Tuesday 11 December 2012

IRAQ;The Oil for Food Program, When Can We End It?نهاية الحصه التموينيه؟

The population of Iraq, a country that now has an oil revenue of
over 120 BillionsUS$ per year, has been reliant on food handouts for 16 years.
It is time we grew our own food!

Jamal Fuad, Ph.D[i].

International Consultant


For the first time in the history of the Kurds, we are more or less independent, receive a budget that could not have been even dreamed of few years ago, and billions of dollars fill our treasury. PLEASE let us take advantage of this opportunity and let us find means of finding work for our young people. Let us invest in Agriculture. With determination we can do it. We can become a real developed country. Why not engage a few international experts and also make use of our own experts, to show us the roadmap to achieving this. Let us consider all venues on how to modernize our land, our people and our future outlook.  Now that we have the chance let us use our budget to take Kurdistan into the Modern World. After years of suffering it is time to go ahead.  This semi- independence was not gained easily. On the road to this semi independence, thousands have sacrificed their lives, thousands were imprisoned, while many more thousands perished in the Anfal Campaign and the chemical bombardment of our villages and towns. We should not ever forget this, and as much as the cost of reaching this current stage was, perhaps it would be even more costly to keep the level of independence we now enjoy. So let us take advantage of the present, and plan for the future of Kurdistan and its people.


The implementation of the Oil-for-Food Program in 1996, using oil revenue to purchase food and other items for distribution to the Iraqi population, was no doubt an important UN decision imposed on the Iraqi regime.  It definitely saved many lives and prevented the imminent starvation that was facing the Iraqi population. However, two regulations of the program caused the decline of the Iraqi agricultural sector, and the loss of the local farmers’ enthusiasm to participate in the production of food. These two damaging regulations were:

1.     No local procurement of food products was allowed, and

2.     The food items were distributed equally to all the sectors of the population, rich and poor alike.

Both regulations discouraged local food production as there were no markets for locally produced food items.

As many of the well-to-do sectors of the population did not use their food rations, either because they could afford not to do so, or they rejected the poor quality of the food rations distributed. Therefore, such items eventually found their way to the local markets and critically lowered prices of locally produced food items. Such low prices discouraged farmers to engage in food production, as it became un-economical to do so. Furthermore, the earlier regime’s policies of evicting farmers from their villages, moving them into collective villages, carrying out the Anfal[2] Campaign, and using chemical weapons in the country side, were further reasons why agricultural production ceased. Our farmers ended up becoming consumers of imported food rather than producers. This was the start of the Dependency Culture that is continuing to date.

Steps needed before the cancellation of the oil for food program:

Recent attempts to do away with the Oil for Food Program failed, as the agricultural sector has weakened greatly and local production cannot meet the demand of the population. Neither the Central Government, nor our Regional Authorities, have so far taken serious steps to increase support to the agricultural sector, such as allocating sufficient budgetary need for the sector, provision of required credit to farmers through agricultural banks, or provision of seeds, fertilizers and machinery. Agricultural extension remains weak as they lack transportation and training to periodically visit the farmers and advise them on better production methodology.  We need to realize that we are living in a global economy and we need to raise production standards in order to face outside competition and survive the challenge.

The Current Situation:

Production methodology, storing and marketing of our agricultural products require serious attention. Yields are low by world standards and the quality of the products is also below standard levels. Storing and marketing need improvement in order to compete in the global markets. This is especially true of dairy, vegetable, and fruit products where local products cannot compete with imported ones. Unless we raise our standards of quality and marketing, sale of these items is problematic and will always bring lower prices that will not pay for the cost of its production. Farm labor has also become more expensive due to existing inflation, and therefore, we need to introduce more machinery in to our farms.

With respect to animal and poultry sectors the cost of feed, which is being mostly imported, will keep meat price high and beyond the reach of the lower income group.

Creating Market Demand for locally Produced Food Items

Due to earlier Baathist political policies, and the unprofitability of agricultural enterprises as a result of the implementation of the Oil for Food Program, large numbers of our farmers have abandoned their farms to live in bigger towns and cities. This is especially true of the younger generation.  It would take a great effort to lure such people back to their land holdings and restart their agricultural activities. As the cost of farm labor has escalated, production costs have also risen causing a rise in sale prices that cannot compete with that of imported goods. Further, poor yields, poor quality and poor marketing prices make the sale of local products even more difficult.

