Enab Baladi – Khaled al-Jeratli

The wheat pricing set by the Autonomous Administration of North and East Syria (AANES) has caused discontent in the areas under its control. Protest sit-ins have spread across various regions, demanding the retraction of the price set at 31 US cents per kilogram. Meanwhile, AANES stated it will not reverse its decision.

The region, where wheat is considered a strategic crop, has river and land borders with areas controlled by the Syrian regime. This makes smuggling crops to the latter a way to avoid losses, according to observers.

AANES justified its inability to increase the price due to Turkish attacks, a budget shortfall, and the inability to export. These issues would lead to significant financial losses, according to a report published by the Hawar news agency, which is close to the Autonomous Administration.

Demands and justifications

On May 24, AANES’ Agriculture and Irrigation Authority set the purchase price of wheat from farmers for the 2023-2024 agricultural season at 31 US cents per kilogram, parallel to the regime’s price of 36 cents per kilogram.

The price set by AANES caused protests in villages and towns in the rural areas of Deir Ezzor, Raqqa, and al-Hasakah, which have not stopped until the time of writing this report. This prompted AANES to justify the current price.

Officials in the Autonomous Administration told the Hawar agency that they tried through traders to export wheat outside the region, selling it to the regime, Kurdistan Iraq, and other neighboring countries at prices that would cover the cost of purchasing wheat domestically. However, all mentioned parties only paid intermediaries and traders $250 per ton of wheat.

Officials in the Agriculture and Finance departments of AANES attributed the current budget deficit to setting a “high price compared to neighboring countries and global prices” last year, according to Hawar agency on May 30.

Additionally, on May 28, AANES officially justified lowering wheat prices through a press statement. It said that the “economic blockade” on the geography it controls and Turkish attacks negatively impacted many financial resources.

Based on a study about the cost of cultivating a dunam of wheat, which amounted to 29 cents per kilogram, according to AANES, the new price was set at 31 cents, allowing for a profit margin for farmers.

Benefiting the regime

The regions controlled by the Syrian Democratic Forces (SDF), the military wing of the Autonomous Administration, and the Syrian regime in northeastern Syria overlap. The regime is centrally located in al-Hasakah city, managing service institutions, including those related to agricultural affairs.

On May 29, the director of the Syrian Grain Foundation branch in Qamishli under the regime said that the marketing process is proceeding “at an increasing pace.” The quantities of wheat delivered to the three company centers (Jurmuz, Animal Wealth, Tawarij) reached 1,476 tons, totaling 2,685 tons of delivered wheat.

While the regime consecutively announced receiving wheat crops, AANES tried to argue that the price set by the regime (36 cents per kilogram) is “illusory,” with fears of reducing amounts from farmers. Moreover, the cost of farming in areas under the regime’s control is high, making it incomparable to the 36 cents price to AANES’ 31 cents.

The director of the Syrian Grain Foundation in Qamishli said in a separate post on May 30 that wheat purchase from farmers is ongoing. The marketed quantities reached 1,877 tons, totaling 8,278 tons, with the process continuing.

During the same period last year, the director of the Syrian Grain Foundation branch, Jirjis Qomi, said the marketed quantity of wheat reached 5,409 tons by June 2, 2023, at the same announced marketing centers.

The economy-focused researcher at the Omran Center for Strategic Studies, Manaf Quman, believes that the pricing of wheat recently set by the Autonomous Administration benefits the regime. With a five-cent difference between the regime’s price and AANES’ price, many farmers east of the Euphrates may sell their crops to the Administration, which will then be transferred to traders and smugglers working for the regime.

The researcher also did not rule out that farmers might store their crops and not sell them until next season, hoping for a price improvement. In both cases, the current pricing will not benefit the Autonomous Administration.

The researcher added, during his talk with Enab Baladi, that the price set by AANES was surprising. All indicators suggest that the decision was made in a way that “favors the regime’s interest over the Administration’s.” It can even be read as a “gift to the regime.”

Towards the smuggling market

The areas controlled by the Autonomous Administration in Deir Ezzor and Raqqa are connected by crossings dedicated to smuggling goods. Other crossings are jointly controlled in al-Hasakah and Qamishli.

The smuggling market has long been an outlet for traders from the region to achieve additional material gains, whether in trading fuel or food products.

Economic researcher Manaf Quman told Enab Baladi that the smuggling market has existed between the two regions for years. Many items are exchanged between the two regions through this market along the Euphrates River, with prices of basic commodities varying, leading to smuggling trade activity.

The economic researcher believes that the price difference in wheat between the two regions could drive traders to the smuggling market, leading to higher prices for the end consumer due to the extended supplier chain.

On the other hand, economic researcher Firas Shaabo expected that farmers might refrain from selling their crops. The price set by the Autonomous Administration does not even cover production costs, leading farmers to resort to smuggling to cover their losses for the current agricultural season.

He added to Enab Baladi that the Autonomous Administration did not set a competitive price, considering the current pricing issued by an entity that does not genuinely intend to purchase. He speculated that AANES might have stored quantities of grains to use if farmers do not sell.

The researcher predicted that the current pricing will have future ramifications on the region. If local farmers cannot sell their crops, they might feel it is pointless to cultivate wheat next year, leading to a shortage of strategic crops for all regions under different authorities in Syria.

Political parties commenting

Political parties, including those participating in the Autonomous Administration, have demanded an amendment to the decision issued by the Agriculture and Irrigation Authority to set the purchase price of wheat from farmers for the 2024 agricultural season.

In a joint statement, the parties said the set price is “unfair to farmers and all workers in the agricultural sector, as it barely covers production costs,” according to North Press.

The Kurdish Leftist Party in Syria, the Kurdish Democratic Party in Syria, and the Kurdistan Democratic Peace Party demanded that the Autonomous Administration review the decision, set a fair price for agricultural production, and provide reasonable prices for the sector.

The statement indicated that setting the purchase price at 31 cents “harms the entire agricultural sector and the economic and social life in northeastern Syria, which is primarily an agricultural area.”

For its part, the Kurdish National Council expressed its disapproval of the declared wheat purchase price, considering it “low.” The regime expressed willingness to buy wheat at 36 cents, causing severe losses for farmers and threatening food security in the region.

It added that such a move might force many farmers to abandon their lands and migrate, seeking better opportunities elsewhere, posing a real threat to the future of agriculture in the region.

The Council called on international bodies concerned with stability in Syria to pressure the Democratic Union Party (PYD) controlling AANES to review this “unjust” pricing and to set a fair price that covers production costs and ensures a profit margin for farmers and peasants.