Agro Outsourcing Target: 10,000 Hectares in Kazakhstan

EghtesadOnline: South Khorasan Province’s ultimate target is to increase the outsourcing of Kazakhstan’s farmland area to 10,000 hectares, director for market control with the South Khorasan Agricultural Jihad Organization said.

News ID: ۷۷۷۰۰۰

14 June 2017

Mohammad Ali Bijari also announced that outsourcing of agricultural cultivation in over 1,000 hectares of farmland in Kazakhstan will start from the sixth month of the current Iranian year (Aug. 23-Sept. 22), IRNA reported.

“Agro outsourcing in Ukraine is also among our plans. A delegation is scheduled to be sent to that country in two weeks to survey the feasibility of such a project and to become familiar with Ukraine’s capacities in this respect,” he said.

This is not the first time Iran embarks upon land outsourcing for agricultural purposes in Kazakhstan. In May 2016, Deputy Agriculture Minister Abbas Keshavarz said Iran had started wheat and oilseed cultivation in Kazakhstan as part of a wider scheme called “Farming beyond Borders”.

According to Financial Tribune, agro outsourcing involves the practice of purchasing, renting or leasing by one country of arable land for the cultivation of agricultural products in another country. These products are later imported into the active country, or alternatively exported to other destinations by the same country. This process ensures food security and boosts agricultural production.

The US, the UK and China are among the first and leading countries that have carried out agro outsourcing projects and countries in Asia, Oceania and Africa have sold or rented out more land than others, due to their vast arable fields and favorable climate.

Cultivable land lease agreements have become an increasingly common phenomenon between capital-rich countries of the global North and countries with underutilized land in the global South as a way for the former to protect their food supplies in a world where volatile food prices pose a risk to national food security programs.

Some Middle Eastern states, rich in oil but facing water scarcity, have played an active role in securing land lease agreements.

In Iran, President Hassan Rouhani’s Cabinet officially approved the “Farming Beyond Border” program in April 2016, although the Ministry of Agriculture had already initiated activity in the field three years prior to this decision.

“The yields will be shipped to Iran or might be sold where they are grown. The Agriculture Ministry will expand the land outsourcing program, if drought persists,” Minister of Agriculture Mahmoud Hojjati has been quoted as saying.

According to statistics released by the Agriculture Ministry, Iran has close to 1 million hectares of land under cultivation in other countries. Yet, due to the sensitivity of the subject, no government announces the exact area of land it has purchased or rented overseas. The figure is estimated to rise to 2-3 million hectares in the near future.

The ministry is using the overseas land to cultivate rice, corn and oilseeds, the local productions of which do not suffice domestic demand at home.

Iran currently practices agro outsourcing in several regional countries, including Russia, Ukraine, Kazakhstan and Tajikistan. In addition to suitable climatic conditions and arability of land, these countries offer low irrigation costs.

In 2015, Isfahan Chamber of Commerce, Industries, Mines and Agriculture signed a memorandum of understanding with Ukraine’s Kherson and Donetsk provinces to lease arable land and cultivate crops to meet domestic demand.

In the same year, during a meeting in Tehran between Brazil’s Minister of Development, Industry and Foreign Trade Armando Monteiro and Mohsen Jalalpour, former president of Iran Chamber of Commerce, Industries, Mines and Agriculture, the two sides discussed the implementation of the program in the South American country.

“Iran and Brazil have common grounds for cooperation in the ‘Farming Beyond Border’ program, particularly for the production of grains and oilseeds for populous countries in the region,” Jalalpour said.

Monteiro said back then that Brazil would implement Iran’s agricultural outsourcing program in a few months.

Diminishing water resources, soil degradation and low productivity in the agriculture sector are the main reasons for Iran to embark on this project in the first place.