Socio-economics an Policy Research

HSAD (Harmonized Support for Agricultural Development in IraqIraq-ICARDA-USAID

Final Meeting: 10-11 June 2014Baghdad, Iraq

Aden A Aw-HassanDirector, Social, Economic and Policy Research

Main Activities

1. Policy analysis by IFPRI– Applied CGE Model to assess the effects of different policy

interventions on wheat supply and on distributional effects on labor and livelihoods

– Iraqi spatial showing different natural resources endowments, production and livelihoods as tool to guide development policy

2. Assessment of Seed Policy and support in its implementation

3. Baseline production surveys of wheat and date palms

4. Value chain analysis of dates and wheat

• The seed policy is in the Shura council for final approval but the seed policy is already in the process of implementation

• Information: qualitative and quantitative. • Qualitative: legislative process used to guide

policy implementation. • Quantitative: Uses aggregate data to illustrate

the general trends in seed production and related wheat production

Wheat Seed Policy

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Wheat sector in Iraq

Planted area:

Average (2000/12): 1.975 mln Ha

Irrigated 1.25 mln Ha (63.3 %)

Rain-fed 0.725 mln Ha (36.7 %)

Production

Average (2000/12): 2.0 mln Ton

Irrigated 1.894 mln Tons

Rain-fed 0.106 mln Tons

Suggesting low yields, on average, in both conditions

Source: FAO statistics

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Importance of the wheat sector in Iraq

Wheat self-sufficiency:

Based upon normative per capita consumption

2007 2010 2013

48.9 % 58.8 % > 70%

In relation to actual wheat imports 50% max

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Relevance of the wheat seed component

1. Seed is a main and sure production factor to improve productivity and production

2. Research to produce new varieties are mobilized and available

3. Seed industry and related multiplication infrastructure to produce increasing amounts of seeds are available,

4. Farmer seed demand guaranteed and enhanced through increasingly motivating incentives,

5. Accompanying inputs are also in supply and at advantageous prices.

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Regulatory framework

The National Seed Policy: Falls within the general framework and is stipulated by the

strategy set for the agricultural sector

Recognizes that Agriculture throughout Iraq has a differentiated potential: North dependence on rain, rivers and ground water Center and the south dependence mainly on river water

Recognizes the importance of high quality, adapted and improved seeds as prerequisites for enhancing crop production

The National Seed Policy

Improve family food security

Improve rural incomes

Elevate standard of living in rural areas

Enhance the contribution of agriculture to GDP

Increase food production

Timely availability of required quantities of high quality seeds of improved crop varieties to farmers at reasonable prices at appropriate locations

Objectives

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Elements of strategy and vision:• While in the long run:

– the aim is minimize the use of public subsidies,

• In the immediate and short run:– The seed industry will be supported to achieve rapid improvements in

crop development by improving both genetic and physical attributes of varieties as private enterprises are perceived to be financially non viable,

• The Government will also support the involvement of the private sector in the seed industry by providing incentives to invest in the seed sector,

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The National Seed Policy

The Government will also: o Play the lead role in developing pilot research operations

o Enhance farmer demand for high quality seeds

o Create an operating and economic environment favorable for investment in seed production and supply

oVariety development is assigned to the agricultural research centers with the expectation that the private sector will in the long run participate in it

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The national Seed Policy:

• Registered and certified seed production are the responsibility of seed suppliers with the expectation that the higher performing of them would develop self-sustaining private-sector seed business operations according to pre-specified rules,

• With time the Government would concentrate on the production of those varieties which are required by farmers but not supplied by the private sector,

• Ultimately, the Government would be responsible for those activities that are of public service nature while the activities that are of a commercial nature would be entrusted to the private sector.

