Giz2012 Organic Agriculture Saudi Arabia En

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Sector Study 2012

by Marco Hartmann, Saad Khalil, Thomas Bernet,

Felix Ruhland and Ayman Al Ghamdi

Organic Agriculture in Saudi Arabia


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The organic sector in Saudi Arabia is young and dynamic. A comprehensive system of data collectionis not yet in place. Thus, the information shared in this document may not be exhaustive.

All information contained in this document has been compiled by the authors within the frameworkof the GIZ/MoA Organic Farming Project.

Numerous persons and organizations have supported the realization of the study.The authors thank the following organizations and professionals for their contributionsin sharing their experience and knowledge:

Department of Organic Agriculture (Ministr y of Agriculture) | Abdul Aziz Al Telas (Al Mahalliah)Eng. Ajmal Hayat (Al Watania) | Dr. Ahmed Suliman (GIZ) | Dr. Mohammed Abdalla (GIZ) | Eng. Badr Al Mutairy (SOFA)Prof. Ibrahim Al Shahwan (Organic Pilot Farmer & SOFA Vice-Chairman)

The authors would also like to especially thank the GIZ Sector Project Sustainable Management of Resourcesin Agriculture which works on behalf of the German Federal Ministry for Economic Cooperation and Developmentand addresses sustainable production systems, genetic resources, cultivated biomass, soil, water and climate.

TABLE OF CONTENTS

Foreword. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Chapter 1

Saudi Arabia A Country Committed to Sustainable Food Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Chapter 2

Historical Development of the Organic Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Chapter 3

Actors Involved in the Organic Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Chapter 4

Production and Marketing of Organic Products. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Chapter 5

Legal and Institutional Framework of Saudi Arabias Organic Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Chapter 6

Outlook and Upcoming Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

Contacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48


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Dear reader,

Global markets for certified organic products have been growing rapidly over the past two decades. Growth has

mainly been driven by the increasing health awareness among consumers. In consonance with global trends, Saudi

Arabia is seeing a growing consumer demand for healthy and high-quality foods. Domestic organic markets are

emerging in the Kingdom. However, in search of high-quality, healthy products, some segments of Saudi society

have shifted their consumption patterns towards imported organic foods. Organic agriculture offers substantial

opportunities for small farmers in the Kingdom. The shift from severe competition at local conventional markets toan organic niche market offers attractive price premiums in a growing market environment. However, the benefits

of organic agriculture are not confined to business opportunities. In addition to market considerations, organic is

environmentally friendly and protects the Kingdoms valuable resources by strengthening soil fertility, biodiversity

and other ecosystem services.

In mid 1425H 2005G, the Ministry of Agriculture commissioned GIZ to support the development of the organic agri-

culture sector in Saudi Arabia, bringing in extensive international expertise in organic sector development. Over the

past 7 years, the Organic Farming Project has established governmental structures and support services to expand

organic production and foster the further development of this sector. To help meet the high standards for quality,

the Ministry of Agriculture introduced its own Saudi National Organic Regulation and Standards in 2010. Standards

include guidelines for production, processing, trade and the import of organic products. However, organic market

development in the Kingdom is largely dependent on consumer trust in certified organic products. As a result, the

Ministry of Agriculture is safeguarding consumers interests via its national organic control system. Its thorough

implementation, together with the monitoring and surveillance of all organic-sector activities, is the core function of

the Department of Organic Agriculture (DOA).

This first Organic Sector Study offers an overview of a young but steadily growing organic sector. I hope this study

will provide not only comprehensive insight into the current status of organic agriculture in the Kingdom but also an

understanding of the potential health, economic and environmental benefits of this important segment of agriculture

in the Kingdom. As you read through the pages of this study, I hope you enjoy learning more about how the organic

sector originated, where we stand now and what opportunities lie ahead for organic agriculture in the Kingdom of

Saudi Arabia.

FOREWORD

Sincerely yours,

H.E. Dr. Fahd Bin Abdul-Rahman Bin Sulaiman Balghunaim

Minister of Agriculture

Alfalfa Harvest, Najran


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Worldwide, consumer attention to food safety and theenvironment has increased overwhelmingly in recentdecades. There is a steadily growing concern abouthuman and environmental health. The rising awareness

is reflected in an annually increasing rate of organicagricultural production across the world. Countriesrecognize organic as a promising alternative to conven-tional farming.

Organic agriculture a worldwide success story

Since the first scientific experiments on organicagriculture in the 1950s, the sector has seen immensedevelopment. Nowadays, about 1.8 million farmers areproducing worldwide under organic regulations. Withinthe past ten years, the area of land devoted to organicagriculture has increased from 15 million to 37 millionhectares (see Figure 1-1). Today, organic farming is themost dynamic and rapidly growing sector in the global

food industry. Twenty years ago organic agriculturerepresented a small-scale niche market. Since then,the increasing global demand for organic products hasresulted in a total sales volume of almost 60 billion US

dollars in 2010. As major sales markets for certifiedorganic products are concentrated in Europe and NorthAmerica accounting for 97 percent of global revenues further growth must be expected worldwide.

Because the global market for organic products hasdeveloped into a multi-billion-dollar business, the termorganic agriculture is associated with strict standardsand rules. At present, 66 countries have fully imple-mented regulations for organic farming, and 19 coun-tries have finalized laws, as well as detailed standardsand rules, but have yet to implement their regulations.Moreover, 25 countries are in the process of draftingtheir own organic standards.

Source: FiBL and SOEL (hectares), Organic Monitor (sales)

Figure 1-1 Developmen t of organic agricultural surface area and sales 1999 2010

SAUDI ARABIA A COUNTRY COMMITTEDTO SUSTAINABLE FOOD PRODUCTION

Consumer demand for healthy and high quality foods is growing in the Kingdom of SaudiArabia. At the same time, domestic organic markets are emerging. Organic is not only healthyto consumers but also environmentally friendly and water saving.

Chapter 1

70

60

50

40

30

20

10

0

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Organic Surface (million ha)

Organic Sales (billion US$)

Suk Al Shemal (Farmers Market), Riyadh

hapter 1


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What is organic agriculture and who benefitsfrom it?

Organic farming relates to a holistic, environmentallyfriendly production system that generates extensivebenefits to state and society (see Box 1-1) includingproducers and consumers (see Box 1-2, Box 1-3 andFigure 1-2).

Box 1-1

Benefits of organic agriculture

Benefits to organic farmers: Enhanced yields as a result of

long-term soil fertility improve-ments

Cost savings due to reducedinput use

Preservation and improvementof animal health

Increase of water retentionin the soil

Increase and preservation ofagrobiodiversity

Benefits to consumers: Guaranteed pesticide-free foods

Guaranteed genetically modified

organism (GMO)-free foods Certified, high-quality products

Reduction of health risks

Benefits to the public: Decreased soil and water

pollution

Enhancement of biodiversity Contribution to water saving

Securing of water quality

Reduction of health risks forproducers and consumers

Box 1-2

What is organic agriculture?

Organic agriculture is a production managementsystem that promotes the sustainability of agricul-tural ecosystems and the production of healthy foods.Its main objective is to conserve natural resources:soil, water, and biodiversity. Organic agricultureemphasizes the use of on-farm inputs and encour-ages biological processes to increase the naturalavailability of nutrients. The soil is a central part ofany organic farming system, and the aim is to maxi-mize its fertility over time.

Organic agriculture relies on a closed farm cycle. Itutilizes the mutual interdependence of habitats soil,plants, animals, and human beings. Crop residues, aswell as animal and green manure, are recycled andreturned to the land, thus minimizing the use of non-renewable resources. The use of synthetic fertilizersand chemical pesticides is excluded, as pest andweed control is accomplished through natural means.

Overall, sound farm management is the cornerstoneof organic agriculture. It is directed towards pre-venting problems while stimulating processes thatenhance soil and plant nutrition and mitigate pests.The primary goal is to strengthen and improve thesoil-plant-animal system in order to raise currentand future yields without the use of external inputs.

In order to ensure the integrity of organic produce,

farmers have to comply with strict standards andregulations. Therefore, organic farms are inspectedand certified. The regulations are consistentlymonitored by national food safety authorities.

Many national organic regulations set criteria for theuse of a special seal of approval labeling system tovisibly differentiate organic goods that are producedin compliance with these regulations. Such seals ofapproval assure consumers that these labeled prod-ucts meet the standards of the respective nationalorganic-farming regulation.

OUTPUTS

Vegetables

Cereals

Fruits

Meat

Dairy Products

INPUTS

Sunlight

Water

Organic Fertilizer

Biocides

SOIL

LIVESTOCK

FOOD

Compost

Nurients

Plant Residues

Farm Fodder

CROPS

Animal Residues

Organic Fertilizer

Animal Residues

Organic Fertilizer

Figure 1-2 Closed organic farm cycle

Source: OFP (2012)

Saudi Arabia A Country committed to Sustainable Food ProductionChapter 1

Saudi Arabia puts the spotlight on organic farming

Saudi Arabia recognizes the potential of organic agricul-ture. In recent years, the Saudi government has startedtaking steps to support more environmentally friendlyfarming systems. In 2005, the Ministry of Agriculture(MoA) commissioned GIZ to help develop an organicsector within Saudi Arabia. In close cooperation withvarious stakeholders, a functional institutional and legalframework was put in place. Therefore, Saudi Arabiasoverall goal today is to boost the organic market tofurther strengthen the sectors development.

