I. Key Messages
Due to the economic crisis, the government has been struggling with distributing payments to farmers who have marketed their production (wheat, barley, corn) to government silos and state companies in 2020. This topic has become a priority in the parliamentary debate on the fiscal budget of 2021.The economic crisis has also affected the food ration distribution under the Public Distribution System (PDS).
The national price of the four main food commodities has leveled post Iraqi dinar devaluation. The highest rate of increase compared to pre-devaluation was in vegetable oil prices by 36%, followed by wheat flour price by 16%, and 10% increase for both rice and sugar prices.
WFP mVAM data showed that approximately 2.6 million people in Iraq have insufficient food consumption, an increase of roughly 143,000 people compared to the last week of January, with Babylon leading with highest number of the population with insufficient food consumption.
The novel coronavirus (COVID-19) has continued to spread in Iraq. As of 02 February 2021, the World Health Organization reported 622,755 confirmed cases and 13,068 deaths, a 2.7% percent and 1% increase over the reported period.
The Ministry of Health and Environment warned from the underlying risks of the increase in cases of the second wave of Covid-19.
The impact of outbreak of corona virus has resulted in diminishing international oil prices, Iraq has experienced a direct negative effect on the gross domestic product where oil prices experienced an unprecedented fall in early 2020, followed by a modest recovery later this year. Over the past two weeks, Basra heavy oil prices fluctuated lightly between USD 52.98 and USD 54.76 per barrel.
As the parliament negotiates the proposed budget of 2021, the parliamentary committee on agriculture, water and the marshlands has been advocating for the delay in debt re-payments owed by farmers for a year, in addition to blocking the sale of agricultural land for financing government deficit. The committee has also demanded the inclusion of payments owed to farmers who marketed their grains production in 2020 to be paid immediately after the budget is ratified and be included within the operational expenditure of the budget together with state employee salaries.
In its continuous efforts to curb smuggling of food and agriculture products, the government of Iraq through the Prime Minister’s office is leading a team headed by the National Security Agency and that includes the directorate of Combating Economic Crime within the Ministry of Interior, and representatives of the Directorates of Agriculture and the Federation of Farmer Associations to monitor and confiscate smuggled agricultural crops.
The Food and Agriculture Organization (FAO), the World Food Programme (WFP), International Fund for Agricultural Development (IFAD) and the World Bank continue to track the impact of this crisis on food security, with a focus on food availability, access, utilization and stability.