Developing commercial agriculture is a difficult but rewarding business here in the UAE
If the thought of agriculture in the middle of the Arabian Desert seems incredible, the chances are you would properly be right. But in the United Arab Emirates, greening the desert has been a major priority with the government for a number of years, as it has been with a number of the Gulf States.
In Dubai however, agriculture has run into a series of problems; at least as far as commercial agriculture is concerned. “The simplest problem is the oldest – lack of water,” says Mike Brewer, an agricultural consultant with Decision Management Consultants, one of the major agricultural consultancies in the Emirates. “When you get to the outskirts of Dubai, there’s very little water. If you make wells to get to the water, you’ve got to be careful since the more water you take out m the more saline the remaining water becomes.”
But perhaps even more daunting than that is the rate of return for agricultural investment. “One of the major stumbling blocks is the initial capital investment required in commercial agriculture,” explains Brewer. “Most investments in this sector must be viewed in the long term. The quickest returns possible from desert agriculture are in plant nurseries, but even here there is a lack of confidence in agricultural investments; particularly when other investments such as real estate and trading bring in faster returns.”
That being said, the government does encourage investment, particularly in terms of providing financing for the private sector. For the Western visitor, the most surprising discovery is that of strawberry and asparagus farms in this region. “These farms run on the off-season demand for such fruits and vegetables in Western markets,” says Brewer. “The mild winter of this region is very conducive to growing such crops and the off season supply means that they can command higher prices in their major markets. That in turn means that the extra investment needed to grow them here can be covered and profitability maintained.”
For Brewer and other agricultural investors, the trick to creating a viable commercial agricultural sector is in developing crops and systems that blend with the natural ecosystem of the land. “Dry land farming is an art and totally different from the kind of farming done in Europe or Asia,” says Brewer. According to him, one of the most viable systems here is hydroponics where crops are grown in circulating water suspension. “Hydroponics is very cost effective and although the initial investment of around 1 million to 1.6 million dollars might seem high, the long term benefits are substantial and the break even can be in as little as three years.”
Given the growing agricultural sector in other emirates such as Abu Dhabi, Sharjah and Ras Al Khaimah, it seems very likely that as Dubai moves to diversify its economy and increase revenues from non-oil sectors, commercial agriculture will become increasingly important over the next five years.