Qatar's Hassad Food eyes firms instead of farms
Doha, August 12, 2009
Hassad Food, owned by Qatar's sovereign wealth fund, will buck the Gulf trend of buying farmland abroad to secure food supplies and consider taking stakes in agricultural companies instead, its chairman said.
Nasser Mohamed Al Hajri said that Hassad Food had an eye to profitability as well as food security, in looking at company acquisitions rather than land purchases.
Gulf countries, heavily reliant on food imports, have been snapping up farmland in developing nations to ensure food security.
"We are not deleting the option of buying farmland but we don't feel like it is the right strategy to take," Hajri said.
"We don't want to go into developing nations and buy or lease land like others have," he told Reuters in a telephone interview.
"In many cases these deals are not win-win situations and we don't want to be in a situation where the rich are taking away food and land of the poor."
Foreign land acquisitions, sometimes labelled land grabs, have provoked opposition from some groups and from many farmers in developing nations.
In April, the United Nations expressed concern that farmers' rights in developing nations could be compromised as rich countries buy farmland to secure food supplies.
The purpose of founding Hassad Food, which was established last year by the Qatari Investment Authority, is to invest in existing agricultural businesses and projects around the world and re-export the produce where needed, Hajri added.
"We are driven by profits and not just food security and right now the economic crisis has created a lot of opportunities for us to invest in financially distressed companies."
The company is in talks with a number of agricultural companies in Argentina and elsewhere in South America to buy stakes in their businesses, said Hajri.
"Within two to three weeks we will announce more details about these projects," he said. "The bottom line is we don't want to go into a region without having the local expertise in the sector. That's why I believe investing into existing businesses is the right choice."
Basic crops such as wheat and sugar will be a priority for the company at present, said Hajri.
"But we are also planning to be flexible in order to meet the market's needs at a given time," he added declining to disclose the company's budget for investment.
Plans to develop the agricultural sector in Qatar, which has a population of 1.4 million, are also underway and the company plans to launch a few pilot green houses to grow vegetables in the next 3-4 months, Al Hajri said.
"In order to have food security Gulf countries must start investing into their own agricultural sectors not only look at investments abroad," he added.
So far foreign investors have acquired some 15-20 million hectares of farmland in poorer countries since 2006, according to the International Food Policy Research Institute. - Reuters