Having almost no expertise in settled farming, Saudi investors were induced by huge government subsidies to import the technology, equipment, seeds, fertilizers, engineers, and the farm workers required by these projects. As may be expected from a strategy declared in the name of food independence, wheat growing was emphasized. Within 12 years, between 1980 and 1992, wheat production grew 29-fold--from 142,000 tons in 1980 to 4.1 million tons in 1992[3]--making the Saudi desert the world's sixth-largest wheat exporting country... No accounting, however, has ever detailed the full cost of this adventure in terms of money or water.

For the sixteen years between 1984 and 2000, it may be estimated that the assessable cost of Saudi agricultural development could be put at about $85 billion, representing 18 percent of the country's $485 billion in revenues from oil exports during the period.This huge investment produced wheat at an average cost of more than $500 per ton. During the same period, the international market price for wheat averaged about $120 per ton...

The Saudis gave up earlier this year. The author of the article, Elie Elhadj, is understandably dumbfounded by the whole story, which sounds like nothing so much as one of the bizarre central planning excesses of the USSR, and speculates that the whole thing may have been a sop to internal political factions rather than an honest attempt to produce an economically or even strategically rational industry.

But here's the punchline. No question that trying to grow wheat on irrigated fields in the 50-degree heat of the Nefud or the Hejaz is one of the more quixotic things that any farmer has ever tried to do. It also burned through a significant amount of the kingdom's non-replaceable geological water reserves. But look at the price; $500 a tonne. That equates to roughly $13.60 a bushel. Wheat's gone higher than that this year already.

I'm not saying that the Saudi wheat industry now makes economic sense; as Elhadj points out; there were other unquantifiable subsidies, and it wasn't sustainable in water terms anyway. But it does raise this question: if we're heading for a time of high sustained food prices, what other apparently irrational crops will soon start making sense? If $130 oil is making people think hard about tar sand, what will $14 wheat lead to?