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Buenas Noches Señoras y Señores Opening Remarks First of all I wish to express my gratitude for participating in this very important International conference,

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Presentation on theme: "Buenas Noches Señoras y Señores Opening Remarks First of all I wish to express my gratitude for participating in this very important International conference,"— Presentation transcript:

1 Buenas Noches Señoras y Señores Opening Remarks First of all I wish to express my gratitude for participating in this very important International conference, titled Agribusiness: Opportunities between Argentina and the Middle East. Organized by the distinguished Dean of College of Business, Universidad De Palermo, Professor Gabriel Foglia. It is an honor for me to be here with all of you tonight.. Turki Faisal Al Rasheed Golden Grass, Inc.& University de Palermo / UP, Argentina 1

2 Message to the Audience Turki Faisal Al Rasheed Golden Grass, Inc.& University de Palermo / UP, Argentina 2 Decision maker: Agriculture can serve as a multi- function. It can generate good revenue plus a tool to alleviate poverty. Businessmen: Industrial Agriculture can be a profitable business financially and socially Academics: Critique my research about “Agriculture development strategies to enhance food security, alleviate poverty and promote economic growth” Future Leaders (Students): If you don’t know where you are going then it doesn’t matter going anywhere, you must write down your goals and be persistent to achieve them. Dear Audience

3 Agriculture Development Strategies (ADS ) to enhance food security, alleviate poverty and promote economic growth: Saudi Arabia Experience Presented by: Turki Faisal Al Rasheed Chairman, Golden Grass, Inc. Riyadh & enrolled in Doctorate of Business Administration (DBA) Liverpool Business School at LJMU, UK 3 Turki Faisal Al Rasheed Golden Grass, Inc.& University de Palermo / UP, Argentina

4 4 Introduction Agriculture Development Strategies Agriculture Development Strategies Examples Business Opportunity Theoretical Concepts for ADS The Role of Agriculture Food Security Economic Growth Saudi Government Challenges Water Optimization Corporate Social Responsibility (CSR) Agriculture Foreign Investments Agriculture Foreign Investments (Advantages & Disadvantages) Saudi Government meeting the challenges Saudi Strategic Commodities requirements Saudi Requirements from Target Countries Laws Governing Agriculture Land Foreign Investment Summary Local and International ADS Recommendation s Conclusion for Saudi ADS Learn to Plant your Goals Visualize you Goals Closing Remarks Questions Table of Contents Turki Faisal Al Rasheed Golden Grass, Inc.& University de Palermo / UP, Argentina

5 Introduction Turki Faisal Al Rasheed Golden Grass, Inc.& University de Palermo / UP, Argentina 5 Scientists Managers, consultants, academics and students Research There is a belief, held by many that ‘research’ is associated with activities that are remote from daily life and usually take place in a laboratory, carried out by scientists. This belief is partly correct in that research is the study of problems through the use of scientific methods and principles. There is a growing number of people outside laboratories who carry out research in order to produce and disseminate knowledge relevant to the business world. The difference between the two groups is in the research philosophies, approaches and strategies, perception of how the knowledge can be created or constructed in a rigorous and meaningful way in order to answer a research problem.

6 Agriculture Development Strategies (ADS) An integrated system of plant and Animal production practices having a site-specific application that will, over the long term: Satisfy human food and fiber needs Enhance environmental quality and the natural base upon which the agricultural economy depends, Make the most efficient use of nonrenewable resources and on-farm resources and integrate, where appropriate, natural biological cycles and controls, Sustain the economic viability of farm operations, Enhance the quality of life for farmers and society as a whole. It correspond to what countries have tried to do to promote development objectives in agriculture. Strategies symbolize the underlying body of beliefs on how the process of agricultural development is supposed to be done. Turki Faisal Al Rasheed Golden Grass, Inc.& University de Palermo / UP, Argentina 6

7 Agriculture Development Strategies (ADS)- (Examples) The importance of understanding environmental concerns as part of agricultural policy. Involving local people in policy objective Need new technologies to raise yields Improve opportunities for agribusiness Inform policy makers on ways to improve poverty, food security, and economic development. Turki Faisal Al Rasheed Golden Grass, Inc.& University de Palermo / UP, Argentina 7

