Gov’t Buys 7% More Wheat From Local Farmers This Year

EghtesadOnline: The Government Trading Corporation has bought 8.22 million tons of wheat worth 207.8 trillion rials ($755 million) from local farmers across the country in the current fiscal year (started March 20), which indicates a 7% increase compared with the similar period of last year.

News ID: ۷۵۱۴۶۵

13 November 2020

Khuzestan with 1.2 million tons, Fars with 911,000 tons and Golestan with 820,000 tons topped the list of provinces from where the grain was bought.

GTC is the lever for enforcing market controls and in charge of maintaining a supply of wheat, rice, cooking oil and meat for the country’s strategic reserve of essential goods.

Close to 2 million hectares of wheat farms (one-third) in Iran are irrigated and 4.05 million hectares (two-thirds) are rain-fed, according to Esmaeil Esfandiyarpour, the official in charge of the “Wheat Project”—the government program to purchase the crop from farmers at a guaranteed price.

“Rain-fed wheat farms give the best grain yields compared to their irrigated counterpart.”

Some 14 million tons of the crop are estimated to have been produced in the last Iranian year (March 2019-20), of which only around 8.8 million tons were purchased by the government.

A total of 12.7 million tons of wheat were produced on 6.5 million hectares across the country in the fiscal 2018-19, according to a new report released by the Statistical Center of Iran.

The report noted that around 11,700 tons of the staple grain were imported during the period while exports hit 189,000 tons.

SCI put domestic demand for wheat at 10.4 million tons in the fiscal 2018-19.

The report also shows close to 1.5 million tons of wheat were used as animal feed that year.

According to CEO of the National Foundation of Elite Farmers Ali Khan-Mohammadi, domestic demand for this staple grain in Iran is around 12 million tons per year.

Meanwhile, the government is building up its wheat reserves by constructing new silos across the country.

The construction of a 100,000-ton grain silo has recently started in Chabahar's Shahid Beheshti Port.

The silo is being built on a 3.5-hectare area. It is expected to create about 200 direct jobs, Roads and Urban Development Ministry's news outlet reported.

About $20 million will be invested for the development of the key project.

Increasing Chabahar's grain storage capacity is expected to help the port play a more significant role in goods transportation to/from Central Asian countries, particularly the Commonwealth of Independent States.

Chabahar, Iran’s sole oceanic port along its southeastern coast, serves as a transit route linking India, Iran and Afghanistan, bypassing Pakistan.

Another silo with a capacity of 100,000 tons will be inaugurated in Semnan Province’s Garmsar County by the end of the current Iranian year on March 20, 2021.

This will be the largest silo in the east of the country, according to the CEO of Government Trading Corporation.

“The Islamic Development Bank and the Iranian government have invested €18.96 million, in addition to 190 billion rials [$700,000] in the project respectively,” Yazdan Seif was quoted as saying by ILNA.

The official noted that the silo, which has so far made over 90% physical progress, has been built on a 10-hectare plot and will help the storage and distribution of this strategic staple in the country.

A contract was signed in June for the construction of another silo with a capacity of 30,000 tons of grains in the northern Amirabad Port.

According to Director of Amirabad Special Economic Zone Mohammad Ali Saeedi, the contract is in the form of a BOT (build, operation and transfer) and will be completed within two years.

“Presently, Amirabad has the capacity to store 235,000 tons of grains. More silos with a collective capacity to store another 235,000 tons are under construction,” the official was quoted as saying by IRNA.

The new silo will be built on 7,000 square meters of land and create 12 direct jobs for local people.

Amirabad is the largest port facility on the Caspian shore and the third largest in Iran. The 1,000-hectare port has nine berths, which can accommodate Ro-Ro vessels, trains and trucks.

“Iran’s capacity for storage of strategic goods and grains is currently 21 million tons,” says Qodrat Heydari, an official with the Government Trading Corporation of Iran, said.

Affiliated to Agriculture Ministry, GTC is the official government body in charge of making guaranteed wheat purchases.

“The capacity of government-owned storage units stands at 5.5 million tons with 156 silos, mechanized or semi-mechanized storehouses and simple warehouses and that of private-owned units hovers around 15.5 million tons with 600 silos, mechanized storehouses, cement and metal silos,” Heydari was quoted as saying by IRNA.

“The government has no concern about food security, particularly regarding wheat. However, we definitely welcome further investment in sectors that need it most.”