UAE-Egypt Alliance Expands to Desert Wheat Venture

Egypt and two companies from its strong backer United Arab Emirates have embarked on an ambitious plan to grow wheat in the desert that could boost the Cairo government’s credibility if successful.

Egypt, the world’s biggest wheat importer, has long aspired to become self-sufficient in its staple food through various schemes including reclaiming land in its desert wastelands.

Experts say growing wheat in the desert makes no economic sense given the logistical and environmental challenges.

That has not stopped UAE companies Al Dahra and Jenaan from turning to Egypt’s southern desert, home to Toshka, a failed agriculture megaproject under former President Hosni Mubarak.

As Egypt recovers from turmoil following the 2011 revolt that toppled Mubarak, Gulf allies such as the UAE hope to ensure that Islamists who briefly held power can never do so again.

Abu Dhabi has put its weight behind President Abdel Fattah al-Sisi, who has promised to deliver everything past administrations could not, from reclaiming millions of acres of desert land to creating jobs.

Within a couple of years, the UAE companies plan to grow and sell several hundred thousand tonnes of wheat to the Cairo government — equivalent to about 10 percent of the domestic crop bought annually from farmers.

Low yields, poor soil quality and uncertain water supplies make such a venture seem reckless.

For a wealthy nation like the UAE, which sees Sisi’s Egypt as a bulwark against Islamists, the political value of the project outweighs the economic risks.

“They will eat the cost. It will not be profitable. It doesn’t make sense economically,” said Toby Jones, history professor at Rutgers University in the United States.

Al Dahra and Jenaan said the decision to grow wheat in the East Oweinat and Toshka regions was made in consultation with Emirati authorities. UAE officials were unavailable for comment.

Jenaan CEO Mohammed al-Falasi acknowledged challenges including a lack of labour and transport costs.

But he said Egypt had become more stable for investors and that growing wheat was the best option the company had for land it had leased in East Oweinat.

In the nearby Toshka area, the looming problem is mainly water supply.

Despite the UAE’s commitment to back Sisi in a range of projects he has portrayed as a cure-all for the economy, reviving the Toshka project could be especially problematic.

Experts such as Cairo University agricultural economist Gamal Siam worry groundwater will run out before the investment could possibly pay off. That could explain why, of the half a million acres the Mubarak government hoped to reclaim, less than 10 percent has been cultivated.

Suleiman al-Nuaimi, who heads Al Dahra’s Egypt projects, said his company produced 40,000 tonnes of wheat last year in the East Oweinat region but has yet to start work in nearby Toshka, where it hopes to grow 300,000 tonnes by 2016.

“We consider ourselves to be strategic partners for the Egyptian government in terms of food security,” he said.

Source: Reuters