By Dr. Layth Mahdi.
Prior to the 2003 Iraq had adopted an agricultural policy based on the financial, administrative, technical and technological support from the government for the development of the agricultural and industrial sectors. This policy led to the domestic production to provide 75% of the food requirement and a GDP contribution of 7.5%.
After 2003, Iraq suddenly shifted to a free market without any government plan or support. The four Ministries (Agricultural, Water & Resources, Industry and Trade) managing this transition did not take the necessary steps to accommodate for this new change. In addition, rising prices for inputs such as fertilizer, seeds and fuel led to reduction in productivity followed by very high unemployment and poverty. More than 50% of Iraq’s cultivable land is abandoned with farmers migrating from the rural areas into the urban cities seeking opportunity.
In 2014 the agricultural GDP dropped to its lowest point. The reason for this sharp economic and social decline is due to lack of leadership, vision, planning and management from the state Ministries and the deterioration of agriculture and industrial sectors. The lack of economic activities in the private sector have also had an impact on unemployment, as well as administrative and financial corruption in the government sectors.
The heavy reliance on oil as a basic rule of economic strength, is nothing but a form of non-sustainable development. Despite the large financial and labor availability along with the water sources, the agriculture sector seems to stay unproductive. The government has spent more than USD 2 billion for an Agricultural Initiative program (2008-2014) to reform and develop the agricultural sector resulting in lower domestic production and increased unemployment.
One example of the failed program is the government purchase of wheat crops. The government was offering farmers a subsidized price of USD 600/ton when the average global price is USD 400/ton. Due to the attractive price and corruption, neighboring countries have been smuggling wheat into Iraq where it is being sold as domestic produce.
Before 2003 the average local wheat production was 1.6 million tons and imported 2.1 million tons. Despite the significant decline in agriculture and security the Ministry of Agriculture has announced that Iraq produced 3.2 million tons of wheat during 2015 however the true domestic production cannot be verified.
The Ministry of Planning announced for 2015, that the population was at 36 million. The labor force between the ages of 14-60 years makeup 58% (21 million) of the population. The government estimates unemployment rate to be at 25% (5.25 million), however; the actual rate is more than 50% with more than 12 million people living below the poverty line ($ 2/day). Those underprivileged have no access to food other than through the Public Distribution System which lacks the necessary proteins and micronutrients.
Reducing Iraq’s unemployment will increase stability and security in the nation. The Strategic Framework Agreement (SFA) signed in 2012 agreed to expand U.S.-Iraq cooperation in the areas of health, agriculture, water, and private-sector development. Unfortunately the SFA was not properly implemented and the agricultural sector continued to decline.
With the guidance of foreign agencies, Iraq must rebuild its agricultural sector to decrease unemployment. A sustainable program needs to be developed that will train & encourage the Iraqi population to return to their farms. The abandoned farms require enhanced irrigation efficiency, improved agricultural services and implement laws favoring domestic produce.
Farming can provide over 1 million jobs for the poorly skilled population therefore strengthening the GDP and decreasing instability.