By introducing the first National Regulation & Standardsfor Organic Agriculture in 2011, Saudi Arabia has shownits commitment for developing a strong organic sector.At present, organic farming is among the prioritiesof the Ministry of Agriculture, aiming to promote thisconcept in all regions for the benefit of producers andconsumers alike.

Organic agriculture a driver for healthy foodproduction

Over the past years, food safety has gained increasedattention within the Kingdom of Saudi Arabia (KSA). Theextensive and intensive use of pesticides and chemicalfertilizers within the agro-industrial production systemhas led to a widespread change of awareness regardingproduction methods and quality of food among bothconsumers and policy makers.

In order to cope with the growing demand for healthyfood products that also help safeguard the scarce waterand soil resources, organic farming is seen as a viabledevelopment strategy for the agricultural sector. Inrecent years, the Kingdom has committed importantfinancial resources to develop and strengthen this sec-tor, drawing upon valuable international expertise.


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Center Pivot System

Sustainable water use is a top priority

Currently, water demand for agriculture accounts forroughly 86 percent of the overall water consumption.Due to its recognized potential to reduce water con-sumption, organic agriculture is becoming ever moreimportant in semi-arid and arid areas. The Arabianpeninsula is one of the worlds driest regions, withrainfall averaging less than 130 millimeters per year.The sustainable use of water is thus a top priority withinand for the Kingdom.

Drip Irrigation

Saudi Arabia A Country committed to Sustainable Food ProductionChapter 1

Box 1-3

IFOAM and its definition of organic agriculture

The most widely adopted definition of organicagriculture was developed and promoted by theInternational Federation of Organic AgricultureMovements (IFOAM), a non-governmental organiza-tion that acts as the worldwide umbrella organizationfor the organic movement. It brings together over750 member organizations from more than 100countries. Its mission is to lead, unite, and assist theorganic movement in its full diversity and to promotethe worldwide adoption of ecologically, socially, andeconomically sound systems that are based on theprinciples of organic agriculture.

IFOAM defines organicagriculture as follows:

Organic agriculture is aproduction system that

sustains the health of soils, ecosystems, and people.It relies on ecological processes, biodiversity, andcycles adapted to local conditions, rather than the useof inputs with adverse effects. Organic agriculturecombines tradition, innovation, and science to benefitthe shared environment and promote fair relation-ships and a good quality of life for all involved.

The impact of organic farming on water availability andquality is remarkable. Above all, thanks to the improvedincorporation of organic matter, the water-holdingcapacity of the soil structure improves considerably leading to a reduced need for irrigation water comparedto intensive conventional agriculture. In regard to waterquality, organic farming prevents water pollution result-ing from the use of synthetic fertilizers and pesticides,which is common in agro-industrial farming. In addi-tion, improved crop rotation and permanent soil coverprevent erosion and soil degradation and hence improvethe water-retaining capacity of arable land.

On the whole, organic farming is an important factorin the promotion of modern and innovative irrigationsystems that increase water-use efficiency. In practice(where applicable), organic farming tends to substituteefficient drip irrigation (water-use efficiency 80-90%)for widespread center pivot sprinkler irrigation (water-use efficiency 50-60%).

All in all, it is indisputable that organic agriculture hasgreat potential to address the current and upcomingchallenges relating to sustainable water managementwithin the agricultural sector of Saudi Arabia.


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Historical House (Midmakh Building), Najran

hapter 2Historically, agriculture on the Arabian Peninsula wascharacterized by small-scale production of dates andvegetables in areas with sufficient water resources.Constrained by water availability, these primarily small

plots produced just enough food for local communities.Any surplus was bartered or sold to passing caravans.

Introduction of modern production methodsin the 1970s

The agricultural sector in Saudi Arabia started to changedrastically in the 1970s with the launching of extensivegovernment programs to establish and promote modernfarming methods. At that time, important investmentswere made for the construction of rural roads and theestablishment of irrigation networks, storage centers,and export facilities. As a result of these interventions, by1984, Saudi Arabia had become self-sufficient in wh eatand, shortly thereafter, began to export significant

quantities of cereals. By the early 1990s, due to thissubsidized agricultural scheme, the country had becomean exporter of wheat, ranking sixth worldwide.

Promoting agricultural sustainabilitysince the 2000s

At the beginning of this millennium, it became clear thatthe intensive agricultural production practices that hadbeen established could only be maintained with a highuse of production inputs and at the expense of fossil wa-ter. This would cause a serious drain on the Kingdomswater resources, drawing mainly from non-renewableaquifers. Furthermore, the widespread use of chemicalfertilizers to boost yields had led to serious food-safetyconcerns.

In the course of negotiations regarding the countrys ac-cession to the World Trade Organization (WTO) in 2005,the Kingdom agreed to downsize its agricultural supportand liberalize its trade regime as necessary steps toaccelerate its integration into the world economy.

However, the Kingdoms scarce water resources re-mained of paramount concern, and in 2008, the govern-ment decided to continue down this path and phase outwheat production by 2016. Consequently, since 2009,Saudi Arabia has started to compensate for the annualreduction of wheat production (12.5% annually) with im-ports. As this decline has also reduced the countrys food

self-sufficiency, Saudi Arabias attention is now increas-ingly directed towards production structures that supporta sustainable development of the domestic market.

In this backdrop, Saudi Arabia has made an importantstrategy shift in recent years, aiming to favor sustain-able production while abandoning conventional produc-tion structures. An important component of this strategyis the promotion of modern water-saving technologies,especially drip irrigation. In addition, farmers areencouraged to grow crops with higher economic value,such as fruits and vegetables, to take better advantageof the limited water resources. In this context, organicagriculture has become a vital part of the countrys newsustainability pathway, as its positive effects on foodquality and water conservation are well recognized.

HISTORICAL DEVELOPMENT OF THEORGANIC SECTOR

Since the early 1970s, the agriculture of Saudi Arabia has gone through tremendous changes.Once the worlds sixth largest exporter of conventional wheat, Saudi Arabia is now promotingsustainable farming systems to have a more positive impact on both food security and water use.

Chapter 2

Source: OFP

(based on data from 1) MoA, 2009 and 2) CDSI 2009 & 2011)

Figure 2-1 Main economic and agricultural indicatorsfor Saudi Arabia

Total Area (km2) 2,150,000

Population 2 27,000,000

GDP per Capita 2 (US$) 20,000

Total Cultivated Area 1 (ha) 835,000

Area of Cereal Crops (ha) 329,000

Area of Fodder Crops (ha) 160,000

Area of Vegetables (ha) 107,000 incl. Greenhouses 9,000

Area of Fruits (ha) 239,000 incl. Dates 162,000

Number of Farms 2 (#) 251,000

Labor Force 2 8,148,000

Employment in Agriculture2 (%) 4.1


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Phase I (2005 to 2007) Setting the stage for organicagriculture in the KSA

The initial sector develop-ment work started with the

establishment of organic pilotfarms. In order to developtechnical know-how amongoperators and strengthenfarmers competencies,pilot farmers were intensivelytrained in all relevant topics,ranging from soil, plant, andanimal production to irriga-tion water management andmarketing aspects. In 2007,GIZ supported the foundingof the Saudi Organic FarmingAssociation (SOFA) in order tostrengthen the private sectorsinvolvement in the organicsector.

Phase III (2011 to 2012)Facilitating market develop-ment and shaping an OrganicAgricultural Policy

The third phase started withan important milestone forthe organic sector. In Janu-ary 2011, the Saudi NationalOrganic Logo for Organic Agri-culture Products was officiallyintroduced. Subsequently, theproject launched its OrganicMarket Development Programin order to facilitate market ac-cess for operators and furtherdevelop organic value chainsat national level. Simultane-ously the project has taken upthe design of a first OrganicAgricultural Policy, pursuingthe implementation of gov-ernmental support measuresfor sustainable and long-termorganic sector development.

In 2011, the DOA accreditedcertification bodies to carryout farm inspections based onthe new National Regulation &Standards for Organic Agri-culture. Consequently, a fewmonths later, the first organic

producers across the countrywere certified according to thisnew legal framework. In paral-lel, SOFA actively promotesorganic farming at nationallevel and strongly engages inmarket development activities.Organic products have enteredRiyadhs weekly market anda national organic awarenesscampaign has been launchedin 2012.

Figure 2-2 Map of Saudi Arabia

Development of the organic sector since 2005

Before 2005, organic agriculture was almost nonexist-ent in the Kingdom. The organic products available onthe Saudi market were mainly imported from the USor EU. The first important domestic players in this newmarket appeared in 2000: Nadec (National Agricul-tural Development Company), Al Watania AgriculturalCompany, and Al Khalediah (see Chapter 4). WhileNadec one of Saudi Arabias largest agricultural com-panies dedicated a portion of its production to organicagriculture, Al Watania and Al K halediah have specializedin organic. Today both enterprises have establishedthemselves as leading organic operators in the Kingdom.Al Watania started building up its organic productionstructures, along with its own marketing channels,mainly through small, company-owned organic retailshops. Al Khalediah, however, is marketing its products

mainly via supermarket chains (e.g. Carrefour).

