With the hunt underway to replace the late head of the Association of Editors, Melhem Karam, and drafting set to begin on a new media law, Executive sat down with Minister of Information Tarek Mitri to discuss press associations, legal loopholes and the future of Lebanon’s media industry.

• We’re seeing a lot of new media associations, both local and international, setting up shop in Lebanon at the moment. Who is supervising the legitimacy of these groups, and what are your thoughts on them?

I don’t know them all, but some come and visit me and those I’ve seen have reported rather fairly. So I have no particular reason to be suspicious of any of them, or to raise the question ‘who are these people?’ I make the bona fide assumption that they’re legitimate, and I haven’t had any unpleasant surprises — I disagree with some of the things I’ve heard, but mostly minor incidences.

• What are some of the things you disagree with?

I think what I tend to disagree with is the way outsiders, if I may call them this, perceive freedom of press in Lebanon. They come with a number of criteria and end up with an assessment that in relative terms the press is free, but it’s not as free as the Lebanese claim it is. I’m not in full agreement with this; I think the problem is that you need to make a distinction between the freedom of media organizations and the freedom of journalists.

Media organizations are free, they’re probably more free [here] than anywhere else in the world. There is a law that is rarely enforced, so that makes them even more free than the law we have allows, and our law is [already] pretty liberal.

Where there is a deficit of freedom is the area of relationships between individual journalists and publishers or owners of media organizations… a more appropriate key to understanding the media scene in Lebanon is to look at independence rather than freedom. I think media in general is not that independent because media organizations are dependent on those that finance them, and more importantly dependent on the political forces that they support or they defend. And then individual journalists are not that independent; either they conform to what they consider to be the policy of their media organizations and therefore are into self-censorship, or they’re subject to pressure.

I always try and focus the attention of people to this problem. And the other focus that’s needed — and I’m still referring to those visitors that we have — is that in many countries where you have authoritarian regimes when you speak about freedom of press you talk about relations with state, the state is the repressive entity so to speak. In Lebanon that’s not the case; it’s non-state actors that [are repressive].

• Such as?

Political movements, armed groups, whoever — I mean, the journalists that have been assassinated, they’ve been assassinated by non-state actors that we don’t know of, I’m not accusing anyone in particular, but it’s not the secret police of Lebanon who kills journalists as in Argentina under dictatorship.

So, some of these people that come from Western countries to investigate freedom of press say ‘but you say press is free but journalists are being killed!’ and I say I know, but they’re not killed by our secret police.

• Why has there not been a professional association created for TV and radio journalists?

That’s a good question. There are two layers to the problem. One is that many of those who are into audiovisual media are also journalists in the written press. But the other fundamental problem is that there is a vacuum in the current law with respect to organizing the media profession, starting with a definition: ‘Who is a journalist?’ is not a question satisfactorily answered by the current law. I sign press cards for members of the union and every time I do this, I wonder what am I signing? What is this card about? And then the important question — why is it that it takes some people 10 years to get this [membership card], some people don’t get it at all, and some people get it who don’t seem to qualify as journalists… I have no proof but I’m tempted to think there are people who are members of the association who are not journalists and there are journalists who are not members of the association.

• Let’s talk about the replacement of Melhem Karam at the Association of Editors — there seems to be quite a heated debate at the moment between editors as to who should replace him, and rumors that you’ve also been involved in the discussion. What are your thoughts on this issue?

The important thing is to state unequivocally that I’m not interfering in this process, it’s none of my business and I’m not going to give anybody a reason to claim that political authorities are putting pressure on this. But as a minister and a private citizen I receive journalists, from the two sides let’s say, and it’s my duty to listen to them and from listening I realize there is a problem [at the Association of Editors]. One of them is what we’ve just said, that there are people who are members who should not be and people who are entitled to be members who are not.

The second, more specific issue is that according to the bylaws of the association, the members of the board should not be publishers or responsible editors. I’ve been told that six out of nine members of the board are either owners or publishers of magazines — non-political ones though — or are responsible editors, so they should not be where they are. My wish both as a minister and as a private citizen is to have an inclusive journalists association — that’s not the case now — in which all journalists who are entitled to be members of the association are members. And at the same time, I’m not pleased with the way the profession is organized now, which is why I’m trying to make a new law.

• Tell us about the new law — what does it entail, what’s new about it, and how will it improve the situation?

We have two problems with the existing laws. First, there is no code of media, there are bits and pieces of legislation; there are laws that contradict each other and then there are those that are old and need to be updated in view of the changes that we’ve seen. There are areas in media that are in a ‘grey zone.’ Look at the electronic media, there’s no law that regulates electronic media, and cable services are also in a sort of grey zone.

