Sunday, February 22, 2009

farming technology for iraq - part 2 creating the industrial infrastructure

In the first part of this series on Iraqi farming, I outlined (extremely briefly) the situation in Iraq that resulted in the situation facing farming today. - as always comments and corrections are greatly appreciated to help improve the scope and potential usefulness of this rant.

Farming has been massively neglected in Iraq as:
  1. a source of food security for the people
  2. a value-add industry employing large numbers of people
  3. to increase Iraq's wealth by reducing imports of food
  4. to increase Iraq's wealth by becoming a net-exporter of foods once again and finally the theme of this post...
5. supporting the creation of a large infrastructure of agri-businesses:
  • tractor manufacturing and maintenance
  • centre pivot irrigation, sprinkler irrigation, drip irrigation, and lateral irrigation equipment manufacture, installation and maintenance
  • Crop dusting aircraft manufacture, pilot-training, operation and maintenance.
  • solar thermal and thin-film based equipment ... but more on that in a future post.
  • chemical industries for pesticides, herbicides, fertilisers - though I am not in any way qualified to comment on this, and will thus not mention this topic in depth, lest I make a fool of myself in front of experts.
  • Food processing industries that help to support animal husbandry and dairy production beyond the extremely limited scope that it has today - though I am not in any way qualified to comment on this, and will thus not mention this topic in depth, lest I make a fool of myself in front of experts.
  • Product marketing, futures contracts, and modern management tools for farmers and farming merchants
  • Funding and capital borrowing for farmers
all in all, it can be seen that the rejuvenation of farming would support a large number of value-adding industries in Iraq's domestic economy, all of which generate local jobs (both skilled and unskilled) and reduce Iraq's need to import finished goods.. improving Iraq's balance of trade EVEN FURTHER. These "core industries" themselves support secondary jobs in many supply industries, that further create more jobs (if not add too much value-add) in services, raw-material import/supply, and logistics.

The role of the "state"
Iraq's farming today is decrepit, the (remaining) farmers have a dependency syndrome on state handouts and rely on the state to buy all their produce (especially the cereal producers but also other farmers' who's produce is bought by the state as part of the "food ration" programme or for the armed forces). The farmers cannot break free, as the state has become an all encompassing monopoly that's the only supplier, bank and customer in town.

with the state monopoly in place, your progress or retardation is wholly dependent upon the competence, integrity and organisational ability of the "agriculture"(1) and "water resources"(2) ministries (note that, two ministries, so far), your regulations depend upon the "environment ministry" (3) and your ability to transport goods (logistics) upon the "transport ministry"(4)... the "trade ministry"(5) buys your produce and the "planning ministry" (6) in association with the "finance ministry" (7) decide what you should grow, how much you will be paid and how to grow it based upon ideas from the "science and technology ministry" (8) who are in competition with the "higher education and scientific research ministry"(9), Of course, the "ministry for mining and minerals" (10) would have to sell you the fertiliser and presumably the "ministry of industry" (11) would be able to supply you with a tractor (via the agriculture ministry...).

That's 11 ministries so far, with a combined total of more employees than the number of PRODUCTIVE farmers in the entire republic of Iraq, and you still haven't planted a single seed.

Suffice to say that the combined output of these ministries is much much less than the input of labour and cash (these organisations have a reputation for being leaky, and for existing for the sake of salaries and graft). Most of what is leaked ends up in amman jordan, fuelling the consumer boom of the Iraqi thieves residing there.


Irrigation equipment

The byzantine network of open canals (stretching 90,000km across Iraq) ,

supporting a mostly surface irrigated farms that result in raised water levels, high salinity and massive waste of water resources must be replaced as a matter of urgency by a combination of :
drip irrigation
lateral irrigation and
centre pivot irrigation
as well as simple sprayers

Such equipment is available today in Iraq, but its imported as complete systems and is used on a small fraction of the farmland (it had been distributed for free by the baathist regime to new farms in the "white provinces" loyal to saddam's regime only). These farmers rarely made any use of the equipment, and would usually sell it onto farmers in the traditional farming regions of southern Iraq via merchants in Baghdad for profit. (thus illustrating one of the many ways in which cronyism was working in the oil-money led state of saddam hussain). These "farmers" are now mostly living abroad, on the proceeds of simply being middle-men in an acquisition scheme involving the sale of southern Iraqi oil -> importing irrigation equipment -> giving it to faux-farmers in the white provinces for free -> faux-farmers selling the equipment to real farmers in the south of Iraq (and cashing in the original oil money used to buy the equipment in the first place... thus robbing the southern citizens twice).

