October 16, 2023

 

Iran's next wheat cultivation season delayed by unannounced guaranteed purchase prices

 

 

Iran's failure to announce new guaranteed purchase prices for wheat and full payment for last year has led to a delay in next season's cultivation.

 

The Iranian government usually purchases farmers' crops at a guaranteed price announced before the beginning of every crop year.

 

In the past few weeks, government officials have repeatedly claimed that the new prices, which should have been announced by July 22, would be revealed "soon".

 

But nearly three weeks after the start of Iran's farming year (September 23), there are still confusions and many wheat producers have not begun planting winter seeds for harvest in spring, unsure whether new rates will justify higher production costs resulting from inflation.

 

Additionally, Arsalan Ghasemi, chairman of the agriculture and food industries committee of the Agricultural Trade Chamber, told Fars news agency that the Planning and Budget Organization has not authorised the payment of around 25% of the government's debts to farmers for the crops purchased last year due to its allocated budget having run dry.

 

"Farmers will lose their trust [in the government] due to the Planning and Budget Organization's approach. This is harmful to self-sufficiency in wheat and production of basic commodities in the country," he said.

 

For several years, the Iranian government has had to import more than half of the country's wheat required for bread, seed and food industries. Wheat imports surged to seven million tonnes in 2013 and a record nine million tonnes 2021 when domestic crops were hit by the worst drought in the past 50 years.

 

According to Deputy Agriculture Minister Mojtaba Khayam-Nekouei, the government purchased 9.7 million tonnes of wheat from farmers at a guaranteed price of 150,000,000﷼ (US$3,600) per tonne during the previous crop year.

 

Farmers demand a much higher payment for the current year, arguing that Iran's 50% annual inflation has hugely increased all their production costs including labor.

 

Jafar Hosseini, an advisor to the Chamber of Agricultural Unions, said that the government's guaranteed price, which it was supposed to announce before July 22, has been set at 195,000﷼ (US$4.68) per kilo. He said anything less could dissuade farmers from planting. According to Hosseini, other farmers, including those producing oil seeds, are facing similar problems as wheat producers.

 

Iran is among the world's top 20 producers of wheat. The country ranked 12 globally in 2022 with 15 million tonnes and is also a major importer.

- Iran International