Iraq

Food Security in Iraq - Impact of COVID-19 June - August 2020 [EN/AR]

Format
Situation Report
Sources
Posted
Originally published

Attachments

EXECUTIVE SUMMARY

Novel coronavirus (COVID-19) cases continued to rise in Iraq; as of 31 August, there were 231,177 reported cases, a caseload that is almost five times that of 30 June, with 6,959 fatalities. Movement restrictions to contain the virus continued to have a cascading impact on livelihoods, particularly those of casual laborers and lowincome workers, endangering small and medium sized businesses, including those operating in the food and agriculture sector.

Globally, COVID-19 mitigation measures contributed to an economic slowdown that negatively affected oil prices. Oil prices partially recovered after April; however, Iraq will need the price to increase to at least USD 58 per barrel to in order to meet its wage and pension obligations. In the current economic climate and due to Iraq’s dependence on oil for its state revenue, the budget deficit is projected to surge to 19% of GDP by end-2020, compared to around 4% in 2019.

The number of households with insufficient food consumption fluctuated over the past two months, driven mostly by improved consumption levels around Islamic holidays that is attributed to increased charitable giving. After Eid al Fitr festivities, the number of households with insufficient consumption peaked at 9% in July (3.5 million people). Around Eid al Adha in August, the share of households with poor food consumption decreased to 7%, but has since risen. Additionally, around 5.3 million people are using negative coping strategies to meet their food needs, a slight increase from the 12% reported in the first issue of this report.

Food access issues will likely continue as livelihood sources in the private sector have taken a hit; over 90% of small and medium enterprises in the food and agriculture sector reported being severely to moderately affected by the pandemic. To cope with decreased revenue, more than 50% either let staff go or reduced salaries, eroding income sources and decreasing their ability to meet their food needs. In response, the government introduced a number of measures to support vulnerable households, such as the Minha grant programme. However, the strained state budget has already begun to affect social protection programmes, including the Public Distribution System (PDS). Ample domestic production replenished wheat grain stocks for the PDS, but a lack of funds hampered the Ministry of Trade’s procurement of vegetable oil and sugar for the majority of households.

Food availability remained stable due to steady international food trade flows and favorable domestic production. Food market functionality and households’ access to food improved compared to April just after the start of the outbreak, although price stability remained a concern. Basic commodity food prices did not undergo any significant changes; however, vegetable – particularly tomato - prices fluctuated wildly over the past few months. Although the government continued to enforce import bans for 24 agriculture products, including vegetables, to limit foreign competition during the high season and to support prices, intergovernorate movement restrictions and good harvests resulted in significant price drops in agricultureproducing governorates as the commodities oversupplied the local markets.

This report identifies policies and regulations to mitigate the impact of COVID-19, while recognizing that this crisis could be leveraged as a catalyst for reform. Diversifying import sources, investing in a food security early warning system and restructuring social protection policy can increase the resilience of Iraq’s agriculture and food system to current and future shocks. This is also an opportune moment to introduce digital innovation to improve food security as physical distancing measures are enforced. The Government of Iraq has been committed to improving Iraq’s digital environment by adopting enabling policies, training the workforce and investing in the necessary infrastructure; however, progress has been slow and requires concentrated efforts.

With a special segment focused on opportunities for digital transformation along the food supply chain, this report reviews the current status of Iraq’s digital ecosystem, and identifies innovations along agriculture and food value chains that have been successfully introduced in Iraq, the region and the world.