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UAE to Develop Farmland in Serbia as Part of Food Security Strategy

A development contract with Serbia will assist the food security of the import-dependent Gulf state and help build its resistance to global food prices.

Background

The United Arab Emirates relies on imports to feed its population. Faced with a shortage of arable land and water, it is looking overseas to secure its food supply. A new agreement between the Emirates and Serbia aims to secure food for the former, while providing much needed agricultural investment for the latter.

Comment

The UAE has taken a further step to ensure the food security of its growing population, by investing in farmland in Eastern Europe. Abu Dhabi's Al Dahra Agricultural Company recently signed an agreement to develop 9,000 hectares of land in Serbia, with the aim of producing a range of crops, meat and dairy produce. The arrangement allows Al Dahra to export produce directly to the UAE, utilising a Serbian port on the Danube River as a logistical centre.

Domestic food production in the Emirates is not sufficient to satisfy demand. The diversification of food supplies is an active move by the government to reduce its vulnerability to food supply shocks. The UAE has the 11th largest population of the MENA region, yet is its second largest importer of food, with imports making up around 85 per cent of the total food consumed. The dependence on food imports makes the country highly susceptible to global food price increases, which constitute a large factor in the county’s food insecurity.

In return for making available agricultural land to the UAE, Serbia will benefit economically; funding from the project will go towards modernising its irrigation and canal networks. Serbia is a major producer of wheat and maize, both important components in the average Emirati diet. Agriculture accounts for around 12 per cent of Serbia’s economy, though in many areas it is under-resourced. Agreements such as this will allow Serbia, which in recent years has experienced negative growth and consistent budget deficits, to capitalise on its valuable land in exchange for much needed foreign investment.

According to economists at the OECD, global food prices are likely to remain relatively high until at least 2020. Countries that are dependent on food imports, therefore, must secure alternative forms of food supply that minimise the impact of price increases on its citizens. The contract between the UAE and Serbia is the second European investment made by the Emirates, both with the purpose of ensuring its future food security. The new agreement is also part of a growing worldwide trend by developed countries to exploit under-used and under-productive farmland, particularly in Central and Eastern Europe, former Soviet states and the countries of Africa.

Jay Vella

Research Analyst

Global Food and Water Research Programme

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