Post-Revolution Track Record of Iranian Agriculture Sector

EghtesadOnline: The agriculture sector’s share in generating Iran’s gross domestic product (GDP) increased from 3.1% in the fiscal 1977-78, the year before the Islamic Revolution, to 6.2% in 2017-18 when the country celebrated the 40th anniversary of the revolution.

News ID: ۷۵۰۱۶۷

06 June 2020

The Majlis Research Center recently released a report which, by drawing on figures from local and international organizations and scrutinizing government policy outcomes, aims to review the achievements and experiences, outline the threats facing the sector, pinpoint the faulty measures implemented after the 1979 revolution and list the potential advantages readily available in the field.

The Islamic Republic entered its fifth decade in 2019 and the state called for renewed action to expedite growth in various fields, including different economic sectors.

Yet, with all the efforts made and measures taken in the face of long years of economic sanctions, Iran’s agricultural performance has failed to meet most of the set goals in the country’s Constitution, 20-Year Vision Plan (2005-25), the Sixth Five-Year Development Plan (2017-22) and other mandated policies for national development, the report reads.

Looking on the Bright Side

The big picture portrayed by the report shows that Iran’s agricultural production has grown from 20 million tons to more than 119 million tons over the period under review, registering a sixfold upsurge.

Citing data from the Food and Agriculture Organization of the United Nations, the report puts the share of exports in Iran’s agricultural trade at 34% in 2017. The figure stood at 16.87% the year before the revolution (1978), yet the country’s agro trade deficit has remained put throughout the years.

Iran exported 7.1 million tons of agrifood products worth over $5.82 billion in the last fiscal year that ended on March 19 to register a 2.34% rise in tonnage and 8.93% decline in value compared to the year before.

Horticultural products accounted for 1.95 million tons worth $2.72 billion of total exports, up 30.03% and 19.72% in tonnage and value respectively year-on-year. Exports of agronomical products stood at 4.41 million tons worth $2.09 billion, down 5.2% and 20.42% in tonnage and value respectively YOY.

Exports of livestock and poultry products stood at 586,400 tons worth $718.87 million, down 7.01% and 34.05% in tonnage and value respectively YOY.

The fisheries sector exported 126,590 tons worth $249.3 million, up 4.58% in tonnage and down 25.21% in value YOY.

Exports from the "forest and rangeland" sector hit 19,080 tons worth $31.2 million, down 29.45% and 46.19% in tonnage and value respectively YOY.

Exports from the veterinary sector amounted to 350 tons worth $2.31 million, up 16.23% in tonnage and down 27.68% in value YOY.

Imports during the same period under review stood at 24.67 million tons worth $12.58 billion, indicating a 20.5% and 17.46% increase in tonnage and value respectively year-on-year.

Agronomical products accounted for 23.02 million tons worth $9.56 billion of total imports, up 20.91% and 19.2% in tonnage and value respectively YOY.

Horticultural products stood at 1.27 million tons worth $1.42 billion, up 14.04% and 10.32% in tonnage and value respectively YOY.

Imports of livestock and poultry products hit 311,810 tons worth $1.39 billion, up 17.58% and 13.07% in tonnage and value respectively YOY.

The veterinary sector imported 1,270 tons worth $79.01 million, up 2.05% and 6.22% in tonnage and value respectively YOY.

Imports by the fisheries sector amounted to 26,540 tons worth $71.82 million, up 12.04% and 22.18% in tonnage and value respectively YOY.

Imports from the forests and rangelands sector totaled 34,950 tons worth $54.68 million, up 37.37% and 52.5% in tonnage and value respectively YOY.

The export and import volumes suggest that Iran recorded a trade deficit of 17.57 million tons in tonnage and $6.76 billion in value during the year in review.

Agro Value-Added

The World Bank database figures on the value-added generated by the agriculture sector in different countries show that, based on fixed US prices for 2010, Iran’s agriculture created close to $43 billion in value-added in 2017 while the figure stood at around $8 billion in 1975.

