Economy, Domestic Economy
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Time Running Out for Pistachio Industry

Last Iranian year (March 2015-16) pistachio exports stood at 118,000 tons worth over $1.2 billion, which showed a 34% decline in weight and 24% fall in value  compared to the previous year.
Last Iranian year (March 2015-16) pistachio exports stood at 118,000 tons worth over $1.2 billion, which showed a 34% decline in weight and 24% fall in value  compared to the previous year.
Pistachios are Iran’s biggest export after crude oil, with 250,000 tons of the nut produced last year - a figure only recently topped by the United States

The pistachio trees in a village in southern Iran are long dead, bleached white by the sun - the underground water reserves sucked dry by decades of over-farming and waste, reads an AFP report.

The last farmers left with their families 10 years ago, and the village has the look of an abandoned Martian colony.

The dome-roofed, mud-walled homes are crumbling, once-green fields are now nothing but dirt furrows, and the only sign of life is a couple of drifters camping out in an old storehouse.

Pistachios are Iran’s biggest export after crude oil, with 250,000 tons of the nut produced last year - a figure only recently topped by the United States.

In Kerman Province in southern Iran, cities have grown rich from pistachios, but time is running out for the industry as unconstrained farming and climate change take a devastating toll.

Near the city of Sirjan, a long line of enormous sinkholes like bomb craters mark the points where an underground aquifer was pumped completely dry, and the ground simply collapsed.

“Farming is being destroyed,” says Hassan Ali Firouzabadi, who has lived in the nearby village of Izadabad for half a century.

His business is barely clinging on. Some of his pistachio trees are old enough to remember the age of Shah Abbas in the 17th century, but the leaves have turned yellow-green from the salty water he now dredges up.

“The well was six to 10 meters (deep) when I was a child, but now it’s 150, and the water is bitter and salty,” he says.

“This used to be a village full of people. Most have left to become laborers and drivers. Ten more years and there will be nothing left.”

  A Long-Held Illusion

Iran faces two key challenges - dealing with a years-long nationwide drought that shows little sign of abating, and trying to convince farmers to stop the uncontrolled pumping of water.

Some 300,000 of Iran’s 750,000 water pumps are illegal - a big reason why the United Nations says Iran is officially transitioning from a state of “water stress” to “water scarcity”.

In 2013, Iran’s chamber of commerce carried out a survey showing that Kerman Province was losing about 20,000 hectares (49,400 acres) of pistachio farms every year to desertification.

For centuries, Iran relied on one of the world’s most sophisticated irrigation systems - a web of underground canals known as “qanats” that carried water from under mountains to the arid plains.

But then came the electric pumps and chaotic politics of the last century. The need to preserve water was little understood and secondary to self-sufficiency in food production - an attitude that persisted into the sanctions era.

“We are slowly moving past a long-held illusion that we have endless resources,” says Mohsen Nasseri at the National Climate Change Office in Tehran.

He says the government is finally looking at financial incentives to encourage water conservation. One scheme offers funding for farmers to buy modern irrigation equipment, but changing ingrained attitudes will take time.

“It’s late, but it’s happening,” Nasseri says.

  A Crisis Point

Some farmers have taken matters into their own hands.

The lushly green pistachio trees of Farhad Sharif’s farm near Sirjan are an oasis against the flat brown landscape.

The family installed a drip-irrigation system eight years ago that carefully controls the amount and quality of water delivered to each plant.

“We get more quality and more quantity from our pistachio trees, and we use 70 percent less water,” says Sharif, who runs the business with his father.

They strictly limit the size of the farm to ensure the underground water levels can be replenished naturally.

“Everyone should do it,” he says, but he knows the problem is money.

Sharif’s family had cash and connections in Tehran that helped them secure a loan for the system, but even their farm cannot avoid the wider problems in the area.

Each year, he says, they have to pull up the pipes and shorten them as water tables deplete and the land gradually sinks.

“The problem is more dangerous than people realize. There is just not enough oversight,” Sharif says.

“What is happening around here is a catastrophe - it has reached a crisis point.”

  24% Decline in 2015 Exports

Last Iranian year (March 2015-16) pistachio exports stood at 118,000 tons worth over $1.2 billion, which showed a 34% decline in weight and 24% fall in value  compared to the previous year.

According to latest data released by the Islamic Republic of Iran Customs Administration, an estimated 28,000 tons of pistachio worth 8.3 trillion rials (close to $234.5 million) was exported during the first four months of the current Iranian fiscal year (March 20-June 20), which indicates a 22% increase in volume and 29% rise in value compared to last year’s corresponding period. The main export destinations were Iraq, Germany, Uzbekistan, India, Greece, Vietnam, Kazakhstan, Turkey, Russia, Lebanon, Kuwait, Canada, Qatar, Pakistan, Italy, Afghanistan, China Australia, Spain, Jordan, Bahrain, Hong Kong and the UAE.  

Iran along with the US accounts for 70-80% of the world’s pistachio production. The two countries have been vying for the top producer and exporter spot over the past several years.

A prominent pistachio producer since the 5th century BC, Iran managed to regain the top rank as producer last year for the first time since 2008.

In sharp contrast, the 2015 harvest in California, which accounts for most of the US output, almost halved due to adverse weather.

A total of 500,000 tons of pistachios is expected to be produced by the US and Iran in this crop year, according to former president of Iran Chamber of Commerce, Industries, Mines and Agriculture Mohsen Jalalpour, himself a seasoned pistachio trader.

“A bumper harvest is projected for the US this year. In addition, they have some inventory from last year and would have to reduce their prices,” he was quoted as saying while still in office. Jalalpour resigned from his post as ICCIMA chief last month. On Sunday, members of the chamber voted for Gholam Hossein Shafeie to replace him.

 

Financialtribune.com