The Autonomous Administration of North and East Syria is attempting to monopolize the procurement of wheat in the Syrian Jazira region under its control. Meanwhile, the Syrian regime is pressing to raise procurement prices, in order to attract farmers in the region in what is considered a sovereignty issue in Syria, especially with the decline of domestic production and the need to import from outside Syria at international prices.
The Autonomous Administration designated the procurement price for the 2019 wheat crop at a value of 25 SYP less than that value set by the Syrian regime, prompting much protest and raising doubts about its intentions.
On May 25, the Administration announced that it adjusted the procurement price of wheat to 160 SYP per kilogram, and fixed the price of barley at 100 SYP, according to its affiliate Hawar News Agency.
Although the Administration raised the price of wheat by 10 SYP, compared to what it had announced on May 19, the new procurement prices remain lower than those offered by the Syrian regime government, of 185 SYP for wheat and 135 SPY for barley.
After broad criticisms and protests, the Administration retracted its declaration of a monopoly on procurement of entire crops from farmers, issuing new resolutions on May 23 which allowed the sale to the Syrian regime.
It claimed that the pricing determination, which takes into account crop grades, was made after consultation between the Presidium of the Executive Board of the Autonomous Administration of North and East Syria with the farmers’ associations at the level of local and civil governance in the region.
Justifications that Failed to Convince
The Autonomous Administration justified its imposition of new procurement prices, which stand at 15 SYP lower than those set last year, with the services it provided to farmers to reduce their cost of production, and which will be provided to people in the region in the future.
However, villagers, farmers and most observers have offered other explanations for the price decreases. These reasons, according to the researcher of Kurdish affairs Bader Mulla Rashid speaking to Enab Baladi, include “a policy of twisting the regime’s arm regarding the strategic crop.”
The Administration will not manage to sell the bulk of the crop, and will then either sell it to the Syrian regime, and thus lose some of its sovereign status, or to the Kurdistan Region of Iraq with a profit that would constitute a new tax at the expense of the local population.
On the one hand, setting a high price this season of more than 10 SYP higher than that of last year, is only an attempt to gain legitimacy, a large part of which has been lost among the people, said Mulla Rashid.
The regime is aiming to demonstrate its influence in the region, and its ability to compensate farmers better than the Autonomous Administration, which so far controls oil and most resources.
Fair Value?
As reported by Hawar last September, the Autonomous Administration provided wheat seed at 160 SYP per kilogram, which is below its cost, and diesel at a price of around 50 SYP per liter for planting and harvesting machines and equipment, with the purpose of supporting farmers.
However, these steps were not enough to justify the “unfair” procurement pricing, protesters said. The people of the region were divided between those who recognized the administration’s provision of actual services, and those who considered it false propaganda.
An agricultural engineer Enab Baladi contacted, and who requested anonymity for security reasons, maintained that the Autonomous Administration did not actually contribute to the reduction of production costs. On the contrary, there were some problems with access to seed and fertilizers, as well as imposed “royalties” on crops by up to 5% per dunam.
While a farmer from al-Hasakah, who did not provide his name for security reasons, expressed his appreciation for the Administration’s provision of fuel and wheat seed at cheap prices, saying that the price of a kilogram of wheat seed on the black market reaches 90 SYP, 40 SYP higher than what is offered.
He said that the Administration provided a lot of facilities and improved public services, but that the designation of the price remains unfair, especially for barley whose seed he purchased at 245 SYP, a significant difference from the regulated pricing.
Difficult Choice
The procurement price is not the only factor considered by the farmer when making sales decisions, since the cost of transportation to delivery centers, with the complexity that entails, might make or break a farmer’s profit margin.
Hawar has reported that, according to a statement on May 20 by the head of the Commission of Economy and Agriculture, Salman Baroudo, there are more than 15 equipped procurement centers with a capacity exceeding 700,000 tons.
On May 23, the Administration announced that the procurement of crops would be made through 12 companies, with wheat procurement centers opening on June 10, and barley procurement centers on May 25, with an allocation of $200 million to buy wheat from farmers.
Meanwhile, the Syrian regime allocated 400 billion SYP (about $70 million) for the procurement of wheat, and equipped 37 centers with full supplies in the governorates under its control, two of them in Qamishli.
The President of the Syrian regime, Bashar al-Assad, issued Law No. 11 this year to alleviate the “waste and ration deficit” through the establishment of the General Organization for Trade, Storage and Grain Processing in the city of al-Hasakah, which is tasked with the procurement of wheat, as well as its storage, production and sale of bakeries, with an organized and automated process.
In al-Hasakah, the farmer told Enab Baladi that the cost of transporting the crop to the Jarmez center in Qamishli for sale to the Syrian regime would be about 75 SYP per kilogram, which constitutes a major loss compared to the cost of transferring the crop to the nearby processing centers of only 10 SYP per kilogram.
Procurement procedures, whether through personal identification or certificate of origin for the crop, will have a significant impact on sales, he said, as most farmers do not have licenses to obtain a certificate of origins enabling them to sell their produce.
He added that the roads to the regime centers are full of military checkpoints, with soldiers eliciting “tips” from each passing car, which regardless of value would lead to the reluctance of locals from going to these centers.
Mulla Rashid, the researcher in Omran Center for Strategic Studies, warned that the price set by the regime to buy wheat applies only to the best quality product, and does not apply to other wheat varieties. However, the low price set by the Administration may prompt farmers to “lose the sense of security” about its economic behavior and may push them to harvest early in order to avoid the Administration’s demand for their harvest, while trying to sell it to the Syrian regime or to black market traders.
Sovereignty Maneuvers
By allowing farmers to sell their crops to the Syrian regime, the Autonomous Administration engages in little more than a maneuver to contain farmers’ agitation. According to Mulla Rashid, the Administration is fully aware of the regime’s financial situation and of the farmers who have more confidence in receiving pay faster and safer from it than from the regime.
In addition to what it can do to harass those who do not comply with its decisions, the Administration also control the roads in the region through their security apparatuses, who have the ability to harass farmers passing through their checkpoints or directing them to the Administration’s own centers. According to Mulla Rashid, we only have to wait and follow up, and to see whether they would actually allow free sale of crops by farmers.
High Yield and High Stakes
Most estimates agree on the high yield of this year’s season compared to previous years. The agricultural engineer in al-Hasakah described the production as excellent and said it increased by 300% over previous years due to the large rate of rainfall this year.
The 35-year-old farmer said he had never seen such an abundance in crop yields, whose production yielded 15 times the amount seed at its lowest, while at its highest rate of production, the yield reached 70 times the seed input.
The Syrian regime estimated this year’s wheat and barley harvest at 2.7 million tonnes, while the Administration estimated the crop to be 1.1 million tonnes of wheat and 1.5 million tonnes of barley.
This surplus follows a sharp decline last year. The UN Food and Agriculture Organization (FAO) estimated the 2018 crop at 1.2 million tonnes, representing only 30% of the pre-conflict production average of 4.1 million tonnes during the period Between 2002 and 2011.
Agriculture accounted for 18% of Syria’s pre-2011 GDP, and about 23% of its exports, with 17% of its labor force. By the end of 2017, however, it accounts for 60% of GDP, with 23% of Syrians employed in this sector, according to the UN agency.
As a result of the deterioration of the economic situation associated with the outbreak of armed conflict and the subsequent destruction of cities and infrastructure, Syria has become a net importer of grain after having long exported it. The FAO expects Syria’s import of grain to increase by 30% this year.