The Halal Industry Development Corporation (HDC) is in discussion with the Islamic Development Bank (IDB) to set up a halal investment fund.
Its focus will include to finance the development of agriculture businesses especially for IDB member countries.
An MoU was signed recently between the two parties to set the ball rolling, HDC chief executive officer Datuk Seri Jamil Bidin told Bernama in an interview.
“We can use the fund as a mechanism and propose it to the wealthy countries like in the Middle East and Brunei to inject funds and then, channel it to IDB member countries that have the ability to produce food supply,” he said.
Usually, the countries that have resources to produce food supply do not have enough financial capability to expand their production and reach export markets.
Richer Organisation of Islamic Conference (OIC) countries like in the Middle East, on the other hand, have the financial capability but do not have the resources like land and manpower to produce food.
For example, Jamil said, countries like Sudan and Pakistan have the ability to become halal meat producers but they do not have the financial capability to be global meat exporters.
In Malaysia, meanwhile, there were over US$500 million of halal investment opportunities, of which agriculture businesses were among the lucrative businesses that can be tapped into.
Jamil said this was where OIC countries can leverage on each other’s capability and at the same time ensure enough halal food supply for the Muslim world without relying on traditional food producers.
He said the move would not only tackle the shortage of halal food supply globally but also a way to tackle rising food prices.
“International food prices increased steeply from mid-2010 to 2011, raising alarm bells across the developing world about a repetition of the food price crisis of 2007-2008,” he said, citing data from the United Nations He said with growth in the economy, rising disposable income as well as increase in halal awareness, trading in halal products especially meat and food products would also increase exponentially.
Non-Muslim Dutch consumers had also shown interest in halal food where the total demand is estimated to reach about US$3 billion annually, he said.
With the possibility of supply-side disruption, he said, there was a dire need for invesment in agricultural projects especially in under-developed and developing Muslim countries.
“We are coming out with a blueprint with the IDB on food security to find a solution. The fund will be one of the proposed solutions as well as other new cooperation between us,” he said.
Jamil said the blueprint was expected to be finalised within the next six months.
Apart from agriculture projects, he said, the fund would also address the missing gap in other underfunded investment opportunities which are neither small nor big enough — valued between US$1 million and US$10 million.