The agriculture sector, which generated 33% of the country’s total employment in 1978, shrank to account for only 19% in 2018.

Parliament researchers attribute this decline to population growth and depletion of production resources, urbanization, technology advancements and the subsequent migration of people from rural to urban areas in the span of 40 years after the revolution.

Yet, advancements on the infrastructural front from 1978 to 2018 have been remarkable. The number of agro processing firms reached around 20,000, indicating a 9,900% hike. Cold storage facilities reached 1,830 units, registering a 695.6% surge.

Iran went from having no rice combine harvesters in 1978 to enjoying the assistance of 7,878 combines on its paddy fields in 2018. The number of grain combine harvesters reached 17,334 (26,934.3% rise) and farm and orchard tractors stood at 555,133 (761.3% increase).

Farmland equipped with modern irrigation systems rose to 2.05 million hectares in 2018 from 37,384 hectares in 1978 (5,383% growth).

Rural water distribution network grew by 378.6% to stretch over 175.1 kilometers over the period. Back in 1978, only 6.1% of the country’s villages had electricity while in 2018, 99% of Iranian rural areas enjoyed the facility.

Flip Side

Yet, the report says, these advancements came about with a cost and continues to delineate the downsides of the sector as well as the handicaps it faces.

Throughout the post-revolution years, water consumption in the agriculture sector has significantly increased (figures differ from around 70% to 90% of the country’s total water consumption) while the valuable resource is inefficiently used and ground and surface water are being depleted. This is further aggravated by water and soil pollution, all of which are rooted in lack of proper management of these resources. As Iran is a dry country with low precipitation and high evaporation and soil erosion levels, this extravagant consumption of these resources is something the country cannot afford.

The report noted that agricultural waste during harvest and post-harvest is very high, as more than 30% of Iran’s agricultural production go to waste. Apart from faulty practices, the fact that farmlands in the country are generally small and far apart makes mechanization in the sector very difficult, contributing to waste increase.

Moreover, inequality, unjust distribution of facilities and income and economic disparity between rural and urban areas have, over the years, resulted in a change of lifestyle in the latter where a tendency grew for a consumerist rather than a producer way of life. One outcome is that the average age of Iranian farmers has increased over the past 40 years, as young rural residents have shown reluctance in engaging in farming activities.

The faulty and haphazard management in every step of the production and supply chain, lack of stable economic and commercial decision-making and the clash of interests between agro development policies and those of other sectors have all had a part in making it difficult to meet the objectives envisioned for Iran’s agriculture sector.

The reason for all this can boil down, as the report suggests, to the state’s lack of in-depth understanding of agriculture’s capacities and significance, and the perils of mismanagement in the field.

The Counting of Blessings

Favorable and diverse climate, educated and professional workforce and its geographical location where the east and west meet are listed in the report as blessings and advantages the country enjoys.

If put to good use, Iran’s grand goals in agriculture, including food safety, self-sufficiency in essential crops, economic gain and independence, are easily attainable.

Iran’s diverse climate allows for the cultivation of various agricultural products. Presently, the country ranks third and 18th in the diversity of horticultural and agronomical production in the world respectively, according to the report.

The parliament researchers further believe that by seeking the assistance of many graduates majored in agriculture, the latest scientific and technological methods can be applied to help make an efficient use of resources and produce high-quality products that meet the demands of different markets across the globe.

Iran has easy access to international markets through road and sea routes, the report concludes.

Being neighbors with 15 countries is an asset. To top that, Iran is located in the Middle East and has common sea borders with the littoral countries of the Persian Gulf where the climate and soil conditions do not prepare the grounds for much agricultural activity.

This is a singular opportunity for Iran’s agricultural exports, which can come about by forming strong trade unions, elevating production standards, defining a suitable insurance system for exports and stabilizing tariff and foreign exchange policies.