Work on the rehabilitation of the food processing sub-sector in Iraq, under the Oil-for-Food Programme, has been almost exclusively focused on the three northern Governorates. On the basis of this experience, the following are some highlights and lessons learnt from the North that seem to be relevant and applicable for the rehabilitation and sustainable development of the food processing sub-sector in the rest of the country.
In the northern Governorates, FAO in close collaboration with the Local Authorities have been working on the rehabilitation of the food processing sub-sector with a view to achieving the following targets: a) to improve the food security; and b) to enhance the nutritional status of the population with particular emphasis on the needs of the most vulnerable segments of the population.
There is a need for a clear understanding within the GOI of the complicated structure of the food market system, particularly fisheries, and the interaction among the key players and the importance of having "the required autonomy" to play the correct role. In particular, the following trade-offs and/or conflicts in interest are key factors in the market:
farmers' interest is focused on getting the best return for their produce, which usually means maximum price for unlimited quantities;
the manufacturer wants the highest quality produce at low cost from the farmer so that it can be sold at competitive, but profitable, prices;
traders and retailers want high quality and reliable supplies from the manufacturer or farmer, at the most competitive prices; and
consumers want high quality products at low prices.
Each of these key actors, and the interactions between them, together with the regulatory sub-system (central, regional and local government) constitute mainly the "marketing system". The efficiency of the system is determined by the interaction of the participants and the level of activity performed within each sub-system.
Adequate emphasis on marketing and sales information to guide production plans and investment decisions has to be developed. Without considering marketing trends, farmers do not receive information on what and for whom to produce, production plans cannot be prepared because nobody knows what the consumer wants to have/to purchase, and nobody knows where and at what price to purchase suitable raw materials. Furthermore, such information system could be highly valuable in case of emergency situation to locate appropriate stocks of various foods. For the agro processing chain it is, therefore, essential to build in their business plans the cost for developing marketing objectives and strategies so that the market information is on hand to enable the plants to stay in the market.
An improved level of communication between farming groups, agro-industry, key market actors (processors, wholesalers and retailers) and the scientific community (plant biologist, agronomist, nutritionists and chemists) must be developed. This communication would help in the identification of agro-industrial opportunity and requirements. Productivity of crops (yield per hectare) or milk (litre per animal unit) should be promoted in such a way that the production increment may reduce the production cost and the sale of a larger and better production may provide increased profit to all
The relevant sections at the GOBI, as well as other key actors in the rehabilitation process, are lacking in technical, human and financial resources to plan, implement and run the processing activities.
In particular there is a need for:
Support to enhance capability in planning and development polices related to the agro-industry sub-sector, including the formulation of a role for private sector participation and involvement;
provision of full feasibility studies and market research for processing plants;
support to agricultural research to increase volume and improve quality and variety of agricultural output for specific processing purposes. Institutional support must be enhanced. A good example of this could be the financing of activities to promote suitable varieties of fruit for processing through the development of existing and/or imported orchard fruit varieties to replace the old orchards; and
adequate financial resources to run processing activities.
Under the Oil-for-Food Programme, the various actors have been trained on the spot to operate the various factories initially by the suppliers of the different equipments and by the international specialists that were fielded.
After two seasons, the daily operations of the plants are well performed by the locally trained staff. Nevertheless there is still an important deficit of experienced management skills with the required autonomy to run the activities. The following elements do not seem to have been taken into consideration during the management of the plants:
Raw material requirements, including established quality criteria, varieties delivery schedules and prices. During the first season, prices of the raw material procured by the Local Authorities to the plants were higher than that on the market, and the quality has been poor. Regular supplies of raw materials have then been secured through agreements with farmers who were supported with Oil-for-Food technological inputs.
Plant efficiency based on appropriate technological choices and procedures linked to precise budgets and production plans. Suitable storage facilities must be available and regular supplies of packaging material, additives, etc.
Adequate emphasis on marketing and sales information to guide production plans and investment decisions. Without considering marketing trends, farmers do not receive information on what and for whom to produce, production plans cannot be prepared because nobody knows what the consumer wants to have/to purchase, and nobody knows where and at what price to purchase suitable raw materials. An essential cost of production is the development of marketing objectives and strategies so that the market information is on hand to enable the plant to stay in the market.
