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June 20 2021 6:29 AM ˚

Investing in food security

Salameh Darawi
Salameh Darawi (Photo: Jordan News)
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Since the beginning of the pandemic, His Majesty King Abdullah has been personally calling for efforts towards food security and enhancing self-reliance, as he realized that the post-pandemic world will be completely different than the one before, so what did the government do in this regard?اضافة اعلان

First of all, it must be said that the Ministry of Industry, Trade, and Supply has, since the first months of the pandemic, implemented Royal directives in this regard, by enhancing the Kingdom’s strategic stockpile of wheat, to cover the Kingdom’s need of the commodity for some 14 months ahead.

Unfortunately, the rest of the commodities remained subject to supply and demand mechanisms in the market, with large amounts held by the private sector and bought under global prices, but without being contracted for, which means that these quantities remained held by importers, and if the government wanted additional quantities of these basic commodities (rice, sugar, corn, oil, and others) it would have to buy them through contracts under the new prices. Official bodies don’t even have warehouses to store additional quantities, with the exception of warehouses owned by indebted institutions where some goods can be stored. As for strategic stockpiling for emergencies, the government does not have that, unlike the private sector, which has invested in this qualitative and strategic investment.

A few days ago, we were introduced, along with some officials from both sectors, to one of the refrigerated storage projects in Jordan, which constitutes a milestone in terms of enhancing food security and the provision of basic commodities under various circumstances.

Investing in refrigerated and other forms of storage is the new form of food security investment, as it is the fundamental guarantor of a safe supply of goods under the various circumstances, in addition to being able to hold the surplus of locally produced goods, many of which would be lost without proper storage, such as agricultural products that are sold below their costs during some seasons. Hence, storage protects both producers and consumers.

Investing in refrigerated storage is an effective precautionary measure to provide goods at reasonable prices and prevent seasonal price fluctuations, in addition to mitigating the repercussions of the madness of global prices, and their consequences for the public. Today in Jordan some sectors produce quantities that exceed the local market’s needs, such as the sectors of poultry and some agricultural products, hence, if there are no spaces equipped for storing the surplus, it will be lost in the market.

The state can even enable the private sector to stockpile strategic imports of foodstuff and raw materials, such as grains and the various food production necessities in quantities that would protect the country from price fluctuations and shortages, hence the heated race by wealthy nations across the world to stockpile basic commodities, particularly in China, Europe, and the US.

In Jordan, investment in the refrigerated storage sector is limited, and yet successful on the regional level. There are also expansion obstacles in the investment incentives law, as it bans investors in this sector from leasing the project, which contradicts the main objective of the strategic project’s concept, because if the investor wanted to build refrigerated warehouses under the investment law they may only be utilized for their personal use, without being able to lease them for others to use for storage, at least not without being subject to hefty fines for violating the investment incentives law, which is unreasonable, because no personal use can cover the costs of refrigerated warehouses with a capacity of thousands of tons of various goods.

Time is going by and there’s panic in global markets and severe demand for storage of basic commodities in major countries. Jordan cannot sit and wait to see what happens in the markets, it must move ahead, as the madness of prices has become alarming, and shortages of some commodities are manifesting. Hence, the government must hurry to facilitate refrigerated storage operations, as well as other forms of storage, by granting it the necessary facilitations and exemptions for this stage in particular, in order to secure the country’s needs of basic commodities, as well as other needs for both producers and consumers.


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