Baghdad slashes wheat procurement targets, tightening support for farmers

ERBIL — The Ministry of Agriculture in the Kurdistan Region announced that Iraq’s federal government has set lower wheat procurement targets for the 2024/2025 season, following discussions involving the Federal Council of Ministers, Iraq’s Economic Affairs Council, and representatives from the Kurdistan Regional Government. The decision reflects Iraq’s broader economic and environmental challenges, according to a ministry statement.

In a practice known as a government procurement or price support program, Iraq’s federal government annually sets a quota to buy wheat directly from domestic farmers at a fixed price—usually higher than the market rate—to ensure food security, stabilize farmers’ incomes, and control the crop supply. For the current season, the government has set the price at 850,000 dinars per ton of wheat. However, the acquisition target has been reduced to 3.6 million tons nationwide, roughly 50% of last year’s levels. In the Kurdistan Region, this year’s allocation stands at 400,000 tons, down from 700,000 tons in the previous season.

These programs function as a form of agricultural subsidy, providing farmers with a guaranteed income by purchasing crops at above-market prices. While this approach protects farmers from volatile market conditions and helps maintain a stable food supply, it has also drawn criticism globally for its high financial cost to governments and the dependency it creates among farmers.

The ministry cited budget constraints as a primary factor affecting this year’s procurement, with arrears to farmers across Iraq and the Kurdistan Region totaling approximately 803 billion dinars. Additionally, climate change and water scarcity are impacting crop yields, particularly in Iraq’s central and southern regions, where drought and desertification are intensifying.

The strain on storage facilities also influenced the procurement decision, as federal silos approach capacity after last year’s large wheat intake. Consequently, Iraq’s wheat acquisition will now cover around 1.2 million acres of farmland—a significant drop from the 2.2 million acres allocated previously. This reduction raises concerns in the Kurdistan Region, where local demand may not be met under the new allocation levels.

To address this projected shortfall, the KRG has proposed that Baghdad consider buying additional wheat at international market prices. A specialized committee within the KRG’s Ministry of Agriculture is advocating for increased federal support to mitigate the challenges that Kurdistani farmers face in wheat production and distribution.

In Iraq, this procurement scheme is coordinated by the Ministry of Trade, which sets targets and prices to help regulate the market and ensure food reserves. The government’s price support program remains a crucial mechanism for agricultural stability, though ongoing financial and environmental constraints underscore the need for further reform and sustainable support strategies.