Saudi Authority disburses US$78.7M in 2024 season payments for wheat farmers

SAUDI ARABIA—The Saudi General Food Security Authority has disbursed US$78.7 million in the first installment of payments to local wheat farmers who supplied their allocated quantities for the 2024 season.

According to the authority, the payments were processed, and accounts were closed through the official electronic platform, Mahsoly. A total of SR295,177,176 ($78.7 million) was deposited into the bank accounts of 792 farmers, covering a net amount of 175,703 tonnes of wheat.

The authority began receiving local wheat from farmers for the current season on April 21, and so far, 552,535 tonnes have been received from 2,751 farmers.

This initiative follows the Cabinet’s decision to authorize the authority to purchase up to 1.5 million tonnes of wheat annually from farmers for a period of five years.

According to the official data, Saudi Arabia’s wheat production is on a steady upward trajectory, with expectations pointing towards a 25% increase in the upcoming 2024-25 season, reaching a total of 1.5 million tonnes.

This surge in production reflects the nation’s commitment to enhancing its agricultural self-sufficiency while addressing the growing demands of its burgeoning population and expanding economy.

The Foreign Agricultural Service (FAS) of the US Department of Agriculture underscores that this production increment aligns with the maximum allowed production quota, subject to potential adjustments by the Ministry of Environment, Water, and Agriculture (MEWA).

Such adjustments hinge on factors like underground aquifer levels and global wheat supply dynamics.

Under a voluntary program, wheat cultivation is restricted to small farmers licensed by MEWA, who can opt to grow either wheat or alfalfa hay.

Previously, alfalfa hay was more appealing to farmers due to its profitability. However, the implementation of competitive wheat prices, set at US$467 per tonne last year, has incentivized wheat cultivation.

While prices for the upcoming crop have yet to be determined, farmers anticipate they will remain consistent with the previous year’s rates.

Domestic wheat consumption is projected to surge by 5% to reach 4.75 million tonnes, reflecting sustained robust demand.

This demand surge is further fueled by the rapid growth in tourism, which witnessed a remarkable 63% increase since 2022 and is anticipated to attract 70 million international visitors by 2030.

Consequently, the nation anticipates heightened import demands for wheat, rice, and corn in the coming years to meet the evolving consumption patterns.

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