flu . 1 7‘ -/-‘ "’ 1‘11””) . l" I »\ [I ABSTRACT ECONOMIC ANALYSIS OF AGRARIAN REFORM IN IRAQ: PRODUCTIVITY, INCOME DISTRIBUTION, AND EMPLOYMENT BY Yousif Suddik Hassan The evaluation of the agrarian reform programs in terms of specific development consequences, and the effects of the post-reform economic organization in the agricultural sector, i.e., family farm system, group farming system (cooperative-collective) and state farm system, from both macro and micro economic point of view is the subject of this study. Specifically, the objective of this study is the evaluation of Iraq's agrarian reform programs, within the setting of its agrarian structure, in terms of the following development consequences of the agricultural sector. 1. Increasing agricultural production and productivity. 2. Income distribution and its economic implications, i.e., increasing effective market demand and changing the demand structure. 3. Creation of employment Opportunities in the agricultural sector as well as in the rural areas. Yousif Suddik Hassan The technique is to demonstrate the relationships between land reform programs and the above development consequences. This is followed by an analysis of the empirical evidence, the conditions in the agricultural sector, from pre-reform to post-reform experience. The connection between land reform and income distribution is difficult to verify. While evidence on pre-reform and post-reform income distribution and expenditure patterns is extremely difficult to obtain, income distribution is inferred from.statistics showing the redistribution of land ownership. The first Agrarian Reform Program of 1958 was implemented in three phases: (1) ekprOpriation, (2) temporary administration of expropriated land by the Ministry of Agrarian Reform, and (3) redistribution of the exprOpriated land to the new owners. Review and analysis of the performance of the agricultural sector prior to the reform program revealed that the agricultural land, the fundamental and basic resource of the national economy, had been controlled by a limited number of owners in a semi-feudalistic pattern of ownership. The agricultural land owners constituted about 0.5 percent of the total pOpulation; 2.8 percent of these landowners held 70 percent of the agricultural land title deeds. While the total rural population who directly Yousif Suddik Hassan depended on agriculture, including landowners and lessees, stood at 3.2 million in 1957, the number of the landless peasants was 2.9 million prior to the reform program. By 1970, more than one decade after the enactment of the first reform program, the following conclusions were drawn: (1) Using the 1957-1959 average as a base period = 100, total agricultural production, crOp production, and food production increased by an average annual rate of 3.4 percent, 3.5 percent, and 3.4 percent, respectively. The increase in agricultural and food production, however, did not keep pace with the increase in the demand for food that resulted from population growth and per capita disposable income. (2) The Reform Program of 1958 provided income- earning opportunities through redistribution of land to 312,019 farm families who became owner operators, i.e., almost 50 percent of the landless farm families prior to 1958. (3) The total land labor force employed in the agricultural sector increased from 971.8 thousand, pre- reform level, to 1,449.8 thousand, post-reform level, i.e., an increase of 478 thousand or 49.2 percent over more than 10 years, with an average annual increase of 4.9 percent. It was found that, despite the accomplishment of the first Reform Program of 1958 in creating more employment and income-earning opportunities in the agricultural sector, it cannot be pronounced as a complete economic success. The Yousif Suddik Hassan program did not bring about a substantial increase in agricultural production and productivity and/or the creation of a dynamic agricultural sector with significant contri- bution to GDP, at least, in the short-run. This was mainly due to the shift in development policies and priorities in the 1960's that resulted in lack of the productive structure and the structure of supporting services. The new Agrarian Reform Law No. 116 of 1970 was one of the rigorous measures to achieve a comprehensive and integrated agrarian structure. It was designed to establish the productive structure, the structure of supporting ser- vices and to create an efficient administrative structure. The new reform program followed the principle of collective distribution and the establishment of new economic organization in the agricultural sector. It was found that while post-reform dualism, farm family system, group farming system (cooperative-collective) and state farm system may be viable, the critical variables associated with the possible success or failure of such dualistic post-reform structures are (1) the size and the rate of growth of the industrial sector, (2) the proportion of the population in the agricultural sector, and (3) the growth rate of the total population. ECONOMIC ANALYSIS OF AGRARIAN REFORM IN IRAQ: PRODUCTIVITY, INCOME DISTRIBUTION, AND EMPLOYMENT BY Yousif Suddik Hassan A DISSERTATION Submitted to Michigan State University in partial fulfillment of the requirements for the degree of DOCTOR OF PHILOSOPHY Department of Resource Deve10pment 1975 To my wiée. Afiafi and my Wen Am: and Maan, 501:. than endu/Lance and patience. Waughoux the duration 06 my gmduwte mag/mm ii ACKNOWLEDGMENTS I wish to thank Dr. Raleigh Barlowe, my major professor, for his constructive guidance, encouragement, and assistance throughout my graduate studies, and espe- cially for his comments, suggestions, and criticisms during the research and preparation of this dissertation. I wish also to thank the members of the research committee: Dr. Daniel E. Chappelle and Dr. M. H. Steinmuller, Department of Resource Development, and Dr. Robert D. Stevens, Dr. Garland P. Wood, and Dr. George E. Rossmiller, Department of Agricultural Eco— nomics, for their careful review of earlier drafts of this dissertation. Also, I am particularly grateful to the Government of Iraq, for the Scholarship that made possible the contin- uation of my graduate studies at Michigan State University. iii TABLE OF CONTENTS LIST OF TABLES O O O O O O O O O O O O O O O O O 0 LIST OF FIGURES O O O O O O O O O O O O O O O O C 0 Chapter I O INTRODUCT ION C C I O O O O O O C O O O O 0 Identification of the Problem . . Obj ectives O O O O O I O O O O 0 Methodology . . . . . . . . General Assumption and Hypotheses Significance of the Project . . . . . II. MAIN FEATURE OF THE IRAQI ECONOMY . . . . . Natural Environment . Topography . . . Climate . . . . . Soil . . . . . . . . . . . . . . Water Resources: The Tigris- Euphrates River System . . . . . . . . . . . Population Growth, Internal Migration and Employment . . . . . . . . . . . . The Agricultural Sector Prior to the 1958 Revolution . . . . . . . The Land Tenure Structure . Land Settlement . . . . . . Land Use and Management . . Land Tenure System, The Ownership Pattern . . . . . . . . . . . . . Development Programs: Agricultural Development Policy . . . . . . . . . . Profile of the Economy . . . . . . . . . III. THE AGRARIAN REFORM PROGRAMS IN IRAQ LAND REFORM LAW NO. 30 OF 1958 . . . . . . The Agrarian Reform Objectives: Economic. Social and Political . . . . . . . . . iv Page vii 14 15 18 19 24 24 25 25 27 29 34 43 43 47 49 53 57 61 65 68 Chapter Financial Aspects: Compensation and Farmer's Repayment . . . . . . . . . . . The Assessment of the Land Reform Implementation . . . . . . . . . . . The Process of Implementation . . . Problems of Land Reform Implementation The Legal Problem . . . . . . . . . Technical and Administrative Problems The Impact of the Land Reform Program of 1958 . . . .. . . . . . . The Impact of the Land Reform Program on Production and Productivity . . . The Impact of Land Reform on Income Distribution . . . . . . . . . . The Impact of Land Reform on Employment Opportunities in the Agricultural Sector . . . . . . . . . . . . . . . Development Planning . . . . . . . . . . . Reform of the Reform: The Agrarian Reform Law No. 117 of 1970 . . . . . . . . . . . Implementation of the Agrarian Reform Law of 1970 . . . . . . . . . . . . . IV. THE INTEGRATED AND COMPREHENSIVE AGRARIAN STRUCTURE . O O C C O O C C C O O O C O O O 0 Production Structure . . . . . . . . . . . Fertilizer and Pesticides . . . . . . Mechanization: The Use of Farm Machinery . . . . . . . . . . . . The Structure of Supporting Services . The Cooperative Movement . . . . . Credit . . . . . . . . . . . . . . Marketing System . . . . . . . . . Administration of Agrarian Reform Program Deve10pment Planning . . . . . . . . The Performance of the Agricultural Sector . . . . . . . . . . . . . . . The Agrarian Structure and Reverse Migration . . . . . . . . . . . . . . . . V. THE POST-LAND REFORM ECONOMIC ORGANIZATION IN THE AGRICULTURAL SECTOR . . . . . . . . . Size of Farm . . . . . . . . . . . . . . . The Impact of Economic Organization on Employment and Productivity . . . . . . . Page 71 73 73 80 80 84 89 90 106 112 119 123 130 132 134 139 158 172 175 187 198 207 211 216 218 222 222 230 Chapter Post-Reform Economic Organization in the Agricultural Sector in Iraq . . . . . . Joint Agricultural Cooperative . . . The Collective Farms . . . . . . . . State Farms and Agricultural Projects Policy Implication . . . . . . . . . . . VI. SUMMARY AND CONCLUSION . . . . . . . . . . The Impact on Increasing Agricultural Production and Productivity . . . . The Impact on Income Distribution; Income Earning Opportunities . . The Impact on Employment Creation . . BIBLIOGRAPHY . . . . . . . . . . . . . . . . . . . vi Page 238 238 241 248 256 262 268 270 272 282 Table 2.1 2.2 2.3 2.5 2.8 3.1 3.2 3.3 3.4 LIST OF TABLES Iraq results of population censuses and the annual compound rate of population growth for 1934-1965 0 o o o o o o o o o o o o o o Iraq's population according to residence in rural and urban areas for 1947—1975 . . . . Iraq's out-migration from the rural to urban center, 1948-1970 . . . . . . . . . . The classification of labor force, employed and unemployed in Iraq during 1960-1969 PeriOd O O O O O O O I O O O O O O O I O O Iraq's gainfully employed population as distributed by economic sectors, 1960- 1969 O O O O O O O I O O O O O O O O O O O Iraq's land utilization . . . . . . . . . . Iraq's distribution of agricultural land ownership prior to the enforcement of the agrarian reform law by area, 1958 . . . . . Iraq's distribution of actually cultivated land prior to the enforcement of the agrarian reform law by area, 1958-1959 . . Iraq's distribution of field crop produce according to production inputs . . . . . . Iraq's areas of land rented, and number of farmers renting them (as on December 1970) area (donum) . . . . . . . . . . . . . . . Iraq's distributed areas and number of beneficiaries during 1959-1970 . . . . . . Iraq's area and production of main crops . vii Page 36 38 38 40 41 52 54 56 71 78 79 91 Table 3.5 3.6 3.7 3.8 3.9 3.10 3.11 4.1 4.2 4.3 4.4 4.5 4.6 Production by commodity, value and indices of total agriculture and food production. Average l957-59-Average 1960-70 . . . . . . Iraq's value added in the agricultural sector and its contributions to gross domestic product; at current and constant 1966 prices, 1962-1969 . . . . . . . . . . Iraq's acreage cultivated, production and yield/donum of the principal winter crops, 1960-1970 e o o o o o o o o o o o o o o o o Iraq's acreage cultivated, production and yield/donum of the principal summer crops, 1960-19.70 o o o o o o o o o o o o o o o o o Iraq's average annual farm-family incomes, 1953—1969 e o o o o o o o o o o o o o o o o Iraq's consumption of fertilizers and pestiCides' 1965-1971 c o o o o o o o o o o Iraq's labor force development during the Peri-0d 1947-1969 c o o o o o o o o o o o o Iraq's present and potential production of main crops . . . . . . . . . . . . . . . Iraq's fertilizer requirements and costs per year of develOpment potential, by crops and nutrients . . . . . . . . . . . . Iraq's agricultural machinery and equipment 801d, 1952-1962 0 o o o o o o o o o o o o o Iraq's pumps, light and heavy agricultural machines and implements, and cars: owned by the state general organization of agricultural mechanical stations by end 1972 . . . . . . . . . . . . . . . . . Agricultural machinery and equipment sold by 1973 O O O O O O O O O O O C O O O O O O Iraq's progress of the agricultural cooperatives, 1961-1973 . . . . . . . . . . viii Page 94 99 100 101 109 111 115 137 145 162 164 166 178 a I (H (KNOB Table 4.7 4.14 5.4 Page Iraq's distribution of agricultural cooperatives by governorates up to 31/12/1972 . . . . . . . . . . . . . . . . . . 181 Iraq's number and amount of agricultural credits. 1963-1973 0 o o o o o o o o o o o o o 1.91 Iraq's amounts of loans paid by the agricultural bank to the agricultural cooperatives, 1964-1973 e o o o o o o o o o o o 194 Iraq's quantity marketed cooperatively from different agricultural production 1964-65 to 1972-73 0 o o o o o o o o o o o o o o o o o 20]- Iraq's number of water pumps which owned by agricultural cooperatives . . . . . . . . . 202 The distribution of employees of land reform in Iraq . . . . . . . . . . . . . . . . 208 Iraq's total investment expenditure in the National Deve10pment Plan for 1970-1974' Fiscal Years distributed between the public and private sectors in comparison with the Five-Year Economic Plan 1965-1969 . . 212 Iraq's summary of investment expenditure under the National Development Plan 1970- 1974 in comparison with the Five-Year Economic Plan 1965-1969, by economic sectors . . . . . . . . . . . . . . . . . . . . 214 Iraq's progress of joing agricultural cooperatives . . . . . . . . . . . . . . . . . 240 Iraq's progress of collective farms . . . . . . 242 Iraq's production cost and return per donum, ID, for the main crops on Sowerah State Farm, 1965-1968 0 O O O O O O O I O O O O O O O 252 Iraq's production cost per donum on the Sowerah State Farm in comparison with the rest of the country . . . . . . . . . . . . 253 ix n“. ‘l 9» V. CHAPTER I INTRODUCTION Identification of the Problem Iraq is a country of great economic potential with wide expanses of fertile land and alluvial soils. Iraq's Blinistry of Planning reports that the nation has about ‘48 ndllion donums of cultivable lands, one donum = 0.62 acre = 0.25 hectar.1 Reports of the Food and Agriculture (Irganization indicate that Iraq has 11.70 million hectares (Df cultivable lands, 7.496 million hectars of arable land and land under permanent crops and 4.264 million hectares (Df permanent meadows and pasture.2 The two rivers, the Trigris and the Euphrates, which drain all the land from lhorth to south, provide valuable water both for irrigation iindgeneration of electric energy. Iraq's well-developed I>etroleum industry contributed ID. 1.9 billion, to the I’Htflic treasury from 1950-1970.3 Petroleum exports have \ 1Iraq, Ministry of Planning, Evaluation of Economic G\rowth in Irah 1950-1970 (Baghdad, 1972). 2United Nations, FAO, Production Yearbook, Vol. 21, 1967. 3ID--Iraqi Dinar = $3.3. act 0' '2': b MIC. ‘ ‘vVu .1 1'“! be“ A. U. ‘n “q not only provided a reliable source of development finance but have also assured the nation of a substantial and continuous flow of foreign exchange. This situation has spared the nation the inflation and balance of payments problems with which many Less Developed Countries (LDC's) have to contend. For almost two decades, the ruling governments have assumed responsibility for developing the country's resources toward rapid attainment of its economic potential. The declared overall objectives of development policies, both before and after the 1958 Revolution, is the stimula- tion, through develOpment expenditure, of the nonoil sectors of the economy. It has been recognized that these sectors must be developed while the nation can still profit from the export of its oil resources. Although there has consistently been a consensus regarding this objective, sharp differences have arisen regarding the means of achieving it. In the early 1950's, a considerable number of foreign consultants were invited to study the problems of economic development in Iraq and to advise the government on policy issues. These visiting experts concluded gen- erally that the promotion of industry, the manufacturing sector, did not merit a high rank in the priority scale Of economic development. The reasoning underlying this cOnclusion was based mainly on the well-known principle of comparative advantage.1 Iraq, it was argued, possesses a comparative advantage in agriculture. Because of the growth in its population (average annual rate of growth for the period 1952-1957 was 2.7 percent) and world pop— ulation, the future market for its agricultural products looked promising. In industry, on the other hand, it would have to compete with great handicaps because of deficiencies in technical skills, in the ranks of labor and management. Subsidizing or protecting industry would foster inefficiency, constitute a heavy burden on the consumer and finally increase the gap between industrial and agricultural income to the detriment of the latter.2 These arguments had some influence on the government outlook at the time, but somehow the government failed to understand that factor supplies could be substantially altered in the long-run as a result of deliberate and direct intervention in the economy, planning for economic devel- Opment, and could thus lead to an altered cost structure and different pattern of comparative advantage. Such transformation has its cost. It is the task of the policy— maker to weigh benefits and costs not only at the present 1International Bank for Reconstruction and Develop- ment, The Economic Development of Iraq (Baltimore: Johns Hcpkins’Press, 1952), p. 40. 2Lord Salter, The Develgpment of Iraq, A Plan for ACtion, Iraq Development Board, 1955} time but in the long run as well. For example, it is in Iraq's comparative advantage to build an industrial complex--petro chemical industries--that could play a significant role in the economic development of the country, especially the development of the agricultural sector. In pursuing its develOpment policy, the government assigned the agricultural sector a high priority ranking and drew up two develOpment programs during the period 1951-1954. The agricultural deve10pment policies emphasized the horizontal expansion of agricultural production, bring- ing new land in cultivation, rather than vertical expansion or intensification of Iraqi agriculture, and the reform of the defective agrarian structure. Consequently, the two development programs were heavily loaded with irrigation and flood control projects, many of which were large and could not show quick results. There is no denying, of course, the high priority that must be accorded to the harnessing of water resources in a coun- try that is preponderantly agricultural and is dominated by the flow of two rivers. To a large extent, however, these programs were engineers' lists of projects rather than eco- nomic programs. These projects were too often conceived in isolation from social and institutional change that Should have accompanied them. They often ignored necessary secondary technical issues such as drainage, disalination and irrigation networks. Faulty planning did little to 4 'Aflu‘g Bruiv ":5 5—: u Ru. 4 .1, P» b... 'a 5:, . 5.... Hi. R5. v'. N: '1 1" reduce the dependence of agriculture on climatic conditions. Therefore, the poor performance of the agricultural sector in terms of production and productivity of both land and labor and the land use pattern--fallow system--was the result of the political and economic institutions that dominated this sector. One aspect of the political and economic insti- tutions that affected the performance of the agricultural sector is the Land Tenure System. Agricultural land, the fundamental and basic resource of national economy had been controlled to an overwhelming extent by a limited number of owners and a semi-feudalistic pattern of ownership. Accord- ing to the official statistics of the agricultural census prior to the Revolution of 1958, agricultural land owners constituted about 0.5 percent of total population; 2.8 per- cent of these land owners held 70 percent of the agricultural land title deeds, and 97.2 percent held less than 30 percent of the agricultural land title deeds. In other words, as total rural population who directly depend on agriculture (including land owner and lessees) stood at 3.2 million in 1957; the number of landless peasants was 2.9 million prior to 1958. As a result of this mal-distribution of ownership Pattern, the average annual rate of out-migration, rural to urban centers, was 20,000 between 1953-1957. Most of the emigrants were unskilled, some secured work as casual laborers while others remained unemployed. The limited improvement in the economic and social conditions for the bulk of the population and the piling up in foreign banks of 20 percent of development expenditures-- government revenues--provided additional reason for popular dissatisfaction with the government and its development policies. Therefore, in a practical sense, policies for the develoPment and management of a country's resources should recognize the need to Operate within the context of a threefold physical and biological, economic and institutional framework.1 When the new authorities took over in 1958, they were fully conscious of the criticisms leveled at the policy of the previous governments. They immediately took a series of measures; some were designed to affect real shifts in policies, others merely involved political tactics aimed at winning pOpular favor. The main policy targets of the new government appear to have been: (1) development of the agricultural sector, (2) expansion of the manufacturing industries, and (3) promotion of the social welfare of the poorer section of the population. During the 1959-1969 period, three development plans were drawn up and followed. The allocation to the various sectors of the economy reflected a change in develOpment k . lRaleigh Barlowe, Land Resource Economics (Englewood Cliffs, N.J.: Prentice-Hall, Inc.,’1972). 1 policy, with the industrial sector receiving a higher priority in the scale of economic development than agri- culture. This shift in priorities took place at a time when it is imperative that the agricultural sector has a tOp priority, especially at the time when a major step is being undertaken by the government that would have a profound impact on the agriculture sector. This major step is the enactment of the Agrarian Reform Law No. 30 of 1958. The Law had the main objectives of providing for more equitable land distribution, control- ling agricultural rental rates and establishing minimum wages for agricultural workers. The land reform program was implemented in three phases: (a) expropriation, (b) temporary administration of expropriated land by the Ministry of Agrarian Reform, in those cases which the lands were leased to beneficiaries, i.e., until the necessary contracted requisits for the productive use and management of the land were completed, and (c) the redistribution of expropriated land to the bene- ficiaries, and the organization of agricultural cooperatives and provision of supporting institutional services for the beneficiaries. The statistics on expropriation, land areas under temporary management and redistribution are constantly Changing as the programs continue. The implementation 0f the program in terms of land expropriations as of September 1968 was 12.5 million donums. The implementation of the program in terms of redistribution as of December 30, 1968 was as follows: the total area redistributed under the law to landless erZaheen, peasants, in the form of small family farm system was 3.1 million donums and the number of beneficiaries was 57,117 farm families. The average area redistributed per family was 40 donums. Furthermore, 6.3 million donums were rented to 186,868 farm families, but awaiting distribution. In other words, 9.5 million donus were redistributed and rented to 237,402 farm families, owner operators and tenants. This shows that after ten years of operation the land reform of 1958, only 25.5 percent of the total land that was eligible for redistribution had actually been redistributed, while 74.5 percent was still being acquired by the government. Also, the government included in its program the reclamation and redistribution of an area of 3.3 million donums divided into 11 agricultural Projects. However, among the areas affected by the land reform law, there were, in 1968, about 3.2 million donums which were neither expropriated nor redistributed because of the uncertainty that prevailed at that time. In other words, the area included in the land reform program, i.e., expro- priation, reclamation and redistribution, represented 75 percent of the agricultural land in Iraq. The level of Inanagement and production practices used on this large area had far reaching effects at the national level on the production of crops and livestocks, income distribution and the nation's employment patterns. As a result of the implementation of the program, several varying problems appeared, arising from the social system, land use and management, relationship between the new owners and landlords and the educational level of the farmers. However, as will be indicated later, only two of these problems were major ones. There were the lack of supporting structures, i.e., the production structure and the structure of supporting services and the problem of agricultural administration and organization. A decade after this major program of the revolu- tionary government went into effect, it was still difficult to evaluate the impact of the land reform program. Just as the impetus for the agrarian reform and its main targets were dictated to a large extent by political motives, most evolutions also have a political basis. However, about 40 percent of the total landless families, prior to 1958, received benefits from the land reform program that made it possible for them to become a new social class, a large owner-operator class, in rural Iraq. In other words, they had access to employment and income earning opportunities. Abolition of feudalism through land reform, undoubtedly, had a favorable profound social and political effect among the rural population in Iraq. The feudal social relationship 10 between former landlord and the peasants was replaced by social justice and by a recognition of the important role individual farmers could play in developing the country as real citizens. Despite its accomplishments, the new policy could not be pronounced as a complete economic success, as it didn't result in increased agricultural production or higher productivity, although apparent or real declines in post-reform production are usually temporary and are not surprising. Reform, especially when associated with major political and social revolutionary upheavals, can be a dis— ruptive process. In other words, the post-reform increase in production did not keep pace with the increase in demand for agricultural commodities that resulted from higher popu- lation growth and increased income. Farm management and production requisites,high yielding inputs, provision of institutions and land use, were far from adequate due to the uncertainty that prevailed. This point will be discussed in more detail later. For this reason, the Agrarian Reform Law No. 30 of 1958 was a transitional piece of legislation. The primary aim of the 1aw--elimination of feudalism--was attained. But the subsequent aims of the law--the trans- formation of a large number of landless peasants into agricultural landowners, the increasing of production and productivity, and a subsequent increase in the relative 11 importance of the agricultural sector--were barely realized because of obvious implementation shortcomings. On the other hand, the performance of the economy, in a relatively short time, early 1950's to 1969, managed to achieve substantial economic growth as measured in national income accounts. Measured in the magnitude and at the rate of Gross Domestic Product (GDP) at constant 1966 prices and factor cost rose from ID 384.9 million in 1953 to ID 980.1 million in 1969 with an average annual growth of 6.0 percent. The per capita Gross National Product (GNP) at constant 1966 prices rose from ID 51.3 in 1953 to ID 84.7 in 1969, with an average annual rate of 2.1 percent. This low per capita income is the result of the high population growth that absorbed most of the increase in national income. The average annual rate of population growth during the 1952-1970 period was 3.0 percent. This total economic growth has not been spread equally among the/various sectors of the economy. The agricultural sector grew at a slower rate than the manu- facturing and service sectors. The value added in the agriculture sector at constant I966 prices and factor cost (rose from ID 85.2 million in 1953 to ID 186.8 million in .1969 with an average rate of 5.0 percent, while for the 1‘Manufacturing and service sectors the annual rate was 8.5 percent and 7.4 percent, respectively. Furthermore, there‘was a wide annual fluctuation in the value added in 12 the agricultural sector, due to varying crops and livestock yeilds because of changing climatic conditions and develop- ment policies. The foregoing discussion has emphasized the failure of the development policies pursued by previous governments to achieve their policy objectives. This can be shown in the contribution of the agricultural sector to GDP, which decreased from 21.3 percent in 1961 to 19.1 percent in 1969, i.e., the relative importance of this sector was declining, while that of the manufacturing sector increased from 7.4 percent in 1953 to 11.7 percent in 1969, and the contribu- tion of the oil sector to GDP was 32.6, still the dominant sector in the economy. Yet if achievement falls short of expectation, it is because the development process requires knowledge and competence that cannot be acquired except through systematic experience over a period of time which can hardly be abridged. Furthermore, attainment of Iraq's great economic potential and achievement of the overall objectives outlined earlier requires: (1) agricultural development, (2) expanding the manufacturing sector, and (3) raising the efficiency of manpower and reducing unemployment. It is unlikely that achievement of the economic potential of this country can be attained without the development of the agriculture sector. While economic development, in Iraq as well as in many LDC's, is frequently 13 identified with economic growth measured in National Accounts, development also involves complex processes and procedures of institutional change. The process of economic development as conceived in this study is one of confronting the problems of income distribution, uneven development, and employment creations, with all their economic consequence.l Consequently, what is needed above all is a decision to elevate the agriculture sector to a position of top priority during the coming decade. This would entail com- prehensive planning, far-reaching change in institutions, devotion of more human resources to the agriculture sector than has been the case in the past and substantially greater financial resources for this purpose than seemed to have been contemplated. National attention and policy emphasis must be focused on agriculture if this sector is to provide increased agricultural production, income and employment Opportunities in the rural areas. However, such strong 1Seers (1969) has stated the issue well: "The questions to ask about a country's development are there- fore: What has been happening to poverty? What has been happening to unemployment? What has been happening to inequality? If all three of these have declined from high levels, then beyond doubt this has been a period of devel- opment for the country concerned. If one or two of these central problems have been growing worse, especially if all three have, it would be strange to call the result 'develop- ment,‘ even if per capita income doubled [p. 3]." D. Seers, ”The Meaning of Development,” International Development Rev., 11 (1969): 2-6. Also see P. Dorner,*Needed Redirec- EIOn in Economic Analysis for Agricultural Development Policy," American Journal of Agricultural Economics, 53 (1971): 8-16. 14 emphasis on the agricultural sector must not be interpreted as disparagement of industrialization. The tenet of this study is that development of the agricultural sector also calls for additional industrialization in the form of in- dustries producing farming requisites, industries producing consumer goods and agricultural processing industries. Also, Iraq can and must be an industrial nation in the 1980's, building an industrial complex in the field of petrochemical industries and making greater use of its available raw mate- rial for the industrialization process. Within this context, a comprehensive and integrated agrarian reform program would not only profoundly improve the performance of the agricul- tural sector and achieve the objectives of agricultural development as conceived in this study, but it would ensure balanced economic development, which is in conformity with Iraq's declared overall Objectives of development policy for the last two decades. Objectives It is the purpose Of this study to show the past performance of the agrarian structure, particularly in the last two decades, to assess its future prospects and to point out major problems and policies that it may have to face in the realization of these prospects. In this regard, the term "agrarian structure"1 is the complex Of 1United Nations (1970), Progress in Land Reform-- Fifth Report. 15 interconnecting sets of relationships, within the agricultural sector, among the tenure structure, production structure, and the structure of supporting services. Specifically, the objective of this study is the evaluation of Iraq's agrarian reform programs, within the setting of its agrarian structure, in terms of the following development consequences of the agricultural sector: 1. Increasing agricultural production and productivity. 2. Income distribution and its economic implications, i.e., increase effective market demand and change the demand structure. 3. CreatiOn of employment opportunities in the agricultural sector as well as in the rural areas. Methodology, During the past decade, considerable thought has been given to the methods and objectives of develOping, organizing, carrying out and evaluating the land reform program. Throughout the world, land reform programs of varying concept and substance have been planned and imple- mented; some have enjoyed achievements and continuing progress. Failures have been frequent with the beginning of new planning and programs; since, short-term failures have been turned into successes. Most land reform programs have been distinguished by the extent of deliberate action undertaken by the state or authority to increase the pace of economic development M '1‘ 0| In 16 and to bring the institutional framework of the agricultural sector into line with the requirements of agricultural and rural development. Systematic evaluation of these land reform measures call for viewing them as acts of preventive economic policy in periods of drastic changes, during which the agricultural sector plays a dominant role and in which its development is of fundamental importance. The selection of an approPriate evaluation method will be determined largely by the content of the program. Any such program Of deliberate action implies Objectives and assumes models of Operation of the economy. It is Obvious that many assumptions and hypotheses are involved in such planning, and that the results depend on a number of expected reactions. Even with fullest amplitude of statistical and other information, predictions in'a complex socioeconomic situation are difficult. Consequently, eval- uation in the structural field presents a problem distinct from the economic evaluation of agricultural projects. Some economists conceive of development planning and project evaluation in terms of present private or project decision-making criteria. Their policy recommenda- tion involving highly SOphisticated models often ignore the employment and distribution aspects of projects. While an evaluation of a multipurpose or settlement project, land reform, in teEms of Benefit-Cost (B/C) analysis, financial return and saving criteria is certainly inadequate, because 17 of oversimplification and the ignoring of secondary and indirect effects for measuring the socioeconomic effects of projects; these criteria have significance from an accounting point of view. Furthermore, socioeconomic programs call for a more specific approach to evaluation which can be adjusted to the particular feature and anti- cipated effects of each program, and will facilitate a qualitative analysis of the data whenever quantitative measurement is impossible or inadequate. This study is concerned with the evaluation of land reform programs, with specific attention to the period of implementation of the structural program, organization and administrative structure, and the effects from both macro and micro economic point of view. The technique will be to demonstrate the relations between land reform programs and the develOpment consequences, i.e., increasing produc- tion and productivity, income earning opportunities, and employment creation. This will be followed by an analysis of the empirical evidence, the conditions in the agricul- tural sector, from pre-reform and post-reform experience. The connection between land reform and income distribution is difficult to verify. While evidence on pre-reform and post-reform income distribution and expenditure patterns is extremely difficult to obtain, income distribution will be inferred from statistics showing the redistribution of land ownership. 18 General Assumption and Hypotheses The central hypothesis, almost an assumption underlying this entire research effort, is that: 1. In addition to the equity, welfare and social justice considerations implicit in land reform programs, other major economic development purposes should be accomplished by such measures. Thus the potentialities of the land reform programs must be viewed within the overall context of economic development. The widening gap between the declared policy objectives of the land reform program and their actual realization can be ascribed to the failure to reorient organization and administrative machinery for the program implementation, including administra- tion of structural reform, inadequate training of staff, ineffective coordination with wider rural development program and virtual absence of follow-up and evaluation. While the influence of the price level on investment and output in the agricultural sector cannot be dis- puted, the land tenure system influences farmer responses to changing prices. Thus land reform programs in providing tenure security is an impor- tant element in creating incentive structure for increased investment and production. 19 Significance of the Project The findings of this study will contribute generally to the attainment of Iraq's post-1950's development policy, i.e., the stimulation of the nonoil sectors of the Iraqi economy. The findings will focus emphasis on the need to push a new development policy that favors continuous and balanced development of the agricultural and nonagricultural sector of the national economy. More directly and specifi- cally, this study will help in the following ways: 1. In dealing with the whole agrarian structure, i.e., the production structure and the structure of support- ing services, the study will help focus attention on require- ments of the productive structure, especially fertilizer, pesticides, and mechanization. It will be concerned with post-reform economic organization of the agricultural sector, i.e., family farm, group farming (cooperative-collective), and state farms and their impact on productivity and employment opportunities in the agricultural sector. 2. While agricultural development and industriali- zation are not valid alternatives, an effective development plan must embrace both goals. In nations such as Iraq, where 50 percent or more of the p0pulation depends on agriculture, the income level of this majority is a key factor in determining the demand for goods and services produced in the economy. It may be impossible to expand the manufacturing sector, i.e., industry for consumer goods, 20 industry for agricultural requisites and agricultural processing industry, without a more equal distribution of income which will generate a wider and a more effective market demand. In other words, supply does not create its own demand especially under condition of skewed income. 3. The transformation of a primary agrarian population into a predominantly urban and industrial one is usually a slow process, especially when it has a high rate of pOpulation growth. Furthermore, the farm population will not decline in absolute numbers until well after it has become a minority in the pOpulation.1 One theoretical exam- ple will demonstrate how difficult it is for a country con- fronting a 3 percent population growth rate and having 50 percent or more Of its population in agriculture to absorb the total natural increase in nonfarm employment. If a country's population is now 50 percent rural and 50 percent urban, then given 3 percent annual population growth, the urban population would have to grow by 6 percent annually in order to hold constant the absolute number now in the rural sector. 1R. P. Christensen, "Population Growth and Agri- cultural Development,” _gricultural Economic Research, 18 (1966): 119-128. For an analysis Of this phenomenon, see F. Dovring, "The Share of Agriculture in a Growing Popu- lation,” in Agriculture in Economic Development, ed. by C. K. Eicher and L. W. Witt (New York: McGraw-Hill, Inc., 1964); and G. Eicher, T. Zalla, J. Kocher, and F. Winch, ”Employment Generation in African Agriculture,"Institute of International Agriculture, Research Report NO. 9, Michigan State University, 1970. 21 In Iraq, in 1970, 54 percent of the labor force is employed in the agricultural sector, while the population growth rate in the early 1970's is 3.25. Maintenance of the present labor force ratio in the agricultural sector of Iraq will require a sixfold increase in job Opportunities in other sectors and especially in the manufacturing sector. While Iraq has the raw material basis for a complex industry, especially in the field of petrochemical and other related industries, it is highly capital intensive industry that requires high skill manpower. Thus, agricultural develop- ment should create more employment opportunities in the agricultural sector during the next decade or so. 4. Finally, this study will highlight means for improving the performance of the agricultural sector, i.e., increasing the value added 'GDP' in the agricultural sector, increasing per capita GNP and to meet the demand for more food.1 A policy for expanding agricultural production and increasing the productivity of the agricultural sector, logically calls both for expanding agricultural exports and for reducing imports. This can be accomplished through 1As Dorner comments, "The category 'food' is a very general one. The income elasticity of demand varies for individual commodities and consumer demands change over time as a result of income change. As per capita incomes continue to rise, the demand for some farm products will increase much more rapidly than that for others.“ Cropping patterns and output mix in agriculture must change accordingly. 22 diversification of agricultural production or mixed farming, by following an annual production plan, adOpting certain crop rotations, or by careful programing of the agricultural sector. Furthermore, recent population growth rates for Iraq have turned out to be much higher (3.1 percent in the 1960's and 3.5 percent currently) than development planners had anticipated. Moreover, this increase has been accompanied by 3.2 percent annual increase in per capita income and disposable income during the 1960's. Accordingly, the demand for food, especially vegetables and livestock and dairy products, has increased considerably. R. D. Stevens pointed out in 1965 that changes in the demand for food are determined largely by population growth, increased per capita income and the income elas- ticity of demand for food, which declines as income rises.’ However, if the increase in income is unevenly distributed, then the full impact of income elasticity of demand for food will not be realized. Agrarian reform programs have created substantial employment and income-earning Opportunities which have had profound impacts on employment and income not only in the agricultural sector, but also outside the agricultural sector. Consequently, the demand for food will 1R. D. Stevens, ”Role of Growth in Food Requirements During Economic Deve10pment,” Journal of Farm Economics 47, NO. 5 (1965): 1208-1212. 23 be further increased. The rate at which the demand for food in Iraq will increase can be estimated by the following equation: D = P + Bg where D = the rate of increase in the demand for food, '0 ll pOpulation growth rate, 3 = income elasticity of demand for food, and rate of increase in per capita income. 