Oman achieves self-sufficiency in crop cultivation

(MENAFN - Khaleej Times) Unlike many of its neighboring countries, agriculture plays a significant role in Oman's economy with the Gulf state achieving a high level of self-sufficiency in several crops, including fruits and vegetables.

Estimates indicate that some 1.3 million Omanis, more than 60 per cent of the country's population, is employed in the farm sector. Agricultural exports accounted for 37 per cent of the Gulf state's non-oil exports last year, fetching RO13 million in foreign exchange.

However, its financing requirements are virtually entirely met by state institutions despite repeated calls by the authorities for the private sector to contribute more. Government-run Oman Development Bank, or ODB, provides 98 per cent of the agricultural sector's credit requirements, a meager two per cent coming commercial banks.

The issue came up for in-depth discussion during a high-profile national symposium on agriculture that ended in Ibri on Tuesday.

The seminar, held on orders from His Majesty Sultan Qaboos bin Said, was attended by several ministers, under-secretaries and key officials from both the public and private sectors. Sultan Qaboos, on his annual 'Meet the People' tour of the country, is currently camping at Saih Al Makarem in Ibri in the Dhahirah region.

"ODB contributed by 98 per cent (of total agricultural financing) during the last four years by providing soft loans with no more than three per cent interest rates," a paper presented by Mohammed bin Salim Al Wadhahi of the Oman Chamber of Commerce and Industry and Hamad bin Salim al Harthy, Assistant General Manager, ODB, said.

They observed that one of the main challenges faced by the farm sector was the aversion' shown by commercial banks and private finance companies to provide credit to it. This situation, in turn, resulted from the high risks and unavailability of insurance cover for agricultural projects, they said.

In the past ten years, ODB has funded more than 6,300 projects worth RO37 million. It is due to launch a seasonal loan scheme for farmers titled Mawsimi' by the end of the year.

The paper also noted that inadequacies in marketing was another stumbling block, as was the presence of a large number of expatriate workers in the farms.

It called for new efforts to step up agricultural exports, the introduction of agricultural insurance products, encouraging private banks to play an active part in the development of the sector and the setting up of central markets in various regions.

Agriculture and its allied sectors have received special care in sultanate's Seventh Five-Year Plan. The amended allocations will amount to RO53 million by the end of 2009, a growth of 279 per cent compared to the original allocations for the sector which was 
RO14 million.

Together with provisions for irrigation and water resources development, the total outlay in the sector will be RO189 million.

Agriculture Minister Shaikh Salim bin Hilal Al Khalili outlined the ministry's plans to promote research, particularly aimed at increasing productivity, while a paper presented by the Public Authority for Craft Industries (Paci) suggested planting of more trees used as raw materials for traditional industries which, it noted, would benefit both craftsmen and farmers.

By Ravindra Nath

Source: Middle East North Africa Financial News (MENAFN).
Link: http://www.menafn.com/qn_news_story_s.asp?StoryId=1093280955.