Why Commercial Farming: is an Advantage to the UAE Economy
Commercial farming refers to the growing of crops or rearing of animals, which leads to the production of food and raw materials. Moreover, it also serves as a major export resource, making it profitable for the economy of a country.
Commercial farming is most effective when it is done on a larger scale, as there is more room for higher margins, and it can also be used to reduce the burden of food imports for any country.
The United Arab Emirates (UAE) has a dry, desert climate, which has inhibited it from growing crops and producing food for itself for a very long time. However, they have come up with ways to start commercial farming and producing crops that they had to import in the past. According to World Bank data, roughly 5% of the land area in the UAE was agricultural, but the percentage is slowly rising.
In this blog, we’ll explore how the UAE can benefit from commercial farming.
Top 6 Benefits of Commercial Farming for the UAE
Agriculture has always been a part of the UAE economy since its birth, but its contribution to the GDP was always minimal, mainly because the land and climate of the UAE didn’t allow for commercial farming on a large scale. The major agricultural export in the 1990s were dates, which were grown in oases and were exported in the millions.
Since then, agricultural production has grown exponentially, which is a strong indicator for the UAE economy that relied heavily on oil production and export. Let’s have a look at some of the benefits that the UAE can experience from commercial farming.
1. Lower Food Prices
According to UAE trade statistics, the import of food products in Q1 2020 amounted to AED 17.98 billion, which is a massive amount. Consider how much money the UAE has to spend all year on food imports, and since these products are imported, they become quite costly and the burden of the cost falls on the residents and expats, who work hard so they can afford to put food on the table.
However, with the rise in commercial farming initiatives, the UAE will be able to reduce its dependence on food imports. Moreover, once this is done on a larger scale, they will be able to reduce the prices of many food items that are hiked up due to them being imported. As a result, food will become more affordable for the people of the UAE.
2. Incentives for Farmers
By encouraging more and more farmers to fuel the economy through commercial farming, the UAE will be able to provide more incentives to farmers. Moreover, it will also help farmers earn more livelihood and provide for their families. Another added benefit of commercial farming is that it will lead to further job creation, since farmers will also need to hire workers to take care of the day-to-day farming activities.
3. Major Boost for the Economy
All over the world, agriculture is a major contributor to the economy of various countries, and the UAE can also follow suit. Much of the UAE’s economy is fueled by oil exports, but since oil is a non-renewable resource, the country will run out of it sooner or later. Therefore, they are looking at other ways to keep their economy growing, and agriculture provides them with one stable alternative.
Although water scarcity is a major challenge for large-scale agriculture, the UAE is looking towards technologies and solutions that can help them grow crops, regardless of the climate.
One of Wafra Farms venture is the commercial vertical farm, which is one of the few of its kind in the GCC region. It produces crops without needing any sunlight or water, as it uses 90% less water than open field farming and recycles the water it uses. Therefore, it could go a long way towards funneling money into the UAE economy.
4. Provision of Raw Material
Various industries manufacture products that involve the use of raw materials generated from agriculture, such as the beverages industry, among others. An added benefit of commercial farming is that it will provide the required raw materials to those industries, thus helping them get what they need at much lower prices.
Production of goods in the UAE is also done through imported raw material, which is another major expense. However, through raw material generated by commercial farming, it will reduce the burden of imports and also help in faster production.
5. Major Export Source
The UAE is one of the largest producers of dates in the world, owning a third of the total global amount. Moreover, it also leads the way in exports, and 40 different varieties of dates are exported all over the world in millions. Through commercial farming, the country will also be able to produce various kinds of fruits and vegetables that can be exported to other countries, thus adding another source of revenue to the economy.
6. Better Food Security
The scarcity of water and heavy food imports is an alarming issue for the UAE, which is why the country keeps going up and down on the Global Food Security Index. In 2019, the country saw its best ranking at 21st, and the rulers envision reaching the top 10 by the end of this year. Commercial farming would go a long way towards helping them achieve this goal.
Through commercial farming, the UAE can produce more crops on its existing cultivable area, and it can also expand the agricultural land through modern methods and technologies, thus allowing it to produce more food and ensure better food security.