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Net profits

Interview - February 17, 2012
United World talks to Dr. Fuad bin Jafar bin Al Sajwani, Minister for Agriculture and Fisheries, about the future of the fishing business in Oman

You were appointed Minister of Agriculture and Fisheries in March 2011. Please give us a brief overview of your academic and professional background.

I spent a good part of my life studying abroad in different countries including Iraq, Kuwait, the United States and finally the UK. I came back to serve the country in different organizations, such as the Development Council and the Central Bank of Oman where I worked for more than 22 years. I then stood for election and joined the Parliament (Shura Council). In March 2011, I became a cabinet member holding the post of the Minister of Agriculture & Fisheries.
The experience of living in different environments gave me a blend of cultures and expanded my horizons and awareness of the needs others. This enabled me to connect with people on a personal level with greater ease. This is essential in today’s world where the divisions in society are widening and we need to have more dialogue and bring ourselves closer. 

2011 was a very dramatic year for the global economy. How was 2011 for Oman?

The global economy continued to witness a dramatic year. The economies of many advanced countries did not recover in 2011. The confidence of consumers was weak, the growth rates of the GDPs were merely meeting their targets and unemployment remained high causing challenges to the stabilities of many governments. In addition, the balance sheets of sovereign states remained frail and the still impaired real estate markets coupled with deleveraging continued to pose real concerns. The debt crises in the Euro Zone did not resolve. This impacted on global uncertainty in regard to growth momentum.
Despite the risks associated with demand from major and emerging economies particularly for oil, the Omani economy witnessed significant growth in GDP driven primarily by increase in oil prices. The new Five Year Development Plan was set to come into effect with more government spending in support of growth. The efforts of the Government to create job opportunities were successful as more than 50,000 jobs were created. Inflation remained reasonable, oil production continued to increase, the fiscal balance of the country improved due to increase in oil prices. 

 In order to prevent overfishing and ensure the environmental sustainability of fisheries, the government has banned trawlers and imposed fishing restrictions. Today, 90% of fish production in Oman comes from traditional fishing methods.  How do you maintain the balance between preserving the environment and keeping the industry competitive?

Oman has centuries of maritime tradition. The Sultanate is uniquely positioned to take advantage of opportunities of the huge stock of untapped fish. The country is situated on the southeastern Arabian Peninsula along 3,165 kilometers of pristine and unpolluted coastline. 

As we are endeavoring to transfer the fishing sector to a modern one, this should be carried out in a more sustainable manner and in harmony with the environment. Therefore while we have put restrictions on trawlers, we aim at partnering with those who care more for the country’s interests. Licenses for other commercial vessels are still in full swing though with clear guidelines. We are also encouraging and supporting traditional fishermen to adapt alternative ways of fishing. We also look for strategic partners/ companies that are more socially responsible and have a more sustainable approach.

Oman produces over 160,000 tons of fish per annum. Nevertheless, over 50% of the production is exported, which creates occasional shortages in the domestic market. Could you comment on your export restrictions and the incentives you are giving to the companies and fishermen to sell their catch locally? 

Oman produced almost 163,000 tons of fish last year. This quantity is more than double the local market requirements. Therefore we have no real shortages of fish except for few types, and that is due to seasonality.

Omani fish has an excellent reputation and the demand is usually high particularly from neighboring countries. The country is a net exporter of fish selling roughly half of its annual catch abroad. Fish export destinations include the UAE and other GCC countries, Asia, EU and the United States.

However most of our fish are exported raw with not much added value. We are therefore putting more efforts in order to add real value to this commodity. This includes the construction of many fish harbors along our coast, together with the development of the ground breaking industrial estate at Duqm area where we aim to create a major hub for the region. We also provide incentives for the processing of fish. In addition, we intend to embark upon fish farming activities to benefit from the huge untapped potential. 

Please give us more insights into Oman’s potential for developing the fish farming industry?

As worldwide demand for fish and shellfish is on the rise amidst stagnating yields from traditional capture fisheries due to depleted wild ocean stock, aquaculture holds the key to meeting global seafood supply needs over the coming years. Fish farming is estimated to account for up to 60% of all fish produced for human consumption and is expected to contribute an even greater share going forward. The highly favorable supply-demand fundamentals that support fish farming together with the steadily increasing fish prices make aquaculture not only a key source of world food supply but also an attractive investment opportunity.

