Netherlands in the Vanguard of Agro Cooperation With Iran

EghtesadOnline: Despite an acute water crisis, the Iranian government is striving to maintain the quantity and quality of its agricultural products at levels that sufficiently meet—at least with regard to select staple food products—domestic demands of the country’s growing population.

News ID: ۷۸۲۳۶۶

18 April 2018

In this respect, there has been a conspicuous about-face in the government’s approach toward farming, food production and the measures it has taken over the past few years.

Among the strategic changes are the considerable investments made in agro mechanization, installation of modern irrigation systems, water management and construction of new greenhouses, to name a few.

Notably, the Agriculture Ministry has shown keen interest in seeking assistance from countries that are more experienced in the agriculture sector and enjoy prominence in international markets, Financial Tribune reported.

Iran has defined joint agricultural projects with many countries in recent years. Standing out among these countries is the Netherlands, which is the first country to have appointed an agricultural attaché to Iran after the lifting of international nuclear sanctions in January 2016.

> Holland’s Agro Exports to Iran

Holland’s exports to Iran stood at close to €1.07 billion during 2017, registering around 51% increase compared with 2016, according to the Netherlands Central Bureau of Statistics.

"It is difficult to say how much of this figure pertains to agro products since these range from seeds, plants and cow semen to agricultural machinery and parts. Yet, roughly estimated, agricultural products account for around one-third of the total sum,” says Hans Smolders, the Dutch agricultural attaché to Iran.

The attaché told Financial Tribune that not everything is stated in these statistics.

The real figures, he added, are probably higher, because a lot of Dutch products enter Iran through Turkey and the littoral states of Persian Gulf.

Iran’s exports to the European country, based on CBS data, stood at more than €590 million during the same period to register a 135% surge year-on-year.

“Holland’s main agro imports from Iran include pistachios, pomegranates, chilis, processed products and flowers,” Smolders said.

> Abundant Grounds for Agro Cooperation

“With Iran, Holland has had a long-term relationship that dates back to about 400 years ago. Since the 1980s and until about 2006 when the sanctions more or less started to kick in, we have had a permanent agricultural attaché here," Smolders said, noting that the agriculture sector is a major contributor to the Netherlands' gross domestic product.

"The value of Dutch agri and food sector grew to €94 billion in 2017, further strengthening the Netherlands’ position on the world market. We are the second largest exporter of agricultural goods in the world after the US."

On opportunities in Iran for agricultural cooperation, Smolders said that with a population of over 80 million, Iran is a very interesting country to do business with.

"It is a diverse country where all kinds of products can be grown. It has a receptive environment with good infrastructure and many well-educated people. It also has good prospects for outreach to the region," he said.

"The Embassy of the Netherlands has made an effort to facilitate trade and matchmaking between Dutch and Iranian companies and organizations. We also need to find out how we can best work together. There is more to trade, isn’t there?”

According to Smolders, many of the best and most innovative international companies in the sector have established their R&D offices in Holland.

"We don’t want to keep those innovations to ourselves. Rather, we want to collaborate with other countries like Iran to further develop sustainable food production systems. Together, we need to address food security issues and produce 70% more food by 2050 when world population booms to 9 billion,” he said.

The Dutch attaché, who started here in Tehran last July, believes that agriculture in Iran is already developed and diverse.

“We want to work in sectors where there is a good demand for Dutch products such as horticulture, potatoes, fisheries, dairy, poultry, cow meat and water management. Apart from trade and investment, I also envisage a copious space for bilateral collaborative activities in research and education,” he said.

By working together, Smolders said, both Holland and Iran can benefit from one another, adding that Holland can develop solutions in Iran for better water management by using remote sensing, that is utilization of satellite images to manage water usage on farms.

“We are running such a project in Khorasan Razavi Province where water resources are scarce and the situation is exacerbating; mapping how much water comes in through rain and other sources and how much is consumed so as to be able to define the trends. Based on this, projections are made for the next couple of years and tools can be further developed,” he said.

As for construction of new greenhouses, Smolders said a number of projects have been carried out by the Dutch in Iran and there are more coming up.

“The Verbakel Group, for example, is building a 32- and a 20-hectare greenhouse in Khorramabad and Semnan respectively. Then we have the Dalsem Company that is building a large 160-hectare greenhouse in Chabahar," he said.

The installation of greenhouses comes with automation systems to regulate sunshine and temperature, picking and packaging, etc, on which other Dutch companies are working.

"Many companies from Holland will have a presence at the upcoming Iran Green Trade Fair held in Tehran from April 19-21 to expand interactions and operations in Iran,” he said.

> Hurdles and Solutions

“The Iranian government wants foreign companies to invest in projects and get into joint ventures with Iranian sides. Yet, there are some major hurdles in the way. Apart from the fact that sanctions have not been totally lifted and there are still some bottlenecks in financial transactions with Europe, another stumbling stone has to do with protecting property rights," he said.

Smolders noted that there are some legal points concerning property rights in Iran and the measures taken so far are insufficient.

He emphasized the importance of Iran joining UPOV (International Union for the Protection of New Varieties of Plants), noting that the country has a diverse environment that makes it necessary to intensify plant breeding and develop new varieties for specific climatic conditions.

The attaché referred to the recently signed memorandum of agreement for Holland to assist Iran with capacity building and increasing awareness in this field over the next three years.

An international organization with 75 members, UPOV aims to protect breeders’ rights as well as the new varieties of plants that come into the market. Once the varieties produced in a country are internationally protected under UPOV, foreign companies will be encouraged to bring in their innovations and step into joint ventures because they will then find the activity safer and more auspicious.

Iran is at present an observer member of UPOV, sitting in its different committees and meetings, but it does not have a vote.

The issue of joining UPOV was discussed in the Majlis Agricultural Commission. But when it was taken to the parliament for ratification in the dying days of the last fiscal year (ended March 20), much ado was raised, which impelled the commission to take it back for amendments.

The subject will be taken up once again this year after thorough studies have been carried out.

“Despite the handicaps, I see growth in Iran’s agriculture and possibilities for further collaboration. What I have noticed is that Iran is very receptive to new technologies and this sets the country apart from other developing countries," Smolders said.

The attaché was positive that Holland-Iran projects will endure despite all the uncertainties arising from US threats to pull out of the Joint Comprehensive Plan of Action (the formal name of the nuclear deal Iran reached with six world powers).

Many delegations from the Netherlands have visited Iran since the lifting of sanctions, resulting in the launch of new activities and projects. “These are only a handful of measures the Dutch are taking to expand cooperation with Iran and this is just the beginning,” Smolders said.