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FOOD SECURITY SNAPSHOT
• Additional rainfall needed in some parts to maintain and improve crop prospects of winter cereals
• Ample cereal crop harvested in 2020, decreasing cereal import requirements forecast
• About 4.1 million people are in need of humanitarian assistance, of which 2.4 million people have acute humanitarian needs
Additional rainfall needed in some parts
Sowing of the 2021 winter cereal crop was completed by mid‑December. The first substantial rainfall of the season in November allowed finalizing sowing under favourable conditions. Rainfall amounts in December and January were below average across the country, except in the northern part of the country (particularly Dahuk, Erbil and Ninewa governorates) where abundant precipitation in the second decade of January mitigated the rainfall deficits. Despite below‑average cumulative rainfall since the start of the season, but owing to relatively favourable rainfall distribution, crop conditions in the main cereal producing areas remain favourable, however, more precipitation is needed in the upcoming weeks to fully compensate the moisture shortfalls and maintain crop prospects.
For the 2020/21 season, as in past year, the Government subsidized 70 percent of the cost of wheat seeds to farmers registered with the Ministry of Agriculture (MoA), while fertilizer subsidies decreased from 50 to 35 percent of their cost. Seeds were delivered by mid‑October in time for planting.
Ample cereal harvest gathered in 2020
Favourable rainfall in terms of amounts and distribution contributed to an ample domestic cereal production in 2020. According to the Central Statistical Organization (CSO), almost 1.8 million tonnes of barley and 6.2 million tonnes of wheat were harvested in 2020, an increase of 16 and 44 percent, respectively, compared to the previous year. Total cereal production in 2020 is estimated at nearly 9 million tonnes, more than double the last five‑year average. The CSO estimates for 2019 and 2020 did not include the Kurdistan Region of Iraq (KRI) and some villages in Ninewa, Kirkuk, Diyala, Anbar and Salah Al‑Din governorates. Similarly, past geographic coverage of CSO was even more constrained by security conditions on the ground, rendering comparisons with the average production inaccurate. The KRI Government estimated the 2020 wheat production at 2.43 million tonnes.
About 5.1 million tonnes of wheat were bought by the General Company for Grain Trade (about 500 000 tonnes more than in the previous year) to be distributed by the Public Distribution System as subsidized basic food rations. In the KRI, the Government silos received 390 000 tonnes of wheat. The 2020 purchasing prices of the Grain Board of Iraq for wheat grain, unchanged since 2017, ranged from IQD 420 000/tonne (equivalent to USD 350/tonne in June 2020) to IQD 560 000/tonne (USD 467/tonne), depending on the quality.
The Government purchased barley from farmers at IQD 460 000/tonne (USD 389/tonne) and has been selling it as feed at 50 percent of the costs to livestock and fishery owners based on registered herd size, as well as to feed processors.
It is reported that potato farmers in the KRI complained that movement restrictions due to the COVID‑19 pandemic prevented them from reaching the main markets in southern provinces. The production of potatoes in the KRI is estimated at 260 000 tonnes and it exceeds the local demand by almost three times, exerting a significant downward pressure on prices in the KRI markets.
Below‑average import requirements forecast
Cereal import requirements in the 2020/21 marketing year (July/June) are forecast at a below‑average level of 2.6 million tonnes, including 1 million tonnes of wheat (imported mostly as flour) and 1.1 million tonnes of rice. The country has been striving to increase self‑reliance on domestic wheat. The Government is taking steps to export 700 000 tonnes of barley from the 2019 harvest. To protect domestic producers from seasonal competition and maintain domestic prices, the MoA periodically revises the import ban on agricultural products which is part of the Local Products Protection policies. Currently, the imports of 24 products are banned.
About 4.1 million in need of humanitarian assistance
Decreased oil income resulting from the decline in global oil prices put pressure on the national budget as oil revenues account for 90 percent of total State revenues. According to the Ministry of Oil, in the last two weeks of December 2020, Basra heavy oil was traded at about USD 49/barrel, up from minimum of the USD 18.7/barrel in April 2020, but still below the USD 58.4/barrel in December 2019. The 2020 budget was prepared with the assumption of a USD 56/barrel of crude oil price.
To cope with decreased income and maintain financial obligations, including payment of salaries and pensions, the Central Bank of Iraq devalued the national currency against the US dollar by almost 22 percent on 19 December 2020, reducing the official exchange rate from IQD 1 182/US dollar to IQD 1 450/US dollar. To offset the impact of the devaluation and increased inflation, particularly in terms of higher prices of imported goods, the Government intends to subsidize the consumer prices of sugar, vegetable oil and rice.
In addition to the impact of the COVID‑19 pandemic and related containment measures on economic activities in the private and informal sectors, the continued delays in payments of public employees’ salaries and the loose price monitoring and consumer protection, the current devaluation of the national currency will have negative effects on households’ food security.
The 2021 Humanitarian Needs Overview (HNO) for Iraq identified 4.1 million people in need (PiN), of which 2.4 million have acute humanitarian needs. While the number of people in need remained similar to the previous year, the severity of those needs increased, largely due to the impact of the COVID‑19 pandemic on top of an existing humanitarian crisis, leading to a 35 percent increase in the number of people in acute need.
More than half of them are concentrated in the governorates of Nineveh and Anbar. The number of severely food insecure people is estimated at about 435 000, while 731 000 are vulnerable to food insecurity, IDPs (in camps and out of camps) and returnees. Among the IDPs living out of camps, the governorates with the most severely food insecure IDPs are Ninewa, Duhok, Erbil and Salah Al‑Din, while the majority of the returnees are concentrated in the governorates of Nineveh, Salah Al‑Din, Anbar and Kirkuk.