0.0 II While P = 3.1, g = 3.2, and assuming 3 = 0.8, it is between 0.6 to 0.8, and more likely 0.8 especially for the livestock and dairy products. Then the rate of increase of demand for food is: D = 3.1 + 3.2 x 0.8 = 5.6 percent. Thus, for both economic--exports and imports--and nutritional reasons, a considerable expansion in food production (supplies) is a necessary condition for economic development. CHAPTER II MAIN FEATURE OF THE IRAQI ECONOMY Natural Environment Iraq is the modern name for the Old MeSOpotamia, the land of the two rivers, the Tigris and the Euphrates. It is situated in Southwestern Asia. The total area is about 172,000 square miles or 110 million acres. Its pop- ulation was reported as 8.1 million in the 1965 census and is expected to rise to 11.2 million in 1975. The country is a little larger than California. With its alluvial soils, main precipitation in the north and the natural rivers with numerous tributaries that flow from north to south that provided both water and silt for the farming of a fertile delta, Iraq long ago was counted in the forefront of the world's agricultural countries. It is said that Iraq boasted at one time a population of 30 million whose main source of livelihood was agriculture. This is evidenced by the ruins of canals and dams dating back to the Babylonian and Assyrian areas, 24 25 2500 B.C. These early civilizations reached their climax in the Abbasside era.1 Topography Iraq possesses great physical variation for its size ranging from the mountains of the north to the alluvial plain of the west. It is an area lying between 29° and 38° north latitude, and 38° and 49° east longitude. Geographi- cally, Iraq can be divided into four main regions: (1) the northern mountainous region, (2) the valley region, the plain lying between the two rivers, (3) the outer plain, which forms the pasture region, and (4) the desert region inhabited mainly by the Nomad Bedouins.2 Climate Iraq has a Mediterranean type of climate, i.e., it llas relatively mild temperatures. Summer in Iraq lasts from liay until October. During this season no rain falls and izemperatures are hot, averaging 95° F. Winter, from IDecember to March, is cold to moderate; rain falls mainly fiLn the winter. ‘ 1E. L. Hadithy and E. L. Dujaili, "Problem of .Qmedementation of Agrarian Reform in Iraq," in Land Policy lien the Near East, ed. by N. R. E. L. Ghonemy (Rome: United ISlations, FAD, I967). 2Iraq, Ministry of Planning, Statistical Pocket &Jk, 1960-1970, Baghdad, 1972. 26 In the northern mountainous region, there are areas of perpetual snow: some places have up to three months of snowfall. Annual precipitation is as much as 1,300 mm (50 inches) in this area of parallel mountain ranges. The ‘valleys are used for crop production, both for rain-fed winter grains and for irrigated summer crops. Where not too steep and rugged, the lower mountain slopes are used for grazing. The middle slopes have been and are still forested.1 The foothills on the southwest side of the mountain area, the Kirkuk, Erbil and Mosul area, located to the northeast of the Isohyetal line, are the most important dry farming areas in Iraq. It has an annual precipitation of 400 mm (16 inches). This is one of the first areas in the World used for grain production. The outer plain, below the Isohytol line has a (lesert climate with about 155 mm (6 inches) average annual IPrecipitation. Precipitation here is less certain from year 1:0 year and the area is very marginal for cultivated crops Siuch as wheat and barley. It can be extensively farmed but ‘flhe risk for the future is good. Well managed grazing would be a better present use than cultivation. \ lM. Clawson, H. Landsberg, and L. Alexander. .EEZQe Agricultural Potential of the Middle East (New York: erican Elsevier Publishing Company, Inc., 1971). 27 Soil The soil of Iraq, in general, is rich in organic matter and other nutrients, and is highly productive. The deposited alluvial soils of the Tigris and the Euphrates Rivers and their tributaries have added fertility to the soil. The alluvial soils of the Mesopotamia in Iraq are primarily a product of man's activity during the last six thousand years. Most of this plain has been covered to a depth of several feet with sediments brought in suspension by irrigation water. Therefore the soils are not pediolog- ically developed in the usual sense. It has been said that these deposits are as much as three kilometers thick.l These alluvial soils, grayish-brown in color, have a (consistently high, 20-30 percent, content of calcium <2arbonate and a small percentage of gypsum. They are Jaeasonably permeable both laterally and vertically. Tex- 1:ures are generally fine silt, fine loam, or fine clay. lfiear the rivers they are coarser than this.2 The second group of soils located in the rainfed Eirea to the northeast of the Isohyetal line, are reddish larown. They are calcareous with a zone of carbonate accu- lnnulations to a depth Of 12 to 20 inches. These excellent 1Ibid., p. 18. 2P. Buringh, Soils and Soil Conditions in Iraq (TEBaghdad, Iraq: Ministry 6f7Agriculture, 1960). 28 rainfed soils are not salty and could be made to produce several times their present output.1 The third group of soils, located southward from the reddish-brown soils, are in a zone of seirozem soil. The rainfall is less here and it is more uncertain from year to year. The soils frequently have a very high content of gypsum as well as calcium carbonate. Many are shallow. This area is very marginal for cultivated crops. Soils in Iraq are affected by many factors. The major impediment to the use of many basically good crop soils of the Mesopotamian plain is the salt that has accumulated during their use over the last six thousand Much of the land has been occupied and abandoned Although, the waters years. more than once because of the salt. (of the Tigris and the Euphrates are relatively low in soluble salts (they contain about 30 parts per 100,000 <>f salt at the time they enter the country) the repeated “vetting and drying out of the soils has Often left enough Esalt to reduce or prohibit plant growth in a large area.2 JEtLis estimated that 13 million donums, 56 percent of the total 23 million donums, of cultivated land in Iraq has Today it is estimated that 100,000 donums become saline . \ 1W. L. Power, "Soil and Land Use Capabilities in Iraq,” Geographical Review, 44 (1954): 375. 2K. Saied, "Agricultural Mechanization in Iraq" (Ph.D. dissertation, Michigan State University, 1971) . 29 of productive land become saline every year.1 Consequently, much of the land, especially south of Baghdad, is so salty that it can be used for cropping only in alternate years, the fallow system. Even then, the yields are very low. A systematically planned removal of salts from irregated land is a necessary part of any successful irrigation scheme. With proper leaching, drainage and good irrigation management, the soils could be among the most productive in the world. Without these improvements, they can only get saltier and experience a further decline in their already low levels of productivity. Many other factors, such as the absence of scientific fertilizer practices, have contributed to this decline in fertility. These and many other factors will be discussed in a later chapter . Egater Resources: The Tigris- !guphrates River System The Tigris and the Euphrates are separate rivers llntil their confluence at their mouth, where they join to iform the Shatl-Al-Arab which is a wide river about 400 luleters across. The two rivers are similar in many respects, ¢ Ho.m OOO.hHH NomH OOH h~h.HHO.~ en.~ hHH.mm O~.bv O~O.omm.H hm.- OO0.00¢ no.m OOO.vHH HomH OOH Hon.mem.H ov.~ O¢>.h¢ vm.hm Hom.mmm.H mm.- OOO.mcv oo.m OO0.0HH oomH 3v oouom sons 25 cocaine—0:9 S; OO>OHmau g OOHzom 2; sOHumuuommcmua use» Hmuoa m¢.m OOO.mvH hm.n OOO.hO we. OO¢.NH Om.m OOO.mvH mm. OOO.mH m.vm v~m.mvv.H OOOH mv.m OO0.0¢H hm.u OO0.00 Om. OOO.NH mo.m OO0.0vH mm. OOO.mH m.vm OhH.mmm.H OOOH Hv.m OOO.mMH mm.~ OOH.mm Hm. OOO.~H mm.m OO0.0vH mm. OOO.vH O.om OO~.mmm.H nomH u¢.m OO0.0mH NH.~ OO0.0h um. OO¢.NH vm.m OO0.0¢H mm. OOO.vH m.mm ONH.mm~.H OOOH mm.m OOO.m~H MH.~ OOO.HO mm. OON.NH mm.m OOO.mnH mm. OOm.MH O.mm OOO.5-.H momH mm.m OO0.00H HH.N OON.>v cm. OOO.NH om.m OO0.0MH mm. OOO.MH O.mm nmm.OmH.H vooH an.m OOO.th OO.~ OOH.mv Om. OOO.NH No.o OO0.0MH mm. OOm.~H O.mm vmv.va.H momH mm.m OO0.0HH ov.n OO0.0m mm. OOO.~H v~.o OO0.0mH Om. OOO.~H O.mm vh¢.vOH.H «omH -.m OOO.mOH mm.~ OOO.mv mm. OOO.HH HN.O OO0.0nH hm. OOm.HH O.nm ONN.OOO.H HOmH vH.m OO0.00H mm.~ OOO.mm HO. OOm.HH mH.O OO0.0mH hm. OOO.HH O.nm HOH.Omo.H OOOH 3. «cone 3 can. 3 nuns. 3 6:33 3 65c? 3 033332 58» nosnuusou a use nuanced: OIUOHm 83:83 .3363 339.30 an 632:5an no sOHunHomom OONOHQEO aHHsusHom u.UnHH .m.N OHndB 42 service sector employed 81.3 percent of the total labor force in 1969.‘ From the foregoing discussion it is clear that (1) there has been a steady increase in the average annual rate of population growth; (2) Iraq is still in the second stage of demographic transition, i.e., the stage of the transi- tional growth: and (3) Iraq, in terms of age structure, has a relatively young population, 45 percent of the population being under 15 years of age. While GDP at constant 1966 prices and factor cost rose from ID 384.9 million in 1953 to 980.1 million in 1969 with an average annual growth rate of 6.0 percent, the per capita GNP at constant 1966 prices rose from ID 51.3 in 1953 to ID 84.7 in 1969, with an aver- age annual rate of 2.1 percent. This low per capita income was the result of the high population growth that absorbed most of the increase in national income. The pOpulation problem is not primarily a food problem, but it does put a great burden of adjustment on economic and social institutions and makes social transfor- mation more difficult. In other words, a high rate of popu- lation growth means a high dependency ratio and lower ability t1) save. Resources are absorbed in child raising. The birth rate, however, can be reduced by the desire and capacity of the peOple to adjust their lives and their institutions. ‘ 1Ibid., p. 321. 43 The Agricultural Sector Prior to the 1958 Revolution The Land Tenure Structure Whenthe kingdom of Iraq took over the administration of the new country in 1932, the leaders were undoubtedly aware of the need for promoting a stable and productive rural economy. But they also had to sustain the system they had inherited. Years later, the president of the Miri-Sirf, state domain, land development committee in a report on settlement activities wrote: The government had no choice in the beginning but to follow the Ottoman Law of Land. At the same time Sir Ernest Dawson, a British expert, was invited to study the tenency problems and make his recommendations. An extensive study of the existing conditions was carried out and a final report was submitted to the government. The British expert suggesting the principle of accepting the actual existing tenency rights and registering them officially and providing the people with documents ensuring their future. Accordingly the government passed in 1932 the Law of Settlement Land Rights No. 50, which provided for the acceptance of the actual production occupancy of land as the right holders.1 After the Settlement Law of 1932 was passed, a Cadastral Survey was begun which modified the Old land Classification, but was still based on the Ottoman Land COde of 1858. The land tenure system in Iraq which was 1Hassan Mohammad Ali, Land Reclamation and Settle- pient in Iraq (Baghdad: Baghdad—Printing Press, 1955) , 44 based on this law, was modified in 1938 with the following definition: 1. MamlookahcnrMulk, real estate 1and.--The lands that are registered in Tapu Registers, by which the disposer has documentary evidence, Tapu Dee, and provided that he had not neglected the disposal of lands without a legitimate excuse for 15 years prior to the announcement of the settle- ment. Private ownership was authorized for these lands. 2. Matruka, abandoned 1ands.--The lands that are earmarked for public facilities or donated to the peOple, or that have been used for such purpose for five years, in case of endowment lands, or 15 years in case of state-owned lands. Such land will be registered in the name of the Ministry of Finance, stating the authority to whom they are allocated and the purpose of use. 3. Awgaf lands.--Lands that have been endowed for the benefit of a charitable party in accordance with the provision of the Islamic Laws. These could be either authentic or unauthentic endowment lands. The authentic endowment applies to those lands the right of disposal of which belongs to the party for whom the endowment was made. The unauthentic endowment applies to those lands which originally belonged to the state. 4. Miri-land, state lands.--A11 lands that have not been proved to be real estate, endowed or abandoned. The state lands are classified under three categories: 45 a. State-owned alienated by Tapu, Miri-tapu.-- The lands which were registered in tapu registers before the announcement of the settlement and the owner of which prOduced re-registration justification, either documentary or through a survey of trees or vines that have been planted for ten years before the settlement. The number of trees should not be less than forty per donum and fruit-bearing trees should not be less than twenty per donum. This category is eligible for morkuge or will. b. State-owned granted by Lazma, Miri-Lazma.-- The lands which are granted through heads of settlement committees to Iraqis who had worked the land during the fifteen years prior to settlement and for a period not less than five years. The state had a veto power on this category. a. State domains, Miri-Sirf.--The lands for which, at the time of the settlement, no rights had been estab- lished that justify their registration as alienated by Tapu or granted by Lazma. This category is registered in the name of the Ministry of Finance and represented more than 71 percent of the cultivable land of Iraq. The Law of 1932 was supposed to be an answer that would resolve the confusion over the tenure structure. Consequently, it perpetuated the very system it was trying to correct. Actually, it had become politically favorable for the government to have tribal lands transferred to the sheiks. By this law they became the legal owners where, as t: titl the Exit. Vat: irr ans 46 as tribal leader, they had been land holders, without title for their people. When tribal land was titled to the sheiks in 1932 the cultivator's position changed very little. As tenant share-cropper, they worked under the direction of the sheiks who were the landlords or their representative, often a subchief or Sirkal. The tenant had few rights, little or no status and they were, more or less, legally tied to the land. On the other hand, this law allowed a few influ- ential peOple to obtain control over vast areas of culti- vated land. Large tracts of cultivable land were owned by individuals, merchants, or other entrepreneurs, who owned irrigation pumps. These owners did not live on the land and did not actively serve as managers or Operators of the farms. Usually they took up residence in the larger towns or cities. Thus, while the 1932 law contributed toward the settlement of the tribal disputes over land and formalized a classification of land, it also sowed seeds of discontent, for it actually legalized feudalism.l As stated in the FAO, Country Report of 1959, ”there was probably no single cause of object poverty greater than this system which k 1H. C. Treakle, "Land Reform in Iraq," A enc for International Deve10pment Spring Review of Land Reform, 1: 1-68. 47 divided agricultural land, cultivable land, into large holdings which were subdivided into pitifully small operational units."1 Land Settlement Although it was conscious of the unrest among the landless and the less privileged groups of Iraq, the gov- ernment was unwilling to make radical changes, at least to the extent of breaking up the large private estates that the former tribal lands had become. However, there were different Opinions and policy approaches in dealing with the problems of the agricultural sector, especially those of the landless, low income and unemployed. One of these was Warrinen's approach, the poverty of the majority of the peasants in Iraq is the result of the low productivity and the land tenure system, the peasants' incomes are low because of low productivity and most of the produce goes to the landlords.2 On the other hand, the government policy approach was that the development programs and projects, carried on by the Development Board, in various sectors will create more employment opportunities outside the agricultural sector. Furthermore, the settlement projects on the state domain lIraq, Country Report, FAO Mediterranean Development Project, FAO, Rome, 1959. 2Warriner, Land Reforms and Economic Development in the Middle East (London, 1950), p. 119. 48 will attract tenants and farmers and weaken the position of the landlords. Therefore there is no need for a mild or token land reform. The State Domain, Miri-Sirf, Land Deve10pment Law of 1945, started a reform and settlement program that allowed distribution of state domain to peasant farmers. Law No. 13 in 1951 provided for distribution of all state land and fixed the size of holding at between 19.8 donums and 336.8 donums, for various regions and types of farming. This program began with the Dujaila Project when arid state- owned lands were made cultivable by the New Dujaila Canal. Nine other projects were located throughout the country. It was estimated that the cost of settlement on these projects was ID 300 per farmer.1 In the Dujaila Project, as an example of these settlement projects, the total area was 387,096 donums, of which 241,935 donums were assigned for distribution to small farmers and some retired police and military personnel. The remainder went to private land owners who were neighboring sheiks. Much of the land that was distributed was rented out soon and ownership by the man who farmed it became an exception. This, of course, was contrary to what the law originally intended. 1M. S. Hasan, Studies in the Iraqi Economy, Beirut, 1966, p. 26. 49 By 1955, 2.2 million donums had been distributed, of which 1.8 million donums was given to the sheiks of shamm- or tribe, to 15,000 peasants. This left the majority of the rural population as landless peasants.1 Doreen Warriner, however, questioned the results of the settlement process: if this total land had in fact been distributed to small farmers, the distribution of the state land would represent a large and beneficial change in the agrarian structure. However, these figures are misleading . . . a large area of the best state land in this region had been granted in registered title to the sheiks.2 Furthermore, there was no organization to direct better farming practices on the new settlement and little experimentation with new crops. Asairesult, the productivity, yield per donum, of the Dujaila and most of the projects, was extremely low. Dujaila project in particular suffered from lack of drainage system Land Use and Management While the total area of Iraq is 181.6 million donums, the cultivable land area is estimated at 48 million donums or 26.4 percent of the total. One-third of this area or 16 million donums are located in the rainfed area. This 1Ibid., p. 28. 2Doreen Warriner, Land Reform and Development in the Middle East (London: Oxford University Press, 1962), p. 160. 50 area is located to the northeast of the Isohyetal line where the yearly rainfall is equal to or more than the average rainfall of 400 mm (16 inches) annually. The remaining 32 million donums are located in the irrigated area. Only 23 million donums or 48 percent of the cultivable land is actually cultivated at present. This area is utilized according to the fallow system, i.e., 50 percent of the area is cultivated with the winter crops and 12 percent with sum- mer crOps.1 Altogether the utilized area, at the present time, amounts to 62 percent annually of the irrigated area as seen in Figure 2.3. In the rainfed lands cultivation is limited to winter crops. This is due to the lack of rain during the summer season. Exceptions occur in some small areas that have natural wells and springs that can be used for irrigation. Somewhat more than one-half of the recently utilized land is in rainfed agriculture. In addition, there are large areas of land used only to pasture grazing animals. Though this half of the agricultural area contributes less than half of total output, it is an important segment of agriculture. The prevailing time-honored cropping pattern is that one year of grain mostly wheat--followed by a year of weed fallow, followed by another year of grain. Two 1A. P. G. Poyck, Farm Studies in Iraq (Wageningen, Netherlands: N. V. HoVeenman, 19627. P. 51 First Year Second Year Third Year Fourth Year Winter Summer Winter Summer Winter Summer Winter Summer [:1 Fallow fizaéa Winter CrOp . Summer Crop Figure 2.3. Iraq's fallow system. Source: A. P. G. Poyck, Farm Studies in Iraq (Wageningen, Netherlands: N. V. HoVeenman, 1962), p. 60. principal reasons have been assigned for the fallow system on the rainfed and irrigated lands. All have said that the land must be "rested," and some have said that fallowing conserves a year's moisture for the succeeding grain crOp. There is a modicum of truth in the first, but practically none in the second proposition.l In the absence of fer- tilizer use, it may well be that the soil could not produce a crop of grain every year. While the change in crop from grain to weeds undoubtedly helps to hold down the incidence of disease and insect pests on the grain. However, little if any moisture is carried over from a weed fallow to the subsequent year's grain crop. Table 2.6 shows land utilization in the late 1950's. h 1Clawson, p. 128. Table 2.6. 52 Iraq's land utilization Category Percent of Total (%) Area (1,000 acres) Land in farm holdingsa Field crops Fallow Orchards, groves, and vineyards Perennial forage, meadow and other pasture woodland and woodlots Built-on and other cultivable landb Total Land outside farm holdingsc Natural woodlands and forestsd Seasonal and other grazing land Non-farm land, deserts, waste- land and othere Total Total area of Iraqf 9,858.2 9.1 8,200.7 7.5 463.3 0.4 175.9 0.2 11.3 --- 1,154.2 1.1 l9,863.6 18.3 4,810.8 4.4 '10,360.4 9.6 73,307.0 67.7 88.478.2 81.7 108,34l.8 100.0 Source: aThe 1958/59 Agricultural and bA residual figure. Livestock Census figures were used for the area of land in agricultural holdings and units for the 14 Liwa (Provinces). The Census figure of 1,241,186 acres for uncultivable land included 87,026 acres of meadow and woodland. CArea figures for these categories were not reported by the Census; figures were derived from Statistical Abstracts (1952-1961), and the 1962 FAO Production Yearbook. dMuch of the natural forest areas are to some extent grazed. eSome areas of this category are at times grazed, but they do f not provide regular, dependable seasonal grazing. The figure for the total area of Iraq includes one-half of the Neutral Zone and the territorial waters, as reported in the Statistical Abstract for 1961. H. C. Treakle, The Agricultural Economy of Iraq, U.S. Depart- ment of Agriculture, ERS-Foreign 125, August 1965. 53 It appears from the above that the area of utilized land at present, 23 million donums, is 48 percent of the cultivable land. While the water discharge from the Euphrates and Tigris River System is enough to irrigate 23 million donums in the irrigated land, only 62 percent of this amount is actually utilized. This is the result of the traditional type of farming, the fallow system, and also because of the traditional production relationship between tenants and landlords. With prOper utilization and management of land and water resources, especially with new production pattern and land use, in the rainfed and irrigated land, production in the agricultural sector could be doubled and productivity of both land and labor could be increased more than twofold. This point will be discussed in a later chapter. Land Tenure System, The Ownership Pattern One aspect of the political and economic institution that dominates the agricultural sector is the land tenure system. Agricultural land, the fundamental and basic resource of the national economy, had been controlled to a large extent by a limited number of owners under a semi-feudalistic pattern of ownership. This tenure arrangement had been generally lacking in social justice. Table 2.7 indicates the mal-distribution of agricultural land ownership prior to 1958. According to these statistical Table 2.7. 54 Iraq's distribution of agricultural land ownership prior to the enforcement of the agrarian reform law by area, 1958a Area Brackets .Area Ratio to Total Number of Ratio to Total (donum) (donum) (%) Owners (’3) Less than 4 102,321 0.3 73,110 28.9 4-10 243,004 0.8 40,475 16.0 11-20 411,152 1.3 30,431 12.0 21-30 419,151 1.3 18,038 7.2 31-50 841,181 2.6 22,580 8.9 51-100 2,055,856 6.4 29,884 11.8 101-500 5,799,012 18.0 31,508 12.4 501-1,000 1,992,431 6.2 2,916 1.2 l,001-4,000 6,144,121 19.1 3,125 1.2 4,001-10,000 4,966,391 15.4 835 0.3 10,001-50,000 6,029,380 18.8 319 0.1 50,001-100,000 1,725,988 5.4 25 0.008 Over 100,000 1,424,835 4.4 8 0.002 Total 32,154,823 100.0 253,254 100.0 aIncluding registered, long-lease, free-hold, government-owned and dead hand land. b Donum = 0.62 acres or 0.25 hectares. source : Government Press, 1961). Iraq, Results of the Agricultural and Livestock Census of Iraq for 1958-1959 (Baghdad: 55 data, agricultural land owners constituted about 0.5 percent of the total population; 2.8 percent of such land owners held 70 percent of agricultural title deeds and 97.2 percent held less than 30 percent of agricultural land title deeds. Table 2.8 shows the distribution of ownership for the 23 million donums of actually cultivated land. The average share per owner of this area was 138.5 donums: 2.0 percent of the landowners owned 68 percent of the actually cultivated land and 98.0 percent of the land owners owned 32 percent of the actually cultivated area. Altogether, the number of land owners and leasees in the rural area, who directly depend on agriculture stood at 3.2 million persons in 1957, while the number of the landless peasants was 2.9 million persons prior to 1958. Elimination of feudalism represents the starting point to bring the political and economic institutions of the agriculture sector in line with agriculture and rural development. Consequently, the new authority took the initiative in early 1958 to improve the agricultural ownership pattern by means of promulgating the first agrarian reform Law No. 30 of 1958. This is the subject of the following chapter. 56 Table 2.8. Iraq's distribution of actually cultivated land prior to the enforcement of the agrarian reform law by area, 1958-1959 Area Brackets Area a Ratio to Total Number of Ratio to Total (donum) (donum) (’8) Owners (1:) Less than 4 73,055 0.31 57,958 34.44 4-29 696,889 2.99 56,725 33.69 30-99 167,118 7.19 30,119 17.89 100-999 5,024,736 21.54 20,126 11.95 1,000-9,999 9,090,279 88.97 3,143 1.87 10,000-49,999 4,554,280 19.52 251 0.15 50,000-99,999 1,334,102 5.72 19 0.01 100,000 & over 876,913 3.76 5 0.003 Total 23,327,259 100.00 168,346 100.00 aDonum = 0.62 acres or 0.25 hectares. Source: Iraq, Results of the Agricultural and Livestock Census of Iraq for 1958-1959 (Baghdad: Government Press, 1972). 57 Developmgnt Programs;_ Agricultural Development Polipy The Iraqi government established a Development Board in 1950 which was to receive the total revenues from oil and spend these funds on development projects. The Development Board was charged with threefold task of (1) preparing a general plan for developing the country's resources, (2) undertaking the execution of projects, and (3) turning over the completed projects to the Ministries concerned with administration and maintenance.1 In pursuing its development policy in the 1950's, the government assigned the agricultural sector a high priority ranking in the scale of economic development. The emphasis was on horizontal expansion, i.e., bringing new land under cultivation, rather than vertical expansion, i.e., increasing productivity and intensifying agricultural produc— tion, which means reform of the defective agrarian structure. However, two development programs were drawn up and followed during the 1951-1959 period. Here is a brief discussion of the two programs and the performance of the agricultural sector during this period. The first four year development program, 1951-1954, called for development expenditures of ID 89.8 million to be financed by estimated revenues of ID 99.9 million. Actual 1Government of Iraq, Law No. 23 for 1950. 58 revenues by the fourth year were ID 107.4 million. Actual expenditures throughout the program were ID 49.1 million, which means an implementation ratio, the ratio of proposed or approximated expenditures to actual expenditures, of 54.6 percent. The allocation to the agriculture sector in this development program was ID 39.7 million or 44.2 percent of total expenditure allocated as follows: ID 32.9 million for irrigations and flood control, ID 6.3 million for underground water, forest management and pasture and livestock production. However, actual expenditures were ID 19.7 million and the implementation ratio was 49.7 per- cent for the agricultural sector. By the end of the program, there was a surplus, the difference between estimated and actual revenues of ID 58.2 million.1 In the second (amended) development program, 1955- 1959, development expenditures were budgeted at ID 416.6 million to be met by estimated revenues of ID 324.2 million, with a deficit of ID 92.4 million to be met by an expected increase in government revenues during the program. How- ever, actual expenditures were ID 227.3 million and the implementation ratio was 54.6 percent. Actual revenues by the end of the program were ID 241.3 million, thus 1A. Al-nasrawi, Financing Economic Deve10pment in Iraq (New York: Frederick A. Praeger, 1967, p. 67. 59 leaving a surplus of ID 14.01 million. Allocation to the agricultural sector was ID 138.4 million or 33.2 percent of total expenditures. Of this amount, ID 120.2 million was to be allocated for irrigation and flood control. Actual expenditure on the agriculture sector was ID 61.5 million and the implementation ratio was 44.4 percent.1 The surplus resulting from the excess of actual revenues over actual expenditures in the two development programs amounted to almost ID 72.3 million, which is about 20 percent of total actual revenues. This failure to spend funds allocated for development activities resulted from a combination of initial inexperience and technical incompetence. The two development programs, 1950-1954 and 1955- 1959, were heavily loaded with irrigation and flood control projects, many of which were large and could not show quick results. There is no denying, of course, the high priority that must be accorded to the harnessing of water resources in a country that is preponderately agricultural and is dominated by the flow of two rivers. To a large extent, however, these programs were engineers' lists of projects rather than economic programs. In a practical sense, policies for the development and management of a country's resources should recognize the need to Operate within the 1Ibid., p. 67. 60 context of physical and biological, economic and institutional framework. Their projects were too often conceived in isolation from social and institutional changes that should have accompanied them. They often ignored necessary secondary technical issues such as drainage, desalination, and irrigation networks. Faulty planning did little to reduce the dependence of agriculture on climatic conditions. Several years of large expenditures on irrigation brought no visible evidence of higher production or returns in the agricultural sector. Although the area brought under cultivation with the two major crops, wheat and barley, increased more or less steadily, from 8.8 million donums in 1953 to 10.4 million donums in 1958, the production and productivity, yield per hectare, failed to show a consistent upward trend.1 While the value of the land brought under irrigation increased, landlords without bearing any costs, were usually the principal beneficiaries of the public expenditures. The bulk of rural population did not receive a direct share in these benefits, nor did it appear likely that they would derive any appropriate indirect share through taxation and public expenditure. The fudalists (landlords) who wielded great political power in the parliament were successful in resisting the imposition of substantial taxes on land or agricultural yield. 1Hassan, p. 27. 61 Furthermore, it was estimated, in 1957, that GDP at current prices was ID 292.4 million and per capita income was ID 57.3. The agricultural contribution to GDP was ID 70.0 million or 24 percent and it employed 57 percent of the total labor force, while the oil sector employed less than 1 percent.1 This extremely low per capita income did not accurately reflect the actual economic and social conditions in Iraq. On the one hand, the national income was so skewed and so unevenly distributed as to be void of any measure of justice. It is estimated that urban income, in the form of wages, was 1.5 times the farmers real or subsistence income. On the other hand, the poor performance of the agriculture sector, in production and productivity of both land and labor, and the land use pattern, fallow system, was the result of the political and economic institutions that dominated this sector. Profile of the Economy Before the 1958 Revolution, the economy operated on a free-enterprise basis. However, the distribution of assets and income was highly concentrated and had little correlation with productivity. A distinguishing aspect of the economy was that of 'dualism,‘ a modern oil sector and traditional agricultural sector. 1Treakle, p. 5. 62 Since 1958, economic organization has been profoundly transformed. This transformation occurred in two stages. In the first one, 1958-1964, the transformation consisted of (l) the redistribution of income, to improve agricultural ownership pattern, by means of promulgating the first agrarian reform Law No. 30 of 1958. This measure put an end to the malutilization of natural and human resources; (2) the 1964 Nationalization Act was promulgated to the effect of nationalizing all insurance and reinsurance companies, bank and a large number of industrial and trading companies. This measure resulted in the establishment of the public sector. Therefore the economy, in this stage, can be described as a modified free-market system. In the second stage, 1965-1970, the transformation had several significant aspects. These happened in accord- ance with the principles envisaged by the July 17, 1968 Constitution and the National Charter Action. The main aspects of these transformations are: 1. Expanding the role of the public sector as it constitutes the cornerstone of all branches of the national economy to realize the task of socialist transformation. Also, to pursue the course of economic develOpment, to attain the two objectives of sufficiency in production and justice in distribution. Within this framework, the government supported private sector activities with public sector guidance and cooperation for the accomplishment of 63 various tasks in the reconstruction of the national economy. 2. Planning is the procedure for the development of the national economy. The first attempt to develop Iraq's national economy on the basis of planning was that of drawing up partial and fragmented development programs. This procedure covered certain sectors of the economy or certain activities within one sector. The Development Board, established in 1950, undertook the two development programs of 1951-1955 and 1955-1959 on these bases. The second attempt was more advanced than the first one. The three economic plans drawn up after 1958, concentrated on the central government activities, though they covered all commodity and service sectors of the economy. This step of partial planning in these plans reflected medium-term planning of the central government sector rather than any other institutional sector. Therefore it implied over- looking other economic activities both in the field of production and consumption. This trend was evident in the Provisional Economic Plan, 1959-1961, the Detailed Economic Plan 1961-1965 and the Five-Year Economic Plan 1965-1970. The third attempt in the field of planning is comprehensive planning. In fact the National Development Plan 1970-1974 is considered the first serious attempt in the pursuit of comprehensive national planning in Iraq. It has covered all economic sectors, the commodity, distribution 64 and service sectors, and all the institutional sectors, the central government, self financed public and private sector. Its coverage extended to the prescription of targets for the various economic variables. 3. Reform of the Agrarian Reforms, to achieve this end the second Agrarian Reform Law No. 117 of 1970 was enacted. This law provided a new approach and envisaged a concept of agrarian reform both in terms of comprehensive- ness and essence. It overcame the drawbacks of the previous experiment and established an integrated agrarian structure, setting the base for agricultural and rural development. The economy in the second stage of transformation, can hardly be described as a modified free market system. In operation, Iraq's economic organization stands between the socialist countries as a model, i.e., embarked on a series of five-year plans with detailed programs of invest- ment allocated between the public and private sectors, and the modified market system. In other words, it has a mixed economic system. CHAPTER III THE AGRARIAN REFORM PROGRAMS IN IRAQ LAND REFORM LAW NO. 30 OF 1958 When the new authority took over in 1958, they were fully conscious of the criticisms leveled at the policies of previous government. They immediately took a series of mea- sures; some were designed to effect real changes in policies. others merely involved political tactics aimed at winning popular favor. Among the principal policy targets of the new government were the: (l) develOpment of the agricultural sector, (2) expansion of the manufacturing industries, and (3) promotion of the social welfare of the poorer sector of the population. As a policy consequence, economic organi- zation has been profoundly transformed. One aspect of this transformation which occurred between 1958-1964 was the redistribution of income, by means of promulgating the Land Reform Law No. 30 of 1958. In its main provisions, the Agrarian Reform Law No. 30 of 1958 followed the Egyptian Agrarian Reform Law of 1952. It decreed: 65 66 The expropriation of privately owned land holdings in excess of 1,000 donums [250 hectares or 625 acres] of irrigated land or 2,000 donums of rainfed land. Requisition was to begin with the largest prOperties. The distribution of expropriated land to occupying and other cultivators in order of priority, in units ranging from 30 to 60 donums [7.5 to 15 hectares or 18-36 acres] of irrigated land and from 60 to 120 donums of rainfed land. Payment of compensation based on assessed land values to expropriated landowners: and payment by the new owners of the full purchase price of a holding over 20, in 1961 amended to 40, years. Formation of Cooperative Societies, with compulsory membership for recipients of land, and wide func- tions including marketing of produce, supply of farm equipment, and organization of agricultural production. Regulation of tenancy relationship between land owners and cultivators on land pending expropriation or not subject to expropriation. Eviction of culti- vators was prohibited, and the proportion in which produce was to be divided between landowners and cultivators were prescribed according to their respective shares in cost. 19C stc G 31 '1 13* b 67 In addition to these main principles governing land in private ownership, the Iraqi law also includes provisions covering the distribution of state domain and of land held in unsettled title. Both of these categories of land are of great importance in Iraq. Their meaning requires a brief explanation, since it is easily misunder- stood and usage is not consistent. Privately owned land, subject to expropriation in excess of the maximum areas under the first clause of the law, refers to land held in two forms of title, Tapu and Lazma, formerly distinct, but now identical in conferring 'freehold ownership.‘ According to the Agriculture Census of 1958-1959, the total area of'land in holding' was 32 million donums of which 23 million donums were privately owned in these two forms of tenures. State domain, Miri-sirt, as mentioned earlier, refers to land registered as the property of the state. It includes grazing, other cultivated land or land culti- vated by private owners without registered title. The state's right of ownership is nominal; it does not farm such land, exert any control over its use or draw revenues from it. The 1958 Law empowered the government to take over and distribute uncultivated state land, without compensation to users. The position of state domain under cultivation by landowners with holdings exceeding the maximum was regulated 68 by the State Domain Law of 1961. This entitled occupiers to compensation for their rights of customary possession, at rates lower than those to be fixed for land held in registered title. The 1958-1959 Agricultural Census put 4.7 million donums of the total 'land in holding' in this category. Land with unsettled title includes 3.7 million donums of the total 'land in holding.‘ This new classi- fication, first used by the Agriculture Census of 1958- 1959, refers to land which is also state domain. But it was actually in the usufructuary possession of sheiks and subsheiks in the marshland provinces. This point will be discussed later. The Agrarian Reform Objectives: Economic, Social and Political The Minister of Agriculture, in a speech introducing the new agrarian reform law, set forth the aims of the 1958 Revolution and reviewed the law. A condensed version of his 1 remarks follow. The objectives of the agrarian reform were: 1. The abolition of feudalistic holdings as a way of agricultural production. The elimination of the political influence which the landlords enjoyed as a result of their ownership of vast areas of land and as a result of directing policies in accordance with their own interests. 2. To raise the standard of living of the majority of the people, namely, the peasants and to give them 1Doreen Warriner, Land Reform in Principle and Practice (Oxford: Clarendon Press, 1969): P. 99. 69 the necessary opportunity to raise their social standards in general. 3. To raise the level of agricultural production, which, in turn, will help raise national income and strengthen the national economy. To achieve these objectives the government regarded it as necessary to take the following steps: (a) to limit ownership, (b) to redistribute the land to peasants in a way that will guarantee them a decent living, (c) to estab- lish a cooperative system in the production centers, that will guarantee the introduction of scientific and technical production methods, and (d) to clarify agricultural rela- tions between those concerned by fixing a just share for every aspect of production. The regulation of tenancy relationships, production relations, between cultivators and landowners on land not subject to expropriation was of crucial importance. These cultivators were exploited by the large share of the produce taken by the landowners. From three-fifths to two-thirds of the crop on lands under flow irrigation, were paid to the landowners. Five-sevenths of the crop was paid on pump irrigated land. These were exhorbitant charges, since the landowners incurred costs only in installing and maintaining irrigation pumps. The provision of seed grain, by the landowners, was necessary because the share of the preceding harvest taken by them was so large that the cultivators did not have enough for the next season. 70 Had the cultivators owned the land they cultivated, they would have had enough to live on and a marketable surplus. However, when these shares were deducted, the cultivators could not live without continuous indebtedness to the landowners. The agrarian reform law established new agricultural production relations. The law provided for the following: 1. The agricultural production relations would be. extended for at least three years. 2. Eviction of cultivators was prohibited, unless the cultivators violate the law's clauses. 3. Agricultural production relations would be covered by a written contract. 