Home > 1999-2002 from Middle East, Iran > Rural Iran thirsts for times gone by

Rural Iran thirsts for times gone by

October 11, 2000

By Guy Dinmore
Financial Times
October 11, 2000

Night falls on Red Earth village in the shadow of Damavand, Iran’s highest mountain, and talk among farmers after a day’s work turns as usual to water.

Some reminisce about the days when trout “half as long as your arm” could be caught in the nearby river, now reduced to a trickle less than ankle deep.

Along comes the “mirab” – the water king – whose role in the village is to check the sluice gates along irrigation channels to ensure each family gets their allotted ration of water for their crops, about two hours worth every fortnight. Disputes follow him. Iran is in the grip of a second year of drought, its worst in more than three decades.

A lack of rain, coupled with poor water management and what critics call misguided agricultural policies, have propelled Iran to the top of the world league of wheat importers.

It is also a significant buyer of rice, barley, corn, sugar, tea and oil-seeds.

Two years ago, Iran harvested 11.9m tonnes of wheat. In 1999, the crop fell to 8.5m tonnes because of drought and, according to Ali Dehghani, a senior official in the agriculture ministry, the harvest this year is projected at 9.2m tonnes because the rain that did fall was better distributed.

Iran bought about 6m tonnes of wheat last year and will buy more in the current crop year. Canada is the largest seller, holding about 40 per cent of the market, followed by France and Australia.

The US Department of Agriculture recently forecast that Iran would import 7.5m tonnes of wheat in 2000/2001. The US last year lifted its ban on sales of food to Iran but so far has sold no wheat. Tehran analysts said Iran might do so but only if Washington scrapped its embargo on buying Iranian oil.

Economists said Iran’s “oil for wheat policy” – using revenues from crude to buy grain – is costing the country dearly. About Dollars 5bn from oil revenues is earmarked for imports of basic commodities.

Iran Economics, an independent magazine, estimated the government spends Dollars 850m a year subsidising flour. It buys wheat from Iranian farmers at the equivalent of 10 cents per kg, well below international rates, converts it to flour and sells it to bakeries at about half a cent per kg.

Moreover, there are those that profit from the trade. “In the past 20 years, a few influential people have constituted a newly developed upper class, which is controlling key elements of the national economy,” Professor Mehdi Sahraeian, an expert on agriculture, was quoted as saying by the Khorasan newspaper.

“It can be predicted that the profiteer noveau riche class would stand against any reform packages that endanger their interests.”

But, according to Mr Dehghani, that is set to change. He admits the government is paying farmers too little.

Under the current five-year plan, the government aims to balance domestic and international prices paid for wheat.

“There is no reason to support consumers. We just inflict losses on the producers,” Mr Dehghani said.

He said the government recognised the need to generate jobs in rural areas to stem the flow of migrants into cities. There is also political agreement to achieve self-sufficiency in food.

In the short term, however, the drought seems unstoppable.

A recent United Nations report warned that more than 60 per cent of the rural population might be forced to migrate to cities as a result.

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