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Agricultural value chain study in Iraq Dates, grapes,tomatoes and wheat

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Agricultural value chain study in Iraq Dates, grapes,tomatoes and wheat

EXECUTIVE SUMMARY

The Iraqi agriculture sector employs roughly 20 percent of the country’s workforce and is the second largest contributor to the gross domestic product (GDP) after the oil sector, accounting for 5 percent of the GDP.

Thus, agriculture development is critical to allow Iraq to achieve their vision of a more diversified economy, in addition to generating employment and boosting private sector engagement.

Approximately 22 percent (9.5 million ha) of Iraq is suitable for agriculture production, yet only about 5 million ha are currently cultivated.

Crop production is the major source of income for the majority of farmers (about 75 percent), while the rest depend on livestock or mixed crop and livestock production systems.

Small-scale farming systems dominate the sector and are typically characterized by traditional methods and minimal capital investments, resulting in low productivity.

There is also limited social capital and positive outcomes from group interactions, causing poor integration along the supply chain.

Iraq has transitioned from a being a smallholder-driven, food-producing country that can cover its needs to becoming a major food importer.

Several decades of sanctions, violent conflict, ineffective government policies, extreme weather events, water scarcity and competition from cheap imports, disrupting value chains and distorting linkages between producers and markets.

Furthermore, the so-called Islamic State of Iraq and the Levant (ISIL) crisis that began in 2014 spurred displacement of entire communities, limited access to inputs and markets and resulted in the targeted destruction of agricultural infrastructure by armed groups.

The Ministry of Agriculture (MoA) estimates that Iraq lost approximately 40 percent of its agricultural production in the wake of the ISIL crisis, and the sector has yet to fully recover.

To address the challenges facing agriculture and improve farmers’ outcomes, a study has been conducted for wheat, tomato, date and grape value chains.

The four commodities were selected based on their

(i) potential market growth and unmet demand;
(ii) level of support available from public, private, and non-governmental actors;
(iii) environmental impact; and
(iv) contribution to food security and food sovereignty.

Wheat and tomatoes have been analysed across all three agro-ecological zones (i.e. the north, centre, and south), while grapes focused only the north and centre and dates in the centre and south.

The study adopted a mixed-methods approach with a secondary data review (SDR) and primary data collection period, that consisted of individual interviews (IIs), Focus group discussions (FGDs) with farmers and Key informant interviews (KIIs) with actors and experts along each value chain.

The analysis identified market linkages, bottlenecks and priority needs and interventions, allowing decision makers to make informed choices to improve the long-term competitiveness of Iraq’s agricultural sector.



5.3 PROPOSED STRATEGY COMPONENTS

In order to increase the economic viability of the agriculture sector and accelerate rural development, policy makers should recognize the importance of the sector and recognize the needs of the value chain stakeholders.

Currently, the economy is dominated by oil, but there has been recognition of the importance of diversification, particularly given the recent drop in international oil prices.

Agriculture can help achieve this vision --  although the loss of infrastructure assets due to conflict(World Bank) and rural-urban migration73 has undermined agriculture’s contribution to the economy, it is still the second largest sector after oil.

To revitalize the sector and overcome challenges, the government should align its policies and strategies with market dynamics to boost operational capacities, while also improving the potential of the private sector involvement in the farming system.

The ability of a sector to compete in the global marketplace depends on actors’ capacity to access critical resources such as finance, technology, and skills.

The public sector should focus on improving the macroeconomic, administrative and regulatory framework for private-sector activities, in addition to the logistics infrastructure, public services and education required to stimulate the availability of service providers.

The government can act as the facilitator to remove bottlenecks and prevent market failures, particularly when introducing smart incentives for on and off-farm investments.  

Government support should also be focused on building national capacity and disseminating best practices, both through extension services and the research centres.

These efforts will increase value-adding activities, such as the production and utilization of quality inputs, food manufacturing and export.

Government can also help support agri-food processing by establishing small grants, credit, and guarantee schemes.

Overall, the Government of Iraq should assume the role of a facilitator rather than the dominant player in the sector.

The agriculture sector has a lot of potential to help the government achieve its goals of food security and economic diversification, but it will only be unlocked by coordinating public and private actors, with the help of international technical assistance providers.

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