4. The division of the produce as follows: if the farmer does the cultivating, harvesting and other farming work and provides the seeds, his share would be: 55 percent in the pump irrigated areas, 65 per— cent in the flow irrigated areas, and 70 percent in the rainfed areas. The share of the landowner who manages the land and supplies it with water would be: 30 percent in the rainfed areas, 35 percent in the flow irrigated areas, and 45 percent in the pump irrigated areas. All those involved in the production process, whether farmers--even in the cooperatives--or landowners were to follow these rules and regulations. Table 3.1 shows the 71 prescribed distribution of field crop produce according to production inputs. Table 3.1. Iraq's distribution of field crop produce according to production inputs Land Classification Agricultural Inputs Flow Irrigation Pump Irrigation Rainfed (%) (%) (%) Land 10 10 10 water 10 20 -- Labor, seed 50 40 50 Harvesting 5 7-5 10 Management 15 15 15 Source: M. S. Hasan, Studies in Iraqis Economy, Beirut, 1967, p. 41. Financial_Aspects:_ Compensation afidfFarmerTs Repayment In certain respects, the Iraqi law followed the Egyptian law very closely, particularly with regard to the term of payment fixed for the new owners. A landowner whose land is expropriated under the provisions of article one of the law would be entitled to compensation equivalent to the price of a similar land, less the value of the government rights in the registered land if rights were held by the government. Within five years the government was to take over land owned in excess of the limits, providing compensation 72 in the form of interest-bearing nominative bonds. These were redeemable within a maximum period of 20 years-- amended in 1961, to 40 years. These bonds could be sold only to Iraqi nationalSa However, this clause was amended in 1963. It stated that compensation for expropriated land should be paid only on land held in absolute private owner- ship. In other words, there would be no compensation for private land held or registered in Tapu or Lazma, i.e., free held ownership. The compensation to absolute private owner- ship in excess of the maximum limits would be divided into two parts. Half of the value of the compensation would be deposited in the Agricultural Bank at low interests for 20 years. The other half of the compensation would be paid in the form of interest-bearing nominative bonds redeemable within a period of 40 years. Compensation for exprOpriated farm machinery and equipment would be paid in bonds redeem- able within a period of 20 years. Compensation was provided in cash before the amendment. Payment for the redistributed land is spread over 20 years with 3 percent interest. This payment covers both value of the land and fixtures and an additional 15 percent for the expenses involved in administration of the program. The new owners must cultivate the land or they can be evicted within five years. However, this clause was also amended in 1963. The amendment provided that the adminis— trative expenses be reduced from 15 percent to 10 percent. 73 Furthermore, it reduced the total cost of the redistributed land to the new owners by 50 percent. The other half of the land value that would be paid over a period Of 40 years divided as follows: 25 percent of the land value payments would be given to the cooperatives for investment purposes. As incentives, for the productive farmers, or innovators, they do not have to pay the other 25 percent of the payments. As for government expenditures, no data were avail- able to estimate the cost Of the agrarian reform program. Although the Ministry Of Agrarian Reform is at Cabinet level, the Higher Agricultural Committee calls for the cooperation of other ministries in implementing the program. The budget Of the Ministry of Agrarian Reform for its Operation is as much a part of the national budget as other ministries. Furthermore, up to 1964, the financial provision concerning compensation had not been enforced, though some landowners had received cash down-payment of ID 1000 per estate. The Assessment Of the Land Reform Implementation The Process Of Implementation When the Land Reform Law was enacted in 1958, it was decided that the whole Operation of implementation would be completed in five years. Then it was extended to ten years. The land reform program was implemented in three phases: 74 1. Expropriation. 2. Temporary administration and management Of the expropriated lands by the Ministry of Agrarian Reform, in those areas in which the lands were leased to beneficiaries: until the necessary contractual requisite for the productive use and management could be completed. 3. The redistribution of expropriated lands to beneficiaries, the organization of cOOperatives and the provision Of supporting structures. Statistics on expropriated land and land under temporary management is constantly changing as the program continues. Also statistics reported by different sources vary widely. The implementation Of the program in terms of expropriated land as of September 1968 was as follows:1 Area Donum % Total areas definitely expropriated 5,640,000 44 Total areas under temporary admin- istration, but subject to legal process for final expropriation 6,944,244 56 Total 12,584,244 100 ExprOpriation had affected chiefly the largest estates. The law decreed that it should begin with them. 1A. S. Hassanien, Report to the Government Of Irag on Land Reform, United NatiOns, FAO, Rome, 1970, p. 3: 75 The number of landowners subject to exprOpriation was 2,433. The size of the largest landholdings--five exceeding 100,000 donum, 60,000 acres--facilitated quick expropriation, because a few administrative decisions could requisition enormous tracts. However, it must be remembered, because of the previous traditional production practices, there were largely uncultivated and wasted lands by salinity and there- fore unfit for distribution. The implementation Of the program in terms of redistribution as of December 30, 1968 was as follows. The total area redistributed under this program to landless peasants, in the form of small holdings, was 3.1 million donums: the number Of beneficiaries was 57,117 farm families. The average area redistributed per family was 40 donums. The proportion of areas already redistributed differs slightly from one region to another: 25 percent in the North and 28 percent in the South. Altogether about half of the expropriated lands were redistributed, and the other half was under temporary management by the Ministry Of Agrarian Reform. Further, 6.3 million donums were leased to 186,868 farm families, while awaiting redistribution. This large area was leased to farmers who would eventually become the new owners after the completion of legal matters related to land title, the improvement of drainage and irrigation systems and the training of technical staff to serve as supervisors for the agricultural OOOperative societies. 76 Following are the details Of the redistribution of lands: II. Distributed (provisional title) a. Land rented to farmers but awaiting Distribution of requisitioned area 1. Flow of lift irrigated 2. Rain irrigated Total Distribution of requisitioned government land 1. Flow or lift irrigated 2. Rain irrigated Total Area exploited for public utilization deemed to distributed land Grand Total a,b,c distribution 1. Flow or lift irrigated 2. Rain irrigated Total Total Of I and II Number of Dunums 951,867 843,987 1,795,854 420,626 564,924 985,550 396,134 3,177,538 2,662,462 3,723,699 6,346,161 9,523,699 Number of Beneficiaries 57,117 103,908 82,960 186,868 237,402 This shows that after ten years of Operation, of the land reform of 1958, only 25.5 percent Of the total land that was eligible for redistribution had actually been redistributed, while 74.5 percent was still being acquired by the Ministry of Agrarian Reform. Also, among the areas affected by this program, there were in 1968, about 3.2 million donums which were neither expropriated nor redis- tributed because Of the uncertainty that prevailed at that 77 time. Furthermore, the Ministry of Agrarian Reform included in its program the reclamation and redistribution of 3.3 million donums divided into 11 projects. However, by 1970, the total area of requisitioned land was more than 8.0 million donums as seen in Table 3.2, while the number of farm families, recorded as Operating land under temporary contract was 236,203 as seen in the above table; the number Of farm families who had secured provisional title--redistributed land was 75,816, as seen in Table 3.3. In other words, the total number Of the land reform program's beneficiaries, whether new owner or tenants under temporary contract but awaiting redistribution, was 311,019 farm families. This number amounted to more than half Of the total landless farm families on the basis Of the Agricultural Census of 1958-59. On the other hand, the area included in the land reform program, exprOpriated, reclamation and redistributed, represented 75 percent Of the agricultural land in Iraq. Thus the level Of management and the production practices used on this large area had far reaching effects at the national level on the production of crOps and livestock, income distribution and the nation's employment patterns. 78 Table 3.2. Iraq's areas of land rented, and number of farmers renting them (as on December 1970) area (donum) Area of land received from Sequester- Agricultural Administrative Units Miri lands ated lands Bank Total Ninevah--Area 2,047,902 1,021,285 1,477 3,070,664 Contractors 30,177 20,716 25 50,918 Baghdad--Area 431,387 277,666 -—- 709,053 Contractors 18,486 6,902 --- 25,388 Basrah—-Area 19,776 7,375 8 27,159 Contractors 2,821 800 3,622 Other Muhafadhas Area 2,560,354 2,213,478 77,715 4,851,547 Contractors 91,125 63,561 1,589 156,275 General Total--Areas 5,059,419 3,519,804 79,200 8,658,423 Contractors 142,609 91,979 1,615 236,203 Source: Ministry of Agrarian Reform, Annual Abstract Of Statistics, Baghdad, 1972. 79 Table 3.3. Iraq's distributed areas and number of beneficiaries during 1959-1970 Distributed Area (donum) Year Sequesterated Miri lands Total Number Of lands beneficiaries 1959 --- 38,402 38,402 1,144 1960 223,925 59,504 283,429 7,393 1961 293,726 198,305 492,032 9,460 1962 569,647 67,876 637,523 11,170 1963 177,161 207,772 384,933 7,530 1964 267,452 149,532 416,984 9,599 1965 52,852 27,830 80,682 1,984 1966 55,422 26,771 82,193 2,340 1967 81,281 60,156 141,437 3,290 1968 73,846 149,402 223,248 3,183 1969 166,673 54,005 220,678 3,585 1970 131,334 230,793 362,127 15,138 Total 2,093,319 1,270,348 3,363,668 75,816 Source: Ministry Of Agrarian Reform, Annual Abstract of Statistics, Baghdad, 1972. 80 Problems Of Land Reform Implementation As a consequence of the implementation of the land reform program, several varying problems appeared. Some Of these arose from the social system, land utilization and management, relations between farmers and land owners, and the educational level Of the farmers. However, two major problems had a direct impact on the implementation process. These were the legal problems related to the law itself and the technical and administrative problems. These and other problems, as will be indicated later, have, to a large extent, affected the Objectives of the agrarian reform program. The Legal Problem Settlement of land titles is a technical-legal operation carried out in cultivated and utilized areas that have been surveyed at a scale not less than l:20,000, or at any scale in other kinds of land.1 This Operation covers land classification, ownership, determination of the rights involved, fixing Of land boundaries and area and public roads. Title registration was enacted to cover all lands in Iraq with the exception of the Marshland Covernerates of INassiriyah and Amarah. Around 3.7 million donums Of lands in these two provinces had unsettled titles. As a result, 1Hadilhy and Dujaili, p. 218. 81 many farmers decided to leave their land and migrate to urban centers to avoid a conflict with the landlords-tribal leaders. Although the influence of these shieks and tribal leaders had been declining, some still exercised, in the early 1960's, a strong influence in both the northern and southern part of the country. Doreen Warriner mentioned situations in several areas: There is said to have been little evasion, though there was a strong opposition from some landowners. The head of Aniza Tribe, owner Of an enormous area in Kerbela, resisted exprOpriation successfully for several years and his lands were not expropriated until 1963. One case in which large landowners had kept their influence was mentioned in 1964: the Shammar Sheikhs' lands, in the remote northern part Of Mosul Covernerate, near the Syrian border, had been expropriated and redistributed. But the Sheikhs were known to be taking up to 90 percent Of the crOps from the tribesmen, now the legal owners of the land, in return for machine culti- vation. The new owners did not work but simply guarded the crops on their land, and so gained nothing from ownership.1 When the Law Of 1958 was passed, the process of settlement Of title in these two provinces of the marshlands had not been undertaken. In Amara Covernerate, almost the whole area in cultivation, two million donums, is held by Sheikhs who have exerted usufructory rights without registered titles since the period Of foreign influence. The Amara Law of 1952, which settled title on terms favor- able to the Sheikhs, caused so much unrest among the cultivators that it could not be carried out. Accordingly, lWarriner, p. 89. 82 it was rescinded in the 1958 Law. The Law's provision concerning expropriation of privately-owned land did not apply and a general clause covering expropriation of land held in the usufructuary possession was not sufficiently explicit to permit administration. Although it brought the large holding under the general provisions Of the law, it did not deal with the holdings Of the Sirkals or tenant heads.1 Consequently, a supplementary law was passed in 1961, fixing the maximum size of these holdings at 150 donums of irrigated land, 300 donums of rainfed land, and 50 donums of rice land. This Law was resisted by the Sirkals. It also caused troubles because it omitted the claims of the religious people who Opposed the government action for sectarian reasons. Accordingly, another supplementary law was passed in December 1964, raising the limits for Sirkals' irrigated land holdings to 300 donums and fixing 75 donums as the maximum for religious people. A little land in this area was distributed, but it was a difficult task for the govern- ment officials to sort out land by Cadastral surveys. Therefore, the widespread migration of rural people from the marshes of Amara to Baghdad's slums before 1958 has continued. Given the economic, social and political ‘Ibid., p. 93. 83 reasons, this province should have had a high priority in the implementation of the agrarian reform program. In the Nasariyah Covernerate, the majority of the land was state-owned, appropriated by "Tapu" influence for certain peOple (alienation). There was a conflict concern- ing the claims of the Saduan family, which the family had never had been able to enforce. The 1958 Law made special provision for this Covernerate, bringing expropriation and redistribution into line with the general principles of the thereby fixing maximum areas for other landowners who The Law Law , occupied land with usufructuary rights (Sirkals). also granted compensation to the Saduan family for their «ownership of the Old title deeds, at the rate Of 7.5 per- <:ent of the land value. This was the rate applied by the British Authority in collecting revenues for the family in 'the time of the mandate. Two supplementary laws Of 1961 find 1964, in response to pressure from the Sirkals and other landlords, amended the limit Of maximum ownership by 300 denums provided that the irrigated land should not be more ‘tfllan 150 donums. Some land was redistributed in the Cov- ernerate, but on the whole the agrarian program was not iilpjplied. In 1964, as in 1954 and 1944, the land was still iiIvaiting survey.l Thus, these amendments of the agrarian J?r'agricu1tural principles. It was restricted to the following functions: supervising the Opening and \ 1Ibid., p. 83. 85 organization of irrigation work on their farm excluding drainage; plowing the land, supplying seeds, irrigating crOps until ripe, then harvesting and threshing; and cleaning irrigation channels of sedimentation accumulated during the year. In other words, agriculture was primitive. There was no apprOpriate crop rotation; fertilizer was not applied to the soil and the land lacked technically orga- nized irrigation networks; and drainage systems were not constructed to prevent rising water tables which caused salinization Of the cultivated soils. As such careless practices had bad consequences, a heavy burden was thrown on the Ministry of Agrarian Reform. All these drawbacks (emerged after the Agrarian Reform Ministry had taken over 'the land management responsibility. Following are some of 'the technical problems that influenced the implementation process. 1. Method Of land redistribution.--In the beginning <>f the implementation Of the agrarian reform, two factors “were taken into consideration: area of redistributable land and number of beneficiaries. Experience has proved, however, that proper distribution must fulfill a number of require- III“ants. The first task to be fulfilled is the preparation Of modern survey and contour maps at scales varying between J—z2500 and 1:10000. Technical studies are made on these Inaps to determine irrigation and drainage projects for the 3urea. Maps specifying soil survey and classification should 86 43150 be made, and cropping systems and type Of crops determined.1 None of these technical requisites were aavailable at the time of redistribution. At first, re- ciistribution was mistakingly made on the basis of giving <3ne plot to every family. But in view of the dual crop- loing system, fallow system, cultivation was disorderly and riot standardized. This made it difficult to provide the Iland with proper agricultural services, such as plowing, liarvesting, fertilization, and combating pests. In other Vmords, the redistribution process resulted in the fragmen- 1Lation of the new holdings. Consolidation Of these hold- ings, with redistribution allowing two or more plots, would facilitate the use Of dual or triple cropping systems. It vnould also ensure standardization and prOper irrigation and (irainage, and no plots would be left to constitute inter- secting fallow spots. All these considerations will facil- :itate the extension Of agricultural services and speed up the implementation process. 2. Organization of irrigation and drainage.--Land redistribution covered two categories of lands: requisi- ‘tioned lands already utilized and served by flow irrigation <=anals, and lands served by lift or irrigation pumps. At the time of redistribution these irrigation canals became unsuitable for the new land division system. Consequently, \ lHadithy and Dujaili, p. 220. 87 the redistributed land continued to be irrigated from the old water ways that intersect the plot in such an irregular way that it is not possible to manage the land properly. This is only possible when new roads, irrigation ditches and drains are constructed. However, construction of such facilities takes a long time during which disputes arise from the lack Of water distribution control among the bene- ficiaries, nor is it easy to organize this work on the farm level. Furthermore, in addition to high cost, they require adequate technical organization. Although progress has been made, the redistribution of land was a difficult task. Because Of the delay and uncertainty that prevailed, it seemed wise to press on with redistribution. However, from an economic standpoint it Wollld have been better first to prepare the land for better farming, i.e., reclamation, irrigation networks, drainage system and then assign viable holdings. One might dispute this approach on the ground that it would take too long. Consequently, the outcome was a‘ compromise: to press on with redistribution where practical, otherwise to prepare the ground before granting title. Thus, in the early 1960's out of 2.7 million donums redistributed in irrigated area, there were 1.7 million donums that had no improvement in irrigation and drainage work. 3. Administrative problems.--The slow process Of implementing the agrarian program was hindered by the fail- ure to reorient organization and administration machinery, including administration of structural reform, i.e., inade- quate training of staff, and ineffective coordination between various departments dealing with the agricultural sector. In Iraq, it is generally agreed that the major efforts for providing the input mix of services to make the agricultural sector productive must come from public organization and institutions. Little attention has been paid to upgrading the administration and management Of public institutions attempting to implement the agrarian program. In the early 1960's, in consequence to the enactment of this program, 2,091 landlords whose lands were requisi- tioned were removed from the land. This is in addition to an estimated 6,000 persons including assistants and head tenants (Sirkals) . The official staff replacing them was 496 persons or 25 percent.1 Ten percent of the total field Staff had university degrees. In view of the fact that the aI‘ea of redistributed and leased lands amounts to approx- imately 9.5 million donums, it appears that the area Of land Supervised by each of the Official staff amounts to approx- iIRately 19,000 donums. This is in addition to the adminis- trative duties such as leasing and contracting. Thus the \ lHassanien, p. 7. 89 aagricultural administrative structure is very small in pxroportion to the vastness Of the agricultural lands. In other words, the reasons for the slow process (of the implementation Of the agrarian reform program should rust be oversimplified. As D. Warriner indicates, to say that mistakes have been made, implying that those responsible made wrong decisions, would be inept, for no one was responsible for long. The trouble lay much deeper: in conflicting political aims and ineffective legislation; technical Obstacles, and the whole magnitude Of the administrative tasks, beyond the power of an inexperienced bureaucracy.1 The Impgct of the Land Reform Program of’l958 The land reform program is a complex subject. It has economic, social and political components, which have tn: be examined in evaluating the performance of the land reform program. In other words, the potentialities of this Errogram must be viewed within the overall context of economic and social development. However, as it was mentioned earlier, this study is Chancerned with evaluating the land reform program in terms <>f specific economic development consequences, i.e., in- ocfiuumz "wousom 91 mmnmmma4 «an . -u- an em em em mm 16666 6:6 panel aouuoo 60H mqa mas mm was mm mma moflm voo.H ma~.H oa~.~ mon.a 6mm.H mm~.H mom.a chemo dance mam ooh m~H.H Ham «om mNn «mo.a smauum amp mmv mmo.a amm Nam «mm «mm your: ammo» oooc coauoaooua .mm -u- an am am am mm couuoo om mos «m 66 on so mm 00am mam.~ «Nm.~ oma.~ amm.~ mem.~ Hmm.~ HH6.~ camuo dance was.” mH~.H mma.a Hoo.a mmo.~ Hmo.a maH.H smegma omw.a mon.a amm.H mqm.a Ha~.H omv.a mmv.a 080g: Amoumuoos OOOV mend mmsmmma mead «mad Homa coma mmma mmuemma 0mmu0>¢ ommuo>fi mmouo news mo cowuoswouo paw mono m.omuH .v.m magma 92 know and for the most part still do not know what land would be allocated to them. Second, it reduced production in the irrigated zone through the failure to replace the landowner's function in pump maintenance. Apart from the irrigation pumps, so little capital was used in agriculture that production could not have been much affected by its withdrawal. Cultivators could work their own animals and graze them: they could use their own seed; fertilizer was not missed because they had not been used except on the cotton crOp, where the fall in production was caused by lack of fertilizer and pesticides. In the North, where tractors were generally used, the shortage Of machinery was a drawback since imported machines were largely unsuitable, the engine cooling system on the tractors did not stand up to the climate: spare parts tOOk several months to Obtain, while service and repair facilities were inadequate."1 warriner's argument and presentation is clear and Obvious. It gives an excellent description of the situation after the enactment of the reform program. However, the relationship between land reform, increased production and productivity are not always direct and positive, especially in the short-run. In other words, the time period, which is used as a base for the argument, is short enough for critical evaluation of the land reform program. Furthermore, Warriner reports that the area figures, in this time period, are also g lWarriner, p. 95. 93 open to question, since land has certainly gone out Of cultivation. The probably more reliable grain and rice production figures show wide year-to-year fluctuation, due to floods in the irrigated zone and the long drought in the North, which began in 1958 before the reform and continued for three years. On the other hand, a long-run study (1958-1970) would constitute a more rigorous evaluation of the impact Of land reform on agricultural production and productivity. Table 3.5 reports crops production, agricultural production and food production; it also shows aggregate production in millions of dollars, at constant prices, during the 1960-70 period. Using the average 1957-1959, as a base year = 100, the statistics show that: crOps production increased from 100, the base year, to 142 in 1970, i.e., 42 percent over this period or an annual average of 3.5 percent; total agricultural production increased from 100, the base year, to 141 in 1970, i.e., 41 percent over this period or an annual average of 3.4 percent: and food production increased from 100, in the base year, to 141 in 1970, i.e., 41 percent over this period or an annual average Of 3.4 percent. There- fore, in contrast to the short-run, the production of food and fiber not only recovered and exceeded the pre-reform level, but there has been a steady increase in crop produc- tion, agricultural production and food production in the long run. In other words, the apparent real decline is £94 .mON coeououummu 5.33833 no .uooo .m .o "oouaom ooo.on.O .. coHuoHoooo OOOH 0.0vH N.OmH O.NOH 0.0NH N.ONH N.ONH O.HNH O.NHH O.mHH N.OHH N.OOH 0.00H coHuaHsoom mo xOOOH NO OHH HO OO HO OO OO OO OO OO OO OOH coon «uHoco you 3 o: No Ho 8 oo on no 8 oo oo SH 233808 338 one HVH OOH HNH vOH OOH OOH OOH OOH NHH OO OO OOH coca Huuoa HvH OOH NNH OOH vOH OOH OOH OOH HHH OO OO OOH ousuHsOHuOu Hence NvH OOH va OOH OO OOH OO OO OHH HO OO OOH mono HOOH I OOOHIOOOHO :OHuusooum no OOOHOOH H.Omv v.OOv 0.00m 0.0Hn n.OHn v.ONm N.th O.vom v.va v.H0m H.OON O.nom OOOH Hence 0.0vv O.va O.VOO H.Hmn 0.0Nm 0.0mm m.Nmm v.an 0.00m O.NHO O.NOO 0.0Hn ouOuHOOHumc Hvuoa In: In: H.On O.hu 0.0: m.On m.On O.>: O.hu p.51 O.>u m.>| OOHOOOOOO coon xuoumo>HH 0.0vN 0.0¢N O.VON H.OOH H.NON O.nON 0.00N 0.00H 0.00H O.NOH 0.00H O.NOH xoouO0>HH 0.00H O.th 0.00H 0.00H O.vnH 0.0vH O.mmH N.ONH O.NOH 0.0NH 0.0HH 0.00H amouo OOOHum unnumcoo um OucHHOO OOHHHHZ coHuosoonm no ouaoouumc OH OH OH NH OH OH OH HH HH OH OH HH NNn OHOonaunuo .HOOB OOm.H OOn.H OON.H OhN.H OON.H OOO.H OOO.H OON.H OON.H ONN.H OON.H OOH.H HHH xHH: OHH OHH OHH OOH OHH OHH OHH OHH OOH OOH HOH OO NOO ado: OON OON ONO OON oov OON oov OHm OOO OON HON HOO mm Oouuo OH O O O O O O O O O O OH ONH 0>HHO O NH O O O O O O O O O NH OOH coon osuuom NH OH NH OH NH NH N O O O O O OO noon udHh ON NN OH OH vH OH OH NH OH OH NH ON OO .OOOO souuoo OH HH OH OH O OH O O O O O HH Hum souuoo OH OH OH OH HH HH OH O O O NH 5 OOO ooouepa OO OO OO OO OO OO ov ov Nv Nv Ow HO OHH OOOHOO OOO OON.H OON OOO OOO OON OON NOO.H ONH.H HHO OOO OOO Hm OOHMOO ON ON ON ON ON ON ON ON NN NN ON ON vn sanOuom O OOHHHZ OOO Omv OOv ONO Ohm OOO OOO OOO OOO OHN OON OON OO woven .OOHO NHH.H OOH.H HOO.H OOO OOO OOO ovO OOO OOO.H OHO OOO OHO VO 960:3 meow $546: oo.H g OOOH OOOH OOOH NOOH OOOH OOOH OOOH OOOH NOOH HOOH OOOH OOINOOH unOHos aunoosaoo omcuoad OOHMO 2.183 ouogcdmuemfl 068.22 .aOHuosooum ooou one OHOOHOOHHOO Huuou no OOOHosH can ost> .OUHooaaoo an OOHuunooum .O.n oHnde 95 post-reform agricultural production is usually temporary and are not surprising. Reforms, especially when associated with major political and social revolutionary upheavals, can be a disruptive process. However, this increase in agricultural production has not kept pace with the increase in demand for food which resulted from an increase in population growth and per capita income. Disposable income, during the 1958-1970 period. Figure 3.1 shows the population growth, agricul- tural production and per capita agricultural and food. The difference between the supply of and demand for agricultural and food commodities resulted in higher prices, a reduction in exports and an increase in the imports Of food and other agricultural commodities. This could be attributed to the lack Of necessary supporting structures such as the produc- tion facilities and the structure of supporting services during the 1960's. Furthermore, in evaluating agricultural output increases or decreases accompanying land reform, the influence of farm price levels on investment and output cannot be disputed. However, despite higher prices for agricultural commodities, the production Of food and fiber did not increase enough to meet the demand for these com- modities. This was mainly due to the uncertainty that prevailed during the early years of the implementation process. Farmers did not know whether they would get the 96 .OuOuHOOHMO€ mo .ummo .O .D "OOHOOO .coHumHOmom OOO 000w one OHOOHOOHHOO OUHQOO mom .coHuOOooum HOHOuHOOHHOO mo OOOHOOH .H.m OHOOHO OOOH, OOOH OOOH OOOH OOOH OOOH vmmH MOOH NOOH HOOH. OOOH OOOH 1 41‘ u‘ q 1 q 1 5 d u d W oooO 3.230 Mom ouOuHsOHuOO ouHmuO mom \‘8..... ‘8--"--"--‘-"-" | ‘ (-‘Ont'o'0\ ‘ 0'.-. ‘ :OHuOsooum HOHOOHOOHumc I -1...“ III -|.|-|.. I. .I- I . .‘Vfll. \\ OOHUOHOQOO I. J 0 cm OOH OOH OON 97 same land they rented under the temporary management contract. Thus, perhaps more important than prices per se, under the circumstances of agricultural production in Iraq, is the incentive structure provided by the land reform program. On the other hand, the value of agricultural produc— tion, at current prices, increased from ID 148.7 million in 1962 to ID 206.2 million in 1969. The value added in the agricultural sector increased from ID 140.3 million in 1962, which is 94.1 percent of total value, to ID 198.08 million, which is 96.1 percent of total value, in 1969. This means, first, the average annual increase in value added during 1962-1969 was 8.2 percent: second, the average annual rate Of value added to total value was 94.1 percent: and finally, for every one ID, of the value of agricultural output, the value added is ID 0.94, i.e., the agricultural sector is the most important sector for capital and income formation.1 At factor cost and constant prices of 1966, total value of agricultural production increased from ID 148.7 million in 1962 to ID 194.8 million in 1969: the value added in this sector increased from ID 148.2 million to ID 186.87 million, with an annual average of 5.5 percent respectively. Therefore, given the circumstance that accompanied land reform implementation, the value added in the agriculture lIraq, Ministry of Planning, Evaluation of Economic Growth in Iraq, 1950-1970, Baghdad, 1972. 98 sector, 5.5 percent, was a relatively good indication Of the progress in this sector. However, while Gross Domestic Product (GDP) at factor cost and constant prices of 1966, increased from ID 695.27 in 1962 to ID 980.14 million in 1969, with an annual average of 4.1 percent increase, the contribution of the agricultural sector Of GDP declined from 21.3 percent in 1972 to 19.1 percent in 1969 as seen in Table 3.6. This relative decline, could be attributed to the circumstances Of the implementation Of land reform and the higher growth rate of other sectors, especially the manufacturing and the service sector. Furthermore, the relative importance of winter and summer commercial crops is very significant in the assess- ment Of agricultural production and the agricultural situa- tion in Iraq. These major crOps are wheat, barley, rice, tobacco, and dates. In order to demonstrate the impact of the land reform program on increasing productivity (yield/ donum), individual attention is given in the following discussion to each crop in terms of area (acreage culti- vated), production in metric tons and yield per donum, as seen in Tables 3.7 and 3.8. WhggE.--The Babylonians and Summatics grew wheat in the Mesopotamia 5,000 years ago. According to DeCondoll, wheat once grew wild in the Euphrates and Tigris valleys, 99 .OO .m .NOOH .ouonmmm .OOIOOOH .ocuH OH :u3ouo OHeocoom mo OOHumOHO>m .OcHscOHm uo mhumHst O.UOHH «mousom OH.OH «N.OH O0.0N vv.OH «0.0H O0.0H am.OH am.HN uosooum OHuOOaOO OOOHO on cocoa OOHO> mo :OHuanuu Icoo O>HuOHOH one vH.OOO OO.nvO OO.NHO HN.OOO OO.NOO ON.HOO OO.vOO ON.OOO OOOHum uscunsoo us nosooum OHuOOEoo OOOHO O0.00H ON.NOH O0.00H ON.NOH OH.OOH OH.OOH vO.HHH vN.OvH Ooowum OOOH $50300 on mound OOHO> O0.0mOH H>.OOO OO.NOO HN.OOO O0.0mO ON.HOO O0.000 Nv.OOO OOOHHm acouuso um unavoum OHUOOEOO OOONU O0.00H Ov.OOH Om.HOH OO.NNH ON.NOH OH.OvH On.OOH Om.ovH OOOHum acouuso 3311.44.11] a. 668.. 2.3 xOOsH OOOH OOOH OOOH OOOH OOOH OOOH OOOH NOOH new» OOOHtNOOH .OOOHHQ OOOH usdumsoo use usouuso on duosooum OHuOOEOO OOOHO ou OOOHuanHuusoo OHH can Mouoou HOHOuHsOHuOO Orv OH woven 09Ho> O.UOHH .O.m OHOOe 100 .NOOH locoommm .coHuuqudOuo HooHouHuuum chucoo .oOmHuoomH .xoom uoxooo HooHomHuoum .OeuH u OUHDOM .ouOuHOOHuOO no OquHcHz mnu uH undo OHOOHOO an» no nost nonuo OOHOOO OraltN .0.0.U 0:» OH OOOHIOOOH OHOOO may Now dune couuoo one OOHO .OOHMOO .uoonz emu uo counou unaltHe OOH OOH OOH HOH OOH OOH OOH OOH OOH OOH HOHHMO assoc mom OHOH» v v O O O O N O v v Aucou OOOO OOHuosooum NN HN ON OH OH ON OH OH ON ON Hmascoo OOOO «OHO oouu>HuHso Odom x630 OON OON HON OON OON VON OOH OON OHO OOO HOHHMV assoc uom OHOHO ON OH ON OH OH OH OH OH OH OH HOOO» OOOV OOHuosooum HO OO OO OO OO NO vO OO Ov OO HOEOOOQ OOOV OOHO oouc>Hano Osman OOOHO Ono OvN OON OON OON OON HvN NOH OOH OOH OOH HOHHMV 35:00 non OHOHO OOO OOO OOO OONH OHO OvO OOO OOO NNO HOO HOOO» OHO OOHOOOOOHO e O c O O O O v v v Auaacoo OOOO OOHO ooun>Hano cesuusm.nouo> OOH OOH OOH OOH OOH OOH vOH OOH OOH OOH .OHHMO assoc Mom OHOH» O O a l O O O O O O O .mcoo oooo coHuoooouo Nv OO Ov OO OO OO VO OO Ov Ov HOBBOOO 0009 «out OODOOHOHOO OHHusoq OON OOH OOH OOH OOH OOH HOH OOH OOH OOH HOHHKO 35:09 Hum OHOHO vH NH NH OH NH NH O O O O .Osoo OOOV OOHuOOOORO OO OO NO OO OO OO NO Ov Ov OO HOIOOOO OOOV «and vouu>HuHsU OOOOOHH .OON O.vON v.VON O.VON OOH VOH .NvH VOH OON OHN HOHHX. assoc Hon OHOHO NOO OOO NOO OOO NOO OOO ONO OvO ONHH HHO Hucou OOOV OOHuosoonm OOON HOOO vHOO OOHO OOOv OOOv HOOO «OOO OOOv VOHv Hnasaoo OOOO OOHO oouu>HuHso «OoHudn 0.00H 0.00H N.ONN 0.00H OHH OVH ONH ONH HOH OOH HOHHMV assoc Mom OHOHO OONH OOHH OOOH ONOH ONO OOOH OOO OOO OOOH OOO HOOO» OOOV soHuoavoum OOOO OOOO OOOO HNOO OVOO OHOO OOOO OHOO OOOO OOOO HOEBOOO OOOO loud voun>HuHso canon! OOOH OOOH OOOH OOOH OOOH OOOH VOOH OOOH NOOH HOOH mono no OGHM OOOHIOOOH .Omouo uoucHr HOQHOGHMQ on» no abcov\vHOHO can :oHuosoonm .vouo>HuHso omdouoc O.UOHH .0.0 oHnda Table 3.8. 1960-1970 101 Iraq's acreage cultivated, production and yield/donum of the principal summer crops, Kind of Crop 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 Rice Cultivated Area (000 Donna) 255 336 431 438 464 443 412 435 424 584 Production (000 tone) 68 113 168 184 198 182 315 354 718 550 Yield per Donum (Kilo) 268 326 391 421 427 411 763.7 812.7 750.9 603.9 Selene Cultivated Area (000 Donula) 38 39 40 50 59 63 68 69 68 73 Production (000 tone) 5 5 6 8 9 ll 12 12 12 13 Yield per Donum (Kilo) 119 131 150 154 161 174 175 175 176 182.3 Millet cultivated Area (000 Donn-a) 22 19 21 23 26 27 32 22 6 11 Production (000 tone) 3 3 4 5 S 6 8 6 1 3 Yield per Donum (Kilo) 141 154 182 221 201 228 258 249 233 260 Green Gra- Cultivated Area (000 Donula) 30 32 34 43 47 50 65 62 58 61 Production (000 tone) 4 5 6 9 ll 11 14 ll 9 13 Yield per Donum (Kilo) 154 159 180 200 230 223 216 170 157.4 211.8 Maize Cultivated Area (000 Donn-e) 12 11 11 12 14 16 17 16 16 20 Production (000 tone) 2 2 2 3 4 4 4 4 5 6 Yield per Dom- (Kilo) 158 173 186 225 258 267 269 282 297 301.4 Dry Cow Peas Cultivated Area (000 Donule) 13 14 20 24 26 26 38 3O 26 28 Production (000 tone) 2 2 3 S 6 7 8 7 S 7 Yield per Donum (Kilo) 156 173 167 227 251 258 222 223 192 241.3 Giant Millet Cultivated Area (000 Donn-e) 27 24 22 25 27 26 28 23 13 17 Production (000 tone) 5 5 5 7 7 8 9 7 4 5 Yield per Donum Okilo) 191 197 204 292 269 312 322 342 283 312.3 Cotton* Cultivated Area (000 Donule) 148 137 98 159 135 132 61 63 88 135 Production (000 tons) 27 26 17 29 32 29 19 26 29 41 Yield per Donum (Kilo) 182 187 171 184 234 217 305.9 413.9 330.2 308.1 Tubacco Cultivated Area (000 Donum!) 50 50 50 60 60 58 58 59.4 59.6 58 Production (000 tons) 10.2 7.9 4.1 13.1 11.3 5.7 13.3 15.7 9 15.2 Dates cultivated Area (000 Donums) 447.9 447.9 447.9 447.9 447.9 582.5 582.5 582.5 582.5 582.5 Production (000 tons) 300 320 420 320 310 280 380 330 260 480 Source: Annual Abstract of Statistics. 101 Table 3.8. Iraq's acreage cultivated, production and yield/donum Of the principal summer crops, 1960-1970 Kind of Crop 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 Rice Cultivated Area (000 Donn-s) 255 336 431 438 464 443 412 435 424 584 Production (000 tons) 68 113 168 184 198 182 315 354 718 550 Yield per Donum (Kilo) 268 326 391 421 427 411 763.7 812.7 750.9 603.9 Sesene Cultivated Area (000 Donn-s) 38 39 40 50 59 63 68 69 68 73 Production (000 tone) 5 S 6 8 9 11 12 12 12 13 Yield per Donum (Kilo) 119 131 150 154 161 174 175 175 176 182.3 Millet cultivated Area (000 Donuee) 22 19 21 23 26 27 32 22 6 11 Production (000 tone) 3 3 4 5 5 6 8 6 1 3 Yield per Donum (Kilo) 141 154 182 221 201 228 258 249 233 260 Green Gran Cultivated Area (000 Dom-s) 30 32 34 43 47 50 65 62 58 61 Production (000 tone) 4 5 6 9 11 11 14 ll 9 13 Yield per Donum (Kilo) 154 159 180 200 230 223 216 170 157.4 211.8 Maize Cultivated Area (000 Donn-s) 12 11 11 l2 14 16 17 16 16 20 Production (000 tone) 2 2 2 3 4 4 4 4 ' 5 6 Yield per Donum (Kilo) 158 173 186 225 258 267 269 282 297 301.4 Dry Cow Peas Cultivated Area (000 Dennis) l3 14 20 24 26 26 38 30 26 28 Production (000 tone) 2 2 3 5 6 7 8 7 S 7 Yield per Donum (Kilo) 156 173 167 227 251 258 222 223 192 241.3 Giant Millet Cultivated Area (000 Donuls) 27 24 22 25 27 26 28 23 13 17 Production (000 tons) 5 5 5 7 7 8 9 7 4 5 Yield per Dom- (Kilo) 191 197 204 292 269 312 322 342 283 312.3 Cotton. Cultivated Area (000 Donuls) 148 137 98 159 135 132 61 63 88 135 Production (000 tons) 27 26 17 29 32 29 19 26 29 41 Yield per Donum (Kilo) 182 187 171 184 234 217 305.9 413.9 330.2 308.1 Tobacco Cultivated Area (000 Donn-s) 50 50 50 60 60 58 58 59.4 59.6 58 Production (000 tone) 10.2 7.9 4.1 13.1 11.3 5.7 13.3 15.7 9 15.2 Dates Cultivated Area (000 Donuns) 447.9 447.9 447.9 447.9 447.9 582.5 582.5 582.5 582.5 582.5 Production (000 tons) 300 320 420 320 310 280 380 330 260 480 Source : Annual Abstract of Statistics. 102 but was domesticated and developed as a cultivated crop, and from there spread around the world. In Iraq, wheat is consumed on a large scale, mainly for human consumption. It is a winter crop and is usually seeded in late October or in the early part of November. Since the early 1950's, the acreage of wheat grown annually has expanded onto sub-marginal land, where annual rainfall is too low and too variable for sustained economic wheat production. Most of the wheat production is on rain- fed land, despite the presence Of extensive areas of irri- gated lands, in large part because the latter are too saline for wheat production. Production in the rainfed areas in the North is usually mechanized. NO fertilizer is used and production practices are similar to those used in the climatically similar regions of the USSR, the United States and Australia. For the non-irrigated wheat, the year to year variation in yields is primarily a matter of moisture supply, and this, in turn, is closely related to total precipitation. For irrigated wheat, yields have not shown a consistent upward trend in the post-reform period. In comparison with other countries, yields are low and highly variable. They mostly fall in the 5-12 bushels per acre range. Total wheat production is greatly affected by yields per donum, hence is highly variable from year to year. For example, total output in the better years may be fully three 103 times the total output in poor years. In high output year, an export surplus of wheat may be produced; in low output years imports are necessary to provide for domestic consumption. Barley.--Barley is a winter crop, grown mainly in the central and southern regions of the country. It is used mainly as fodder and as a cash crop for export. Although wheat sells for twice as much as barley, farmers prefer barley because of its tolerance to aridity and soil salinity: and because Of its earlier maturity and its high resistance to pests and disease. These reasons are espe- cially pursuasive in the central region where salinity is high, sometimes reaching pH 8.3.1 Since the early 1950's, the acreage of barley grown annually has decreased from 4.0 million donum prior to land reform to 2.6 million donum in 1970. However, a consistent upward trend in yield per donum made barley production rather stable from year to year throughout this time period. In comparison with other countries, barley yields are extremely low. Rigg.--Rice is a summer crop, grown mainly in the central part of the country. Since the early 1960's, acreage of rice grown has expanded annually. While rice production has steadily increased, the percentage increase in production has been more than the percentage increase in 1W. L. Power, ”Soil and Land Use Capabilities in Iraq.” Geographical Review 44 (1954): 375. 104 acreage. It was 550,000 tons in 1970, more than double the pre-reform level. While the production of rice is generally affected by yield per donum, there have been encouraging signs of major improvement in rice yields in the country. Yields increased from 268 kg/donum in 1962 tO 603.9 kg/donum in 1970. This is partly due to fertilizer use and partly to the incentive structure provided by the land reform. Cotton.--Cotton is a summer crop, and is almost always an irrigated crop. It is grown in the central and northern irrigated areas of the country. Cotton is an important industrial crop which provides raw materials for the growing industries in Iraq. Since the late 1950's, the acreage Of cotton grown annually has decreased, primarily because Of the shortage Of water supplies during the summers. After the land reform program, the government took various measures, such as providing better seed, fertilizer and pesticides, and other supporting services, to expand production and increase productivity. In 1966, the acreage allocated to cotton production was 1 percent Of the actually cultivated area. However, cotton production has increased steadily in the post-reform period. Cotton productivity, yield/donum, increased from 182 kg/donum in 1961 to 308.1 kg/donum in 1970. Given the current trend in increasing yields, it should be as high as the level of cotton yields in other major cotton-producing countries in the next few years. 105 Dates and tobacco.--Dates and tobacco are other important cash crops in Iraq. Dates are grown in the central and southern region of the country. The date industry plays a vital role in the national economy. According to the FAO, there are approximately 30 million palm trees in the country now; Iraq is regarded as the number one producer and exporter Of dates in the world. The acreage Of dates grown annually is 3.2 percent Of the total cultivated area. Production and yield per donum have been rather variable from year to year due to climatic conditions and lack Of pest control. Tobacco is a summer crop, grown mainly in the northern part of the country. The acreage Of tobacco grown annually has been relatively stable. It represents 0.5 percent Of the actually cultivated land. Tobacco production has more than doubled the pre-reform level. Iraq has recently exported tobacco to other countries, and there are encouraging reports Of major improvements in tobacco yields. From the foregoing discussion, it is clear that Iraq raises some high value crops such as rice, cotton, dates and tobacco, and most of its fruits and vegetables. However, its total crop acreage is dominated by large areas Of cereals. The acreage allocated to wheat and barley is 82.4 percent of the total acreage cultivated: while rice, tobacco and cotton represent only 4.6 percent. The value 106 of the two major crOps, wheat and barley, as a percentage Of the total value of agricultural production, at constant prices, rose from 41.3 percent in 1962 to 45.97 percent in 1967. During the same period, the value Of all crops rose from 61.6 percent to 78.0 percent, respectively. Therefore, given the circumstances that accompanied the land reform program, its impact on increasing agricul- tural production has been relatively moderate. The impact Of land reform on increasing agricultural productivity, yield/donum, has been moderately good with some crops such as rice, cotton, and tobacco. However, in comparison to other countries, Iraq is, by and large, a country of rather low crOp yields. Yields of cereals are especially low, yields of cotton and rice are moderately good, and the yields Of fruits and vegetables are only fair. The Impact Of Land Reform on Income fiistribution Many economists argue that a more equilitarian distribution of income could provide a stimulus to demand and subsequent investment, especially in the light Of consumer good industries.l Income distribution, in the context of this study, is a redistribution of income-earning opportunities through the land reform program. To verify 1J. W. Mellor, "Review Of Agriculture and Economic DevelOpment: Symposium on Japan's Experience," in Th2, Economic Review, ed. K. Ohkawa, B. F. Johnston and H. Haneda, vol. 217 NO. 2 (1970). 