In 2005, the Saudi government commissioned GIZ tosupport the development of the organic sector. As AlWatania and Al Khalediah were still the only majorlarge-scale organic actors within the domestic market,the first step of the GIZ Organic Farming Project (OFP)was to stimulate the conversion of 10 farms to organic,becoming the first organic pilot farms in the country(see Box 2-1). Accordingly, during the initial stages of theproject, the training of pilot farmers in a wide range oforganic farming practices was a top priority. From 2007onwards, the projects focus was clearly on the crea-tion of support services and governmental structuresto expand organic production and sustain the furtherdevelopment of this sector.

Cartography: Sven Oehm (2012)

Historical Development of the organic sectorChapter 2

Box 2-1

GIZ Organic Farming Project Mission & Milestones

On request of the Saudi Arabian Ministry of Agriculture, GIZ started to supportthe development of organic agriculture in April 2005. The overall mission ofthe Organic Farming Project was to establish a functioning and sustainableorganic agriculture sector in Saudi Arabia. Within a mere 7 years, the projecthas turned organic agriculture in the KSA into a success story.

Phase II (2008 to 2010) Enabling private sectordevelopment and shaping thelegal organic framework

In the second project phase,

the development of a sup-porting legal framework andfunctional value chains, includ-ing technical support services,was prioritized. In 2008, GIZinitiated the establishmentof the Department of OrganicAgriculture (DOA) within theMinistry. As the competentauthority, the DOA is in chargeof monitoring and surveil-lance for the entire organicsector. Because operationalstructures and sustainablecapacities within the DOA werefundamental for the sector, theproject worked very closelywith the Ministry of Agriculturein this phase. This collabora-tion was further strengthenedthrough the developmentprocess for a legal framework.In 2009, the National Regula-tion for Organic Agriculturewas introduced to the sector. In

the following year, the regula-tion was supplemented by theNational Organic Standards,the so-called Saudi TechnicalSpecifications for Good Prac-tices in Organic Production.


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The Saudi National Organic Logo, launched in 2011, wasanother important milestone in the development of theorganic sector in Saudi Arabia (see Figure 2-4). Its crea-tion is the result of a close and successful cooperationbetween all three leading actors the Department ofOrganic Agriculture, the Saudi Organic Farming As-sociation, and GIZ. The logo serves as both a marketinginstrument for certified organic operators and a guidefor consumers. It is granted by the DOA to products thatmeet the requirements of the National Organic FarmingRegulation. In 2011, a nationwide publicity campaignwas implemented by SOFA and the MoA to create publicawareness for this logo and boost the organic move-ment in general.

In addition to the organic logo used on product labelsand promotional material, a special logo for organicinputs was created to differentiate organic inputs (seeFigure 2-4, Chapters 3 and 5). A list with all organicinputs available on the domestic market using this labelis published by the Department of Organic Agricultureand the Saudi Organic Farming Association (see Table

3-4).

The founding of the Saudi Organic Farming Associationin 2007 paved the way for enhanced private sectordevelopment and can be viewed as one of the firstimportant milestones for the organic agriculture move-ment in the Kingdom (see Figure 2-3).

One year later, in 2008, the Department of OrganicAgriculture was created within the Ministry of Agricul-ture. It was this department that drafted Saudi Arabiasfirst regulatory framework for organic agriculture theNational Regulation for Organic Agriculture. Publishedin 2009, this new set of rules has formed the basis forany organic farming activity in the Kingdom.

By the year 2012, the OFP had succeeded in doubling thenumber of organic pilot farms. All farms, currently 21(April 2012), are inspected by international certificationbodies. Until the year 2010, private certification bodieshad been responsible for the certification of organicfarms in Saudi Arabia according to EU Standards. Thenew National Organic Regulation has been in place since2011 and serves as the legal framework for certifyingorganic farms. Similar to the EU Regulation, certifica-tion bodies operating in the Kingdom must be accreditedaccording to international standards.

Figure 2-3 Milestones and achievements within the Saudi organic sector Figure 2-4 Saudi National Organic Logo(s)

Historical Development of the organic sectorChapter 2

2005 / 2006

MILESTONE I

MILESTONE III

MILESTONE IV

MILESTONE V

MILESTONE VI

MILESTONE VII

MILESTONE II

2007

2008

2009

2010

20112012

Initiation of Organic Farming Project

First pilot farmers join the projectFoundation of Saudi Organic

Farming Association

Introduction of

National Regulation

for Organic Agriculture

Nationwide public awareness

campaign for organic food

Organic farmers: 78

Farmers registered

for conversion: 280

Organic farm

area: 16,247 ha

Farm area under

conversion: 2,216 ha

ACHIEVEMENTS

Establishment of Department

of Organic Agriculture

Introduction of Saudi Organic

Standards

Launch of National Organic Logo

Start of organic policy and

market development program

Source: OFP (2012)

Saudi Organic Consumer Logo Saudi Organic Input Logo

Public Awareness Campaign, Riyadh

Fast expansion of organic production in 2012

To date, the DOA has registered 78 farms as certifiedorganic. As of July 2012, however, some 280 additionalfarmers have requested official registration at theDepartment of Organic Agriculture to convert theirproduction system into organic. In 2012, almost 16,400ha of arable land are being cultivated in compliance withthe organic regulation; in addition, about 2,200 ha arecurrently under conversion (see Table 4-1). While cropproduction plays a key role within the organic sector,organic animal husbandry is still of minor importance.More information on production structures and organicmarketing can be found in Chapter 4.


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Chapter 3

On-Farm Research

& Farmers Training

SUPPORTFUNCTIONS

POLICYFUNCTIONS

Organic

Standards & Regulations

Promotion &

Sector Support

MAR

KETCHAIN

Farmers Traders Retailers

Farmers Traders Farmers Consumers

Purchase &

Consumption

Agricultural

Production

Collection

& Trade

Processing

& Labeling Retailing

Organic

Certification

Policy & Market

Consultancy

Organic

Policy

Consumer

Protection

Public Awareness

Creation

OFP

Organic R&D Center

Certification Bodies OFP

SOFA

Saudi Food &Drug Authority

MoA / DOA

MoA / DOA MoA / DOA

MoA / DOA

In general, there are three different groups of actorsinvolved in the organic sector: (1) market chain actorsdirectly involved in production and marketing processesfor organic commodities such as farmers, input trad-ers, processors, retailers, and consumers, (2) privateservice providers who offer various types of technical,

administrative, or management-related services tomarket chain actors, and (3) policy makers who supportand promote the entire sector through a number ofgovernmental measures (Figure 3-1).

Farmers the basis of the organic sector

The farmers involved in organic production play akey role in this sector. In 2012, all 78 organic farmersthroughout the Kingdom are producing in accordancewith the new Saudi Organic Regulation. Among theseare the 21 pilot farmers involved in the Organic Farming

Project (see Table 3-1).

Farms are located throughout the country and arerepresented in all major agricultural production areas

ACTORS INVOLVED IN THE ORGANIC SECTOR

The organic sector in Saudi Arabia is developing fast. Since the Organic Farming Projectwas launched in 2005, meaningful capacities and structures have been created in closecollaboration with the public and private sector.

Figure 3-1 Overview of main actors involved in the KS As organic sector

Source: FiBL & OFP (2012)Stakeholder Workshop, Asir

hapter 3


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(see Chapter 4). Organic production involves primarilythose crops that are typical to each area: dates, vegeta-bles, herbs, and fruits. Due to the limited availability oforganic fodder, organic animal husbandry is currentlyrestricted to a small number of farms and animals.

The organic farms vary greatly in size, from 1ha toseveral thousand hectares (see Figure 3-2). Most of thefarms are run by the owners themselves, who mainly relyon hired foreign specialty workers to successfully imple-ment the daily on-farm operations. Farm managementcapacities vary owing to the difference in the financialmeans of farm owners and the educational backgroundsof the farm managers and other hired staff.

The 21 pilot farmers involved in the Organic FarmingProject have a special role in the organic sector. Havingobtained in-depth training by GIZ, in cooperation withthe MoA and SOFA, they act as regional promoters andmultipliers for organic agriculture. A s pilot farms,they attract the interest of conventional producers andassist them in converting to organic production. Mostorganic pilot farmers have participated in local, regional,and national events, such as workshops, festivals, andexhibitions. These farmers are deeply integrated andacknowledged within Saudi society. Moreover, theyrepresent highly recognized personalities in publiclife a most valuable basis for the effective promotion oforganic farming and foods. In addition to pro duction andcollection, most farmers are also involved in trading andretailing activities.