Personnel policy, this also includes housing and wages. It is essential that suitably trained individuals are selected.
Cottage industries represent a new component of food processing that originated from the numerous different requests received. In fact, there is a need to develop and promote agro-industry at the cottage level as a source of income and employment for the most remote villages, the farmers out of reach from the newly erected plant, the most vulnerable groups which may have access to some agricultural resources.
This could also be of interest to other UN Agencies such as Habitat, which decided to develop a concept of "integrated settlement" after facing many problems.
In fact, Habitat has only provided houses to refugees, which is now considered a limited task; the persons who live in the new settlements do not have any source of income nor employment close to their houses; they are, therefore, reluctant to live in the new settlements without having job opportunities in the vicinity. There is a need for the generation of employment and income at village level.
AGST has developed a set of standard projects that can be used for this purpose as background information, and copies were sent to the field in the north.
There is a complex combination of commercial, technical and managerial constraints which hamper the sustainable reconstruction/establishment of the agro-industry.
At present, the available information and data relevant to the sub-sector are insufficient to perform a solid analysis of production surpluses, processing needs at various levels, local and unofficial trade etc. The lack of data is a serious impediment to carrying out feasibility studies.
Edible oil and milk processing plants have faced serious constraints in the supply of raw material. In some cases, the local production of the necessary raw material could be stimulated if the procurement prices were more attractive than alternative options like for example the export of the products.
The almost free supply of various food items to the population under the "food basket" is a serious impediment to the development of the following industries:
a) Edible oils
b) Dairy
c) Grain processing:
As a result none of the three existing flourmills in the North are operating efficiently, the animal feed industry is facing serious challenges, the local production of sunflower is unprofitable and the milk production remains a family production because of the abundance of cheap high quality milk powder on the market.
Regular trade links with the neighbouring countries allows the unofficial importation of numerous food products entering directly in competition with locally processed items such as tomato paste, edible oils, fresh dairy products, some other are imported because no local production can satisfy the demand: flour, animal feed, energy rich biscuits, etc.
A further constraint to the sub-sector is the lack of managerial experience of the LAs and the local population. The present Universities are not preparing specific courses in this respect: since 1989 no new food technologist has graduated from the northern Universities. It is, therefore, recommended that in the medium to longer-term the national universities be strengthened so that they provide graduates from a four-year degree that is characterised by a rigorous understanding of food science and engineering coupled with food quality assurance/food safety and management of processing facilities. This is complementary to the training programme that seeks to fill immediate gaps as discussed in later chapters.
Availability of raw milk to run the plants is uncertain particularly in seasons other than spring. However, the milk to run the plants on single shift basis can be available subject to: erection of the plants in milk producing areas; and collection of milk through milk collection centres.
It is estimated that in the absence of electricity and the lack of refrigerating facilities, a large percentage of local produce is wasted. Especially in areas where milk is abundant which raise large number of livestock.
Considering the very low prices of milk and dairy products, it is not feasible for farmers who are living in areas far from city centres to bring their produce to the market, because of high transportation cost. Furthermore, some dairy marketing studies showed that many sheep rearing farmers do not milk their sheep in many areas such as in Amadia /Dohuk and Said Sadiq/ Sulaimaniyeh, because there is no market to sell in. In these circumstances local-processing activities would assist in utilizing local resources and improving household income levels.
Dairy products are handled and sold in extremely un-hygienic conditions. Dairy selling shops in Sulaimaniyeh as in all other Governorates neither have refrigerators nor reliable cans or packages to store these products before selling. Therefore, contamination problems particularly in summer prevail.
