I missed this Reuters piece when it came out last month. It’s an important move by the Saudi government. Most developing nations look for ‘food independence’ much the way some in the US today call for ‘energy independence’. They’re both good ideas, but extremely hard or expensive to implement. The expenses for Saudi Arabia were doubled: not only did the government have to pay high subsidies to farmers to make their to-market price competitive with imports, it also had to pump huge amounts of a resource more important than oil… water. The ending of wheat production in the Kingdom is a sign of economic maturity and recognition that the KSA is truly part of the global economy.
(Reuters) Saudi Arabia is abandoning a 30-year program to grow wheat that achieved self-sufficiency but depleted the Kingdomâ€™s scarce water supplies. The government will start reducing purchases of wheat from local farmers by 12.5 percent per year from this year, officials from the agriculture and finance ministries said yesterday.
The Kingdom aims to rely entirely on imports by 2016. â€œThe reason is water resources,â€ said one official, who did not want to be identified.
Saudi Arabia produces 2.5 million tons a year of durum and soft wheat, enough to meet domestic demand. In the 1970s, the government started a program to encourage farmers to produce wheat, guaranteeing them at the time a massive SR3,500 ($ 933.5) for every ton.