Oman has a variety of key fish and other aquatic species. It provides an optimal environment for turning this potential into reality.  The country has already built a modern economy with world-class infrastructure, a professional, business friendly legal and regulatory framework aligned with international best practices, and an attractive suite of incentives designed to encourage private sector investment by both Omani and international companies. Accordingly, we are committed to developing a world-class, sustainable and socially responsible aquaculture sector that well provide attractive returns to investors and lasting benefits to Oman communities.

Moving onto agriculture, arable land is limited in Oman, it is only 7% of the total land area, and almost 50% of that is in the North of the country, in Al Batinah region. What are your priorities in the agriculture sub-sector?

Agriculture plays an important role in the country. The total cultivated area is about 73,000 ha of which 92% is located in the coastal areas. The Al Batinah is the most concentrated farming area of the country accounting for more than 40% of the land area under cultivation.

With the exception of Dhofar Region, which has a monsoon climate, the climate of the country is hot and dry for most of the year.  The priority is therefore to develop a national strategy to combat salinity and protect water resources to sustain agricultural productivity in the country. This requires improving the management practices and crop productivity, including irrigation-intensity, frequency and leaching fraction, soil health and nutrient status and the salt-tolerance of plant species suited to Oman.  The focus will be on improving both the exiting agricultural system on land with good quality water and high potential productivity.

How important is the role of agriculture and fisheries in keeping people in their home towns and preventing urbanization?

Agriculture and fisheries are two important pillars of the economy employing more than 100,000 Omani workers. This means that more than one third of the population either work or live on these two sectors. That is why the government is so keen to support these activities and provide lucrative subsidies to them. 

One of the key factors that allowed sustainable agriculture in Oman is the ancient Al Felaj system – a network designed to transport water with an amazing technical complexity, as in some parts the water is even moving upwards. How significant is this feat of engineering for Oman’s agriculture today?

As you rightly said, Al Felaj is a unique ancient water network system dating back more than two thousand years. It has been created to meet the subsistence demands and the development of the agriculture sector which has always been the backbone of the economy. The felaj rises from the mountains, flowing down in streams passing through hills and plains to bring life to land. Al felaj reflects on the diligence, hard work and determination of Omanis in building their civilizations. 

 Even though the livestock sub-sector is relatively small, Oman is still the leader in the GCC (Gulf Cooperation Council) area. What is your strategy to boost production and increase the stock levels?

The livestock in Oman includes cows, sheep, goats, and camels, and it is on the rise annually. The number of different livestock is in excess of 2.5 million with goats representing almost two thirds of this. Poultry which include commercial layers and broilers and domestic birds are all on the rise steadily.

Efforts are put in to improve the productivity of the local breeds by adopting modern methods of reproductive biotechnologies in breeding programmers. Other efforts include treatment of various animal diseases and the prevention of transboundry diseases in animals. Distribution of improved bulbs and hybrids among farmers for producing highly productive offspring’s for both of milk and meat. Introducing foreign breeds for adaptability under local conditions and cross breed with indigenous breeds and promotion of domestic poultry in the country.

Oman is investing a lot in its research and development activities.  What are the main areas you are focusing on in your sector?

The Ministry has been undertaking applied research in both agriculture and livestock. The objective is to increase the crop and livestock productivity as well as solving problems facing them. Oman is challenged by two main problems both abiotic - water stress and salinity, and biotic - associated with sever attacks of pests on major horticulture crops of the country.

The research also covers the use of advanced technologies such as biotechnology, conservation and management of biodiversity and genetic resources to ensure their sustainability, improve water-use-efficiency, use non-conventional irrigation water resources like saline water and tertiary treated wastewater in agricultural production, control of pests and diseases of majour field both vegetable and horticulture crops, control pests and diseases of livestock animals such as goats, sheep, cattle, camel and poultry, as well as studies on the socio-economic feasibility of the research projects. 

In which areas would like to attract more investment and what incentives do you provide?

There are several reasons why investors should look at Oman. We have a committed government and an orderly civil society, rich natural resources, world class infrastructure, a strategic location, and an investor-friendly environment with attractive incentives.  

Oman aims to make it attractive and easy for corporate to do business in the country by providing them with a supportive environment to establish and operate business. The offer includes a wide range of financial and business development incentives such as no income tax, no restrictions on the repatriation of capital and profits, 70% foreign ownership which could be increased, 5 years corporate tax holiday extendable up to 10 years, low corporate tax of 12% above Omani Rial 30,000, low energy and fuel charges and no custom duty on manufacturing components on import of machineries and raw material.