Iraqi Agriculture Brief Middle East Water and Livelihoods Initiative December 13, 2011

Transcription

1 Iraqi Agriculture Brief Middle East Water and Livelihoods Initiative December 13, 2011 John M. Schnittker Agricultural Economist USDA FAS Baghdad - Iraq

2 USDA-FAS Trade Policy Market Access for US Ag Products Market Development Cooperator Groups Data and Analysis Market Intelligence International Development Work w/ Developing Countries: Develop their Agricultural Systems Partners with USAID/Food Aid AG Specialist at the PRT s Iraq

3 Rural Agriculture Sector Depressed and Underperforming GoI is Heavily Involved with Inputs and Outputs Inputs: Water, Seed, Fertilizer MoA, MWR, MIM Procurement Policy, Wheat, Corn, Rice, Cotton... MoA, MoT. MIM (Can Create Distortions) GoI, MoA, MoT, MIM The Appropriate Role Market Orientation GoI?

4 AG Lands North/South Very Different Irrigated /Rain Fed Salinity/Drainage

5 Agriculture in the Economy Historically Agriculture has Contributed 10-12% 12% of GNP Recent Years 7-9% %(Declining in Relative Terms) Drought, 2 of last 4 Years Crop Failures, Livestock/Herd Liquidation High Feed Cost for Livestock Sector Limits Growth Lack of Credit and Investment Outdated Policies/ Mentality

6 Demographics 2007 Rural/Urban Mix 35% / 65% % of Workforce Actively Engaged in AG <10% Male Unemployment > Female unemployment Women Play a Critical Role in Iraqi Agriculture Targeted Programs One Approach Urban per capita income > Rural per capita income Rural to Urban Migration is likely to Increase (Destabilizing)

7 Agriculture is Important It has Great Potential to Contribute to Stability/Security it Through Income and Employment Gains A Broad Based Approach is Needed Crops Diversification Livestock Integration Agribusiness Investment Strategic Framework Agreement, building a dynamic partnership across a range of government sectors, including education, energy, trade, health, culture, information technology, law enforcement and the judiciary.

8 MoA Strategic Plan Long Term Goal of Self Sufficiency Realistically Increase Food Security Production Increases Crops/Livestock Focus on Productivity Technical/Economic Increased Farm Income Reinforces Gains Helps Rural communities Leads to Agribusiness Development Market Oriented?

9 MoA Strategic Plan Optimal Development of Land and Water (Productivity Up / Employment Down) Job Growth Input/transport/processing Rural Agriculture Strategy Integrated? Investment/Education Required! Agriculture Within GoI Ag seen as Contributing to Macro - Economic Stability (Narrow Focus Less Imports ( Self Sufficient Food Security) Self Sufficient Unrealistic, but politically relevant

10 MoA Strategic Plan The Problems/Challenges A Long List Water Scarcity, Drainage, Salinity, Small Plots, Inputs, Skill/Knowledge Level, Poor Water Management, Bad Roads, Post Harvest Losses, Palm Trees, Livestock base

11 MoA Strategic Plan Two Approaches Considered Comprehensive Plan -- All Areas Pi Priorities iti -- Work on Most Pressing Problems The Winner! Priorities Approach Limited Focus Wheat, Potatoes, Dairy, Date Palms Fish/Poultry

12 MoA Strategic Plan Problems? MoA Identified Goals and Constraints Resource Base, Technical, Economic Factors Will Suggest a Production Pattern Stronger on Technical than Economic Matters Iraq can grow more wheat but where and how does it make economic/financial sense

13 MoA Strategic Plan Remove Obstacles Address Constraints Land Reclamation, Better Tillage, Soil Management, Soil Fertility, Modern Irrigation, Research Centers, Modern Seed, Extension Training,. These are Good Things!

14 MoA Strategic Plan MoA Recognizes that Task is Formidable and that Cooperation Between Ministries will be Required? That New Legislation is Needed Existing Law is Outdated That Agriculture is Operating in a New Market Oriented Environment? GoI/MoA moving away from Market Oriented?

