreover, some Arab countries believed the claim made by exporting countries that it was cheaper for them to import wheat than to produce it. Egypt was told that it could save 8.5 billion cubic metres of water -- which represent one sixth of its water quota -- through buying wheat from countries which use rainfall in agriculture, such as the US, Russia, France, Australia and Argentine. Wheat prices are not expected to decline in the next six months, since the orders made in September would be fulfilled in December 2007 and January 2008. While some experts predict that prices will not go down for another year or so, others believe that it would take two years for prices to drop. It is therefore safe to assume that prices will remain high until the next harvest in May-June 2008. The recent hikes in wheat prices greatly affect the economies of Arab countries. Egypt's total imports are expected to reach LE16 billion in the fiscal year 2007/ 08, which means that the country will have to pay LE8 billion in additional subsidies. Hence, it's logical that several practical solutions should be introduced to address the high wheat consumption in the Arab world. These include increasing the total area cultivated with wheat to 50 per cent (100 million feddans), instead of the current 30 per cent (60 million feddans). Egypt, with an agricultural land totalling 8.5 million feddans, should increase its total area of wheat cultivation to approximately four million feddans. In order to do so, it must put in place a new policy that rewards farmers with prices comparable to international ones. For example, farmers should be able to make more money from wheat than from its competitor crop, clover, which is better known in the international market as Egyptian berseem or alfalfa. Currently, farmers make LE4,000 per feddan of clover. It is also prudent to ignore claims by the West that Arab countries should import rather than produce wheat. Saudi Arabia did just that, and its policy has been a success. Five years ago, Saudi farmers were spending five times as much as the price of imported wheat to produce the crop locally; today, they are doing this at slightly more than international prices. Sudan has a surplus of agricultural land, estimated at about 20 million feddans from a total of 32 million feddans. Through technical assistance from Egypt and investments by Gulf countries, this area can be cultivated and replenish most of the shortage in wheat production in the Arab world. Those who do not own their food, do not own their destiny. Agricultural policies in the Arab world need to be revisited if this region is to reach food self- sufficiency. * The writer is a professor at the Faculty of Agriculture, Cairo University, and former expert at the General Authority for Food Commodities.
