Agro Investment Down 10.8% Annually Over Eight Years

EghtesadOnline: The average annual growth rate of investment in the agriculture sector stood at -10.8% from the fiscal 2011-12 to fiscal 2019-20, says the head of Agricultural Planning, Economic and Rural Development Research Institute of Agriculture Ministry.

News ID: ۷۸۵۷۸۸

19 January 2021

According to the Central Bank of Iran’s data, investment in the agriculture sector decreased from 87 trillion rials ($378 million at the current exchange rate) in the year ending March 2012 (using the constant prices of the same year) to 35 trillion rials ($152 million) in the year ending March 2020, indicating an annual decrease of 10.8%.

Ali Kianirad added that investment worth 55 trillion rials [$239 million] was made in the sector in the year ending March 2013, indicating a 38% decline compared with the year before. In the year ending March 2014, investment in this sector increased by 7% to reach 59 trillion rials ($256 million), Mehr News Agency reported.

“During the Joint Comprehensive Plan of Action negotiations in the year ending March 2015, agricultural investment improved by 3% to hit 61 trillion rials [$265 million]. In the following year, i.e., fiscal 2015-16, a total of 37 trillion rials [$160 million] were invested in the sector, showing a 39% decrease year-on-year. In the years ending March 2017 and March 2018, agricultural investment stood at 45 trillion rials [$195 million] and 41 trillion rials [$178 million] respectively. These figures show a 22% growth and 9% decline year-on-year,” he said.

The official noted that after the withdrawal of United States from JCPOA and the reimposition of sanctions, investment in the agriculture sector declined by 7% and 8% in the years ending March 2019 and March 2020 respectively.

Stressing that agricultural investment has been affected by exogenous economic shocks, including sanctions, over these years, he said agricultural investment growth either by the government or the private sector decreased, as sanctions got more severe.

“Investment in the agriculture sector accounted for 5.1% of the total investment in the country in the year ending March 2012. That ratio stood at 4% in the year ending March 2013; 4.6% in the year ending March 2014; 4.4% in the year ending March 2015; 3.1% in the year ending March 2016; 3.9% in the year ending March 2017 and 3.5% in the year ending March 2018. The share of the agriculture sector from total investment stood at 3.7% and 3.6% in the years ending March 2019 and March 2020, respectively,” he said.

Kianirad said the share of agriculture in total investment declined with the first round of sanctions in the years ending March 2012 and March 2013, but increased in the year ending March 2014.

Figures indicate that the tougher the sanctions got, the lesser the share of agricultural investment in the total investment.

“The CBI says the share of investment in the industrial and mining sector from total investment in the economy reduced from 17.2% in the year ending March 2012 to 12.3% in the year ending March 2020. Despite the decline, the investment in the sector was three to four times more than that of the agriculture sector over the period under review,” he said.

“The share of investment in the services sector increased from 76.2% in the year ending March 2012 to 82.7% in the year ending March 2020 over the eight-year period, which shows that Iran’s economy is not based on production and more inclined toward services.”

Government’s Track Record

Agriculture Minister Kazem Khavazi recently expounded on the government's track record since President Hassan Rouhani first took office in August 2013.

“Agricultural production has increased from 97 million tons in 2013 to 125 million tons in the fiscal 2019-20 to register a 28.86% rise. It is estimated that the figure will reach 130 million tons by the end of the current Iranian year [in March 2021],” Khavazi was quoted as saying by IRNA.

“When the Rouhani administration took office in August 2013, each cubic meter of water yielded around 920 grams of agricultural products. The figure presently stands at 1,450 grams, which shows a significant improvement in water efficiency. Farms equipped with modern irrigation systems increased from 1.2 million hectares to 2.4 million hectares and irrigation efficiency has increased from 35% to 45% over the course of the seven years.”

According to the minister, agronomical harvest stood at 83 million tons and horticultural production reached 24 million tons last year, which show a 22.06% and 50% increase respectively compared with 2013.

Livestock production increased to 16 million tons last year, showing a 384.84% surge over the period.

Milk production saw a 34.14% growth over the period under review to reach 11 million tons last year. The government plans to maintain the figure in the current year and the year to come.

“Seafood production experienced a 44.44% rise to stand at 1.3 million tons last year, from 900,000 tons in 2013. Estimates are that the figure will rise to 1.5 million tons by the end of the current year in March 2021. Shrimp production has increased from 12,000 tons to 46,000 tons and caviar production from 1 ton to 10 tons,” Khavazi said.

He added that last year, 13.7 million tons of wheat were produced in Iran while the figure stood at 9.3 million tons seven years ago.

The minister noted that in the field of agro mechanization, the government has provided 112,000 tractors and more than 10,000 combine harvesters.

There are 18,500 hectares of greenhouse spread across the country while the figure was 8,800 hectares when Rouhani first took office.