Take television stations that rebroadcast from Lebanon using a satellite; they don’t have a license here, they’re registered in the Cayman Islands or Panama, or who knows where. [If I receive a complaint] I have no way of identifying them, and even if I do find them I have no juridical instrument to hold them accountable.

You need a law that covers these uncovered areas. I have to admit that legislating everywhere in the world takes time, but in Lebanon it takes more time than elsewhere; not just because of the political situation and the slowness of the decision making processes, but also because the technical work of drafting a law should be accompanied by a public debate. So, I’m listening and talking to people and hoping to start the process of drafting in the near future, maybe in early autumn.

There is a resistance in parliament to the drafting of a code for media — to have all the laws relating to media in one place — this is something that quite a few legislators don’t like.

• Why not?

I’ve not been able to really make sense of their arguments. They say it’s the ideal way of legislating, but this is not the way we do it in Lebanon. They’re happier drafting a law on media crimes, drafting a law on censorship, drafting a third law on something else, rather than saying look, media law is so interconnected and even the same people that write in print media work in broadcast media. There are so many problems in common, such as libel law and defamation.

• So in the draft law, you’ll be harmonizing all the different areas?

Harmonizing, updating and then adding what needs to be added. It will cover areas that still need to be covered — I’ve given you two examples, electronic media and the rebroadcasting channels. And when you update, it also means taking into consideration technical developments that we’ve had.

Ideas and information circulate more freely today, making censorship absurd. But I’m not sure everyone knows or accepts that it’s absurd, so it needs to be stated in the law that there won’t be any censorship, neither before or after [publication], but anyone who chooses to do so can take any journalist to court, or any media organization. So it’s the judiciary that looks at crimes, not the political authorities, nor the security services. So that’s one major change that needs to be confirmed in a new law.

Another example of some importance that I’ve not made up my mind on yet is that of licensing. If you want to start a daily political newspaper in Lebanon, you can’t. By law, the number of daily political newspapers is limited to 22, so we don’t give licenses any more. If you want to start a daily you have to buy an existing one, and it costs some half a million dollars to buy a license.

The Ministry of Information has given 1,900 licenses for non-political media, a huge number. These are very easy to give, but where do you draw a line between what is political and non-political? Suppose I have a license for an economic publication and I write an article about the economic vision of the government, is that political? This distinction is absurd, but if abolished, which is my intention, then those who have licenses to sell will protest, and they’re very influential.

• Lebanon has traditionally been considered to have the region’s leading media industry. What is the ministry doing to make sure Lebanon keeps this pioneering position and develop it further?

A new media law is a necessary though not sufficient condition for promoting the regional role that the Lebanese media has always had. But we’re losing that role, and we’re losing it for structural reasons, I think. Even in countries that have more repressive regimes than we have in Lebanon, because of new technology you can enjoy greater freedom [there] now.

In the Gulf countries, the need to read the Lebanese press or listen to the Lebanese media to know what is happening is not what it used to be. They now have their own television [stations], good publications and good access to information.

They are also investing more — there is probably an economic dimension to this. Think of Al Jazeera in Qatar, and the amount of public money that has been invested in it — no one in Lebanon or elsewhere for that matter can compete with this. Thirty years ago if a Qatari wanted to start Al Jazeera, he would have done it in Lebanon. But they were able to start it in Qatar, and then probably get some of the Lebanese to work for them. It’s easier now to disassociate between Lebanon and the Lebanese — you can use the Lebanese wherever you are without having to come to Lebanon.

It’s a question worth exploring more thoroughly, and we need to face the fact that we can no longer work on the assumption that most Lebanese made in the past — that this country is the hospital of the region, the university of the region, the bank of the region and the media organization of the region. It’s no longer the case, for all the sectors mentioned above, not only the media.

Yemen’s problems are myriad: the World Food Program estimates that one in three Yemenis cannot afford sufficient food, a level of malnourishment unmatched even in sub-Saharan Africa. Unemployment cripples 40 percent of the workforce. The currency of this import-dependant economy tumbled to record lows against the United States dollar last month and violent rebellions against the central government simmer in both the tribal north and secessionist south.

Yet for the international community, the only concern that has received significant attention is that Yemen could become “another Afghanistan.” While a 2006 conference of donor countries in London produced $4.7 billion in pledges for Yemeni development, barely a fraction of this was ever distributed.

World attention only turned to Yemen with urgency after the failed Christmas Day bombing of a Detroit-bound airliner, in which a Nigerian allegedly affiliated with the Yemen-based Al Qaeda in the Arabian Peninsula (AQAP) tried to blow up a Northwest Airlines flight arriving from Amsterdam. Shortly thereafter the US devoted $150 million in military aid to try and prevent Yemen from becoming an Al Qaeda-sheltering failed state.