Such excuses no longer apply today, so why haven't the farmers caught on? The reasons are many (and in the "marketing" and financing sections below illustrate it in detail)

There is no incentive for the "government" to support the farmers to buy more imported equipment (especially when government is surrounded by all the ex-saddami goon officers wanting to buy F16 fighters and M1A1M abrams tanks). The government speaks of "restarting weapons manufacture" in a state that can't crush tomatoes and put them in a metal can (more on that later on below...). Showing that the priorities created under the previous regime seem to have resurfaced as a result of "national reconciliation" bringing back the baathist and "military thugs" of the past.

If however the equipment was made locally, then the government can appear "modern" and "21st century" whilst enabling "barbaric, backward, farming" to finally progress beyond the middle-ages. The basics of creating the modern irrigation equipment are surprisingly simple. Basic enough even for Iraq's "industry ministry" to comprehend (perhaps), but perhaps some input from the irrigation ministry (yes, it does exist) on the exact designs and specifications usable in Iraq would be useful.

We would need the ability to forge aluminium and steel tubes. We can't do that in Iraq yet, but in the hope that the Steel forge in Al Zubayr (Basra) and the new steel plant in Samawah will go someway to alleviate that shortage... Once you had the "basic" equipment in place (the tubes) you still need some motors, simple-gears and the ability to create nozzles and valves... not beyond the ability of a medium sized workshop.

The illustration below shows the parts needed to create a drip irrigation system.















The small scale farmer can also make use of simple, manually moved sprinkler based systems such as the one illustrated below



the technology to construct the above, en masse for the farmers is so easy, as to make their unavailability a complete and utter disgrace. Iraq may complain bitterly about Turkey or Syria using a lot of the water from the Euphrates and Tigris... but Iraq has enough water left to irrigate 5 times the farmland area currently being used with less water than Iraq is receiving... not to mention that using the correct amount of water increases yields, lowers salt levels and reduces problems with the water table.

The "grand-daddy" schemes centre-pivot (and its cheaper sibling, lateral-movement) irrigation schemes have been used in the western anbar region since the 1980s (government schemes to support the newly settled beduins in the regions who tended to support the regime of saddam hussain). however these were made piecemeal, and used complex imported equipment, with few locals skilled in using or maintaining the equipment the inevitable disuse and rusting happened...

This can be overcome by producing the equipment locally, and by having a better understanding (at the farmer level) on how to correctly operate and maintain the equipment to make the best use the potential to increase yields and reduce labour and water requirements.

the following site would be extremely useful for Iraq's "powers that be" in planning to create an industry to produce and support both lateral movement and central pivot irrigation schemes as part of a wider effort to eliminate the massive canal networks, reduce water usage, increase yields, and open up new areas for farming.

http://www.dpi.nsw.gov.au/agriculture/resources/water/irrigation

here's hoping that they're listening.

One good piece of news, is that the government has completed the drainage cannal to wash away the salinity of thousands of hectares of saline land.



Finally, all these irrigation schemes need pumps. There are plenty of pumps already in Iraq
(though there's certainly scope to make them locally), but powering these pumps in Iraq is inevitably a diesel generator... the one exception that I know of being the solar powered pumps operating in falluja (installed by US forces)....

here's hoping that the canals can be ditched, the factories making tubes for centre pivot and drip farming, and farmers and agronomists working to deploy and use them across the nation on existing and greenfield farms...



Crop Dusting

The application of pesticides on farmland is a "controversial" issue. I'm not going to discuss the controversies in the world on this thread. Iraq has a relatively undeveloped infrastructure for pesticide / herbicide deployment. Some people in developed countries may consider that to be a positive thing (in line with the modern organic farming ideals...) but in a realpolitik world where a developing nation with farms devastated by pests and diseases due to neglect and lack of skills among agrarians such idealism must be put aside... for now.

