Food Security as a Public Good: Oman’s Prospects

The recent phenomenal crisis in the financial sector and the surge in food prices have resurrected the debate on the role of government, in economic management and in particular in securing national food security. This paper briefly reviews the theoretical literature in favor of government intervention in the market to secure food security. It is argued that food security needs to be considered as a public good, hence justifying government intervention in supplying it. Sustaining the potential to domestically produce safe minimum amounts of a staple food should be considered as a national strategic objective to achieve food security. Wheat is a staple food in Oman and it has been a major crop in the farming systems of Oman. Wheat cultivation under present circumstances of crop prices, yield, agricultural technology and resource availability in Oman’s commercial farming is not viable, without government support. With the use of a linear programming model that simulates the farming systems; in a major agricultural region in Oman (Batinah region) the production subsidy that is required as an incentive to promote the cultivation of wheat is estimated. The wheat yield in Oman is considered as 3 Tons/Ha and world price of wheat is around 100 OR/Ton. Wheat cultivation under commercial farming would be viable if a subsidy of at least 414 OR/Ha (138 OR/Ton) is provided. This subsidy can be instrumented as an input subsidy and/or price supports as Saudi Arabia had done (190 OR/Ton of wheat). If the wheat yield could be increased through technological and managerial means to global potential yield of 5 Tons/Ha then the price support needs to be at least 83 OR/Ton of wheat. The extent of its achievement in terms of extent of land cultivated and total domestic production of wheat, need to be considered in relation to the trade-off of fiscal cost and political choice of the degree of food security deemed as necessary to achieve.