Foundation Slams Gov’t Decision to Import 2.3m Tons of Wheat

EghtesadOnline: The government has decided to import about 2.3 million tons of wheat during the course of the current crop year (September 2020-21) to replenish its strategic reserves, according to the head of the National Wheat Farmers Foundation.

News ID: ۷۸۵۷۲۱

06 January 2021

“Local farmers as well as our foundation are strongly opposed to this decision. We believe that if the guaranteed prices are reasonably set and the government devises proper policies for the annual purchase of the grain, domestic production can adequately meet the country’s demand,” Ataollah Hashemi also told Young Journalists Club.

The official noted that due to faulty policies and low guaranteed purchase prices set by the government, farmers refrain from selling part of their harvest and high-quality wheat suitable for human consumption is used as livestock and poultry feed because it pays better.

Hashemi said it is estimated that wheat production will exceed 13 million tons in the current crop year, which is sufficient to meet domestic annual consumption and to fill the government’s strategic reserves.

Esmaeil Esfandiarpour, the manager of Agriculture Ministry’s “Wheat Project”, recently told ILNA that a total of 4.49 million hectares of land have gone under wheat cultivation so far this year, more than 1.27 million hectares of which are irrigated and 3.21 million hectares are rain-fed, which register a 7.4% and 3.7% increase respectively compared with the similar period of last year.

“We estimate that a total of 6 million hectares of farms will go under the cultivation of this staple grain this year,” he said.

The official noted that precipitation has been favorable so far this year and hence ample yields are predicted.

The government has bought 8.22 million tons of wheat from local farmers in 31 Iranian provinces in the current fiscal year (started March 20), which indicate a 7% increase compared with the similar period of last year.

This amount of purchased wheat has cost the Government Trading Corporation a total of 207.8 trillion rials ($800 million), Mizan Online reported.

Khuzestan with 1.2 million tons, Fars with 911,000 tons and Golestan with over 820,000 tons topped the list of provinces from where the purchases were made.

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

Considered a staple in Iran, wheat is purchased every crop year by the government to build up its reserves and supply the market over time.

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.

Storage Capacity on the Rise

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 begun in Chabahar's Shahid Beheshti Port.

Being built over 3.5 hectares, the silo is expected to create about 200 direct jobs, Roads and Urban Development Ministry's official news outlet reported.

An estimated $20 million will be injected into the development of this key project.

Increasing Chabahar's grain storage capacity is expected to help the port play a more significant role in goods transportation to and 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 grain storage capacity of 100,000 tons is expected to be inaugurated in Semnan Province’s Garmsar County by the end of the current Iranian year on March 20.

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

“The Islamic Development Bank and the Iranian government have invested €18.96 million in addition to 190 billion rials [over $700,000] in the project respectively,” Yazdan Seif was also 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 be a great help to the storage and distribution of this strategic staple food in the country.

A contract was signed in June for the construction of another silo with a grain storage capacity of 30,000 tons 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).

The project is expected to be completed within two years.

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

The new silo will be built on around 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 has currently reached 21 million tons,” says Qodrat Heydari, an official with Government Trading Corporation of Iran, a subsidiary of Agriculture Ministry.

The capacity of government-owned storage units stands at 5.5 million tons with 156 silos, mechanized or semi-mechanized storehouses and simple warehouses, while 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 about wheat. However, we definitely welcome further investment in sectors that need it most.”