Promoting Agricultural Value Chains:
In the OIC Member Countries
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standards, but in 2011 Saudi Arabia introduced its own National Regulation & Standards for
Organic Agriculture. Private certification bodies are mostly internationally operating firms,
with the first Saudi Arabian certifier currently awaiting accreditation according to
international norms (ISO 65/17065) (Hartmann et al., 2012).
5.1.3 Infrastructure and logistics
Date production still operates using manual labour. Infrastructural and logistical problems are
thus particularly noted for the processing and manufacturing of dates in Saudi Arabia, as only
about 10 percent of total production is used for further value-added activities (Elsabea, 2012).
Of the 10 percent, 80 percent is used for packaging and the rest is turned into molasses and
paste (Beers et al., 2014). Studies point out that the increase in production of dates over recent
years (from 941,300t in 2004 to 1,050,000t in 2012, according FAOSTAT, 2015) was not
accompanied by a corresponding increase in processing and manufacturing, although there are
sufficient processing facilities (43 in total) in Saudi Arabia (Eleid, 2008, cited in Elsabea, 2012).
Both private and government-owned facilities exist; the most important government-owned
one being the Alhassa processing facility, which was established to support farmers by paying
minimum prices for dates and to donate the packaged dates to low income households or
international food security programmes (Elsabea, 2012).
Problems restricting the growth of value-added activities can be identified both at the farm
and processing levels. Firstly, a lack of grading and standardised quality dates as well as
continued production of low quality date varieties contribute to a general shortage of suitable
dates for processing (Al-Abdoulhadi et al., 2011). The problem of low quality date varieties is
currently addressed by the National Centre for Palm and Dates, as discussed above. Secondly,
the lack of adequate cooling and transport facilities and old or unspecialised processing
equipment lead to inefficient manufacturing processes and high spoilage rates (Elsabea, 2012;
El-Habba & Al-Mulhim, 2013). Overall, this results in high per-unit costs for processing
factories (Elsabea, 2012). Upgrading existing infrastructure is thus recommended to become
more competitive and cater to the needs of consumers (Al-Shreed et al., 2012).
5.1.4 Governance and value chain actors
According to Elsabea (2012), two main marketing channels for dates and date products can be
distinguished in Saudi Arabia (see . The first is the traditional marketing channel
through which most farmers sell their produce, particularly those in the Eastern Province
where farms are usually small and date palms are old (more than thirty years). Dates are sold
on the fresh market through face-to-face spot market transactions. Linkages and trust-based
relationships between actors are generally weak. While farmers conduct rudimentary on-farm
grading, the quality, variety and size of dates sold on the fresh market is highly heterogeneous,
leading to a general decrease in farmer prices. Prices are further reduced as most farmers sell
their produce directly after harvest which leads to short-term surpluses of dates available on
the market. Finally, improper storage increases the percentage of dates with microbial
infestation and insect contamination, which again negatively impacts on the prices received by
farmers.
The second marketing channel is the modern marketing channel, which is particularly
important in the areas around Riyadh and Al Qasim where there are a number of large-scale
and relatively recent established palm plantations. These are often larger integrated