VZCZCXYZ0000
PP RUEHWEB

DE RUEHKH #1961 3450912
ZNR UUUUU ZZH
P 110912Z DEC 07
FM AMEMBASSY KHARTOUM
TO SECSTATE WASHDC PRIORITY 9500

UNCLAS KHARTOUM 001961 
 
SIPDIS 
 
DEPT FOR AF/SPG, AF/EPS, EB/IFD, AND EB/ESC 
DEPT PLS PASS USAID FOR AFR, AND ALSO PASS USAID 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958:  N/A 
TAGS: PREL PGOV EFIN ECON EAID SU
SUBJECT: EFFECT OF U.S. SANCTIONS ON AGRICULTURAL SECTOR 
 
 
¶1.  (U)  SUMMARY:  In a December 3 site visit to Kenana Sugar 
Corporation, the managing director of one of the world's largest 
integrated sugar farms told emboffs that U.S. sanctions have 
affected his business, forced it to use inferior non-U.S. products, 
and hurt the overall efficiency of his company.  On December 4, in a 
separate meeting with the Governor of White Nile State, Dr. Mohammed 
Nur Al-Tigani, also stated that U.S. sanctions have hurt the economy 
of his agricultural state.  On December 5, Sudanese President Omar 
Al-Bashir blamed another dimension of U.S. policy for threatening 
agriculture, claiming that humanitarian food aid is a "conspiracy" 
aimed at undermining Sudanese farmers.  END SUMMARY. 
 
¶2.  (U)  On December 3, Mohamed Mardi El-Tijani, the General Manager 
of the Kenana Sugar Corporation, told emboffs that U.S. sanctions 
have forced his company to buy Brazilian crop harvesters and use 
non-U.S. consultants, despite not being as effective, efficient, and 
reliable as American products and services.  (Note:  Although the 
Government of Sudan owns a 30% share in Kenana, it is not listed as 
a specially designated national company by the Office of Foreign 
Assets Control.   Saudi Arabia and Kuwait hold 35 and 30 percent 
respectively.  Eight other Sudanese sugar companies including the 
neighboring Assalaya Sugar Company in Rabak are specially 
designated.  End Note.) 
 
¶3.  (U) El-Tijani said that Kenana previously used U.S. crop 
harvesters made by Cameco Industries, Inc. (a subsidiary of John 
Deere & Company since 1998) but that U.S. sanctions prevented access 
to new machines and spare parts.  El-Tijani also stated that his 
company valued the advice of American consultants such as Francis 
Schaefer, the original designer of Kenana, who, due to sanctions, 
can no longer serve as a technical consultant.  El-Tijani stated 
that "it is still possible to get U.S. goods and services, but it 
really becomes a nightmare as there are so many middle men.  Each 
agent will raise the price and it become out of sight."  El-Tijani 
stated that U.S. sanctions also affect Kenana because his company 
does not have access to the U.S. market, which in his view, is even 
more attractive since the signing of the 2000 African Growth and 
Opportunity Act. 
 
¶4.  (U)  In a December 4 meeting with emboffs, the Governor of White 
Nile State, Dr. Mohammed Nur Al-Tigani also acknowledged that U.S. 
sanctions have affected agriculture in his state, saying "We need 
American investments from the U.S. government and the private 
sector."  Nur Al-Tigani also ambitiously stated that if U.S. 
sanctions are lifted that Sudan could quickly become an economic 
power like the United States. 
 
¶5.  (U)  On December 5, Sudanese President Omar Al-Bashir told a 
rally in Gedharef State that Sudan is being targeted and is facing a 
major conspiracy aimed at "bringing it to its knees through relief 
wheat and sorghum." He praised farmers for helping foil this 
conspiracy through increased food production. 
 
¶6.  (U)  COMMENT:  Agriculture is not usually named as a sector of 
the Sudanese economy significantly affected by U.S. sanctions. 
(Telecommunications, transportation, and technology are more 
frequently cited as impacted by U.S. sanctions.)  Nonetheless this 
visit to one of Sudan's most fertile areas reveals that U.S. 
sanctions have affected Sudanese agriculture. 
 
¶7.  (SBU)  Comment continued:  Bashir's remarks on humanitarian food 
aid are not a new phenomenon from various levels within the National 
Congress Party.  The USG is the largest donor to the U.N. World Food 
Program, which provides life-saving food aid on a monthly basis to 
more than 2.5 million internally displaced persons and others 
impacted by the conflict in Darfur, as well as millions of others 
affected by food insecurity throughout the country.  If the Sudanese 
Government were to provide food for its own citizens in need, the 
U.S. would not need to send as much food aid as it currently does. 
 
FERNANDEZ