After years of neglect, Iraqi agriculture strives to adopt new systems, technology
Since the beginning of recorded time, agriculture has been an important, if variable, economic sector for the area that is now Iraq.
The Tigris and Euphrates river valleys offer naturally fertile soil. But the rivers’ unpredictable and irregular flow as well as salinity problems have plagued the region’s agriculture as far back as the Mesopotamian era.
In modern times, Iraqi agriculture continues to face
the same historical challenges, along with a few new ones. More than 30 years of land mismanagement and 12 years of United Nations-imposed economic sanctions have taken a heavy toll on crop productivity.
Farm machinery and equipment is dilapidated, irrigation systems need modernization, and salinity issues have not been addressed. Although the government, through the Ministry of Agriculture, provides subsidized farm inputs at 20% of cost, higher market prices in neighboring countries often have encouraged farmers to sell the inputs rather than use them.
In spite of the situation, most analysts agree that Iraq has the potential for substantial agricultural growth, including a doubling of grain production, once these impediments are removed.
The area of cultivatable land in Iraq is estimated to be around 12 million hectares, with 4 million rain-fed and 8 million irrigated. But currently, only about 50% of the total is actually cultivated.
Some 80% of planted area is sown to grains, including hard red winter wheat varieties, durum, barley and rice. Some 10%, mostly in the north, is planted to orchards, with the remainder in crops such as dates, cotton and vegetables.
As with the production systems, neglect of key grain handling and processing infrastructures has left those segments struggling with inefficient, antiquated systems in need of investment. Although some Australian and European interest has surfaced in these areas, political uncertainty and security concerns have tempered much activity to date.
In addition to problems related to farming practices and equipment, Iraqi producers and processors have been constrained by government policies emphasizing central control.
The former Iraqi government set up a controlled wheat market and fixed prices for bread wheat using the Iraqi Grain Board, which operates under the Ministry of Trade. The activities of this procurement agency support the Public Distribution System, which since 1990 has provided a "Food Basket" distributed to every Iraqi each month at a price of about 12 U.S. cents.
The "Food Basket" includes 9 kg of flour, 3 kg of rice, 1 to 2 kg of pulses (lentils and chickpeas), cooking oil, milk, washing powder, soap, tea, salt and sugar. Distribution takes place through 40,000 agents, such as small retail shopkeepers, throughout the country who are paid to give out the rations and keep records on each recipient.
Some 90% of Iraqis use the PDS system, and 60% reportedly are dependent on it. Some people resell items they do not need, creating some wealth distribution and economic activity.
Money for PDS procurement and administration now comes from a Coalition Provisional Authority fund created with Iraqi oil revenues. The budget is being turned over to the Ministry of Finance.
The PDS concept was highly successful in providing for Iraqi citizens’ nutritional needs when economic sanctions were in place, but it did little to help agricultural productivity. With the end of Saddam Hussein’s government, the Iraqi technocrats now managing the ministries and the Grain Board expect to move to a more market-orientated system, but policy reforms will not be made until the new government is established.
In the interim, Iraqi agriculture officials, with input from CPA advisers, have made some changes to the existing wheat procurement system. Three quality designations have been set up, with the highest quality wheat fetching U.S.$180 per tonne, to encourage farmers to pay more attention to quality issues.
In conjunction with this program, Iraqi officials earlier this year received training in updated grain inspection techniques at Egypt’s Central Laboratory for Food and Feed, where they studied grain grading, mycotoxins, quality control and sampling. Additional training followed at the Ministry of Supply Storage Facilities and Laboratories in Jordan.
In addition to modernizing the domestic grain inspection system and increasing the emphasis on quality, Iraqi officials have relaxed grain export restrictions somewhat. Although exports of bread wheat still are prohibited, durum and barley may be sold with export certificates issued by the trade ministry.
These changes have encouraged a small but growing number of Iraqi entrepreneurs to enter the export trade. In addition to brokering grain sales, some have begun to rent storage space to manage inventories.
GRAIN STORAGE, HANDLING AND TRANSPORTATION
The Iraqi grain storage system relies primarily on a network of 55 government-owned elevators, most of which are located in the Tigris and Euphrates river valleys. The elevators generally are old, and the most modern of them feature 1980s technology and process control.
The condition of the facilities varies. Although some have suffered from neglect, others are clean, well maintained and sources of pride for their managers.
The facilities also vary in size, with observers estimating storage capacity for all elevators totaling about 1.1 million tonnes. It is not uncommon for grain to be stored outdoors with no cover, but, at least during the six-month dry season, that situation poses few quality issues.
Elevators receive domestic grain from farmers. Grain inspection typically has been based on visual assessment of damaged kernels and manual weighing, with farmers issued a receipt based on quantity. Farmers then take the receipt to a bank for cash, as Iraq has no agricultural lending programs.
Although Iraq built an extensive rail system, it, like most other infrastructure, has been neglected and is not widely used. In its place, a thriving commercial trucking business has evolved to handle virtually all grain transportation, particularly for imported grain.
Iraq has only one deep-water port, at Umm Qasr in southern Iraq on the Persian Gulf. Imported grain also moves through the port of Aqaba, Jordan, and overland through Turkey.
Iraq’s grain import contracts traditionally include delivery to interior locations, requiring exporters to arrange transport from the port. Private entrepreneurs in Iraq typically are hired to manage the interior logistics.
