Saudi Arabia spends money to "buy oasis": drip irrigation subsidies will surge 60% in 2024. How will Chinese suppliers eat up the $1 billion bonus?

1. Vision 2030 drives agricultural revolution: subsidy policy upgraded again

The "Agricultural Modernization White Paper" released by Saudi Arabia in 2024 shows that as the core strategy of

"Vision 2030", the government has listed agricultural water conservation as a national priority. The latest policy clearly

states that the proportion of subsidies for the purchase of drip irrigation equipment will be significantly increased from

45% in 2023 to 60%, aiming to achieve the goal of increasing food self-sufficiency by 30% through technological upgrades.

This move directly responds to the crisis of over-exploitation of groundwater in Saudi Arabia - the country's agricultural

water consumption accounts for 85% of the country's total consumption, and drip irrigation technology can save 40%-60%

of water.

Policy documents show that the subsidy coverage includes intelligent water-fertilizer integrated systems, anti-clogging drip

irrigation belts and solar-driven equipment. Taking a 50-hectare farm as an example, the use of domestic equipment can receive

a subsidy of up to 1.8 million riyals (about 480,000 US dollars), significantly reducing the initial investment threshold. The application

process requires submitting a project feasibility report through the official website of the Saudi General Authority for Food and

Agricultural Investment (SFAIA), and issuing a subsidy eligibility letter after evaluation by the technical committee.

According to the latest policy of the Saudi Agricultural Development Fund (ADF), farmers and agricultural enterprises can apply for

drip irrigation equipment purchase subsidies through the following steps:

a. Submit an application: Applicants need to submit a detailed project plan to the Saudi Agricultural Development Fund, including

project background, drip irrigation equipment purchase plan, expected benefits, etc.

b. Project evaluation: The fund will evaluate the submitted projects to ensure that the projects are in line with the national agricultural

and food security strategy.

c. Approval and funding: The evaluated projects will be approved, and the fund will provide up to 60% of the purchase subsidy based

on the project scale and needs.

d. Implementation and supervision: During the implementation of the project, the fund will supervise to ensure that the project proceeds

as planned and achieves the expected goals.

Market opportunities for Chinese suppliers

Chinese drip irrigation equipment has obvious cost advantages in the Saudi market. According to market analysis, the installed cost of

Chinese drip irrigation equipment can save US$300 per hectare, which makes Chinese equipment highly competitive in the Saudi market.

In addition, the Saudi government has always been welcoming to cost-effective and innovative equipment and technologies, especially

zero-emission, energy-saving and consumption-reducing desalination, wastewater reuse and other related water treatment technologies,

which are urgently needed by the Saudi market.

How Chinese suppliers can seize the $1 billion bonus

a. Technical advantages: China's drip irrigation technology has a high technical level and cost advantage in the international market, and

can provide efficient and reliable irrigation solutions.

b. Policy support: The Chinese government has strengthened trade and investment cooperation with Saudi Arabia through the "Belt and

Road" initiative, and provided policy support for drip irrigation companies to enter the Saudi market.

c. Market demand: Saudi Arabia has a huge demand for drip irrigation technology, especially in the agricultural field, and the market

potential is huge.

d. Cooperation model: Chinese drip irrigation companies provide customized solutions to meet local market needs by cooperating with

local Saudi governments and enterprises.

Saudi Arabia has further promoted agricultural modernization and food security by increasing the purchase subsidy for drip irrigation

equipment to 60%. The cost advantage of Chinese drip irrigation equipment makes it highly competitive in the Saudi market. Through

reasonable policy support and technological innovation, Chinese companies are expected to play a greater role in the Saudi agricultural

market and help Saudi Arabia achieve its agricultural goals in its "Vision 2030".