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SPECIAL ALERT

FAO/WFP CROP AND FOOD SUPPLY ASSESSMENT MISSION TO IRAQ
JULY 1993

OVERVIEW

An FAO/WFP Crop and Food Supply Assessment Mission visited Iraq from 14-28 June 1993 to forecast the outcome of the 1993 cereal crop, assess the current food supply situation and estimate the basic food import requirements of the country for the 1993/94 marketing year. Mission members travelled extensively in the country and visited 17 of the 18 governorates, interviewed farmers, traders and city dwellers and carried out independent market surveys for an on-the-spot assessment of food availabilities and market prices. The Mission received full cooperation from the staff of the UN agencies based in Baghdad and the government agencies engaged in food and agriculture sectors.

In approaching its task the Mission was acutely conscious of the fact that given normal circumstances, Iraq would not be a "food insecure" country. Nor would Iraq, normally qualify for international humanitarian assistance due to its abundant natural resources and capacity to commercially import all of its food and other needs. Rather it is a country whose economy has been devastated by the recent war and subsequent civil strife, but above all by the continued sanctions since August 1990, which have virtually paralyzed the whole economy and generated persistent deprivation, chronic hunger, endemic undernutrition, massive unemployment and widespread human suffering. Given the current precarious situation, a vast majority of the Iraqi population is living under most deplorable conditions and is simply engaged in a struggle for survival; but with increasing numbers losing out in this struggle every day a grave humanitarian tragedy is unfolding.

Based on its spot surveys and interviews with families in both urban and rural areas, the Mission confirms a substantial deterioration in the food supply situation in all parts of the country. It noted with deep concern the prevalence of the commonly recognized pre-famine indicators such as exorbitant prices, collapse of private incomes, soaring unemployment, drastically reduced food intakes, large scale depletion of personal assets, high morbidity levels, escalating crime rates and rapidly increasing numbers of destitute people. A massive starvation in the country has so far been averted by the provision of low-cost food, under the public rationing system, which is an indispensable means of sustenance for a majority of the population. However, even if basically equitable in its coverage, the rationing system provides only about one-half of the average per caput calorie intake before the imposition of the sanctions and rations are deficient in essential micro-nutrients and animal protein. In the areas outside government control, food distributions under the public rationing system remain insignificant. Due to hyper-inflation and the collapse of real incomes (widely attributed to serious supply constraints due to embargo and a sharp fall in the value of Iraqi Dinar) a large section of the population is unable to supplement their rations from market purchases. As a result the nutritional status of the population continues to deteriorate at an alarming rate. In fact large numbers of Iraqis have now food intakes lower than those of the populations in the disaster stricken African countries.

	FOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONS, ROME
	WORLD FOOD PROGRAMME, ROME

D/V 1502

Following a careful review of the various factors affecting agricultural production the Mission provisionally forecast the 1993 cereal harvest at 3.2 million tons, some 10 percent above last year's output, but below the 1990 crop of 3.5 million tons. The recovery in production is attributed to larger plantings, generally satisfactory weather and the efforts made by the government to cushion the impact of the sanctions on food supplies. Nevertheless, the yield potentials remained seriously constrained due to acute shortages of essential inputs and high incidence of crop pests and diseases; with FAO assistance some 111 000 hectares of crops (including 97 500 hectares through aerial spraying) were treated against Sunn pest, other insect infestations and diseases, but substantial infested areas could not be covered due to lack of pesticides and equipment. The Mission also noted a significant recovery in the production of other food products, particularly vegetables, although current outputs of most commodities remain substantially below the 1990 levels. Huge investment will be needed to enhance productivity and restore production and employment in agriculture sector to the pre-embargo levels.

Reflecting a recovery in domestic food output in 1993, the country's import needs for food are forecast to decline in 1993/94 (July/June). Nonetheless, the Mission estimates that Iraq will need to import 5.4 million tons of basic food stuffs in 1993/94 (June/July) to feed its population of 19.5 million at an estimated cost of U.S.$ 2.5 billion. This is clearly a huge amount which cannot possibly be funded by the international community and would therefore have to be borne by Iraq itself.

