By Layth Mahdi, Agricultural Advisor. The opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.
Iraq is predominantly an agricultural country. It has a great diversity of climate, soil types, and natural resources. In the 1950’s, Iraq was self-sufficient in agriculture and the number one exporter of dates in the world. The agricultural system started to collapse with the beginning of the war with Iran. The following years saw a subsequent downfall of the agriculture economy. Finally, with the lifting of agriculture subsidies in 2003, the system nearly collapsed.
The agricultural sector is second to oil for job opportunities in Iraq. However, the workforce consists of unskilled and uneducated people who have participated only marginally in the country’s economic growth. The current agricultural output is inadequate to provide a sufficient amount of food for its own population.
The Iraqi economy needs to accelerate investments and mobilize physical and human resources. A joint investment between Iraqis and US companies would promote economic growth in agriculture development. Some goals would include the establishment of certified seed companies, improved irrigation management, development of agrochemicals industries (fertilizer and pesticides), improved agricultural machineries, and other various agricultural necessities. Middle Eastern economies could also use the principles of cooperative ventures seen between Iraq and foreign investment.
Performance of GOI is weak due to lack of vision in economic sectors. The Iraqi public is unsatisfied with the 100-day promises. Prime Minister Nouri Al Maliki needs fresh faces and ideas to improve the economy. He needs to establish working groups to develop a real strategic plan for economic growth across Iraq.
Iraq’s petroleum has traditionally provided about 95% of the total government revenue. Data from the Ministry of Finance shows that until the end of June 2011, Iraqi oil revenue reached up to 80 trillion dinar ($68 billion). By the end of this year, the Iraqi budget may reach more than $100 billion. The additional revenue is a result of increased oil demand and production. Even with this increased revenue, Iraq still struggles investing the countries income. For example, the growth of the agricultural gross domestic product declined from 7.5% in 2000 to less than 1% in 2010.
Agriculture has been neglected in Iraq. There are little funds allocated for agriculture development in the provinces. The small agricultural budget consists of federal employees and minor projects. Iraq’s oil revenue will continue to increase over time. The time is now to set the priorities for development outside of oil. Prime Minister Al Maliki must allocate funds for agricultural development. Money needs to be obligated for agricultural production, counter rising food security. This will creating employment for Iraqi citizens, reduce poverty and violence. Any type of national fund program from petro-dollars will greatly enhance all facets of the agricultural production in Iraq. It will allow an increase in sustained domestic and international investment.