Iran’s agricultural outsourcing extends across 500,000 hectares in 18 countries, which figure is negligible, as the initiative was launched 17 years ago, according to the first deputy head of Iran’s Cross-Country Agriculture Association of Iran.
“Over the past two years, Iran’s food security has been neglected. Officials claim fluctuations in foreign exchange rates and economic sanctions to be the main reason behind the deterioration of the country’s food security. This is while studies conducted by the association on feasibility and investment opportunities show that with proper and smart planning, the benefits of outsourcing could be multiplied,” Ali Rezvanizadeh was also quoted as saying by ILNA.
The official added that by outsourcing, the country’s agricultural demand can be procured at 15% lower than global prices.
Agro outsourcing involves the practice of purchasing, renting or leasing by one country of arable land for the cultivation of agricultural products in another country. These products are later imported into the active country, or alternatively exported to other destinations by the same country. This process ensures food security and boosts agricultural production.
“Although we started overseas agriculture close to two decades ago, yet, we are far behind our neighbor, Saudi Arabia, which only began around six years ago and, at present, has more than one million hectares under cultivation in Canada and Australia,” he said.
Rezvanizadeh noted that government officials have only focused on agro outsourcing in Brazil, whereas many other countries could be considered for this purpose.
“Dedicating only 8% of the country’s annual agricultural imports to outsourcing will not only guarantee our food security, but also turn Iran into a main regional player in the agricultural market,” he said.
Iran’s Agriculture Ministry is currently using overseas land to cultivate rice, corn and oilseeds, the local production of which does not suffice domestic demand.
Iran practices agro outsourcing in several countries, including Russia, Ukraine, Kazakhstan and Tajikistan. In addition to suitable climatic conditions and arability, these countries offer low irrigation costs.
In 2015, during a meeting in Tehran between Brazil’s former minister of development, industry and foreign trade, Armando Monteiro, and Mohsen Jalalpour, former president of Iran Chamber of Commerce, Industries, Mines and Agriculture, the two sides discussed the implementation of the program in the South American country.
“Iran and Brazil have common grounds for cooperation in the ‘Farming Beyond Border’ program, particularly for the production of grains and oilseeds for populous countries in the region,” Jalalpour said.
Monteiro said Brazil would implement Iran’s agricultural outsourcing program in a few months.
The US, the UK and China are among leading countries that have carried out agro outsourcing projects and countries in Asia, Oceania and Africa have sold or rented out more land than others, due to their vast arable fields and favorable climate.
Cultivable land lease agreements have become an increasingly common phenomenon between capital-rich countries of the global North and countries with underutilized land in the global South as a way for the former to protect their food supplies in a world where volatile food prices pose a risk to national food security.
Some Middle Eastern states, rich in oil but facing water scarcity, have played an active role in securing land lease agreements.
In Iran, President Hassan Rouhani’s Cabinet officially approved the “Farming Beyond Border” program in April 2016, although the Agriculture Ministry had already initiated activity in the field three years prior to this decision.
Diminishing water resources, soil degradation and low productivity in the agriculture sector are the main reasons for Iran to embark on this project.
Water Crisis
Drought has inflicted 670 trillion rials ($2.8 billion) in losses on Iran’s agriculture sector since the beginning of the current crop year.
According to Mohammad Mousavi, an official with Agriculture Ministry, assessments carried out over 11.2 million hectares of farming lands in 30 provinces show 43% of the total losses worth 670 trillion rials were attributed to the decline in the production of agronomic crops, 26% fall in horticultural products, 13% dip in fisheries and livestock, and 11% decrease in forage crops.
“In addition, 4% of the total damage are to be blamed on challenges created in water transportation infrastructures, pools, pipes, qanats, springs and 3% of losses can be attributed to water supply complications and the animal feed used by nomads,” he was quoted as saying by Mehr News Agency.