Then we should ask ourselves: How can we convince our farmers to return to their land, and restart reviving an agriculture sector so badly damaged?  

It is obvious that this cannot be accomplished by simply lecturing them to go back, or forcing them to do so. Neither can this process be accomplished by distributing a few pickups, or by the unrealistic policy of buying crops at three times the international price from a small group of wheat growers, as is practiced in the plains of Erbil with the wheat crop.

What we need to do at present is to create demand for the traditional crops that can be locally grown.  We need to guarantee purchase of all farmers’ production of identified crops at reasonable prices, possibly close to the prevalent international price.  This could be one serious action that will give financial incentives to the farmers and may encourage them to return to the countryside. 

An important question now arises: What would the government do with all the products that are purchased by the government? The answer to this important question is that establishing agro-industries can be an important factor that can come to the rescue.  Such products that are bought by the government and which cannot compete with imported products, will be processed in specific agro-industrial projects which need to be immediately constructed such as a dairy processing industry, oil production, cereal processing, and fruit and vegetable processing plants in addition to feed production plants for the production of feed for our livestock, poultry and fish farms. Such agro-industries become the center for marketing locally produced agricultural products.  The quality demanded by such specific industries is not as restrictive compared to the consumers demand for high quality merchandise that can compete with imported, well presented, and good quality items. Creating specific agro-industries will create the required demand and would encourage farmers to engage in crop and livestock production activities as they will be assured of a market for their product and an agreed price for it.  This is the only way to encourage farmers to return to their farms and start producing the food required for the population. Only when this system is established, and our farmers start quality agricultural production, can we think of ending the Oil for Food Program.

The importance of Agro-industries:

Specific agro-industries, whether built by the government or by the private sector through provision of credit, are very important for a number of reasons:

1.    Provision of a center where farmers can dispose of their agricultural production;

2.    Providing the market with some food items that are currently imported;

3.    It would provide job opportunities, especially where our young       graduates can find jobs;

4.    It would create demand for agricultural products and give incentives to our farmers to improve the quality of their products and increase their production level;

5.    It would provide funds to the farmers whereby they can improve their financial and social status;

6.     The marketing venues are established through annually announcing guaranteed purchase of food items, with agreed upon prices acceptable to the farmers.  Once the farmer is assured of an income, he will endeavor to return to farming practices.

(I suggested that the government has to initiate the agro-industries since investment in the agricultural projects takes a longer time than investment in other sectors, such as the construction sector or in some industrial projects.  This being the case the private sector is wary of such projects and is not ready to invest in a project that takes a longer time to recover the costs involved.   However, the government can afford waiting for its return of its investment in agro-industrial projects, unlike the private sector which are after quick gains on their investments.)

History behind this suggestion:

Early in the 1950’s, the Iraqi Ministry of Development decided to introduce the sugar industry to Iraq because of the large quantities of sugar that were consumed by Iraq’s population. A joint committee between the ministries of Development, Agriculture and Industry was formed to supervise this project. 

The crop that was used was sugar beet. The beet crop was to be tested in three regions to select the best area or region suited for its growth.  Three areas were selected for this purpose: Sharezoor, in Sulaimani, Hawija  in Kirkuk, and selected areas in the plain of Mosul. When the program started there was not a single head of sugar beet grown in Iraq. (Sugar beet is different from the garden beet which is very well known in Iraq). A program of extension activities on how to grow sugar beet started on farmers’ fields, while plans for a sugar beet factory was progressing in parallel at the Ministry of Industry. Through an effective extension system, farmers were guided to plant small areas of sugar beet on their farms to acquaint themselves with the agronomic procedures and find out how much they would gain if they shifted to sugar beet production. They were continually supervised on how to get maximum yield from the crop, and were given seeds, fertilizers and plant protection chemicals. At the end of the season the beets were harvested, weighed and the farmers were rewarded with a check for the quantity of the beets they had produced. As the factory was not ready, the beets were left on the farmers fields to feed their livestock until the factory become operational.

The first beet factory was built in Mosul in 1959. The second factory was built in Sulaimania in the1970’s. Unfortunately, this factory was destroyed during the Iraq/Iran war in the eighties. Currently, a similar experiment for soybean is under implementation by a group of Americans on the plains of Erbil.  

