Why The Gulf States are Investing in Ag-Tech
With the dramatic events coming out of the Arabian Peninsula– from blockades to alleged political assassinations—one could be forgiven for missing the latest tech trend in the region. Yet, it is likely because of these potentially destabilizing events that countries like Qatar and the United Arab Emirates (UAE) have taken steps to promote agricultural technologies (ag-tech) to ensure greater food independence and security. And while neither of these desert kingdoms are likely to turn into lush green forests in the near future, with enough money and brainpower they hope to reduce their food dependence on other states. Qatar learned to avoid food dependency the hard way – experience. The 2017 Saudi-Emirati blockade of Qatar meant that the kingdom would have to find new and quick ways to replace about 80% of its food supplies. In addition to that, any foreign import over land became impossible after the Saudis closed the single land route to the Kingdom, and shipments by air and sea became far more difficult due to the need to avoid the blockading countries’ territory. And while Iran and Turkey saw this opportunity to build ties with Doha by providing it with much needed goods, the Qatari decision makers obviously saw this crisis as evidence of a more serious problem.
To address the root issue of its food security problem, Qatar has used a multi-pronged approach that includes stockpiling goods and promoting agriculture and ag-tech. According to state media, the country now has enough rice, sugar, and other staples stockpiled in Hamad Port to last 2.5 years. In addition, it has taken economic initiatives to promote farming that have yielded quick results – production of vegetables, fish, meat, chicken, eggs, and milk have reportedly jumped 400% since 2017. At the same time, Qatar continues to strive to make those agricultural operations more efficient by using advanced techniques (including vertical farming and hydroponics) as well as developing new technologies and becoming an ag-tech hub through its efforts like hosting an annual AgriteQ summit.
Less than 400 kilometers away and situated in a similar resource poor environment –excluding energy of course—the UAE also depends on imports for upwards of 80% of its foodstuffs. And while the Emirates have not experienced the dramatic effects of enduring a blockade, they are undoubtedly inspired by the potential for regional and global crises (not only political but also environmental issues) to promote food security and independence.
The Emiratis have taken many clear steps to promote agricultural innovation, which one UAE official noted will be “a key factor in securing the food supply chain.” The Minister of State for Food Security, Mariam bint Mohammed Saeed Hareb Al Mehairi, similarly declared that “adopting advanced agricultural technologies is crucial to ensuring the UAE's future food security.”
One component of that effort was facilitating a strategic partnership between the country’s Office for Future Food Security and the Abu Dhabi Future Energy Company to promote two new initiatives: vertical farming and smart home farming. Another was commissioning JBA Agritech to build the world’s largest AQUAPONIC system for the Government of Abu Dhabi at the Zayed Agricultural Center. Of course, the government also hosts an annual ag-tech conference entitled the Global Forum for Innovation in Agriculture in Abu Dhabi (in 2019 it will take place in early April) and invests in numerous ag-tech companies including a $47 million stake in Indigo and $4.5 million in Pure Harvest.
As the kingdoms’ harsh terrains are inhospitable to most farming, it is difficult to envision a scenario in which local produce becomes the most cost-effective solution to provide for the local population. Yet, threats emanating from regional instability, global warming, and rapid global population growth could interfere with the supply chain and either raise prices or make commodities unavailable altogether. And because these oil-rich monarchies derive much of their legitimacy from an ability to provide for their people (as they have no democratic process by which citizens bestow their faith in the government), the respective leaderships likely consider local produce and ag-tech to be issues of national security.
Ari Heistein is a senior analyst at Alpha Brown. Alpha Brown is a leading international provider of market research and market survey services.