107 empirically this redistribution pattern, this study will examine Iraq's land reform experience, i.e., whether this program actually led to a more equal distribution of income and the subsequent change in the demand structure of the beneficiaries. While, evidence on pre- and post-land reform income distribution and expenditure patterns is extremely difficult to Obtain, income distribution must be inferred from statistics showing the redistribution of land ownership. Therefore, the impact of the land reform program on income distribution, income-earning opportunities for the beneficiaries, can be appreciated, because the total area affected by this program constitutes about 75 percent of the total agricultural land in Iraq. By the late 1960's, the process of implementation still continued, the total area Of redistributed lands in the form of family farms, were 12 million donums to 312,000 farm families, who became owner-Operators, either with provisional titles or under temporary contract. In other words, the proportion of owner-Operators, increased by 50 percent from the pre- reform landless farm families level. Furthermore, the 50 percent reduction in the value of the redistributed land, resulted from the 1964 amendment, and the nominal rent paid by the tenants under temporary contract, were highly signi- ficant in transferring income from the land owning class to the landless farm families. 108 Consequently, the farmers who farm their own land or tenants under temporary contract, are definitely better Off because they do not have to share their produce with the previous landlords. Table 3.9 illustrates the house- hold Or farm family's incomes, at constant prices, in the pre- and post-land reform program period. As can be seen in this table, the average annual farm family income during the 1953-1958 period was ID 145.9. Average annual farm family income during the 1959-1969 period was ID 205.3. Average annual income per family increased from ID 145.9 to ID 205.3, i.e., an increase of ID 59.4 or 40.7 percent. Furthermore, while the average annual income fluctuated during the pre-reform period, it has steadily increased, with the exception of 1963, in the post-reform period. The average annual income, as any statistical average does not reflect the distribution of income within the agricul- tural sector, i.e., the number of families who have higher or lower income than the average. Nevertheless, it does indicate quantitative changes in the income of land reform beneficiaries. No attempt has been made to reconstruct expenditure pattern or change in the demand structure of the land reform beneficiaries. It appears that a considerable amount of the increased income was spent on a variety of consumer goods available from OOOperative stores that appeared in the rural areas. Part of the increased income is re-invested to increase agricultural production and productivity. These .109 Table 3.9. Iraq's average annual farm-family incomes, 1953-1969 Index Of 7' Employed in Number of Average farm—family Rural the agricul- farm farm-family incqme Year population tural sector families incomes (ID) 1953.:100 1953 3,524,665 3,172,198 634,440 134.3 100.0 1954 3,604,322 3,248,890 648,778 164.0 122.1 1955 2,685,780 3,317,202 663,440 112.5 83.8 1956 3,769,079 3,392,171 678,434 145.5 108.3 1957 3,853,754 3,468,378 693,675 175.8 130.9 1958 3,863,893 3,477,503 695,500 143.2 106.6 1959 3,874,059 3,486.653 697,330 112.5 91.2 1960 3,884,252 3,495,826 699,165 146.1 108.8 1961 3,894,471 3,505,023 701,004 178.7 133.1 1962 3,904,717 3,514,245 702,849 210.9 157.0 1963 3,914,990 3,523,491 704,698 158.4 117.9 1964 3,925,290 3,532,761 706,552 209.6 156.1 1965 3,935,616 3,542,054 708,410 238.7 177.7 1966 3,945,971 3,551,373 710,274 243.2 181.1 1967 3,959,353 3,563,417 712,683 234.4 174.5 1968 3,966,762 3,570,085 714,017 261.0 194.3 1969 3,977,199 3,579,479 715,895 Source: Iraq Ministry Of Planning, Evaluation Of Economic Growth in ‘Iraq, 1950-1970, Baghdad, 1972, p. 69. 110 investments were in the form of fertilizer, irrigation pumps, and farm.machinery. For example, most of the fertilizers distributed by the public sector, as seen in Table 3.10, was used by the c00peratives. The number of tractors increased from 2,400 in 1958 to 10,400 in 1970, including 623 tractors for the public sector; the number of combines increased from 1,000 in 1958 to 2,280 in 1970, including 633 combines for the public sector. In 1968, 144 cooper- ative societies owned 399 irrigation pumps. Therefore, the new expenditure pattern not only appeared to be based on economically rational criteria, but also the change in the demand structure of the beneficiaries seems to be in line with the consequent objective of income distribution. This point will be discussed later. As warriner comments in the Husseiniya project, there were 15 cooperative societies with 163 members cultivating 4,000 donums. Funds were being raised for investment by joint cultivation, using a tractor which they bought with a loan in 1964. They allocated 300 donums of land to cultivate in common, using this tractor in addi- tion to working on the member holdings for hire. Each member agreed to sew and harvest two donums of this land. The proceeds estimated at ID 1,000 per annum, would meet the cost of the tractor and other farm machinery and the cost of irrigation pumps' maintenance. Joint cultivation to raise investment funds for specific purposes was a sound 111 .mea .Omdsunm .mnmum usuacuo>ou .moomna qumMOM no muomuumnfl HuOHumAuuum .Hmscaa momma .wcHH "cousom omm.mn mma.oo mem.vm www.mm sma.m~ mac.» mum uousaauuou Hangs com vwm mmm our coupon nun mmv Now vov vmm nun nun «mm .cumouuflz hmo.oa Hom.m avo.v mm~.~ med In: N ahvlmv mononmwonm nomdm om>.H mo¢.H mom «he an: In: tun m\ma\mH HoNfiawuuom ocuomaou nun mmm mac oma Nam ovo ma oa\m~ Mouwawuuou pasomaou oma.m mam.~ mm5.v vmo.m mm~.v oma ma o~\o~ uouwawuuom vasomaoo wav.n hum.a How mmm mmm mmo mm ma\ma woudawuuou vasomaoo .mh~.om oam.mv ~mo.~w ovh.m~ Hmm.qa oum.m mmm mum .ououasm aawsoaaa uhoa ohma meme meme hood coma moon muomoumo Ammo» canvas. dbmdlmmmd .movfloaumom can muowddwuuom mo cowumaamnoo m.wmuH .oa.m magma 112 idea. The outlook for cooperative success in this project is much higher than before when each farmer was working alone. According to the president of the cooperative society, the annual income per holding, using the fallow system, from winter crops,averaged betweeen ID 70 to ID 80, some earning much more and some less. This income could be earned by growing wheat on about 8 donums of the 40 donums holding. By cultivating more of the land they could have doubled their incomes. In this settlement, the farmers seemed much better off than in the old days; certainly they were much better fed, much better dressed and more alive.1 Fragmentary though it is, the evidence from Iraq's land reform experience, does show that the impact of land reform on income-earning opportunities resulted in sub- stantial income transfers to the poorer rural classes. It also shows, given the significant change in the demand structure of the beneficiaries, increased participation in the money-economy, following the implementation of this program. The Impact of Land Reform on Employment Opportunities in the Agricultural Sector As Dovering comments, "the transformation of a primarily agrarian population into one predominantly urban 1Warriner, p. 107. 113 and industrial is usually a slow process, especially with a high rate of population growth. Moreover, the farm population does not decline in absolute numbers until well after it has become a minority in the total pOpulation."l In other words, there is a high prospect that unemployment and underemployment will become increasingly serious during the next decade or so, as a result of the combination of a rapidly growing labor force and a relative capital-intensive pattern of industrialization yielding insufficient new jobs. Almost 50 percent of Iraq's population depends on agriculture and is likely to be so dependent for the next decade. The rate of population growth was relatively high, 3.0 percent, during the 1957-1970 period. So, while there has been a relative capital-intensive development industries, the creation of additional employment opportunities in the agriculture sector is certainly one of the main objectives of the land reform program. More specifically, the land reform.must lead to improved factor combination and better allocation of land and labor. The extent to which employment can be increased through redistributive employment patterns depends very much on the prevailing conditions, such as the population in agriculture, the rate of population growth and development of the industrial sector. Thus, Iraq has had ‘F. Dovring, "The Share of Agriculture in a Growing Popualtion," in Agriculture in Economic DegelOQment, ed. by C. K. Eicher and L. W. Witt (New York: McGraw-Hi Inc., 1964). 114 through its land reform program an opportunity for restructuring the agricultural sector and for providing employment and income-earning opportunities. From the foregoing discussion, it is clear that the distribution of ownership patterns within the agricultural sector, prior to the land reform program, was as follows: landowners constituted about 0.5 percent of the total popula- tion, 2-8 percent of the landowners held 70 percent of the agricultural land title deeds; 97.2 percent of the landowners held less than 30 percent of agricultural land title deeds; and the landless peasants accounted for 2.9 million of the 3.2 million persons who depended on agriculture. This pre- vailing structure had a profound impact on increasing out- migration from rural to urban centers. It caused a relative and absolute increase in urban populations and a relative decline in rural population. Economic activity or participation in the labor force represents a key aspect of population composition. The distribution of employed labor force according to occu- pation in various economic sectors, during the 1947-1969 period can be seen in Table 3.11, i.e., before and after the land reform program. The data in the above table indicates the following: In 1957-58, prior to the land reform program, the total employed labor force was 1,663.1 thousands. The relative structure of the labor force, distribution to the main sectors, was 971.8 thousand or 115 .tha .vavnmum .mcancsam have: uuoummum .quncdam no manuacdz .mauH .moousOu Hoeuo and wooden scandasmom hmma Iona maxed one mmmanhmma wow nounmdu.oouou Honda u Ougom a .uoouaom Honuo use nausea caduadamom hvma scum :0x10 and mvanuhvoa you newsman oouou uonaqn ~.ovm~ o.mov~ o.~on« o.rm~n >.no~n «.oaaw H.mooa n.moua deuce undue o.mmm o.omm o.m~m o.mom o.oom o.mmv m.mom o.mmn noou>uom uonuo o.mo~ o.om~ o.~h~ o.mo~ o.va o.m¢N o.mmH m.mHH Hmuoa Imuouoom 332:...qu o.mva o.oeH o.mna 0.0ma o.m~a o.o~a o.moH m.mh oucdaah one ovens o.nva o.ov~ o.hma o.nma o.m~a o.m~H o.om m.mn ounuoum use seducedesaaoo .uuomnoaua ~.nmoa o.mnm~ o.moma o.mama n.mvva «.moma n.0naa m.hho Heuoaunnuouoom auwvosaou o.ho. o.ow a.mm o.oh o.Ho ~.sv o.mn o.nd noduuouuusou a mauvuasm m.~a m.~a o.na v.~H ~.~H o.na H.u m.H use a noun! .huaouuuuoam o.mva o.ova o.ova o.ovH o.mna o.oma o.vHH o.vm nowuunsuan maauauoouusdx m.ma o.ma m.va o.va m.nu o.ma n.o h.v mashuudso can means: m.mvca «.amma v.mnma ~.nm~H o.m-a o.hoaa o.anm m.~hn unannounum< onmanmoma mooanmooa womanhood nomauooma oomanmoma snow momma smvma wouoom and» know ado» Meow use» comm nomad Ihvmd nuuam onu condom 0:» pussy on» oaooom 0:» unuwm on» mood as manhood cu panacea as cannons ca oosuou< ca cookout lemma sawuano>om newusao>om on» on Haaum noduom 23 65.638 633m oomaamwma undo» swam uasocoom usoano>wm = .3922. unannofio $3-33 63qu 23 minus 3933256 .88 non: Bus: .3." .33. 116 58 percent of the total labor force employed in the agricultural sector; 4.7 thousand or 0.01 percent in the mining and quarrying sector; 84.6 thousands or 6.8 percent in the manufacturing industries; and 289.0 or 22 percent in the service sector. The agricultural sector was the main sector in providing employment opportunities, followed by the service sector. Out-migration from agriculture and the slow process of land reform implementation, however, caused the relative contribution of the agricultural sector to employment opportunities to decline from 58 percent in 1957-58 to 53 percent in 1960. The impact of the land reform program on employment opportunities can be evaluated in terms of the absolute and the relative structure of the labor force. The total labor force increased from 1,663.1 thousands, pre-reform, to 2,546.2 thousands, post-reform; that is an increase of 883.1 thousand or 53.1 percent over the decade with an average annual rate of 5.2 percent. The relative structure of the labor force in 1969-70 was 1,449.8 thousand or 54.5 percent of the total labor force in the agricultural sector; 15.5 thousand or 0.58 percent in the mining and quarrying sector; 148.0 thousand or 5.5 percent in the manufacturing industries, and 565.0 thousand or 21.24 percent in the service sector. Agriculture is still the main sector for providing employment opportunities. Although there has been a relative decline in rural population, there has been an absolute and relative increase 117 in employment opportunities in the agricultural sector. The total labor force employed in the agricultural sector increased, in absolute number, from 971.8 thousand, pre- reform level, to 1,449.8 thousand, post-reform level, i.e., an increase of 478 thousand or 49.2 percent over more than a ten-year period, or an average annual increase of 4.9 percent. As for the manufacturing sector, though it had higher priority in the scale of economic development than the agricultural sector in the 1960's, and because of cap- ital intensive approach, its relative contribution to employment opportunities decreased from 6.8 percent to 5.5 percent, respectively. While there is a definite limit to the employment creation possibilities in the agricultural sector, major efforts are required to create employment opportunities in the non-farm sector as rapidly as possible. Resolution of the unemployment problem rests ultimately with a dynamic industrial and manufacturing sector, such as consumer goods industries, agricultural processing industries and industries producing farming requisites. In addition, there must be a labor-intensive approach with reliance on yield-increasing technical innovations in the earlier phase of agricultural development.1 Such basic reorientation in the industrial and manufacturing sector may be impossible without a 1P. Dorner, Land Reform and Economic Development, Penguin Books, 1972, p. 182 118 restructuring of the employment and income-earning opportunities in the agricultural sector. Thus, the land reform program has profound impact on the reorientation of the agricultural sector by creating more employment and income earning opportunities in the agricultural sector. From the foregoing discussion, it is clear that the land reform program did not achieve much in terms of increasing agricultural production and productivity. That is, the increase in agricultural production did not keep pace with the increase in demand for food, and agricultural productivity, yield/donum, is generally low in comparison to other countries. This is mainly due to investment policies in the three development plans implemented during the 1960's. If the land reform program was to contribute significantly to these objectives it would clearly be necessary for it to be undertaken in conjunction with a variety of supporting structures, i.e., the productive structure and the structure of supporting services. A brief examination of the performance of these supporting measures during the ten year period after the enactment of the land reform program, and the discussion on how these measures can and must be changed for a more productive agriculture will be dealt with in the next chapter. 119 Development Planning In the post-reform period, 1959-1969, three develOpment plans were drawn up and followed: The Provisional Plan of 1959-1961 called for development expenditures of ID 323.6 million.1 Actual expenditures throughout the plan were ID 108.3 million, i.e., an imple- mentation ratio of 35.5 percent. Allocations to the agri- cultural sector were ID 43.9 million or 13.6 percent of the total expenditures. Actual expenditures on this sector were ID 22.6 million, i.e., an implementation ratio of 51.1 percent. Allocations of actual expenditures within the agricultural sector were as follows: ID 17.5 million or 78 percent for irrigation, drainage, and water storage; ID 1.7 million or 7.3 percent for livestock production, pasture improvement and forest management; ID 0.5 million or 2.6 percent for the land reform programs. That is for land surveys and the establishment of four 'Machinery Rental Stations' as a matter of fact, nothing was spent in the first two years on the land reform program. The rest of the expenditures were for the completion of previous projects. In comparison, allocations to the industrial sector under this plan were ID 32.7 million or 11.1 percent of the total expenditures. 1Republic of Iraq, "Provisional Economic Plan," Baghdad, 1959. 120 The detailed Economic Plan of 1961-1966 called for development expenditures of ID 444.7 million.1 Actual expenditures throughout the plan were ID 204.2 million, i.e., an implementation ratio of 45.9 percent. Allocations to the agricultural sector were ID 87.4 million or 20 per- cent of total expenditures. Actual expenditures on this sector were ID 19.8 million, i.e., an implementation ratio of 22.7 percent. Most of the actual expenditures on the agricultural sector were allocated to irrigation and drain- age. There were 23 agricultural projects which covered an area of 15.8 million donums, 9.8 million donums on the Tigris River and 6.0 million donums on the Euphrates River, to be completed in 15 years. Actual expenditures allocated to the land reform program were ID 1.04 million, for the establishment of three state farms and 13 'Machinery Rental Stations' to cover an area of 1.5 million donums. In com- parison, allocations to the industrial sector in this plan were ID 121.7 million or 27.4 percent of the total expenditures. The Five-Year Economic Plan 1965-1969 called for develOpment expenditures of ID 668.05 million.2 Actual 1Republic of Iraq, "Detailed Economic Plan, 1961- 1964," Law NO. 70 for 1961. 2Republic of Iraq, The Five-Year Economic Plan, 1965-1969, Law No. 87 of 1965, published in the official Gazette 8 , No. 1185 (July 1, 1965). 121 expenditures throughout the plan were ID 446.6 million, i.e., an implementation ratio of 66.9 percent. Given the previous implementation ratios, this plan was relatively successful. Allocations to the agricultural sector were ID 173.5 million or 26 percent of total expenditures. Actual expenditures on the agricultural sector were ID 56.2 million, i.e., an implementation ratio of 32.4 percent. One of the plan's targets was that of raising the average annual growth rate of the agricultural sector to 7.5 percent. By the end of the plan, the average annual growth rate was 2.0 percent. As in the previous plans, most of the actual expenditures were allocated to irrigation and drainage, a long-run irrigation and drainage policy was adopted. This policy called for the construction of three new dams on the Euphrates-Tigris River System in the irri- gated areas. Total allocations to the land reform programs were ID 5.8 million of total actual expenditures. This was the first time a large sum of investment expenditures was allocated to the land reform program in the three develop- ment plans. In comparison, allocations for the industrial sector were ID 187.2 million or 28 percent of total expenditures. 122 The allocation of development expenditures, in the three development plans, reflected a change in development policy with the industrial sector receiving a higher priority in the scale of economic develOpment than the agricultural sector. This shift in priorities took place at a time when it was imperative that the agricultural sector have a tOp priority, especially as major steps were being undertaken in this sector in the enactment of the land reform program. The implementation ratios for the three development plans in the agricultural sector were the lowest among the various sectors of the economy. They were 51.1 percent, 22.7 percent, and 32,4 percent, respectively. These low implementation ratios affected the performance of the agricultural sector. Furthermore, while total actual expenditures on the agricultural sector, in these plans, amounted to ID 98.4 million, only ID 7.34 million or 7.5 percent were allocated to the land reform programs. Thus one decade after the enactment of the land reform program, public investment policies still did not contribute to full attainment of the potentialities of the land reform, especially increasing agricultural production and productivity. 123 Reform of the Reformzerhe Agrarian Reform Law No. 117 of 1970 Despite the accomplishment of the agrarian reform law of 1958, it embodied numerous legal and technical short- comings that affected its performance. Some of the main shortcomings were: 1. The high ceiling on ownership. This ceiling was 2,000 donums in the rainfed areas and 1,000 donums in the irrigated areas. No more than 6.0 percent of the land held by landlords was distributed to the landless peasants. While this distribution pattern had profound impact on income earning opportunities in the agricultural sector, there was not enough land to be redistributed to the land- less peasants. 2. The implementation process of the law, was carried out irrespective of the differences in the land use or classification, i.e., the cropping pattern, soil fertility and access to precipitation and irrigation. For example, a 1,000 donums of irrigated land for rice produc- tion has higher value than 1,000 donums of irrigated land for wheat or barley production. 3. The implementation process of the law, followed an individual pattern of distribution and sometimes led to fragmentation of the newly distributed holdings. This resulted in increased soil salinity and deterioration of agricultural production. In other words, the law did not 124 include, in its provisions, any measure for the consolidation of the fragmented units to ensure the use of modern agricultural policies. 4. Landlords, whose lands were requisitioned, were 'given the right to choose the lands allocated to them. As a rule, they chose the most productive and fertile lands that had access to irrigation and were left in control of the irrigation systems in the land reform areas. 5. Landlords were compensated for the requisitioned lands, even though most of the lands were public domain lands registered in the name of the heads of tribes. Lands held in absolute private ownership represented 4 percent of the total lands subject to expropriations. 6. The redistribution of lands to the landless peasants was implemented on the principle of the repayment of the land value. 7. The Law's provisions concerning the expropria- tion of land holdings in excess of the maximum limit, was not implemented in the two marshland provinces of Amana and Nasaniya. Furthermore, the 1961 amendment to the Law created complicated agricultural relationship in these two provinces. Consequently, a decade after this major program of revolutionary government went into effect, it is still difficult to evaluate the impact of the reform program. This is true as the impetus for the land reform and its main targets are dictated to a large extent by political 125 motives. Despite its accomplishment the creation of more employment and income-earning opportunities in the agricul- tural sector, the new development policies could not be pronounced a complete economic success. They did not bring about a substantial increase in agricultural production and productivity or the creation of dynamic agricultural sector with significant contribution to Gross Domestic Product. Therefore, the land reform law No. 30 of 1958 is a transi- tional piece of legislation. The primary aim of the law, elimination of feudalism, is attained. After the July 17th Revolution the national authorities took rigorous measures to achieve an integrated and comprehensive agrarian reform. These measures were designed to establish the necessary supporting structures, the productive structure and the structure of supporting services, and to create an efficient administrative structure for implementing the agrarian reform programs. One of these main measures was the enactment of the new agrarian reform Law No. 116 of 1970. In its main provisions the new agrarian reform law decreed: l. The establishment of the Higher Agricultural Council.i According to article one, the Higher Agricultural Council shall be formed under the chairmanship of the President of the Republic and the membership of the Ministers of Agrarian Reform, Agriculture, Irrigation, the chairman of the General Union of Peasant Societies and fulltime members not less than five in number, who are very highly qualified in the following 126 fields: economics, irrigation and drainage, agrarian reform and two of them in agriculture. This was the first serious attempt toward an efficient administrative structure. To avoid conflict and overlapping between various Ministries and Departments related to the agricultural sector for the planning and implementing of agricultural development strategies. 2. Limitation of agricultural ownership, article 2, part one: The area of agricultural land owned by a person or alienated to him by 'Tapu' or granted by 'Lezma' shall not exceed the following limits: a. In the rainfed land: (1) 2,000 donums, in the less fertile land area located south of the rainfall line. (2) 1,600 donums, in the very fertile land area located south of the rainfall line. (3) 1,300 donums, in the less fertile land area located north of the rainfall line. (4) 1,000 donums, in the very fertile land area located north of the rainfall line. b. In the irrigated land: (1) 600 donums, in the less fertile land area irrigated by lift (pumps). (2) 400 donums, in the less fertile land area irrigated by flow. (3) 400 donums, in the very fertile land area irrigated by lift. (4) (5) (6) (7) (8) (9) (10) (11) 127 300 donums, in the very fertile land area irrigated by flow. 120 donums, in the land irrigated by lift and cultivated with cotton or vegetables in the North Provinces. 80 donums, in the land irrigated by flow and cultivated with cotton or vegetables in the North Provinces. 80 donums, in the land irrigated by lift and cultivated with rice in the North Provinces. 60 donums, in the land irrigated by flow and cultivated with rice in the North Provinces. 50 donums, in the land irrigated by lift and cultivated with tobacco in the North Provinces. 40 donums, in the lands irrigated by flow and cultivated with tobacco in the North Provinces. 100 donums, in the land irrigated by flow and cultivated with rice in provinces ot-her than the North Provinces. In the case of holding two types of lands, the proportions must be affected according to the mentioned ratio. The Higher Agricultural Council may decrease the high limits of ownerships to half the limits fixed in this article for the land situated near the marketing centers. 3. 128 On Redistribution, article 16, part two, The agrarian reform lands shall be distributed among the peasants individually or collectively according to the district circumstances within which the distribution is carried out, and within the limits specified hereunder: a. In the rainfed lands: (1) (2) (3) (4) 200 donums in the less fertile land area located South of the rainfall line. 160 donums in the fertile land area South of the rainfall line. 130 donums in the less fertile land area North of the rainfall line. 100 donums in the fertile land area North of the rainfall line. b. In the irrigated lands: (1) (2) (3) (4) (5) 60 donums in the less fertile land area irrigated by lift. 40 donums in the very fertile land area irrigated by lift. 40 donums in the less fertile land area irrigated by flow. 30 donums in the very fertile land irrigated by flow. 12 donums, in the lift irrigated land area cultivated with cotton and vegetables in the North Provinces. 129 (6) 8 donums, in the flow irrigated land and cultivated with cotton and vegetables in the North Province. (7) 8 donums, in the lands irrigated by lift and cultivated with rice in the orth Provinces. (8) 6 donums in the flow irrigated lands cultivated with rice in the North Provinces. (9) 5 donums in the land irrigated by lift, cultivated with tobacco in the North Province. (10) 4 donums in the flow irrigated land cultivated with tobacco in the North Provinces. 4. The new agrarian law did not give the landlords the right to choose the land allocated to them to increase the prOper distribution of the irrigation network. 5. The new agrarian reform law abrogated the compensation principle to the landlords, and at the same time the redistribution of lands was carried out without the repayment principles. Other provisions of the agrarian reform program covered the areas of: Production relationships between the landlords, the farmers and the agricultural laborers to protect the interest of each and to promote agricultural production. The participation of the farmers in the implementation process through their farmer organizations, the cooperatives and the General Peasants Union. The 130 post-reform economic organization in the agricultural sector. Finally the agricultural marketing and credit institutions. In other words, most of the drawbacks associated with the implementation of the first agrarian reform laws were corrected through the promulgation and implementation of the new agrarian program. Implementation of the Agrarian Reform Law of 1970 The Higher Agricultural Council followed a time- table for quick and efficient implementation of the new agrarian reform law. The total area requisitioned under the first agrarian reform between 1958 and 1970 was 4.2 million. Under the new agrarian reform of 1970, 3.1 million donum were requisitioned by 1972. The area expropriated in two years was equal to 80 percent of the total exprOpriated land during the previous 12 year period. The process of redistribution also worked faster under the new law than under the first law. By March 1972, a total of 5.5 million donums were redistributed to 130,882 landless farm families. As a matter of fact, the implemen- tation process, exprOpriation and redistribution was com- pleted in ten of the sixteen Provinces by 1972. It was planned to carry out the implementation process in the rest of the six Provinces by early 1974. The first agrarian reform of 1958 satisfied the needs of 312,019 farm families or almost 50 percent of the 131 total landless families. The new agrarian reform allocated land to an additional 165,000 farm families by 1974. Alto- gether, the total number of beneficiaries, whether new owners or tenants under temporary contracts totaled 477,000 farm families under the first and second agrarian reform programs. That is almost 75 percent of the total 685,000 landless families according to the 1957-58 Agricultural Census. Furthermore, it is worth mentioning that after the enactment of the new agrarian reform law, neither agricultural production nor cultivated areas decreased. Quite the opposite, the area under cultivation increased from 12.6 million donums in 1969-70 to 14 million donums in the 1971-72 winter season and there was a large increase in the area cultivated for summer crops, eSpecially vegetables. Thus, the agrarian reform law of 1970, envisaged a concept for agrarian program both in terms of comprehensiveness and essence. It removed obstacles and paved the way for the agricultural revolution. That is,the new law set a strong basis for a comprehensive and integrated agrarian structure. This is the subject of the next chapter. CHAPTER IV THE INTEGRATED AND COMPREHENSIVE AGRARIAN STRUCTURE The foregoing discussion has emphasized the failure of the development policies by the previous government between the early 1950's and the late 1960's, to achieve their overall policy objective. The government had planned to stimulate the total economy through development expendi- tures of the non-oil sectors, especially the agricultural and industrial sectors. Ten years after the enactment of the land reform of 1958, however, the relative importance of the agricultural sector measured by its contribution to GDP had declined from 24.1 percent in the 1950's to 19.1 percent in the late 1960's. Agriculture is still charac- terized by low productivity of land and labor. Meanwhile, there is little increase in the relative importance of the industrial sector. Its contribution to GDP increased from 7.4 percent in 1953 to 10.7 percent in 1969. By 1969, the contribution of the oil and quarrying sector to GDP was 32.6 percent; it was still the dominant sector in the economy. Dualism, which had characterized the Iraqi economy in the early 1950's, still existed in the late 1960's. 132 133 It is unlikely that the achievement of the economic potentials of Iraq, the overall policy objective and the specific objectives of this study, can be attained without development of the agricultural sector. Decisions are needed that will elevate the agricultural sector to a position of top priority during the next decade. This calls for compre- hensive planning, far-reaching changes in institutions, devotion of more human resources to the agricultural sector than has been the case in the past and the allocation of substantially greater financial resources for this purpose than was contemplated earlier. National attention and policy emphasis must be focused on the agricultural sector if it is to provide increased agricultural production, employment and income-earning opportunities. Within this context, a compre— hensive and integrated agrarian structure would both pro- foundly improve the performance of the agricultural sector and insure balanced economic development. This conforms to Iraq's declared overall policy objective for the last two decades. The enactment of the new agrarian reform of 1970 and the vigorous initiation of the supporting measures are serious attempts toward the Agricultural Revolution in Iraq. Agricultural development calls for the application of a package of special but closely interrelated programs. This is the essence of the new policy approach. Previous expe- rience had demonstrated that single programs could have 134 limited and sometimes even negative effects. These same programs could be highly productive if combined with other programs in proper proportion and with prOper timing. In this and the following chapters, the author will examine the performance of the complementary structures, the productive structure and the structure of supporting services; assess their future prospects and point out major problems and policies that they may have to face in the realization of their prospects; and finally examine the impact of the agrarian structure on the performance of the agricultural sector. Production Structure The discussion in Chapter II about land and water resources indicated that: the annual water discharge of the Euphrates and Tigris River System is estimated at 68 billion cubic meters. This water supply is sufficient to cultivate 22 million donums with winter and summer crops. The irri- gated area would represent 46 percent of the total, 48 million donums, cultivable land in the country, if all the river waters were utilized, all proposed dams and reservoirs constructed and all incoming water utilized. Though this figure is large as compared with the percentage of lands now being utilized under irrigation, it is still less than half of the cultivated land. 135 Of the area of land in the Tigris basin now utilized under the fallow system, 18 million donums, only 9 million donums are cultivated annually. Another 5 million donums are utilized under the fallow system in the Euphrates basin. Altogether, around 12 to 14 million donums of irrigated land are utilized annually under the fallow system. The quantity of water stored at the present time, by Dokan and Derbendkan dams and the Habbaniya Lake, does not exceed 12 billion cubic meters annually. It is used for the irrigation of the 12 to 14 million donums under the fallow system. There- fore, this very large gap between the area that could be irrigated (22 million donums) and the area that is irrigated (12 to 14 million donums) is the result of the lack of orga— nization and control of rivers flow by measures of the con- struction of dams and reservoirs. It is mainly due to the fact that the very bad drainage situation necessitates a crop fallow rotation on the irrigated land. Irrigated agricultur, in Iraq, can indeed be greatly expanded. In the forecoming five-year plan, 1975-1979, Iraq plans to construct three large dams: The Mosul and the Himrin dams on the Tigris and the Haditha dam on the Euphrates at a total cost of ID 345 million ($1.1 billion) and with a storage capacity of 26 billion cubic meters. However, the policy approach should concentrate on more intensive use of the irrigated land, vertical expansion or increasing productivity, rather than horizontal expansion 136 or bringing new land under cultivation, at least in the short run. Furthermore, such intensification, if it is to con- tribute to higher agricultural production and productivity, must be part of a package approach for agricultural development. While the previous discussion illustrates the possibilities of the expansion of irrigated lands, the greatest agricultural output potential in Iraq lies with the presentely irrigated land. This is mainly because agricultural productivity, yield/donum, of the major crops is extremely low. The future agricultural production of the main winter and summer crops in Iraq can be seen in Table 4.1. The agricultural potential of Iraq assumes the present estimated water diversion in Iraq.1 No increase is assumed because (1) a treaty would have to be worked out between Iraq, Syria and Turkey, to provide Iraq with addi- tional water from the Euphrates River, and (2) a low priority is placed on additional irrigation relative to other measures that can be used to increase agricultural productivity.2 1Clawson, p. 134. 2A recent study of the Euphrates, concerning the current water use and planned additions comes to this conclusion (figures in million cubic meters): Irrigation Turkey Syria Iraq Total Current use 51,500 2,980 12,860 17,340 Planned addition 12,140 4,610 6,040 22,700 Total future use 13,640 7,590 18,900 40,130 Gail A. Halhaway, Harry W. Adams and George D. Clyde, Report on International Water Problems, Keban Dam, .Hhma .xuow 3oz ..osH .hsmmaou mcfinmwandm HoH>omHm cmowuoad .ummm .137 udoow: onu mo Hmwucouom Honsuasowumc one .Hoocmxoad .A can .muoamocmq .m .cOmamHU .m "meadow OOOpmN. coasN. admum Hmuos oom.m~ ooo.~ oom.m oma.m Hones ooa mm amouo umeuo com and mmaaouomos museum ma ma H.H pandas can aaamuom OCH CH 00H mm o.H mN.o couuoo com mom OOH Hod com N.~ 004m ooo.o ooo.~ o.m puma: . oouomauuw nouns aanmuom ooe.ma ooo.~ 004 5.6 cosmonuus ooa.~ ooo.a oom.a a.~ nomads» omm nmn.~ mv.o anon: woo: woo: 0mm ooummfiuuw och.~ ooo.H omm h.” oomcwou Nmm moa.~ H5.o hoaudm A.us ooo.He ..ua ooo.a. ..ua ooo.ae ..na ooo.ae l.ma\.uae x.us\.us. mono coauusoonm :Ofiuonvoua noun mono noun mono puma» puma» Hoflucouom wcmmoum Howusouom ucomoum Huwucouom aconoum mmouo mama mo coduoaooum Huwvcouom one usomoum m.umuH .H.v manna 138 Far from assuming more irrigation, the study assumes that the area to which irrigation is extended will decline from 3.3 million hectars, 8 million acres, to 2.5 million hectars, 6 million acres, but the area of irrigated land crOpped each year will rise substantially due to a minimum of one crop each year on all irrigated land and two crops each year, wheat and sorghum on the irrigated wheat land. Some adjust- ment in land use patterns, especially in the rainfed areas, also is assumed. On the basis of present irrigation water use, grain production could be increased many folds, as shown in the above table; so could the production of cotton and vegetables readily be increased. Several other requirements must be met if Iraq is to achieve the agricultural output potential outlined in the above table. These include the best possible land, water and crop management practices, including, fully adequate drainage system, fertilizer and pesticide mech- anization and other requirements regarding the institutional structures. All of these fit in with the package approach. The discussion that follows will describe these other requirements. Euphrates River, Report to International Bank for Reconstruc- tion and Development, December 1965. For further analysis, see: John V. Krutilla, The Columbia River_Treaty, in The_ Economics of agInternationalRiver Basin Development (Baltimore: Johns Hopkins Press, 1967). 139 Fertilizer and Pesticides The use of commercial fertilizer in the pre-reform period, during the 1950's, was insignificant. Very little commercial fertilizer was used in the post-reform period, during the 1960's. Figure 4.1 gives a rough idea of nitrogenous fertilizer, the main kind of fertiliaer, use in Iraq in relation to other countries as reported by FAO. It shows that Iraq uses less nitrogenous fertilizer than any other country. As for the use of other chemical fer- tilizers, such as phosphate and potash fertilizer, Iraq used 1,800 and 200 metric tons, respectively, in 1966. Iraq lagged behind. Indeed, for all practical purposes it may be said not to have used these fertilizers at all. It is not surprising, therefore, that the land which had been producing for thousands of years without a program of fertility maintenance has very low yields.1 In general, nitrogenous fertilizer is used primarily or exclusively on irrigated land in Iraq. The government, with the technical help of FAO, started a fertilizer campaign in the middle 1960's, for increasing the production and productivity of rice and cotton. It started on the state-farm and experiment stations for demonstration 1H. G. Treakle, The Agricultural Economy of Iraq (ERS Foreign 125, USDA [washington, D.C., August 1965]). 140 .noma .xooaumm» coauosooum Q¢m “monsom .mofiuucsoo up .mmouo newsmauom ca ocma pom coma manmum no use: mom on: nouwafiuumm sz somouuwz .H.v ousmfim moumum oouwso moan ownmm common condemn umxmm 0 § E E E \\\ x o . \\ k5 o. m H .mgmwNm NNWV\‘ WWWHV\ o .m . . .ml5 2. . \\ 8 v m \\V \R N .h V cm o.m _ ooa ouom mom oHMNMMMOMMM mocsom 141 purposes especially for the new rice varieties.1 cOOperative members in areas near these state-farms and experiment stations started using commercial fertilizer on their land. Though the fertilizer campaign was conducted on a limited scale, it resulted in major improvements in the productivity of rice and cotton, as was mentioned in the previous chapter. To expand this campaign, the govern- ment established the Chemical and Agricultural Implement Company, which imports various kinds of fertilizer, chemicals and farm machinery. It makes these high-yielding inputs available to farmers and c00perative members. Fertilizer is sold at a profit margin of 10 percent. However, cooperative members and farmers involved in the Supervised Credit Program received the fertilizer at cost. On the other hand, modern agriculture requires large inputs of diverse kinds of chemicals to control insects, plant disease and weeds and for other purposes. Insects, disease, and weeds reduce crop yields in ways which farmers often do not fully comprehend and their control has been a problem. ‘Introduction and Breeding of New Varieties with High Yield Potential Improvement of Rice Production in Ira , FAO, International Rice Commission, Working Party, Twe fth Seminar, September 9-14, 1968. 