US embassy cable - 05BAGHDAD3555

UNCLAS SECTION 01 OF 03 BAGHDAD 003555 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR NEA/I, EB/EX WAYNE, D STAFF 
PASS TO USAID FOR ADMINISTRATOR NATSIOS 
 
E.O. 12958: N/A 
TAGS: ETRD, ECON, EAGR, EIND, KPRV, SOCI, EAID, IZ, ECON Development, Reconstruction 
SUBJECT:  JCRED  AGRICULTURE AND FOOD SECURITY 
 
This cable is sensitive but unclassified.  For 
government use only.  Not for internet distribution. 
 
Summary: 
1. (SBU) U.S. and Iraqi delegations discussed Iraq 
agricultural issues in Amman during the Joint 
Commission on Reconstruction and Economic 
Development (JCRED) July 11.  Minister of 
Agriculture Dr. Ali Hussein Al-Behadli presented his 
strategy to reduce poverty and increase food 
security.  In addition, the Minister prioritized his 
needs from donors.  He also noted that the Ministry 
is unaware of all components of the Agriculture 
Reconstruction & Development in Iraq (ARDI) 
initiative and he hopes to improve communication 
between the Ministry and USAID.  USAID Administrator 
Natsios noted that USG will continue to work with 
the ITG to find common priorities for developing the 
agricultural sector and increasing private sector 
involvement. 
 
2. (SBU) During side meetings, the Ministry of 
Agriculture and the Ministry of Water Resources 
indicated that they are doubtful that institutional, 
public distribution system (PDS), market 
development, and state-owned enterprise (SOE) reform 
will occur during this government.  End Summary. 
 
3. (SBU) Minister of Agriculture Dr. Ali Hussein Al- 
Behadli began the JCRED session by noting the long 
history and development of the Ministry of 
Agriculture.  He listed the Ministry's primary 
functions as conducting agriculture research, 
providing services related to food production, 
adopting modern sector approaches and introducing 
new technologies to farmers, providing technical 
guidance and training, and applying laws and 
implementing programs. 
 
4. (SBU) Dr. Al-Behadli noted that the Ministry has 
22 ongoing projects and another 17 proposed, all 
intended to alleviate the food insecurity situation. 
The Ministry proposes to reduce poverty and increase 
food security through agricultural industrial 
development, farming in rural areas, subsidized 
microcredit programs, providing fertilizers for 
farms and drugs for livestock, and "to lead the 
[agriculture] sector and initiate projects... to be 
delivered eventually to the private sector." 
Subsequent to the latter statement, Dr. Al-Behadli 
listed the many state-owned companies intended to 
support the private sector's development. 
 
5. (SBU) Regarding ongoing donor support, the 
Minister thanked USAID for its Agriculture 
Reconstruction & Development in Iraq (ARDI) project, 
and noted livestock assistance in particular.  In 
addition, Dr. Al-Behadli listed his needs from 
donors: reconstruction of the national seed industry 
and associated research and development and 
restoring and modernizing fisheries ($1.3 million); 
refurbishing a vaccine center ($22 million); 
implementing an integrated pest management program 
throughout the country targeting export crops ($25 
million for airplanes); beginning anti- 
desertification/ deforestation programs and 
establishing a "greenbelt" around Baghdad ($45 
million); replenishing bovine livestock ($6 
million); and establishing alternative crop programs 
and fertilizer factories to counter the salty soil 
of southern Iraq.  (Note: A list of all the projects 
was given to USDA Baghdad Agriculture Attache James 
Smith at the conference.  End note.) 
 
6. (SBU) The Minister also listed "other priority 
projects," such as establishing model villages 
throughout Iraq wherein engineers, farmers, and 
students work together on farm campuses to teach the 
next generation of Iraqi farmers.  He again noted 
the importance of reforestation efforts, and 
highlighted the need for subsidized credit for small 
farmers.  The Minister continued his speech with a 
description of the agricultural environment in Iraq. 
Highlighting that he is "looking forward to American 
support," Dr. Al-Behadli indicated that salty soil 
and negligence have forced people to leave their 
farms.  He also noted that the irrigation system 
created by the previous regime led to the poor soil 
conditions in the south, and he implied the need to 
change the entire system.  Dr. Al-Behadli commented 
that much work and support is occurring in the 
governorates, but the Ministry is not informed about 
much of it. 
 
7. (SBU) At the end of his opening remarks, Dr. Al- 
Behadli noted that USAID's agricultural 
reconstruction project is "doing a good job", but 
that the Ministry is not aware of all the work being 
done in the governorates and better coordination is 
needed.  He concluded his remarks by thanking the 
United States for its support and stated that he 
looks forward to continuing to work together. 
 
8. (SBU) The Deputy Secretary thanked Dr. Al-Behadli 
for his comments and followed-up the Minister's 
remarks with a rhetorical request to the Government 
of Iraq for their "thinking on (public distribution 
system) reforms". 
 
9. (SBU) USAID Administrator Natsios began his 
comments by highlighting the two reasons why 
agriculture is so important to all Iraqis, 
specifically that: 25 percent of the population is 
directly or indirectly involved in agriculture, 
which represents Iraq's second largest productive 
sector; and agricultural development affects 
national security by decreasing urban migration, 
increasing markets and jobs, and reducing fodder for 
the insurgency. 
 
10. (SBU) Remarking on the importance of Iraqi 
agriculture to the USG, Director Natsios noted that 
the USG cannot fund everything, but will continue to 
work with the Iraqis to find common priorities.  He 
highlighted the areas in which USAID is currently 
supporting Iraqi farmers and the Ministry of 
Agriculture: initiating vaccination programs and 
rehabilitating veterinary clinics around the country 
to increase animal productivity; instituting a 
national tractor repair program throughout Iraq's 
agricultural districts to repair over 2700 tractors; 
implementing a wheat seed program to take Iraq away 
from levels comparable to North Korea; planting 
35,000 date palm trees; helping the Ministry of 
Agriculture and Ministry of Water Resources to 
develop the country's National Water Strategy; and 
introducing over six million new fishlings into 
Iraq's rivers, ponds, and farms to revive the 
fisheries industry. 
 
11. (SBU) Quoting Minister of Finance Dr. Ali 
Allawi, the Administrator reinforced USG views that 
the private sector will be the growth engine for 
Iraq, and that a "better, more responsive, and 
stronger agriculture market will develop... 
[through] a free market system, which is essential 
to agricultural production and food security." 
Natsios also noted that the PDS "is not working 
well," that privatization without production 
increases does not work well, and that a multi- 
ministry effort is required to reform the sector. 
He ended his comments by indicating that Iraq has 
the capacity to feed itself without imports, but he 
acknowledged political issues with the reform effort 
and highlighted that agricultural reform is in the 
hands of the GOI. 
 
12. (SBU) Comment.  The Ministry of Agriculture and 
the Ministry of Water Resources gave indications 
during their prepared remarks and during side 
conversations at the JCRED that they see themselves 
- still - as catalysts for economic growth despite 
subsidization of inputs and government competition 
with the private sector through SOEs.  Further, at 
least half of their project support requests were to 
support entities and activities that should be 
handed over to the private sector, but the 
government is retaining its physical and 
intellectual ownership of Iraq's agricultural 
industry.  While agricultural reconstruction is 
s 
critical to Iraq's future, it is doubtful that 
institutional and SOE reform will occur during this 
government and, in turn, that meaningful 
advancements will be made with regard to the PDS, 
market development, production, and the Minister of 
Agriculture's guiding hand on the direction of the 
industry. End Comment. 
13.  (U) This cable was cleared by Ross Wilson in D. 
 
Khalilzad