More recent international assistance came when the International Monetary Fund loaned $369 million for currency stabilization following the rial’s recent slide.

Yemen’s neighbors have been much more heavily invested in maintaining the country’s stability and security; in 2009, Yemen was the United Arab Emirates’ largest aid recipient, receiving more than $760 million, and last month Saudi Arabia pledged $1 billion in investments. Fears that the teetering Yemeni state will collapse completely seem to have spurred an international drive to try and pay its way out of instability.

The Yemeni government’s capacity to maintain control independent of international assistance has dwindled in proportion to its oil reserves: the World Bank estimates oil receipts constitute 75 percent of government income and 90 percent of exports, but production slowed considerably in 2007 and the World Bank predicts resource exhaustion by 2017.

The tenuous authority exerted by the central government over the network of tribal loyalties across the country depends on its ability to offer incentives to regional power brokers, yet an employee of a US-sponsored non-governmental organization says there is simply “no more juice in the machine” to fund such endeavors. Thus, as oil revenues shrink, Yemen depends ever more heavily on external aid for the state’s basic functions.

This creates the unhealthy equation in which the government actually benefits in proportion to international anxiety vis à vis Yemen’s stability. Although possible solutions exist for many of Yemen’s woes, the authorities have done little  to implement them in favor of economic and political brinksmanship.

For one, the American government has criticized Yemen for not doing enough to combat AQAP. Al Qaeda expert Saeed al-Jemhi says AQAP has become a political tool for Sana’a: “The government says the opposition party supports Al Qaeda, and vice versa… Al Qaeda becomes an insult, a tool to win elections. But the winner is Al Qaeda itself.”

The presence of AQAP in Yemen may bolster the government by eliciting military aid, he argues, but such dubious benefits “include a huge risk. It is like giving away your organs in order to buy a palace.”

AQAP’s presence in Yemen, compounded by economic hardship and military strikes that publicly appear to kill civilians as often as terrorists, increase the potential for revolt.

“The economic situation is threatening the government because it leads to joblessness and corruption. This gives Al Qaeda the chance to say the government is unworthy to lead the country, and that [a regime established by] Al Qaeda should be the replacement, because they will bring justice,” Al-Jemhi explains. “All of [Yemen’s] problems benefit Al Qaeda.”

“‘We’re talking about ‘to be or not to be.’ You can’t exchange water for jobs”

Running dry

Besides Yemen’s oil reserves drying up, Sana’a is expected to be the world’s first capital city to run out of water, likely within the next five to 15 years. The Ta’iz basin, south of Sana’a, has already collapsed, while 19 of the country’s 21 aquifers receive no replenishing groundwater. Citizens all over the Yemen are forced to rely on increasingly expensive water trucks as centralized water and wells run dry.

Yet agriculture uses water for free, pumped by government-subsidized fuel. Staple and cash crops, such as wheat, coffee and cotton, have been steadily replaced by the more profitable qat, a leaf chewed for its narcotic effect. Data from the Ministry of Agriculture shows that qat production increased 40 percent from 2004 to 2008, from some 118,000 tons to 167,000 tons, with thousands of wells dug for the specific purpose of irrigating qat fields.

Abdullah al-Thary, deputy chairman of the National Water Reserves Authority, explains that for agriculture to represent a viable percentage of GDP, water resources must exceed the water poverty level of 1,000 cubic meters per capita per year; in Yemen, water resources come to only 130 cubic meters per capita.

“We now have a satellite to detect where someone drills illegally [for water]… But people do not understand that it’s not allowed. They have this idea of ‘Yemen the fertile’, they talk about how Yemen should become agriculturally self-sufficient,” Thary sighs and points out that agriculture — about 60 percent of it qat — currently consumes 90 percent of annual water usage.

Thary suggests importing agricultural products in order to preserve Yemen’s water for human consumption. Importing qat from Ethiopia, for example, would also ameliorate the health problems caused by pesticide-laden Yemeni qat and conserve water for drinking. However, reducing qat production would anger the wealthy landowners who cultivate it and weaken their loyalty to the regime.

Cutting fuel subsidies — one of the primary conditions of the recent IMF loan — would reduce the $700 million spent annually, but would further antagonize landowners. When qat reductions are discussed, those opposed point out that many Yemenis are employed in its cultivation, and reducing qat production would harm the country’s economy.

“We’re talking about ‘to be or not to be,’” says Thary. “You can’t exchange water for jobs.” In his opinion, although Yemen will always have to monitor its water supply, the needs of citizens could be met if they were given priority over other, more parochial considerations.