Table 3-1 Pilot farmers of GIZ Organic Farming Project

Source: OFP (2012)

Figure 3-2 Size of organic farms in Saudi Arabia

Absence of specialized traders and processors

Most of the fresh fruits and vegetables produced aremarketed directly by the producers. In many cases,fresh produce is sold from the farm gate. Specializedoperators in organic trade and processing are stillvirtually nonexistent. The entire processing businessis currently in the hands of a few innovative organicproducers, i.e. companies who combine the produc-tion, processing, and trade of their products underone umbrella brand. Processing applies especially tovegetables (tomatoes), fruits (e.g. dates, pears, citrus,olives), and cereals. Tomatoes, for example, are pro-cessed into tomato paste, olives into olive oil, and fruitslike pears or citrus into juice. Grain is mainly processedinto flour, various types of pasta, and an array of bakedgoods, such as cookies and bread. Organic dates aregraded and processed on farm, whereas the packagingis usually done by nearby packing companies. Althoughdates are one of the countrys main agricultural prod-ucts, there is currently still no company in Saudi Arabiaspecializing in the processing of organic dates.In this context, three important farming enterprises thatact as both producer and processor, as well as retailerand/or trader, are worth mentioning: Al Watania (pro-duction, processing, trade, and retail), Abazeer (produc-tion, processing, wholesale, and retail), and Al Khal-ediah (production and trade). Al Watanias operations,for example, cover the entire value chain: the cultivation

of tomatoes, their processing into tomato paste, retail-ing the processed tomatoes through supermarkets, andselling them at its own retail stores.

Limited but growing number of retailers

In addition to the direct sale of fresh produce via farmers,specialized organic stores are gaining increasing impor-tance, particularly for processed products (see Table4-2). Some retailers are fully specialized in organic foods,others in health foods, where organic products are partof a larger product portfolio.

In response to the growing consumer awareness forwholesome and organic products, major supermarketsare gradually expanding their organic product ranges.Certain supermarkets have special organic sections,such as Carrefour and Danube; others like Tamimidisplay their organic products along with conventionalproducts, sorted by product type. In all cases, however,the majority of the processed products offered bysupermarkets most of which are convenience foods(e.g. breakfast cereals, nutritional supplements, cookies,

juices) are imported, mainly from the US and EU.

Service providers who are shaping Saudi Ar abiasorganic agriculture sector

The entire organic sector of Saudi Arabia, including allkey stakeholders, is closely related to the OrganicFarming Project (see Box 2-1). The Saudi OrganicFarming Association (see Box 3-2) and the Departmentof Organic Agriculture (see Chapter 5) are certainly themost relevant and influential actors in the Kingdom.SOFAs main services, in addition to the over all promotionof organic agriculture, are focused on the support of itsmembers through the provision of relevant informationabout all different aspects of organic agriculture suchas requirements and procedures for certification,marketing opportunities and contacts, innovativefarming methods, and legal guidelines.

Source: OFP (2012)

Actors involved in the Organic SectorChapter 3

30

25

20

15

10

5

0

ha1-

1011

-50

51-100

101-

500

501-

1000

>100

0

No. of Organic Farms

Abazeer Retail Store, Jeddah

Pilot Farm / Company Region Main Products

Al Mahdi Asi r V eg etab les, Fruits, Wheat , Herbs , Honey, Chi cken, Sheep , Goats

A l Ma rzo uqi B ah a B ar le y, Cu cu mb er s, F ru it s, To ma to es

Sulaiman Al Buti Eastern Province Dates, Vegetables, Mulberries, Grapes, Lemons, Limes, Figs, Alfalfa

Al Rayana Eastern Province Dates, Barley, Chilies, Eggplants, Garlic, Herbs, Dromedaries

Al Abdulmuhsin Eastern Province Fallow Land

Al Shawi Hai l Dates , Fruits (e.g. Grapes, P omeg ranates, L emons, F ig s) ,Vegetables

Al Fur aihan Hail D ate s, Ol ive s, Veget ables, W he at

Ali Mohammed Fahad Jizan Dates , Bananas, Cheri moya, Guavas, L emons, Forag e Crops

Al Adawi Jizan Figs, Lemon s, Man goe s, HennaAl Salem Farm Jouf Olives, Lemons, Fruits (e.g. Gr apes, Pomegr anates, Figs)

Abazeer Madinah Dates, Almonds, Barley, Citrus Fruits, Beehives

Al Aramiah Makkah Fruits (e.g. Pineapples, Mangoes, Papaya, Oranges, Plums, Grapes),Olives

Al Sweegah Najran Dates, Grapes, Figs, Olives, Vegetables, Wheat, Pasture

Judan Farm Najran Dates, Figs, Grapes, Mangoes, Alfalfa

A l H ejr es sy ia h Q as si m D at es , B ar le y, Wh ea t, Al fa lf a, Co rn , P ot at oe s, Go at s, Sh ee p, Pi ge on s

Organic R&D Center Qassim Dates, Citrus, Mulberr ies

Wahat Maramer Qassim Dates

Al Faw az R iy adh Tomatoe s, Car rot s, Eggpl ant s

Dr. Al Shahwanfor Organic Farming

Riyadh Tomatoes, Cucumbers, Beans, Eggplants, Dates, additional variety of36 vegetables, Sheep (from end of 2012)

Al Sheha Riyad h Dates , V eg etab les, Fruits, A lfal fa , Goats

A l J an adr iy ha R iy ad h D at es , Ve ge ta bl es (e .g . J ew s M al lo w, R ed R adi sh , P um pk in , Be an s,Tomatoes, Cabbage, Broccoli, Cauliflower)


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Company Accreditation Certified Area Percentage

ECOCERTSocit Anonyme 7,700 ha 47 %

BCSko-Garantie GmbH 4,650 ha 28.5 %

CERESCertification of Environmental Standards GmbH 880 ha 5.5 %

COAECenter of Organic Agriculture in Egypt 2,920 ha 18 %

TAWTHIQ in progress 200 ha 1 %

OneCert

The DOA represents the Ministry of Agriculture in allmatters relating to organic agriculture and acts as adriving force for the establishment of all relevant publicservices and legal guidelines in favor of the organicsector. Its core task is the monitoring and surveillanceof all organic sector activities. Furthermore, the DOA isresponsible for the publication of the so -called OrganicInput List (see Table 3-4). This document lists all author-ized organic inputs, as well as retailers who produce,import, and/or trade these agricultural products. Anotherkey task of the DOA is the coordination of public-relationsactivities, including festivals, exhibitions, and workshops.The main purpose of these events is the exchange,dissemination, and provision of information among allrelevant actors within the organic sector. Finally, the DOAdefines, develops, and fine-tunes the necessary legalguidelines to ensure optimal sector development (seeChapter 5).

The Organic Agriculture Research & DevelopmentCenter, located in Unayzah (Qassim), is another importantactor. As a research institution, it trains farmers inorganic production methods and delivers farm-basedconsultancy on special topics (see Box 3-3). Above all theCenter is dedicated to the delivery of practical solutionsfor meeting the needs of organic producers throughoutthe Kingdom.

Organic certification bodies operating in the KSA

Regarding organic certification, Saudi Arabia has at-tracted a number of international certification bodies.Currently, in the year 2012, there are four internationalcertification organizations operating in the Kingdom (seeTable 3-3): two from Germany (BCS and CERES), onefrom France (ECOCERT), and one from Egypt (COAE). Thecompanies who have entered the certification marketmost recently are TAWTHIQ and OneCert. TAWTHIQ, thefirst Saudi certification body, is still in the process ofaccreditation. OneCert, a certification company from theUS, was authorized by the DOA in February 2012 to certifyaccording to the Saudi National Regulation but has yetto performed any certifications in Saudi Arabia. To date,the majority of Saudi Arabias organic farms have beeninspected and certified by BCS, whereas ECOCERT hascertified the largest share of the organic surface area.

Until 2010, the certification of organic farms was per-formed by private certification bodies in accordance withinternational standards, especially the EU Regulation.Since 2011, organic farmers can also be cer tified accord-ing the new Saudi National Organic Regulation. This newregulation, like the EU Regulation, requires that certifiersoperating in the Kingdom be accredited according tointernational norms (ISO 65/17065).

Small number of input manufacturers andsuppliers

Organic production is expanding, and the demand fororganic inputs is growing fast. At present, there are onlya few manufacturers of organic inputs in the Kingdom(see Table 3-4 and Box 3-1). Up to now, most organicinputs have had to be imported. Although there are alimited number of domestic suppliers for biologicalfertilizers and pesticides, there are currently no domesticproducers of organic seeds. Therefore, organic farmersdepend completely on imports, meaning that the avail-ability of organic seeds is not always ensured. As a result,organic farmers are forced to use and rely on conven-tional untreated seeds. Overall, it is one of the sectorspriorities to increase the number of input suppliers in the

near future.

Table 3-3 Cer tification organizations operating in Saudi Arabia

Al Watania Branch, Riyadh


GIZ a driving force for sector development

Since 2005, GIZ has been act ing as the main initiator,mediator, and facilitator in the organic sector in SaudiArabia. Through its Organic Farming Project (see Box2-1), GIZ promotes networ king among sector stake-holders, develops policy and marketing concepts, andprovides operating recommendations to decision makersand producers. With the aim of setting up essentialprivate and public structures, the project collaboratesvery closely with the DOA (see Chapter 5) and SOFA (seeBox 3-2), bringing in outside expertise wherever needed.

