The Role of GSFMO in Achieving Agricultural Development

The GSFMO was established by Royal decree No. 14/M in 25-31392 H (Feb., 1972) at a time when the Kingdom was importing wheat and its by-products due to the limited local production which did not exceed 3,000 tons.

The objectives of GSFMO were:

To form an integral industry of grain storage, flour production and processing of animal feed. To establish any other relevant food industries. To market its products inside and outside the Kingdom. To purchase grains and create a convenient reserve stock to face emergency circumstances. To meet the goals of the approved agricultural policy.

To achieve the goal, the role of GSFMO was stated as:

To establish silos projects in the midst of wheat production areas to help farmers in marketing their crops, and reduce their efforts and expenses in transporting their crops to distant markets, as well as the continuous expansions in silos capacities to meet the increase in production. To create a stable market with fixed prices announced in advance in order to safeguard the farmers from price fluctuations and merchants' exploitation, and to guarantee the selling of farmers' crops at ease.

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To purchase the crops at encouraging prices in order to increase investments in wheat production and attract new farmers both individuals and large agricultural companies. As a result of this policy, the GSFMO projects spread to become eleven at the present time distributed in the various regions of the Kingdom. There are nine projects out of eleven producing flour and five of those are producing various types of feed (poultry and livestock) as well, and the other two are only grain storage silos. The total grain storage of GSFMO is 2,520,000 tons. The total flour mill capacity is 11,000 tons of wheat, producing 8,800 tons of flour and 2,200 tons of bran everyday (24 hours). The total capacity of feed mills is 2,100 tons of feed every 24 hours. GSFMO started to receive wheat from farmers in 1978 with total quantity of 8,686 tons of wheat from 356 farmers. The maximum quantity of wheat received was 4,314,478 tons from 24,810 farmers in the year 1993. GSFMO stared the first mill in Riyadh then Dammam and then Jeddah as the consumption of the flour increased. GSFMO established extension of the existing projects and build new mills in different areas with all required facilities. As being noticed in 1978, the quantity of 179,522 tons of wheat had been milled, and as the consumption increased the wheat used by the mills by 2008 was 2,600,000 tons.

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Saudi Wheat Exports A total of 17,465,707 tons (about seventeen million and five hundred thousand tons) of wheat had been exported to many countries such as Arab countries (Kuwait, UAE, Bahrain etc.), Asian countries (Korea, Indonesia, China etc.), African countries (Kenya, Ethiopia, Namibia etc.), European countries (Italy, Norway, USSR, England etc.), American countries (Columbia, Venezuela, Uruguay). Exporting of wheat started in 1986 for the period of ten years. GSFMO stopped exporting wheat at the end of 1995. Importing wheat As you know Saudi government started to decrease the quantity of wheat to be planted locally by 12.5% yearly. Therefore, GSFMO started to import wheat in the last quarter of year 2008 by importing 305,000 tons of wheat of which about 58,000 tons was from USA. This year up until now 880,000 tons of wheat had been contracted to be received on schedule basis. The last shipment to be received is in Aug 2009. The future tender will be available as needed after revision of the requirement based on the consumption and stock.

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