The Saudi Binladin Group's 4.3 billion US dollar planned investment in Papua, east Indonesia, to develop rice fields has stalled because of problems acquiring land from local people.
Saudi Arabia and other countries, including China, are acquiring farm land abroad as part of their strategy of achieving greater food security, following sharp increases in food prices in 2008.
An Indonesian agriculture ministry official says Binladin is considering acquiring up to 2 million hectares of farmland in Papua to grow basmati rice, which is not popular in Indonesia.
Saudi Arabia has launched a government-sponsored push to invest in agriculture outside the Kingdom to secure food supplies, and is considering Indonesia, Sudan, Ethiopia, Egypt, the
Philippines and Turkey.
Land ownership is one of the issues that tends to hold up investment in infrastructure and other projects as indigenous people do not like to sell their land.
The head of the promotion and market development division at the agriculture ministry, says it is a problem that they have been facing from generation to generation.