Sustainable Agricultural Economic Development In SAUDI ARABIA 1970-1995 - Present Situation and Future Challenges

(Abdul Aziz Saad al-Husseini)

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Abstract

The objective of this research paper is to shed some light into what have been achieved in the last 25 years of development planning to the Saudi agricultural sector. The sector has grown at a high rates even by international standards. This growth was due mostly to heavy government intervention which took many forms. The most important of which is the price support for certain field crops, providing input subsidies for many field crops and animal products, and providing different types of free interest loans, as well as improving the infrastructure of the agricultural sector through different means. The study showed that the positive effects of such policies have been reflected in high aggregate agricultural income and its growth rates which exceeded planned levels. It also was reflected in successive increases in production of many field crops and animal products, which lead to high levels of self-sufficiency in many agricultural products. The value of aggregate production function have been estimated. It showed that the most important factors limiting the agricultural production were area planted, mechanization and chemical fertilizers. It also showed that the Saudi agriculture has exhibited constant returns to scale. The study also found that the technical change in the Saudi agriculture, as a result of its modernization was a mechanical technical change rely on mechanization rather than the biological factors such as fertilizers, which coincide with recent modernization of the Saudi agriculture which rely mostly on intensifying machines at the expense of labour resources. The study also revealed that there are some challenges which will face the Saudi agriculture in the future, among which, is the more toward lower government spending, increased scarcity of water resources, inefficient marketing system, the increased volume and value of agricultural products import and the expected Saudi Arabian acceptance as a member in the world trade organization {WTO). The study finally presented the most important recommendations which may help in ensuring sustained agricultural development in Saudi Arabia.
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