Given the scale and magnitude of the food crisis facing Iraq, the Mission urges the most urgent response from the international community to seek a solution to this crisis. The experience over the past three years lends support to the fact that notwithstanding the justification for their imposition, the sanctions have caused persistent deprivation, severe hunger and malnutrition for a vast majority of the Iraqi population, particularly the vulnerable groups-children under five, expectant/nursing women, widows, orphans, the sick, the elderly and disabled. The Mission believes that it would be impossible to continue the sanctions in their present form, without further aggravating the already grave food supply situation in Iraq. The lasting solution to the current food crisis would lie in the regeneration of the Iraqi economy which cannot be achieved without a resumption of international trade by the country. Such an action will not only relieve the grave human suffering in Iraq, but will also allow a release of scarce humanitarian assistance resources (currently being used in Iraq) for their most appropriate allocation to the benefit of large numbers of starving people elsewhere in the world.

CURRENT FOOD SUPPLY POSITION

PUBLIC FOOD RATIONING SYSTEM

Since September 1990 the public rationing system, has provided food to the population at highly subsidized prices which currently represent less than 1 percent of the cost of market purchases. These rations are an exclusive and indispensable means of sustenance for a vast majority of the households. Although individual food rations provided under the government rationing system have steadily improved from the very low levels after the war, these currently provide 53 percent of the average calorie intakes of the 1987-89 period (Table 1).

Moreover, rations being carbohydrate-based are deficient in essential micro-nutrients and animal protein. Hence while the rationing system has been instrumental in banishing the threat of a massive famine in the country so far, it has not be enable to check the increasing malnutrition and morbidity rates, affecting large section of the population. Recent surveys indicate a considerable deterioration of the nutritional status of the population.

Table 1 - Per Capita Monthly Food Ration Under the Public Rationing System (kg)

Based on its spot investigations the Mission confirms that public rationing system is basically equitable in its coverage and generally efficient in its operations. However, in the areas outside government control, food distributions under the public rationing system remain extremely low.

In view of their high implicit value, public food distribution represents a major addition to the purchasing power of Iraqi households. The in-kind contribution from food rations for a family of six, currently estimated at some 2 400 Iraqi Dinars is more than three times the monthly salary of a senior civil servant in Iraq (Table 2).

Crucial as its role is in averting the threat of massive starvation, the functioning of the food rationing system is steadily coming under increasing strain due to serious difficulties faced by the government in financing food imports and the excessive burden of subsidy. The Mission estimated that at current market prices the direct monthly cost of government subsidy on food rations amounts to 8.7 billion Dinars (or U.S.$ 108 million). Such a huge cost, a substantial part of which is composed of foreign exchange component, cannot be supported by the government for too long, without having the ability to earn foreign exchange. The inability of the country to resume international trade renders the public rationing system extremely vulnerable; a collapse of this system would spell a catastrophe for the majority of the Iraqi population.

Table 2 - Monthly Food Rations Distributed under Public Rationing System

PRICES AND INCOMES

As the food rations are inadequate both quantitatively and qualitatively, people would have to supplement these rations from purchases on the open market. Prices for basic food stuffs on the open market have now reached a level that only a small proportion of the population can afford. During spot market surveys conducted by the Mission, the basic food stuffs (wheat flour, sugar, vegetable oil, baby milk) had virtually disappeared from several of the markets visited. In the markets where supplies of some food items were available, traders' stocks were low and reflected a lack of purchasing power of the people rather than an abundance of supplies. Given adequate purchasing power, those stocks would last for only a few hours and will not be readily replenished. In some cases market supplies of certain items in fact represented the resale of rations by the poorest section of the population to raise the much needed cash to cover the cost of medical care and other essential expenses.

Independent market surveys carried out by the Mission in both the rural and urban areas showed phenomenal increase in food prices. For example, compared to the pre-embargo (July 1990) levels, the average price of wheat flour (the most important staple food) increased in June 1993 by 355 times (or a 35 500 percent increase); rice by 71 times, vegetable oil by 106 times and sugar by 149 times (Table 3).

