Food Self-Sufficiency Up 24% in Three Years

EghtesadOnline: Iran's self-sufficiency in food production has improved by 24% since the government of President Hassan Rouhani took office, mainly thanks to higher production of wheat and sugar.

News ID: ۷۷۵۸۳۹

01 May 2017

The rate stood at 55% when Rouhani took office in August 2013. It rose to 65%, 72% and 79% in the following years to fiscal March 2016-17, according to a report by the Persian daily Iran.

Official statistics on the domestic agro-food sector point to major improvements over the years.

Iran’s annual agricultural trade experienced an $8.1-billion deficit in the fiscal March 2013-14, which narrowed down to $1.5 billion in the last Iranian year (ended March 20, 2017), according to Financial Tribune.

A record high of 14 million tons of wheat was domestically produced in the last fiscal year, leading to complete self-sufficiency for the first time in the history of Iran.

The guaranteed price of wheat purchases had a threefold increase since 2013, more specifically from 4,200 rials ($0.1) in the fiscal March 2012-13 to 12,710 rials ($0.3) last year.

The total value of wheat purchases showed a 17-fold increase, rising from 8.820 billion rials ($234.4 million) in the fiscal March 2012-13 to 147 billion rials ($3.9 million) last year. As a result, wheat reserves were boosted by 4,300 tons, increasing from 1,800 tons to 7,781,000 tons during the period.

The total volume of purchases witnessed a 5.6% rise during the period, growing from 2.044 million tons to 11.520 million tons.

There have been no wheat imports since Rouhani was elected president. This is while Iran imported 5.7 million tons of wheat the year before Rouhani took office.

According to Food and Agriculture Organization, Iran is the 11th biggest wheat producer in the world.

Every year, the government buys strategic crops, including wheat, from local farmers at guaranteed prices to build up its strategic reserves and control prices in the domestic market.

According to Agriculture Minister Mahmoud Hojjati, sugarbeet production grew from 27 tons in the fiscal March 2013-14 to 54 tons in the last Iranian year. This growth, along with growth in sugarcane production, led to a rise in sugar production from 1.1 million tons to 1.65 million tons during the three-year period.

Hojjati noted that 1.65 million tons of sugar were produced in the last Iranian year, registering a record high and meeting more than 74% of the domestic demand for the product.

Domestic demand for sugar stands at 2.2 million tons annually.

Among other agro crops, tea production has also seen growth over the past few years. Last year, the government bought 139,000 tons of fresh tea leaves from farmers–five times more compared to the fiscal March 2012-13. Production of dried tea stood at 30,000 tons last year.

Mohammad Vali Rouzbehan, the head of Iran Tea Organization, told Financial Tribune in February that tea production registered a 60% increase last year, marking a record high in the last seven years.

"About 110,000 tons of dried tea, worth between $550 million and $600 million, are consumed in Iran every year," he said, adding that last year, over $150 million worth of the product were produced domestically.

"We managed to decrease imports by $50 million, which means more jobs were created and less foreign exchange left the country," he said.

Three years ago, production of dried tea amounted to 14,000 tons and reached 19,600 tons last year, meeting 16% and over 18% of the domestic demand respectively.

This year, with the production of around 31,200 tons, 28-29% of domestic demand was met.

With government support, according to Rouzbehan, nearly 4,000 hectares of abandoned tea farms have been revived over the past three years.

"Every hectare yields about 2 tons of dried tea. With the revival of each hectare, one direct and sustainable job is created," he said.

The official believes that measures taken by the Rouhani government in recent years have encouraged farmers to take the job more seriously and remain hopeful that their efforts will pay off.

Last year, the government increased its guaranteed purchase price for tea by 100%.

"Low-interest loans worth $2.6 million have been allocated to tea factories to overhaul and renovate their machinery, sanitize the production process and optimize energy consumption," he said.

> Livestock, Poultry Surplus

Last year, there was an 18% rise in the production of livestock and poultry products, compared to the year Rouhani took office.

Deputy Agriculture Minister Hassan Rokni said more than $1.2 billion worth of livestock and poultry products were exported over the 11 months to February 18, registering a $554.7 million trade surplus in the sector.

“We had $136 million in trade deficit when President Hassan Rouhani took office in August 2013,” Rokni was also quoted as saying by IRNA earlier this month.

About 62,600 tons of chicken worth $77.3 million, 750,000 tons of milk worth $683 million and 800,000 tons of eggs worth $53.5 million were exported during the 11-month period.

According to Rokni, 815,000 tons of meat, over 9.5 million tons of milk, 2 million tons of chicken, 940,000 tons of eggs and 81,500 tons of honey were produced in Iran last year.

> 40% Rise in Seafood Production

Seafood production hit 1.07 million tons last year (March 2016-17), over 40% more compared to the fiscal March 2012-13, the head of Iran Fisheries Organization, Hassan Salehi, said.

Shrimp production stood at 23,000 tons last year compared with less than 10,000 tons in March 2012-13.

“About 3 tons of caviar were produced last year, a large part of which was exported to North American countries. Seafood exports reached a record high of $412 million last year and imports were less than $180 million," he was quoted as saying by IRNA.

"The production of 164,000 tons of trout has made Iran the world’s biggest producer of this freshwater fish,” Salehi added.

Iran's per capita seafood consumption was 10.6 kilograms last year, which was 3.1 kg more than the 7.5 kg consumed in March 2012-13.

> Modernization of Irrigation Systems

Rice production registered an 8% growth last year compared to the year before, as paddy fields in the north of the country were modernized.

"The government of President Hassan Rouhani invested 6 trillion rials (about $156 million) on the mechanization of rice production," Kambiz Abbasi, an official with the Ministry of Agriculture, said in Jan. 2017.

“Given the water shortage in Iran, the administration is not willing to expand paddy fields in provinces other than the northern Mazandaran and Gilan."

According to the official, automation would cut rice harvesting costs by up to 70%.

“The government will cover about 80% of the costs of buying the machinery by granting loans with a 15% interest rate,” he said.

Abbasi said pre-harvest, harvest and post-harvest stages of rice production in 250,000 hectares of paddy fields have been automated under the Rouhani government, adding that previously only 100,000 hectares were mechanized.

Iranians consume about 3.2 million tons of rice a year while domestic production stands at around 2.2 million tons. Therefore, there is a need for around 1 million tons of imports every year.

During the Rouhani administration, an unprecedented amount of investment was made in the development of water supply infrastructures when 100 trillion rials ($2.658 billion) were allocated to the ministries of agriculture and energy by the National Development Fund of Iran during the period to carry out projects in this field.

Dam construction to restrain border waters and establishment of irrigation and drainage networks both grew by more than 50%. In addition, there was a fivefold rise in the implementation of alternative irrigation systems.