15 Comments Very Low Productivity, real, and relative to neighboring countries (crops, livestock) Wheat Yields: 20/bu.acre (1955) (National Avg.) Poultry Feed Conversion: Very Low Production Efficiency: only 50% (est) Based upon Resource Base (Land, Water) Results of Good Producers/Experiment Fields (Labor, Technology, Capital)

16 Production Function? 900, , , ,000 ID/MT 500, , , , ,000 Production 0 Metric Tons 1,000,000 1,100,000 1,200,000 1,300,000 1,400,000 1,500,000 1,600,000 1,700,000 1,800,000 1,900,000 Series1 Linear (Series1)

17 Fertilizer Response 350, , ,000 Fertilizer MT 200, , ,000 50, Yield KG/DN Series1 Linear (Series1)

18 Production Cost & Sector Adjustments High Per Unit Production Cost small holdings, poor quality inputs = low yield Marginal Areas Planted = low yields/pasture Efficient Sized Operations, Investment, Technology, Machinery Reduced Planted Area, (conservation) Rural to Urban Migration

19 Agricultural Policy Direction State Capitalism/ Private Sector Sustainable Agricultural Development Relative Crop Price Crop Rotations Marginal Crop Land Pasture Water Conservation/Management Alternative Crops: Sunflower Grain Sorghum Cotton Short Season Rice Varieties

20 GOI Strategic Goals: Wheat (Area= Mil. Donum, Yield= MT/Donum, Production =TMT) Approximately 90% of the (net) planned increase in wheat production is dependent upon the installation of CP irrigation. Rain fed and traditional flo Agricultural Development/Food Security Wheat Sector Rain Fed Baseline % Change Quantity (+ )) Area Yield Production Flood Irrigated Area Yield Production 1,445 1,575 1, Center Pivot Area Yield Production , ,516 Total Area Yield Production 1,915 2,332 3, ,702

21 Iraqi Strategy: Wheat Largely Neglects the Existing Agricultural Base But May be Realistic! Cooperation? Approximately 90% of the (net) planned increase in wheat production is dependent upon the installation of CP irrigation. Rain fed and traditional flood irrigated area also have the potential for sizable increase in productivity. (ARDI) From a development perspective the CP project will concentrate new production in the hands of relatively few individuals while extension and progressive regulatory activities would benefit tens of thousands, of small and mid-sized producers. Technology is easy! ($$$ ) Fixing what is Broken is Hard!!

22 Economic Drivers Productivity Gains allow new Market Oriented Direction Net Returns per Donam - Increase Conservation practices/incentives Market Orientation Incorporated in New Programs More intensive i and appropriate use of resources base will conserve both land and water Productivity Gains will fuel farm and rural Incomes lead to increased investment, and facilitate additional agribusiness development.

23 Agronomic Water Use Crops Demand = 20B/M3 Supply = 60B/M3 CROP AREA (Hct.) WATER USE(Bm3) VALUE (Bil $) VALUE/H2O UNIT Wheat 985, * / 150wp Barley 403, * /feedVA Vegetables 355, Rice 125, Corn 164, Dates Other 151, Alternatives: Crops/Marsh /Envrmt.?? Total 2,205, /38.8.0** ** Assumes 50% Efficiency 4.1 *Winter Crop

24 Productivity - More W/Less Increased Production Across all Sectors Less Planted Area Conservation Restore Pastures/Grasslands/Marshes /M Control Soil Erosion (Wind & Water) No Trade Off High Value/Low Value Winter/Summer -- Demands Different A 25% Switch from Grain to Vegetables Would Double the Vegetable Area - Big Problem/Lower Prices

25 Priorities Conservation: Water and Soil Inputs: Better Seed /Access to Seed Policy: Facilitate t Good Production Practices Market Oriented: Farmers Respond to Price Signals Not Administered Prices