Environmental experts, opposition journalists, and public intellectuals were not the only actors critical of the New Valley Project. Unlike the state-sponsored reclamation projects of the Nasser period, which targeted small farmers as beneficiaries, Mubarak’s New Valley Project was supposed to at-tract large-scale private investment in commercial farms. The state prom-ised large-scale engineering works to the borders of private land, but the task of leveling land, building irrigation and drainage networks, and cul-tivating crops was delegated to agribusiness. As a 2004 World Bank paper noted, these projects “renew the nineteenth-century tradition of close cooperation with the state by national and foreign investors to develop export-based agricultural production.”73 The key difference, however, was the source of external capital. Rather than European firms, external invest-ment largely flowed from the Gulf region, particularly Saudi Arabia and the United Arab Emirates.
Prioritizing large-scale investors was congruent with the regime’s larger macroeconomic policies of privatization and neoliberal restructur-ing. As in tourism and industrial zones, the government offered investors a twenty-year tax holiday, cheap land prices, long-term concessions, tax exemptions on imported equipment, and guaranteed allocations of irriga-tion water.74 Officials justified the privileged position accorded to large-scale investors by arguing that they would employ water-conserving irrigation technologies, such as pivot irrigation.
While promoting agribusiness in the New Valley, the Mubarak govern-ment dismantled Nasser-era policies supporting small-scale peasant agri-culture in the old Delta during the 1980s and 1990s. Land tenure protec-tions were repealed, subsidies on fertilizers, pesticides, and diesel fuel were reduced, and the system of cooperatives was left largely unfunded.75 These changes put significant pressures on Egypt’s small-scale farmers, many of whom have limited access to credit, cannot afford sufficient quantities of fertilizers, gypsum, and other soil amendments, and who are not consulted in the planning or delivery of government-sponsored rehabilitation and drainage projects.76
This neoliberal restructuring of Egyptian peasant agriculture reflected broader regional trends. Egyptian and Arab agribusiness firms pursued consolidation among agricultural companies and sought vertical integra-tion of supply chains to enhance competitiveness during the 1990s and 2000s. New investment vehicles for private and public capital, such as private equity firms and sovereign wealth funds, also began to target the
Egyptian agricultural sector.77 As a result, foreign companies accounted for 37 percent of agro-industrial investment in Egypt in 2008.78
Despite government incentives and increasing foreign investment in agriculture, private investors were reluctant to invest in the New Valley Project.79 By 2008, only five companies had acquired plots in Toshka, and of these, only three firms were cultivating crops.80 With rapidly increas-ing global food prices in 2007–8, a number of Saudi and Gulf investment groups were reportedly interested in acquiring land in the New Valley Proj-ect, but few details of finalized deals emerged.81 Eager to deflect criticism, the government declared that it would start selling 2,900 feddans in the Toshka area to new graduates and young peasants as early as 2002,82 yet few of these transfers have been evident.
Of the three companies cultivating crops in the New Valley Project, two were privately owned and one was majority owned. The state-owned South Valley Company for Development, created in 1999, was al-located 160,000 acres and had reportedly cultivated about 7,000 of these by 2006.83 One of the private companies, Green Valley Association, was an Egyptian joint-stock company established in the early 1990s. It owned a total of 7,000 acres devoted to peanut cultivation for export and served as the local agent for multinational manufacturers of pivot and drip irriga-tion systems.84
The second private company, Kingdom Agricultural Development Company (KADCO) was wholly owned by Prince Al-Waleed bin Talal Al-Saud of Saudi Arabia, the first private investor in the New Valley Proj-ect. The nephew of King Fahd of Saudi Arabia, Prince Al-Waleed’s hold-ings included ownership of the Saudi Kingdom Holding Company, and significant shares of such global conglomerates as Apple, Citigroup, the Four Seasons hotel chain, and others. Al-Waleed had a reputation for busi-ness acumen by investing in well-known companies during hard times and then reaping the benefits as companies restructured and stock prices climbed.85 In 2009, he was ranked as the twenty-second wealthiest person in the world, despite steep declines in his net worth as the result of the global banking and financial crisis.86
KADCO, incorporated as an Egyptian joint-stock company, initially planned to cultivate 100,000 acres over a seven-year period, investing US$500–650 million total. The acquisition was part of what Al-Waleed de-scribed as a limited investment strategy in Egypt targeting only “real estate, tourism, and agriculture, all fields with high rates of return.”87 Al-Waleed already had significant investments in Egypt’s tourism and real estate sec-tors when he purchased land in the New Valley Project.88
KADCO’s reclamation efforts in the New Valley began with an ex-perimental farm, drawing groundwater from wells in order to determine the viability and profitability of export agriculture. Al-Waleed also sought to link KADCO with global agro-industrial firms through joint ventures.
