Government Programs
The progress made by the Saudi Arabian agricultural sector in recent years has been largely due to an array of government programs, including the provision of soft, interest-free loans and technical and support services.
The agriculture sector has also benefited from low-cost water, fuel and electricity, and duty-free imports of raw materials and machinery. Foreign joint-venture partners of Saudi individuals or companies are exempt from paying taxes for a period of up to 10 years, and the investment regulations in effect since April 2000 offer further incentives.
The primary agency responsible for implementing agricultural policy is the Ministry of Agriculture, which provides research and extension assistance to farmers. Another supporting agency is the Saudi Arabian Agricultural Bank (SAAB), which disburses subsidies and grants interest-free loans. The Grain Silos and Flour Mills Organization was established in 1972 to purchase and store wheat, construct flour mills and produce animal feed to support the nationwide growth of agriculture.
To encourage private investment in the agricultural sector, Saudi Arabia has allocated substantial financial resources for improving roads linking producing areas with consumer markets.
In addition, the land distribution and reclamation program, which was introduced in 1968, aims at distributing fallow land free of charge, mostly in small plots, as a means of increasing the area under cultivation and encouraging crop and livestock production. The beneficiaries are required to develop a minimum of one quarter of the land surface within two to five years. Upon compliance, full ownership of the land is transferred to the farmer.
Under the Development Plans, the government continues to assist new farmers in implementing capital-intensive projects with special emphasis on diversification and greater efficiency.
To raise farm productivity, the government also funds and supports research projects aimed at producing new food crops to increase harvest and develop plant strains with greater resistance to pests. These programs are conducted in cooperation between local farmers and scientists at agricultural research facilities at Saudi Arabian universities and colleges.