Table 3 - Open market prices of basic food items in Iraq (June 1993 compared with July 1990)

The Mission identified that severe supply constraints coupled with a drastic fall in the unofficial exchange rate of the Iraqi Dinar, have been the main factors responsible for the unprecedented hikes in prices. The effect of hoarding and speculation on prices is anticipated to be insignificant due to low stocks held by traders and the severe measures taken by the government against profiteering. The supply constraints have been mainly due to the difficulties faced by the government in financing food imports while the serious erosion of the value of the Iraqi currency reflects a general disruption of the economy. Even prior to the imposition of sanctions the unofficial exchange rate of Iraqi Dinar was about 13 times higher than the official rate. At the time of Mission's survey, the average unofficial exchange rate was 260 times higher than the official one. Hence for the commodities imported by the traders (who have to mobilize their own foreign exchange resources for imports) a large proportion of the recent sharp price increases can be attributed to the fall in the value of Dinar alone.

The Mission's investigations showed that personal incomes, in terms of purchasing power, have virtually collapsed. Average monthly wages for most occupations have increased 2-3 fold since 1990. In June 1993, average monthly wages/salaries ranged from I.D. 250 (U.S.$ 3 at unofficial exchange rate) for an unskilled labourer to I.D. 775 (or U.S.$ 9) for a senior civil servant; i.e. Under-Secretary of a Ministry. The Mission estimates show that whereas the average monthly food basket for a family of six cost about 110 Dinars in July 1990, the same purchases cost some 5 400 Dinars in June 1993. Even after taking into account the contribution made by the low-cost food provided under the public rationing system, a family will still need 3,000 Dinars to make up the shortfall in food consumption to the normal levels. These income levels are clearly beyond the reach of majority of the population. Food prices will decline only if the food supplies increase substantially, if the value of the dinar improves or if government restarts its programme of comprehensive subsidy; such developments seem unlikely as long as sanctions remain in force in their present form.

Household surveys undertaken in 1988 indicate that per capita expenditure on food accounted for about onehalf of the total expenditure, the remainder spent on other commodities and services such as medical and health care, rents, clothing, transport, communications etc. With average incomes now insufficient to cover even the minimum food requirements of a large section of the population, the use of other essential commodities and services has been reduced to a modicum.

Mission's interviews with a cross-section of the respondents in various parts of the country showed that in the wake of a rapidly deteriorating food supply situation families had developed a number of mechanisms to ensure their survival. A vast majority resorted to the sale of their personal assets (jewelry, household goods, even clothing and children toys, etc). As these assets were depleted people started borrowing money from friends and relatives both within the country and abroad, but such patronage practices are undergoing severe strain and can hardly be relied upon to ensure survival for long. Most of the respondents stated that they had drastically reduced their food consumption and changed the composition of their diets to incorporate cheaper and low quality food items. A significant number reported that the food shortages have forced them to do away with the time honoured traditional Arab hospitality values causing a severe social and psychological stress. Some in the cities reportedly sold their houses and moved into rented quarters, to their relatives or to the rural areas. Those who could find work carry the burden of extra jobs to augment their family incomes. A massive movement of the professional and skilled work force into the informal trade sector was reported.

Recent surveys show that an increasing number of children are dropping out of schools to enter petty trading to supplement their family incomes. Beggars have become a common sight on Iraqi streets and most of them beg for food rather than cash. Almost all the respondents reported a sharp rise in unorganized crime in their localities. Many poorer families, often resorted to selling a part of their meagre monthly food rations to raise the much needed cash to purchase other essential commodities and to cover the expenses of medical care

The Mission found that for a large section of the population the coping mechanisms are fast running out. Recent surveys indicate a considerable deterioration of the nutritional status of the population, with the vulnerable groups worst affected. There has been a substantial increase in the number of people seeking destitute status who cannot be absorbed in the state support system for lack of government funds. Taken collectively the above indicators clearly demonstrate a widespread and acute food supply and access crisis which, if not averted urgently, will cause massive starvation in the country.

FOOD ASSISTANCE PROGRAMMES

In view of the precarious situation of the vulnerable groups, emergency feeding programmes, such as those implemented by WFP, have been continued since early 1991. Between December 1992 and March 1993 a total of 1.2 million beneficiaries were covered by the WFP operations. Due to delays in deliveries to central and southern governorates, distributions are still continuing and stocks are expected to last until July 1993.

