Saudi Government approves farming fund

FARM FUND: Billions to be made available for agricultural devlopment. (Getty Images)

A 20 billion riyals ($5.33 billion) agricultural development fund to support activity in Saudi Arabia was agreed by the cabinet on Monday.

The fund aims to "support and sustain agricultural development by offering soft loans and the necessary credit facilities", the official SPA news agency said, quoting a cabinet statement.

SPA said the new fund will "adhere to the preservation of water and rationalise its agricultural and the preservation of the environment". It did not elaborate.

Saudi Arabia announced in 2008 that it would start importing wheat supplies and scale back domestic production to save precious water reserves.

The country will reduce purchases of wheat from local farmers by 12.5 percent per year from 2008, abandoning a 30-year programme to grow wheat which achieved self-sufficiency but depleted the desert kingdom's scarce water supplies.

SPA said the law governing the fund replaces the one governing the Saudi Arabian Agricultural Bank. It was not immediately clear whether the allocations were fully new.

The state-owned Saudi Arabian Agricultural Bank was set up some 45 years ago to grant interest-free loans to farmers. It granted loans totalling 968 million riyals in 2006, according to its website. (Reuters)

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