In the framework of the OFP, GIZ disseminates know-ledge and enhances organic agriculture competenciesmainly through training courses for organic farmers,addressing a broad range of topics, such as soil fertility,plant nutrition and protection, irrigation management,greenhouse and fodder production, animal husbandry,and the marketing of organic products. For the design oforganic agricultural policies and marketing strategies,GIZ collaborates with all relevant actors.

GIZ Plant Nutrition Workshop, Asir GIZ Organic Input Workshop, Riyadh

Source: OFP (2012)


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Table 3-4 Organic input companies in Saudi Arabia

Source: OFP (based on data from the DOA, 2012)


Box 3-1

Interview with Abdul Aziz Al Telas

Abdul Aziz Al Telas is the founder and CEO of Al Mahalliah Company one of Saudi Arabias firstcompanies supplying organic inputs. Currently, Al Mahalliah is constructing a new factory to expandthe domestic production of organic inputs. Production will start by the end of 2013.

Organic Farming is a relatively new movementin Saudi Arabia. What gave you the idea to gointo this business?

Almost 12 years ago, we took a closer look at theagricultural market. Back then, we noticed that thereis a growing interest in organic agricultur e amongfarmers. But there were almost no organic inputsavailable on the domestic market. This is why we madethe decision to become active in th is field and fill thismarket niche.

One can say that Al Mahalliah is one ofSaudi Arabias pioneers in the organic sector.What were your experiences at this early stage?

To be honest we were suf fering in the beginning ofour endeavor. We invested a lot of money and effortinto gaining a good understanding of the organic inputbusiness. Since no one was pr oducing such inputs inSaudi Arabia at that time, we visited numerous confer-ences and agricultural exhibitions all over the worldto keep pace with the latest production standards.Our goal was, and still is, to provide farmers with themost modern organic inputs available on the market.In retrospect, I must say that the first years were quitetough, but it was worth it!

So how is the situation today?

In the past, 90% of our products, mainly biocides,were imported from the US, the EU, China, India, and

Korea. Today, we only import around 15 to 2 0%. Themajority of our products, especially fertilizers, comefrom domestic sources. The new factory that we arecurrently constructing in Al Kharj will further expandour domestic-product portfolio. Since the costsand sales prices for these inputs will be drasticallyreduced by up to 50% we expect a strong increaseof organic input sales in the coming years.

The Ministry of Agriculture is currently developinga customized Organic Agricultural Policy for theKingdom. What are your expectations?

Such a policy will have an extremely positive effecton the organic market. The government would senda clear signal to all stakeholders that this sector hasgreat potential, thus enhancing confidence and trustwithin the sector. This is likely to trigger further invest-ment in organic farming and marketing. An importantaspect of this policy should be the educational ad-vertising of the benefits of organic farming. The mostrecent public-awareness campaign is a good exampleof how the government can have a strong impact onsociety. Many Saudis heard about organic food forthe first time thanks to this campaign. So increasedawareness is essential for the further development ofthis market!

What, in your opinion, are the upcoming challengesfor the organic sector?

The key element is the consumer. If consumersrecognize the value of organic foods, the demand willfurther increase and therefore lead to new, promisingopportunities for all actors along the value chains.Nevertheless, the most important factor will bekeeping supply on pace with demand. For this re ason,a sound support policy is essential to help equilibratethe increasing demand for and supply of organicproducts. The important first steps have been madein this area. If we continue down this path, I am quite

optimistic that Saudi Arabias organic sector will havea prosperous future.

Import /Tranding Company Product ion Company Count ry ofOrigin

Input

Advanced Ossos Agr. Est. Carlan Lab Spain Fertilizer Probion Set Probion Beri V

Probion X Full

G re en Ha s I ta li a S .p. A I ta ly Fertilizer Vit-Org

Al Mahalliah CompanyTrading & AgricultureCo. Ltd.

Al Ahram for Mining &Natural Fertilizers

Egypt Fertilizer Raw Phosphate

Nabat Al Aradh Factory Saudi Arabia Fertilizer Amino FeAmino Cu

Amino Zn

Amino Ca

Amino Mn

Humic PowerSoil Conditioner BioFert Legumes

BioFert Crops

BioPhos

BioPotas

Plant Protection BioGuard

LoCup 6%

Rhizo M

Nema Stop

International EnvironmentalServices

BIOWISH TechnologiesInc.

USA Fertilizer BIOWISH Crop

Al Emar International BioVert Spain Fertilizer Manvert BiosterenManvert Complex

Soil Conditioner Manvert Mator

Saudi United FertilizerCompany

Beijing Kingbo BiotechCo. Ltd.

Aglukon

China

Germany

Fungicide Vegard 0.5 AS

Acaricide Sophora

Fertilizer Multimicro Liquid

AL Manef Company Arya B iotechnology I nd ia Fertilizer Shrungi Biobest N LiquidShrungi Biobest N Solid

Ibn Al Sheikh Agric. Est. Kawa Agricultural Co. Ltd. China Fertilizer Admiral Guano

A ss asia Nawa Es t. Al gin it Dist rib uti on Ce nt erCompany Ltd.

Hungary Fertilizer Alginit

Yassin Agric. Company Kelp Products Ltd. South Africa Fertilizer Kelpak

Proteina Factory for OrganicFertilizers

Proteina Factoryfor Organic Fertilizers

Saudi Arabia Fertilizer Proteina Organic

Source: OFP (based on data from the DOA, 2012)


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Box 3-2

Saudi Organic Farming Association

The Saudi Organic Farming Association was foundedin 2007 with the support of GIZ, becoming the mostimportant stakeholder platform related to organicagriculture in Saudi Arabia. SOFA is a private and inde-pendent non-profit organization under the supervisionof the Ministry of Agriculture. It represents organicfarmers, manufacturers, wholesalers, retailers, andimporters. To date (mid-2012), SOFA has 143 members.

SOFAs aim is to incorporate all private stakeholdersrelated to organic agriculture under one umbrellaand to produce and provide consistent information toboth members and consumers to further promote the

organic sector. Its members represent all differentsegments of the value chain farmers, traders,retailers, and scientists although farmers representthe largest group by far. With its technical support,education, and training, SOFA seeks to encour agefarmers to shift to organic production.

For its members, SOFA aims to improve market accessand upgrade the sector by supporting farming. Beyondthat, SOFA unites stakeholders along the organicmarket chain and enables them to exchange and com-municate their interests. Often, SOFA acts jointly withthe Department of Organic Agriculture.

Together, they develop and provide appropriaterecommendations for the sector in general andmembers in particular. The launching of the SaudiNational Organic Logo in February 2011 as part ofa huge public campaign is one example of S OFAsimportant work in this area.

Box 3-3

Organic Agriculture Research &Development Center

In June 2009, H.E. the Minister of Agricultur e took thedecision to convert the Qassim Agriculture ResearchCenter into the Organic Agriculture Research andDevelopment Center. As Saudi Arabias first organicresearch and development center, its main researchareas are soil science, horticultural science, plantprotection, and biodiversity.

The mission of this new Center is twofold: to deliveradvice on organic agriculture to a broad farmingcommunity and to provide farm-based consultancy.So far, the Center has conducted a variety of activities

and events to promote organic farming within theKingdom. It offers workshops, lectures, seminars,and training courses on various topics, mainly in closecollaboration with both the Organic Farming Projectand the DOA.

The new Organic R&D Center is gradually improv-ing its capacities for playing the lead role in thecoordination and implementation of research andextension services related to organic agriculture. Onefundamental strategy is to shift its research activitiescloser to the farmers fields, in order to provide betterhands-on solutions to technical challenges in the fieldand to obtain a better linkage between research andextension activities.

Presentation at Saudi Agro Food Exhibition, Riyadh

Public Relations Activity of SOFA, Riyadh


Biological Pest Control Workshop, Organic R&D Center

Date Palm Trees at the Organic R&D Center

Nursery at the Organic R&D Center


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Saudi Arabia is famous for its desert climate. Yet,there are great seasonal and regional differencesin precipitation and temperature, which explain thelarge variations in agricultural production across the

country. The central regions are hot in the summerand cool in the winter. During the summer months,the maximum temperatures exceed 50C. Conversely,nighttime temperatures in the winter can drop belowthe freezing point. Throughout the year, the climate isdry, with average annual rainfalls between 50 and 100mm. In contrast, the coastal areas are hot and humidin the summer, while winters are warm. Comparativelyfavorable agricultural conditions exist in the mountain-ous region in the southwest of the country, where thetotal rainfall can reach 250 mm/year.The prevailing crops of a region are dependent uponclimatic characteristics: The mild coastal climate inthe southwest allows for the cultivation of tropicalfruits. Wheat and vegetables are grown predominantlyup-country. For organic production, these varying localconditions are just as important as good market access.

Regional differentiation of organic production

Organic production can be found throughout the countryin various agricultural areas (see Figure 4-1). The mostimportant are Qassim and Al Kharj, located in thecenter of Saudi Arabia, which is considered to be theagricultural heart of the Kingdom; the main productsof these areas include dates, vegetables (e.g. carrots,cucumbers, tomatoes, lettuce), and fodder crops.Saudi Arabias most important olive-production areais located in the northern region of Al Jouf. This regionis also prominent for its date-tree cultivation. Majorfruit-production centers are located in the southwestalong the Red Sea coast. Jizan is especially well knownfor its production of tropical fruits, such as mangos andpapayas. Asirs mountainous area is famous for small-scale agricultural production on terraces. The maincrops cultivated there include fruits and vegetables such as peaches, apricots potatoes, and lettuce.

