KSA Agriculture Market Outlook to 2028

KSA Agriculture Market Overview

• The KSA Agriculture market is valued at USD 16 Bn, driven by robust government investments and the push for food security in line with Vision 2030. The agricultural sector is a priority for diversification as Saudi Arabia seeks to reduce its reliance on oil revenues. Investments in technologies such as hydroponics and vertical farming, alongside the growth of organic farming, are fueling market expansion. The push towards self-sufficiency in food production, coupled with efforts to manage water scarcity through advanced irrigation systems, continues to strengthen the market's growth.

• The market dominance is primarily centered around key regions like Riyadh and the Eastern Province, as well as the agricultural hubs in Al-Qassim. These regions benefit from substantial government support, advanced infrastructure, and favorable climatic conditions for crop production and livestock farming. Additionally, these areas are home to some of the largest agri-businesses and have established supply chains that cater both to local consumption and export markets, positioning them as dominant players in the overall agricultural landscape.
• Under Vision 2030, Saudi Arabias government has set ambitious targets for agricultural diversification and food security. The Ministry of Economy and Planning has committed SAR 130 billion to agricultural projects aligned with these objectives, including investment in sustainable farming practices, such as organic farming and aquaponics. In 2023, Saudi Arabias food self-sufficiency reached 50%, with plans to increase it to 70% by 2025. Vision 2030 policies also focus on reducing reliance on food imports, supported by public-private partnerships in agricultural development.

KSA Agriculture Market Segmentation

By Product Type: The market is segmented by product type into grains and cereals, fruits and vegetables, livestock and dairy, poultry and meat, and organic products. Among these, the grains and cereals segment hold a dominant share in the market due to the Kingdom's focus on increasing domestic grain production to reduce import dependency. Major government initiatives supporting the production of wheat and barley have further cemented this segment's lead. In addition, the continuous investment in research and development for drought-resistant crop varieties aligns with the country's goal of achieving agricultural sustainability in an arid climate.

By Application: The market is also segmented by application into commercial farming, subsistence farming, agro-processing, and retail and consumer goods. The commercial farming segment has a dominant market share due to the large-scale farming operations supported by technological advancements, government subsidies, and the private sectors involvement. Commercial farms, particularly those focusing on date palms, wheat, and livestock, dominate due to their efficient production processes, contributing heavily to both domestic food supply and exports. The integration of modern farming technologies has also increased productivity levels in this segment.

KSA Agriculture Market Competitive Landscape

The KSA agriculture market is dominated by a mix of local agricultural companies and multinational players who have established operations within the Kingdom. These companies benefit from favorable government policies, such as subsidies for farming inputs and access to state-of-the-art farming technologies. The market remains highly competitive, with a strong emphasis on innovation and sustainable practices.

KSA Agriculture Industry Analysis

Growth Drivers

• Government Subsidies and Investments: The Saudi government continues to prioritize agriculture through its Vision 2030 projects, focusing on food security and the diversification of the economy. In 2023, the government allocated over SAR 92 billion towards agricultural subsidies and infrastructure developments, including initiatives such as the Saudi Agricultural Development Fund (ADF), which provided SAR 1.5 billion in financing for innovative farming solutions. These efforts are designed to reduce reliance on imports and increase domestic food production. Additionally, the Ministry of Environment, Water, and Agriculture (MEWA) announced investments in key projects such as greenhouse farming and date palm cultivation.

• Technological Advancements: The KSA agricultural sector has witnessed notable technological innovations such as smart farming and hydroponics. As of 2024, over 70,000 hectares of land have been equipped with drip irrigation technology, resulting in water savings of approximately 45%. Saudi Arabias hydroponic farms, currently valued at over SAR 2.8 billion in investment, provide efficient crop yields with limited water usage. The government, in collaboration with private entities, is introducing artificial intelligence (AI) and machine learning for predictive analytics in crop management, paving the way for more sustainable farming practices.
• Water Scarcity Management: Addressing the critical issue of water scarcity, Saudi Arabia has implemented several large-scale water conservation initiatives. MEWA reported that its desalination capacity had reached 8.5 million cubic meters per day in 2024, largely aiding agricultural irrigation. Additionally, water conservation policies have led to a reduction of groundwater use by nearly 30% since 2022. The Kingdom is investing SAR 20 billion in water reuse projects, with the aim of recycling over 5 billion cubic meters of water annually by 2025. These efforts are crucial to maintaining agricultural productivity in the face of limited natural water resources.

Market Challenges

• Lack of Skilled Labor: Saudi Arabias agriculture sector faces a shortage of skilled labor, especially in technological proficiency. The number of agricultural workers has decreased by 15% since 2020, with a lack of agri-education programs and inadequate training in advanced farming techniques cited as contributing factors. In 2024, the Kingdom launched new initiatives, including partnerships with local universities to increase agricultural education, but the gap remains significant. Furthermore, technology adoption in farming, such as AI and smart irrigation systems, requires skilled operators, which is currently a barrier to widespread implementation.

• High Operational Costs: Agricultural production in Saudi Arabia faces high operational costs, primarily due to input costs such as fertilizers, seeds, and irrigation systems. In 2024, the average cost per hectare for irrigated agriculture was estimated at SAR 35,000, a significant increase from 2022, driven by global supply chain disruptions. Additionally, infrastructure costs, including the establishment of cold storage facilities and transportation logistics, remain high, with the government investing over SAR 7 billion annually in agri-infrastructure projects. These expenses contribute to the challenges faced by small-scale farmers in maintaining profitability.

KSA Agriculture Market Future Outlook

Over the next five years, the KSA Agriculture Market is expected to witness a growth, driven by continuous government support through Vision 2030, increasing investments in Agri-tech solutions, and a push towards sustainability in food production. The expansion of organic farming practices, combined with enhanced water management techniques and investments in modern irrigation, will also fuel market growth. Additionally, international trade agreements and the rise in exports, particularly of dates and dairy products, are expected to contribute to the overall development of the market.

Future Market Opportunities

• Investment in Agri-infrastructure: Saudi Arabia has prioritized investment in agri-infrastructure, particularly in cold storage and supply chain efficiency. In 2024, SAR 12 billion was allocated for the development of agri-logistics hubs across major cities like Riyadh, Jeddah, and Dammam, aimed at reducing post-harvest losses and enhancing food security. These facilities are expected to store over 1.2 million metric tons of perishable goods annually. The governments focus on improving transportation networks is also boosting the efficiency of domestic food distribution and export readiness.

• International Trade Agreements: Saudi Arabias growing network of international trade agreements offers a key opportunity for agricultural export expansion. In 2023, the Kingdom signed trade agreements with several non-GCC countries, boosting agricultural exports by 25%, with significant growth in dairy, dates, and poultry products. Saudi agricultural exports to the European Union were valued at SAR 1.6 billion, driven by increasing demand for organic and Halal-certified products. The Kingdoms strategic location as a trade hub between Africa, Asia, and Europe further enhances its export potential, with ongoing negotiations set to open additional markets.