US military aid to Yemen ($millions)

No grease for the wheels

Oil, on the other hand, will run out regardless of improved management and alternative sources of income are underdeveloped: last year Yemen LNG began exporting liquefied natural gas but production capacity is limited to one facility. Energy investment in Yemen remains minimal, given the absence of security and rule of law. Low prices per barrel of oil on the international market coupled with overspending caused Yemen’s fiscal deficit to reach 10 percent of GDP in 2009.

Although efforts to attract investors include the establishment of the General Investment Authority in 1992, investment has a history of being intentionally de-prioritized. Examples of governmental restrictions, such as the aborted attempts by Hyundai and Toyota to establish factories in Yemen in 1990, demonstrate reluctance to welcome investors.

The implementation of policies to encourage investment would help enhance Yemen’s stability by creating employment and spreading wealth; yet greater stability would weaken the impression that the Yemeni government is the sole defence against complete chaos. By allowing, and even fostering, insecurity in Yemen, the regime secures its own necessity, both domestically and in the eyes of the international community.

Economic brinksmanship, however, cannot last forever. The recent depreciation of the rial illustrated the gravity of the economic condition. A senior official at the finance ministry said that 60 percent of the government’s budget consists of two items: fuel subsidies and government salaries.

“Expenditure exceeds revenue, a gap that we used to cover with treasury bills. But we have reached saturation of the market, there isn’t enough money in the economy to buy treasury bills,” he said. “Now we have a problem because we’ve been borrowing from the central bank… and issuing new currency.”

This influx of rials — coupled with dire and disastrous developments on various other fronts — has caused the currency to shed value this year. At currency exchange offices in Sana’a $1 at the beginning of January bought about 200 rials; when the rial slipped again in early August that same $1 bought 280 rials, before the announcement of the IMF loan calmed panic and allowed it to regain some strength.

The Central Bank has also been hemorrhaging foreign currency reserves trying to keep the rial afloat. In statements to the media, Central Bank Governor Mohammad Awad bin Hammam has said the bank has expended nearly $1 billion so far in 2010 fighting currency deflation, however, the senior official at the Ministry of Finance told Executive that propping up the rial has actually cost closer to $3 billion this year, and that the Central Bank’s coffers now hold no more than $5.5 billion in reserves.

“I’m not very optimistic about the near future if the rial starts sliding down again,” the finance ministry official said. “The Houthi [rebel] problem, the Southern thing, Al Qaeda, water… the economic situation is more important than all of these. Because when the rial starts dropping, that is felt by 23 million people.” Especially given that Yemen, already one of the poorest countries in the world, imports nearly everything it consumes and so a devaluing currency puts the price of things like food and other life staples further beyond the reach of ever-larger portions of the population.

Should the rial fall again, “more instability could happen, and then things could get out of control”

Refusing to reform

In conjunction with the IMF’s assistance program, the Yemeni government has pledged to reduce fuel subsidies, implement a general sales tax and control nonessential expenditures. Yet the finance ministry official remains skeptical: “I don’t think we’ll be capable [of implementing reforms]. We are trying, but I think that the fiscal situation is quite serious and we lack the capacity to implement many of these components.”

In early 2010 the government announced a 10 point plan to address key issues paralyzing development, beginning with the removal of 100 ineffective government officials. However, according to the Ministry of Finance source, the plan has failed.

“Maybe we can’t handle 10 points, maybe we can only a handle a one point plan… Say we promise to create 2,000 jobs next year by taking advantage of the Aden Free Zone,” he said. “We need big signs of hope, we need the leadership to make a promise and deliver.” Yet the government has consistently demonstrated that the improvement of economic and security conditions do not rank as top priorities, and donors are losing patience. Concern is mounting over Yemen’s ability to remain on the brink; if the government fails to keep promises, it may lose its balance.

The finance ministry official warned that, should the rial fall again, “more instability could happen, and then things could get out of control. Nothing can stop this eventual slide [of the rial’s value], and even if we could, it wouldn’t last too long… If people start panicking, that’s it; we can’t stop it.”

As the world’s largest wheat importer, Egypt has been hit hard by Russian’s export ban on grain [see A cruel, hot summer]. The North African nation relies heavily on Russia for its wheat imports, as Egyptians consumed roughly 9 million tons more wheat than they produced last year.

The ban, which is to run until the end of December, canceled 540,000-tons in Russian deliveries between August 1 and September 10. Egypt then rushed to secure contracts with France and Canada totaling some 600,000 tons, at an average price of $280 per ton, compared to the $183 per ton it paid Russia in July.

