Order Code RL32093 CRS Report for Congress Received through the CRS Web Iraq Agriculture and Food Supply: Background and Issues Updated June 7, 2004 Randy Schnepf Analyst in Agricultural Policy Resources, Science, and Industry Division Congressional Research Service ˜ The Library of Congress Iraq Agriculture and Food Supply: Background and Issues Summary Iraq’s agricultural sector represents a small but vital component of Iraq’s economy. Over the past several decades agriculture’s role in the economy has been heavily influenced by Iraq’s involvement in military conflicts, particularly the 1980- 88 Iran-Iraq War, the 1991 Gulf War, and the 2003 Iraq War, and by varying degrees of government effort to promote and/or control agricultural production. Rapid population growth coupled with limited arable land and a general stagnation in agricultural productivity has steadily increased dependence on imports to meet domestic food needs since the mid-1960s. Prior to the 1991 Gulf War, Iraq was a major trading partner with the U.S. Iraq benefitted from substantial USDA agricultural export credit during the 1980s to purchase large quantities of U.S. agricultural commodities. By the mid-1980s Iraq was the major destination for U.S. rice exports. Iraq was also an important purchaser of U.S. wheat, corn, soymeal, and cotton. After the 1991 Gulf War, U.S. agricultural export credit to Iraq was ended and USDA was left with $2 billion in unpaid credit. U.S. agricultural trade with Iraq remained negligible through 2002. Present-day Iraqi agriculture and trade have been heavily shaped by the 1990 U.N. sanctions and the Iraqi government’s response to them. From 1991 to 1996, prior to the startup of the U.N.’s Oil-For-Food program (OFFP), Iraq’s agricultural imports averaged $958 million or less than half of the pre-war level. Under the OFFP, the value of Iraq’s agricultural imports rebounded to average $1.5 billion (during the 1997-2002 period). In early 2003, just prior to the U.S. — Iraq War, the country’s agricultural sector remained beset by the legacy of past mis-management, unresolved disputes over land and water rights, and the lingering effects of a severe drought during 1999-2001. Clearly, Iraq will be dependent on imports for fully meeting domestic food demand for several years to come. In the near term, food aid shipments are likely to play a major role in determining the share of Iraq’s agricultural imports, and may influence the evolution of future commercial imports. This report is an extension of CRS Report RS21516, “Iraq’s Agriculture: Background and Status.” It provides a brief description of Iraq’s agro-climatic setting and the history of agricultural policy, production, and trade leading up to the period just prior to the 2003 Gulf War; it reviews issues likely to affect the long-term outlook for Iraq’s agricultural production and trade; and it provides several tables of historical data relevant to understanding the evolution of Iraq’s agricultural production and trade. This report will be updated as events warrant. For detailed discussion on the status of humanitarian aid efforts, see CRS Report RL31833, Iraq: Recent Developments in Humanitarian and Reconstruction Assistance. For discussion on the U.N. Oil-For-Food Program and trade during the decade of the 1990s see CRS Report RL30472, Iraq: Oil-For-Food Program, International Sanctions, and Illicit Trade. Contents Purpose of This Report .........................................1 Introduction ..................................................1 Agro-climatic Setting ...........................................3 Land Use Patterns .........................................5 Mineral Wealth Favors Agriculture ............................6 Crop Production Occurs in Two Major Zones ........................9 Rain-Fed Agriculture .......................................9 Irrigated Agriculture........................................9 Iraq Possesses Extensive Irrigation Potential .......................11 Surface Water Resources and Irrigation .......................11 Salinity Has Been a Persistent Problem ........................12 Ground Water Resources and Irrigation .......................13 Structural Evolution of Iraq’s Agricultural Sector ....................14 Introduction .............................................14 Early Structure of the Agricultural Sector: Pre-1958 ..............14 Rise of State Dominance: 1958-1979 .........................16 Iraq’s Agriculture