Dubai, UAE – The Emirates Development Bank (EDB) has launched a groundbreaking financing initiative aimed at bolstering food security in the UAE, offering loans of up to Dh5 million to both Emirati and expatriate farmers. This pioneering scheme allows for repayment over several years, a move designed to support the country’s essential food security sector.
The initiative, which was unveiled during a panel discussion at the global vertical farming show in Dubai on Wednesday, is the first of its kind in the UAE. Abdulla Al Hamed, Vice President of Micro, Small, and Medium Enterprises (mSMEs) at EDB, highlighted the bank’s commitment to enhancing agricultural productivity and sustainability.
“We have financed several farms to expand and upgrade to new technology,” Al Hamed stated. “We finance farmers up to Dh5 million to achieve this. Any project we are going to finance in this space is a high-risk project, but it is a risk we are willing to take because it contributes to the overall food security.”
The EDB’s loan program is structured to accommodate the unique challenges faced by farmers. Al Hamed explained that the bank offers a two-year grace period before repayments begin and designs loan schedules that align with the farmers’ operational cycles. This flexibility aims to alleviate financial pressure during off-seasons and facilitate a return on investment (ROI) over a period of ten to twelve years.
“Other financing institutions typically do not extend such long repayment periods due to the inherent risks,” Al Hamed added. “Our approach is tailored to support farmers comprehensively and to address their specific needs.”
The financing initiative comes amid growing interest and investment in vertical farming technologies in the region. Amit Grover, founding partner and CEO of Grover Venture, addressed the panel on the advancements in this field, emphasizing the role of technology in transforming agriculture.
“Key trends driving vertical farming include robotics and automation,” Grover said. “We are also witnessing significant advancements in artificial intelligence, machine learning, and Internet of Things (IoT) technologies. These innovations are crucial for reducing labor costs and optimizing crop genetics.”
Grover explained that genetic optimization of crops is essential for mass production and meeting regional market demands. “Optimizing genetics allows us to enhance crop yields, making it possible to export high volumes of agricultural commodities. Cutting-edge research in places like the Netherlands, Germany, and Australia is paving the way for similar developments in the Middle East.”
The discussion also highlighted the critical role of government support in the success of vertical farming. Halim Ben Haj Salah, Director of the Technical Support Department at the Arab Authority for Ag Investment and Development, underscored the necessity of supportive policies and frameworks.
“There is a pressing need for policies that address land costs, which constitute about 50 percent of a farm’s total expenses,” Salah said. “As vertical farms are likely to be established near urban areas, real estate costs will be a significant factor. Governments should implement policies to stabilize agricultural land prices.”
Salah also advocated for the introduction of certification for vertical farming products. “Vertical farms use less water, but there is currently no certification for these products akin to organic certifications. Implementing such certifications could appeal to environmentally conscious consumers.”
The EDB’s initiative and the broader conversation about vertical farming underscore a concerted effort to address food security and sustainability challenges in the UAE. As the country continues to invest in agricultural innovation, the support for farmers and the adoption of advanced technologies are set to play pivotal roles in ensuring a secure and sustainable food supply for the future.
This new loan program represents a significant step forward in the UAE’s agricultural strategy, reinforcing the nation’s commitment to leveraging technology and financial support to enhance food security and sustainability. As the industry evolves, ongoing government and private sector collaboration will be essential in driving further advancements and achieving long-term food security goals.
This article was created using automation technology and was thoroughly edited and fact-checked by one of our editorial staff members