Saudi investors eye leasing Tanzanian farmland

RIYADH, April 15 (Reuters) - Saudi investors have asked Tanzania if they can lease 500,000 hectares of farmland mainly for rice and wheat farming as part of a plan to secure food supplies for the desert kingdom, officials said.

Senior officials from the Saudi capital’s chamber of commerce made the request on the sidelines of a meeting with visiting Tanzanian President Jakaya Kikwete.

“Tanzania is ready to do business with you ... There is 100 million acres (40.5 million hectares) of good arable land,” Kikwete told Saudi businessmen.

Samir Ali Kabbani, head of the chamber’s agriculture committee, said: “We had very positive feedback.”

“He (Kikwete) told us that Tanzanian authorities can lease us plots each of which covers up to 10,000 hectares for a 99-year period,” he told Reuters after the meeting.

The Saudi government has joined private operators to invest in farm projects abroad after a long and costly food sufficiency plan threatened to deplete the desert kingdom’s water supplies.

Saudi businessmen and officials will visit Tanzania in the next few weeks.

“They can lease the land from the government,” January Makamba, an aide to President Kikwete, told Reuters.

“But we have to make sure we don’t end up in a situation similar to that of Nigeria: Huge oil reserves but long queues in front of petrol stations,” Makamba said.

Saudi officials are particularly interested in Tanzania because of its geographic proximity, political stability and the availability of water resources and farmland.

Several Saudi firms have already started investing in agricultural projects from Indonesia to Ethiopia.

Indonesia said in August that Saudi BinLadin Group would invest $4.3 billion on 500,000 hectares for rice farming.

Saudi Arabia’s annual wheat needs are estimated at about 2.5 million tonnes and it imported a little over 1 million tonnes of rice in 2008, according to the U.S. Department of Agriculture. (Double click on [nLV956284] for related Reuters stories) (Editing by Sue Thomas)