during Saddam’s Early Years: 1979-1990 ...........18 Reforms Favor the Private Sector ............................18 Agricultural Inputs Highly Subsidized.........................19 Despite Extensive Subsidies, Trade Dependence Grows...........20 U.S. Provides Substantial Trade Assistance to Iraq ...............20 Date Production and Trade Remain Important ..................21 Poultry Surpasses Beef as Primary Meat Source .................21 Iraq’s Agriculture in the Post-Gulf War Era: 1991-2002 ...............23 U.N. Sanctions Impact Agricultural Trade .....................23 Gulf War Damage Difficult to Assess .........................25 Agricultural Sector Returns to State Control in the Center-South ....25 Food-Ration System Avoids Starvation ........................25 Field Crop Production Rises Initially Under State Control .........26 Iraq’s Date Industry Focuses on Domestic Market ...............27 Implicit Tax on Agriculture and Inherently Poor Incentives ........28 Agricultural Input Availability Plummets ......................28 Irrigation Support Lessened .................................29 Crop Productivity Declines .................................30 Livestock Output Declines ..................................30 Middle East Drought of 1999-2001 ...........................31 Increasing Malnutrition Sparks International Concern ................31 U.N. Resolution 986 Initiates the Oil-For-Food Program ..........32 Food Imports Accelerate Under the OFFP ......................33 Nutritional Status Improves .................................34 OFFP Reorients Focus to Rehabilitation .......................34 Agricultural Situation in Northern Iraq: 1991-2002 ..................36 De Facto Independence ....................................36 Large Humanitarian Relief Operation Directed to Northern Iraq ....36 Free Market Agriculture? ...................................37 The Oil-for-Food Program in the North ........................38 Outlook and Issues for Iraq’s Agricultural Production and Trade ........40 Growing Importance of Food Imports .........................40 Problems Remain for Agricultural Productivity in Iraq ............41 Trade Dependence Likely to Continue ........................41 References and Data Sources ....................................43 List of Figures Figure 1. Agro-climatic Zones in Iraq ..................................4 Figure 2. Iraq's Agricultural Areas ....................................7 Figure 3. Iraq’s Political Divisions: The 18 Governorates ..................8 Figure 4. Iraq’s Crop Calendar ...... ................................10 Figure 5. Iraq Imports of Key Agricultural Commodities as a Share of Total Consumption, Annual Averages for 1985-1989 and 2000-2003 ....24 List of Tables Table 1. Iraq Population Dynamics, Selected Category by Decade Since 1960 ..2 Table 2. Historical Precipitation and Temperature Data for Mosul and Nasiriyah, Monthly and Annual Averages ...........................3 Table 3. Iraq Field Crop Area, by Major Crop, 1981-2002 .................45 Table 4. Iraq Cereal Area, Production, and Yields, by Type, 1981-2003 ......46 Table 5. Iraq Livestock Populations and Egg Production, 1970-20021 ........47 Table 6. Iraq’s Date Production and Export Data, 1970-2002 ...............48 Table 7. Iraq Fertilizer Production and Use, by Selected Period ............49 Table 8. Iraq Food Calorie Availability per Capita per Day, 1975-2000 .......50 Table 9. Iraq Population and per Capita Calorie Production, Consumption, and Imports of Cereals, 1970-2002 ...............................51 Table 10. Iraq Calories from Meat by Type and Share, 1970-2000 ...........52 Table 11. Iraq Agricultural Imports, Selected Periods .....................53 Table 12. Iraq Food Imports as Share of Domestic Consumption, Selected Commodities, 1970-2000 ...............................54 Table 13. Iraq Wheat and Wheat Flour Imports by Source, 1981-2003 .......55 Table 14. Iraq Coarse Grain Imports by Source, 1981-2003 ................56 Table 15. U.S. Agricultural Exports to Iraq, 1984-2001 ...................57 Iraq Agriculture and Food Supply: Background and Issues Purpose of This Report This CRS report provides background on the nature and evolution of Iraq’s agricultural sector and food supply situation leading up to the 2003 Iraq War. It directly supports an understanding of Iraq’s current food production and supply situation by describing the historical development of agricultural