Features » March 11, 2005

Plowing for Profits

U.S. agribusiness eyes Iraq’s fledgling markets

By Christopher D. Cook

Iraq's fragile food sector, battered by decades of war and sanctions, is open for business.

Iraq’s Fertile Crescent, the fabled birthplace of ancient grains and agricultural civilization, is emerging as a new market opportunity for American agribusiness. Even as U.S. officials tout gracious shipments of food aid and technical assistance to thankful Iraqi farmers, the agenda articulated by government agencies and industry groups is clear—Iraq’s fragile food sector, battered by decades of war and sanctions, is open for business.

U.S. exports of wheat, rice, soybean products and poultry to Iraq all ballooned in 2003 after sanctions were lifted. Freshly minted contracts show American wheat exporters are expanding sales (albeit still small) to Iraq, and congressional testimony by industry groups shows their keen interest in recapturing what was once, through the late ’80s, a profitable destination for U.S. crops.

And the American project extends beyond prying this revived market away from Australia and other nations that did agricultural business with Saddam Hussein during the sanction decade. The broader agricultural plan includes privatizing state-run food companies, phasing out farm subsidies, boosting food prices and, possibly, introducing genetically altered seeds that are patented and not reusable—all moves that dovetail with an overall neoliberal strategy to open up and deregulate Iraq’s markets.

This broader push for privatization is reflected in the language of Order 81, one among 100 legal orders left behind by U.S. administrator L. Paul Bremer’s departed regime. This order, which covers patents and copyrights, including “protected plant varieties,” calls for a “transition from a non-transparent centrally planned economy to a free-market economy.”

Patenting the future

Order 81 paves the way for genetically modified crops (GMOs), stating: “Farmers shall be prohibited from reusing seeds of protected varieties.” The order, exposed by Focus on the Global South and GRAIN in an October 2004 report, does not require Iraqi farmers to use GMOs. But it etches into Iraqi law WTO-style patent protections for genetically engineered crops—assuring U.S. GMO-producing firms a legally protected niche in the country’s future.

Agricultural giant Monsanto, for one, claims to have no interest. “For the record, Monsanto has no plans to introduce biotechnology in Iraq,” insists company spokesman Chris Horner. “It doesn’t fit with our business plans.” If security and other factors improve, Horner says, “there could be opportunities for conventional seeds and chemicals. … I would not characterize it as an emerging market.” The outcry about Order 81 has “no basis in fact,” says Horner. “How many new patented seed varieties are there in Iraq? Zero.”

But the law was enacted only last April, and activists say its implications are far-reaching. “If seeds had to be patented, there would have to be significantly more money in the farmer sector,” says Antonia Juhasz, former program director for the International Forum on Globalization, who is writing a book about Iraq. “Only those who can afford to patent or buy patented seeds would remain farmers.” At the same time, she suggests, the order establishes an economic beachhead into the rest of the region for the GMO industry.

Deborah James, global economy director at Global Exchange, calls seed-saving prohibitions like Order 81 “one of the biggest assaults on food security.” Farmers, she explains, would be forced “to buy from multinational corporations like Monsanto, instead of doing what farmers have done throughout the millennia: guaranteeing food security by saving seed varieties.”

Despite Monsanto’s assurances, James cautions, “corporations never announce their plans to flood markets with genetically modified food.” Under NAFTA, “there wasn’t supposed to be genetically modified corn coming to Mexico,” yet GMO corn from the United States was discovered there in 2001. This February, a coalition of 70 groups from six Central American and Caribbean countries announced that GMOs—specifically, the infamous StarLink maize not authorized for human consumption—had been detected in U.N. food aid and commercial imports from the United States.

Liberation—for U.S. commodities

Meanwhile, the $100 million agricultural reconstruction project undertaken by the U.S. Agency for International Development (USAID) aims to get the government out of food production. “The idea is to make this completely a free market,” says Doug Pool, agriculture irrigation and environment specialist with the USAID’s office of Iraq Reconstruction.

The USAID goal—mirroring U.S. and WTO policies—is to help the new government phase out farm subsidies. “The Minister of Agriculture has been quite good in doing that,” says Pool. State enterprises, such as the Mesopotamia Seed Co., “need to be spun off and privatized,” he said.

Other USAID efforts include an “agricultural mechanization program,” deploying U.S. companies such as Case New Holland to rehabilitate Iraq’s dilapidated farm machinery. While this may seem like a goodwill gesture, it has its payoffs. “Of course, the companies themselves will eventually sell replacement machinery and parts,” adds Pool, “so it will be a good deal for them.”

Indeed, while Pool emphasizes USAID’s project to expand and revitalize Iraq’s farm sector, U.S. commodity exporters are hungrily eyeing renewed market opportunities—which could undercut Iraq’s farmers. “Iraq was once a significant commercial market for U.S. farm products, with sales approaching $1 billion in the 1980s,” former agriculture secretary Ann Veneman told a conference of farm broadcasters in 2003. “It has the potential, once again, to be a significant commercial market.”