8 8 Message to Businessmen

9 Business Opportunity The Agro-industrial sector is a very attractive areas, for investment cooperation benefiting Argentina and the Middle East in light of the growing global demand for food. Good opportunity for Argentina and the Middle East can be a win –win situation. Rice, wheat, Barley, Corn, Soya Bean,oil seeds, sugar, Animal feed, livestock and fisheries are the Strategic commodities needed by Saudi Arabia and most Middle East countries. Argentina’s diverse landscape ranging from the mountainous region of the Andes to the fertile plains of pampas a partnership in terms of agricultural investment can be a good possibility. Turki Faisal Al Rasheed Golden Grass, Inc.& University de Palermo / UP, Argentina 9

10 10 Message to Academics Message to Students

11 Theoretical Concepts for ADS Sustainable development: is a development that meets the needs of the present without compromising the ability of the future generations to meet their needs (WCED 1987) Corporate Social Responsibility (CSR) is a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis. Stakeholder Theory is any group or individual who can offer or is affected by the achievement of the firm’s objectives. Situational Agriculture Development Strategies an integrated system of plant and Animal production practices having a site-specific application. 11 Turki Faisal Al Rasheed Golden Grass, Inc.& University de Palermo / UP, Argentina

12 Improve Food Security Promote Economic Growth Water Optimization Government Social Responsibility ( CSR) Employment/Poverty Reduction, depopulation rural areas 12 The Role of Agriculture Turki Faisal Al Rasheed Golden Grass, Inc.& University de Palermo / UP, Argentina

13 Food Security According to FAO Food Security means that food is available at all times; that all persons have means of access to it; that it is nutritionally adequate in terms of quantity, quality, and variety; and that is acceptable within the given culture. The world as well as the World Bank have forgotten just how important food and agriculture is. Currently the industrial world is operating at 60 to 70% of its capacity unfortunately, agriculture, now operating at full capacity. The number of malnourished people in the world rose to over 1 billion this year, up from 915m in 2008 (FAO). World Bank Economist reckons that the number of people living on less than $1.25 a day will rise by 89m this year. Agriculture and food security have become “the core of the international agenda”, as the G8 called it. Turki Faisal Al Rasheed Golden Grass, Inc.& University de Palermo / UP, Argentina 13

14 Economic Growth….(1/2) Turki Faisal Al Rasheed Golden Grass, Inc.& University de Palermo / UP, Argentina 14 Economic Development is a sustainable boost in the standard of living. It implies an increase in the per capita income of every citizen. It also leads to the creation of more opportunities in the sectors of education, healthcare, employment and the conservation of the environment. Traditionally, agriculture economist consider that growth in the farm sector provides food, raw materials, labor, capital, and foreign exchange necessary to finance subsequent growth in the rest of the economy, while simultaneously growth in the rest of the economy, while simultaneously generating an additional demand of industrial goods and services.

15 15 Economic Growth….(2/2) Self Sufficiency Improvement of Rural Incomes/Poverty Reductions Minimize depopulation from rural areas Employment Food Security Turki Faisal Al Rasheed Golden Grass, Inc.& University de Palermo / UP, Argentina

16 Saudi Government Challenges 16 Turki Faisal Al Rasheed Golden Grass, Inc.& University de Palermo / UP, Argentina Food shortages resulting soaring food prices raised questions about the long-term prospects for food security (2008 hike & Russia today). Urban population growth VS – Rural depopulation, – high unemployment, – environmental degradation, – reduction in arable land Water Scar city

17 Water optimization Water scarcity in Saudi Arabia is one of the limiting factors to local food production. Cereal grains has to be imported to compensate for the water deficit. Water consumption at 29 billion cubic meters (BCM) of which 23 BCM consumed for Agricultural purposes, accounting to 87.5% of total water consumption (SAMA 2008) World Ave. 71% (yang 2003) In GCC countries, particularly Saudi Arabia it was decided that, given impending water shortages, it will stop producing wheat by Turki Faisal Al Rasheed Golden Grass, Inc.& University de Palermo / UP, Argentina 17

