Based on a research paper.

1. Food Security as a Public Good:
Oman’s Prospects
Hemesiri Kotagama,
Houcine Boughanmi,
Slim Zekri,
Shanmugam Prathapar
College of Agricultural and Marine Sciences
Sultan Qaboos University
Hemesiri Kotagama

2. Introduction
 The unprecedented surge in food prices
experienced during 2007-2008, particularly of
the staples wheat and rice, have awakened
worldwide interests on food security.
 Although the food prices have receded, it is
expected that the phenomenon of food price
volatility would continue (World Bank, 2009).
Hemesiri Kotagama

3. Oman’s food security
 Nearly 95% of the cereal requirement of
Oman is imported.
 Hence vulnerable to food price volatility.
 Strategies to be implemented to assure a
realistic degree of food security, within
economic and political realities and resource
scarcity.
Hemesiri Kotagama

4. Oman’s potential
 Oman has the potential to increase the
production of wheat, as it has past
experience of wheat cultivation, the right
climate and reasonably high average yields,
constrained to resource availability,
particularly water.
 Cultivation of wheat domestically may be
considered a minimal strategic measure to
assure food security.
Hemesiri Kotagama

5. Scope of the paper
 Examines the prospects to cultivate wheat in
Oman
– using a farming systems and production
economic analysis.
Hemesiri Kotagama

6. Theoretical Basis:
Food Security as a Public Good
and Role of Government
 Economic theory provides the basis to argue,
for and against intervention of government in
economic management.
 Where markets fail, the government has a
justified role to intervene and direct the
market, to manage the economy.
Hemesiri Kotagama

7. Food security as a public good
 ‘Food security’ is a public good as every one in
society enjoys without rivalry and exclusion the
sense and benefit of food security.
 Food security provides public goods of a healthy,
productive and harmonious society.
 The acceptance of the paradigm that ‘food security is
a public good’; justifies government intervention and
support in the market to supply it.
Hemesiri Kotagama

8. Position and Prospects to Achieve
Food Security in the Arab Region
 A three prong strategy to secure food security has
been proposed. These include
– (i) strengthening food safety nets such as though improved
family planning and education,
– (ii) reducing vulnerability to international food market
vagaries through adoption of improved supply chain
management and use of financial instruments and
– (iii) improving and increasing domestic food production
despite the constraints of resources such as water.
Hemesiri Kotagama

9. Response of Arab countries to
address the recent food price shock
Hemesiri Kotagama

10. Precautionary principle
 Precautionary principles of maintaining
domestic potential to:
– produce safe minimum amounts of staple food.
Hemesiri Kotagama

11. Food security in Oman:
Cereal production in Oman
0
20
40
60
80
100
120
140
160
180
1961
1964
1967
1970
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
2006
Years
Index(BaseYear2000)
Total Cereal Production Per Capita Cereal Production
Hemesiri Kotagama

12. Wheat Cultivation in Oman :
Extent of wheat cultivation in Oman
0
200
400
600
800
1000
1200
1400
1600
1800
2000
1961
1964
1967
1970
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
2006
Year
Area(Ha)
Hemesiri Kotagama

13. Wheat production in Oman
0
500
1000
1500
2000
2500
3000
3500
1961
1965
1969
1973
1977
1981
1985
1989
1993
1997
2001
2005
Year
Production(Tonnes)
Series1
Hemesiri Kotagama

14. Wheat yield per ha in Oman
0
5000
10000
15000
20000
25000
30000
35000
40000
1961
1964
1967
1970
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
2006
Year
Yield(Hg/Ha)
Hemesiri Kotagama

15. Saudi Arabian experiences on wheat
cultivation with government support
 The wheat support price has been:
– 533 US$/ Ton or 190 OR/Ton.
 The world market price has been:
– about 60 OR/Ton.
 Saudi Arabia had achieved wheat self
sufficiency and surplus production by 1984.
Hemesiri Kotagama

16. Existing farming systems in Oman
 As indicated above wheat had been a prominent
crop in the farming systems in Oman in the past.
 However since 1970 the extent of wheat cultivation
has dropped from 1700 ha to 500 ha.
 Recent studies (Al Said et al., 2007) on farming
systems in Batinah region indicate a shift towards
commercial seasonal crops and do not indicate
farmers cultivating wheat.
Hemesiri Kotagama

17. Analytical Methodology
 Maximize: π f (Σ Pi .Yi):
– where π is gross margin, Pi are gross margins
per hectare of land Yi are hectares of land of
alternative crops i:
 Constrainted to Σ Cij.Yi ≤ Xj and Yi ≥ 0;
– where Cij are input-output coefficients and Xj are
available input level.
Hemesiri Kotagama

18. Analysis and Discussion
 Wheat can not compete with the existing
crops and be a component crop of the
existing farming system with present gross
margins at import price of wheat.
 The present cropping system is constrained
in achieving its full potential in terms of use
of land and water due to labour constraint.
Hemesiri Kotagama

19. Subsidy
 The sensitivity analysis showed that the
‘Allowable Increase’ of wheat gross margin
as 414 OR/Ha.
 If the gross margin of wheat increased by
more than 414 OR/Ha from the present gross
margin of wheat (51 OR/Ha) to 466 OR/ Ha,
then wheat would become a competitive crop
and farmers would cultivate wheat.
Hemesiri Kotagama

20. Wheat price and yield permutations on
viability of wheat cultivation in Oman
Wheat
Price
(OR/T)
Wheat
Yield
(T/Ha)
Gross
margin
(OR/Ha) Viability Comment
100.00 3.00 55.00 No Present yield and world price.
255.00 3.00 466.00 Yes
Price support and present yield.
World wheat price has not increased
beyond 150 OR.
100.00 5.00 255.00 No
Present price and world average
yield (5 T/Ha).
183.00 5.00 505.00 Yes
Support price with world average
yield.
Hemesiri Kotagama

21. Policy Guidelines
 Wheat cultivation under commercial farming would
be viable if a subsidy of more than 414 OR/Ha (138
OR/Ton) is provided.
 This subsidy can be instrumented as input subsidies
and/or price supports as Saudi Arabia had done.
 If the wheat yield could be increased through
technological and managerial means to global
potential yield of 5 Tons/Ha then the price support
need to be more than 83 OR/Ton of wheat.
Hemesiri Kotagama

22. Conclusion: Positive
 Considering food security as a public good, the cultivation of wheat in
Oman could be achieved, through governmental support.
 However, the extent of its achievement in terms of extent of land
cultivated and total domestic production of wheat, need to be
considered in relation to the trade-off of fiscal cost and political choice
of the degree of food security deemed as necessary to achieve.
 The governmental support in the form of a production subsidy need to
be also compared with other alternatives; such as the cultivation of
wheat in new land (provided resources such as water is available)
undertaken by a government organization or outsourced to private
companies, considering the fiscal cost and the transaction cost
required for the successful implementation of a subsidy program.
Hemesiri Kotagama

23. Conclusion: Normative
 Sustaining the domestic potential to cultivate
a staple food crop and produce safe
minimum amounts of it, needs to be
considered as producing a public good of
strategic national importance, which should
not be traded-off with other alternatives of
producing, sourcing and supplying food
through the market.
Hemesiri Kotagama