142 Moderate amounts of pesticides were first used in the 1950's when Iraq had a fairly active insect control program in operation. They were used on a far more limited scale during the post—reform period. According to the Ministry of Planning, Iraq's annual losses because of insects and diseases were as follows: ID 10 million from winter crops--wheat and barley, ID 3 million from dates, 44 percent of corn production, 35 percent of tobacco and 40 percent of vegetables. However, as in the case of fertilizer use, Iraqi's use of pesticides was extremely low. Figure 4.2 gives a rough idea of pesticides and other chemicals per unit of arable land and land under permanent crops in Iraq and other countries in the area as reported by the FAO. Thus, inasmuch as increased use of commercial fertilizer and pesticides is one of the most effective technical measures for vertical expansion, it is obvious that more use of commercial fertilizer and pesticides is needed in Iraq. The study on "Agricultural Potential of the Middle East" indicated Iraq's need of the major plant nutrients in the form of commercial fertilizer, nitrogen, phosphate, and potash. These calculations were based on data collected from areas where soil conditions are not too different from those found in Iraq. 143 .homa .xoonumo» coauooooum omm "condom .moHHHCdoo ha .mmouo unocmshmm a“ mama mam pend manmum mo was: Hum .mHMOflsono Honuo one moofiowumom .N.v ounmwm moumum mouse: UmuH mwumw common cosmnon umhmm o. .NNNNNBH‘ NNMMKNM mmwv\ o w.m mmwwwm v 1\\ m 0.0 \& OH onus Mom , oumuomn mom mocsom msmumoaflx 144 The data obtained at the agricultural experiment station at Pullman, Washington, for each bushel of wheat produced--60 lb or 27 kg--approximately 2.7 lb or 1.2 kg of nitrogen must be available to the plant root system. All of this becomes a part of the wheat plant, but all is not removed in the grain. Approximately 1.5 lb of nitrogen are found in the protein of a bushel of wheat, and approx- imately 1.2 lb of nitrogen in the plant roots and the wheat straw. On the other hand, while most if not all of the soils producing grain have high pH, low acidity, this would reduce phosphate availabil- ity. Therefore it is necessary to add more phos- phate than the plant will use. Over a long period of time the phosphate content of the soil will build up so that eventually the need for this element may decrease somewhat. However, this takes a long time period. For potash, it was estimated that K205 would be equal in weight to the phosphate P205, added per unit of area and that both of these would be required in one-half the amount of nitrogen.1 These estimates are for only one grain, wheat. Most other. grains have similar requirements. Rice, however, requires somewhat higher levels of phosphate and potash. Iraq's need of the commercial fertilizer and its expected cost can be seen in Table 4.2. Obviously, there is a large gap between the amount of commercial ferilizer use, during the 1960's and the commercial fertilizer needed for the intensification of agriculture. The statistics in the above table indicate that Iraq's fertilizer needs will be 1.678 thousand metric tons with a total cost of $329 million.2 1Clawson, p. 145. 2Ibid., p. 146. .Hhma .xuom 3oz ..o:H .acomsoo mcfinmwandm umw>mmam amoauosa .umom maooflz on» no Hmaucouom Housuaoowmmw one .uoocuxmad .9 0H>A was muonmocoq .3 new: .somsmHU scans: «mousom 145 000 0s0.~ 0.H 0.0 manuosm av one manamaamo: a. HH moss am one 0. 0.H am 0 0 now 0H0 0.H 0.0 mm) «Am 2 A» .m.D Ammo» uwuuos A» .m.a Annoy Dunums comflaflae ocmmaoauo cowHHHas , vqmusonus Husucouom snowman umoo mucosmuwowum mumoo mucmsoudsvom ..mx mom mucmo .m.DV cofiuoaooum Hofiucouom scauosooum ucomoum oowum muuoo .HH 000.000 000.000 000.0H0 sauce 000.0H 000.0H 000.0H «mono umauo 000.00 000.00 000.00 mmanmummo> uqaaam 000.00 000.00 000.004 asemuom 000.00 000.00 000.00 mmauom 000.00~ 000.0¢~ 000.000 some: 000.0H 000.04 000.00 000000 ONE non z mono macs owuuoz mungougvom . H mucmwuumc can mmouo ma .HmHucmuom ucosmoHo>oo mo Moo» mom mumoo new muomsmuwswmu Hmuwawuuom m.vmuH .~.v canoe 146 As the consumption of commercial fertilizer increases, there will be a greater need for pesticides to control insect and fungus pests and to suppress or eliminate weeds. The kinds of chemicals used are constantly changing as newer and more effective compounds are developed. Thus, one cannot project with certainty how much and what kind of pesticides will be required for high-level produc- tion at sometime in the future. According to W. B. Ennis et al. there is a linear relationship between fertilizer and pesticide use, i.e., 30 kilograms of pesticides per metric ton of fertilizer. However, it is possible to give a fairly accurate estimate of how much it will cost. For example, one might deduce from pesticide statistics pub- lished by FAO, that Egypt was buying pesticides at an average cost of little less or little more than one dollar per pound. But the average is heavily affected by large volume of low cost culfur and mineral oils.1 Recent sta- tistics in the United States suggest the cost of pesticides at the processing plants ready for use at about 70 cents based on imported pesticide price of 50 cents a pound. Adjusting the cost of the latter to 70 cents, to be representative of a wider range, and allowing for a markup 1W. B. Ennis, "Pesticides Inputs for Agricultural Production," in The World Foongroblem, a Report of the President's Science Advisory Committee, The White House (Washington, D.C.: Government Printing Office, September 1967). pp. 130-175. 147 after the product leaves the plant, might result in a cost per pound of perhaps $1.25.1 Therefore, to match Iraq's future consumption of commercial fertilizer, the country needs about 50.4 metric tons of a total cost of $139.2 million. In other words, the total cost of future com- mercial fertilizer and pesticide use would be in the general order of $468.2 million. The above estimated costs of fertilizer and pesti- cides were based on the prices in the international market and at a time when there was no fertilizer industry in Iraq. However, a fertilizer plant was constructed in Iraq in the late 1960's to utilize natural gas produced in the country to produce nitrogenous fertilizer. This plant cost ID 11 million ($36.3 million) and has a production capacity of 190 thousand metric tons annually. Production started in the early 1970's. The government has since expanded the fertilizer industries in an effort to expand the supply of this technical measure for agricultural intensification. In 1974, construction was started on a larger fertilizer plant, that will cost ID 60 million, with a production capacity of two million metric tons. Thus, Iraq should soon produce its future needs of nitrogenous fertilizers and also become an exporter of these products. 1Ibid., p. 195. 148 From the foregoing discussion it is clear that Iraq needs a new combination of practices partly to adjust to recent and current changes in irrigation systems, and partly to attain the full benefits from new crop varieties. Farmers and cooperative members have three basic decisions to make in their use of fertilizer: (1) the amounts of fertilizer to use per donum, (2) the crOpping system, and (3) the form and source of plant nutrients. Their choices among alternatives involve both agronomic and economic considerations.’ Agronomic information is necessary as a basis for determining the physical input-output, or response quantities, associated with fertilizer applied in different amounts, forms, and by alternative methods on different crOps. These data must be combined with correct economic principles if fertilizer is to be used in making the greatest contribution to farm profits and family living levels. Even though agronomic research provides precise knowledge of the responses expected from fertilizer on a particular soil, the Optimum usage of fertilizer still depends on economic considerations. The optimum amount and kind of fertilizer to be used will differ between points in time and among farms having the same soil 1B. M. Abdel-Sayed, "The Potential Use of Fertilizer for the Intensification and Development of Agriculture in U.A.R." (Ph.D. dissertation, Michigan State University, 1969). 149 and response function. It would depend on the amount of capital available, the tenure system, the ability of the operator to shoulder risks, and uncertainties and varia- 1 At each point of tions in fertilizer and crop prices. decision, the farmers or cooperative members must apply economic principles and information in the use of a fertilizer plan which is integrated into the profit maximization goal of the entire farm. There are three economic principles that are especially important in determining What crops should be fertilized and when and how much fertilizer should be used: (1) the substitution principle for deciding what combination of elements to use, or how far, for example, the farmer should substitute commercial fertilizer for legumes or barnyard manure and vice versa. (2) The opportunity cost principle. (3) The added cost-added return principle—-the principle of diminishing returns and marginal costs for deciding how much fertilizer to apply if the operator has unlimited capital. All of these, in essence, call for comparison of the marginal value products with marginal costs.2 Following is a brief discussion about these three economic principles. lDavid Hapgood, "Policies for Promoting Agricultural Development," Center for International Studies, Massachusetts Institute of Technology, 1965. 2Abdel-Sayed, p. 100. 150 The substitution principle.--In deciding whether to substitute fertilizer for legumes in a relation, one has to consider the nature of the soil and the cropping system. Soil test results are very effective in illustrating the influence of legume, forage crops and barnyard manure on the status of soil fertility. Legumes may be the most satis- factory source of nitrogen, if the farmer is short of ready cash and may not have the money to pay for commercial nitrogen.1 In such a situation, a well-planned cropping system including legumes is essential to supply the nitrogen needed for growth of the non-legumes. But it should be noted that the use of green manure is not a profitable practice at the present fertilizer crop price ratio, nor when there is a shortage of irrigation water. On the other hand, when legumes are used for forage with a livestock system of farming, the problem is different. The legumes serve the dual purpose of feed for livestock and as a source of nitrogen for the grain crops. In such a system, legumes are generally essential. The gpportunity cost principle.--With respect to decisions on the crOps to be fertilized, the farmer must select those crops which will give the greatest return from fertilization of specific crops to the return from the same 1F. E. Allison states in his article, "Nitrogen and Soil Fertility," USDA, Yearbook 1957, "that legumes may fix 200 pounds of N an acre each year if effective strains of the proper root nodule bacteria are present in the soil or are added to the seed as commercial innoculants. 151 capital used for livestock enterprises, or other investment opportunities within the farm business. This can be expressed in the following simple equation: MVPxi(Y1) _ MVPxi(Y2) _ MVPXi(Yj) Pxi ' ‘Pxi ‘ Pxi = 1 xi are variable resources, x to xd used in the production 0.1 J In considering whether or not to substitute one crop of any number of crops or enterprises from Y1 to Y for another, each farmer considers how it will fit in with his other crops. If a new variety of rice promises a 15 percent increase in yield but requires a twenty-day longer growing period, a farmer may reject it because it will 1The equilibrium conditions for the firm, assuming two factors and two products and both factors variables may be stated as: PY1MEEx1y1 = Py1MPEX2Y1 = PY2MPPX1Y2 = PY MEPXZYZ = Px 2 where Pyj - Price of jth product. px. 1 = Price of ith factor. MPPxiy- = Marginal physical product of the ith factor 3 used in production of the jth product. T. Kelley White and George D. Irwin, "Farm Size and Specialization," in Size Structure and Future of Farms, ed. by A. Gordon Ball and Earl’O. Heady (Ames: The Iowa State University Press, 1972), pp. 190-212. 152 prevent his planting the succeeding crop on time. He may likewise continue to grow a crop that doesn't seem very profitable considered by itself provided it fits well into his cropping system.1 Risk aversion, an unwillingness to depend on the market as a source of wheat for the family consumption may favor wheat even when its monetary return seems to make it a less desirable choice. Therefore, it is apparent that the role of management in planning farms for optimum fertilizer use involves the whole farm business family complex, laying all resources together, learning how the amount of one affects the productivity of the other and then deciding on the most profitable combination for the entire farm unit.2 Marginal cost-marginal revenue principle.--It is apparent that equaling marginal costs with marginal revenue or marginal value product of the fertilizer with the price is not a simple task for the farmers or cooperative members. The production economist would even find it difficult to make such estimates because data are confused, inaccurate, and also because of the complex of the factors that influence yield. lAbdel-Sayed, p. 102. 2Ibid., p. 103. 153 Many natural factors and many management practices influence yield responce and modify the operation of the above economic principle. Internal and external access to capital, and risk and uncertainty as to returns from an application of fertilizer keep cooperative members from applying as much fertilizer as would be profitable--the optimum-~if there were no uncertainties as to the result. Also, the cropping systems, inadequate information, and modification in economic incentives and non—economic influences might affect the environment in which the economic theory has to function, and perhaps fail to be fully implemented. While the impact of the price level on increasing investment and productivity cannot be disputed, the tenure structure in providing incentive structure, influence farm- ers'responses to the use of the fertilizer or any other technical measures. In other words, residual responses may also bring up important questions of prOper fertilization rates on tenant farms under temporary management. The best rate of application for a tenant who will move at the end of the year and get no return from residual response is higher than for the owner who will stay on his farm. Thus, land tenure influences the decision of farm operators in a number of ways. The best fertilizer combination between owner- operated farms and temporary tenants, depends on the process of redistribution. 154 It can be shown that a tenant farmer paying all the costs of fertilization, or any other input, but getting only a share of the yields should not apply as much fertilizer for maximum profits as an owner or cash tenant. Figure 4.3 shows the difference in return on investment in different tenure structures. Method of analysis.--The optimum or most profitable level of fertilization as farmers seek to maximize profits, in a decision making environment of unlimited capital, is defined by the equation:1 92.: 2! dx Py 1A great deal of valuable work in the field of economic efficiency as it relates to leasing arrangement has been done: "Two major sets of goals--(l) maximizing of economic efficiency in resource use, and (2) attainment of distributive justice in the allocation of return between landlords and tenants--have far-reaching effects upon the determination of ideal and workable leasing systems. Eco- nomic efficiency is often heralded as one of the principle objectives to be attained under leasing arrangements." In his valuable discussion of the "Leasing Arrange- ments," Barlowe points out that: "Among the leading issues that arise in the development of mutually acceptable and advantageous leasing arrangements are the concerns over (1) equitable sharing arrangement covering costs and returns; (2) comparable rental arrangement with all products; (3) opportunities for a fair return from all investment inputs; (4) flexibility, which permits adjustments for changing costs, prices and production; and (5) arrangement that recognizes social justice and welfare objectives. The first three of these issues have an economic efficiency orientation while the last two are concerned mostly with social justice.” Raleigh Barlowe, Land Reserve Economics (Englewood Cliffs, N.J.: Prentice-Hall, Inc., 1972); andfiEarl O. Heady, Economics of Agricultural Production and Resource Use (Englewood Cliffs, N.J.: Prentice-Hall, Inc., 1951). 155 A. U) f} MVP s 4..) o m IO :3 I u 3; MVP . m I 8 /\L // m Input Units B MVP 90% of MVP m C /_——\ g m : \ a: ,' : '0 l | I: . g I ‘6' I I 0 l I | I , I . I ' I R 8 Input Units Figure 4.3. Illustration of the possible effects of (A) a one-half rental arrangement and (B) a 10 percent percentage leasing arrangement upon the tenant's willingness to apply addi- tional inputs in the production process. Source: R. Barlowe, Land Resourge Economics (Englewood Cliffs, N.J.: Prentice-Hall, Inc., 1972), p. 468. 156 where the term to the left of the equal sign is the marginal yield or response and the term to the right is the price ratio (price per unit of fertilizer divided by the price per unit of output). The marginal yield is the derivative of yield in respect to nutrient; it is the slope of the response function for any particular input level. It is obvious that the most profitable level of fertilizer changes as the term to the right of the equality changes. Likewise, the optimum level of fertilization will change, as the price of the crOp, fertilizer or any other product or resource of the farm changes. How much change needs to be made in fer- tilizer use, as prices change, depends on the slope of the response function.1 The above equation with a schedule of marginal physical products of any crop, can be used as a tool in finding the most profitable rate of fertilizer application. This can be done by dividing the cost of the unit of fer— tilizer (one kilo for example) by the price of one kilo of cotton, i.e., find out how many kilos of the crop could buy one kilo of the fertilizer, then compare the marginal physical product with the price ratio.2 Recently more adequate recognition has been given to the influence of price policies in product and factor markets in creating incentives for farmers which, in turn, lAbdel—Sayed, p. 104. 2Ibid., p. 104. 157 may encourage or discourage the adoption of new technology. As Schultz emphasized, there are three economic requirements for increasing agricultural production in the less developed countries. These requirements are: (1) an efficient system of prices for agricultural (farm product prices, agricultural input prices and the prices of consumer goods and services that farm peOple buy; (2) agricultural inputs that are profitable for farmers; and (3) the discovery and develOpment of such agricultural inputs through organized research.1 The farmers' incentives to invest in high produc- tivity inputs such as fertilizers, would be increased if the ratio between cost and return is improved. This can be accomplished by higher and more stable product prices or by lower costs per inputs. Thus, in discussing fertilizer use or any other technical measure in Iraq, the most important factor is the provision of adequate incentives for farmers and cooPerative members to increase the rate of fertilizer application. While the foregoing discussion has briefly outlined the economic principles that influence the pro- vision of adequate incentives, non-economic measures such as the structure of supporting services also are important. These will be discussed later in the chapter. Furthermore, 1T. W. Schultz, Increasing World Fgod Supplies—-The Economic Requirement, National Academy of Science, VOIZ 56 (August 1966). 158 more research is needed on the impact of these economic principles on the provision of adequate incentives to use fertilizer in Iraq. Mechanization: The Use of Farm MaEHinery‘ Mechanization, which in developed countries, is often though of exclusively in terms of labor saving, 1A great deal of valuable work in the field of agricultural mechanization has been done. There is the work which deals with an area similar in many ways to Iraq: Agricultural Mechanization in Equatorial Africa, by B. A. Slout et al. This study, the result of several years work including 18 months in the field, is a comprehensive compi- lation of information relevant to agricultural mechanization in equatorial Africa. A sampling of the specific informa- tion contained in the report and relevant to this disser- tation include: "the importance of adequate markets before increased productivity can be profitable, the need for simple but effective methods of record-keeping for small farmers, and the fact that the cost of mechanization should be met out of resulting increase in production, and that tractors are ordinarily economical only if they can be used for a major portion of the year. . . ." Of equal importance with this wealth of particular facts is the general philos- Ophy of mechanization which forms the essence of this report. The Preface summarizes the team's view of this important but difficult undertaking: "There is no question that mechani- zation will be employed; the question is at what level and to what degree. These questions do not seem difficult to answer until one considers that agriculture is only one aspect to be considered, and that mechanization is but a small segment of agriculture. In other words, questions about mechanized agriculture must be considered in relation to much broader social, economic, and political issues. Thus, . . . there is no single or simple path to develOpment. The role of mechanization in agricultural development will continue to be a matter of opinion and conjecture." B. A. Slout, G. Kline, D. A. G. Green, and Roy L. Donahue, Agricultural Mechanization in Equatorial Africa, Report No. 6, College of Agriculture and Natural Resources, Michigan State University, 1969, pp. 2, iii. 159 actually is a necessary part of the "high potential package" to which farmers must have access for timely and satisfac- tory land preparation, fertilizing, and planting. One of the important prerequisites for high yields in crOps is a good seed bed, but this cannot be prepared, especially with fine textured soils, without adequate power for plowing, harrowing, and smoothing the soil. For example, some of the high yielding varieties of wheat will not provide good stands of plants under the traditional practice of throwing seeds on the ground and plowing them under. Instead, grain drills must be used. Similarly, the application of large amounts of fertilizer required calls for mechanized appli- cation, for best return on investment. These operations cannot be adequately handled by hand labor or by animal power in a short period of time. In addition, timeliness of land preparation, planting, and harvesting are important to high productivity. Therefore it may be critical to mechanize certain operations in order to encourage and facilitate double cropping. This possibility is favored especially by the new high yielding varieties with sub- stantially shorter growing seasons and less photo sensi- tivity. Any delay in soil preparation means lost time for preparing crops and loss of income. Hence, of the inputs needed to sustain high levels of agricultural productivity, adequate farm power or implements are important. 160 The payoffs from machinery have been well categorized, "mechanization can . . . permit the completion of tasks with more precision, accomplish more work quickly, develop resources not presently utilized and accomplish tasks not possible with traditional techniques."1 Furthermore, under appropriate private rental, coOperatives or state sponsored arrangements, such mechanization services could be available to farmers on small farms or to those farming under coopera- tive systems. The experience of Japan in this regard is very significant, especially the small scale implements and power machinery, that could be developed for small family-farm system. The use of modern farm machinery has increased rapidly in Iraq since the early 1950's, but the quantity of machinery imported has been extremely limited in relation to the needs of the country. Most of the new farm equipment was purchased for the plains and northern farms, as the irrigated farmsof the South were less adaptable to the use of large machinery for cultivating, planting and harvesting. The most advanced and highly mechanized areas are the marginal wheat and barley areas of Iraq. Farming there is of the extensive kind and mechanized units are large. 1Lyle P. Schertz, ”The Role of Farm Mechanization in Developing Countries," Fore%%n Agriculture (U.S. Depart— ment of Agriculture), VI, No. (November 25, 1968). 161 In other parts of the country, much wheat and barley is still produced by primitive methods. In the pre-reform period, 1952-1958, the flow of new farm equipment into the country was constant. Using tractors as an example, records of machinery and equipment sold indicate that an average of 300 tractors was purchased each year as seen in Table 4.3. Roughly a third of the tractors were owned by the government and were used for demonstration purposes and were hired out to farmers. While this was taking place quite slowly, a gradual change took place from dependence upon traditional practices to a more modern agricultural cultivation practice.1 In an effort to expand mechanization in the c00pera- tive areas, new services and supplies have been brought in during the post-reform period. The government established 20 or more machinery hiring stations throughout the country, which permitted cooperative members and tenants under tem- porary management to rent modern machinery and equipment from the inventory of the Ministry of Agrarian Reform. However, neither the progress of the cooperatives nor the supply of machinery available were particularly impressive. Most of the machinery was inoperative due to breakdowns, lack of spare parts and trained personnel and other manage- ment and administrative problems. By December 31, 1968, ten lTreakle, p. 35. 162 .oeonmem .mmeum unusnuo>om .muoeuumnn Heowumwueum .meuH mo unannmmm "mounom .nmma on» one weHH nee3uon unmaeenmn oesonoom one HeOAnnoeB we» nua3 eone vououoe nH muumanaz auoumm neaueumn an» an ammo any scum peuuomsfi muouoeuu eoa wepnaonH a .eouuomou adeueuemom uoz I ma em .hm HOH em mm Hm mm HH m OH H huenanoea Heunuanowume nonuo hm." mom mz m2 mz mz mz mz mz mz mz anus-mauve nofiuem lemma one manna neues mm mm «a n ma 0H ma we o o m muonoufln em ha ma m ma ma an we 0H dd m2 muemeuom ooeam me 3. 00 0m mm mm an on a S mz 0.2313 2326004 mz mz III III e H H H mz m2 III mH0>OZ III III 0H III m III 0 III III A N unannouna mmm men No Hma mm mmm mam on va Hue mm menwnsoo owe mum mod No mo and sea om ema mod me muoue>wuanu m o m e NH NH 0H III N m. m madame nfleuo mm me me we ov mm hm hm mm me an msouuen omen mmm mmm mmm mm How NNN 0mm oma mma had we mzoam omo.a th «owm mNH vmm mum Hem mom mmm men moa muouoeua 0.8.404 Nome Homa coma mmma mmma hmma omma mmma vmma mmma NmmH mama momHImmmH .oaom unmamflnme one huenwnoes Heunuanoaume m.veuH .m.v wanes 163 years after the enactment of the first agrarian program, the number of farm machines represented only 10 percent of the country's need. The total number of farm machines, private and public, was in the following order: 8,686 tractors, 2,169 combines and 9,247 irrigation pumps. Rigorous measures were undertaken to expand the mechanization of the agricultural sector in the late 1960's and especially after the enactment of the new land reform program of 1970. The Ministry of Agrarian Reform has fol- lowed two methods in expanding agricultural mechanization in the agrarian reform areas. The first, was to develop the Mechanical Units and Rental Stations, and promote their efficiency in the provision of the mechanical services needed for agricultural production as shown in Table 4.4. Several measures were initiated in this respect. Examples include the transferal of the Directorate General of Agricultural Machinery and Implements, formally attached to the Ministry, to the State Organization of Excavation and Agricultural Stations which has under its administration the Agricultural IMechanical Station, and the establishment of a Mechanization Institute at Abu-Ghriab for the training of technicians and drivers. In 1970, more than 1,221 technicians and drivers ‘were trained at this Institute. This training process still Icontinues. The government also encouraged the formation of Iwork and wage systems that will reconcile the private inter- «est of technicians and drivers and the public interest. Also .1654 .HHHH .uOHumHuaum no nonhuman Hennnd .mnoauenwnemno Heonuuaueum Heuunoo .manneHm mo auumwndz menu "mounom 000.0H000 0H H0 00H 000 00 0 0H 00 HH HOH 00 HH 000 000 00L H0009 moo.H 0v II II II mH II II II II II II II II II II II muouoeu uwemou manna II II II II II HH II II II II II II II II II II II ousuHumcn :oHunuchaooz II II II II II 0 II II II II II II II II II II II canon» nHenno not II. II II II II 0 H II II II II n 0 II 0H II 0H 0H00 Huochaooa Hoa.0 00H 0 H 0 0H 0H H II II H H II II II HH 0H 0H ans Huochaooa «queens: H00 0H II 0 H 0H II H II II H H 0 II 0 II 0 uHca HuoHcaauoa gunman HH0.H 0H H 0 HH 0H 0 II II II H n 0 II 0H 0H 0H :oHuuuu uuHs census HHH 0 H HH 0H HH H H II II H II II II Hm 00 on coHuuuu «HHH unoIHaa H00 0H 0 0 HH 0H H H 0 II H H II II HH 00 HH coHuuuu ouHa usHuHeuaIHu H00.H 0H H H II 0 II H II II II 0H II II 0H HH 0H 0H00 HooHaoaooa HHHHHH H00.H 00 H n 0 HH H II II H H 0 II II 0H HH 0H coHucuu «HHH uanzm 0H0.v 00 H HH 0H on H H H H 0 0H II II 0H 00 on :oHuauu «HHH uHuaz II II H 0 HH HH H II II H II H II II 0H 0H 0H uHau HuUHauaooa nHonuon II II 0 0H HH 0H H II H H H II II II 0H 0H 0H uHcs HuoHnueooa aoHHnam HHH 0 n 0 0 HH H II II 0 H H 0H II HH m 0H aoHuaun «HHH unnquHa mmm 0H H 0 HH 0H H H H H H H 0 II 0H H0 H0 coHuaua «HHH uHaHa HHH «H II II II 0 H II II H 0 H II II HH 0H 0 0H00 Hoochnuos uHHuHuoH 00H.H «H II II II 00 vH II HH HH 0 0H II 0 mm 00 00 coHuauu «HHH nHouno sac II II II 0 H 0H H II II H II II H II H0 H0 00 .0». ouHe aanuaHuHamIHu 0H H H m 0 0H H H II 0 II 0 0H II 0H 00 00 :oHuuum «HHH xnqun II II II II II 0H H II II II II 0 «H H H 00 HH coHuauu «HHH HHnue II II II II II 0H H II 0H H H 0H 0 0 0 00 0H coHuuun «HHH ao>ucHz m. m an am. Hm... msmu In mmmnmmmmmmummmmm i w T. e m. r.A o T. u. s .b m w. 1. a m 1 1 .b e T. r. a u. o a .a m. 1% 32 33W. Jautxmvtd 1 anos 818.48 ”0.189 1 1 J 2 B m 1 MO 8 8w 9 w: .m a 1 9 am. a t m .8330 no 300 canon Hones nonwnoe: >>eom nonanuez HeunanoHumn HumH one ma nnOHueun Heoanenoos HeunanoHume no noHueHHnemuo Heuonem oven» on» an oonao Hanan one .nunaloamna one nonfinoen Heunudnowume abeon one uanH .emsnn u.meuH .v.v oHnea 165 in an attempt to encourage the use of machinery, the government reduced the rental cost by 50 percent to the farmers and 60 percent to the cooperative members. The low rate for cooperative members favored collective mech- anization by members of the local, joint and collective c00peratives. This was carried out through the purchase and ownership of the machinery and implements by the cooperatives. Encouragement of ownership of agricultural machinery by c00peratives was pushed to overcome previous drawbacks and foster improved performance in the use of the machinery and implements. Imports of agricultural machinery have considerably increased, as is seen in Table 4.5. By 1973, the total number of machinery and implements for both the private and public sectors was as follows: 12,580 tractors, 2,673 combines, and 12,745 agricultural implements. Altogether total imports of machinery and implements increased more than fivefold between 1958 and 1973. While the statistics in the above table show that significant changes have taken place in agricultural practices since 1970, the supply of agricultural machinery and implements is still less than the country needs for adequate agricultural mechanization. Now the question is, what is an adequate level of agricultural mechanization in Iraq? According to G. W. Giles, who discussed the question of what constitutes adequate min- imum Tractive Power for general farming, concluded that the .166 .HO0H .uoHumHueum mo noenumnn Hennnn .nOHHeNHnemuo Hecaumwueum Heuonou .mnwnneam mo mnumwnwz mesa “mounow 00H 000 H00 000 mucmsoHnsH nonuo mOH III ohm III muonmonna one m3ouuem omen 0H0 H00 0H0.H 000 muou0>HuHso HHH.H III 00H III mamsoHn omHo ecu macaw HOH.H H00 HHH.0 000 mnouoeua 0H0 000 000.H 00H mmcHnsoo 000HI000H HHmHImomH 000HI000H momHImmmH mans Houoom eue>Hum nouoom unannm Houoom oue>wum nouoom unannm HHHH Ha 0Hom ucmanssm 0:0 HumcHaoen HmusuHaoHnmm .0.0 «Hams 167 minimum power required for high-level crop production is in the range of 0.5 to 0.8 horsepower per cultivated hectar (including animal and manpower).1 However, the study on "Agricultural Potential of the Middle East“ concluded that for the subsequent calculation, it is assumed that an adequate level would be 0.75 horsepower. It is believed that an area with predominantly fine-textured soil would be underpowered at .05 horsepower per hectare, and that 1.0 horsepower per hectare would represent overpowering, although understandable perhaps in terms of convenience.’ While the tractor is usually the largest single item of farm expense, the most economical tractor size for Iraq differs according to different soil and terrain situations. For the fine-textured soils where cultivated areas are large enough, a 40-45 horsepower tractor will do a much better job.3 1G. W. Giles, ”The WOrld Food Problem," a Report of the President's Science Advisory Committee, The White House (Washington, D.C.: Government Printing Office, September 1967), p. 178. 2Ibid., p. 178. 3A great deal of valuable work in the field of mechanization has been done by B. P. Pothecary. He pointed out, "Almost no developing country has based its mechaniza- tion program on tractor of low horsepower (70 hp or less). Reasons for this include unfavorable circumstances of soil, climate, crOps, production levels, and skills, as well as the fact that many of the fundamental tasks to be done require more than 70 horsepower. Then, too, there is a lower cost per unit for manufacturing large tractors. Nevertheless, in India the introduction of 15-70 hp tractor with four wheels has been a great success; and a major reason for this is that farmers prefer riding a tractor to doing the manual labor which is necessary with two wheel tractors. Pothecary concludes that a 15 hp four wheel tractor would be eagerly used by farmers in developing countries. B. P. Pothecary, "The Small Tractor in Developing Countries," World Crops 21 (July-August 1969). 168 But the study used the 25-30 horsepower tractor size as a basis of calculation.1 The fact that this size may be either too large or too small, depending on specific situa- tion, does not appreciably affect the overall calculations (of cost per hectare of land calculated. The manufacturing cost, at the time the study was conducted, would permit sale tn: the farmers at about $120 per horsepower. Therefore, :[raqfs need for additional power for attaining the production Exatentials would be 2.48 million horsepower; i.e., 83,000 izractors of 30 hp. and would have a total cost of $290 million; wihile Iraq had 2,400 tractors in early 1960's, the difference Imould be 80,600 tractors. Since the number of tractors has :increased considerably, 12,580 in 1974, the additional number <>f tractors required and the cost are likely to be somewhat lower than the results of this study. Although the tractor is used as an example of power Ineeds, the grain combine, serving more area than the tractor, :is a more expensive piece of machinery. In considering the «costs of plows, disc harrows, drills, planters, fertilizer ciistributor and other equipment, it is assumed that equipment can be used to its full potential. That is, one grain combine _—_r 1Clawson, p. 150. 169 may harvest the area served by five 30 hp. tractors. Thus, the farm units must be rather large or else large machines must be shared by a number of farms, as is being done now in Iraq. As Giles pointed out, "other farming implements and accessories are needed for high level agricultural production . . . it turns out that the cost of equipments other than tractor approximate the cost of the tractors. With elimina- tion of a few items, the cost of tractors represent 56 percent of the total equipment cost."1 The major item missing in these calculations is transportation equipment, such as trucks for hauling grains and other produce. The net outcome of the calculations, based on 0.75 hp. per hectare, $120 per tractor horsepower, and tractor cost representing 60 percent of the total equipment cost, is total equipments'investment of $150 per hectar, or $61 per acre. The cost of maintenance and repair of tractors and other major farm machinery in Iraq, as in many developing countries, has been greater than in the countries where such machinery are manufactured. This is partly due to the cost necessarily associated with imports of spare parts; lack of trained and experienced repairmen; and in part because maintenance and repairs have often been neglected until more costly repairs were necessary. This situation, it is lGiles, p. 178. 170 hoped, will improve in the future, especially as machines are used in larger numbers-—providing both economies of scale in servicing and putting more machines of the same make in the country. Considering the experience of the United States, the annual replacement, repair and operating costs of this machinery should be somewhat under 20 percent of the annual cost of farm machinery and equipment. The Ministry of Agrarian Reform in another recent study has concluded that to expand agricultural mechanization in this period (1970's to 1980), Iraq needs 36,000 tractors of 60 horsepower, 8,000 combines and 9,800 other pieces of equipment and accessories.1 In an effort to meet the emerging demand for these machines, Iraq has started a production plant for agricul- tural machinery and equipment.2 The agricultural machinery plant in Iskendareyah produced 530 tractors in 1971 and 1,012 tractors of 60 horsepower in 1972. Since then, the production has expanded considerably; in 1974, Iraq produced 2,100 tractors of 70 and 80 horsepower and 10,350 agricultural implements such as plows, disc harrows, planters, etc. Thus, while the process of agricultural mechanization was quite slow during the 1960's, since the early 1970's, there has been a lClawson, p. 151. 2Iraq, Ministry of Agrarian Reform, Annual Report, 171 a significant change in agricultural practices, i.e., from traditional and primitive cultivation to a highly mech- anized farming.1 To expand employment opportunities in the rural area, especially for those who did not benefit from the agrarian reform programs, the agricultural machinery plants are located in the rural area. The employment affect in manufacturing, distributing, and the many repair shops in the rural areas, has been very significant in providing job opportunities. In the long run, the new employment will probably not care for more than a fraction of the probable shrinkage in agricultural employment, but it nevertheless will assist in providing jobs and thus is highly important and deserves attention. While further.research is needed in this area, the future employment opportunities in the agricultural sector, depends on the economic organization within this sector. This point will be discussed in the next chapter. 1H. F. McColly lists important factors in the advancement of agricultural mechanization which include: development of industrial production, development of machines for small farms, favorable price of fossil fuels, shortage of labor, inefficient draft animals, and an encouraging governmental policy. After surveying the Japanese situation in detail the article concludes that it is a model of agricultural development. H. F. McColly and J. W. Martin, Introductign tg_Agricultgral En ineerin (New York: McGraw-Hill Book Company, Inc., 172 The Structure of Supporting_Services Throughout the early 1950's, prior to the enactment of the first land reform of 1958, it was felt that there was no need for a land reform program. Widespread and often uncritical acceptance was given to the assumption that the position of the small farmers, tenants and share croppers, would automatically and invariably improve with the gradual monitization of the agricultural economy through economic development. There is every reason to believe that, after the monitization of the agricultural sector, i.e., the investment by the landlord in the form of machinery and irrigation pumps, the gap between the rural rich and the rural poor had widened. This was mainly due to the defective agrarian structure. New technology, the adoption of new varieties of wheat and rice along with the package of farming practices called the Green Revolution, has encountered some of these problems. Despite its positive results, several weaknesses and new problems created by this technology deserve recog- nition. As Ladejinsky has noted in speaking of India, without minimizing the significance of the accomplishment, however, one must say that the revolution is highly "selective,” even if its spread effect is not inconsiderable in certain areas. The green revolution affects the few rather than the many, not only because of envi- ronmental conditions but because the majority 173 of the farmers lack resources, or are "institutionally" precluded from taking advantage of the new agricultural trends.1 It seems reasonable to believe that the green revolution has created employment opportunities, both in agricultural production and in the handling, processing and marketing of increased output. However, employment oppor- tunities in the production phase may have become more pre- carious, with less permanent employment, but increased seasonal work, and fewer opportunities for renting land. As land values have risen and the prospect for profit from farming has increased, some landlords have taken their formerly rented lands for operation on their own account without hired labor.2 The new technologies are certainly the primary reason for the inequalities in the rural areas. It is not the fault of the green revolution that credit services do not serve those for whom they were originally intended, that the extension services are fairly behind expectations, that the village councils are essentially political rather than developmental bodies, that security of tenure is not given to the many, that rentals are exorbitant or that ceilings on land ownership are national. To a considerable extent these are man-made issues of long standing. 1W. Ladejinsky, "Ironies of India's Green Revolution," Foreign Affairs 38 (l970):763-764. 2Dorner, p. 26. 174 Modernization of agriculture should include a combination of technical factors geared to higher production and environments in the institutional framework to benefit the rural underprivileged.l The green revolution, therefore, is not a substitute for a land reform program. In fact, a comprehensive agrarian structure becomes in- creasingly imperative as the role of new technologies accelerates. Therefore, the structure of supporting services should function as an integrated unit with the ability to coordinate its activities within the agrarian structure. It should be internally capable of facilitating vertical integration within itself, and complementary arrangements, horizontal integration,with other structures, the tenure structure and productive structure, to undertake the rural and agricultural development activities. In effect, the structure of supporting services should be able to perform effectively the functions previously performed by the land- lords, money lenders and shopkeepers and private processors. Thus, such a proposed system should operate as an effective alternative to non-institutional structures.2 1Ladejinsky, p. 766. 2For an analysis of this phenomenon, see the experience of Taiwan and (l) as Christensen (1968) reports: "Land reform in Taiwan was successful in increasing agri- cultural output and productivity for several reasons. Perhaps most important is the fact that supporting services to provide extension education, marketing, credit and pro- duction requisites had been built up. In addition, tenant 175 While the first land reform of 1958, emphasized expropriation and redistribution of land; lack of supporting structures influenced the attainment of its objectives of increasing agricultural production and productivity. For- tunately, in conjunction with the enactment of the new land reform of 1970, the government established new insti- tutions and initiated rigorous measures for the reform of supporting structures. The discussion which follows examines the performance of these structures and assesses their future prospects. It also points out problems and policies that it may have to face in the realization of its prospects. The Cooperative Movement The first land reform of 1958 required farmers to join agricultural c00perative societies that provided them with improved seed, fertilizer, machinery and guidance. farmers who became landowners were experienced farm operators accustomed to making managerial decisions" (p. 89). R. P. Christensen, ”Taiwan's Agricultural Development: Its Relevance for Developing Countries Today,” Foreign Agricultural Economic Report No. 39, U.S. Department of Agriculture, 1968. (2) As Voeltiner (1970) reports: ”The Japanese record is equally as impressive. Here too farmers received new incentives to intensify productive efforts as they became owners of land rather than tenants or share croppers. Although suffering from the exhaustion and destruction of the second World War, Japan nevertheless enjoyed many of the same favorable circumstances existing in Taiwan, and have too the role of agricultural output following the reform accelerated." H. E. Voelkner, "Land Reform in Japan," Agency for International Development, Spring Review of Land Reform, 3 (1970): 1-79. 