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Amstutz foresees Iraq agriculture making transition into a 'free market economy'

(Tuesday, May 6, 2003 -- CropChoice news) -- via The Agribusiness Examiner: PHILIP BRASHER, DES MOINES REGISTER: A former grain executive heading the U.S. effort to rebuild Iraq's agriculture sees the country doubling its grain production to pre-Gulf War levels in two to three years and getting into the livestock business.

"With a transition into a market economy, we can see health returning to agriculture and incentives to employ good farming practices and modern techniques," said Dan Amstutz, speaking to reporters by phone from Kuwait.

Iraq has 27 million acres of land that could be farmed - about the same as Iowa. Just half that land is in cultivation, and the country"s agricultural industry is in shambles after a decade of economic sanctions that have left farmers short of spare parts, fertilizer and pesticides.

In addition, Iraqi farmers have had little incentive to increase production because of price controls that have kept food very inexpensive, Amstutz said.

"Culturally and historically, this is a rich agricultural area. Iraqis were irrigating production in the Tigris and Euphrates area prior to the Greeks and Romans, thousands of years ago," Amstutz said.

Iowa is unlikely to benefit significantly from Iraq"s import needs because the state doesn"t grow the food crops, such as wheat, that Iraqis prefer.

Muslims also don"t eat pork, an Iowa specialty.

But Iraq will need sources of animal feed, such as corn, as livestock production develops, Amstutz said. Iraq grows a relatively small amount of corn and sorghum.

The United Nations" Food and Agricultural Organization has plans to help Iraqis develop chicken production. Amstutz also envisions feedlots for sheep and cattle.

"They are meat eaters. It"s not a vegetarian society," he said.

Iraqi farmers are expected to harvest about 1.7 million metric tons of wheat and barley this year, about the same as last year"s harvest and enough to fill about 30% of the country"s needs.

By comparison, Iowa typically produces more than 40 million metric tons of corn a year.

Amstutz, a former executive with agribusiness giant Cargill Inc. and the North American Export Grain Association, is working with a counterpart from Australia, Trevor Flugge, on the development effort in Iraq.

The appointment of Amstutz has been criticized by representatives of Oxfam, a major relief organization based in Britain, [See Issue #243] because of his industry connections and his espousal of free-market principles. He was an agricultural trade negotiator in the Reagan administration.

J.B. Penn, the U.S. Department of Agriculture's undersecretary for farm and foreign agricultural services, said Amstutz will benefit from his background in the grain business and his knowledge of USDA programs.

Note from A.V. Krebs, Editor, Agribusiness Examiner : Colleague and farm columnist Alan Guebert recently noted: "Ann Veneman's selection of American master of the ag universe Amstutz was upstaged by Australia's selection of its man in Baghdad: Trevor Flugge, the former chairman of the Australian Wheat Board (AWB), the country's monopoly wheat seller to the world. Unlike Amstutz, Flugge is a farmer.

"The Flugge appointment ups the fattening food ante both the U.S. and Australia believe is at stake in the soon-to-be-remade Iraq. Before the 1991 Gulf War, Iraq was a one million metric ton per year importer of American wheat. Since then, however, no direct sales of American ag products have occurred.

"(USDA undersecretary J.B. Penn noted in a briefing that Iraq owes the department's Commodity Credit Corp. $2 billion on loans that facilitated pre-1991 ag sales and nearly $2 billion in interest on the loans.

"After the U.S. left Iraq in 1991, Australia stepped into the breach. Currently the AWB holds contracts, signed by Saddam Hussein's Iraqi Grain Board, to deliver more than 1 mmt of wheat in 2003. In 2002, Australia sold $484 million of wheat to Iraq.

"Part of Flugge's portfolio will include his insistence that those contracts be honored despite the fall of Hussein. Flugge will also attempt to position Australia as the natural source for much of the anticipated food aid flowing to Iraq during the country's rebuilding because of its geographic closeness and long-standing trade ties. His hands-on, dry land farming knowledge also makes him the credible source to assist efforts to re-establish the country's once prosperous farm sector."