Chapter 4

PRODUCTION AND MARKETINGOF ORGANIC PRODUCTS

The total area of organically certified land is expanding fast as more farmers areconverting to organic production. At the same time, organic sales are growing with theincrease in consumer awareness. Nevertheless, an improved coordination betweenproduction and marketing will be crucial in order to better balance supply and demand.

Dessert Landscape, Center of the KSA Asir Mountains, Southwest of the KSAPackaging at Al Khalediah Farm, Riyadh

hapter 4


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Organic animal husbandry still of minorsignificance

Compared to organic crop production, organic animalhusbandry is still of little relevance. In 2012, about 2,800farm animals were kept in accordance with organicstandards the majority of these were sheep and goats.In addition, approx. 735 small ruminants are currentlycertified under conversion, i.e. in the process ofbecoming organic.

To date (mid-2012), organic livestock production is en-tirely focused on meat production. Specialized organicdairy farms are virtually nonexistent. Currently, theproduction of organic fodder is insufficient, hinderingthe expansion of the organic livestock sector.

Organic Camels, Qassim

Table 4-1 Organic production by region

Region Farms(no)

Crop Area (ha) Fallow Land (ha) Livestock (heads) Birds (heads)

or gan ic co nv er si on o rga nic con ver sion or gani c co nve rsio n o rgan ic co nv er si on

Asir 1 5 0 0 0 150 0 50 0

Baha 1 0 2 0 0 0 0 0 0

EasternProvince

5 105 0 20 0 9 0 0 0

Hail 4 101 0 58 0 0 0 0 0

Jizan 2 34 0 9 0 95 0 0 0

Jouf 6 6.982 1.408 63 0 0 0 0 0

Madinah 2 192 0 409 0 0 0 0 0

Makkah 1 0 71 315 0 0 0 0 0

Najran 2 28 0 1 0 0 0 0 0

NorthernBorders

0 0 0 0 0 0 0 0 0

Qassim 22 2.395 103 785 6 2.541 90 300 0

Riyadh 31 1.027 616 3.797 10 0 645 0 0

Tabouk 1 0 0 20 0 0 0 0 0

TOTAL 78 10.869 2.200 5.477 16 2.795 735 350 0

Source: OFP & FiBL (based on data provided by the DOA)

Source: OFP & FiBL (based on data provided by the DOA)

Production and Marketing of Organic Products

Eastern Province

Riyadh

Makkah

Asir

Najran

Jizan

Baha

Qassim

Hail

Tabouk

Jouf

Northern Borders

Fallow

Regions without organic surface

Vegetables

Fruits

Dates

Cereals

Forages

Fallow Land

Regions with reduced organic surface

Regions with meaningful organic surface

Regions with considerable organic surface

Madinah

Figure 4-1 Organic production by region

Chapter 4


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Vegetables

Fruits

Dates

All numbers are [ha]

1.702

6.671

2.03221443

5.477

Organic

1.440

443

4316

Under Conversion

84 190

Cereals

Forages

Fallow Land

Main organic crops

The most important organic crops in Saudi Arabia arevegetables in particular tomatoes, eggplants, cu-cumbers, and onions and fruits, such as dates, citrus,olives, and grapes (see Figure 4-2). Organic vegetablesare produced both on the open field and under con-trolled conditions (i.e. polytunnels and greenhouses);the latter is particularly common for crops like toma-toes, cucumbers, and eggplants. Legumes are mainlycultivated as part of a sound crop rotation. Fallow

land is either included in crop rotations or constitutesconverted production areas for upcoming cultivation.Among fruits, date palms are of major importance inSaudi Arabia. Their production is distributed throughoutthe country; Alfalfa is the major organic forage crop.Organic cereal production has little significance com-pared to conventional agriculture; only a few farmersgrow organic barley, wheat, sorghum, and corn.

Organic Grape Production, Najran

Organic Greenhouse Production, Riyadh

Organic Sorghum Production, Jizan

Organic Date Production, Al Jouf

Figure 4-2 Main organic crops grown in the KSA

Main markets for organic produce

Saudi Arabias major urban areas are the main con-sumption centers for organic products. The majority ofspecialized organic shops, as well as supermarkets withorganic sections, are located in some of the countryslargest cities: Riyadh, Dammam, Al Khobar, and Jeddah.Overall, the market for organic produce is still small,fragmented, and often personalized. The limited and

seasonal supply makes it difficult to establish close col-laboration with traders and retailers. This is particularlytrue for perishable crops, which are sold predominantlywithin the production region through the local marketsor at the farm gate.

The home delivery system that a number of farmershave developed to reach consumers directly representsan interesting alternative. Farmers like Ibrahim AlShahwan have responded to the current situation byusing a direct distribution system, delivering organicvegetable baskets to their customers on a weeklybasis (see Box 4-1).

Organic Vegetables at Farmers Market, Riyadh

Pilot Farmer Ibrahim Al Shahwan, Riyadh

Production and Marketing of Organic ProductsChapter 4

Source: OFP (based on data provided by the DOA)


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An increasing number of specialized retail shops

Retailers specializing in organic and health foods aregaining importance. Although the logic of both typesof retail shops is the same providing healthy andhigh-quality foods to consumers in urban areas thereare important differences in terms of ownership andproduct range. For instance, Al Watania, Saudi Arabiasleading organic retailer, currently with a total of 20outlets in all major cities (see Table 4-2), is the com-mercial branch of a large agricultural cooperation. Theproduct range consists exclusively of organic in-house

products, with a clear focus on fresh fruits and vegeta-bles in addition to other grocery products, such as oliveoil, pasta, tomato paste, and flour.

Other important specialized retailers use a differentmarketing strategy: Abazeer, located in Jeddah, andBioBest, in Riyadh, both sell a broad range of organicproducts, fresh and processed, making them the firstand largest completely organic retail stores in SaudiArabia. Their organic product portfolios also includebeauty products. While BioBest is solely a specializedvendor with no affiliated production sites selling

BioBest Organic Retail Store, Riyadh


Box 4-1

Interview with Pilot Farmer Ibrahim Al Shahwan

Ibrahim Al Shahwans farm is located in the desert-like landscape south of Riyadh. On six hectares ofland, he is growing around 40 different kinds of organic vegetables. Although he is working as a full-timeprofessor for plant pathology at the King Saud University, Ibrahim Al Shahwan is an organic farmer atheart. In order to demonstrate to his students the advantages of organic farming, he has set up his farmas a sideline.

How did you start growing organically?

As a scientist in plant pathology, I am aware of thesevere risks of using pesticides. The uncontrolled useof fertilizers and pesticides in conventional far mingis causing high levels of contamination in a r ange ofproduce on sale in Saudi Arabia. I show my students

how conventional farmers use pesticides and how weare operating on my farm without using any chemicals.Once they have seen that, they will never want to eatanything but organic!

Why is organic agriculture important to you?

Besides being a scientist, I am also a father. And forthat, it is my deepest interest to offer healthy productswithout any chemicals. We have to make sure thatfuture generations have access to safe and healthyfood.

You have set up a delivery service for your products.How is the demand?

Each week I send out baskets containing an assort-ment of vegetables to some 80 or more households. Ican hardly keep up with the demand, which is steadilygrowing. I would be delighted if I had more colle aguesto cooperate with to keep my customers happy.

What are the challenges facing the organicagriculture sector in Saudi Arabia today?

Organic farming in the Kingdom is in a tr ansitionalphase. At the moment, demand is greater than sup-ply. This is actually a promising situation. But t hereis still a long road ahead of us. Our goal must be to

promote organic farming to a wider public and makeall consumers in Saudi Arabia aware of the benefits oforganic food.

How would you describe the future of organicagriculture in Saudi Arabia?

Saudi Arabias upcoming challenge is to develop asustainable way of using its scarce water resources.Organic farming can contribute to that mission byincreasing the water retention of the soil and improv-ing its fertility. My ambitious hope is that, in 5 to 10years, organic produce will play a significant role inthe food market of Saudi Arabia. If the awareness forhealthy food continues to stimulate the demand fororganic produce, I see a huge chance and potential forthe organic sector in the Kingdom.