policy, production, and trade, as well as land use and tenure issues and the recent evolution of the country’s irrigation system. As such, it provides clues to understanding what Iraq’s agricultural potential and future trade needs might be under a new political and economic environment in the post-2003 Iraq War era. The report includes maps that highlight the principal agricultural zones and political divisions, and it provides several tables of historical data relevant to understanding the evolution of Iraq’s agricultural production and trade into the 21st century. The development and implementation of Iraq’s food ration system, as well as the role of the U.N.’s Oil-for-Food program (OFFP) and its influence on Iraq’s agricultural sector are outlined. The report ends with a brief discussion of issues likely to affect the long-term outlook for Iraq’s agricultural production and trade. Introduction Iraq’s agricultural sector represents a small, but vital component of the country’s economy. Prior to the development of the petroleum industry, agriculture was Iraq’s primary economic activity. As late as 1976, agriculture still contributed about 8% of Iraq’s GDP, and it employed more than half the total labor force.1 Over the past several decades agriculture’s role in the economy has been heavily influenced by Iraq’s involvement in military conflicts, particularly the 1980-88 Iran-Iraq War, the 1991 Gulf War, and the 2003 Iraq War, and varying degrees of government policy intervention to promote and/or control agricultural production. Population dynamics also have been influential in determining the role and importance of Iraq’s agricultural sector in the general economy, and the extent of domestic food security. During the period from 1971 to 1990, Iraq’s population grew at an annual rate of 3.2% compared with only a 1.2% growth rate for Iraq’s 1 Library of Congress (LOC), Federal Research Division (FRD), Iraq: A Country Study, edited by Helen Chapin Metz, research completed May 1988, p. 153; Copyright(C)United States Goverment as represented by the Secretary of the Army. CRS-2 cereal production (cereals are the principal source of calories in Iraq).2,3 As a result, food demand outpaced food production and created a growing dependence on agricultural imports to close the gap between food demand and availability. Table 1. Iraq Population Dynamics, Selected Category by Decade Since 1960 Age group Total Urban 0-14 15-64 65+ Female Persons —————————Millions————————— 1960 6.8 2.9 3.2 3.5 0.2 3.4 1970 9.4 5.3 4.4 4.8 0.2 4.6 1980 13.0 8.5 6.0 6.7 0.3 6.4 1985 15.3 10.5 6.9 8.0 0.4 7.5 1990 18.1 12.6 8.0 9.6 0.5 8.9 1995 20.8 14.3 8.9 11.3 0.6 10.2 2000 23.3 15.7 9.7 12.9 0.7 11.4 2003 24.8 na na na na na —————————Percent————————— Share of Population 1960 100.0 42.9 46.1 51.4 2.4 49.1 1970 100.0 56.2 46.6 51.0 2.4 49.1 1980 100.0 65.5 46.0 51.3 2.7 49.1 1985 100.0 68.8 45.2 52.0 2.8 49.1 1990 100.0 69.6 44.2 52.9 2.9 49.1 1995 100.0 68.6 42.8 54.2 3.0 49.1 2000 100.0 67.5 41.6 55.5 2.9 49.2 2003 100.0 na na na na na —————————Percent————————— Average annual growth rate per period 1960-69 3.1 5.9 3.2 3.0 3.1 3.1 1970-79 3.3 4.9 3.2 3.4 4.1 3.3 1980-84 3.3 4.2 2.9 3.5 4.1 3.2 1985-89 3.3 3.6 2.9 3.7 3.9 3.3 1990-94 2.9 2.6 2.1 3.3 3.5 2.9 1995-99 2.3 2.0 1.7 2.7 1.5 2.3 2000-02 2.1 na na na na na na = not available. Source: World Bank, World Development Indicators, 2003. By Middle-Eastern standards, Iraq is fairly well-endowed with agricultural resources that include fertile soils, access to water from two major river systems (the 2 World Bank, World Development Indicators (WDI) 2003. Note that the World Bank’s WDI data does not appear to include adjustments for 1991 war-related population loss as is done by the U.S. Bureau of the Census in their population series for Iraq. 3 Average annual growth of cereal production between the periods 1969-71 and 1988-90. CRS-3 Euphrates and the Tigris), and extensive irrigation potential. However, the agricultural sector has a long track record of government intervention and mismanagement of the agricultural policy setting. Investment in the sector has been discouraged by a history of shifting land and water property rights that has ebbed and flowed with the government’s changing role. Multiple claims to individual land and water rights have evolved, spawned by tribal affiliation, political patronage and persecution, and outright military conflict. Agro-climatic Setting Over 90% of