Promoting Agricultural Value Chains:
In the OIC Member Countries
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Saudi Arabia has a rich genetic pool of over 400 date palm varieties, of which 25 are
commercially significant. Together they account for an annual production volume of more than
1 million tonnes from an estimated 23 million date palms grown over 172,000 ha (Al-Wusaibai
et al., 2014). Production is concentrated around Riyadh, in the Eastern Province, Al Qasim
Province and the Al Madinah Province (El-Habba & Al-Mulhim, 2013).
Productivity is at 6.6 tonnes per ha and thus slightly lower than the world average of 6.8
tonnes per ha (Beers et al., 2014). The main causes for the comparatively low productivity are
widespread pests and diseases (e.g. the red palm weevil), old fruit orchards and the existence
of low yielding date varieties (e.g. El-Juhany, 2010). It is also pointed out that a large number of
newly planted palm groves have not yet entered the production phase, and thus increases in
production and potentially also productivity are expected for the coming years (El-Habba & Al-
Mulhim, 2013).
Most of the dates produced in Saudi Arabia are consumed on the domestic market. While
average per capita consumption is high, there are signs that this is decreasing due to shifting
consumption patterns brought by changes in family size and food traditions, such as increased
competition in the form of other fresh fruit and artificial sweets (El-Juhany, 2010). Although
the production of dates exceeds local consumption requirements, exports play only a small
role at about 7-8 percent of national production (Ali et al., 2014; El-Habba & Al-Mulhim 2013).
5.1.1 Institutional framework and public policy
The Saudi Government has focused intensely on promoting agriculture for food security and
export over the past decades. Large areas of desert were turned into agricultural fields by
means of large scale irrigation projects and mechanisation. Nonetheless, the land area suitable
for agricultural use amounts to only around one percent of the total area. The area devoted to
growing crops has fallen steadily in recent years, from 1.07 million ha in 2007 to 743,742 ha in
2012 (Oxford Business Group, 2014).
From the 1970s until the 1990s, priority was given to wheat production and the Kingdom
managed to become the world’s sixth largest exporter of wheat. However, due to increasing
water scarcity and a growing awareness of prevailing water mismanagement, the government
revised its agricultural strategy in 2008 and has since shifted focus towards more value-added
crops, such as fruits and vegetables, through the utilisation of water-saving technologies, such
as greenhouses and drip irrigation (Oxford Analytica, 2009). Subsidies for crops that consume
large amounts of water are being phased out, and food security issues are now sought to be
addressed through agricultural projects abroad in land-rich developing countries (Lippman,
2012). Wheat production, for instance, is reduced by an annual rate of 12.5 percent and is
expected to be phased out completely in 2016.
Dates, both as a high value-added crop suitable for export and as a traditionally grown fruit,
have received considerable attention by the Saudi Government. Firstly, date producers receive
government subsidies per kg of fruit produced, even though they sell their product through the
market, and per tree planted (Al-Sheikh, 1998). Subsidies also exist for fertiliser, seeds,
machinery and equipment, and irrigation systems. Interest-free loans are available to farmers
from the state-owned Agricultural Bank (Alshuaibi, 2011).
Secondly, the Saudi government financially supports a number of specialised research
institutes dedicated to improving the cultivation and processing of dates. The King Abdulaz
City for Science and Technology (KACST) is the Saudi Arabian national science agency and