During field visits by Mission members to various governorate capitals long queues at the offices of the Ministry of Labour and Social Affairs of people trying to apply for destitute status were observed. Enquiries indicated that these people are not so much interested in the destitute allowance which ranges between I.D. 67 - I.D. 84, but would like to have access to free rations.

A cause for particular concern is that at a time when the population needs are increasing rapidly and the condition of the vulnerable groups is deteriorating fast, donor response to the humanitarian needs is becoming rather passive. Consequently WFP has been forced to reduce the number of beneficiaries.

The UN Inter-Agency Needs Assessment Mission which visited the country in March 1993 found that the condition of the vulnerable groups has worsened. Under the new programme of co-operation, WFP had planned to provide food assistance to 1 974 882 beneficiaries for the period, April 1993 to March 1994. However, the number of beneficiaries has been reduced to 1 300 000 due to lack of resources. WFP has received funds (U.S.$ 4 million) to purchase 27 000 tons of wheat in the North for redistribution within the Autonomous Region.

It should be noted that food aid has so far covered only 5-7 percent of the total population of Iraq. The needs of the country are enormous and cannot be met through hand-outs. The only solution to the grave food supply problem is to work out suitable arrangements which would allow Iraq to commercially import its entire food needs.

Faced with the serious supply constraints due to the embargo, the government has, over the past 3 years taken a number of measures aimed at achieving greater self-sufficiency in food. These measures included a partial rehabilitation of the war-damaged agricultural infrastructure and agro-industries and a substantial expansion of plantings under cereals and other crops. Procurement prices for crops were raised sharply. For example procurement prices for top quality wheat were raised from Iraqi Dinars 600 per ton in 1990 to I.D. 3 000 in 1992 and to I.D. 5 000 in 1993; barley prices were increased from I.D. 2 000 per ton in 1992 to LD. 2 500 per ton in 1993. Farmers were provided with low interest loans and the state-owned land was leased at cheap rents for cultivation. Supplies of fertilizer (mainly urea) were increased in 1992.

These measures, coupled with generally satisfactory weather conditions, have resulted in a significant recovery of domestic food output in 1992/93, which nevertheless remains substantially below the 1990 level, due to low productivity as a result of acute shortages of essential agricultural inputs. It must be noted that a large part of the recovery in food output is contributed by cereals, the production of which, being predominantly rain-fed based, is highly variable. For example, following adverse weather, cereal production in 1989 fell by over 40 percent from the previous year's level. Hence the weather related recovery in cereal production in 1992/93, though a welcome addition to the precarious national food supplies, cannot be relied upon as a lasting gain.

The 1992/93 season started very well with abundant rains received in November and December which encouraged plantings and benefited initial crop development. Supplies of fertilizer (mostly urea) showed a significant recovery following the rehabilitation of the war-damaged factories in AI-Anbar (at AI-Qairn) and Salah AI-Deen (at Baiji) governorates. Given these positive factors, there was an expectation of a bumper harvest in 1993. However, these hopes were largely thwarted as the season progressed.

Prolonged dry spells between January to March and excessive rains accompanied by strong winds at the pre-harvest period, offset much of the anticipated gains from the earlier favourable weather. In Nineveh governorate, which normally accounts for more than one-third of the national cereal production, rainfall in May 1993 was over 700 percent above the normal. The improved use of Urea undoubtedly benefited crops, but the yield potentials remained constrained by shortages of compound fertilizers. Serious crop losses, (reported to have virtually doubled over the last three years), occurred due to crop pests and diseases in all parts of the country; with FAO assistance some 111 000 hectares of crops (including 97 500 hectares through aerial spraying) were treated against Sunn pest, other insect infestations and diseases, but large areas remained untreated due to lack of pesticides and equipment. For example, in Dohuk governorate, over 90 percent of the cereal area could not be treated against pest infestations in 1992/93.

In the predominantly irrigated areas in the centre and the south, serious shortages of spare parts for the water pumps have not only reduced crop yields, but also raised underground water table causing serious salinity problem and an increasing loss of productive lands. Reflecting acute shortages of spare parts, a large proportion of the farm machinery (tractors, combine harvesters, etc) has been found to be out of service. A partial substitution of mechanical operations by manual labour has led to inordinate delays in planting and harvesting operations and a significant increase in pre-harvest losses. In the northern govemorates of Arbil, Dohuk and Sulaimaniyah, serious shortages of fuel and all types of fertilizer posed further problems for crop production.

