Miller Magazine Issue: 119 November 2019

IRAN 90 MILLER / NOVEMBER 2019 Iran is an upper middle-income country, with the population of 83 million. The population resides predominantly in urban area where seventy-one percent of the total population is found. The coun- try is bordered by seven countries, namely Afghan- istan, Armenia, Azerbaijan, Iraq, Pakistan, Turkey and Turkmenistan. About 52 percent of the coun- try consists of mountains and deserts and some 16 percent of the country has an elevation of more than 2 000 m above sea level. The country has the next largest economy in the Middle East, after Saudi Arabia with large reserves of natural gas and crude oil. The economy is heav- ily dependent on hydrocarbon exports and dom- inated by the oil industry. As a result, economic growth has traditionally been strongly influenced by oil market developments. A goal of Iranian eco- nomic policy over the last 20 years or so has been diversification of the economy away from depend- ence on oil earnings. Agriculture accounts for some eight percent of GDP, absorbing 19 percent of the labour force. The country is an important agricultural producer, rank- ing among the top 20 producers in the world for sev- eral agricultural commodities, including wheat, bar- ley, chicken and potatoes. The agricultural system in Iran is a combination of traditional and modern systems, and of small self-sufficiency farms, medium sized and large commercial farms. According to the United Nations Food and Agriculture Organization (FAO), Iran’s total cultivated area is approximate- ly 15 million hectares, spread mostly across Iran’s western, northwestern, and northeastern provinces. Around $80 billion worth of agricultural products are produced every year, $75 billion of which are con- sumed inside the country. Crop production has increased over the past dec- ades in Iran. The main crops are wheat, barley and maize. Wheat is the most important grain in Iran and accounts for 70 percent of the grain produc- tion. The Ministry of Agriculture Jihad declared that Iran’s production of wheat fully covered domestic demand in 2006, but the drought in 2008 and the subsequent fall in production made it necessary to resume import of wheat. In 2008, severe frost and drought caused a sharp drop in production, particularly for grains and legumes, which has not reached the same level again. Acreage used for grain production has remained between 8,500 and 9,500 hectares since the early 1980s. The increase in production is mainly due to improvements in yield, through modernisation and ir- rigation, rather than the increase of the cropping area. Water shortage is a serious concern in Iran, requiring more efficient use of water in the agricultural sector. According to FAO, the availability of agricultural land is not a major constraint, but rather the availability of water for the development of these lands. MAIN STAPLES: WHEAT AND RICE The food market in Iran combines element of free market and government control. Specifically, the government is concerned with key staples such as wheat, milk, rice and chicken, regulating both pric- es and import. The government exercise its policies through the Economic Council and Consumer and Producers Protection Organization, and regulates import of commodities that are in short supply. In addition, the government’s Trading Cooperation of Iran plays an important role in the purchase, storage and distribution of key food products. Wheat and rice are Iran’s two main food staples. Bread made from wheat has traditionally served as the primary source of calories, but per capita con- sumption, despite ranking among the world’s high- est, has remained flat in recent decades. Iran’s rice consumption per capita has gradually risen over time, as rice tends to replace wheat there when incomes rise, though in recent years the growth of rice con- sumption has declined. Iran is expected to achieve self-sufficiency in rice production in the current fiscal year (ending March 2020). It is estimated that rice production will increase 42% this year to reach be- tween 2.9 million and 3 million tons. This volume will meet the entire domestic demand and there will be no need for imports, according to Iran deputy agri- culture minister for planning and economic affairs. Wheat is Iran’s largest crop by area. Wheat area has averaged around 6.6 million hectares over the last 5 years. Average production was around 13.4 million tons, placing Iran among the top 15 producers in the world. Yields averaged a little over 2 tons per hec- tare, comparable to those of producers in Russia or Australia. Around 40 percent of Iran’s wheat area is irrigated, with yields of around 3 tons per acre. 20 PERCENT ESTIMATED INCREASE IN WHEAT PRODUCTION Wheat production in Iran is estimated at 16.8