176 To insure the proper functioning of these cooperatives, the Directorate General of Agricultural Cooperatives was established in 1960 to supervise these cooperatives in the agrarian reform areas. The drive for the organization of many more cooperatives was begun in 1961. But as the membership was confined to new owners, the great majority of the recipients of land "temporary tenants” could not form cooperatives at all, as they could not offer their land as security; more were entitled to get farm machinery services from the Ministry of Agrarian Reform. Later on, these draw- backs were overcome. Temporary tenants were allowed to form cooperatives, the 1964 amendment of the law, and a number of cooperatives including them were formed. This amendment also gave the right to form cooperatives to farmers whose owner- ship did not exceed the redistribution ceiling in the areas. The expansion of cooperatives actually started in 1964 when there were 253 cooperatives with 36,249 members. However, few of these cooperatives confined their activities to one or two lines, the provision of seeds and pesticides or the hiring of machinery; few owned tractors and some marketed produce. Ten years after the enactment of the program in 1968, there were 499 cooperatives with 65,784 members, but it was doubtful if all these c00peratives were active. The area under cooperatives represented 41 percent of the total areas under the administration and management of the 177 Tlinislry. The proportion of the beneficiaries who were members of cooperatives was 24 percent of the total number of land reform beneficiaries. In addition, the cooperatives did not expand to the areas outside the agrarian reform areas. The lack of trained personnel had been a serious problem, especially for cooperative expansion. Even the center for cooperative and extension training, which was established in 1963 with the help of FAO, could not offer training for cooperative supervisors to more than 327 supervisors in 1968. Even with all the emphasis given to these cooperatives, so that they might become links between the state and beneficiaries for the provision of services; both the number established was far below the country's needs, and their performance was limited and inadequate. Since the 17th July 1968 Revolution, and after the enactment of the new land reform of 1970, the Ministry of Agrarian Reform has taken the initiative in expanding the number of c00peratives and improving their performance. The number of cooperatives has increased manyfold, as seen in Table 4.6, and their activities cover the provision of credit, marketing and the supply of agricultural requisites, as will be discussed later. The questionnaire "Analytical Framework for the Evaluation of Farmer CoOperatives" that was sent to the Ministry of Agrarian Reform, revealed that by 1974, there .HO0H .moHumHueum mo uoeuumnn Hennnn .nowueuflnemuo Heowumfiueum denunoo .mnwnneam mo huumwnflz menu “oounom .m\Hm ou m\H sown mnemon nown3 Meow o>wueuom0Ioo on» on ooueaon on eueo one "ouoz 178 III III moo.mvv.HH -H.0m~ mmm.H mumH 0mm.v¢~ mmv.o~m mmm.m omo.ovH wmm NHmH mmm.va Hmm.hom oo0.o mom.o~H Hmm HhmH omo.0m 0mm.MH~ HmH.m hm>.hOH ooh osmH voo.mn mmm.mvH mHo.m HOH.@h moo momH mmH.mm omN.HHH hm~.m onm.~o mun momH mmm.Ho ov0.00H mNm.~ omh.¢m oav homH mHm.o~ 00H.oh mom.~ mmh.hv hon oomH mHo.oH 00m.om 0mm.~ He~.mm mmm momH m00.0 mmo.m~ mum.H omv.mm mam eomH NOH.m «Hm.h mow vov.HH mo momH vmo.~ nHm.m How 0mm.m om NomH vme m0o.~ mbH oom.m 0H HomH H.o.HV H.o.Hv Hmsnnonv muonsoz mo>aueuomoIoc meow HeuHmeO HeuHmeu xuo3 mo>wueuom0Iou no nonsnz o>uomon mnIoHem gowns nw meoun mhmHIHomH .mo>fluenomooo Hehnuanownme on» no mmoumonm m.UeHH o.v oHneB 179 were 1,361 cooperatives with 250,180 members. It also indicated significant improvement in the performance of these cooperatives. The Ministry has encouraged the establishment of "joint cooperatives"1 to complete the cooperative structure and increase the participation of the cooperatives in the development tasks. This task was undertaken gradually. Joint cooperatives render services to c00perative societies that they are unable to undertake individuall such as agri— cultural mechanization and the use of pesticides. These joint c00peratives form among themselves a cooperative union 1The noteworthy feature of experiment in Taiwan is that cooperatives have been developed and operated as part of self-contained network and an integrated system covering credit, marketing and the supply of requisites. Further, the cooperative system in fact has other functions than that of a mere supporting service structure; it has assumed all the characteristics of a development oriented agency as well as being an efficient mechanism for mobilizing rural savings. These cooperatives play a fourfold role. First, it is one of increasing the bargaining power and promoting group activity among farmers, an objective emphasized in regard to cooperatives in the industrialized countries of Western EurOpe. Secondly, they provide services to agriculturalists by acting as an agency specially sponsored by the State. Thirdly, they act as an extension agency for spreading knowledge of new techniques; fourthly and perhaps most importantly, they operate as an agency for mobilizing rural savings for accelerating economic development. Republic of China, "Land Reform in the Republic of China" (RU: WLR-C 66/45), pp. 35-40. 180 at the province level, while these local unions form the "General Union of Agricultural Cooperative" at the national level as seen in Table 4.7. The organization of joint coop- eratives started in 1968, and in 1972 the General Union began its activities and rendered its services to c00perative areas throughout the country. By 1973 there were 132 joing cooperatives, representing 818 societies, and utilizing 201,242 donums. Furthermore, the General Union has expanded its activities outside the agrarian reform area. There are about seven million donums, 29.5 percent of the total area utilized annually, owned by 23,044 landowners, whose owner- ship holdings are less than the maximum ceiling, employing about 150,000 farm families outside the agrarian reform area. Forming c00peratives among tenants and owner-operators is essential to expand the structure of supporting services. By 1974 there were 92 c00peratives with 3,561 members. Another important measure, aimed at improving the performance of the cooPerative, was to overcome the problem of lack of trained personnel. This task was carried out and through different channels. For example, the center for cooperative and extension training, was replaced by the "Agricultural Cooperation and Extension Institute." The Ministry of Agrarian Reform paid more attention to the preparation and training of the technical staff through special training courses for the agricultural colleges, 181 Table 4.7. Iraq's distribution of agricultural cooperatives by governorates up to 31/12/1972 Local Joint Agricultural Agricultural Collective Governorate Co-operatives Co-operatives Farms D'hok l7 1 -- Nineveh 135 8 -- al-Sulaimaniya 42 7 -- Arbil 39 5 -- Kirkuk 70 9 -- Diala 42 7 2 al-Anbar 50 5 -- Baghdad 116 15 4 Wasit 109 6 1 Babylon 84 8 -- Kerbela 25 4 1 al-Qadisiya 76 10 -- al-Muthanna 27 -- I -- Maysan 106 10 -- Thi-Qar 52 7 -- Basrah 25 3 -- Total 1,015 105 8 Local Agricultural Co-operatives: The Local Agricultural Co-operative society established or to be established and registered according to the provisions of the Agrarian Reform Law No. 117 for 1970, and the instructions of the Higher Agricultural Board No. 149 for 1972, includ- ing all the co-operative societies at the village level. Joint Agricultural Co-qperatives: Joint agricultural society consist- ing of two or more Agricultural Co-operatives, and working within a wider scope than the village, as it is at an administrative centre level. Collective Farms: Agricultural Co-operative Establishment, based on collective work of members, and collective ownership of production means. Source: Iraq Ministry of Planning, Central Statistical Organization, Annual Abstract of Statistics, 1972, p. 93. 182 institutes, and school graduates. These training sessions, in-service or on-the-job training, lasted from three to six weeks and covered various areas, such as cooperative adminis- tration, book-keeping, credits, marketing and processing, etc. This training process still continues. By 1973 1,202 c00per— ative supervisors and 314 inspectors had graduated from this Institute. They were assigned to cooperatives throughout the country. In addition, many agencies at the Ministry level continuously hold short courses for training officials on cooperative management and increasing agricultural production. The Ministry also established 980 Adult Education Centers for the training of the c00perative members through- out the country to expand the introduction of the new tech- nology and improve agricultural practices. These centers conduct short-term courses three to four weeks, to train the cooperative members in various agricultural practices such as, the use of the new technology, cooperative principles, maintenance of agricultural machinery, credit and marketing processes. By 1973, 450 c00peratives with about 9,000 members participated in this training program. Other training ses- sions, held at the agricultural colleges and Institutions, were conducted to train the members of the Board of Adminis- tration of these cooperatives. More than 470 c00peratives and 1,473 Board of Administration members have participated in this program. In addition, an agreement was reached with the German Democratic Republic for establishing an institute 183 for agricultural education "The Social Agricultural Institute" in Seven April Project for the training of technicians and farmers on the management of State, Collective and Cooperative farms. The Ministry planned to establish another training center in every province to expand the training and education processes.1 The Ministry of Agrarian Reform has encouraged the participation of these cooperatives in agricultural planning and accepting crop-rotation practices. COOperative members were formerly allowed to cultivate their land according to their individual decisions. No production plans were followed or supervised by the cooperatives. Soil fertility and natural conditions were not considered in plans for the growing of high-yielding crops and other industrial crops. These practices resulted in the deterioration of soil fer- tility and wastage of water and land resources. The annual production plans of cooperatives merely covered the member's needs in respect to cash and in-kind advances, especially for seeds, fertilizer, livestock and marketing. However, such plans did not cover all the cooperative members. In Inost cases it did not cover more than 50 percent of the Inembers; and in other cases it only covered 10 to 30 percent (of the cooperative members. ‘_ lAl-Nowfel Sami Jawad and Mustafa Hamdoon, New jgttitudes in Agrarian Reform and Agricultural Cooperation :in Ira , Ministry of Agronian Reform,‘fiirectorate General (of Planning and Following Up, Baghdad, April 1970. 184 Faced with these technical and institutional problems, the Ministry drew up an agricultural plan and crop rotation plan for certain c00peratives compatible with the local conditions and resources. In addition, the Ministry was able to draw up a preliminary plan for the agricultural projects, state farms and collective farms for the 1972 winter and summer seasons. Despite the technical difficulties and the weaknesses of the planning and the executive staff. The Ministry was able to implement these plans successfully. The c00peratives participated in the production of 30 percent of the wheat and barley and 60 to 70 percent of the vegetable production.1 The success achieved by the Ministry and the coop- eratives in this partial programming of the agricultural sector has encouraged the Ministry to formulate a more comprehensive production plan for the agricultural sector. In early 1972, all the Directorate of Cooperatives, agrarian :reform, state farms and representatives of the General Union (bf Cooperatives were asked to take all necessary measures to eachieve this goal. Measures included the formulation of Iaroduction plans and suitable crop rotations for each <2ooperative, drawing up a unified agricultural production 61nd services for all cooperatives based on the plans prepared Eat the local level; and submitting these plans with the Irecommendations to the Ministry of Agrarian Reform. ‘ 1Ibid., p. 80. 185 In March 1972, a conference was held for the Directors of Cooperation and Agrarian Reform at the province level. The purpose was to discuss the production plan for the 1972-73 winter season. In April 1972, another meeting was held for the managers of State-farms, cooperative directors and representatives of the General Union that resulted in drawing up of this plan. At the same time, the Ministry made available all the prerequisites for the execution of this plan, i.e., the provision of seeds, fertilizer and pesticides, machinery and other institutional arrangements. Thus, the drawing up and implementing this plan is considered as the turning point in the field of agricultural planning in the agrarian reform subsector; and a significant measure toward comprehensive planning and programming of the agricultural sector, where the coop- eratives have effective participation. In other words, the reasons for the cooperative farming in the agrarian reform areas are: 1. Greater control over agricultural production, by retaining the advantages of large scale production or 'economics of scale' and the supply to urban centers. 2. Preserve infrastructure of expropriated large farm, especially irrigation pumps and other installations. 3. Prevent rise or increase of inequalities in farming community and include the landless among land reform 186 beneficiaries, as a result of the 1964 amendment of the reform program. The issues of c00perative farming are included in this dissertation since it is now a major alternative for organizing and integrating farming, marketing, credits and other functions being tried in Iraq. However, cooperative farming might best be dealt with as a separate tOpic con- cerned with analyzing the experience of various models of cooperative farming in different countries, and the lessons of that experience for the advisability of using and adapting cooperative farming to various situations and policy requirements.1 However, further research is needed in the area of "Organizational Problems of COOperative Farming," such as: 1. Internal discipline and efficiency versus responsi- bility of management to membership and participation of members in management decision. 1There are currently three major models for c00perative structure: (1) The Japanese, West European, North American pattern of family farms. . . . (2) A pattern of large, private farms which integrate some or many of the marketing and processing functions with crop and livestock farming in the same firms. (3) A pattern of cooperative farming which dominates or forms a substantial part of the agricultural sector, as in the Socialist countries, Egypt, Algeria and Peru. UNRISD, A Review of Rural Cooperation in DevelopingAreas, ed. by Oriando Fals Borda and Inayatullah, UNRISD Series, No. 1, June 1969. 187 2. Orientation of management to dealing with external problems and Opportunities, requiring relatively free hand from members versus conservative managerial performance and emphasis on membership relations. 3. Review of experience with c00perative farming and methods developed to deal with organizational problems.1 Credit Credit is obviously an imperative in any program to induce farmers to increase their use of non-farm produced inputs. Agricultural credit and financial institutions in Iraq are usually grouped into two types according to whether they are (1) a private, informal such as the traditional money-lender, and (2) public or institutional, such as the Agricultural Bank and the Cooperative Bank. After the enactment of the land reform of 1958, the supply of credits in the rural areas was greatly affected. The landlord's functions, especially in credit provision, were imperative for the production process, even at a low level of agricultural production. The great majority of the land reform beneficiaries, tenants under temporary management and even the new owners lacked not only the lDonkanel, "Organization of Agriculture and Coop- erative Farming," in Land Policy for Developin Nations, Land Tenure Center, University of Wisconsin, June 1972. 188 financial resources, but they did not have access to credit institutions. Because of this lack of security and collateral, the small farmers and tenants were almost totally excluded from these credit or financial institutions. The Agricultural Bank continued its pre-reform policy. It preferred to make loans to landowners with substantial holdings (security) or other assets. Cooperative credit as such did not begin until 1956 when the Cooperative Bank was established. It had an authorized capital of ID 250,000 of which the contributions from the Ministry of Finance was not to exceed 51 percent and the rest was to be supplied by the few cooperative societies. In practice, the bank lacked the financial resources to supply the cooperatives with an adequate amount of credit. Consequently, the majority of the land reform bene- ficiaries, tenants and small farmers, turned to private or informal sources for financial needs. Throughout the country there were numerous traditional money lenders, merchants and shOp keepers who would supply credit against the advance sale "green crops," i.e., before the harvest, of a specified amount of certain crops at a set price which also incorporated the interest charge. Because the terms of credit are usually settled in advance, the money lenders make sure to set the unit price of the crop to be accepted as payment low enough to insure him return of the principle with a high interest rate. Obviously, the farmers'inability to wait and market their own crops when prices are higher worked to their disadvantage. 189 These drawbacks were overcome to a certain extent. Temporary tenants were allowed to join the cooperatives, as a result of the 1964 amendment of the land reform law; the Cooperative Bank Law, Law No. 65, of 1956 was replaced by Law No. 163 of 1959 to make loans for cooperative members; and the agricultural Bank Law was amended by Law No. 120 of 1964 to further aid the cooperatives in obtaining credit. Furthermore, the "Higher Agricultural Committee" had guaranteed "supervised credit" to help small farmers, especially those under temporary contract to have access to the agricultural credit. This is needed because they lacked security to obtain loans for making use of the new technology. This kind of credit also helped to diversify agricultural production, especially the production of cash crops and raw material needed for the local industry. However, the provision of credit to cooperative members and other farmers was'far below the minimum needed to sustain a high production level. In 1964-65, the Agri- «cultural Bank issued ID 18,000 loans to 225 cooperative .societies, i.e., an average of ID 80 ($250) per society. Furthermore, in 1968, ten years after the enactment of the :land reform program, the amount of cash loans paid through time cooperatives totaled about ID 27,000 for an area of 3..9 million donums, with an average of “7'fills, $0.20 per dC>num. The same applied to credit in kind, as for instance, 190 the average per donum was about 0.4 kg of seeds in areas served by the agrarian reform cooperatives.‘ These drawbacks have been overcome to a large extent, since the late 1960's and early 1970's, in part because of the various measures initiated by the Ministry of Agrarian Reform to establish a comprehensive agrarian structure. Funds are available for different kinds of credits. Easy access to credit or financial institutions and the amount of credit issued to cOOperatives and other farmers has increased many folds. Table 4.8 shows the amount of credit issued by the Agricultural Bank to cooperatives and other farmers in the last decade. Furthermore, the informal or the traditional farm credit provision has been eliminated to a large extent. Since then, Iraq's experiment with the credit system is a combination of the Agricultural Bank, the major financial institution, and the Cooperative Bank. The Agricultural Bank is among the oldest financial institutions established in the country to render services to the agricultural sector. It started Operation in April 1936 under the title Of the Iraqi Industrial and Agricultural Bank. In April 1946 this bank was separated into two banks: the Industrial Bank and the Agricultural Bank, each of which embarked on independent activities as of that date.2 Upon 1Hassanien, p. 11. 2United Nations, Industrial Development_in the Arab Countries, ID/CONF., l/R.B.P. 16, New York, 1967, p. 63. 113]. .man .oeonmem .unoun unosnuo>oo .xoom Heunuanowumn on» no unowueuomo on» no phonon Hennnn "oounom vao.amw.ma bnv.Hm mom.mo¢ vov.w Hmv.ooo.m moh.w mm>.wmm.oa th.mm Mona? oneuo mma.mmm.n omh.o mom.am NHH.H ov~.th.N mmo.d 0mm.mnm Ohm.n nhIthH mNH.hoH.n hhw.h obo.mNH. hom.d and.hNH.N mnv.d hm0.Hmm amm.v Nhldhmd mva.moo.m mav.h mah.Noa 0mm.H hnn.owo.fl Onmed n50xovm hom.n ANIONQH mh5.mmm.H mmH.m bhm.vv ohm «no.0nh ovm Ono.hmH.H voo.n OhImomH nmm.on.H onm.m omm.mu moo ohm.mdn mmv omm.vhm.d oom.v moImomH hh~.mho.a mmn.v vNH.nH mmH vnn.ovn Hwn mmm.mHv.H mHN.v mouhomH hon.mom dvm.N Hmm.m mad mhv.vmm Adm hno.flho.d Nho.m hmIoomH hos.mom va.N «mm.H mm wmv.~m «mu m~e.¢am H0h.~ ooImomH MOH.VHM.H hmm.v III III woo.md 5N hHo.omN.H Onm.v mevme mmm.vmw vno.N III III . III III mmm.vmo vnm.N volnoma oneHHoo nH mnowuoemneuu nueHHoo nH unowuoeuneuu._ nueHHoo nw nnoHuoeuneuu uHeHHOo na unoauoeuneuu undone no uonasz unseen «0 Hanson unseen no Honeys usage: mo Hanan: Heuoa unoouo oouH>uomnm unoouu u «venomooo muondnoez .oueuuu .muwuounm ueox uaHnIcn nouns eoouauuuso uHoouo HhmHInomH .nuHeouo HausuHsoHumu no unseen ecu Hones: u.uauH .0.0 oHnms 192 independence, the nominal capital of the Agricultural Bank was ID 0.5 million, and the paid-up capital in the 1946-47 fiscal year was ID 380 thousand, and increased gradually to nominal capital of ID 15 million, and paid-up capital ID 6.6 million until March 31, 1972. Agricultural credit loaned by the Bank to farmers in 1972-73 totaled to ID 3.8 million divided into 6,790 credit transactions of which cooperative credit constituted about ID 2.9 million on credit secured under in-kind guarantees ID 935,590, and supervised credit ID 81,365. In 1972-73 the Bank ran 30 branches and 5 divisions in all Provinces and some important agricultural districts. Currently the Cooperative Bank provides three kinds Of loans, i.e., in terms of time-period and purposes: 1. Short-term loans--These loans are provided up to three years. They are for general agricultural practices such as cultivation and harvesting, channel clearing and some in cash for the use of fertilizer and pesticides and seeds. 2. Medium-term loans—-The time period for these loans does not exceed six years. They are used for livestock production, dairy industry, etc. 3. Long:term loans--These loans are issued for a period of not more than 15 years. They are provided for agricultural machinery and equipment, land rec- lamation and drainage and irrigation network. 193 Currently the Agricultural Bank carries out the following types Of credit. 1. Cooperative credit.--Extended exclusively to the agricultural cooperatives set up under the agrarian reform program, against an interest rate of 3 percent. Table 4.9 shows the amount and purpose Of credit issued to these cooperatives from 1964 to 1973. Since the early 1970's the procedure adopted by the Bank for facilitating cooperative credit has significantly improved its performance. 2. Supervised credit.--This kind of credit is Offered to small holders, land tenants and farmers who have not joined the cooperative, at an interest rate of 3 percent. This supervised credit has two sides: (1) material, which is entrusted with the Bank in its capacity as a financier, and(2) technical, which is undertaken by the technical staff in the Directorate General Of Agricultural Extension. The productive element Of agricultural credit can increase only when the borrower has learned to make proper use of credit facilities by adopting better farming practices. TO encourage the use of these improved practices, supervision of credit may be desirable and should be tied to a package of inputs and practices. Loans should be granted on condition that the farmers agree to adopt a package Of recommended inputs and practices. 194 .00 .n .H00H .moHumHumum mo uoenumnn Hennnn .noaueNHnemno Heowumfiueum denunoo .mnwnnean mo huumfinfiz meuH "oounom HH0.000.H 000.H 0HH.0HH 0H0.H00 000.0H0 000.0H0 H00.000.H H00HIH00H H00.00H.H H0H.00 000.00H 000.00H 000.000 0H0.0H0 0H0.H00 H00HIH00H 0H0.000.H 000.0H 000.00H 000.H0 H00.000 00H.00H 000.000 H00HI000H 00H.00H H0H.0H 000.00H 0HH.0HH 000.0H0 000.00H 000.000.H 000HI000H 000.HH0 0HH.H HH0.HH HOH.00 000.0HH 0HH.0H H00.00H 000HI000H 000.HOH 000 III 000.H 000.00 000.0 000.00H 000HI000H 0HH.0HH 000.0 III H00.0 HH0.0H 0HH.0H 000.00 000HI000H 000.00 III III III 0HH.0 0HH.00 000.H0 000HI000H 000.H0 III III III III H00.00 H00.0H 000HI000H o v v v x 00 a 0 s.» I 0m ".0 30 0 . .. a I H. .0 m0 0 0 0 I 00 m. 00 II I. I0. an IT. IT. a. a s .T. I... s a 1. U. 3. 1. mu 1. .6 .4 a an 7...... an n 8 8 u A u 8 1 p. 6 a H... 9 s T. s 8 T. T. 000HI000H .00>Huuuonooo HeHnanOHume on... on xnen Heunuanoaume o5 an oeem oneoH mo nunnoae ooeun .m.v oHneH. 195 The Bank gives special care to the supervised credit program as it enables a considerable group of small farmers to adOpt modern farming techniques. The program is also aimed at encouraging these farmers to diversify crop production and especially the production of cash crops and the raw materials needed for local industries. Through cooperation between the Bank and the Directorate General of Agricultural Extension this program has made profound progress among the small farmers. Loans granted to farmers in 1972 totaled ID 128,074, distributed to 1,907 transactions. 3. Ordinary credit.--Credit guaranteed uner in-kind securities. These are usually extended to farmers and orchard owners against an interest rate of 6 percent. The credit utilized for various activities required for the management of farms and orchards in various seasons included the purchase of agricultural machinery and equip- ment. Total amounts disbursed in 1972-73 for this category of credit was ID 935,590 or 28 percent of total credit in this year, divided into 3,979 credit transactions. Since then, the Bank policy has been to increase the availability Of credit in this category to expand agricultural production and increase productivity outside the agrarian reform areas. 196 An integrated agricultural credit system, based on a suitable combination of cooperative and state owned banks should be capable of providing credit to the new owners and tenants on an adequate scale. However, the emphasis would have to shift from loans against land security to those against production capacity as the reformed system may not necessarily permit free transferability Of land rights. While in the initial stage public subsidies are required, in the long run cOOperatives will have to Operate on a self sustaining basis. In the short run, funds from the state owned bank may have to be introduced into the agricultural sector. Over the longer run when agricultural productivity has increased, the cooperatives can be used for mobilizing rural savings and directing local investments. Such an integrated credit system would Operate as an effective alternative for non-institutional sources. Consequently, in conjunction with the land reform program, such a system will be in a position to replace the previous landlords, money lenders and traders functions. Thus it would be capable Of financing all types of credit needs, i.e., short, medium or long-term for production and consumption purposes. Furthermore, agricultural credit loses a good deal of its impact if the farmer needs of the new technology, fertilizer and pesticides and farm machinery and equipment, are not available at the proper time, in the proper place and at reasonable prices. While one Of the important aspects 197 of the increase in agricultural production is the marketing problem, the coordination between the credit system and the system for processing and marketing on the one hand and for input supply on the other has great advantages. It would also facilitate loan repayment. The Japanese experiment is significant in the use Of cooperatives as an integral supporting structure. This has facilitated the planned shift in credit-Operation from "security nexus"tx>”production nexus." Land reform has adversely affected earlier credit and debtor relationships, such as that between landlord and tenant or between trader, money lender and producer. It has also resulted in restric- tions on the transferability and marketability of land. However, there has been no decline in credit availability, largely because of the integrated cooperative structure of credit, marketing and supply Of requisites.l Loans given by credit cooperatives are also recovered by them, because the farmers produce is more often than not sold through these cooperatives. Also, there are experiments in other countries such as the United Arab Republic, in some parts of India and the Comilla Project in Bahgladish that could be adopted to the local condition.2 1T. Midoro, "Marketing of Agricultural Products in Japan," paper presented at the Agricultural Forestry and Fisheries Conference, Tokyo, Japan, n.d. , p. 33. 2For an analysis of this experience see: Robert D. Stevens, "Institutional Change and Agricultural Development,” 198 Iraq's experiment with its credit system is still in the initial, short-run stage. Credit provision is carried out by state owned banks. The role at which the cooperatives are promoting rural savings and local investments, especially after the recent increase in agricultural production and productivity, remains to be seen. Marketing System Improvements in the performance of the marketing system, agricultural product and factor markets, can encourage increased agricultural production both through thier direct and indirect effects in bringing higher prices to producers. The effect may be direct as reduced marketing costs pass directly to the farmers in the form Of higher prices. The process may also work indirectly through lower prices to the consumers, which due to high price elasticities can expand the market and thereby increase total revenue to producers. Other indirect effects may include reductions in uncertainty, lower prices and greater availablity of consumer goods that may increase incentives of farmers to earn more by increasing production. Therefore, it is just Department of Agricultural Economics, Michigan State Univer- sity, 1967; A. F. A. Hussain, "The Comilla cOOperative Exper- iment," Review of International Copperation, No. 57 (1964); and H. W. Fairchi1d7"The Comilla Rural Modernization Experi- ment, Its Philosophy, Underlying Hypotheses and Usefulness as a Rural Development Model," MonthlyBulletin of Agricultural Economics and Statistics (Rome, FAO, March 1968). 199 as important to improve marketing techniques as to improve the production itself. However, when the land reform of 1958 was enacted, there were no institutional arrangements for processing and marketing farm surplus or factor market tO achieve the objec- tives Of the agrarian reform program. The marketing system and provision of credit followed the traditional system. Throughout the country there were numerous middlemen, usually money lenders, merchants and rural shop keepers, who seized the Opportunity to exploit the farmer. They made loans when the farmer needed the cash badly and took payment in "green crops" before the harvest at a low price. This traditional system resulted not only in lower prices to the producers and higher prices for the consumers, but also in enormous profits for the middleman. Further, marketing costs were high, partly because many cooperatives areas had no roads to link them to market places in urban centers, and partly due to lack of storage capacity for fresh meats, milk, fruits and vegetables. These Obstacles created the lack Of incentives to improve the marketing system; few cooperatives marketed their produce cooperatively. The government price support program could offer premiums on crOps marketed cooperatively. How- ever, in l965,government grain prices Offered no incentive.1 The cooperatives at the Hussieniya Project had asked the 1Personal experience of the author. 200 regional cooperative supervisor to market their wheat. But the official price plus transportation cost was lower than 1 Meanwhile, the price offered by merchants in the village. cooperatives at Musieyib had succeeded in selling cotton direct to the state ginning mill, and by so doing received higher prices than they would have received from local merchants. Since the late 1960's, the Ministry Of Agrarian Reform has initiated the various measures to replace the traditional marketing system by a more efficient and modern marketing system in which cooperatives have a significant role. The Agricultural Bank has provided marketing loans to OOOperatives before harvest time. The government price support program is extended to cover grain production and the industrial crops. Most Of the cooperatives in the area are linked to the highway system to facilitate and reduce the cost of the marketing process, and many central markets, with modern facilities, are built in the province to which the farmers could bring their produce. Also the Ministry constructed large storage facilities attached to the main cooperative Office buildings to help the COOperative mem- bers store their agricultural inputs especially seeds, fertilizer, and pesticides and their produce after harvest time. Table 4.10 shows the number of cooperatives who have participated in the marketing system. lWarriner, pp. 98-99. 201 nefiuemun no muumnnwz .veHH n0 noflueuomooo Heunuanuaumn one Shanon nonueumn nu moonuwuun 3oz ..h .m .HomzoZWNMH "MMMMMM II II mmo.N one OHH QHN mom.h II ooo.mN onm.mN mmn.ha Ham.Hn mav.mw MNIthH II II mmo.H OMH OON NmN ovH.m ohm onm.o QOH.mH mmh.oH hno.mN mnm.Nm NNIHNmH mma mHN.HH mmH.H ONH vm 00v mom.N man mom.m HNH.o mvo.NH who.a ovo.m H0IO0mH mmv ovN.oN mmo.H mo omH mmh mHN.H NmN hoN.N mmh.n hmn.HH mv0.n mHN.o osImomH moN moN.m mNn o vm med nod MN omH.N om00N. hhm.d OON.H mmn.N mOIooma MNH mmm.n II II II HON II II won mnm.a vhN mmH oNo.N moIhomH mo oma.N II II II and II II vNN mNN omN Nod mmo hoIoomH «N has II II II II II II Nod ma Ho II who ooImomH oH HoN II II II II II II II II OHH .II HVN moIvomH mo>wueuomoIoo muonaos RAH: H003 onenom nonwn omen: OooenOB mound coax nouuoo weaken neon: ueoa mnwuoxues mnfluoxuea no Monanz mo nonsnz Anon ouuuoa ”nanny mhIthH on moIvomH nOHuonoOHn HeunanOHHme unouowmwo noun aao>wueuomooo oouoxuefi mudunenv u.uaun .OH.v oHnea 202 Also these cooperatives have increased their activities in supplying agricultural inputs, such as irrigation pumps, fertilizer and farm machinery as seen in Table 4.11. Furthermore, some of these cooperatives have established grocery stores in rural areas to provide consumer goods to the cooperative members. There are about 56 stores, each of which on the average makes more than ID 4,000 profit a year. Hence, the supervised cooperatives seem to have advantages through their contacts with govern- ment agencies, including research and extension in pioneer- ing the effective provision Of the new technology, new inputs, and new marketing services. Table 4.11. Iraq's number of water pumps which owned by agricultural cooperatives Details 1970 1971 1972 Number of agricultural COOperatives 225 227 256 Number of water pumps 616 636 673 Total horsepower 34,930 35,165 37,107 Value of water pumps (ID 1000) 1,162 1,166 1,193 Value of buildings (ID 1000) 153 153 158 Note: Were owned in accordance with the revolution commanding decision NO. 233 of September 6, 1969. Source: Iraq, Ministry of Planning, Central Statistical Organization, Annual Abstract of Statistics, 1972. 203 While intensification of agriculture, increasing agricultural production and productivity, requires the use of technical and organizational measures to increase agri- cultural output from given package of inputs; these measures will be more fully adopted if economic policies take advantage of the price responsiveness of supply and factor demand whenever it is positive. It is recognized, however, that though an efficient system of prices is a necessary economic requirement for organizing and integrating the production decision of numerous farmers among each other and with the rest of the economy, it is, however, not sufficient to assure increased food supplies in semisubsistence economies. The sufficient condition, according to Schultiz' analysis is met by assuring the supply to the farmers of the new and profitable inputs. Concurring, Krishna argues that: The growth of agricultural output has to be induced primarily through institutional and technological improvements and a great in- crease in the supply of inputs embodying these improvements. But price movement can either accelerate, retard, or arrest these changes. Therefore, a favorable price policy is needed alongside techno-organizational change.l 1Rajkrishna, "Agricultural Price Policy and Economic Development," in Agricultural Development and Economic Growth, ed. H. M. Southworth and Johnston (New York: Cornell University Press, 1967). 204 The Report of the President's Science Advisory Committee on the World Food Problem, volume 2, states that a reduction in the price of technical input relative to the price of a product (or a rise in the price of a product relative to the price of an input) is an important incentive for increased production. The report also adds that comparatively higher and more stable product price and the freer environment for farmers in selling their crops would increase farmer incentives. Stable and higher product prices also reduce risks in investment in high productivity inputs and would have an indirect effect on increasing production. It must be noted that prices affect the incentives of COOperative members and other farmers if (1) farm supplies and equipment necessary to increase output are physically available, (2) marketing channels for farm products are adequate, and (3) other influences which might Oppose farmer's decisions to adopt yield—increasing technologies have largely disappeared. Price supports or price guarantees at levels 5 to 10 percent below current market prices could assist OOOp- erative members to organize their productive activities more effectively by eliminating some of the risks and reducing the range of price expectation. However, such a guarantee usually involve very minor financial commit- ments by the government. Prices at or above current prices 205 would induce the cooperatives to use currently available resources more intensively and to adopt the package of improved inputs and agricultural practices. This could involve a significant financial and organizational commit- ment by the Ministry of Agrarian Reform. Since the rate of actual use of the package approach (yield increasing technology) by cooperative depends very much on the ratio between the expected return from the recommended package and the cost of the package, floor prices can improve this ratio.1 Further research is needed in the area of "Product Price Guarantee Versus Input Price Subsidization." The question is, if the goal is to increase the use of modern inputs, fertilizer and pesticides and farm machinery, and to increase agricultural output, is it better to subsidize modern inputs or to guarantee minimum prices of output. If product prices are raised, guarantee minimum prices, cooperative members and farmers may or may not like the improved techniques. They may continue current practices and simply spend the extra income on consumption; if so, government expenditures on support prices will be wasted. Also higher product prices add to the income of 1Abdel-Sayed, p. 227. 206 both non-innovators and innovators. This windfall income may cancel out some or all of the incentives to increase production by permitting the marginal preference for leisure relative to labor to be more fully expressed. If, on the other hand, the new inputs are subsidized, the benefit of government expenditures can be denied by the cooperative only in proportion to their use of the modern inputs.1 Input subsidization avoids raising food and raw material prices against the growing industrial sector. Also, the cost to the economy as a whole of increasing agricultural output is likely to be lower in the case of subsidies and can be borne through the tax system. However, input price subsidization is not a complete substitute for product price guarantees to improve the performance of the marketing system and intensification of Iraq's agriculture. As a matter of fact, both are needed as complementary instruments of policy for different reasons.2 lIbid., p. 228. 2In Iraq, in the early 1960's, the price incentives were based on the produce price guarantee for field crOps; since the early 1970's the Higher Agricultural Council has followed the input price subsidization. 207 Administration Of Aggarian Reform Program In Iraq, the gap between the declared policy Objective Of the land reform of 1958, especially increasing agricultural production and productivity, and their actual realization can be ascribed to the failure to reorient administrative machinery for land reform implementation (including administration of structural reforms), defective land records, inadequate training of staff, ineffective coordination and absence of follow-up and evaluation. No attempt was made to adapt existing administrative structure to the need of agrarian structural change.1 The Ministry of Agrarian Reform was established, as a new administrative organization, to carry out the imple- mentation of the land reform program. It was planned that the Ministry would carry out this process in five years, later extended to ten years. The creation of separate admin- istrative organization also created the problem of multiplic- ity of agencies dealing with the agricultural sector and a competitive demand for the already limited resources of staff and technicians. In 1968, the total staff of the Ministry was 2,000 staff members or about 10 percent of that which it ought to have been as seen in Table 4.12. Further- more, the centralization Of work was at the Ministry level, 1John L. Simmons, "Agricultural Deve10pment of Iraq: Planning and Management Failures," Middle East Journal 120 (Spring 1965): 29-140. 