Noting that the precipitation rate in the current crop year has decreased by 54% compared with last year and 41% compared with the long-time average, the official said, “Besides the decline in precipitation rate, increase in heat waves and evaporation as well as the inappropriate distribution of rainfalls have resulted in drought and its adverse consequences on the agriculture sector.
“Reports by Iran’s Meteorological Organization say 92% of the country have been affected by drought at different levels: 20% of the country’s area are facing extreme drought, 28% severe drought, 25% moderate drought and 19% of the country are going through stages of becoming abnormally dry; while only 8% of the country are having normal conditions.”
Mousavi stressed that emergency plans put together by the Agriculture Ministry underline the management of strategic reserves, animal feed and essential goods in proportion to the decline in production.
“Easing the pressure on groundwater resources and soil in the country, fair distribution of pressure or weight of water shortage in different sectors, when used as potable water, or in agriculture or industrial sector, has been underscored in this plan,” he said.
“On the other hand, given the decline in animal feed production, compared with last year, the shortage must be filled through imports. We have proposed an increase of 3.7 million tons in imports of barley compared with last year to control prices, reduce the pressure of livestock on pastures and support the production of milk and meat in drought condition.”
Hedayat Fahmi, a water and energy expert, says negative growth is bound to occur in the agriculture sector with the continuation of drought.
“By June 9, precipitation rate decreased by 52% compared with last year and 36% compared with the long-time average. The 130 million-ton agricultural output projected by the Agriculture Ministry [for the current fiscal year] will decrease to 110 million tons with the prolonged shortage in water supply and decline in rainfalls. Under drought conditions, the aggregate sum of water withdrawal from groundwater would reach 11 billion cubic meters and dry land farming will decline by 6 million hectares,” he said.
“Iran ranks first in the world in terms of soil erosion: 2.5 billion tons of soil are lost to erosion annually. Losses inflicted by erosion on the country and future generation amount to $28 per ton of soil. A decline in forage crops and fertile soil as well as surface water and groundwater, wetland drying and surge in dust storms are direct and indirect impacts brought by an extended drought on the economy,” he told the news portal of Iran Chamber of Commerce, Industries, Mines and Agriculture.
“Agriculture used to be the largest sector and main driver of Iran’s economic growth in the not-too-distant past. But today, its share in the economy has shrunk dramatically. As we speak, the agriculture sector accounts for 8% of gross domestic product and agricultural output reaches 120 million tons. However, under the current drought situation and management, agricultural output will fall by at least 10 million tons and the share of the sector in GDP will drop by 1%,” he said.
$4.69b in Agricultural Trade Deficit
Iran exported 8.83 million tons of agricultural and food products worth $6.21 billion in the last fiscal year (ended March 2021).
The figures indicate a 23.57% and 5.99% rise in tonnage and value respectively compared with the output of the year before, the Agriculture Ministry’s website reported.
Fresh and dried pistachio topped the list of exports in terms of value, as the country exported $1.37 billion worth of it during the period.
Tomato was the second major agricultural export product in terms of value with $358.45 million, followed by apple worth $326.67 million, dates worth $296.7 million and dried grapes worth $234.3 million.
In terms of tonnage, potato topped the list with 950,400 tons, followed by apple with 884,800 tons, tomato with 767,870 tons, watermelon with 703.38 tons and onion with 429.4 tons.
Imports during the same period stood at 23.69 million tons worth $10.9 billion, indicating a year-on-year 5.53% decline in volume and a 14.45% fall in collective value respectively.
Feed corn had the biggest share in total imports in terms of value with $2.506 billion, followed by soybean with $1.04 billion, semi- and whole-milled rice with $932.5 million and various types of vegetable oil with $848.74 million.
In terms of tonnage, feed corn topped imports with 9.86 million tons, followed by wheat with 2.28 million tons, barley with 1.86 million tons and soymeal with 1.81 million tons.
The export and import volumes suggest that Iran recorded an agrifood trade deficit of 14.86 million tons in tonnage and $4.69 billion in value during the last Iranian year.
