Iraq's Agricultural Sector
Iraq's agricultural sector represents a small, but vital component of Iraq's economy. However, rapid population growth during the past three decades, coupled with limited arable land and a general stagnation in agricultural productivity, has steadily increased dependence on imports to meet domestic food needs and made Iraq a major importer of agricultural products. By 1980 Iraq was importing about half of its food supply. By 2002, between 80 and 100 percent of many basic staples -- wheat, rice, sugar, vegetable oil, and protein meals -- were imported.
In the early stages of the post-2003 Iraq War period, the country's agricultural sector remains beset by the legacy of past mismanagement and the lingering effects of a severe drought during 1999-2001. Clearly, Iraq will be dependent on imports to fully meet domestic food demand for several years to come. In the near term, food aid shipments will play a major role in determining the share of Iraq's agricultural imports, and may influence the evolution of future commercial imports.
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 (78 percent) is not viable for agricultural use under current conditions. 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. An estimated 340,000 hectares are in tree crops (mostly dates, but also some figs, grapes, and olives).
Area cultivated annually to field crops such as cereals, pulses, fruit, and vegetables varies with weather and market conditions, but generally averages between 3.5 to 4 million hectares. Between 75 and 85 percent of crop area is generally planted to grains (mostly wheat and barley). Iraq is divided into a rain-fed northern winter grain producing zone and a center-south irrigated zone that produces vegetables and fruit, as well as cereal crops. According to the FAO, 2.55 million hectares were irrigated in 1989.
Pre-U.N. Sanctions (1980-89)
During Saddam Hussein's early years in power (1979-1990) the state attempted to foster private sector control and investment in Iraq's agriculture. Surging oil revenues were used to acquire Western technology and to lavish extensive government subsidies on the sector.
Area and production expanded through the 1980s for cereals, vegetables, and fruit. However, cereal yields stagnated due to poor production practices and limited varietal development. In addition, the Iran-Iraq War diverted labor and other resources away from agriculture. Population growth continued to outpace agricultural production, increasing the importance of trade. Despite Government efforts at stimulating agricultural production, cereal and poultry imports as a share of domestic consumption nearly doubled to 69 and 48 percent, respectively, during the 1980s. By 1989 Iraq was importing over $2.5 billion in agricultural commodities annually including 78 percent of its cereals and nearly 100 percent of its vegetable oils and sugar.
In the 1980s, U.S.-Iraqi trade expanded rapidly on the strength of generous GSM credits to Iraq to buy U.S. agricultural products. From 1983 through mid-1990, Iraq received nearly $5 billion in U.S. GSM-102 and GSM-103 export credit guarantees to purchase significant quantities of U.S. agricultural commodities. By the mid-1980s Iraq was the major destination for U.S. rice exports and also an important purchaser of U.S. wheat, feed grains, oilseed products, cotton, sugar, dairy products, poultry, and tobacco. In addition, Iraq also participated in other U.S. agricultural export programs including the Export Enhancement Program, the Targeted Export Assistance Program, and the Cooperator Foreign Market Development Program.
U.N. Sanctions Period (1990 to Present)
In August 1990 the U.N. Security Council adopted resolution 661 imposing comprehensive sanctions on Iraq following that country's short-lived invasion of Kuwait. Under U.N. sanctions, the importation of agricultural products was not banned; however, foreign companies were prohibited from investing directly in Iraq. (Country Factsheet, The Economist Intelligence Unit.) In addition, the Iraqi governments unwillingness to participate in the U.N.'s 1991 Oil-for-Food (OFF) plan cut off government oil export revenues needed to purchase foodstuffs and agricultural inputs on the international market.
From 1990 to 1994, Iraq's agricultural imports averaged slightly above $1 billion or less than half of the pre-war level. U.S. GSM credit that had been so generously extended to purchase U.S. agricultural products during the 1980s was stopped, and USDA's Commodity Credit Corporation was forced to cover $2 billion in unpaid Iraqi credit guarantees. U.S. agricultural trade with Iraq fell to nearly zero.
Under the terms of Iraq's military defeat, the country was effectively partitioned into two distinct entities -- three northern governorates (Erbil, Dohuk, and Sulaimaniyah) and the remaining fifteen governorates in central and southern Iraq. As a result of the partition, the central government's control over agricultural policy was limited to the 15 southern governorates. Following the implementation of U.N. economic sanctions, the government took several steps to increase both production and control of domestic food within its zone of control. These changes included government monopoly control over most grain production and the introduction of a state-managed system of rationing of basic foodstuffs.
Government incentives coupled with rising internal food prices encouraged Iraqi farmers to expand crop area by planting on marginal pastureland and fragile hillsides. Record cropped area was attained in 1992 and again in 1993. However, agricultural productivity suffered for lack of fertilizers, agricultural machinery and the means of spraying planted areas with pesticides. Iraq's irrigation infrastructure fell into disrepair and salinity has spread across much of the irrigated fields of central and southern Iraq. Iraq's poultry and livestock populations were devastated by the loss of rangeland to grain crops and the cut off of imports of feed grains and veterinary medicines needed for routine control of parasites and diseases.
By the mid-1990s severe macroeconomic problems related to the international sanctions led the government to end most support to the sector and instead to implement austerity measures that further curtailed agricultural investment. Declining food availability resulted in a significant rise in malnutrition in Iraq, particularly in the center and south of the country.
U.N. Oil-for-Food Program
By 1996, Iraq agreed to U.N. terms (U.N. Security Council Resolution 986 on 14 April 1995) for establishing an Oil-For-Food (OFF) program. The first OFF-funded food shipments arrived in March 1997. Once started, however, OFF food imports made Iraq's trade dependence nearly complete for many basic foodstuffs. According to the World Food Program, by early 2003 nearly 60% of Iraq's population was totally dependent on imports via the OFF. The Iraqi population's failing nutritional status and growing trade dependence was further aggravated by a severe drought that persisted throughout much of the Middle East from 1999 through 2001 and devastated crop output in Iraq.
A return to normal weather patterns is critical for domestic cereal production in Iraq. Political stability, improved internal security, and an end to international sanctions will also likely be needed before Iraq's agricultural sector witnesses significant investment and growth. Restoration of the irrigation infrastructure (including a long-term de-salinization program), as well as the grain marketing infrastructure for handling, storing, and distributing agricultural inputs and outputs will be vital. In addition, the development of a viable agricultural research and extension service to develop and disseminate improved varieties and successful production practices are needed to restore agricultural productivity.
Clearly, Iraq will be dependent on imports for fully meeting domestic food demand for several years to come. In the long term, after the economy has regained its viability and vibrancy, market forces and international competition will likely be the driving forces behind Iraq's agricultural trade patterns. Iraq's historical trade and food consumption patterns suggest that food grains such as wheat and rice, feedstuffs including corn, barley, and protein meals, vegetable oil, sugar, meat, and dairy products are all likely to be important imports into Iraq.
CRS Report RS21516, Iraq's Agriculture: Background and Status.
CRS Contact: Randy Schnepf (7-4277)
Page last updated May 16, 2003.
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