Iraq’s rainfall occurs during the November-April period (Table 2). However, precipitation may vary greatly from one year to the next in intensity, timing, and frequency. Generally precipitation levels increase from lower to higher elevations (Figure 1). For example, precipitation at Nasiriyah in the southern lowlands averages only 112 mm (4.4 in.) per year compared with 408 millimeters (16.1 inches) at Mosul in the northwest foothills. Table 2. Historical Precipitation and Temperature Data for Mosul and Nasiriyah, Monthly and Annual Averages Precipitation1 Temperature2 City Mosul3 Nasiriyah4 Mosul3 Nasiriyah4 Period 1923-1990 1941-1990 1961-1999 1941-1970 units mm inches mm inches C F C F Jan 58 2.3 22 0.9 7.2 45.0 11.5 52.7 Feb 64 2.5 16 0.6 6.1 43.0 13.8 56.8 Mar 94 3.7 15 0.6 12.2 54.0 18.1 64.6 Apr 59 2.3 16 0.6 17.2 63.0 23.4 74.1 May 24 0.9 8 0.3 23.9 75.0 29.6 85.3 Jun 0 0.0 0 0.0 28.9 84.0 32.7 90.9 July 0 0.0 0 0.0 32.8 91.0 34.1 93.4 Aug 0 0.0 0 0.0 32.2 90.0 34.4 93.9 Sep 1 0.0 0 0.0 27.8 82.0 31.7 89.1 Oct 12 0.5 3 0.1 21.1 70.0 26.0 78.8 Nov 36 1.4 14 0.6 15.0 59.0 18.8 65.8 Dec 60 2.4 18 0.7 8.9 48.0 12.8 55.0 Total 408 16.1 112 4.4 — — — — Average 34.0 1.3 9.3 0.4 19.4 67.0 23.9 75.0 Source: USDA, World Agricultural Outlook Board; Major World Crop Areas and Climatic Profiles, Agr. Handbook No. 664. 1Note that 1 inch equals about 25.4 millimeter (mm). 2C = Centigrade; F = Fahrenheit. 3Located in northern Iraq. 4Located in central Iraq. During the dry period from May to October, extremely high temperatures and a dry north-westerly wind lead to very high evaporation rates from water surfaces, CRS-4 irrigated land, and plants.4 This exacerbates summer water shortages and soil salinization in irrigated areas. Figure 1. Agro-climatic Zones in Iraq Note: Isohyets show annual rainfall levels in millimetres (mm); 25.4 mm = 1 inch. Source: K.A. Mahdi, “Agricultural Labor and Technological Change in Iraq” in Dennis Tulley (ed.), Labor and Rainfed Agriculture in West Asia and North Africa, Dordrecht: Kluwer Academic Publishers. Iraq’s soils are generally fertile and easily convertible to agricultural activity. Two major soil types predominate — heavy alluvial deposits of the Tigris-Euphrates Plain (brought and deposited by river water) containing a significant amount of humus and clay; and lighter soils which lack in humus and clay content but contain 4 Kamil Mahdi, State and Agriculture in Iraq, “Chapter 1 — The Agricultural Resources and Population of Iraq,” Exeter Arab and Islamic Studies Series, Ithaca Press; copyright(c)Kamil A. Mahdi, 2000, p.12-13. CRS-5 wind-deposited nutrients.5 Approximately 9% (about 4 million hectares) of Iraq’s land is under cultivation, although it is estimated that as much as 21% (about 9.24 million hectares) of the total land could be used for crop production. Estimates of actual and potential grazing land vary widely. Iraq’s Ministry of Irrigation, in a 1975 report, stated that nearly 73% of Iraq’s land is potentially viable for grazing, although other studies suggest that potential grazing land is substantially less with significant seasonal variation.6 The primary limiting factors for land use in agriculture are high summer-time temperatures, water availability (in the form of either rainfall or river flow), and the problem of salinity control in the alluvial plains of the Euphrates and Tigris Rivers. There is some disagreement among experts as to Iraq’s true agricultural potential since much of the country’s soil is cultivable (weather and water permitting) and technical procedures exist for reclaiming prime farmland lost to salinization. Kamil Mahdi, an expert who has researched and published extensively on Iraq’s agriculture, characterizes Iraq’s agricultural land base as follows: “It would be true to say that cultivable land in Iraq is abundant, but that land of good quality is very limited. Much land could be reclaimed and improved but at too high a cost in relation to the yields that might be expected from prevailing agricultural practices.”7 Land Use Patterns. Iraq has a total surface area of 43.7 million hectares (about the size of Wyoming and South Dakota combined) of which 34.0 million (77.7 percent) is not viable for agricultural use under current conditions.8 Less than 0.4 percent is in forest and woodlands situated along the extreme northern border with Turkey and Iran. The remaining 22 percent (about 9.5 million hectares) are involved in agricultural activities, although