18 18 It is about capturing the whole sets of values, issues and process that companies must address in order to minimize any harm resulting from their activities and to create economic (profit), social (people), and environmental (planet) value. It involves being clear about the company’s purpose and taking into account the needs of all the company’s stakeholders, customers, employees, business partners, governments, local communities, and the public. Corporate Social Responsibility (CSR) Turki Faisal Al Rasheed Golden Grass, Inc.& University de Palermo / UP, Argentina

19 19 Message to Decision makers

20 Agriculture Foreign Investment Middle Eastern countries are major investors in agricultural land in developing countries, and the nature of this type of investment has raised ethical concerns. These investments pose particular threats to local communities, especially with regards to food and water security. Saudi Arabia and the United Arab Emirates as ‘worldwide leaders in buying land in third-party countries’ with Bahrain, Egypt, Kuwait, Libya and Qatar also actively exercising their interests in acquiring foreign farmland on a large scale. World Bank 2009 plus China and South Korea and US investors. African countries are the main focus, however Ethiopia has 13 million hungry people, Southeast Asia and South America are seeing a rise in foreign-owned farmland. The scale and nature of the investments has raised international concern. The right to water is threatened the locals while investors need to minimize irrigation cost. Turki Faisal Al Rasheed Golden Grass, Inc.& University de Palermo / UP, Argentina 20

21 Agriculture Foreign investment Advantages and Disadvantages Turki Faisal Al Rasheed Golden Grass, Inc.& University de Palermo / UP, Argentina 21 Advantages Provide domestic benefits i.e. capital inflows, employment, improved crop yields, and possibly infrastructure, technology transfer and increase in food supplies for the host country and for export. Poverty reduction and sustainable development strategies in the host countries. Disadvantages Land degradation, water depletion, labor rights limitation (FAO, 2009). Force migration,human rights principles, public interest, lack of consultation and compensation with the locals. Trade bans, Grain exporters large and small imposed to keep food prices from rising at home. i.e. Russia, Ukraine and India while Argentina increased export taxes sharply.

22 22 Turki Faisal Al Rasheed Golden Grass, Inc.& University de Palermo / UP, Argentina Saudi Government Meeting the Challenges Saudi Arabia’s vision is to focus on facing the world food crisis by taking sustainable measures and securing food supplies for the citizens and residents. Establishment of a strategic reserve for basic food commodities such as wheat, rice, barley, corn, sugar, and livestock. Identify countries targeted for agri-investment. Explore ways of acquiring lands in targeted countries. Agree with hosting countries on facilities given to the Saudi investors. Improve local production by adopting new technologies (GMO & water desalination by solar & nuclear energy).

23 Saudi Strategic Commodities Requirements Wheat needed 2.7 Million tons/year (2008). This represents 2.5% of the globally available wheat for export. Kingdom’s domestic harvest of hard wheat stood at 1.1 million tons this year (2009/2010). 16% percent above the 950,000 thousand tons produced in the year (2008/2009). Two million tons of hard wheat needed to be imported before the start of the next harvest in the Kingdom. Rice needed 1.0 Million tons/ year (2008). This represents 3.7% of the globally available for export. Barley needed 6.3 Million tons/year (2008). This represents 45% of the globally available barley for export. Animal Feed total animal feed produce in Saudi Arabia is 3 Million tons/year and the total animal feed needed in Saudi Arabia is 14 Million tons/year. 23 Turki Faisal Al Rasheed Golden Grass, Inc.& University de Palermo / UP, Argentina

24 Saudi Requirements from Target Countries Natural resources (climate, fertile farm land, water availability). Political, Social and Economic Stability Stable legislative and administrative system Free Market environment Anti corruption laws and Transparency Tax relaxation on agricultural inputs Friendly relations with the Kingdom 24 Turki Faisal Al Rasheed Golden Grass, Inc.& University de Palermo / UP, Argentina

25 Laws Governing Agriculture Land Foreign Investment Domestic law: to regulate all investment in agricultural land /water in the host country International investment contracts: are direct agreements between a foreign investor and the host government. International investments agreements: As are treaties between states that provide investors from one state investing into the territory of the other state with special protections under international law. Turki Faisal Al Rasheed Golden Grass, Inc.& University de Palermo / UP, Argentina 25

