Food Security or Bank Security?

Food Security or Bank Security?

Food Waste

Since the evolution of humans and animals there has always been the issue of hunger, the struggle to feed one’s self and family and the devastating fact of famine. Although there are many starving people in this world there are also those who are not.  Americans throw away 40% of food produced in America, amounting to 1,400 calories per person per day, $400 per person per year, which adds up to 31 million tons of food, entering landfills each year. Meanwhile about 842 million people in the world do not eat enough to be healthy.  That means that one in every eight people on Earth goes to bed hungry each night. By 2050, the world will need 60% more food to feed a population that will exceed nine billion by that time, according to the Food and Agriculture Organization of the United Nations. Countries will continue to compete for land, water and food, which may result in greater poverty and hunger.

The Middle East and North Africa (MENA) is an economically diverse region that includes both the oil-rich economies which are usually Gulf and countries that are resource-scarce, such as Egypt, Morocco, and Yemen.  The MENA countries spend as high as 0.15 to 0.62 per cent of their GDP on food subsidies. Algeria, Libya, Egypt, Morocco, and Tunisia are already facing food security challenges. The Middle East is, therefore, now looking at investing in food production in countries from where food is imported, to secure its food supplies.

Saudi Arabia jumped the gun and is already providing funds, credit, and logistics to Saudi investors to invest abroad in agriculture. It is also establishing a strategic reserve for basic food commodities, to meet local needs for food and avoid future food crisis. This is soon likely to be a key trend for all oil exporting countries in the Middle East. King Abdullah’s Initiative for Saudi Agricultural Investment Abroad intends to obtain food from local production, imports and Saudi agricultural investments abroad.

“King Abdullah believes that many countries have the natural resources to produce food, but lack other resources such as capital, experience and technology production,” says Dr. Khaleel. “Such resources are available in Saudi Arabia. So, we can complement each other and produce sustainable food for all.”

By encouraging the private sector to invest abroad using their financial surpluses, will ultimately lead to supporting communities by contributing to their food security, job creation and improving the infrastructures serving the projects. Any investment abroad faces challenges, like political instability, corruption, customs, registration and license problems, as well as social and cultural problems. The government is said to facilitate the private sector by providing strategic partners, represented by the Saudi Agricultural Investment and Animal Production Company, they will provide financial support through interest-free loans via the Saudi Development Fund. Saudi Arabia is not the only one who sees this as a good investment but sum thirty-one countries have been identified thus far. These countries have natural resources and are willing to support these investments.

My question is what kind of return are these investors getting and what make this such an attractive deal that already thirty one countries are jumping aboard? And once these needy countries receive the capital and start producing their own food and resources who receives the profit from those goods and natural resource. Are these wealthy countries going to ultimately gain control of these needy countries agricultural sector? I hate to be cynical because this is a great idea that is going to help so many people but, it all just seems a little too good to be true.I will be interested to see what happens in the long run.\


5 thoughts on “Food Security or Bank Security?

  1. Food is so important to conflict and is a huge natural resource that I think most, even myself sometimes, often forget. Investing in food security is super intelligent! Our country is terrible at throwing away food and composting. Wish we could give food to the people who need it. Great blog read!

  2. This blog was really informational! If Saudia Arabia does implement this plan, it will be interesting to see how that will effect their economy and world conflict.
    I like Alena find it easy to forget that food is such a HUGE key in foreign conflict and resolution because here in America we don’t have to worry about food scarcity.
    Great job!

  3. King Abdullah is a great businessman. (of course there must be a group of people behind him, as Saudi Arabia as a whole has made strides) I read of initiatives claimed under his name and they seem like huge investments for the country, responses to near zero literacy and now, what is this, response to food scarcity? They are playing on what they have: “capital, experience and technology production,” Hold on, what is experience? Experience in business I’m assuming. And I definitely see how having agricultural land abroad could generate revenue. “Consumers in not only the richest nations but, increasingly, the developing world expect food whenever they crave it, with no concession to season or geography.”

    That quote from this article entitled “Environmental Cost of Shipping Groceries Around the World”

  4. This was an interesting to say the least. It would be neat to see the United State’s efforts in mitigating food insecurity compared with Saudi Arabia’s or perhaps other Middle Easter countries. However, it is important to know where this foreign aid is being allocated in regards to food. The United States is actually one of the biggest suppliers in foreign food aid–that’s a complicated fact, but nonetheless it’s still a fact. The problem is, the US supplies the majority of its food aid in surplus subsidized dairy–the problem is most of the world is lactose intolerant. My point being, aid is good, but where it goes and how much goes where is really what’s most important.

  5. Great blog! It is crazy how much Americans throw away food. We really should do a better job at keeping track. Food really is an important topic that I think a lot of Americans overlook. We really need to figure out ways to help other countries by providing them with food.

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