Wednesday, March 4, 2009

Another Tough Year Ahead For Iraq’s Farmers

Iraq was once one of the major agriculture producers of the Middle East. Now the farming sector has fallen into disrepair, and Iraq is a major food importer. Both Baghdad and the U.S. military however are hoping that it will make a come back to provide a source of growth to make up for the plummeting price of oil, and jobs for an economy that is still facing high unemployment. The problem is that the farm sector faces such large structural problems that it will probably take a decade for it to recover.

In 2008 Iraq faced one of the worst drought in years. Rainfall in 2007 was down 40% according to the Iraqi government, and affected the northern provinces of Irbil, Dohuk, Tamim, Diyala, and Ninewa the worst. Barley and wheat that are dependent upon rain were hit the hardest. Production for both dropped 51%, and in November 2008, the government announced that it would have to import 50 thousand tons of wheat to make up for the shortfall. The Ministry of Agriculture started several assistance programs, but U.S. government observers didn’t think that many were effective.

2009 looks to be no better. The Iraqi paper Al Sabah reported that the Water Resource Ministry announced in January that snow and rain were down 1/3 from normal levels. In February the Agriculture Minister said that farm production is down 30%. This year the United Nations has also designated Iraq one of 32 countries that needs external food aid. Iraq already imports 50% of its food needs.

The lack of water was just the latest hit to a sector of Iraq’s economy that has fallen on hard times since the 1980s. 26% of Iraqis are involved in farming, and it accounts for 8% of the country’s production making it one of the largest after oil. It has largely been neglected since the Saddam times however, and then faced international sanctions, the chaos and sectarian war that followed the U.S. invasion, and government incompetence. For example, many farm workers have left the rural areas for the cities. The fighting also disrupted trade within the country. Corrupt government officials is another issue. The chief Iraqi inspector in Wasit told The National that corruption was everywhere in the province. Many officials take cuts of aid that is supposed to go to farmers, and families often offer bribes to get assistance from the government. The government is also not able to supply fertilizer and water from the irrigation system. Electrical shortages have limited power for pumps. There are few tariffs, which means Iraq has been flooded with cheap food imports from Syrian, Iran, and Turkey since the U.S. invasion. The lack of adequate drainage is also leading to high salinity in the south. 5% of the country’s arable land is disappearing a year as a result. Finally, there is little use of modern farming techniques, and a lack of credit. Many farmers can’t qualify for loans anyway, and need bribes if they want one. All of these make Iraqis less competitive than their foreign competitors.

Baghdad is now trying to promote the farm sector in a drive to diversify the economy. Prime Minister Nouri al-Maliki announced a $200 million plan for agriculture. The government is going to subsidize seed sales and support for livestock and dates. Baghdad also has a plan to reclaim six million acres of land with high salinity. At the same time the government has cut subsidies for fuel and fertilizer.

Many U.S. officials in Iraq are skeptical of these plans. The head of the U.S. Provincial Reconstruction Team in Maysan and another member in the province told Reuters that the business was so dysfunctional and broken, and the government so incompetent and corrupt that it would be a Herculean task to revive farming. A U.S. Department of Agriculture report said the sector was “a disaster.” A U.S. farm expert thought it would take ten years to recover.

None of this is good news for Iraq’s struggling economy. The country is almost completely dependent upon oil to earn money. Now that prices have dropped for crude, the government is facing some tough decisions. Baghdad is talking about diversifying, and it’s important that the Agriculture Ministry is getting more money, but it’s unclear whether this is mere lip service or a real commitment.

SOURCES

Alsumaria, “Iraq waning farm sector urges recovery,” 3/3/09

Ashton, Adam, “Iraqi farmers are back in business, and Iraqis love local produce,” McClatchy Newspapers, 12/20/08

Aswat al-Iraq, “Agro-production down due to scarce rain – minister,” 2/23/09

Department of Defense, “Measuring Stability and Security in Iraq,” December 2008

Iraq Directory, “Iraq is Submitting a Tender to Buy 50 Thousand Tons of Wheat,” 11/25/08

Latif, Nizar, “Iraq in midst of ‘agricultural disaster,’” The National, 12/11/08

Ryan, Missy, “Iraq’s ailing farm sector more crucial than ever,” Reuters, 2/28/09

Al Sabah, “Iraq faces massive water shortage, Water Resources said,” 1/21/09

Sands, Phil and Latif, Nizar, “Corruption at the root of Iraq’s failing agriculture,” The National, 2/24/09

Special Inspector General for Iraq Reconstruction, “Quarterly Report and Semiannual Report to the United States Congress,” 1/30/09

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