Multimarket analysis of agricultural policy in Iraq

Abstract

Government intervention in Iraq agriculture takes the form of supporting output prices and subsidizing input prices for producers. At the same time, consumer prices are far below the domestic prices of producers and world markets. While the Government is trying to liberalize agricultural markets because of the heavy budgetary costs associated with price support, Iraq is facing an embargo situation that calls for particular steps towards increasing food self-sufficiency and food security. To analyze the impact of alternative policy scenarios on the markets of related commodities, a multi-market model was constructed to analyze the impacts of the two paths mentioned above (market liberalization versus food self-sufficiency). The model focuses on the production system of five commodities (barley, wheat, sheep and goats, lentil and chickpea) in two main regions (irrigated and rainfed). However, the rainfed area is divided into three sub-regions (high-, moderate- and low- rainfall areas referred to as HRA, MRA, and LRA). Wheat is produced in the three rainfall zones as well as under irrigation. Barley is mainly produced in moderate- and low - rainfall areas as well as under irrigation. Chickpea is only produced in high rainfall areas. Lentil is mainly produced in the moderate rainfall area. Sheep are raised almost everywhere in the country. The structure of the model is summarized in Table 1. Several changes in output and input price policy were investigated. These pricing policy changes are summarized in Table 2. The impact of these specific changes in price policy instruments is summarized below.