According to John King, vice chairman of the USA Rice Council, Iraq was the top market for U.S. rice in the late ’80s, prior to the 1991 Gulf war. “The U.S. rice industry wants to play a major role once again in supplying rice to Iraq,” King told the U.S. House Agriculture Committee this past June. “With the current challenges facing the U.S. rice industry … renewed Iraqi market access could have a tremendous impact in value-added sales.”

King added: “The liberation of Iraq in 2003 by coalition forces has brought freedom to the Iraqi people. The resumption of trade has also provided hope for the U.S. rice industry.”

The American wheat industry is also poised for a new export banquet. That industry—which at one point in the ’70s had a 100 percent market share in Iraq—recently secured its first exports there in years. “Iraq is under a lot of pressure to buy wheat from the United States,” said a disheartened executive from the Grains Council of Australia, a top wheat exporter to Iraq.

History’s lessons

Critics of American agribusiness warn that this confluence of privatization policies, GMO-friendly patent protections and U.S. exports is a volatile mix that could further destabilize war-ravaged Iraqi farmers while producing few benefits for their American counterparts.

“Any profit that’s made will go to the companies that export it to Iraq, not to farmers,” says George Naylor, Iowa farmer and president of the National Family Farm Coalition. Foisting Iraqi growers into a privatized free market will “destroy” small family farms there, just as similar policies have done in the United States, Naylor insists.

Mark Ritchie, president of the Minneapolis-based Institute for Agriculture and Trade Policy, argues that the U.S.-led overhaul of Iraq’s agriculture is a “completely ideological” endeavor that ignores historic lessons. Well-recorded failings of large-scale industrial agriculture in the former Soviet Union and in the United States, he says, “haven’t deterred people who ideologically think that’s the way to go, so we’re going to repeat the mistakes again if we have a chance.”

Ultimately, Ritchie says, American taxpayers may also pay a stiff price for any wartime export bubble. He points to the Vietnam War, during which the American rice industry was temporarily enriched by huge exports. Then the postwar market evaporated, and the industry was propped up with big subsidy payments. “The U.S. can create a giant export flow for underpriced commodities, and taxpayers can just pay through the nose,” Ritchie warns. “The dangers to producers there are real, and the dangers to American taxpayers are equally real, and Vietnam has shown us how devastating this is.”

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• Reader Comments

  What a bunch of crap, first the crusade, thaen the oil, now this… What the hell, is W done making money for his business buddies? What next, the cherry contract for a bologna plant in Karbala going to Halliburton Sausages, Inc.

  Posted by skip on Mar 15, 2005 at 1:23 AM

  afadf

  Posted by jacie on Mar 17, 2005 at 6:34 PM

  A very timely, well stated article. I’ve read a number of books on the food system, and am just finishing up SECRET INGREDIENTS - THE BRAVE NEW WORLD OF INDUSTRIAL FARMING, by Stuart Laidlaw, who writes for The Toronto Star.

  I’m totally convinced from all that I’ve read and seen that neoliberal capitalism (privatization, deregulation of business) and industrial farming is nothing but destructive and perverted.

  Posted by Arby on Mar 21, 2005 at 6:44 AM

  Always having know how valuable and rich Iraq’s river fed agricultural base is, I always suspected that US agribusiness opportunities would figure in at some point during the reconstruction phase of the US occupation.  In the first place consistent US agricultural subsidization of Iraqi purchases of US farm products figured into the debate in the runup to Gulf War I.  Bush Sr. sent $1.1 billion in agricultural credits to Iraq in late 1989, 1.5 years after the Anfal campaign against the Kurds, showing often stated US human rights concerns in Iraq to be bogus.  Order 81, which arrogantly and falsely accuses the Iraqi economy of being “centrally planned” actually threatens to centralize the Iraqi agricultural sector far more than did Saddam.  Beginning with the abolition of state food processing industries and subsidies which guaranteed plentiful, cheap food to the Iraqi urban population through a well co-ordinated program of land reform (which favored small and middle-holding peasants who could sell their produce to the state for processing and sale), state processing and distribution, the US solution is to hand Iraq’s agricultural sector over to US agribusiness TNCs.  The neo-liberal privatization will reduce Iraqi control of farming partly by dumping US subsidized grains on the local market while introducing US terminator gene crops that rely on expensive inputs to successfully farm.  This will reduce jobs and farms as it concentrates the agricultural sector and the profits toward corporate food processors, large landholders who purchase expensive inputs like seed, pesticides, and fertilizer, distributers.  While making this sector highly efficient and vertically integrated it will also concentrate it and the profits from it while allowing urban food prices to skyrocket! The Iraqi people will suffer for it! Small farming will become unsustainable and overall national income will decline as a result.  Economic policies which compliment these policies in other sectors according to other Bremer Orders will even more intensely globalize Iraq’s battered economy. But than again, what was this unnecessary and brutal war about in the first place?

  Posted by steve on Jun 1, 2005 at 2:52 PM

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