As envisaged in the Memorandum of Understanding signed by Iraq and the United Nations on 20 May 1996, regarding the implementation of the United Nations Council's Resolution which permits limited sales of oil, the Government of Iraq has prepared a Distribution Plan which delineates in detail the procedures for ensuring equitable distribution of food, medicines, health supplies and other humanitarian relief. The Plan was approved by the UN Secretary-General on 17 July and adopted by the UN Security Council’s Sanctions Committee on 8 August. The Distribution Plan calls for the allocation of U.S.$ 805 million for food distribution. Under the plan the monthly flour ration will increase by 2 kg to 9 kg, the amount of rice will double to 2.5 kg, sugar will be increased from 0.5 kg to 2 kg and cooking oil by 250 gm to 1 kg. These new monthly food rations will ensure a daily energy intake of 2 030 Kcal and 47 gm of protein per person per day.
The "oil-for-food" agreement, which is subject to renewal, permits the sale, under certain conditions, of U.S.$ 2 billion of oil over six months to raise money for purchasing various humanitarian needs. The oil sale and distribution of humanitarian supplies will be conducted under strict UN supervision including the monitoring of all aspects of the agreement and special provision for food distribution in the three northern Governorates of Arbil, Dohouk and Suleimaniyeh. It is estimated that Iraq will be allowed to sell 750 000 to 800 000 barrels of oil per day. However, this amount will fluctuate according to international oil prices. Before the Gulf War Iraq used to pump more than 3 million barrels per day.
The UN Security Council Resolution No. 986 imposes substantial deductions from the revenue of the oil sale of U.S.$ 2 billion for war reparations, humanitarian programmes in the three northern Governorates and other UN costs, including those for the maintenance of the special commission for the elimination of weapons of mass destruction.
The implementation of the agreement will undoubtedly reduce food shortages and improve the nutritional and health situation of the affected population. It will also regenerate some economic activity, result in a decrease in exorbitant food prices and an appreciation of the Dinar against hard currencies.
The output of wheat and barley in 1996 is again expected to be below normal as a result of damage from pests and short supply of agricultural inputs such as quality seeds, fertilizers, pesticides and herbicides, as well as lack of spare parts for agricultural machinery.
Food aid requirements in 1996/97(April/March) for the 2.15 million beneficiaries targeted by WFP is estimated at 321 000 tons. Carryover pledges and new allocations total 64 000 tons, leaving a shortfall equivalent to 80 percent of the estimated needs.