II. Regulatory frameworkC. The Seed and seedlings Act (Law 50 of 2012):

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Top management, advisory & investment stimulation

Agricultural research, experimentation & seed development

Inspection, control & certification of seeds

Registration and accreditation of new seeds

National seed council

NCRRPAV PAAR GAECR

Seed companies

Seed producers

Wheat producers

Seed multiplication, marketing & storage

Ministry of Agriculture (Minister)

Initiator (Ex Agr Supplies)

Planning and Follow up

Ministry Council Legislation Directorate (MoA Legal Office)

Ministerial Council

Shura’a Council

Parliament

Law passed

Procedures for implementing the Law

The Process of Legislating Agricultural Policy

Seed policy implementation and instructions (2013)

• The main implementation aspects deal with:

– Seed production and certification modalities,

– Reiteration of the exclusive nature of the higher grade categories and their certification procedure and requirements (field checking, seed cleaning, laboratory analyses, etc.),

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High grade seed technical specifications

Seed grades

Purity (%)Min

Germination (%)

Min

WeedSeeds/Kg

Max

Moisture content (%)

Max

Other crop seeds/Kg

Max

Base (Foundation) 98 85 10 12 5

Registered 98 85 15 12 10

Certified # 1 97 85 30 12 25

Certified # 2 96 85 60 12 50

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High grade seed elaboration steps

Steps Denomination Institutions in charge

1 Seed breeding Agricultural Research Stations and the National Committee for Release, Registration and Protection of Agricultural Varieties (NCRRPAV)

2 Seed multiplication Seed companies in cooperation with seed producers on contractual bases

3 Seed quality testing and certification General Authority for Examination and

Certfication of Seeds (GAECS)

4 Seed management, storage and supply Seed companies (MSP, ICSP & STC)

5 Seed marketing Seed companies and marginally by the private sector

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Structure of the market

Seed producers are 3 major companies:• Mesopotamia seed company, public with revolving funds• Iraqi seed company with mixed capital (51, 49%) with access to

public funding (Seed fund and agricultural fund)• Seed Technology Center, entirely public

– All operating on contractual bases with seed producers

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Seed total utilization evolutionYears High grade seed use (Tons) Self-sufficiency ratio (%)

2003 3500 22004 6576 42005 7600 42006 9716 52007 10500 62008 40000 222009 47718 261010 36726 202011 60000 332012 62000 342013 132000 73

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Impact on wheat production (All Iraq)

Period Average 2000/08

Average 2009/12

Variation (%)

2013

Wheat production (MT) 1.8 2.6 + 47 3.82

Estimated yield (Ton/Ha)

1.13 1.84 + 62 2.18

Estimated wheat Consumption (MT) 4.4 4.8 + 9 5.1

Production consumption gap (MT) - 2.6 - 2.2 - 15.4 1.9

Wheat imports (MT) 3.1 3.8 + 24.6 3.2

Constrains to farmers access to seeds• Farmers face huge administration problems when buying

certified seeds.

• The sales points are far away from farmers, thus requiring long distances to get certified seeds.

• Farmers also have to undertake substantial paper work to be eligible to certified seeds and subsidies.

• Some farmers did not get the amount of seed they need.

• Farmers are not fully convinced of the certified seed in some cases so trust has to be gained.

• Distribution of seeds has to be improved, with less bureaucracy.

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The private sector involvement

The seed policy of Iraq, and related legislation call for two main ideals:

1. Support public sector:1. Supporting the wheat seed industry in the short to medium run in every

way possible 2. Support wheat production with other related inputs, price of wheat, provide marketing

services, etc.

3. The aim is to help the industry get started and reach a critical stage of take-off and follow-up development,

2. Private sector:1. Expect the private sector to gradually take over the mission in the long

run

2. Allowing the Government to disengage and focusing on public service activities that can be of benefits to all.

Progress and obstacles on seed sector privatization

• The sector now heavily depends on state support both the demand and the supply

• It is generally difficult in any systems to withdraw subsidies

• The private sector will not be able to enter the industry due to these strong state support

• The state support to the main seed companies has crowding-out effect on the private sector

• The assumption that in the short and medium run private firms are not financially viable to undertake private investment in the seed sector- should be questioned and reviewed.

FINAL WORD

• Policy is sound and it supports clear food policy strategy

• Policy is being implemented

• BUT: The role of private sector needs further measures:– Leveling the plane field with state supporting companies,

– Devolving the distribution to small and medium size input traders (Conduct pilot case):• Need support in training and information• Also capitalization by through local financial institutions• State will retain monitoring and evaluation of the system and implementing changes as needed

• Small-scale seed enterprise sector should be developed:– particularly as they play complementary roles with the formal sector-– the advantage of this system is could produce verities that adequate for local

conditions

Thank you