IRAQ - Sept. 27 - Iraq Plans To Sweep Shake-up Of Farm Sector.

Iraq's deputy agriculture minister, Sawsan al-Sharify, tells the FT "Subsidies will be reduced by more than half next year,within four years they will be reduced to zero". Iraq's nascent administration embarks on sweeping agricultural reforms to unshackle farming from state control, as farmers struggle to recover from the aftermath of war. Farmers fear the removal of large subsidies for seeds, fertilisers and pesticides, coupled with the fallout of war, could drive them out of business. However, officials of the CPA say the ending of economic sanctions and the oil-for-food programme will benefit farmers by reversing 35 years of state appropriation of land, subsidies skewed against the south, and oil largesse which fostered an import culture.According to the UN Food and Agriculture Organisation 7m Iraqis live on the land, and a severe postwar electricity shortage has left many unable to power irrigation pumps". I can't sow because my fields have no water," says Sheikh Jasim Sumermed, a tribal leader whose farm lies 70km south of Baghdad, and just 3m above the water-level of the Tigris.Ms Sharify says the US-led CPA is cutting subsidies from $230m under Saddam Hussein to $100m (91m, [pounds sterling]61m) in the 2004 budget. Farmers will be forced to improve productivity or lease land to foreign investors, she says, although sales of land to foreigners will remain banned.The agricultural ministry's US and Australian advisers say farmers will be able to offset their increased costs against higher revenues, as the wheat price rises from $105 to $140 per tonne - the market price for imports". The net effect is that the support level will be maintained at a very high level," says a former head of the Australian Wheat Board ,Trevor Flugge, now advising Iraq's ministry.The message has not yet got through to farmers at Qusaiba, a large co-operative near Suwaira, who say they have no funds to cover the initial outlay, and no access to credit.They are suspicious of US motives, and say an American missile hit the turbines powering the co-operative's irrigation system during the war, turning outlying farms to a dustbowl. According to the FAO in Baghdad, poor conditions have long driven farmers from the land and encouraged rural migration to the cities. An FAO official says only 38 per cent of Iraq's once irrigated land is now under cultivation. CPA advisers to the agriculture ministry admit the postwar harvest was a third down on 2002, but blame Hussein for the meagre production levels in the bread-basket of the ancient world". We're not looking at war-damage but neglect," says Flugge. He says wheat production plummeted from a peak of 4m tonnes in the 1980s to an estimated 1.5m tonnes in 2002". Iraq for many years will never be self-sufficient, because as the economy rises food consumption will rise," he adds. Earlier this year a visiting delegation from the Australian Wheat Board received assurances from Baghdad that contracts signed by the former regime would be honoured through to June 2004.Under the UN's oil-for-food programme Iraq bought much of its food purchases from Australia, but none from the US, making Iraq Australia's third largest wheat market.