In Iraq traditionally the agricultural ministry had a small airstrip in Diyala province, from where a small number of Mi2 Hip helicopters and AN-2 biplanes crop-dusted the farms of Diyala, Baghdad and babylon province. Suffice to say that the small number of planes and limited scope for crop-dusting meant that over 80% of iraqi farmland was not efficiently crop-dusted by air.

Of course, the excuses of the agriculture ministry are many. During the 1980s there was the Iran war (they couldn't fly near border areas), then after 1991 southern Iraq was a no-fly zone (with the notable exception of a politically motivated crop-dusting exercise in basra in 2002)... now the excuse is that they don't have enough:
  • aircraft (currently down to 3 decrepit Mi-2 helicopters, and a couple of AN-2 biplanes)
  • airfields (one airfield was traditionally operated in Diyala, now there are two more under construction in babel and Karbala provinces... unnecessarily because the long-range AN-2 can cover both those provinces from their base in southern Diyala... but that's iraqi planning for you)
  • crew
  • money to increase the above

I have a nice simple solution for them. Currently Iraq runs a rigid timetable based crop-dusting season that is inflexible and doesn't solve small farm or region level issues since they use large crop dusters (AN-2) or expensive short ranged helicopters. The solution in my view is very simple....


start making the CH-701 (or its new replacement the 750) Short Takeoff and Landing (STOL) ultralight aircraft in Iraq. The basic airframe is so cheap and simple (welded duralumin sheets and tubes) with an imported ROTAX 912 engine (the only part you need to import).

These aircraft can be repaired and maintained by an semi-literate farmer. They need no pilot's licence to fly (though 10 hours flight training is still needed), they fly very slowly and need no airfield to operate. They can be used to crop dust very small fields, very accurately and the total operating cost per hectare of crop dusting is 15-20% of the price of using a heavy aircraft like an air tractor or AN-2.

That's not all. Not only can you make them in Iraq (except the engine), repair them and operate them for the same price as a PICK UP TRUCK (on a per mile basis), but they have a 100 uses as small aircraft beyond the simple crop-dusting role including:
-police patrol
-border patrol
-flying medicare
-can be equipped with floats to operate from Iraq's rivers, lakes and marshes

here's the original manufacturer and they will happily sell you the plans for $500 so you can make them merrily in your backgarden...

(or you can buy a complete kit for about $20,000) Even Iraq can manage that I hope.

http://www.zenithair.com/stolch750/index.html

Yes, it only carries a 150litre tank (AN-2 can carry 2000 litres), but that's not the point... you can take off and land, refill, and cover your acreage using smaller droplets than with an AN-2 from a lower altitude and for a fraction of the price on a per hectare basis... and you don't need any ace pilots, turbine mechanics or an airfield...

I reckon, Iraq's farming collectives and clubs alone can pick up a 100 of these, and revolutionise their freedom of movement, assessment of agricultural areas, crop-dusting, and 1000 other roles that I'm sure the ingenious farmers could think up...


and perhaps the police, rural medical centres, and tribal sheikhs may also be interested in this nifty little plane that's built in iraq, and gives the average person the freedom to see their homeland from the air and to finally he access to services (such as emergency medical care, etc...) that they never had before...

I also have another idea in mind for the little CH-750, and that's to use it in winter time to take the rare and precious chime (Iraqi desert truffles) from the desert straight to Baghdad or Basra or a large processing centre before the truffle rots (they rot within a few hours of being picked, and the ones that don't can fetch $50+ per kg on the international market..

the above example may be a seasonal one-off occurring for a few weeks a year (January time usually), but it demonstrates the key point of the unprecedented access and logistical ability such an aircraft gives to people who can now increase their earnings from this lucrative trade.


Marketing, futures trading and management tools and infrastructure

So why exactly hasn't farming bounced back since 2003?

Well, firstly, the old merchant class that used to buy the farmers produce for both domestic as well as export consumption had been completely decimated in the past 4 decades and is for all intents and purposes extinct. The nouveau-merchant class that grew up in the saddam era is, unsurprisingly, simply a collection of "well connected" crooks who used baathi cronyism followed by family nepotism to build up "merchant empires" based purely on importing (and in days gone by such import licences were monopolised by the state to a few associate merchants). These "merchants" used to making easy money, simply began to import produce on a massive scale from the neighbouring states as soon as the borders became opened-up after 2003. They had never dealt with the Iraqi farmers, and saw it beneath them and too much hassle to visit farmers and buy local. Why bother, when the supplier in Damascus will just ship you whatever you need and dump it in baghdad for you... why bother with the hassle of dealing with a 100 farmers and the complex supply chain inside iraq?