City Sales Outlets Location

Riyadh Watania 9 branches all over Riyadh

BioBest Musa Bin Nussair Street, Olaya

Organic Food Center Al Oroba Street, Olaya

Nu tr it io n C or ne r A l O ro ba St re et , O la ya

Bait Al Ashab Al Mu ger a Bin S hiaa Str eet

A l Mi za n A l Ta pe i Pr in ce Su lt an St re et

Mini Mall

Dr. Al Shahwan forOrganic Farming

King Abdulaziz Road

Home Delivery Service

Jeddah Watania Um Ul Qura Street

Abazeer Al Mu sadiah Mar ket No 3, A lmadinah Al Nazil Road

Damman Fteet Prince Naeif Bin Abdul Azizz Street

Watania Dhahran Doha

Al Khobar Organic Plus King Faisal Road

Al Hassa Bait Al Saha Al Mubaraz Al Thuriat Street

Qatif Al Mizan Al Tapei n/a (no data available)

Shagra Watania Abdul Aziz Mosque Street

Makkah Watania Ibrahim Al Jafali Street

Madinah Watania Mohammad Bin Abdul Aziz Street

Buraydah Watania King Abdul Aziz Road (Buraydah)

Unayzah Watania Zulif Road

Hail Watania Talateen Street

Al Rass Watania King Abdul Aziz Road (Al Rass)

Abah Watania Khalidia Street

Tabouk Al Tabia Center n/a (no data available)

Source: OFP (2012)

Table 4-2 Organic sales outlets across the K ingdom

mostly imported products Abazeer offers fresh fruitsand vegetables from its own farm as well. OrganicPlus, which entered the market in 2011, making it SaudiArabias newest retailer, has a similar concept. LikeAbazeer and BioBest, it has a large selection of organicproducts ranging from fresh produce and conveniencefoods to beauty products. Most of the processed grocer-ies are imported.


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An increasing involvement of largersupermarket chains

In response to the increasing consumer awarenessfor natural and organic products, most of the hyper-markets in the Kingdom, such as Carrefour, TamimiMarket, Danube Hyper Market, and Lulu Market, areoffering a selection of organic groceries as well (seeTable 4-3). However, they still focus considerably moreon international products, and organic is not yet ofstrategic relevance. Major obstacles that hamper bettercommercial relations between organic producers andsupermarkets are, on the one hand, the small andinconstant production volumes, and, on the other hand,the relatively high fees charged by supermarkets forshelf display and storage. The latter is especially criticalfor small and medium-sized producers, who are notable to compensate for these fees with the revenues

that they receive from such sales, particularly as theyare in a weak position to negotiate favorable price andpayment conditions in this context.

Nevertheless, it is very likely that the supermarketchains in Saudi Arabia, like their counterparts in othercountries, will begin to play a more dominant rolein organic marketing in the near future as consum-ers become more informed and sensitive about thebenefits of organic foods. In this sense, organic is likelyto become a key differentiation factor, especially forthose supermarket chains that aim to source within theKingdom and are interested in counterbalancing foodimports with high domestic quality, especially in regardto fresh produce.

Sales Outlets Branches Locations

Danube Hyper Markets 11 Jeddah (9), Riyadh (2)

Tamimi Mar ket s 14 Al K hobar (2), Dammam (2), Riy adh (9), Jeddah (1)

C ar refour 12 Riy adh (5), Jeddah (1), Dammam & Al K hobar (4), Madinah (1), Bur ay dah (1)

Lulu Markets 3 Riyadh (2), Al Khobar (1)

Caption: () = data in brackets refers to number of branches

Table 4-3 Supermarkets with organic section in the Kingdom

Organic Section at Carrefour, Riyadh Organic Section at Danube Supermarket, Riyadh

Box 4-2

Interview with Ajmal Hayat, sales manager of Al Watania

Al Watania is the organic pioneer in Saudi Arabia. It started its organic food production in 2001 in Qassim.As of 2012, Al Watania operates four different organic farm sites in the country, with a total of 2,600 hectaresof land. It sells its products through a nationwide network of company-owned organic sales outlets.The product portfolio ranges from fresh fruits, dates and vegetables to juices, pasta, and flour makingAl Watania not only a producer but also a key processor and retailer for organic food within Saudi Arabia.

Why did Al Watania switch from conventionalto organic production?

Sheikh Sulaiman Abdul Aziz Al Rahji, the companyfounder, was very concerned about the quality andsafety of conventionally produced foods. His idea wasto promote and provide pesticide-free foods to Saudi

consumers and thus contribute to a healthier andmore ecological future for the Kingdom. You could saythat turning to organic agriculture was just a logicalconsequence of his vision.

Could you say a few words on the currentdevelopment of the organic market?

I can speak for Al Watania we have seen a continu-ous growth of organic sales in the past, and the devel-opment does not seem to be slowing down. For years,we have experienced a 7 to 8 percent annual increasein sales from our ow n retail shops. Today, we have 20sales outlets across the country. Within the next 5 to 6years, we are planning to expand the number of shopsby up to 70 percent. I see a promising future for theorganic market in Saudi Arabia. But there are still a lotof challenges ahead of us.

What, in your opinion, must be done to sustainthe positive market trend?

Saudis have a strong purchasing power and respondquite favorably to high-quality and high-pricedcommodities such as organic products. The futurekey challenge will be to target, address, and informconsumers about the benefits of organic foods.We need to create consumer awareness that organicfoods are high-quality products that are more expen-sive but have a high value and positive health effects.

Could you explain that in more detail?

If you want to boost the sector, you have to raisepublic awareness about the positive effects of organicagriculture. There was a successful campaign by theMinistry of Agriculture early this year. A good start hasbeen made. What is most important now is to continue

this promising initiative. Because Saudis trust thegovernment, public campaigns have a significant influ-ence on consumer awareness. Once they are aware ofthe positive health effects of organic foods, I am quiteconfident that they will be willing to spend more moneyon their daily groceries.

Where do you see future opportunities forsupporting sector development?

The health and educational sector certainly must betargeted early on. Schools, universities, and medicalfacilities are suitable partners for the promotion oforganic and health foods. It is all about education.Children and young people are the consumers oftomorrow. If we teach them today about the benefitsof organic foods, we will make a significant and, aboveall, long-term and sustainable contribution to thedevelopment of the organic sector. In the end, we allbenefit the consumers, the farmers, and the trad-ers.

Source: OFP (2012)


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The national control system for organic agricultureserves as the basis for the sectors functional develop-ment. Its sound implementation, together with themonitoring and surveillance of all organic-sector activi-

ties, is the core function of the Department of OrganicAgriculture. This includes the supervision of interactionsamong sector participants and the control mechanismsby domestic and international certification bodies.

Saudi Organic Regulation and Standards

Legally, the national control system is rooted in the Na-tional Regulation & Standards for Organic Agriculture,which are in line with the European Organic Regulation.Due to the arid production environment, specific localconditions have been considered and included. While theRegulation provides the general framework for organicfarming, the Standards define all technical details andallowed substances related to organic production.The National Organic Regulation was approved by H.E.the Minister of Agriculture in 2009. Subsequently, theStandards, the so-called Saudi Technical Specificationsfor Good Practices in Organic Production were added in2010 to complement the Regulation.The National Regulation & Standards for OrganicAgriculture guides the work of the DOA. For instance,the DOA grants the use of the National Organic Label tothose actors that fulfill all conditions according to theRegulation.

Saudi Organic Law

Subsequent to the approval of the National OrganicRegulation, the Saudi Organic Law was drafted toprovide a legal basis for sanctions and penalties in thecase of irregularities and violations of the requirementslaid down in the National Regulation & Standardsfor Organic Agriculture. The Saudi Organic Law wasdeveloped by a technical committee of the Ministryof Agriculture. The law is currently under revision byhigher authorities.

Supervising the organic sector the nationalcontrol system

The national control system is based on the NationalOrganic Regulation, as well as the National OrganicStandards. To ensure operator compliance with legaldirectives (Regulation), the DOA is in charge of themonitoring and surveillance of all sector activities. TheDOA is responsible for the registration and control ofall actors involved in organic production and market-ing, including farmers, processors, traders, retailers,importers, and organic-input dealers (see Figure 5-1).With regard to organic certification, the DOA confers itscontrol competence in the form of licenses to privatecertification bodies who comply with the requirementsof the Saudi National Regulation for Organic Agricultureby offering adequate services that guarantee objectivity,qualification, and impartiality. Only certification bodiesaccredited by internationally registered accreditationservices (see Figure 5-1) are eligible for such licenses.As part of the national control system, the DOA alsocarries out regular control visits to organic farmsthroughout the Kingdom. On these visits, inspectorstake plant and soil samples, which are then analyzedby accredited laboratories for chemical and toxicresidues. The level of control intensity and frequency ofsuch visits depend on a risk assessment that takes intoaccount the occurrence of irregularities and potentialabuse. In any case, all farms are controlled at least once

a year. The control system also includes the monitoringof the national food-retail sector. Random controls areconducted at supermarkets, farmers markets, andspecialized organic retail shops. The validity of organiccertificates is verified and withdrawn from the market inthe case of non-conformity.The same conditions apply for all stakeholders engagedin the processing of organic products. In addition, theDOA monitors all producers and traders of organicinputs. The evaluation and authorization process forinputs follows special guidelines (see Box 5-1).

LEGAL AND INSTITUTIONAL FRAMEWORKOF SAUDI ARABIAS ORGANIC SECTOR

The legal and institutional framework for organic agriculture is still young.The fast-growing sector requires careful supervision by the Department of OrganicAgriculture, who ensures that framework conditions favor organic-sector development.

