Going organic: The potential of the segment is rapidly becoming apparent

Since the Saudi government commissioned Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), a sustainable development firm owned by the German government, to build a strategy for developing organic farming in Saudi Arabia in 2005, the subsector has taken an increasingly prominent position in the overall strategy for agriculture. Given the water-saving potential and high-value produce of the organic sector, it is unsurprising that the government is keen to focus on the industry. Indeed, the use of drip- feed irrigation and the production of high-value fruit and vegetables suggest that organic farming should dovetail nicely with the Ministry of Agriculture’s (MoA’s) aim of achieving maximum returns from the minimum water use in the Kingdom’s agricultural industries.

Planting The Seeds

Much of the past seven years has been dedicated to putting in place the framework for an indigenous agriculture sector, including the development of a Department of Organic Agriculture (DOA) and the creation of several regulations monitoring and accrediting the sector. Following the introduction of the National Regulation and Standards for Organic Agriculture in 2011, including a national logo certifying organic produce within the Kingdom, the MoA has now begun to aggressively promote organic products to domestic consumers, including the introduction of a national awareness campaign in 2012.

Similar to EU legislation, the new regulation provides a framework to accredit certification bodies according to international standards. Now that this framework is in place, there is an expectation that organic farming will really take off in Saudi Arabia. According to GIZ, the DOA has certified 78 farms as organic and, as of July 2012, a further 280 farmers have requested official registration to turn their farms organic. The country now has 16,400 ha using organic farming methods, with a further 2200 ha in the process of being converted. While this may represent a small percentage of the total cultivable land (2% of land as of 2010), it represents significant progress in a short period of time.

Some of this success has been driven by 21 pilot farms established under the GIZ programme. These farms, which have received training and support from GIZ, the MoA and the Saudi Organic Farming Association (a private body), have been acting as centres to promote organic farming and to support the conversion of traditional farms. This strategy has also been supported by an MoA decision to convert the Qassim Agriculture Research and Development Centre into the Organic Agriculture Research and Development Centre in 2009. The centre is concentrating on soil science, horticultural science, biodiversity and plant protection.

Organic Growth

Such initiatives should help steer the industry toward a sustainable and lucrative future. The MoA will be hoping that the country can follow the global trend in which organic farming has skyrocketed in the past decade. According to GIZ, there are now approximately 1.8m farmers working under organic certification, while the land designated for organic agriculture has more than doubled from 15m ha to 37m ha in the past 10 years. Furthermore, demand for such produce has been rapidly rising. As of 2010, sales volumes of organic products had reached almost $60bn.

Saudi Arabia already seems to be moving in the right direction. Although the government has played a crucial role in the development of the sector, the Kingdom has already produced a number of well-established private players. Since 2000, the National Agricultural Development Company (NADEC), Al Watania Agriculture and Al Khalediah Farm have ventured into organic farming. While NADEC has only dedicated part of its operations to organic farming, Al Watania and Al Khalediah have become specialised solely in organic produce. The former has integrated operations that include everything from farms to sales outlets dedicated to organic products. Indeed, Al Watania now has 20 retail outlets around the Kingdom and is planning to expand the number by 70% in the next five to six years. With an annual growth rate of almost 8%, the company is a prime example of organic’s potential in Saudi Arabia.