Following a careful review of the various factors affecting production, the Mission forecasts the 1993 production of cereals at 3.2 million tons, some 10 percent better than last year's level, but below the harvest in 1990 (Table 4).

Table 4 - Cereal Production, 1989/90 - 1992/93 ('000 tons)

The increase in production is mainly attributed to larger plantings. A part of this year's cereal produce may find its way across the Iraqi borders due to lucrative prices in the neighbouring countries. The Mission found evidence of Iraqi wheat and barley being sold across the border in Jordan at prices which were about 75 percent higher than those offered by the Iraqi Government.

The aggregate production of other food crops, showed some recovery in 1993, mainly due to increased output of vegetables. In 1992, date production showed a substantial decline (20 percent) over the 1990 level due to serious pest infestations; with FAO assistance some 25 000 hectares under date palms were sprayed last May against pests. Current indications are that date output would improve in 1993.

Production of vegetables in 1993 is forecast to recover from last year's level mainly due to larger area brought under cultivation, but will remain below the 1990 harvest reflecting serious shortages of seeds.

The Mission found that the poultry sub-sector, which had been virtually decimated in 1991, is showing signs of some recovery, although at a very slow pace. Egg and poultry meat production in 1993 is estimated at about 20 percent of the 1990 levels. By contrast, livestock numbers have continued to decline due to serious shortages of feed, veterinary drugs which are causing increased mortality and slaughter rates. The remaining stock, due to poor health, have low productivity. The migration of animals, particularly sheep and goats, to the neighbouring countries, continues despite close surveillance; attractive prices offered across the border, in the wake of the collapse of the Iraqi Dinar, have been the main factor responsible for uninterrupted migration. The current livestock numbers are reported at less than one-half of their pre-war level of over 10 million. However, output of the fisheries sub-sector has recovered sharply; fish catch is currently estimated at about 22 000 tons, against 32 000 tons in 1990.

BASIC FOOD IMPORT REQUIREMENTS FOR 1993/94

Prior to the Gulf crisis domestic food production in Iraq, even in exceptionally good years, accounted for about one-third of total requirements and the balance was covered by imports, costing over U.S.$ 2 billion annually. In poor production years, the annual food import bills would rise up to U.S.$ 3 billion. Following the imposition of embargo in August 1990, the country has had to rely heavily on domestic production to meet the needs of its population. Iraq's capacity to finance the much needed commercial food imports has remained seriously constrained, due to loss of export revenues (estimated at U.S.$ 14.6 billion in 1989 almost exclusively from crude oil exports) and the freezing of Iraqi financial assets abroad. Precise data on food imports for the past three years was not available to the Mission. However, acute food shortages and phenomenal increases in prices in the open market, are indicative of the fact that commercial food imports since the embargo have represented a small proportion of the total requirements. The Mission estimates that average food supplies available to an Iraqi household have now been virtually halved from the pre-crisis levels.

Reflecting a recovery in domestic food output in 1993, the country's needs for food are forecast to decline in 1993/94. Nonetheless, the Mission estimates that Iraq will need to import 5.4 million tons of basic food stuffs in 1993/94 (July/June) to feed its population, currently estimated at 19.5 million, at an estimated cost of U.S.$ 2.5 billion (Table 5).

Table 5 - Basic Food Import Requirements of Iraq for 1993/94

This cost figure is significantly below that of U.S.$ 2.63 estimated for 1991/92, considering that an estimated 1.2 million additional population will need to be fed in 1993/94. The 1993/94 estimated food import needs would allow daily per capita calorie intakes of some 10 percent lower than the average levels for 1987-89. The food import bill for 1993/94 will be substantially higher than U.S.$ 2.5 billion, if food intakes are to be provided at pre-embargo levels, and an allowance is to be made for the population to recuperate from the adverse impact of persistent undemutrition suffered over the past three years.

(THIS INFORMATION WAS TELEXED/FAXED TO YOU ON 6 JULY 1993)

This report is prepared on the responsibility of the FAO and WFP Secretariats with Information from official and unofficial sources and is for official use only. Since conditions may change rapidly, please contact the undersigned for further information, if required.

Rome, 8 July 1993