So the farmers don't have much of a market then.

Here the farmers are almost alone. But over the centuries and millennia, Iraq's farming community and the merchant community supporting it have been a hardy and innovative lot (futures contracts for farm produce were used in Iraq 4 millennia ago at least)... a combination of the existing farming co-operatives with a website and contacts with markets outside Iraq can give Iraqi farmers the forward markets (with deposits) to make starting farming worth it (and with a guaranteed return), and the merchants markets should claw back the market from the foreign produce and the local "nouveau-merchants" who import the produce by mounting a campaign with the police and tax authorities to stop further shipments of fruits and vegetables from the neighbouring states.


Tractors, trucks and associated equipment
Iraq is a medium sized nation with 400,000km2 of landmass and 27M population. That is sufficient for Iraq to support a domestic automotive industry that includes the "basic" steel foundries right up to the production of engines, chassis, running gears and associated equipment. Such a domestic industry (using a common chassis/engine/equipment for multiple purposes on one line to complete configurations of pickups, medium trucks, refrigerated trucks, mini-buses etc...) as well as reusing the engines and a local chassis for producing a range of tractors for domestic consumption.

This industry alone will support steel mills, small component manufacturers, tool and dye industry, as well as reduce the largest component of Iraq's trade imports (machinery and automotive equipment).

I will not make comments on the type of equipment that should be produced in Iraq (except to say that it should be simple to maintain and have good hot weather/dust capability), suffice to say, that for expediency purposes it should be a foreign design that is produced locally (not assembled), and the only way that the government can support this effort is to restrict the imports of vehicles via high taxation, and give a 24 month moratorium to any international manufacturer who sets up production in Iraq. Once the initial plant is setup, the manufacturer gets 30% off the import duty, and as the local component count increases, the company can get exemption from all duties once the local part value goes up to 75%.

with the global economic crisis underway, international firms that once "overlooked" iraq may eat humble pie and join the game... (or so we hope)

Yes, the above sounds like the protectionist talk that the "global market" pundits abhor. But every country starts with a unique situation. In Iraq's case the situation is:
-no local industries to compete with imports
-we have a commodity export, that nobody will reject (oil)
-we don't want to spend our oil money on equipment that we should be able to make locally.
-The only way to attract investment to Iraq is with a carrot (free land, exemption from local taxes) and a stick (exclusion from a lucrative market if they don't setup here).
-Iraq will never be a world class automotive / industrial exporter. but with a market size of several million users and large farming / industrial use there is a sufficient market to support at least two competing local automotive suppliers... as well as limiting expensive imports


Funding and capital borrowing for farmers
All the above talk of capital expansion, modernisation etc... is moot if the farmers don't have a way of making it happen.

In my rant, there's one thing I want clear. I consider all the 11 or more ministries "responsible" for the profession of "farming" in one way or another, to be superfluous to requirements and exist for the sole reason of maintaining a social security for large sections of baghdad's so-called middle-class without them sitting at home (so they feel self-righteous too).

The only role for Iraq's oil income should be in a fund that can be used to guarantee low-interest loans to farmers, industrialists and other value-add industries. The loans should come from a commercial lender and be denominated in Iraqi dinars.

Thankfully there's some movement towards this, now the government has raised a (measly) $100M guarantee scheme for medium sized enterprises to borrow up to $500k from private banks. In addition interest rates have been finally dropped by 2% points... but main lending rates are still above 10%. Not exactly conducive to mass lending (in a nation that certainly needs credit to rebuild).

I do hope that credit will not be abused and wasted on speculative bubbles in real-estate. Towards this end the government should only guarantee lending to farmers and industrialists (and here, ones without a dark past).

2 comments:

  1. it's so nice to see the irrigation solutions that the human brain create. hope the systems are saving water to.

    ReplyDelete
  2. The loans should come from a Appendages commercial lender and be denominated in Iraqi dinars.

    ReplyDelete