A group of Saudi Arabian businessmen is close to signing a deal to invest millions of dollars in cultivating rice in an isolated region of Indonesia, said an Indonesian government official.

The 15 investors are reportedly planning to pump $65 million into the venture to develop about 150,000 hectares of paddy fields in the Merauke area of Papua. The cost of rice has soared on world commodity markets this year.

Saudi Arabia and other Gulf nations are scouring the globe for agricultural investments to lock in supply of key crops like wheat, corn and rice.

An official from the Saudi Agriculture ministry would not say when work on the project might begin but confirmed negotiations were in the latter stages.

The deal coincides with the Indonesian Government’s plan to develop the remote area in a bid to make the country one of the world’s major rice exporters by the end of next year.

The proposal is all the more ambitious given that Indonesia until recently was a major importer of the commodity.

The government has set aside more than 1.5 million hectares of land on the island for rice cultivation and hopes to export up to six million tonnes next year.-
 
The move comes as part of the initiative from the Indonesian government to develop a Connecticut-sized farming tract on the remote province of Papua to grow rice, sugar cane and soybeans.

Promoters of the project have met with Saudi investors in the hopes of receiving hundreds of millions of dollars in return for dedicating part of the crops to the Middle East nation, said a government source.