KADCO sought to create a joint venture with CADIZ, a subsidiary of the California-based agro-industry firm Sun World International, one of the largest vertically integrated agricultural development companies in Cali-fornia. The venture collapsed, however, when CADIZ declared bankruptcy in 2002.89
By the winter of 2008, when the author visited KADCO’s fields, the company had cultivated 600 acres out of their initial 100,000 target.90 They employed 70–100 permanent workers, and at peak packing and harvesting times employed 250–1000 temporary laborers. Even permanent workers, however, commuted from the nearby city of Aswan, and no permanent settlement had been created.
These modest acreage and employment figures troubled the Mubarak government. For the regime, Al-Waleed’s investment was a crucial mar-keting device to justify their estimated LE5.5 billion (US$1.6 billion) investment in the pumping station and main canals. The slow pace of land reclamation in the New Valley had become fodder for parliamentary debates,91 newspaper editorials, satirical cartoons, and public jokes. As a result, the government threatened to suspend KADCO’s operations and revoke their land title.
Although managers admitted that Al-Waleed’s commitment and in-vestment in KADCO had fluctuated, their story-lines about land reclama-tion focused on obstacles created by weak domestic markets, poor gover-nance, inadequate infrastructure, and unpredictable policies. In short, they argued that poor economic returns on land reclamation were in large part the result of government policies and practices.
Farm managers took the inadequacies of government planning as the starting point for their narratives. Investors like Al-Waleed bought New Valley land based on government soil classifications that proved inaccurate.
In the case of KADCO, only half of their 100,000-acre parcel could be cul-tivated, according to their soil surveys. Both KADCO and the state-owned firm reported encountering a stratified salty clay layer, locally termed tafla, that was difficult to cultivate. One of the expatriate agronomists working for KADCO noted:
Our land was supposed to be class one and two agricultural soils, but the government didn’t get the topography and the
soil right. This was because the layout and design of the branch canals was done from an engineering perspective, not an agri-cultural one. The canal layouts were designed to take advantage of gradients, to go down into the Toshka depression. But as you go down, you encounter more tafla. From an agronomist’s perspective, it is better to pump the water up to better soils.92 The state-owned company reportedly shifted to flooding fields, in the old style of basin cultivation, as well as growing salt-tolerant rice, in order to cope with tafla in their soils. Rice is a water-intensive crop, and thus the Mubarak government’s claims about conserving water in New Valley agri-culture rang increasingly hollow.
Some Egyptian experts involved in planning the irrigation infrastruc-ture had anticipated such problems. These employees of governmental research institutes published articles in academic journals describing alter-native routes for the canal system to access better quality soils in the New Valley.93 Yet their recommendations went unheeded.
Agribusiness managers highlighted a number of other difficulties. The government failed to provide needed infrastructure and transport invest-ments, which made it difficult to get horticultural produce to overseas markets in a timely fashion. Faced with difficulties in export opportuni-ties, KADCO managers found that their certified organic, labor-friendly produce was too costly for domestic markets. Cold nights in winter require greenhouses, and blisteringly hot days in summer require shaded cultiva-tion with the ongoing use of sprinklers, but neither export nor domestic prices were sufficient to recoup these kinds of production costs. KADCO and other farms in the area have thus increasingly turned to growing for-age and fodder crops, particularly alfalfa.94 Alfalfa is salt tolerant, breaks up clay soils, and produces a crop every twenty to twenty-two days.
Most important, demand for fodder from the United Arab Emirates and Saudi Arabia has escalated rapidly in recent years. To conserve deplet-ing fossil groundwater aquifers, Saudi Arabia imposed limits on extractdeplet-ing groundwater in recent years, while subsidizing the import of fodder to sus-tain existing dairy and meat operations.95 Other Saudi investors see similar opportunities for cereal production in the New Valley Project. Suleiman Al Rahji, who controls Saudi Arabia’s largest publicly traded bank, Al Rahji Bank, reportedly acquired 100,000 acres in the New Valley for wheat and corn production.96
Shifting to fodder for export, however, poses a significant risk: namely, that the Egyptian government, with its own needs for domestic fodder and
cereals, will impose export bans. Export duties on wheat and corn exports were already in place, and in 2008, faced with skyrocketing global food prices, the government imposed an export ban on rice, one of the most lucrative crops for Egyptian farmers.97
Given these issues, agribusiness firms have dramatically lower esti-mates for economically viable land reclamation than the government. In interviews, one manager noted, “The New Valley Project will not even reach half of the 540,000 acres that the government has been touting as its first phase.” Another noted that “we have been telling this to the min-isters, but they don’t believe us. The Minister of Agriculture threatened to take our land back, even though we have paid for it, because we have not cultivated it. I told him, ‘I will give half of it back to you, for free, because you cannot grow anything!’ And that is when I think he started to listen.”98