Koya is located in a central position among the three northern Governorates. For this reason it can receive easily the raw products from each place. Koya must be strictly related to Harir factory from where it can receive the concentrate produced in the pack time. Koya itself should have the capacity to produce intermediates concentrates to be finished later. If the introduction of new cultivation requires more years, the improvement of the production quality and quantity wise can be done year by year. The use of each species for producing jams is related to the market demand. The following list of locally produced fruits gives an idea of the potential for the area.
|
Species |
Harvest |
Availability |
|
Loquat |
May |
Low |
|
Strawberry |
May - June |
To be developed |
|
Apricot |
May - June |
High |
|
Cherries Sweet |
May - June |
To be developed |
|
Sour |
June - July |
To be developed |
|
Mulberry |
June - July |
To be developed |
|
Plums |
June - September |
High |
|
Peaches |
June - September |
High |
|
Apple |
July - October |
Very high (plus storage) |
|
Pears |
June - October |
High (plus storage) |
|
Grapes |
August - October |
Very high |
|
Figs |
August - September |
High |
|
Pomegranate |
September - November |
High |
|
Quinces |
September - November |
To be developed |
|
Citrus |
November till March |
To be developed |
|
Melon |
July - October |
Very High |
|
Watermelon |
July - September |
Very High |
|
Squash |
September - November |
Very High |
The introduction of packing lines for fruits may separate the best quality for fresh market and leave the rest for the processing use. Another big feature that Koya plant could have is the establishment of a line for biological production since most of the fruits from the mountains are grown without use of chemicals
The hotels and restaurants are more quality conscious than price conscious, as indicated by the market survey, and appear willing to pay higher prices for Darbandikhan dairy products, based on their perception of higher quality. There seems to be good potential for the marketing of Darbandikhan yogurt to this market segment. However, this would require careful analysis of the cost for packaging in alternative packaging sizes and additional investment in areas like containers, washing, transportation etc.
As mentioned above, three flourmills, though presently idle, could be reactivated if the major constraint of the food basket is lifted. In the meantime, there is high demand for storage facilities at all levels of the production chain. The shortage of such facilities in Suleimaniya Governorate is such that the potential short supply of wheat (because of war and drastic drought) may cause very serious food shortages.
The Statistical Department of FAO has particular importance as it is a precious source of data. This is because it translates many results into numbers pursuant the intervention of FAO programmes, and also run a series of market and territory analyses.
The available data are at the level of the Governorate, District, Sub-district, village border. Therefore, data generally cover up to the smallest administrative units. One can find many details necessary for the elaboration of a Master Plan in the agro-industry sector in this office while, for some specific sectors, such as orchards, summer crops surveys and others, data are missing or have still to be collected.
Available data together with the accumulated know-how technologies set the base for the implementation of an efficient Market Information System that will be oriented towards the dissemination of market information to the professional actors of the food-processing sector.
The grain storage facilities are slightly different from other food-processing activities, because some facilities under the former already exist even though these are not fully operational. For the rehabilitation of the grain storage facilities, under the Strategic Framework, the following proposals are made in parallel with those related to other agro-industries:
- At the individual level (farm level), a set of individual metallic silos similar to those built in South America by FAO projects could be established. The management of these storage facilities has to be included in the FAO training programme addressed to producers;
- At the collective level, similar storage facilities could be provided in addition to other equipment that farmers are normally renting (harvesting, threshing, cleaning machines) from private entrepreneurs;
- At the regional level, some bulk storage capacities have to be built in order to receive and store the production of the region at optimal conditions. These facilities could consist of a warehouse and vertical silos and have to be polyvalent (able to store grains, as well as oilseeds or raw materials for animal feed). Before the construction of such storage facilities, some basic analytical studies have to be undertaken on such aspects as the following:
selection of the area of construction, close to consumer centres, to production areas, to farmers associations;
assessment of the required capacity and identification of the different products that have to be stored;
identification of specific precautions to be taken in relation to the selected constructions;
making a choice between bulk or storage in bags;
reaching agreements with farmer's cooperatives; and
deciding on the number of storage facilities units required for the Suleimaniyah Governorate.
In addition to the above components, the setting up of a "cereal chain "will require:
a training programme in favour of the different actors for the management of the storage facilities;
the elaboration of a price policy based on a quality control system in order to improve the quality of grain and to reduce percentages of impurities;
the organisation of a price information system, allowing the "chain" actors to be aware of price fluctuations;
the establishment of a basic rural credit system in order to offer farmers the option to sell their crop just after harvest at lower prices;
the organisation of a rural credit system to facilitate the purchasing and the renting of storage facilities; and
the establishment of a strategy for maintenance of the strategic reserve (financing, turn over...).