Chapter 5

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PRODUCEHANDLING

INPUTHANDLING

QUALITYASSURANCE

Producer

Importer

Processor

Retailer

InputImporter

InputProducer

CertificationBody

Int. Accreditation Body

Accrediting

Reporting

Monitoring & Surveillance

DEPARTMENT

OF ORGANIC AGRICULTURE

Compliance with National Regulation

Box 5-1

AUTHORIZATION PROCESSFOR ORGANIC INPUTS

Organic agricultural inputs are evaluated andapproved exclusively by the DOA. All authorizedinputs meet the requirements of the Saudi OrganicRegulation. The approval process for these inputsis designed to ensure the effective handling ofapplications:

1. Input registration

Input application forms are submitted to the DOA.Application forms are well-structured and differen-

tiated by input type (e.g. fer tilizer, plant-protectioninputs). The input must meet the requirementsspecified in the National Organic Standards.

2. Evaluation of applications

The DOA evaluates each submitted application.A specialized unit of the DOA is responsible for thisassessment. The input-evaluation procedure usedby the DOA is identical to that of the EU.

3. Recommendation of (dis)approval

Depending on the outcome of the evaluation, arecommendation for approval or rejection is madeby the DOA. This recommendation is forwarded tothe Agricultural Services Department of the Ministryof Agriculture, who is in charge of the final approvalfor all agricultural inputs used in the Kingdom.

4. Final decision

The MoA communicates the final decision to th eapplicant. In the case of a positive decision, the MoAofficially registers the approved input. At the same

time, the applicant receives the right to use theOrganic Input Label.

The Organic Input Label is theproperty of the MoA. It simplifiesthe marketing of organic inputsand the certification processfor operators in the KSA, as itprovides evidence as to whether

or not a certain input is allowed for organic produc-tion. This is the only l abeling scheme for organicinputs in the entire Gulf Region.

The Organic Input List guidance for producersand certifiers

Once inputs are approved by the MoA (see Box 5-1), theDOA adds them to the Organic Input List, a documentthat lists all approved organic inputs (see Table 3-4).The list is regularly updated, which facilitates the workof organic producers, traders, advisors, and certifica-

tion bodies, by clarifying whether or not an input isofficially approved for organic production and whichfields of application are allowed.

As of July 2012, 32 organic inputs are listed. Most of themare fertilizers, soil conditioners, or plant-protectionagents. Regularly updated versions of the Organic InputList are published online on the DOAs website, makingthem accessible to everyone. Furthermore, the list is alsoaccessible via the Saudi Organic Farming Ass ociation.

Governmental support for organic farming

The Saudi government acknowledges that the organicsector in Saudi Arabia is still in a nascent stage. In order

to capitalize on the achievements to date and furtherenhance the sectors development through soundgovernmental support, the Ministry of Agriculture hasput the development of an Organic Agricultural Policyat the top of its agenda. The overall goal of this policyis to upgrade the framework conditions and supportmeasures that favor a steady and well-balanced growth

of the sector in the coming years. Of special concern is asustainable expansion of organic food production in linewith the increasing market demand.

In 2011, the Ministry of Agriculture delegated thedevelopment of the Organic Agricultural Policy to GIZ,as a key activity of its Organic Farming Project. Incollaboration with the Agricultural Policy Division of theHumboldt University of Berlin, the OFP finalized a com-prehensive organic support policy concept in mid-2012,incorporating input from numerous Saudi stakeholdersand drawing on international expertise in this field.Taking into account experience from the European Unionas well as the special conditions prevailing in SaudiArabia, this draft document specifies interventions infour clearly defined objectives (see Box 5-2).

Box 5-2

ORGANIC SUPPORTPOLICY OBJECTIVES

The organic agricultural policy focuseson the following four major objectives(listed in descending priority):

1. Increase in productivity and in the numberof organic farms

2. Production of healthy foods

3. Conservation of natural resources

4. Preservation of water/sustainable water use

Governmental support measures are aimed atachieving these objectives.

The Saudi National Organic Label and its promotion

One area that merits special attention is the govern-ments commitment to promoting awareness for organicagriculture. The main instrument for this strategy isthe Saudi National Organic Label. Since its launching inearly 2011, it has helped differentiate organic productsand promote organic foods in various exhibitions andtrade fairs. Nevertheless, the label and its message hasnot reached the general public. Thus, it is not surprisingthat stakeholder workshops conducted as part of theOrganic Farming Project concluded that there is a clearlack of broader consumer information about the labeland the benefits associated with organic products.

As a result, a nationwide public consumer awarenesscampaign was undertaken from January to March 2012.The campaign was carried out in close collaborationbetween SOFA and the Organic Farming Project. Roadbanners were placed in all major cities in the KSA,including Jeddah, Riyadh, and Al Khobar. In parallel, theorganic message was spread through various media,such as newspapers, Facebook and Google advertise-ments.

Since its launching in early 2011, the Saudi NationalOrganic Label has also been promoted abroad. Animportant platform for this promotion work has beenthe International Federation of Organic AgricultureMovements (IFOAM), through which the label waspromoted at organic conferences, exhibitions, and tradefairs, as well as on the IFOAM website. In addition, theOFP has developed various PR materials, such as flyers,brochures, and manuals, which have helped promotethe label as part of the dissemination process of techni-cal information.

Legal and Institutional Framework of Saudi Arabias Organic SectorChapter 5

Source: OFP (2012)

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Compared to other countries, the Saudi organic marketis still small. From a market-development perspective,Saudi Arabias organic sector is at a stage where a fastexpansion of organic sales must be expected in the

coming years (see Figure 6-1). This rapid growth will bestimulated mainly by a governmental support programsetting a strong focus on the linking of organic produc-tion with the retail sector, improving market access forproducers. With increasing organic production and agrowing consumer interest for healthy and environmen-tally friendly products, retailers will be encouraged toprogressively include more organic products in theirsales portfolios.

Expected development pathway and key challenges

From 2005 to 2012, the organic sector in Saudi Arabiahas developed remarkably. During this period, a soundinstitutional and supportive framework has beenestablished. This framework will serve as a sound basisfor further sector development. Most of the importantactors, as well as the essential legal and structuralconditions, are in place: e.g. organic production sys-tems, the National Organic Regulation & Standards,the National Organic Label, a certification system fororganic operators, and the relevant sector institutions,such as SOFA and the DOA.

OUTLOOK AND UPCOMING CHALLENGES

The favorable legal and economic conditions for the organic sector in Saudi Arabiapromise strong growth in the coming years. At this point, the implementation ofsound support measures and interventions is essential for overcoming the upcomingchallenges and triggering optimal impact.

Figure 6-1 Domestic organic market Saudi Arabia compared to other countries

Source: FiBL (2012) TIME

MARKE

T

SIZE

DEVELOPMENT

OF ORGANIC

SYSTEMS

EMERGING MARKET GROWING MARKET MATURE MARKET

Establishment of

organic production

systems

Slow but steady

growth after a

difficult start

Fast growth thanks

to rapid market

expansion

Reduced growth or

stagnation if no

further investments

NigeriaChina

Albania

Saudi Arabia

Spain

England

Germany

Switzerland

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The coming years will certainly capitalize on theseachievements. However, in contrast to the early stagesof sector development, further sector growth will bestimulated increasingly by the market. The futureexpansion of organic production will occur not onlyas a result of government-driven interventions thatencourage farmers to convert to organic, but also andprimarily in response to an increased demand fromconsumers and retailers alike.

The prospects for development in Saudi Arabia are notonly encouraging but also promising. On the one hand,consumers are interested in healthy foods and havestrong purchasing power. On the other hand, stakehold-ers have invested in the expansion of organic businesses,and the government is committed to providing sustain-able support for the organic sector (see Figure 6-2).

The bottom line for an overall successful developmentof the organic market is a coherent trustworthy valueconcept that is fully understood by consumers andimplemented to all segments of the value chain: fromproduction, trading, and processing to retailing andconsumers. The optimal implementation of such produc-tion, marketing, and networking activities, however, isassociated with a series of challenges, which are bestgrouped into five specific, complementary and mutuallysupportive intervention areas: (1) awareness creation, (2)quality marketing, (3) on-farm research & extension, (4)access to organic inputs, and (5) stakeholder networking.The concrete needs and types of action proposed foreach case is outlined below.

Figure 6-2 S audi organic market development pathway and key intervention areas

Source: FiBL (2012)

2012

2017

SNOWBALLEFFECT

Adding

thep

erfe

ct

new

conte

nt

FAVORABLE CONDITIONS

Consumers with strong purchasing power

Stakeholders interested in collaboration

Government willing to support organic agriculture

Few sales points with small

variety of organic products

Many food retailers with large

range of organic products

KEY INTERVENTION AREAS

1. Awareness creation

2. Quality marketing

3. On-farm research & extension

4. Access to organic inputs

5. Networking among stakeholders

Outlook and Upcoming ChallengesChapter 6

Challenge 2: Quality marketing

The successful expansion of the organic market willdepend, to a large extent, on how consumers willperceive the quality of the organic products that willbe offered in the marketplace. In this respect, not onlytaste will matter but also various external factorsrelating mainly to appearance (shape and color ) andpresentation (packaging and labeling). Thus, organicactors should be encouraged to

Documents

Giz2012 Organic Agriculture Saudi Arabia En