Posted on June 07, 2019

Two years after flying in thousands of dairy cows to beat a trade embargo, Qatari milk producer Baladna has made its first exports.

Qatar is the world’s top liquefied natural gas exporter but a net importer of nearly everything else. The illegal blockade by Saudi Arabia and its allies since June 2017 has made the country to retool an economy once heavily reliant on fellow Gulf states. Baladna received its first cows a month after the boycott and set up a huge dairy farm. It says it now supplies more than half of Qatar’s fresh milk and is exporting to Afghanistan, Yemen and Oman, and soon to Libya.

Soon after the boycott was imposed, Doha developed new trade routes to replace its former Gulf partners. In late 2017 it opened a $7.4 billion port designed to become a regional transport hub. Government officials say Baladna’s rapid expansion shows the embargo has made Qatar’s economy stronger. Their goal is to encourage local producers. In April, Baladna rolled out a line of fruit juices. In Qatar’s supermarkets, brands like Mazzraty, which opened the country’s largest poultry plant in January, sit beside “Qatar Farms” displays of local fruit and vegetables.

Vegetable output is up about 20% since mid-2017 to around 66,000 tonnes per year and is expected to increase by 20,000-40,000 tonnes next year as new farms come online, said Sheikh Faleh bin Naser al Thani, an official at the Ministry of Municipality and Environment. Qatar is now self-sufficient in dairy and fresh poultry. Before 2017 it produced only about 20% and 10% percent of its needs in those sectors, respectively. “Qatar after June 5, 2017 is not like Qatar before,” said Baladna communications director Saba al Fadala, referring to the start of the boycott. “We now don’t want or need anyone.”

Schoolchildren tour the milking parlours of Baladna’s farm, where 20,000 cows live in vast air-conditioned sheds. The visitors learn how flying in cows restored milk supplies that had been trucked in before Saudi Arabia closed the border. With a $320 billion sovereign fund, Qatar is well-placed to weather the embargo, diplomats and analysts say. “If you are going to be subject to a blockade, then you better have a lot of money,” one banker told Reuters.

In the early months of the crisis, Qatar liquidated nearly $3 billion in US treasury investments and drew down over $40 billion in foreign reserves to support its currency and banks. The economy has since stabilised, growing 2.2% year-on-year in the third quarter of 2018. Qatar’s banks have been replenished by foreign deposits replacing much of the Saudi and Emirati money that left, and its stock market was the top performer in the Middle East last year.
Qatar’s goal of greater food self sufficiency has required launching agriculture on a commercial scale in one of the world’s harshest desert climates.

Nasser al Khalaf, the managing director of Agrico, a produce grower and greenhouse manufacturer, says his business has boomed since he designed a system to keep fruit and vegetables cool enough to grow year-round. In a polycarbon greenhouse, rows of ripening hydroponic tomatoes are cooled below 28 degrees Celsius as the temperature outside tops 40. Khalaf said the system allowed him to more than triple fruit and vegetable production to over 15 tonnes per day. Khalaf said his greenhouses are attracting investors looking at farming for the first time, drawn partly by increased subsidies for power, fertiliser and seeds since 2018.

“We never before saw businessmen investing in farms. They liked to invest in buildings and industry, anything but farms,” said Sheikh Faleh, the Qatari official. Rabban Agriculture is one of the new entrants. Al Rabban Holding - with investments in property, transport and bottled water - is tapping initiatives like a QR1 million ($275,000) collateral-free loan from Qatar’s Development Bank to build a greenhouse farm, said deputy chairman Khalifa al Rabban.

Nader Kabbani, director of research at Brookings Doha, said Qatar’s tone had changed from initially wanting to resolve the dispute to asserting it can go it alone. Qatar can do that, said a Western diplomat, thanks to its gas wealth, World Cup exposure and international outreach efforts.

source: Qatar Tribune