Egyptian Trade Minister Rachid Mohamed Rachid said the ban on Russian wheat imports would cost the state up to $877 million. He also said that Egypt has wheat stockpiles which will last up to five months, even factoring in the increased bread consumption typically seen during Ramadan. Still, a long-term international price hike would eventually trickle down to consumers and affect the prices of other staples, such as corn and rice.

“[Higher wheat prices] would greatly impact the urban poor, so [governments] will be very careful,” said Abdolreza Abbassian, senior grain economist at the United Nation’s Food and Agriculture Organization.

The memory of the 2007-2008 global food crisis is still fresh in Egypt, when bread prices doubled after the price of wheat tripled on the global market, leading to social unrest and violence in some areas. Up to a quarter of Egypt’s 80 million people survive on less than $1 per day, and any upward motion in prices is hard-felt.

The Egyptian government subsidizes some basic food items, including bread, to the tune of 8.5 percent of GDP, but aims to scale this spending back in favor of health, education and other social services. However, in August, when an impending wheat crisis became apparent, Solidarity Minister Ali Musailhi announced: “We have no intention of raising the prices of subsidized commodities.”

Though not as dire as the crisis of two years ago, the current wheat shortage should hammer home the need for Egypt to increase its food security measures. On August 15, Russian press reported Egyptian Agricultural Minister Amin Abaza as saying that “Egypt will follow a strategy of reducing bread consumption and increasing [grain] production.” He added that Egypt aims to meet 70 to 75 percent of its consumption needs by domestic production.

In recent years, the country has focused on growing high-value crops such as figs, green beans, spring onions and melons for European markets, while importing the commodities it lacks a competitive advantage in producing. Russia, for example, can produce wheat far more cheaply due to Egypt’s water constraints. But this model has proved unviable, as it leaves the population hurting for staple foods in times of global shortages.

For now, Egypt is said to be in talks with the United States, Canada and France to diversify its import sources away from Russia, Ukraine and Kazakhstan for the remainder of the year. Additionally, a free-trade agreement signed in August with the South American trade bloc Mercosur should enable Egypt to import from Argentina, another major wheat producer.

In the long term however, increasing overall agricultural production, especially of grains, is needed for Egypt to become less reliant on food imports and more resilient to price shocks. This is easier said than done in a desert nation, but a large-scale land reclamation program is in the works to create more arable land. With explosive population growth in the developing world, global food supply is only going to contract in the coming years, and Egypt would be well-served to speed up investment in its agricultural future.

Like the wise farmer who knows disaster can and does strike, no matter how carefully he cultivates his harvest, policy makers at the Kremlin must be shaking their heads at how badly their well-laid plans have gone arwy.

Moscow had sown all the seeds a country should need to achieve a greater share of the global grain export market in recent years, having overhauled its agricultural industry and boosted sector investment. The result had been a near doubling of wheat exports between 2005 and 2009, from 10 million to 18 million tons, with Russia’s biggest export markets including Egypt, Turkey, Syria and Iran.

This amounted to Russia last year cornering 14 percent of global market share — a number that is precipitously set to plummet in 2010 from the disastrous interventions of Mother Nature and rising temperatures.

The wildfires raging across Russia this summer have destroyed as much as 25 percent of Russia’s wheat crop, with widespread drought diminishing yields of surviving fields. The United States Department of Agriculture (USDA) issued a revised forecast predicting that by year’s end the crop will shrink to 45 million tons from 2009’s 60 million.

In response, Prime Minister Vladimir Putin at the beginning of last month imposed a moratorium on grain exports for the rest of the year to protect domestic supplies and stave off inflation in the price of local foodstuffs. Russians consumed 42 million tons of wheat in 2009 — slightly less than the total expected crop this year, helping to explain the export ban.

Yet the move surprised many international observers, who expected Russian leaders to continue to complete export sales by tapping into government inventories, as moves to restrict trade can damage a country’s reputation as a reliable exporter. 

Futures contracts for wheat were dipping to nine-month lows in early June, trading at $4.30 per bushel — some $158 per ton — on the Chicago Board of Trade (CBOT), effectively the world benchmark for wheat prices. Prices rose quickly as the Russian fires spread and reports emerged that other major wheat producing countries — such as Canada and the Ukraine — were also facing crops losses. Wheat spiked following Putin’s announcement, reaching near $285 on the CBOT [See graph page 24].

Abdolreza Abbassian, senior grains economist at the United Nation’s Food and Agriculture Organization, told international press on August 6 that: “a situation which was not serious has now become serious.”

A New York-based commodity, who was not authorized to speak to the media, told Executive that wheat “futures have been very volatile recently,” adding, “they made new highs right after the Russian export ban… but have come off [those highs].”