The importance of Agro-industries:

We currently import just about every food and animal feedstuff that we need from abroad.  The quality of these food and feed is not assured, and many imported items are expired by the time they reach the markets. Further, we have ample land and water to attend to the needs of our population. We need not wait for food or feed to come from out of the country. Above all we have a large number of unemployed people who must be put to work if we want our young country to develop. We have a chance to become an important agricultural country, especially now that we have a sufficient budget to allocate to the agricultural sector. The country cannot develop with our countryside devastated and our young graduates remaining without work.  Further, and most importantly, we need to provide good quality food for our population, and provide cheaper feed to our livestock to bring down the inflated prices of poultry and beef because of the high costs of importing feed.

How to Start:

As I stated earlier, the quality of our agricultural products is poor, its storage and marketing are such that the consumers prefer imported well packaged products, and therefore the farmers will not get the prices they like to get. Having a guaranteed market such as an agro-industry will encourage them to produce a better crop or spend money to improve their crops’ quality through varietal changes, better storage, or eventual marketing.

Initially, specific locations are chosen for the production of crops or animals in the region. For example: Duhok and Zakho could be good places for fruit processing or animal and poultry feed production. So is Sharbazher in Sulaimany. The plains of Erbil remain the center of wheat production, while Sharezoor in Sulaimany could be the center for a dairy industry where maize, millet, sorghum and soybean can be successfully grown. The warmer regions of Kirkuk and Garmian would be assigned to barley. Vegetables are grown just about everywhere.  Penjween, having a colder climate, is well suited for the growth of seed potato and its storage.  There are other considerations that need to be taken into account, such as economic justification for selecting specific locations, ease of transport, accessibility, etc. The places mentioned in this report are by no means exhaustive and are only given here as possible examples. 

While the agro-industries are being implemented, the Ministry of agriculture will strengthen its research and extension staff, with emphasis on training both abroad and in the country, and plans for the selection and production of better seeds, while the mechanization department tests the best machinery suited for the production and harvest of the crops to be grown.

What is required from the Government?

A policy statement from the government stating its commitment to the rejuvenation of the Agricultural Sector and recognising the importance of the sector in the development of the country. To this effect it will establish The Agricultural High Committee, to attend to the following tasks:

1.    Identify the food and feed stuff needs of Iraqi Kurdistan and lay down a road map identifying specific steps for its implementation.

2.     Identify measures needed to satisfy the food and feed needs of Iraqi Kurdistan.

3.     Identify areas where specific projects are to be implemented, especially those of the agro-industrial projects.

4.     Discuss needs of trained personnel in specific disciplines, and those areas where they are needed.

5.     Identify, and implement, the means of strengthening the agricultural quarantine system in the border areas of Kurdistan.

6.    Identify suitable agricultural machinery for crops grown.  

7.    Determine where expertise is needed to support proposed projects.

8.    Encourage the agricultural staff to attend seminars and conferences

9.    Establish Agricultural Credit banks, and raise loan ceilings to satisfactory levels.

10.Form committees to engage in specific tasks assigned by the Committee.

11.Set up an advisory system to follow up progress on projects suggested by the High Agricultural Committee.


[i]Jamal Fuad, born in Sulaimania, finished his grade and high school education also here ; left for Beirut , Lebanon, to improve his English language; received his B. Sc. from N.C State college and MS.C from the U of Maryland, in Agronomy, both USA. Worked 5 years for the Ministry of Ag in Baghdad, Iraq, then returned for further studies at the U of Minnesota , where he received Ph.D. in Plant Genetics. Back to Min of Ag. Baghdad, to head the Field Crops Division, then to FAO as International technical staff for 9 years, and later for 13 years at the World Bank headquarters in Washington, D.C.;Spent 4 years as assistant to the University of Sulaimania President , before returning to FAO and the World Bank. He was recruited to become Minister of Humanitarian Affairs for 2 years and one year as Minister of Agriculture with the Regional Kurdish Government in Iraqi Kurdistan. Now, he is retired and enjoys living with his wife Kathy, on a hobby farm near a small village, close to his home town Sulaimania.

{2} The Anfal Campaign refers to a policy of the Iraqi former regime to destroy large number of villages, evicting its population to the South of the country where they were all killed men, women, and children.



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