Analyzing Trade Liberalization's Impact on Saudi Agriculture

This report examines the effect of trade liberalization on the agricultural market, specifically focusing on the case of Saudi Arabia. The introduction defines trade liberalization and its impact, distinguishing between tariff and non-tariff barriers. The discussion section analyzes the challenges faced by Saudi Arabia's agricultural sector due to its desert climate and limited water resources. It then explores government policies and initiatives, including trade liberalization measures such as reduced import duties and support for agricultural inputs, which have improved the agricultural sector. The report highlights the country's focus on exporting products like dates, eggs, and vegetables. It also discusses the role of the Saudi Arabian government, including the Ministry of Environment, Water, and Agriculture, in promoting agricultural development and organic farming. The conclusion emphasizes the importance of sustainable agricultural practices, water resource management, and educating agricultural communities to address potential water depletion issues. The report includes references to academic research and publications supporting the analysis.

Running head: EFFECT OF TRADE LIBERALIZATION ON AGRICULTURAL MARKET
EFFECT OF TRADE LIBERALIZATION ON AGRICULTURAL MARKET
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1EFFECT OF TRADE LIBERALIZATION ON AGRICULTURAL MARKET
Table of Contents
Introduction......................................................................................................................................2
Discussion........................................................................................................................................2
Conclusion.......................................................................................................................................3
References........................................................................................................................................4

2EFFECT OF TRADE LIBERALIZATION ON AGRICULTURAL MARKET
Introduction
The term “trade liberalization” refers to the reduction or removal of trade restrictions
between two economies (Khandelwal, Schott & Wei, 2013). The barriers of trade can be of two
types – tariff barriers and non-tariff barriers. The tariff barriers incudes duties, surcharges while
non-tariff restrictions consists of quotas, licensing rules and others. The effect of trade
liberalisation (eradication of trade barriers) in agricultural sector can be in terms of promoting
free trading opportunities which in turn lowers the prices of the agricultural products. The
agricultural industry of Saudi Arabia will be analyzed completely on the undertaken government
policies and initiatives in the country.
Discussion
Saudi Arabia, being primarily consisting of desert terrain along with limited amount of
ground water, is not at all ideal for agricultural development (Ouda, 2014). Moreover, the
extremely dry desert climate characterized by utmost heat during daytime, abrupt decline in
temperature at night as well as very little annual rainfall condition acts as a major challenges in
agricultural sector faced by the country (Albassam, 2015). However, in order to handle such
problems and ensure food security, the nation adopted several programs and trade liberalization
policies to advance services, facilities and agricultural inputs. These helped in increasing the
production of agricultural commodities and feed more of its citizens.
The agricultural industry of Saudi Arabia has improved drastically over the past decade.
The Agricultural sector of the country mainly focuses on exporting products like dates, eggs,
poultry, dairy items, fish, fruits, flowers and vegetables to the global market. The KSA
(Kingdom of Saudi Arabia) government is highly associated with the agricultural sector and

3EFFECT OF TRADE LIBERALIZATION ON AGRICULTURAL MARKET
agricultural ministry and is mostly accountable for agricultural policies of the country. In
addition to the facility of importing duty free machinery and raw materials, the government
provides support in terms of long term interest free loans as well as low cost fuel, electricity,
water and so on. While the majority of the food products requires only 5% import duty; fresh red
meat, tea, coffee enter the economy duty free. Furthermore, government has assisted in
converting the large desert areas of the country to agricultural fields by implementing foremost
irrigational projects while undertaking large scale mechanization which has proceeded in
developing the farming sector of the country. A new was undertaken by Saudi Arabia Ministry of
Environment, Water and Agriculture in the year 2018, which aims in boosting up organic
farming (Elhag, 2016). The new policies of agriculture undertaken by KSA government is
expected to lead towards selective agricultural growth and development for achieving a balance
between food security and water.
Conclusion
It can be predicted that being a desert country, Saudi Arabia might face from the major
problem of underground water depletion which will result in breaking down as well as
disintegration of the nation’s agricultural sector. In order to avoid such circumstance, the
situation needs vital changes in the current agricultural practices along with the adoption of
suitable farming concepts. Hence, it has become increasingly important to educate the
agricultural communities of the country, for enabling them to use natural resources like water
with proper and sustainable mindfulness.

4EFFECT OF TRADE LIBERALIZATION ON AGRICULTURAL MARKET
References
Albassam, B. A. (2015). Economic diversification in Saudi Arabia: Myth or reality?. Resources
Policy, 44, 112-117.
Elhag, M. (2016). Evaluation of different soil salinity mapping using remote sensing techniques
in arid ecosystems, Saudi Arabia. Journal of Sensors, 2016.
Khandelwal, A. K., Schott, P. K., & Wei, S. J. (2013). Trade liberalization and embedded
institutional reform: Evidence from Chinese exporters. American Economic
Review, 103(6), 2169-95.
Ouda, O. K. (2014). Water demand versus supply in Saudi Arabia: current and future
challenges. International Journal of Water Resources Development, 30(2), 335-344.