As Executive went to print at the end of August, the CBOT’s price-per-ton was about $243.

Production vs consumption of wheat (millions of tons)

Imports vs exports of wheat (millions of tons)

Last time around

In 2007, an unusually volatile spate of natural disasters beginning in the summer caused widespread crop damage across the globe. This, coupled with rapidly rising fuel prices, spurred sharp inflation in foodstuffs globally. The price of wheat tripled on world markets, leading to social unrest and violence in many developing countries,  including Egypt, where rioters clashed with police when bread prices doubled.

This international food crisis revealed the interconnectivity of the modern world’s food and commodities markets, and exposed how dependent many countries are on these markets for their political and social stability.  

Russia’s sudden wheat export ban will force the Egyptian government to fork out $877 million extra to secure new supplies

Russian wheat in the Middle East

Egypt, as the world’s largest importer of wheat, has been particularly affected by Moscow’s export ban. The country’s total wheat consumption was 17 million tons in 2009, vastly outstripping domestic wheat production of 8 million — meaning Cairo must import the difference. The Egyptian government has said Russia’s sudden halt to wheat exports will force it to fork out $877 million to secure new supplies [For more see story on page 26].

Neighboring Jordan has taken steps to shore up its domestic stores of wheat last month, floating a tender for 100,000 tons, which was filled by Germany at a cost of $328 per ton on August 13. However, the increased price of wheat is not expected to cause a corresponding price uptick in Jordan’s bread market because of government flour subsidies, which cost Amman some $169 million in 2009.

“Despite the rise in international wheat prices, which will increase the cost of the government bread subsidy, we will continue supporting bread with the same mechanism,” said Amer Hadidi, the Jordanian Minister of Industry and Trade, to the Jordan Times. 

Syria and Lebanon will also have to import significant amounts of wheat this year. The effects of the Russian wildfires have combined with a ‘wheat rust’ fungicide epidemic, which has affected Syria particularly badly. According to the USDA, “the concentration of rust-affected crops is the highest in north-east Syria and southern and south-east Turkey, where the governments reported outbreaks in the prime wheat growing regions.” 

Syria imported 2 million tons of wheat this past year, which is its third consecutive year as a net importer after years of drought.

Wheat Futures US cents/bushel

GCC prepared and spared

Gulf States appear to be better equipped to manage the price spikes and supply shortages, with Saudi Arabia intending to wait another five months before issuing its next wheat tender. The kingdom is betting that wheat prices will drop in the interim period and that it won’t have to pay the current, inflated price. 

Speaking to Reuters, Waleed el-Khereiji, director general of the Saudi Grain Silos and Flour Mills Organization said: “I don’t foresee a crisis, or a crisis similar to what happened in 2007 and the prices now are still below their level in 2007.” 

Saudi stores of wheat are enough to meet domestic needs until April 2011; not counting another 200,000 tons of wheat that will be delivered in September. The kingdom imported just under 2 million tons of wheat in 2009, none of which originated in Russia.

The United Arab Emirates also appears to be minimally affected by the inferno that burned across the Russian heartland.

According to a report issued by the Department of Analysis and Business Information, 89 percent of the UAE’s wheat imports originate in Canada, Germany, Australia and Argentina. Russia by contrast, provides only 2 percent of the total.

“I don’t foresee a crisis, or a crisis similar to what happened in 2007 and the prices now are still below their level in 2007” 

The next harvest

Fortunately, there is some optimism that a good wheat harvest in other parts of the world will make up for the damage caused by the loss of Russia’s crop.

The USDA has reported that North Africa produced 20.2 million tons of wheat in the  2009-2010 season, up from 14.4 million tons the previous year. Factoring in Russia’s harvest failure, the USDA forecast for the 2010-2011 global wheat supply was only slightly adjusted from 676 million tons to 651 million tons, as other countries are stepping in to close the supply gap left by the Russians, led by the United States and Australia.

The prospect of Russia being forced to import grain from other countries over the next year, however, caused price volatility toward the end of August, with Dow Jones Newswires reporting Moscow may import up to four million tons of various grains through the 2011 harvest season.

Speculators are also adding momentum to the price swings and were a major factor in the steep rise in prices seen in the past month, according to Makram Makarem, senior financial consultant at FFA Private Bank in Lebanon

“This up-move [of prices] is led by investors buying back their short positions after Russia banned grain exports, as well as speculators and hedge fund managers wanting to ride the wave,” said Makarem to Executive.

He pointed out that people should keep things in perspective, however, when making comparisons to price hikes that caused the 2007-2008 food crisis.