WHEAT PROCESSING AND CONSUMPTION
Most officials involved in Iraq today concede that statistics on the number, capacity and status of Iraqi wheat flour mills — either now or in recent years — are unreliable.
In April 2003, the World Food Programme attempted an assessment and reported that Iraq’s major milling hubs consisted of Baghdad with 39 mills, Mosul with 21 and Basra with nine. The WFP also estimated that before the 2003 hostilities began, the total effective milling capacity in Iraq was 17,455 tonnes per day.
In addition to these major mills, smaller facilities — each with milling capacity of perhaps 1,000 tonnes per month — are affiliated with some of the 55 grain elevators, particularly in the northern sections of the country.
Wheat flour and bread are staples of the Iraqi people. Although flour consumption figures, like capacity figures, are not available, the 9 kg ration in the monthly "Food Basket" works out to annual per capita consumption of 108 kg, which in turn implies a minimum total consumption level of 2.6 million tonnes of flour a year, based on population.
All of Iraq’s flour mills are owned by the government, but some are privately operated. In those cases, millers lease the premises.
As with the elevators, Iraq’s flour mills typically operate with 1980s technology and vary in terms of maintenance and condition. Given the lack of attention to domestic wheat quality, millers typically have used a 50-50 blend of domestic and imported wheat to produce ration flour.
Many small bakeries dot cities and villages, and flat bread and rolls are the most popular items. Some Iraqis sell flour from the PDS ration to bakeries.
LIVESTOCK, FEED AND OILSEEDS
Lamb and poultry are the staple meats in Iraq, but only the broiler industry constitutes a major commercial sector. Processing plants are owned by the government.
A commercial feed industry currently does not exist. Instead, feed rations have consisted almost entirely of imported poultry concentrates mixed by broiler operators with domestic barley.
That situation may change in the future, as owners of nine Iraqi poultry operations representing 70% to 80% of total production recently formed the Iraqi Poultry Producers Association. This group, modeled after the Moroccan National Poultry Federation, expects to draw support from a total of 27 large Iraqi producers.
The association’s goal is to bring Iraq’s poultry sector, isolated for the past 20 to 30 years, into the 21st century. As a first step, IPPA members recently traveled to Turkey to see new poultry management and feed technologies, and they attended a feed formulation seminar in Jordan.
The industry hopes to begin importing maize and coarse grains to improve feed and enhance productivity. But in the near term, security concerns and a lack of a commercial banking system will pose challenges to these goals.
Another area of potential development is in oilseeds. Iraq grows some sunflowers and olives, but has no commercial production.
Under a UN program last year, soybeans were planted and reportedly resulted in a good crop. But the field was torn out, as no market could be found.
Iraq has only one oilseed plant, which consists of a hydraulic press. But UN officials said the program demonstrated the commercial potential for soybean production if a viable oilseed processing industry were established.
Demography: Population 24.7 million (July 2003), 2.78% growth rate (2003 estimate); Arabic language, Kurdish in the north Kurdish region; Muslim religion, 97% (65% Shi’a, 35% Sunni).
Geography: Middle East bordering Persian Gulf, between Iran and Kuwait; mostly desert, broad plains, reedy marshes along Iranian border, mountainous regions in north; dry, hot summers, with cold winters, snow in north.
Government: In transition following April 2003 end of Saddam Hussein regime. Efforts to establish an interim government are under way, with election of a permanent government tentatively scheduled in early 2005.
Official agricultural agencies: The Ministry of Agri-culture; Iraqi Grain Board, operating under the Ministry of Trade.
Economy: Iraq’s economy is dominated by the oil sector, which traditionally has provided about 95% of foreign exchange earnings. The Iraq-Iran war in the 1980s, the 1991 war following Iraq’s invasion of Kuwait and subsequent international sanctions substantially cut into Iraq’s oil revenues, although the United Nations in the 1990s authorized oil exports in exchange for food, medicine and infrastructure spare parts. A drop in gross domestic product in 2001-02 was largely the result of the global economic slowdown and lower oil prices. U.S.-led military actions in 2003 to oust the regime have resulted in the shutdown of much of the central economic administrative structure.
G.D.P. per capita: U.S.$2,400 (purchasing power parity), -3.0% growth rate, 70% inflation (all 2002 estimates).
Currency: Iraqi dinar (IQD). Exchange rate fixed to the dollar in 1982 (2002 exchange rate: 0.31 IQD = 1 U.S. dollar). Former IQD bank notes under the Saddam Hussein government became officially worthless on Jan. 15, 2004. The replacement bank notes currently are not traded on exchange markets, resulting in no reliable indicative value for the IQD.
Exports: U.S.$13 billion f.o.b. (2002 estimate), crude oil.
Imports: U.S.$7.8 billion (f.o.b., 2002 estimate), food, medicine, manufactured goods.
Major crops/agricultural products: Wheat, barley, rice, vegetables, dates, cotton.
Transportation: Highways, 45,550 km, 38,399 paved; railroads, 1,963 km, all 1.435-m gauge; Umm Qasr is the major port.
Internet: Iraq’s Internet sites and access currently are supported by commercial and non-profit providers. Since 2003, dozens of news and information web sites have been established.
Production Consumption Exports Imports
Wheat 2,000 4,300 400 2,500
Barley 1,150 800 250 0
Rice 100 1,195 0 1,100
2003-04 marketing year; rice production is milled
Source: U.S. Department of Agriculture