almost half of this is very marginal and used only for seasonal grazing of Iraq’s livestock population of predominantly goats and sheep. The extreme northeastern frontier of Iraq bordering Turkey and Iran is mountainous with cold winters and cool summers. Elevations in the Zagros range of Iraq-Iran and the Taurus range of Iraq-Turkey exceed 3,000 meters. The Zagros mountains are attributed to be the location of the original domestication of sheep. Livestock grazing occurs throughout the country’s agricultural zones, but is more widespread in the north where hillside grazing prevails. Small ruminants — sheep and goats — are the most prevalent livestock species. However, beef (from cattle) has been the traditional source of dietary protein for most Iraqis. Commercial poultry production has increased in importance since the 1960s and generally occurs in close proximity to urban centers (Table 5). 5 Compton’s Interactive Encyclopedia, Copyright(c)1993, 1994 Compton’s NewMedia, Inc.; and “Iraq,” Microsofts(R) Encarta(R) 98 Encyclopedia. (c)1993-1997 Microsoft Corp. 6 Ibid., pp.17-18. 7 Ibid., p.17. 8 United Nations (UN), Food and Agriculural Organization (FAO), FAOSTAT. (A hectare equals about 2.47 acres.) CRS-6 The hill country of northern Iraq — sometimes called Kurdistan — has sufficient precipitation to support rain-fed agriculture (Figures 1 and 2). From the foothills of north-central Iraq, a broad, dry rolling plain (used primarily for desert grazing and marginal agriculture) sweeps downward to the fertile valley of the Tigris and Euphrates rivers where irrigated agriculture predominates. South-western and western Iraq is mostly desert, extending into Syria, Jordan, and Saudi Arabia. Some vegetable production under drip-irrigated plastic tunnels has been practiced in the western desert region, otherwise little other agricultural activity occurs in this zone.9 Area cultivated annually to field crops such as cereals, pulses, and vegetables varies with weather and market conditions, generally averaging between 3.5 to 4 million hectares.10 Cereal production (mostly winter wheat and barley) is the principal agricultural activity in Iraq accounting for 70 to 85 percent of crop area in any given year (Tables 4 and 5). Fruit orchards are well suited to Iraq’s temperate hillsides and to more arid regions where irrigation water is available. Over 300,000 hectares are permanently in tree crops — mostly dates, but also some olives, grapes, oranges, apples, and other fruit orchards (Tables 7 and 9).11 Date palms are the most important tree crop farmed in Iraq and have traditionally been Iraq’s main export after petroleum.12 Mineral Wealth Favors Agriculture. In addition to its petroleum reserves, Iraq is endowed with abundant supplies of natural gas and phosphates. Natural gas is the major feed stock in the production of nitrogenous fertilizers. Nitrates and phosphates are essential ingredients for plant growth. Phosphate rock reserves are located mainly in the Akashat area northwest of Baghdad and were estimated in 1987 at 5.5 billion tons — enough to meet local needs for centuries.13 Following the oil boom of the 1970s, Iraq invested heavily in fertilizer production. During the 1970s and 1980s Iraq was a consistent exporter of nitrogenous and phosphate fertilizers, with annual fertilizer production running well ahead of domestic use (Table 7). During this same period, the government also invested in Iraq’s domestic production capacity for agro-chemicals and farm machinery. However, both the agro-chemical and farm machinery industries were dependent on critical imports of raw materials, technology, and spare parts, and were particularly vulnerable to international trade restrictions. 9 Ahmad, Mahmood. “Agricultural Policy Issues and Challenges in Iraq: Short- and Medium-term Options,” from Iraq’s Economic Predicament, Kamil Mahdi, Editor. Exeter Arab and Islamic Studies Series, Ithaca Press, copyright©Kamil Mahdi, 2002, p. 172. 10 In the early 1990s, cultivated area temporarily expanded to nearly 5.5 million hectares, due primarily to government incentives (see section “Iraq’s Agriculture in the post-gulf War Era: 1001-2002" of this report), before returning to under 4 million. 11 U.N. FAO, FAOSTAT. 12 Europa Publications, “Iraq: Agriculture and Food,” from The Middle East and North Africa 2003, 49th edition, pp 475. 13 LOC, FRD, Iraq: A Country Study, “Chapter 3 — The Economy: Industrialization,” May 1988, p. 153