208 .O0mH .osom .Onm .suomon oneH .menH mo unosnuo>om on» on upomom .noHnemoem..m .n "oonnom .mHoonOm anooa Honuo one HeHOHosEOO .HeHuumnonH .HeunanOHume on» oonHonH mHoonOm anooS one .ooonHOnH omHe one menH nH mounuHumnH nOHueOnou anm on» no mesOHmHn one” H00.H 00H H0H 000.H 00H 000 :38 00000 moN hH 0H hmH . mH No Heuoa 00H I0! .0) 00 0 0H 0005 00 0H 0 00 0 0H 003.3002 03000 mm H N 0N H HH nonmem nnonunom mmN.H om moH mmo NMH mmm Heuoa 00 .0I. HH HOH 0 HH 300002 va O 0H 00H mN me unx 00H 0H 0H 00 0H 3 0030030 omH HH 0H on m we eHHHm mm o 0 mm 0 vN Hoesem HNH 0 HH mo 0 mm neHemHO nOHmom Nmo on mN HmH mo mOH oeonmem Heuunou va MN mm oeN ON OOH Heuoa 0HH «I .0IH 00 0| 0H .3an 00 0 m on N mH HHan 00 H HH 00 0 0H 03005030 HOH OH o mm o no Homo: nunoz Hence muonuo Hoonom Hoonom mooumoo mooumoo :ezHH= onON anm snwooz .umnH anm huHmno>Hna oonH>oum NmnOHueOHMHHena Ho>oH anooz H.umnH.mmHm one.NmeHo>HnD meHH nH suomou oneH mo moohOHmso mo nOHunnHHumHo one .NH.v oHneB 209 where most of the personnel worked. This represented about 44 percent of the total staff, leaving 56 percent in the Provinces. Between 3 and 10 percent of the total field staff had university degrees. Since 1970, the Ministry of Agrarian Reform has initiated various measures to overcome the problems of agricultural administration and organization. To upgrade the performance of the public institutions serving the agricultural sector, the number of technically trained personnel, agricultural specialists, COOperative supervisors and extension agents, has increased manyfold. In addition, the technical staff of the Ministry has now been adequately distributed at the provisional level, where cooperatives have assumed a viable role in the provision of the necessary services. Also the government established the Higher Agricultural Council to coordinate the activities Of the Ministries of Agriculture, Agrarian Reform, and Irrigation. The need for close coordination Of rural and agri- cultural development policies and programs became especially acute in the agrarian reform areas. This has led to the merging of the Ministry of Agriculture and the Ministry of Agrarian Reform into the Ministry of Agriculture and Land Reform, based on the principle of a unified administration, concentration of efforts and concentration of administrative and technical responsibility. In an effort to improve the performance Of its central and branch agencies, the new 210 Ministry established the Agricultural Project System in the agrarian reform areas. Each agricultural project is an administrative structure with a manager appointed by the General Manager at the Ministry's level. While technical support and services from the headquarters are insured for all field personnel, in different specializations; managerial responsibility at the Project level is centralized and fixed. Therefore, such an administrative system will insure vertical and horizontal coordination, in the provision of agricultural services, at both the national and field level. Comprehensive administrative machinery, i.e., the creation of new administrative concepts, new administrative structure and organization to bring about and sustain the structural change in the agricultural sector is required to implement the agrarian reform program. However, it is important to realize that the agrarian reform administration cannot be studied in isolation. It must be seen in the light of the socioeconomic conditions to which it relates and the agrarian structural change that it intends to bring about. The effectiveness of the administration of the agrarian reform program is always contingent with the political will to carry it out. Even an efficient admin— istrative structure cannot bring about land reform in the absence of the political will to do so. But, Obviously, purely political action will not suffice to achieve the Objectives of the agrarian reform in the absence Of suitable 211 administrative machinery for the transmission of this political will into concrete acts of implementation at the national and field levels. Development Planning In the field of planning, the general and detailed framework of the National Development Plan (1970-1974) marked a turning point in the planning history of Iraq. The emphasis in planning has shifted from fragmented programs to serious attempts to draw up comprehensive national plans. The original version Of the NDP was far more ambitious than the previous five-year economic plan. It called for total investment expenditures of ID 1,143.7 million, as compared with ID 821 million, i.e., an increase of ID 322.7 million or 39.3 percent. These investment expenditures were distributed to the institutional sectors in the following manner: ID 536.9 million or 46.9 percent to the central government sector, ID 321.8 million or 28.1 percent to the self-financed public sector, and ID 285 million or 25 percent to the private sector as seen in Table 4.13. The rise in the state Oil revenues, under the recent agreements brought a corresponding increase in the plan revenues. This necessitated the revision of the NDP, 212 .meH .oeonmem .manneHm noon: mmoumonm .manneHm mo muumHnHz UeuH "oonnom 0.00H 0.000.H 0.00H 0.00H.H 00.00H 0.HHO H0009 00000 0.0H 0.00H 0.0H 0.00H 0.HH 0.HOH 1000000 0000: 00000Ho000 “Houoom oue>Hum 0.H0 0.00H.H 0.00 0.000 0.00 0.000 H0009 000 0.0H 0.HH0 H.0H 0.HHO 0.0 0.00 a 000000 oHHnsm 000000H0I0H00 H.H0 0.H00 0.00 0.000 0.00 H.H00 000000 0000000>00 H00000O “Houoom OHHnnm 0 0 0 H0009 on onHe> Heuoe Ou onHe> Heuoa Ou. onHe> 00000 00000 00000 000HI000H 000HI000H 000HI000H 0HH0000 100000 00000000 H00000 H00H0H000 neHm unosmoHo>oO neHm unosmoHo>oo neHm oesonoom HMCOfiufiz may” CH H00oH00z 000 0H neomIo>Hn onu nH ounuHonomxm unofiumo>nH .000HH00 0oHHHHze 000HI000H 00H0 00000000 0000I0>Hm 000 n0H3 nowHuemsOo nH muouoom o0e>Hum one OHHnnm on» noosuon oovnnHuumHo mueow HeomHm 000HI000H 000 00H0 000000H0>00 H00oH00z 000 0H 00000000000 0000000>0H H0000 0.0000 .0H.0 0H00e 213 with a view of investing the increased revenues in NDP projects. TO attain this Objective, the government resolved on December 15, 1971 to promulgate Law No. 158 of 1971, which provided for raising total investment expenditure to ID 1,559.3 million, i.e., an increase of ID 415.6 million. Most of the increased revenues were allocated to the central government sector. The increase in the central government investment was from ID 536.9 million as provided in the original version or 46.9 percent of total investment to ID 952.5 million or 61.1 percent in the amended version. While total autonomous (self-financed) public sector and private sector allocation remained the same, this has intensified the role of the public sector and raised its relative magnitude from 75 percent to 81.7 percent. Under the amended version of the NDP, the relative magnitude of the agricultural sector, within the framework of the central government sector, increased from ID 185 million or 34.5 percent to ID 336.5 million or 35.3 percent. The relative magnitude of the industrial sector fell slightly from 24.6 percent to 21.8 percent; transportation, communication, and storage fell from 11.1 percent to 10.1 percent; and building and construction sector fell from 14 percent to 12.6 percent as seen in Table 4.14. These investment policies reflected more emphasis on the agricultural sector than the industrial sector. 214 .N0mH .oeonmem .manneHn uoono uuoumouh .manneHm no hHuanH: menu "cannon .munosumo>nH mnooneHHoonHz Henna one mnowuemHHno HenOHuenuounH .muoanoez mnIonHOE one manneHm no ounuHonomxo mnHonHonH00 .neo one none: .NUHOHquoHu .manHz mnHonHoan 0.00H ncmmmd 0.00H mINmm OIOOH FIMVHH OIOOH OI0MM OIOOL OIHNQ OIOOH Nodom H5008 UflflNU MINA OINGH N.ON OINGH VIN OIQO coma GIVO 0.h m.N0 NIHH mono inuflflfluuflbfiH ”0‘00 GINN wIGVM mINH HIONH wow“ mIVOM . OIQH Oomh @INM mIFON GINA hoha IOOflbhom d mflfivdflflfl omeuoum a noau GIHH momma HIGH 000$ OIMH MIOVH H.HH 0.0m mI¢H OIGHH N.OH OIHG Idcfifldfllflu .UHOGUEIHB mImN MIBGM SIHN MIFON mo'n Oovmn WIVN OINMH N.@N Oomdfl OION 0.00H OhhvflflflfiH $.hN movnfi ”Inn moonm mowd OIHHN mIvn OommH HIQH OIBMH Momfl OINVH QHfluHQOHHO‘ 31 7:31 3 I 1.1.3 mm 000m mm mmm 3.0000. mm mm». mm 0 0.0 mm 0mm 1. e r. e n n m. e e n t. e n “u IoWMsI to s toaMst to s e to m st to m n II H 3.. mm0 .0 m .0 2.. I0 .m I0 m 0 0 an... 0d: . an. Inn u Imu an In we: 33 no: 31 we: a: 0330 Vhwdlchmd aflfldkh VBGHIOhaH AQIINM fiOOHImOOH fidfiflafidv fiddm I>OO HIQOdUdZ HGGHDfiHOv clam I>OD HGflOflUGZ flddm OflEOBOON HHO? Obwh HuueHHoo nOHHHHsc 0000000 00500000 an .momHImomH neHm OHaonoon neeuIspan on» nuHa nonHueaioo nH v0mHIO00H neHn unosnOHo>on HenoHuez on» noon: ounuHononxo uncluue>nH no Nun-In. n.0euH .vH.v oHnea 215 The main objectives in the development of the agricultural sector under the NDP were: 1. To achieve an annual compound rate of growth of 7.0 percent in this sector. 2. To obtain self-sufficiency in the production of the principal agricultural crOps and commodities. 3. To attain self-sufficiency in the production of raw materials needed by the industrial sector. 4. Increase agricultural production, with emphasis on vertical expansion rather than horizontal expansion; i.e., intensification of agricultural production. 5. Following an import substitution policy, the sub- stitution of the locally produced agricultural commodities for the imported one. 6. Increase the capacity of water storage for flood control and irrigation. Three targets were set in the develOpment of the agricultural sector. They were: 1. The NDP (1970-1974) aimed at increasing GDP in the agricultural sector from ID 198.1 million in the base year to ID 277.1 million in the plan target year, i.e., an increase of ID 79 million or 39.9 percent with an annual compound rate of 6.9 percent. Consequently, the contribu— tion of the agricultural sector to GDP would increase from 19.1 percent in the base year to 19.7 percent in the target 216 year, i.e., an increase in the relative importance of this sector, which is in conformity with the overall objectives of the development policy. 2. The NDP, aimed at increasing the value of agricultural production from ID 224.5 million in the base year to ID 317.2 million in the target year; i.e., an increase of ID 92.7 million or 41.3 percent. Consequently, the relative value of agricultural production to total value of production (of all sectors) would increase from 19.8 per- cent to 14.9 percent, respectively. 3. The NDP aimed at increasing the size of the labor force in the agricultural sector from 1,449.8 thousand in the base year to 1,770.4 thousand in the target year, i.e., an increase of 320.6 thousands or 22.1 percent with annual compound rate of 4.1 percent. The plan also aimed at increasing the wages from ID 10.17 million to ID 11.02 million, i.e., an increase of ID 0.85 million or 8.4 percent respectively. The Performanggof the Agricultural Sector The national economy managed to achieve substantial economic growth as measured in national income accounts in a relatively short period of time under the NDP (1970-1974)- Preliminary analysis indicates that the national income: measured in the magnitude and rate of GDP at current prices: 217 increased from ID 867 million in 1969 to ID 2,550 million in the plan target year of 1974, i.e., an increase of ID 1,683 million or 184.6 percent against the base year with an average annual rate of 36.9 percent, a compound annual rate of 23 percent. Though most of the high increase in the national income is attributed to increasing govern- ment revenues from oil production, it is also due to the high growth rate of the other commodity sectors in the economy. Excluding the crude oil sector, the average annual compound rate of growth of GDP in the agricultural, mining, manufacturing, and construction sectors, under the NDP, was 14 percent as compared with the 6.9 percent in the largest plan. Per capita Gross National Product at current prices increased from ID 100 in the base year to ID 236 in the target year, i.e., an increase of ID 136 or an average annual rate of 20 percent. As for the expansion in employment, the number of the labor force increased from 2.5 million in the base year to 2.9 million in 1974; the wage of the labor force in various sectors, excluding the agricultural sector, increased from ID 321 million in 1969 to ID 500 million in 1974. Furthermore, as an indication or criterion for the plan consistency, the average imple- mentation ratio was 89.3 percent against 61 percent of the previous plan.1 1Ath-Thawra, Daily News, 1974. 218 The value added, GDP, in the agricultural sector, at current prices, increased from ID 202 in 1969 to ID 302 million in 1972, i.e., an average annual rate of 15.3 percent. However, because of climatic conditions, GDP decreased by ID 50 million in 1973 as compared to 1972. In the plan's target year (1974) GDP increased to ID 350 million. In other words, GDP at current prices increased by ID 148 million against the base year or 73.3 percent. GDP in the agricultural sector, thus, increased at an annual compound rate of 14 percent against the plan's target of 6.9 percent annually.1 Furthermore, by 1974, the plan's target year, the agrarian reform programs of 1958 and 1970 provided employment and income-earning Opportunities to 477,019 farm families in the agricultural sector. That is almost 75 percent of the total 685,000 landless farm families, according to the 1957-58 Agricultural Census. TheAgrarian Structure and Reverse fiigration The first land reform program of 1958 placed little emphasis on the provision of social and cultural services, such as establishing schools and extending education, med- ical care, and adequate rural housing, in the cooperative areas. The economic development policies in the 1960's followed the same path of the 1950's, i.e., it placed more 1Ibid. 219 emphasis and attention on the urban centers. This created a wide gap between the rural and urban centers in terms of economic, social, and cultural programs and projects. After the July 17, 1968 Revolution, however, the government initiated rigorous measures to correct these drawbacks and to meet the challenge of out-migration. These initiatives were undertaken not only because of the profound impact of out-migration on the performance of the agricultural sector, but also because of the tremendous economic and social problems that it created in the urban centers. One of the measures within the comprehensive approach to the agrarian structure in the new agrarian reform of 1970 provided more employment and income earning opportunities to the landless peasants in the rural areas. The Ministry of Agrarian Reform placed more atten- tion on the provision of social and cultural services in the rural areas. The fact that many farmers live in extremely poor housing conditions and are scattered over the vast agricultural land makes provision of a suitable package of social services very difficult. To meet this problem the Ministry undertook the provision of suitable homes to cooperative members by grouping them in combined housing areas or modern villages. Varying, according to the number of farmers and the area of land they cultivate, villages are constructed of 5 to 700 brick homes with 220 architectural and health designs suitable to the farmers' conditions. The modern villages are normally located at sites convenient to the cultivated lands. In 1970, as a first step, the cooperation between the Ministry and the General Farmers Union, resulted in the construction of 25 villages. In 1971, 700 modern villages were constructed in the cooperative areas through a public works campaign. In addition, the Ministry, with the tech- nical help of FAO, started a new plan in 1974 for the construction of these modern villages throughout the rural areas.1 Also, in order to extend education to rural areas, the Ministry opened 985 adult education centers in the cooperative areas, in addition to 100 primary and inter- mediate schools and 58 dispensaries and health centers. Furthermore, 130 social activities centers were opened. They are equipped with libraries, radio and TV sets, and carpentry and weaving equipment.2 Hence, the provision of the social and cultural services have profoundly affected the process of out-migration. The Ministry, with the cooperation of the General Farmers Union, also undertook a significant step to estab- lish a pilot project for reverse migration. This project lAl-Nowfel, p. 70. 2Ibid., p. 72. 221 is located in Wasset Province. In fact, it is an old settlement project known as the Shehaimiyia Project. The Farmers Union made an appeal to the local cooperatives to participate in a public work campaign for the construction of 500 houses in this project. A large number of coopera- tive members participated in this campaign and constructed houses which were divided into six modern villages. As a result, 700 farm families moved from the capital city, Baghdad, to this project. In another nearby project, the Gesaiba Project, about 598 farm families moved to it from urban center, i.e., a total of 1,298 farm families. The total area of the two projects combined is 139,163 donums; all of their lands are irrigated. In this pilot project, four cooperatives were established. These c00peratives own large amounts of agricultural machinery--8 tractors, 9 cars, 2 bulldozers, 3 trucks, and 3 plows, in addition to 19 irrigation pumps and 8 distribution pumps. The agricultural production plan for 1971-1972 (the first plan) resulted in the cultivation of 25,000 donums of witner crOps and 10,000 donums of summer crops. This has been a very successful experiment in the agricultural sector of Iraq. Thus, the comprehensive and integrated approach to the agrarian structure not only stOpped the process of out— migration, but also provided the necessary conditions for the reverse or back-to-the-farm migration. CHAPTER V THE POST-LAND REFORM ECONOMIC ORGANIZATION IN THE AGRICULTURAL SECTOR Size of Farm The discussion in this chapter will focus on the post-reform economic organization in the agricultural sector, i.e., the family-farm system retaining private property or owner-operatorship, the cooperative-collective farms and the state farms; the impact of these economic organizations on the objective of the land reform program, especially on employment and increasing production and productivity; and some alternative policy implications regarding the reorga- nization of the agricultural sector in the post-reform period in Iraq. The reorganization of the agricultural sector, establishing any of the above systems, does not only depend on economic principles and economies of size, but also involves political and ideological consideration. The discussion in this study, however, emphasizes economic considerations. Emphasis needs to be given to the changing size of farms with economic development in a single ecological area. Analysis of these changes is needed: (1) to understand the 222 223 present distribution of sizes of farm, (2) to analyze the interaction between size of farm and economic development, and (3) to consider issues in land reform and other policies which attempt to change size of farm.- Discussions of size of farms are sometimes confused when size is measured only in acres or hectares. Concepts drawn from the theory of the firm (factor prOportions and economies of size) are useful for clarifying various dimen- sions in farm size. For discussions of most policy issues, the distinction between small and large farms is primarily a distinction between family farms, that is of farms with one to three workers per farm, and collective or state farms with more workers per farm. While it is more common to use acres or hectares as a measure of size, over time the acres per farm can increase without any increase in the number of workers per farm, that is without any change in the compara- tive efficiency of family and larger than family farms. More precisely, farm size depends on the following factors: (1) changing employment Opportunities and wages outside the agricultural sector, (2) changes in technology which in- crease productivity of both land and labor, (3) technolog- ical reasons, if any, for achieving economies of size with a farm labor force larger than the labor supply of a farm family--reasons such as division of labor, and (4) condi- tions related to inadequate supplies or differential access 224 to market, credit, and public services.1 Therefore, an understanding of the factors that determine farm size is important for analyzing impacts of development as well as barriers to development. The economic argument in favor of large farms, such as collective or state farms, as against the small, family- farm system is based on the principle of economics of scale. Many agricultural technicians and economists believe that large farms are more ”efficient" and indeed they are in terms of certain measures of productivity and efficiency.2 However, economies of size need to be determined separately for each type of farming. The minimum efficient size with most types of farming is determined by indivisibilities of crucial forms of capital, typically the source of farm machinery and equipment. Such forms of capital usually only need one or two men per unit of capital, but require sufficient land to provide full employment to labor and capital.3 Hence, under these conditions family farms can achieve economies of size provided they have sufficient land. The question whether family farms 1Don Kanel, "Size of Farm and Economic Development," in Land Policy for the Developing Nations, Land Tenure Center, UniversityofWisconsin, 19727 2Dorner, p. 119. 3Kanel, p. 90. 225 are competitive with larger farms is best answered by comparing the performance of family farms that have an adequate supply of land with the performance of larger farms and not by basing comparisons on the performance of small farms with an inadequate land base. While redistribution of land would result in fragmentation of farms into minute parcels, a condition that has been called the most endemic disease of agriculture, it is difficult to provide the necessary productive structure and the structure of supporting services. Technological advances, especially mechanization and the use of agri- cultural chemicals and practices, have made the cost of fragmentation prohibitive. According to Raup, these costs include: a. Loss of work time in travel from parcel to parcel; b. Loss of usable land area in field boundaries, excessive bunding, diking or ditching, and in field roads and paths; c. Loss of flexibility in choices of land uses, crop rotations, and disease control measures; d. Loss of freedom in developing livestock agriculture and pasturing; e. Social costs of disputes over boundaries and efficient use of irrigation; f. Excessive land title recording and surveying costs; 226 g. Rigidness in the location of farmsteads, villages, highways and the resultant inflexibility in altering settlement patterns; and h. Distortion in the land market and land prices.1 While solutions have often been attempted without a clear understanding of causes or of the experience of other countries, certain techniques can be used to overcome these problems and at the same time retain the family-farm system with the incentive of private property. One of the most promising of these is the consolidation process. The costs of this process are often very high, frequently approaching or exceeding $1,000 per hectare. These costs are typically beyond the capacity of the farm land owners. A key problem involves the prOper determinatiOn of benefits and costs, and especially the share of costs that should be borne by non- farm sectors. The experience of land reform in Egypt is relevant in this regard. The consolidation process involved an interesting modification of family-farm operating system with some functions and decisions collectivized or per— formed by government technicians. The land reform's beneficiaries were required to join the cooperatives. 1P. M. Raup, "Fragmentation, Consolidation and Rural Deve10pment," in Land Policy for the Developin Nations, Land Tenure Center, University 6? Wisconsin, 1 2. 227 These cooperatives perform a number of the usual functions such as purchasing and distributing production inputs as well as serving as a collecting point through which all farm produce is marketed. Government technicians have played a major role in administering and managing these cooperatives, although more of the functions are now being turned over to the farmers themselves, making the coopera- tives more autonomous and independent of government. The interesting feature of the consolidation technique is the ”Block Land Use" system, which these c00peratives have developed. The entire area served by one c00perative is divided into three Blocks approximately of equal size and managed under a three-year rotation system. The individual land holder, whether owner-operator or tenant, must comply with this rotation scheme. In any particular year the land in a block is planted in the same crop or crap sequence. This provision is especially important for the efficient use of irrigation water, mechanization of certain tillage and crop spraying operations. Since each farmer needs crops every year, whereas in any given year his entire holding might be planted in cotton or legumes clover, individual farmers exchange use of lands among the blocks in order to obtain the needed products not grown on their own land in that particular year. Thus, the Block System circumvents the physical problems of using fragmented farm units by combining them into tracts of efficient management size, 228 i.e., economies of scale. Under this system, farmers retain private ownership of their farms and the produce they grow, but certain functions and decisions are socialized.1 Consideration needs to be given to the interaction between the tenure structure, the previous economic organi- zation in the agricultural sector and technological change. Successful new technologies such as the Green Revolution have brought with them problems of uneven distribution of benefits, uncertain effects on employment and rural unrest. Changing technology interacts with the tenure system in two major ways: (1) the institutional arrangement may need to change to accommodate the requirements of new technology and (2) owner-operators or managers of state farms (those with discretion to make the decisions about how to modernize) will by their action determine the employment and income- earning opportunities in rural areas and the path of agricultural development--1abor versus capital--intensive. Each new technology has specific economies of size. High yielding seed varieties and fertilizers are divisible inputs adapted to farms of any size, while tube wells or irrigation pumps and farm machinery, tractors, require minimum sizes for economic use. Thus some technologies 1K. B. Platt, "Land Reform in the United Arab Republic,” Agency for International Development Spring Review of Land Reform 8:1-68. 229 are available to almost all existing farms, while others can only be used on collective and state farms or will require new institutional arrangements or farm consolidation. For example, in the case of tube wells, new institutional arrangements can provide a market for water or for joint c00perative or public ownership of irrigation pumps. The extent to which different kinds of farms can utilize new technology also depends on how credit, marketing and processing are organized. "Land-saving or yield increasing technologies, high yielding seed varieties, fertilizer and pesticides and improved agricultural practices, can usually be applied equally well and efficiently on small family farms. They are neutral with respect to economies of scale. Tube wells or pumps for irrigation, however, are economical only on farms of over 30 acres or with the consolidation of farm units. Mechanization, tractors call for farms of over 45 acres or the consolidation of farm units."1 As some have argued, the small family farm system of owner operators results in an excess of capital equipment on small holdings, i.e., much duplication and under utiliza- tion of machinery and equipment. The Janpanese experience shows that mechanization can be adapted to fit small farms if research is specifically directed to that end. Also the 1Kanel, p. 92. 230 reorganization of the agricultural sector on cooperative principles or public rental stations, may be able to assure efficiency in the use of capital equipment. Thus, a modified version of the family farm.system that retains private property can attain all the economic advantages of the collective or state farm, economics of scale, in the use of modern technology. The Impact of Economic Organization on Employment and Productivity In many countries family-farm units with private property, owner-operators, have been retained or created in the process of land reform implementation. This category of economic organization in the agricultural sector is the most labor-absorptive system. Family farms organized along conventional lines are favored in Japan and Taiwan. Modified forms of the family-farm system where certain decisions and functions are socialized, are accepted in Egypt with its ”Block Land Use" system and with the Geziru Project in the Sudan. The latter can be considered an intermediate form between private property on the one hand and group farming on the other.1 The greater tenure security and the incentive that the family farm system provides leads to the intensification of cultivation practices. Also, under appropriate conditions, lDorner, p. 53. 231 the provision Of the necessary structures, multiple cropping pattern may become more widespread. This can greatly increase the demand for labor and it may at times lead tO seasonal labor shortages. Systems Of communally owned land in which parcels are allocated to individual families for their private use, cultivation may also be highly labor- intensive. This is characteristic Of the Mexican ejidos. While the family-farm system absorbs population increases up to the limits Of capacity in the course Of economic development, and permits the use Of modern technology, it does not necessarily act as a barrier tO out-migration when employment Opportunities appear outside the agricultural sector. In those countries where part or most Of the agri- cultural land has been socialized, the situation with respect to labor absorption is quite mixed. It depends on the rela- tive emphasis placed on the private, peasant sector and the varying rates Of manpower transfer from agriculture to industry. In general, the various cooperatives, collectives and/or state-farms systems occupy a position between the family farm system and the pre-reform large estate system. The possibilities for Offering labor absorption in the agricultural sector Of the socialists economies are illus- trated in the economic organization in the agricultural sector Of Yugoslavia, Rumania and Poland. All these 232 countries implemented comprehensive land reform programs during the decade following the Second World War. In Yugoslavia, most Of the land remains in private ownership; about 86 percent Of the cultivated land is in privately owned peasant farms. A ten hectares ceiling was imposed in 1953, while the remainder is incorporated in worker-managed enterprises called "social estates.” In 1969, there were slightly more than 200 social estates and over 2.5 million individual holdings. The ”social estates" held 14 percent Of the cultivated land, had 72 percent Of all tractors in use in Yugoslavia's farms and employed 3 percent Of the agricultural labor force. The family hold- ings held 86 percent Of the cultivated land, had 28 percent Of the tractors and employed 97 percent Of the agricultural labor force.1 This dualistic policy is deliberate. That is, the tax structure encourages more mechanization and labor efficiency on the "social estates" and promotes production intensification--sometimes for different commodities than those most commonly found on the social estates--and increased employment and labor absorption on the small family farms.2 In 1969, Rumania had slightly over 20 percent of its arable land in state farms, 75 percent in agricultural 1Federal Institute for Statistics, Statistical Pocket Book Of Yugoslavia, 1970. 2Dorner, p. 106. 233 producer cooperatives (collectives) and less than 5 percent in privately held individual farms.1 The private farms, located in the hilly and mountainous regions Of the country employed approximately 10 percent Of the total agricultural labor force. Rumania also maintains a deliberate dual policy in its two major subsectors Of agriculture. The state farms have slighly over six hectares Of arable land per worker. By contrast the agricultural producer coopera- tives have less than 1.5 hectares of arable land per worker. That is, man per land ratio is over four times greater on the collectives.2 Individual family farms also predominate in Poland. This small farm subsector includes 85 percent of the arable land, employs 92 percent Of the economically active agricul- tural population and produces 88 percent Of the gross agri- cultural output. The state farms have slightly over 13 percent Of the land, and the remaining land is Operated by the relatively small sector Of producer COOperatives employ- ing about 4 percent Of the agricultural work force and produces 11 percent Of the total output. The man per land ratio on the small farms is about four times greater than on the state farms.3 1Ibid., p. 107. 2Central Statistical Board, Statistical Pocket Book of the Socialist Republic of Rumania, 1970. 3W. Lipski, "Agriculture in Poland," Interpress Publishers, 1969. 234 As these data indicate, the state farms in Rumania and Poland and the social estates in Yugoslavia are much less labor absorptive than the agricultural producer coop- eratives on the family farms with private property. Obviously, this is the result Of a deliberate design Of public policy. Or, it may result from the tendency Of Operator to prefer owner-Operatorship. The dual policy with regard to employment in the agricultural sector is not a socialist principle and is not confined in practice to socialist countries. For example, even after a widespread land reform program, Mexico has followed a dual policy toward the agricultural sector. Much more Of a capital--capital intensive approach, but less Of manpower is utilized by the larger private farms than by the small farms or the ejidos.1 In contrast, Japan and Taiwan are more successful in implementing a relatively uniform policy based on small units with labor-intensive agriculture. These two countries, through intensive land use practices, including double and triple cropping pattern, were able to employ thier growing population in the agricultural sector until the industrial sector was large enough tO absorb more of the rural labor force.2 1F. Douring. "Land Reform in Mexico," Agency for International Development Spring Review of Land Reform, 7 (1970): l-6l. 2Dorner, p. 108. 235 On the other hand, while it is true that labor productivity is consistently higher on larger farms, collec- tives and state farms, this is primarily the result Of capital-intensification, mechanization, and labor-saving techniques. However, under conditions Of abundant rural labor and continuous rapid pOpulation growth, productivity per unit Of land will be the most relevant measure for policy purposes for the long run. As Dorner comments, Actually a single factor productivity measure such as land or labor is not wholly adequate, what is needed is a measure Of efficiency or productivity based on output per unit of total inputs with inputs valued at their social Oppor- tunity cost. . . . Unfortunately, data are not available for the latter condition.1 However, in a number Of recent studies, comparing farm size and output per unit Of land, support the hypothesis that output per unit Of land is inversely related tO farm size. Figure 5.1, from Dorner and Kanel (1971), present graphically the results Of these studies, most Of which measure output in terms Of gross value per unit Of land. Value Of output per unit Of land above variable cost would be a better measure since it would minimize the distortions due tO possible differences in amounts Of capital used by farms Of different size. However, in those cases in which this concept was applied, the results are consistent with the gross-value concept. In fact, using gross-value ‘Ibid., p. 119. 110- 100 -- 90- 80‘ 7O - Relative Output 60 - 50 ~ 40 ~ 236 30 India Brazil ColombiaMexico Japan Guatemala Taiwan Philippines Figure 5.1. Output per hectare for farm size groups. For each country, Source: bar at left represents output per hectare for smallest farm size group; bars to the right represent successively larger farms with their output per hectare expressed as a percent of that of the smallest size group. P. Dorner and D. Kanel, "The Economic Case for Land Reform: Employment, Income Distribution and Productivity," Land Reform: Land Settlement and Cooperatives, FAO, ESR, 1971. 237 probably understates the small farms' margin over large farms since small farms generally employ less capital.1 Some may contend that these data do not prove an inverse relationship between farm size and productivity per unit Of land. But, they dO cast serious doubts upon the general presumption Of a highly positive relationship which underlies most arguments in favor Of large farms. The data from Japan are not inconsistent with the view. In fact multiple crOpping patterns, not shown in this figure, are consistently smaller as farm size increases. In the case Of Taiwan, this figure shows a very consistent inverse rela- tionship between farm size and net farm income per unit Of land. From 1940 to 1965, cultivated land per farm was reduced by almost one-half while output per hectare more than doubled.2 The Mexican data also support this view. The gjigg_sector in 1960 had only about a quarter Of the total land area but accounted for a third Of all marketed farm product. In terms Of sales as a percent Of total output, the ejido subsector sold practically the same 1P. Dorner and D. Kanel, ”The Economic Case for Land Reform: Employment, Income Distribution and Productivity," Land Reform: Land Settlement and Cooperatives, FAO, ESR MonO., 1971. 2R. P. Christensen, "Taiwan's Agricultural DevelOp- ment: Its Relevance for Developing Countries Today," Foreign Agricultural Economic Report, NO. 39, 0.8. Department Of Agriculture, 1968. 238 proportion (65.2 percent) as did the large farm sector (67.7 percent).1 Interestingly enough, the evidence available on post-reform experiences in Mexico, Japan, Taiwan, Egypt, and Yugoslavia, shows that although in some cases there were an initial drop, average productivity per unit Of land increased rather substantially after these reform programs. Furthermore, all these cases experienced a reduction in the average size Of farms. While the data and arguments are not presented as an argument for small family farm holding per se, it is instructive to lOOk closely at the small family farm system, since they exist on a large scale in Iraq. Post-Reform Economic_0rganization in the Agricultural Sector in Iraq Joint Agricultural Cooperative The discussion in Chapter III indicated that the first Land Reform Law Of 1958, which followed the Egyptian Agrarian Reform Law Of 1952 in its main provisions was aimed at establishing a family-farm system with private property holdings and the organization Of COOperatives. By 1974, there were 1,361 agricultural COOperative societies with VF.Dovring, "Land Reform and Productivity, The Mexican Case," Land Tenure Center, University Of Wisconsin, Paper NO. 65, pp. 1-22. 239 250,000 members at the local level in the agrarian reform areas. Out Of the 15 million donums annually cultivated, in 1974, the cooperative subsector cultivated 6.3 million donums or 44.3 percent, while the private subsector, outside the agrarian reform areas, cultivated 8.9 million or 54.2 percent and the public sector cultivated 0.5 million donums or 1.5 percent. It thus appears that the family-farm system has been effective in providing employment and income- earning Opportunities in the agricultural sector. The Ministry of Agrarian Reform, in an effort tO overcome the physical problems Of fragmented farm units, established the joint cooperatives. The joint cooperatives are a modified form of the family farm system in which some functions and decisions are socialized or carried out by government technicians. This task was undertaken gradually. It was started in 1967-68, when the first joint cooperative was established and it included nine local COOperatives. These joint cooperatives render various services to local OOOperatives, which they were unable to undertake indi- vidually, such as the provision Of agricultural machinery, irrigation pumps, and marketing services. In addition, the joint cooperatives form a cooperative union at the province level, while these unions form the General Union Of Agri- cultural Cooperative at the national level. Table 5.1 shows the development Of joint cooperatives in the country. 240 Table 5.1. Iraq's progress Of joint agricultural cooperatives Number Of Local Area in Which Agricultural the Agricultural Agricultural Cooperatives Cooperatives Year Cooperatives as Members Worked 1967-68 1 9 89,010 1968-69 7 48 422,160 1969-70 23 176 1,742,071 1970-71 31 221 2,161,793 1971-72 105 607 6,096,424 Source: Ministry Of Planning, Central Statistical Organization, Annual Abstract Of Statistics, 1972. 241 The Collective Farms Since the July 17, 1968 Revolution, the role Of the public sector has expanded considerably. The national authority has tended to support the public sector by ex- panding its base and extending the scope Of its activities. The second Agrarian Reform Law Of 1970 has pushed the prin- ciple Of collective distribution and cultivation, i.e., the establishment Of collective farm system. The decision to establish collective farms is based on twO considerations. First, an economic Objective to retain the efficiency and productivity of large-scale production or economies Of scale. It is hoped that this system would not only overcome the physical problems Of fragmented farm units, but also would help the programming Of the agricultural sector by following an annual production plan and certain crOp rotations. Second, political and ideological considerations--the collective farms, under the direction Of the public sector, would be the first step toward the social transformation Of the agricultural sector. The Ministry concentrated on establishing collective farms in certain areas for the introduction of modern tech- nology and introduction Of suitable crOp rotations in an effort to control production, program agriculture and maintain soil fertility. Without agricultural grouping 242 and the organization Of collective farms it was not felt that these Objectives could be attained. In this respect, the Ministry adopted the following measures: (1) Emphasis on cultivating the collectively distributed land or col— 1ectively tenanted land according to a unified crOp rotation suitable for the area. Rules prohibited the actual distribution of land to farmers. Farmers will cultivate various crOps allocated seasonally. (2) Grouping Of similar cultivated crops in particular areas to facil- itate the acceptance Of determined crop rotations and to make consolidation of land holdings easier. (3) Estab- lishment Of three collective farms in 1969. Table 5.2 shows the progress Of these categories Of the economic organization in the agricultural sector. Table 5.2. Iraq's progress Of collective farms Number Of Area in Which the Year State Farms Members State Farm WOrk 1969-70 6 680 30,720 1970-71 25 1,919 93,120 1971-72 21 2,492 107,540 1972-73 35 3,838 2,422,571 Source: Ministry Of Agrarian Reform, Annual Report, 1974. 243 While the process of collectivization continues, there are three types Of collective farms according to the degree Of collectivization: l. A modified form Of the joint cooperatives in which plowing, seeding, and river and canal dredging are normally carried out collectively. After the seeding process, the land is divided among the collective members, each with his family for management during the crOp year. The farmer, collective member, usually gets the produce Of the plot allotted to him. 2. Farmers are divided into production teams and groups. Each group works a plot adjacent tO the other plots Of specified crops within the crOp rotation. Normally, plowing, feeding, and river and canal dredging are done collectively. After seeding, the land is divided among various groups according to the number Of their members. The produce Of each plot is divided among the number of the group. 3. Farmers work collectively and cultivate the land according to a crOp rotation. The farmers are divided into teams or groups for carrying out various agricultural practices. The produce is divided among the members on the basis Of the number Of working days. Incentives are granted tO the efficient and productive members. ISIS" 0'} A. 244 In all cases, costs and farm reserves are deducted from the produce, which is marketed OOOperatively after allocating a certain quantity for distribution among the members. Regulations for the collective farms have been approved by the "Higher Agricultural Council," and the Ministry has formulated the By-Law for these collectives, elaborating the working methods, means for dividing the produce, incentives and the Obligations and rights Of the members. Produce is distributed on these collectives in the following manner: The basic principle Of distribution is the quantity and quality Of the member's exerted labor in the economy Of the farms. The following is deducted from the gross collective income. a. Production cost, including the depreciation of fixed capital. b. Taxes and duties due to the state. The net profit is divided as follows: a. Not less than 10 percent is allocated tO the reserve fund. b. Not less than 5 percent is allocated for establishing social security funds, and cultural, health and social services. c. NOt more than 5 percent is allocated for the incentives payments to the farm's members, Officials and laborers. 245 d. Not less than 5 percent is allocated as interest on additional shares, provided that the amount paid should not exceed 6 percent Of the value Of the shares. e. The remainder is paid to the farmers according to their work inputs, after deducting any advances or credit they have received.1 Until the produce is divided, members are given cash or in-kind advances once each month that will be repaid at the end Of the season. The farms distribute to their members an in-kind share Of the grains and crops sufficient for their living. A quantity Of forage crOps is distributed for the member's livestock, according to available means. Provisions also permit distribution Of produce to help Other members and the reservation Of seed for planting purposes. In addition, collective farms allocate an area not exceeding 2 to 4 donums to each member, including a house and appartenances for his use, to be cultivated with vegetables and pastures. Though certain livestock projects have recently established and belong to the collectives; the private livestock ownership Of the members has not been affected. The allocation Of these small areas Of lands to the collective members is to satisfy their need for vegetables and for breeding their lAl-Nowfel, p. 14. 246 livestock, in addition to utilizing their secondary and partial labor force. This procedure strengthens collective farming, especially in the initial stage.1 From the previous discussion, it is clear that group farming with some form of COOperative, collective management, is tO be followed by a movement toward socialization Of agriculture, with the establishment Of state farms and collectives accompanied by a concerted effort Of industrial- ization. Although voluntary in principle, a strong educa- tional campaign is undertaken by the government and supported by various policy incentives to encourage farmers to join the collective farms. Individuals could choose not tO join the collectives and are given the choice Of access to an equiva- lent amount Of land elsewhere. There are even today a scattering Of individually Operated farms around the collectivized reform areas. However, many local cooperatives joined in the collectivization process. Refusal meant pos- sible constraints on the availability Of public services. Farm policy incentives--credit, marketing, technical assis- tance and input supply--are used to encourage Operators to join the group farming. During their short period of Operation, the collec- tive farms have realized considerable success. For example, a production plan was formulated for each collective farm ’Ibid., p. 15. 