Transitioning Iraq

by Morton Sosland
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Daniel G. Amstutz relates his experience as senior agriculture adviser to the Iraq coalition

Hardly anyone in grain-based foods in America has had a more varied, and also more challenging, career than Daniel G. Amstutz. While Amstutz does not rank the latest chapter as the apex of a life that has taken many twists and turns, he does consider his service in 2003 as senior adviser for agriculture to the Coalition Provisional Authority in Iraq as something that burnishes his many years of public service as well as his work on behalf of United States agriculture and the global grain industry.

It was almost to be expected that the Bush administration would turn to Amstutz when, in the wake of the military defeat of Saddam Hussein’s army, it was suddenly decided that an American with skills in agriculture needed to be involved. This was an urgent and sudden decision, prompted in part by the discovery that Australia had been promised a leading role in shaping the post-war Iraqi food and agriculture system in return for that country joining the Coalition that defeated Saddam. While Amstutz didn’t pause too long, he acknowledged that accepting the assignment involved some deep thinking on his part.


At the time the invitation came, Amstutz was happily involved in developing his own consulting business, with headquarters in Arlington, Virginia, U.S. He was at last being his own boss after a highly varied career that saw him working for any number of different entities.

Beginning his grain career with Cargill, Inc., which included manning the spring wheat and durum trading desks at corporate headquarters, Amstutz’s ability to enunciate and carry out strategies led to his assignment to the new Cargill Investor Services.

After managing that business for a number of years, he was persuaded to join Goldman, Sachs & Co. by its then leader, Robert Rubin, who perceived that Amstutz would help him and his associates understand the opportunities of what was then the newly-born futures trading. In that position, Amstutz helped guide Goldman Sachs into a leading position in non-traditional futures trading.

Always interested in politics, Amstutz in 1982 went from New York to Washington as under secretary of agriculture during the Ronald Reagan administration.

From that USDA leadership position, Amstutz was asked to head agricultural negotiations for the U.S. during the Uruguay Round negotiations. He received great credit for helping to conclude the first international trade negotiations that achieved meaningful progress in liberalizing agricultural support programs.

In 1992 Amstutz went to London as the executive director of the International Wheat Council, now the International Grains Council. He was the first American in that position. After three years with the I.G.C., he returned to Washington and became director of the North American Export Grain Association (NAEGA), where he worked to expand U.S. exporting opportunities.

No wonder then that the Bush administration chose Amstutz for the exceptionally tough task of assuring the Coalition Provisional Authority that their policies on agriculture matched the military and political goals of the coalition’s member governments.


The difficulties faced in regard to agriculture, Amstutz noted, were not only exacerbated by the aftermath of a military conflict, but also by the fact that the 26 million people of Iraq had become totally dependent on their government for food during the Saddam Hussein regime.

"Everyone in the country receives a food basket," he pointed out, "and this food provides the daily food ration for at least 60% of the country." These food baskets, which in the case of flour include 9 kilos (nearly 20 lbs), were distributed by 44,000 governmentally-appointed agents.

It was only in the aftermath of the first Gulf war in 1991 that Iraq became a substantial food producer. Prior to 1991, it depended on imports for 75% of its calorie supply. Amstutz noted that Iraq is the only country in the Middle East that does not have a water shortage problem, and also has large swaths of land that are quite similar in their production capacity to the central plains of the United States.

Currently, about 4 million tonnes of wheat are milled annually to meet the food basket requirements, of which 1.2 million tonnes were domestically produced in 2003, a good crop year. In 2000-01, the Iraqi wheat crop fell to a recent low of 400,000 tonnes, contrasted with 1.5 million being grown in 1991-92.

Even with the electricity shortages that worsened in the wake of the war, flour mills in Iraq for the most part have their own power supplies, and he said there was no need for importing large quantities of flour.

Food supplies and distribution mainly came through the United Nations’ World Food Programme as well as the U.N.’s Food and Agriculture Organization. The problem, Amstutz noted, was that Saddam Hussein told the F.A.O. and even the W.F.P., using funds from the Food for Oil Program, how to spend the money earned from oil exports.

In many instances, money that should have been used to improve domestic production and domestic food supplies went into acquiring vast quantities of equipment, including trucks, that are nowhere to be seen, Amstutz noted. He pointed out that the General Accounting Office is expected to conduct an audit of how some of this money was spent.


One of the primary issues facing Amstutz in Baghdad was determining how the food supply should be handled after the middle of 2004, when the Iraqi provisional government is scheduled to assume power and even to name a minister of agriculture.

He said that he strongly advocated the use of a food stamp system similar to what is used for food relief in the United States, but that this was turned down in favor of the issuance of "checks" to people to be used in purchasing food. At the same time, prices for commodities like wheat, in an unfettered market, have more than doubled, and he expressed concern about the problems this might cause for the development of a democratic society. This was especially the case for a country that has experienced 70% unemployment, with a huge gap between market prices and actual incomes.

In addition to food stamps, Amstutz said he preferred a Marshall Plan-type of operation in Iraq, instead of the "purge and destroy" course adopted by the Coalition forces, primarily as the result of recommendations by ex-patriates from Iraq who had become close advisers to the Bush administration. He opined that this advice had caused several mistakes in dealing with Iraq after the war, including the expectation that the victorious military forces would be hailed as liberators and that guerilla sabotage could be easily controlled.

At the same time, Amstutz could hardly have been more positive than he was in expressing pride in the U.S. military, whom he described as made up of "cheerful, professionally-trained young people." But even these people, he noted, cannot correct the billions of dollars that have to be spent on managing the country’s affairs and the attempt to bring democracy to that nation.

He pinned his hopes for the future on the emergence of a leader acceptable to the Iraqi people, someone who could shape a coalition between the various warring forces within the borders of that strife-torn country. "No one has emerged yet, but I certainly hope that will happen soon," he said.

From an agricultural and food production point of view, Amstutz has his own vision of what should happen in Iraq. He placed great emphasis on re-seeding date palm trees, 16 million of which were killed by Hussein’s orders during the Iraq-Iran war to keep invaders from using the trees for hiding. Amstutz is working to obtain the funding for this vast program, which will require at least seven to nine years for rebuilding what was at one time the core of the Iraqi food supply.

He said there’s no reason why Iraq shouldn’t be producing 2 million to 3 million tonnes of wheat annually, and that the country also has the potential to become a major exporter of fruit and vegetables.

A successful U.S. exit policy, he declared, depends on providing Iraq with this food production potential, Amstutz said, even while acknowledging the difficulties of the present situation, particularly the chaotic state of security.