“We need to note that wheat reached a high of $13.34 per bushel in February 2008 after a much steeper increase in price,” remarked Makarem, while the highest prices peaked last month was $7.75 per bushel.

Mohamad Ajami’s 65 beehives overlook the pastoral idyll of the Litani River Valley, with Jebel El Sheikh looming in the distance and Beaufort Castle laying to the right. Last year Ajami’s business was flourishing; he had a bumper honey harvest, generating 650 kilos. He was optimistic that this year would be even better, purchasing extra hives and equipment in anticipation of producing one ton of honey. At $25 for a 900-gram jar, Ajami should have netted more than $25,000.

But three months ago he started realizing all was not well. The winds had been continuously blowing from the east, dry, desert winds instead of the westerly winds that provide the right moisture and dew for flora to thrive, and for the bees to pollinate and produce nectar. Ajami also noticed that the bees were not breeding, meaning he could not artificially swarm them and build up the number of colonies to allow him to have more hives.

“That was when I realized something wasn’t right,” he said. “And while the summer flowers did come, there were no forager bees in the hives. Something did not encourage them to generate honey, something — beyond my understanding — that is beyond normal events.”

When it came to harvesting, Ajami’s suspicions turned out to be even more warranted than he had thought: “I only generated 50 kilos. It was not a harvest, it is solely for family consumption this year,” he said.

Ajami’s experience is not an exception; beekeepers throughout Lebanon have had a bad season, with rough estimates — in lieu of official statistics — of a 50 percent decline in production from an annual average of 200 tons. For Wadih Yazbek, a beekeeper and equipment distributor in Beirut, hardware sales are down 60 to 70 percent, indicative of the overall decline in the honey sector. “Beekeepers aren’t needing the extra hives and secondly, with not a lot of honey, keepers are not keen on purchasing new extractors or filters,” said Yazbek.

It is not just honey production that has been affected by the unusual weather patterns Lebanon has witnessed over the past year. Abnormal precipitation in the winter and spring — on average the same quantity but occurring over half the number of days — and a heat wave in prime harvesting time has also hit other agricultural sectors.

“We’ve had a lot of problems this year, particularly with grapes, olives, vegetables, apples and potatoes”

Leaner times

The United States Department of Agriculture’s (USDA) Foreign Agriculture Service estimates Lebanon will produce 100,000 tons of wheat this year, a 23 percent drop from the 130,000 tons grown in 2009. Green leafed vegetables have been frazzled by the sun, and fruits are ripening earlier than usual. “We’ve had a lot of problems this year, particularly with grapes, olives, vegetables, apples and potatoes,” said Elia Choueiri, head of the department of plant protection at the Agriculture Ministry’s Lebanese Agricultural Research Institute (LARI) at the Tal Amara Station in the Bekaa valley.

In some areas the olive harvest is down between 30 and 50 percent, particularly in areas where olives trees were not irrigated or had supplemental irrigation. At two major vineyards in the Bekaa some 70 percent of the grapes were lost, while vineyards at higher elevations have also been affected, particularly white grapes.

“The heat wave had an impact on the physiological status of the vine: a rapid increase of alcohol content because of the increased sugar content in grapes over a very short period,” said Carlos Adem, president of the Syndicate of Wines and Spirits. “In general, the year 2010 will not be one of the great vintages, like 2003 for example.”

In the north, trees have brought forth fruit but not enough leaves, due to it not getting cold enough over the winter. Japanese plums are down 40 percent and forest fires have also wrought damage.

“Each plant has a life cycle, but they are flowering before time, so the life-cycle is shorter. It’s because of climatic change,” said Roula Faris, Middle East representative of the Research Institute of Organic Agriculture. “Leafed vegetables and herbs have flowered early due to the temperature, and they are unmarketable.”

While the Bekaa has had temperatures this summer of up to 45 degrees, in the country’s mountainous regions — where a significant amount of produce is grown, whether fruit trees or in greenhouses — temperatures have soared to unprecedented levels.

“For the first time in Lebanon, even the mountains are hotter than the coast,” revealed Faris. On top of all this, phytoplasma diseases have affected stone fruits such as peaches and almonds, killing more than 100,000 trees within three years. LARI’s Choueiri said: “We have tested over 100 insects to find the pathogen, but don’t know what kind of insect is spreading the disease… Also, due to the hot weather, the activity of these insects is higher, and we’ve seen large infections of peach trees in the south and the Bekaa. The diffusion is getting higher year after year.”

So far this year, LARI has recorded a further 40,000 trees in the south affected by the phytoplasma which, curiously, on a regional basis is only affecting Lebanon and Iran.