247 based on the use Of available measures such as land, irrigation, machinery and manpower; and compatible with the conditions Of the district. In addition, plans were formulated for the diversification Of agricultural production, through a crOp rotation, with emphasis on the production Of cash crops and raw materials which are in great demand for the local industries. Furthermore, agricultural productivity, yield/donum, on these collectives has more than doubled above the national average level. For example, the productivity Of wheat, yield per donum, in the Baladruze Collective farm in 1970 was 466 kg, while the average productivity in the country that year was 142 kg. Also farm incomes on these collective farms have increased as a result of the overall agricultural production increase and cooperative marketing. Members Of Al-Talayh Collective farm received an income Of ID 340 each in 1970. In the 1971 winter season, members received an income Of ID 175, despite adverse climatic conditions. That is in addition to the high returns from their privately owned livestock and land. There has also been considerable improvement in the cultural, health and social conditions Of the collectives' members. Many collectives have constructed modern villages for the farmers, and provided schools, dispensaries, water supplies and electrical power. For example, in 1971, a brick-built modern village was constructed on the Al-Talayi 248 collective farm with 50 houses plus a school, Office building, living quarters for Officials, livestock stables and other structures. Overall, these collectives have strengthened the cooperation and political awareness Of the farmers and increased their participation in managing their collectives. State Farms and Agricultural Projects State farms exist in almost all countries, either for the production of certain specialized commodities or for experimental breeding and other scientific purposes. State farms differ from collectives in that they are state enterprises Operated by state appointed managers. Labor on state farms is hired in much the same manner as a factory hires its work force. The management Of state farms seems less complicated and provides greater Opportunities for successful Operation by an efficient manager.1 Collective farms are generally managed by a number Of committees. The chairman Of the top-level manaterial committee Of a collec- tive is subject to more demands and must include a greater number Of frequently conflicting Objectives in the plans Of Operation for such an enterprise. 1O. Schiller, "The Communist Experience in Dealing with the Agrarian Question: Their Significance for Devel- oping Countries," in AgrarianPOlicies and Problems in Communist andNon-Communist Countries, University 0 ”Washington Press, 1971? 249 The most prominent examples of state farms remain in the Soviet Union and the countries Of Eastern Europe. In Rumania, the state farms were created mainly from large private estates confiscated by the state. The state farm system assures the state some measure of direct control over a certain production base and quantity Of agricultural produce and serves as a model for the agricultural collec- tives. State farms can also help improve the general level Of farming in their region by demonstrating the effectiveness Of modern farming practices and providing improved seeds and breeding stocks to other farms in the region. They are state— managed enterprises Operating with hired labor with a variety Of incentives built into the Operating procedures. For example, on one large Rumanian state farm Specializing in hog production (producing 150,000 market hogs per year) profits in recent years averaged about 25 percent Of the total revenue. Thirty percent Of this is retained by the state farm for internal investment purposes. The remainder is paid to the state, but part is returned to the enterprise for incentive payments tO its workers after all quantity, quality and cost Of production goals have been met.1 In Iraq, the first state farm, Bakrajo farm was established in 1933; then another one. Abu-Ghraib farm was established in 1937. They were primarily for experimental breeding and other scientific purposes. After the enactment lDormer, p. 62. 250 Of the first land reform Of 1958, more emphasis was placed on encouraging the establishment Of this category Of the economic organization. In 1960 the Ministry Of Agriculture established the Latytia State Farm. Also in the early 1960's, in accordance with technical and economic agreement between Iraq and the Soviet Union, the latter provided the technical assistance for establishing five state farms for the production of cotton, rice, sugarbeets, etc. By 1970, there were thirteen state farms throughout the country. In the early 1960's, the main Objectives for establishing the state farms were: (1) the production Of agricultural commodities for the local consumption and (2) the production Of raw materials for the local industries. In the late 1960's, these Objectives were modified to empha- size the production Of the new and improved seed varieties Of wheat, barley, rice, and cotton to be distributed tO cooperative members. A recent study conducted by the Ministry Of Planning on three state farms in various districts, showed evidence Of poor economic performance in terms Of efficiency and productivity.1 The Sowerah State Farm established in 1960 with a total area Of 151,000 donums, for example, had actually cultivated under 25,000 donums, or 10.5 percent Of the farm's area in any year. This resulted from the 1T. Al-Bauder and A. Naji, State Farm in Iraq, Ministry Of Planning, July 1971. 251 accumulation of salt, lack Of a drainage system, and a shortage of water supply. Theoretically this farm should benefit from the economies of scale in the production process. The study indicated that the productivity yield per donum of the main crOps, wheat, barley and cotton, on this far, was barely above the average national level. In addition, most of these state farms had incurred heavy losses or negative returns on their investment. Table 5.3 shows the investment, return and the deficit per donum of the main crOps on the Sowerah State Farm. Furthermore, the production cost per donum of these crops were twice as much as the production costs at the national level. Table 5.4 shows the production cost per donum, for the main crops on this farm in comparison with the rest of the country. The high production costs on these state farms is mainly due to the cost of labor and administration that represented about 60 percent of the total cost. The farm hires more labor than it needs. Depreciation and maintenance costs also represented more than 35 percent of the costs. These examples are in sharp contrast to the commercial principles under which this enterprise Operates. The poor economic performance of the state farms can be attributed, among other things, to the following: First, while the management of state farms seems less complicated and therefore provides a greater Opportunity for success for an efficient manager than that of the collective farms, the 252 .ahma =.UouH cw nanom unnum: .ocfiscnam mo muumwcflz .monH "wousom moo.vH| vNN.H~ www.mm II mam.o nu NNO.mI mbm.h Hoo.NH moma ooo.oHI Hmm.mm me.¢e mmm.~| Hmm.m onm.oa th.ml mmm.m ouh.~a homfl vev.han mmv.m~ mom.om mov.m| 5mm.m oom.HH emo.ou hmh.o Hmh.~H mood ooa.m| mam.m~ mao.m~ vmm.al mao.h mem.m moa.o o0m.oa HON.OH mood “NV shoved 0000 “my shoved unoo Amy snouom unoo menu was“: AHV ANV coauosooum nose: adv Amy cowuosooum moods adv Amy seauosooum uaowmoo nae uaoamoo may uwuwmoo “do couuoo aoaunm 000:3 momanmomd .sumh oumum nmuosom so macho cans 0gp How .QH .aficoo Hon Guano“ one #000 cowuosooum m.vouH .m.m manna 253 Table 5.4 Iraq's production cost per donum on the Sowerah State Farm in comparison with the rest of the country Wheat Barley Cotton Sowerah Sowerah Sowerah Year State Farm Iraq State Farm Iraq State Farm Iraq 1965 10.201 5.470 8.573 4.685 29.019 16.865 1966 12.781 5.735 11.266 4.988 36.963 17.812 1967 12.829 6.242 10.930 5.334 44.831 19.218 1968 12.601 6.547 -- 5.596 35.289 20.000 Source: Iraq, Ministry of Planning, ”State Farms in Iraq," 1971. management of state farms has been hampered by bureaucratic rules and old financial regulations provided in the 1960's. In addition, there is no relationship between the wages Of officials and laborers and the performance of the farm. If the state farm should operate on a commercial basis, more incentives built into the operation process should be provided to officials and laborers. Second, the inefficiency of the utilization Of the resources available on these farms-- such as land and water resources, labor force, and capital. For example, the Sowerah State Farm, following the fallow system, had about 370 farm machines and equipment. Among the equipment (149 tractors Of different sizes, 45 combines and 18 cars) only 30 to 45 percent of the 149 tractors were in At the same time, the Operating condition; the rest were idle. study revealed that the farm needs only 40 tractors. 254 The Ministry of Agrarian Reform manages another category of these economic organizations, i.e., the Agricultural Projects. These projects are located in the irrigated areas, where each project is irrigated by a canal. Therefore, the project may be called an agricultural basin. Some of these projects were established before the enactment of the first agrarian reform of 1958, others were established during the 1960's and early 1970's. At the present time, there are 19 agricultural projects covering more than three million donums. Farmers on these projects are the bene- ficiaries of the agrarian reform programs. However, most of the projects that were established in the early 1960's became submarginal--unsuitable for cultivation because of improper land use, increase of salinity and lack of supporting structures. Since the early 1970's, the Ministry has initiated certain institutions and adopted various measures for success- ful economic performance of these projects and the state farms. For example, within the framework of the National Development Plan, 1970-1974, the Government Central Sector allocated ID 24.1 million, investment expenditures, for the agricultural projects and state farms. Furthermore, the Ministry established a special department for managing these agricultural projects, where efficient technical and adminis- trative staffs have been appointed to every project. On each project there are agricultural technicians specialized 255 in the fields of crops, horticulture, animal husbandry, and cooperative Officer and supervisor, in addition to mechanical, irrigation, and civil engineers and a number of mechanics and drivers. Also, the OOOperative movement is introduced to each of these projects as an integrated part of the agrarian structure. The Ministry established a state farm on every project to serve as demonstration models that would encourage the diversification of agricultural production on these projects. The economic success of the state farm on these projects provided a breakthrough in terms of efficiency and productivity. For example, wheat pro- ductivity, yield per donum, on the April 7th project was more than 620 kg, while the average productivity of wheat on farms outside the project, outside the agrarian reform area, was 150 kg. The Shatrah State Farm, in 1971, realized a net profit of ID 28,000, while previously it incurred negative returns on its investments. This is in addition to the various cultural, social, and health services that have been provided for the cooperative members on these projects. 256 Policy Implication Agricultural development in the sense of adoption of new technology and increasing production and productivity can probably occur in agricultural sector characterized by different economic organizational systems, family farm, cooperative-collective and state farms. Changing the owner- ship and size distribution shifts the power to make decision about modernization and changes the nature of government assistance programs to agricultural sector. Some of the main policy issues that have to be examined within the strategy of overall economic development may be listed as follows: 1. The dimensions in the organization of the farm firm, whether family-farm, group farming--cooperatives or collectives, or state farms, are (a) number of workers per farm, (b) acres or donums per worker as a function of substitution between capital and labor (mechanization), (c) acres per worker as a function of intensity of land use, and (d) yield-increasing capital and technology per acre.1 2. In later stages of economic development increased use Of labor-saving capital is very likely (mechanization). This is equivalent to an increase in the capacity of each worker to cultivate more land, and thus an increase in acres per worker can be expected to occur 1Kanel, p. 89. 257 throughout the whole range of farm sizes. But on the family farms an increase in acres per worker will require an increase in acres per farm, while on the larger than family farms (collectives or state farms) increase in acres per worker will often be accomplished by decreasing the number of workers per farm. However, this depends on employment Opportunities outside the agricultural sector. The resulting increase in acres per farm on family farms is not a sign of the disappearance of family farms. By itself this relation would result in the same ratio of acres to workers on all sizes of farms at the same point in time.1 3. Furthermore, small family farms are likely to be farmed more intensively with less acres per worker than larger farms (state farms) in the same economy. This is due to the fact that the larger farms (state farms) operating on commercial basis, hire only as many workers as they can economically employ (VMP equals wages), while family labor on small farms will be used as long as it adds to family income (with lower or zero marginal product). Also, in an agriculture which has not been subject to much technological change, prior to land reform in Iraq, both large and small farms are likely to use the same technology (same capital per worker) while differing in intensity of land use. In cases where technological change is recent and rapid, large farms, 'Ibid., p. 90. 258 the experience of state farms in Iraq are likely to differ from small farms in both respects: (1) greater substitution of capital for labor, capital intensive approach and (2) lesser intensity of land use, that is, the gap between family farm and state farm in terms of acres per worker is widened. 4. Output per acre is likely to be larger on smaller family farms due to the application of more labor per acre (more intensive land use). However, under condi- tions of rapid technological change, large farms, state farms, are likely to use more yield-increasing inputs (such as fer- tilizer and pesticides) and this may give them a larger out— put per acre than on smaller farms. However, the advantages of large farms may disappear with the modification of family- farm system into group farming--cooperatives and collective-- and the development of government and COOperative organiza- tion in processing, marketing, credit and extension. From the foregoing discussion, it is clear that the post-reform economic organizations in the agricultural sector have followed the family farm, group farming--cooperative- collectives and state farm system. The economic advantages of larger farms, especially state farms, on economies of scale in terms of efficiency and productivity, could be retained through a modified form of the family farm system, the joint cooperatives in Iraq or the Block land use system system in Egypt, where certain decision and functions are 259 socialized or collectivized. Furthermore, the family—farm system is not only the most labor-absorptive in comparison to the collectives or state farms, but also highly productive in terms of output per unit of land. However, there is no reason to assume that nations would choose a post-reform reorganization of the agricultural sector based on private property or family farm system. Under the conditions existing in Iraq, as well as in the less industrial countries, the major reform program will Often lead to mixed systems of family-farm with private prOperty, group farming--cooperatives-collectives, and state farms. The main point to be emphasized is that development of the agricultural sector requires reorganization of this sector in such a way as to (1) provide incentives for in- creasing investments and productivity, (2) use a combination of production factors such as land, labor and capital con- sistent with the cost and availability of these factors at a given time and at the social Opportunity cost, and (3) assure an equitable distribution of increased output.l While post-reform dualism may be more viable, the critical variables associated with the possible success or failure of such a dualistic post-reform structure are: (l) the size and the rate of growth of the industrial sector, (2) the prOportion of the population in the agricultural lDormer, p. 124. 260 sector and (3) the growth rate of total population.1 For example, in the East European countries, discussed earlier, all these variables appear favorable, i.e., substantial expansion and growth of the industrial sector, slightly under 40 percent of the pOpulation in the agricultural sector and a relatively low' (1.0 to 1.5 percent annual) population growth rate. In Iraq, these conditions are much less favorable despite a rapidly expanding industrial sector, with a highly capital intensive industrialization process. The major difference is the much more rapid rate of popula- tion growth which is currently averaging 3.2 percent. A modified form Of the family-farm system or group farming with labor-intensive agricultural development, at least in the short run, may be more favorable for the local conditions in Iraq. Furthermore, one of the Objectives of the agrarian reform program must be the increased agricultural employment Opportunities that can be created within a reorganized tenure structure. To get at the crux of the matter, the specification of such a reorganization of the agricultural sector should be decided within the ovarall economic devel- opment strategy of the country. As Dorner pointed out, "in 1J. R. Schaub, "Agricultural Performance in the Developing Countries,” in Economic Progress of Agriculture in Developing Nations, 1950-1968, U. S. Department of Agri- culture, FAO, Report No. 59,1970. 261 actual practice, people must deal with the agricultural sector as it is and as it might reasonably be modified, not as it could be if there was a 'clean state' from which to begin."1 1Dorner, p. 108. CHAPTER VI SUMMARY AND CONCLUSION For about two decades the government of Iraq has assumed responsibility for develOping the country's resources toward rapid attainment of its economic potential. The declared overall Objective of the development policies both before and after the 1958 Revolution has stressed stimulation through development expenditures of the nonoil sector, especially the agricultural and industrial sectors, of the national economy. Although there consistently has been a consensus regarding this Objective, sharp differences have arisen regarding the means of achievement. In pursuing its development policy, the government in the early 1950's assigned the agricultural sector a high priority ranking on the scale of economic development. The reasoning underlying this conclusion was based mainly on the well-known principle of comparative advantage. This argument had some influence on the government outlook at the time, but somehow the government failed to understand that factor supplies could be substantially altered in the long run as a result of deliberate and direct intervention in the economy, planning for economic develOpment, and could 262 263 thus lead to an altered cost structure and different pattern of comparative advantage. The agricultural development policies emphasized the "horizontal expansion" or bringing new land into culti- vation rather than "vertical expansion" or intensification of Iraq's agriculture and the reform of its defective agrarian structure. Widespread and often uncritical acceptance was given to the assumption that the position of the small farmers, tenants, and share croppers, would automatically and invariably improve with the gradual monitization of the agricultural economy through economic development. There is every reason to believe that along with the gradual monitization of the agricultural sector, i.e., the introduction Of the new technology, machinery, and irrigation pumps, by the landlords, the gap between the rural rich and the rural poor had widened. This was mainly due to the defective agrarian structure. The government drew up two develOpment programs during the 1951—1959 period. Both were heavily loaded with irrigation and flood control projects, many of which were large and could not show quick results. To a large extent these were engineer's lists of projects rather than economic programs. These projects were too often conceived in isola- tion from social and institutional changes that should have accompanied them. They Often ignored necessary secondary 264 technical issues such as drainage, desalination, and irrigation networks. The poor resulting performance of the agricultural sector in terms of production and produc- tivity of both land and labor and the land use pattern-- fallow system--was the result of the political and economic institutions that dominated this sector. One aspect of the political and economic institutions that affected the performance of the agricultural sector is the land tenure system. Agricultural land, the fundamental and basic resources of the national economy had been con- trolled to an overwhelming extent by a limited number of owners and a semi-feudalistic pattern of ownership. Prior to the Revolution of 1958, agricultural landowners consti- tuted about 0.5 percent of total pOpulation; 2.8 percent of these landowners held 70 percent of the agricultural land title deeds, and 97.2 percent held 30 percent of the agri- cultural land title deeds. In other words, as the total rural population who directly depend on agriculture (in- cluding landowners and lessees) stood at 3.2 million in 1957; the number of landless peasants was 2.9 million prior to 1958. When the new authorities took over in 1958, they were fully conscious of the criticisms leveled at the policy of the previous government. The main policy targets of the new government appear to have been (1) development of the 265 agricultural sector, (2) expansion of the manufacturing sector, and (3) promotion of the social welfare of the poorer portion of the population. Three development plans were drawn up and followed during the 1959-1969 period. Allocation of investment expenditures to the various sectors of the economy reflected a change in develOpment policy, with the industrial sector receiving a higher priority in the scale of economic devel- opment than the agricultural sector. This shift in prior— ities took place at a time when it was imperative that the agricultural sector receive top priority, especially at the time when a major step is being undertaken by the government, the Agrarian Reform Law No. 30 of 1958, that would have a profound impact on the agricultural sector. The Agrarian Reform of 1958 had the main Objectives of providing for more equitable land distribution, control- ling agricultural rental rates, and establishing minimum wages for agricultural workers. The agrarian reform program was implemented in three phases: (1) expropriation, (2) temporary adminis- tration and management of exprOpriated land by the Ministry Of Agrarian Reform, in those cases which the lands were leased to beneficiaries, until the necessary contracted requisition for the productive use and management of the land was completed, and (3) the redistribution of 266 expropriated land to the beneficiaries, and the organization of agricultural OOOperatives and provision of supporting institutional services for the cooperative members. This study is concerned with the evaluation of agrarian reform programs, with specific attention to the period of implementation of the structural program, orga- nization and administrative structure, and the effects of both macro and micro economic point of view. This study has shown (1) the relationship between agrarian reform programs and specific develOpment consequences, i.e., increasing production and productivity, income earning opportunities, and employment creation; (2) the past per- formances of the agrarian structure, especially the pro- ductive structure and the structure of supporting services, and the assessment of its future prospects and to point out major problems and policies that it may have to face in the realization of these projects; and (3) the post-reform economic organization, i.e., family farm system, collective farms and the state farm and their impacts on the agrarian reform objectives, especially increasing productivity and employment creation in the agricultural sector. The implementation of the agrarian reform program in terms Of land exprOpriation as of September 1968 was 12.5 million donums, i.e., 5.6 million donums or 44 percent were expropriated and 6.9 million donums or 56 percent were 267 under temporary administration by the Ministry of Agrarian Reform, but subject to legal and technical process for final expropriation. The exprOpriated lands were redistributed by December 1968 as follows: the total area redistributed to the landless peasants, in the form of small family farm systems was 3.1 million donums and the number of benefi- ciaries was 57,117 farm families. The average area of redistributed unit per family was 40 donums. Also, 6.2 million donums were rented to 186,868 farm families, but awaiting redistribution. Altogether, 9.5 million donums were redistributed and rented to 237,402 farm families. In addition, the Ministry included in its program the reclamation and redistribution of 3.3 million donums divided into 11 agricultural projects. Hence, after 10 years of Operation, only 25.5 percent of the total land that was eligible for redistribution had actually been redistributed while 74.5 percent was still being acquired by the Ministry of Agrarian Reform. By 1970, the total area of expropriated land had increased to more than 8.3 million donums. The number of farm families recorded as operating land under temporary contract was 236,203. The number of farm families who had secured provisional title to redistributed lands was 75,816. Altogether there were 312,019 farm families who were new owners or tenants under temporary contract awaiting 268 redistribution. The area included in the agrarian reform programs, exprOpriated, reclaimed, and redistributed, represented 75 percent of the agricultural land in Iraq. Thus, the level of management and production practices used on this large area naturally had far-reaching effects on the production of crops and livestock, income distribution, and the nation's employment patterns. The analysis indicated the following impacts of the agrarian reform program on the performance of the agricul- tural sector. The Impact onlngreasing Agricultural ProductiOn andiProductivity After 1958, crop production declined and remained low for a period of two to three years. This was partly due to the long-drought in the north and partly to the disruption brought about by the agrarian reform programs. A long-run period (1958-1970) provides a better basis for evaluation of the impact of the reform program on agricul- tural production and productivity. Using the 1957-1959 average, as a base period equals 100, crop production increased from 100 the base year to 142 in 1970, i.e., an increase of 42 percent over this period or an annual average increase of 3.5 percent. Total agricul- tural production increased from 100 during the base year to 141 in 1970, i.e., an increase of 41 percent over this 269 period, or an annual average of 3.4 percent. Food production increased from 100 in the base year to 141 in 1970, i.e., an increase of 41 percent over this period or an annual average of 3.4 percent. Furthermore, the total value of agricultural pro- duction, at factor cost and constant prices of 1966, increased from ID 148.7 million in 1962, after the initial decline in crop production in short run, to ID 194.8 million in 1969; and the value added in the agricultural sector, at constant prices of 1966, increased from ID 148.2 million in 1962 to ID 186.87 million in 1969, with an annual average of 5.1 percent. Therefore, in contrast to the short run, agricultural and food production not only recovered but has steadily increased above the pre-reform level. The increase in agricultural production and food production, however, has not kept pace with the increase in demand for food that has come with increase in population growth and per capita disposable income. Excesses of demand above supplies Of agricultural and food commodities led to higher prices, a reduction in exports and an increase in the imports of agricultural and food commodities. Also, while the Gross Domestic Product, GDP, at factor cost and constant prices of 1966, increased from ID 695.27 million in 1962 to ID 980.14 million in 1969 with an annual average Of 4.1 percent, the contribution of the agricultural sector to 270 GDP declined from 21.3 percent in 1962 to 19.1 percent in 1969. This relative decline in the importance of the agricultural sector could be attributed to the conditions associated with the implementation of the agrarian reform and the higher growth rate of other sectors, especially the manufacturing and the services sector. The analysis indicates that the impact of the reform program on increasing agricultural productivity, yield per donum, has been moderately good with some crOps such as rice, cotton, and tobacco. In comparison to other countries, Iraq is, by and large, a country Of rather low agricultural productivity. The Impact on Income Distribution; Income-Earning,Qpportunities The connection between agrarian reform and income distribution is difficult to verify. While evidence on pre-reform and post-reform income distribution and expen- diture pattern is extremely difficult to Obtain, income distribution will be inferred from statistics showing the redistribution of land ownership. The analysis shows that the Agrarian Reform of 1958 provided income-earning opportunities to 312,019 farm families who became owner-operators, either with provisional titles or under temporary contract. This number amounted to about 50 percent of the landless farm families on the basis 271 of the Agricultural Census of 1957-58. Furthermore, the 50 percent reduction in the value of the redistributed land, which resulted from the 1964 amendment of the law, and the nominal rents paid by the tenants under temporary contracts, are highly significant in transferring incomes from the land owning class to the landless farm families. Consequently, the average annual farm family income, at constant prices, increased from ID 145.9, pre-reform level, to ID 205.3, post-reform level; i.e., an increase Of ID 59.4 or 40.7 percent. While no attempt has been made to reconstruct expenditure patterns or change in the demand structure of the agrarian reform beneficiaries, a considerable amount of the increased income is spent on a variety of consumer goods. Part of the increased income is reinvested to increase agri- cultural production and productivity. The investments are in the form of fertilizer and pesticides, irrigation pumps and farm machinery. Most of the fertilizer and pesticides distributed by the public sector, for example, are used by cooperative members. In 1968, 144 COOperatives owned 394 irrigation pumps or tube wells. Also, the number of tractors increased from 2,400 in 1958 to 10,400 in 1970, including 623 tractors for the public sector. The number of combines increased from 1,000 in 1958 to 2,280 in 1970, including 633 combines for the public sector. Thus, the 272 new expenditure patterns or the change in the demand structure, not only appears to be based on economically rational criteria, but also the change in the demand structure of the reform beneficiaries seems to be in line with the consequent Objective of income distribution. The Impact on Employment Creation The analysis indicated that Iraq has had, through its agrarian reform programs, an opportunity for recon- structing the agricultural sector for providing employment and income-earning Opportunities in the agricultural sector. The impact of the reform program on employment can be evaluated in terms of the absolute and relative structure of the labor force. Prior to the reform program, 1957-58, the total number of the employed labor force was 1,663.1 thousand. The relative structure of the labor force, distribution to the main economic sector, was 971.8 thousand or 58 percent of the total employed in the agricultural sector, 4.7 thousand or 0.01 percent in the mining and quarrying sector, 84.6 thousand or 6.8 percent in the manufacturing sector and 289 thousand or 22.0 percent in the service sector. As these statistics indicate the agricultural sector was the most important sector in providing employment Opportunities. In the post-reform period, 1969-70, the total number of employed labor force increased to 2,546.2 thousand, i.e., 273 an increase of 883.1 thousand over one decade or an annual average rate of 5.2 percent. The relative structure of the labor force is 1,449.8 thousand or 54 percent in the agricultural sector, 15.5 thousand or 0.58 percent in the mining and quarrying sector, 148 thousand or 5.5 percent in the manufacturing sector and 565 thousand or 21.24 per- cent in the service sector. The agricultural sector is still the main sector for providing employment Opportunities but it now provides a smaller proportion of the total jobs. In other words, the total labor force employed in the agri- cultural sector increased, in absolute numbers, from 971.8 thousand, pre-reform level, to 1,449.8 thousand, post-reform level; i.e., an increase of 478 thousand or 49.2 percent over more than 10 years, or an annual average income of 4.9 percent. While there is a definite limit to the employment creation possibilities in the agricultural sector, major efforts are required to create employment Opportunities in the non-farm sector. Thus, resolutions of the unem- ployment and under-employment problems rest ultimately with a dynamic industrial and manufacturing sector, especially industries for consumer goods, industries for agricultural requirements, and agricultural processing industries. This study has shown that, despite the accomplish- ment of the Agrarian Reform of 1958, in terms of creating 274 more employment and income-earning Opportunities in the agricultural sector, it cannot be pronounced as a complete economic success. That is, it did not bring about a substantial increase in agricultural production and productivity and/or the creation of dynamic agricultural sector with significant contribution to GDP, at least, in the short run. This can be attributed to two main reasons: First, the shift in development policies and priorities, especially after the enactment of the reform program, which resulted in a lack of the necessary productive structure and the structure of supporting services. For example, during the 1960's, fertilizer use in Iraq was insignificant and little use was made of weed killers and pesticides. By 1968, i.e., ten years after the enactment of the reform program, farm machinery and equipment for both the public and private sectors supplied 10 percent of Iraq's need. As for the structure of supporting services, one decade after the enactment of the agrarian reform program, there were 499 cooperatives with a total of some 60,000 members. While special emphasis was given to agricultural OOOperatives, so that they became linkages between the state and the farmers for the provision of necessary services, credit- provision and marketing facilities, the number of these cOOperatives was inadequate to handle the country's need 275 and their performance was limited and inadequate. Second, the technical and administrative problems developed with the implementation of the reform program, especially with the fragmentation of redistributed units, lack of trained personnel and poor performance of public institutions providing supporting structures. Thus, if the agrarian reform program is to contribute significantly to the specific development consequences, it is clearly necessary that it be undertaken in conjunction with a variety of supporting structures, productive structure and the structure of supporting services. The analysis concluded that the Agrarian Reform Law No. 30 of 1958 was a transitional piece of legislation. The primary aim of the law--elimination of feudalism was attained. But the subsequent aims of the law, the trans- formation Of a large number of landless peasants into productive agricultural land owners, increasing agricultural production and productivity, and a subsequent increase in the relative importance of the agricultural sector were barely realized because of the obvious implementation shortcomings. Yet, if achievement falls short of expec- tation, it is because the development process requires knowledge and competence that cannot be acquired except through systematic experience over a period of time which can hardly be abridged. Furthermore, attainment of Iraq's 276 great economic potential and achievement of the overall objectives outlined earlier requires (1) agricultural development, (2) expanding the manufacturing sector, and (3) raising the efficiency of manpower and reducing unemployment. Consequently, what is needed above all is a deci- sion to elevate the agricultural sector to a position of top priority during the coming decade. This would entail comprehensive planning, far-reaching change in institutions, devotion of more human resources to the agricultural sector than has been the case in the past and substantially greater financial resources than seemed to have been contemplated in the past for this purpose. After the July 17, 1968 Revolution, the national authorities initiated rigorous measures to achieve a comprehensive and integrated agrarian structure. These measures were designed to establish the productive structure, the structure of supporting services and to create an effi- cient administrative structure for implementing the agrarian reform program. One of these measures was the enactment of the new Agrarian Reform Law No. 116 of 1970. The two main provisions of the new agrarian reform law were the following. (1) The establishment of the Higher Agricultural Council, which was the first serious attempt to establish an efficient administrative structure that could 277 avoid conflict and overlapping jurisdiction between various Ministries and Departments that had responsibilities con- cerning the agricultural sector. (2) TO retain the advantages of the large scale production, economies Of scale, and to avoid the physical and technical problems of fragmentation, the new agrarian reform program followed the principle of collective distribution. The new agrarian program emphasized the establishement of new economic organizations in the agricultural sector, i.e., the family farms, a group farming system (OOOperative-collective) and a state-farm system. Hence most of the drawbacks associated with the implementation of the first reform program were corrected through the promulgation and implementation of the new agrarian program. The Higher Agricultural Council followed a time table for quick and efficient implementation of the new program. While the total requisitioned area under the first program between 1958 and 1970 was 4.2 million donums, under the new program 3.1 million donums were requisitioned by 1972. The area expropriated in two years equalled 80 percent of the total requisitioned area during the previous 12 year period. The process of redistribution also worked faster under the new program than under the first program. By 1972 a total of5.5 million donums were redistributed to 130,883 landless farm families. 278 This study has shown that the first reform program provided employment and income earning opportunities to 312,019 farm families; the new reform program provided employment and income-earning Opportunities to an additional 165,000 farm families by 1974. Altogether the total number of beneficiaries, new owners, and tenants under temporary contract, totaled 477,019 farm families under the first and the new agrarian reform program. This number equals about 75 percent of the total 685,000 landless families according to the 1957-58 Agricultural Census. Furthermore, the new agrarian reform program abrogated the compensation principle to the landlords, and at the same time the redistribution of land was carried out without the repayment principle. Thus, this measure is significant in transferring incomes from the land-owning class to the landless farm families. In conjunction with the enactment of the new reform program, the use of modern technology, fertilizer and pesti- cides, and farm machinery has substantially increased. To meet the effective demand for the use of modern technology and to create more employment Opportunities in the rural area, Iraq has expanded its industries for agricultural inputs. Given the raw material basis for a complex industry, especially in the field of petrochemical and other related industries, Iraq constructed a 'fertilizer plant' with a 279 production capacity of 190 thousand metric tons of nitrogenous fertilizer. Another fertilizer plant, under construction, will produce two million metric tons Of different kinds of fertilizer and pesticides. Iraq is not content to be self-sufficient in the production of yield increasing inputs, but also wants to produce these inputs for export. Also, the farm machinery plant constructed in the rural area is producing tractors, combines, and irriga- tion pumps, to achieve adequate levels of mechanization and to encourage the introduction of modern agricultural practices. Cooperatives have expanded their activities, as an integral part of the structure of supporting services, by providing credits, marketing facilities, and other social and cultural activities in the rural areas. There are 1,360 multipurpose agricultural OOOperatives at the local level with 250,000 members utilizing 16 million donums, 151 agricultural COOperatives at the regional level, and the Cooperative Union at the national level. Furthermore, the cooperative movement has expanded its activities outside the agrarian reform area; the number of cooperatives in the private subsector is expanding. There are 71 agricultural cooperatives with 3,581 members-~landowners and tenants-- utilizing 0.5 million donums. Thus, the COOperative network has established itself as a linkage between the public 280 sector and public institutions and farmers in the introduction of modern technology and the provisions of the complementary services in rural areas. This study has shown the impact of post-reform economic organization in the agricultural sector, i.e., family farm system, group farming system (cooperative- collective) and the state-farm system on increasing productivity and the employment Opportunities in the agricultural sector. The data and economic consideration are not presented as an argument for the family farm system per se. It is instructive to look closely at the family farm system, since it exists on a large scale in Iraq while post-reform dualism may be more viable, the critical vari- ables associated with possible success or failure of such a dualistic post-reform structure are (l) the size and the rate of growth of the industrial sector, (2) the proportion of the population in the agricultural sector, and (3) the growth rate Of total population. The review and analysis concluded that the new Agrarian Reform Program Of 1970 envisaged a concept for agrarian program both in terms of comprehensiveness and essence, i.e., it has provided a strong basis for compre- hensive and integrated agrarian structure. The new program removed Obstacles and paved the way for the Agricultural Revolution in Iraq. Hence, within this context, the new 281 agrarian structure would ensure balanced economic develOpment which is in conformity with Iraq's declared overall objectives of development policy for the last two decades. BIBLIOGRAPHY BIBLIOGRAPHY Abdel-Sayed, B. M. "The Potential Use of Fertilizer for the Intensification and Development of Agriculture in U.A.R." Ph.D. dissertation, Michigan State University, 1969. Allison, F. E. "Nitrogen and Soil Fertility." USDA Yearbook, 1957. Al-Najar, Isam. Introduction and Breeding of_New Varieties withHigh Yield Potential Improvement of Rice Production in Iraq. 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