26 Summary Agriculture is one of the most effective tools to promote growth and improve people’s standard of living. To highlight the neglect of agricultural development, we take an example: The World Bank lending in 1980 was 25% loan to agriculture project. In the year 2000, the number went down to 10%. Moreover, the bank has lost almost half of its technical staff in the area of agriculture development.(Econ.2009) Lack of investment in agriculture over decades has meant continuing low productivity and stagnant production in many developing countries. Lack of investment has been identified as an important underlying cause of the recent food crisis and the difficulties developing countries encountered in dealing with it. Agriculture investments should not be rejected in principle there are risk for the host developing country and they raise complex and controversial issues on economic, political, institutional, legal and ethical in relation to food security Turki Faisal Al Rasheed Golden Grass, Inc.& University de Palermo / UP, Argentina 26

27 Recommendations for Local ADS Crop per drop (the optimum usage of water management) Adopt and encourage the usage of new technology – GMO, water desalination by solar or nuclear energy to achieve the maximum benefit. Farming should be restricted to the amount of renewable water in Saudi Arabia Turki Faisal Al Rasheed Golden Grass, Inc.& University de Palermo / UP, Argentina 27

28 Recommendations for International ADS….(1/2) sustainability triple bottom line (society, economic and environmental). creating a public company that is jointly owned by the public and the investors. The government can withdraw taxes from this public company provided the land is not leased to these companies but owned by the companies. A solution that will benefit for everybody the investors, host government, and local people. Local settlers without official land ownership must be relocated and compensated by the host government. Saudi government should create long-term contract with Saudi investors who invested abroad and provide them with cheap finance and barter trade agreement with them to guarantee the sustainable food supply in Saudi Arabia. Saudi government should act as facilitator/protector between Saudi investors and the host country. Turki Faisal Al Rasheed Golden Grass, Inc.& University de Palermo / UP, Argentina 28

29 Recommendation for International ADS …(2/2) Support Saudi investor to buy agriculture land in the host country Support Saudi investor to Joint venture with the existing local food company in the host country Saudi government form a strategic alliances or become a major shareholder with global food giants company, These multinational companies offer enormous economies of scale, vertical integration, financing, research capabilities and global strategic alliances. Saudi investors should have full access to all investment rules and regulations about target countries by King Abdullah initiatives. Decision must be base clear transparent information regarding the geography, political risk, rule of law and domestic economic and infrastructure conditions. Turki Faisal Al Rasheed Golden Grass, Inc.& University de Palermo / UP, Argentina 29

30 Conclusion for Saudi ADS Saudi local food production must be equivalent to the renewable water ( 5-8 BCM). Situational agriculture strategy per region. Clear agriculture development strategies for multi-functional purpose on the sustainability triple bottom line society, economic and environment. Encourage Saudi private sector to partner with multinational (or local) companies specialized in agricultural investment, fish farming and animal husbandry due to their experience and knowledge. 30 Turki Faisal Al Rasheed Golden Grass, Inc.& University de Palermo / UP, Argentina

31 31 Special Message to the Students

32 Turki Faisal Al Rasheed Golden Grass, Inc.& University de Palermo / UP, Argentina 32 Career Goal Personal Relationship Goal New Leaders For Tomorrow Are Goal Oriented Recreational GoalPersonal growth Goal Material Goal Social Goal Learn to Plant your Goals

33 “Close to the God” “ Independent “ Independent” “Freedom” “I like to fly like a Falcon” Give Your Ultimate Goal a Visualized Picture Visualize your Goals Turki Faisal Al Rasheed Golden Grass, Inc.& University de Palermo / UP, Argentina 33

34 Closing Remarks Food security is not only about food. It is all about security, chronic hunger threatens individuals, governments, societies and borders. Achieving food security needs policy and investment reforms on multiple dimensions. Food security is the political Aspect of agriculture development. Central Governments must not give all the priority to urban areas but must balance it with rural development. There is an urgent need to monitor the extent, nature and impacts of international investments and to catalogue best practices in law and policy to better inform both host and investing countries. Governments are concerned that as population growth increases, high unemployment, environmental degradation, reductions in arable land combined with effects of urbanization, economic growth and food security may emerge as one of the key issues of this century Turki Faisal Al Rasheed Golden Grass, Inc.& University de Palermo / UP, Argentina 34

35 Happy to Receive you Questions Turki Faisal Al Rasheed Golden Grass, Inc.& University de Palermo / UP, Argentina 35


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