Briefing Paper

Rob Bailey with Robin Willoughby
Edible Oil: Food Security in the Gulf
  • Sustainable food self-sufficiency is unattainable for the countries of the Gulf Cooperation Council (GCC). Domestic production meets only a small proportion of needs, yet consumes significant economic resources and almost monopolizes water use.

  • GCC food security rests on international trade, leaving countries exposed to price risk (relating to volatility of import prices) and supply risk (relating to import disruption).

  • Recent events such as the 2011 Arab uprisings, continued instability in Egypt and Syria, threats by Iran to close the Strait of Hormuz and repeated spikes in international food prices have sharpened these risks.

  • The worst-case scenario is conflict in the wider Middle East and North Africa region that disrupts multiple import routes for a sustained period. GCC governments can hedge supply risks through strategic storage and investments in port and rail infrastructure to create a regional import and transport network.

  • Land-based investments in food-insecure countries with weak governance and poor rural infrastructure do little to manage price or supply risk. Overseas investments are better targeted at existing farm operations in key trade partners.

  • GCC resource wealth mitigates price risk. In the long run, the ability of governments to manage price risk will depend upon successful economic diversification.