Iran Economy NewsA Massive Blow to Iran's Agricultural Sector

A Massive Blow to Iran’s Agricultural Sector

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With less than a month left to the June 18 Presidential election in Iran, opponents of President Hassan Rouhani reveal surprising details about the administration’s horrible performance in the past eight years.

In its May 22 edition, Sepehr newspaper, affiliated with Supreme Leader Ali Khamenei’s faction, criticized the Rouhani administration for its failures in the agricultural sector. “The Rouhani administration made three mistakes in the agricultural sector leading to chaos in the market and loss of national resources,” Sepehr wrote. “The next administration has a heavy duty to revive farmers’ lost trust.”

Given the wrong infrastructures of production management, incorrect financial-exchange policies, absolute reliance on Iran’s 2015 nuclear deal with major world powers known officially as the Joint Comprehensive Plan of Action (JCPOA), and lack of export destinations, the agricultural products had the worst market in the past decades.

Farmers have been selling their products ten times lower than the market price. Mind-blowing expenditures compelled them to leave their products, and there are many videos circulating on social media showing tons of onion, tomato, potato, apple, orange, and watermelon left besides roads or in depots.

In his term in office, Rouhani suspended the abstraction law, which contrary to its name had focused on marketing tasks and responsibilities in the Agriculture Jihad Ministry. This suspension drove the market to much more chaos and instability. Based on the law, the ministry had burdened all tasks of production chain, which has partially improved farmers’ conditions and balanced the market.

Indeed, Rouhani suspended the law for two years following objections by the Parliament (Majlis) to establishing the Trade Ministry. In this context, neither the Industry, Mine, and Trade Ministry nor the Agriculture Jihad Ministry admitted the production chain’s obligations.

Rouhani practically laid the blame of economic dilemmas, including disorders in the market and above-40-percent inflation, on the Majlis’s failure to establishment of the Trade Ministry.

On the other hand, livestock farmers faced massive disadvantages. Systematic corruption rendered to shaping giant importers, which hoard feed. Whenever the feed became scarce, these importers sold their cargoes at five-fold prices, causing an astronomical rise in the price of protein products in the market. This is while livestock farmers have to spend 70 percent of their revenue for just feed.

Farmers and orchardists also deal with numerous dilemmas and difficulties, including high price of seeds, water shortage, and lack of government support. In this respect, farmers’ costs are far higher than their incomes.

“Here, farmers had produced significant amount of onion but there is no consumer. The government does not export, and farmers have to leave their products or stockpile in warehouses to decay,” said a farmer from the southeastern province of Kerman.

“Recently, the Rural Cooperative Organization buys each kilo of onion for 6,000 rials [$0.26]. This price does not cover farmers’ harvesting costs,” he added.

Watermelon farmer Alireza Dejkameh pointed to the dramatic distinction between the prices in farms and in the market. “In farms, dealers purchase each kilo [of watermelon] for 5,000 rials [$0.21] while they sell it for 50,000 rials [$2.17] in the market,” he said. “Once I sent a 25-ton truck of watermelon to Mahabad city [in northwestern province of West Azarbaijan]. The transportation cost was 13 million rials [$56.52]. I had to give the cargo instead of the rent.”

Notably, there are around 250,000 tons of apple and orange in Tehran’s depots and cold storages, according to the chief of grocers’ union. “These fruits are on the cusp of decay,” he added. However, the government neither distributes them among needy people, who have not eaten fruits for months, nor exports them to gain revenue.

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