Give them bread

The extent of losses in the agricultural sector will not be fully known until harvesting is finished and all the data is collated. While early indications imply it has been a bad year, it has not been a total disaster, with some regions affected far more than others.

Lebanon has not experienced the drought that neighboring Syria has gone through over the past five years, which has hit agricultural output hard and affected the livelihoods of more than one million people. But the reduced yields have coincided with poor crops globally, particularly in fire-ravaged Russia, which has driven up global wheat prices, and the disastrous flooding in Pakistan, which has reduced rice cultivation [see story on page 32].

As global food prices are on an upward curve, Lebanon is sure to be affected. The country imports some 70 percent of the food it consumes, according to the United Nations’ Food and Agricultural Organization (FAO). Indeed, with wheat production in Lebanon down 42 percent, the government banned exports at the beginning of August, preventing a ship loaded with 4,000 tons of grain at the Beirut port from setting sail.

Lebanon imports some 400,000 tons of wheat per year, and the government went to the international markets to purchase an immediate 50,000 tons last month, either for strategic reserves or to regulate domestic wheat and flour prices.

“With wheat prices at today’s level, around $320 for a ton, flour should be around $450 per ton or more but the ceiling for bread prices was set [by the government] at a maximum of $320 for a ton of bread,” said Arslan Sinno of Dora Flour Mills and president of the Syndicate of Agrifood Traders. “Someone must pay the difference, certainly not the millers, nor the bakers, so either the consumer by liberalizing the price of bread — which may increase the pack price from LL 1500 ($1) to maybe LL1800 ($1.20) or LL2000 ($1.33) — or the state by subsidizing the wheat by about $200 per ton.”

If the government subsidizes wheat it will come at a heavy cost to the state’s coffers. The alternative is higher costs for the Lebanese populace and potential rioting if bread prices do spike, as happened in Beirut in January 2008, when rumors spread that prices were to rise.

The new agricultural plan

The agricultural sector as a whole in Lebanon is underinvested, which has only compounded the losses caused by the topsy-turvy weather this year. According to the Lebanese Farmers Syndicate, agriculture generated some $1.5 billion in gross revenues in 2009, but could generate $3.5 billion if there was sufficient infrastructure investment.

According to research at the American University of Beirut (AUB),  some 50 percent of rural families rely on agro-food production. AUB also said that around 20 to 25 percent of the country’s workforce is employed in agriculture, although the Ministry of Agriculture puts this figure at nine percent. Either way, climatic change clearly poses a threat to agriculture’s potential and therefore to the income generation of a good swathe of the populace.

This importance finally seems to be coming to the forefront in politics, with Agriculture Minister Hussein Hajj Hassan releasing a four-year plan to address the sector’s core problems.

“As of this year, the agriculture ministry has started to be more active,” said LARI’s Choueiri, adding that LARI has taken on a further 70 staff to improve research. “If you compared 10 years ago to today, our work has improved incredibly.”

Implementing reforms requires data, which is currently sorely lacking; the last census on the agricultural sector was in 1988. FAO is carrying out a new census for the whole country, slated for release in October. “We’ve a horizontal project for synergy between all the ministries for efficiently developing the agricultural sector to help realize its potential,” said Ali Moumen, FAO’s representative in Lebanon.

LARI and the Ministry of Agriculture have implemented a strategy to boost and retain production levels. “We are working on new varieties that support dry climatic conditions, such as introducing new apple varieties at an altitude of 700 meters instead of the old varieties of the Bekaa,” said Choueiri.

Farmers are being given codes for identification purposes in the event of disease, nurseries are being monitored, workshops are being held on growing techniques and pesticide use, and a forecast service by LARI kicked off this year that sends text messages to farmers about disease and climatic change.

Organic agriculture, although very much in its nascence, is also improving, with the number of hectares rising from 250 to 2,465, and organic farmers increasing from 17 to 331 since 2000. “Organic agriculture can reduce global warming as there is lower water usage, it increases biodiversity and improves soil fertility,” said Faris.

Improvements in the sector will certainly help offset climatic change, but for the immediate year ahead, much will depend on future temperatures and whether precipitation is better spread and rainwater retained.

“If this year there is again hot weather over the winter period, it will be a big problem for apples, pears and cherries,” said Choueiri.

While the proactive approach of the ministry may offer room for cautious optimism — though very much weather dependent — many agriculturalists will be feeling the sting this winter.

For beekeeper Mohamad Ajami, the income he planned to live off has disappeared.

“I am really concerned about saving the bees for a harvest next year. Adding insult to injury, my whole land was burned as it was so dry and someone must have flicked a lit cigarette,” he said. “My focus was this line of work, but I’ll have to do something else to survive the rest of the year.”