Yet another row between Erbil and Baghdad, this time over wheat

ERBIL, Kurdistan Region--Kurdish farmers are dismayed by an Iraqi government decision to only buy half a million tons of the wheat from them when they expect to harvest at least 1.5 million tons in the coming harvesting season.

 

The Kurdistan Regional Government (KRG) forms an assessment committee from specialists in ministries of trade, finance, planning, and agriculture every year to determine the pricing and amount of crops bought from farmers.

 

“In this year’s budget, 1.7 trillion Iraqi Dinars (Approx. US$ 1.3billion) has been dedicated to buy wheat from farmers and import it from abroad. But this amount is little, and cannot therefore provide for the needs of the Iraqi people. Hence, the committee has asked the council of ministers to add another trillion to the budget in order to purchase wheat. And the council has approved the request. But this increase in the budget has to be approved by the parliament, too,” Najeba Najeb, an Iraqi MP on the economic and investment committee, told Rudaw.

 

Najeb also talked about the price and amount of the wheat which the Iraqi government is planning to buy from Kurdistan’s farmers.

 

“No final decision has yet been made on the price and amount of wheat expected to be purchased from farmers. But the position of the high assessment committee and that of the Iraqi council of ministers is that only 17 percent from the budget determined to buy wheat, be dedicated to purchase wheat from farmers in the Kurdistan Region, which will be 500,000 to 550,000 tons of wheat.”

 

Iraq needs 4.5 million tons of wheat annually to provide for flour and other wheat-related products of its people. It buys some of this wheat from its farmers with subsidized pricing, and imports the rest from abroad.

 

“In the past, the Iraqi Trade Ministry was buying wheat from farmers of Kurdistan according to its marketing plan. But last year, in a bid to hurt Kurdistan Region’s economy and under the pretext of having insufficient budget, they purchased only 70 percent of the wheat produced by farmers in Kurdistan, whereas they purchased 90 percent of the wheat produced by farmers in other provinces,” Najeb added.

 

“There is an attempt in Iraq to politicise the purchasing of wheat from farmers in a bid to hurt Kurdistan Region’s economy. The [Kurdish] prime minister himself along with the ministry are talking to authorities in Baghdad, urging them not to politicise the matter, also asking them to send farmers their money of their recent years sale of wheat [to Baghdad],” Dr Abdulrazaq Nawandi, general manager of the presidency of the ministry of trade and industry, said.

Kurdish farmers and officials reject this Iraqi government decision to dedicate only 17 percent from its wheat purchase budget to buy wheat from farmers in the Kurdistan Region.

 

“We are not satisfied with this decision. We reject it,” Nawandi added. “We will talk to them and urge them to buy at least half of the (wheat) produced by farmers in Kurdistan.”

 

Over the past five years, the size of land used to grow wheat increased from 434,250  hectares to 775,000 hectares. During this period of time, wheat products also increased, from 227,000 tons to 1.68 million tons.

 

Under the pretext of financial crisis and inadequate budget, the Iraqi government reduced 92,000 IQD from the price of one ton of wheat. They also allowed Kurdistan Region’s silos to only buy nearly 882 tons of wheat from farmers with price support.

 

As a result, 800,000 tons of wheat was left unwanted. This was a big disadvantage to farmers. Some of them had to sell their products for less than half of received price in order to pay off their debts incurred from farming costs. 

 

According to a KRG’s agriculture ministry letter on October 25, 2016, this year alone, 888,000 hectares of land in the Kurdistan Region have been used to grow wheat. A copy of this letter has been sent to the federal government’s agriculture ministry. It is anticipated that this year’s wheat product will reach 1.673 million tons. If Baghdad goes ahead with its decision, more than a million tons of wheat will be left over outside the region’s silos.

 

“In an attempt to support framers’ products and help sell the wheat that is not sold, we submitted a project to the ministerial council last year, suggesting that the government buys 500,000 to 600,000 tons of wheat from farmers for a price higher than the price of the stock exchange,” Dr Anwar Omar, spokesperson for the ministry of agriculture and water resources, said. 

 

“The Kurdistan Region’s High Economic Council has our project. The government couldn’t dedicate budget to buy wheat from farmers last year due to the financial crisis. This year, we are trying to reach an agreement with foreign companies, urging them to purchase the farmers’ wheat. We are also planning to add 50,000 IQD to every ton of wheat they sell in a show of support to the crops produced by farmers,” Abdulstar Majid, the KRG minister of agriculture and water resources, told Rudaw.

 

In order to reduce imports and rely on local products, we have asked the ministerial council to allow us to ban imports of wheat products so that we can make these products from local wheat produced in the Kurdistan Region, Omar added.

 

“There is big demand on Kurdistan’s wheat, especially from Iran, Jordan, Syrian and Switzerland. They are prepared to buy wheat from us for the price listed in the stock exchange,” Omar detailed.