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  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 new investment regulations of April 2000 offer further incentives.

 

The primary agency responsible for implementing agricultural policy is the Ministry of Agriculture and Water, which constructs and maintains irrigation and drainage networks, and 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. During fiscal 1997, for example, it processed nearly 4,000 loans worth over 167 million U.S. dollars, a figure that is 28.6 percent higher than that for the previous year. In addition, SAAB granted farmers 120.8 million U.S. dollars specifically for the purchase of agricultural equipment in that year.

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. By the 1990s it was purchasing annually around 4 million tons of domestic grain.

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 Fifth Development Plan (1990-94), the government continued 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.

 

 

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Economy & Global Trade
Opportunities for economic growth have increased steadily over the decades since King Abdulaziz bin Abdelrahman Al-Saud founded the Kingdom in 1932.



Agriculture
The Kingdom of Saudi Arabia has made great progress in realizing the long-held objective of achieving self-sufficiency in food production.



Agricultural Achievements
The 1970s marked the beginning of serious agricultural development in the Kingdom.



Banking
Commercial banking has undergone tremendous growth during the course of the country's development. There are now nine commercial banks, with branches all over the Kingdom.

Development Plans (7)
Commercial banking has undergone tremendous growth during the course of the country's development. There are now nine commercial banks, with branches all over the Kingdom.

Government Support
The government plays an essential role in industrial and economic development. The Ministry of Planning assists in formulating the five-year development plans that set long-term economic goals.

Industrial Cities
The Kingdom's policy for ensuring the growth of the non-oil industrial sector focuses on establishing industries that use the country's abundant and inexpensive supplies of petroleum products, petrochemicals and minerals.

Oil Industry
Saudi Arabia possesses a quarter of the world's proven oil reserves and is the largest exporter of oil.

Private Sector
The combination of loans, incentives, subsidies and information, and the government emphasis on strengthening the role of the private sector especially during the course of the Fifth and Sixth Development Plans (1990-94 and 1995-99), and now under the Seventh Plan (2000-04), have clearly had the desired result.

Water Resources
Water has always been a scarce and extremely valuable resource in Saudi Arabia.





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