AMMAN — Two weeks into Syria’s wheat harvest and amidst an economic crisis spiraling out of control, Damascus is scrambling to secure its supply of the essential grain. 

Bread, the most important staple in the country, is seen as a red line for many Syrians—especially among the government’s most loyal supporters. A potential shortage comes as the Syrian government struggles to curb rising prices throughout the country, blaming inflation on monopolists, traders, and smugglers.

In a nod to the severity of the situation, Bashar al-Assad admitted that “our most difficult internal challenge is securing basic goods, especially foodstuffs," in a May 4 meeting with the government team tasked with confronting the COVID-19 pandemic.

A week later, Assad removed the Minister for Internal Trade and Consumer Protection, Dr. Atef al-Naddaf, from his position and replaced him with Talal al-Barazi, the Governor of Homs province. Taking on one of the most important yet difficult positions in the country, the new minister—understood to be close to the family of Assad’s wife, Asma—is responsible for maintaining affordable food prices and clamping down on monopolies, smuggling, and price gouging.

These statements and high-profile replacements, however, do not change the underlying problems of Syria’s agricultural sector, especially wheat production, which has been in steady decline over the past nine years.

Since 2011, wheat production has almost halved, declining from a pre-war average of 4.1 million tons per year to 2.2 million tons in 2019—entailing serious implications for the quality, quantity and price of bread. 

Pre-war liberalization

Syria’s recent marginalization of agriculture, especially the destruction of its domestic wheat production, is not only a post-2011 phenomenon. While Syria switched from being a net importer of wheat to a net exporter in the 1990s, the mid-2000s witnessed a decline in agricultural output as Assad further intensified economic liberalization, known as the “social market” strategy adopted in 2005.

During the “social market” era, overseen by Bashar al-Assad, priority was given to growing more profitable sectors such as real estate, banking, tourism, and telecommunications through increasing private and foreign investment. 

A new generation of urban businessmen such as Rami Makhlouf and Firas Tlass saw their wealth grow immensely during this period, acting as intermediaries for international capital in Syria, while the old Ba’athist leadership who had historically protected rural producers became increasingly marginalized.

From 2005 to 2009, the agricultural growth rate fell to an average of 1.5% and approximately 600,000 workers—44% of the agricultural workforce—left the sector. Between 2007 and 2008, the total area dedicated to wheat production declined by a staggering 180,800 hectares. 

Agriculture under conflict

Marginalized in the years leading up to the uprisings of 2011, Syria’s agriculture took unprecedented damage during the course of the conflict. According to the UN’s Food and Agriculture Organization (FAO), Syria was one of the ten countries hardest hit by acute food insecurity in 2019, with approximately 6.5 million people considered food insecure. 

The previous year, as a result of war and severe drought, wheat production stood at merely 1.2 million tonnes—the lowest it had ever been since 1989. The droughts primarily affected the northern provinces of Hasakah, Raqqa, Aleppo and Deir e-Zor, in addition to Hama in central Syria, which account for 96% of total national wheat production. 

To make matters worse, 2019 witnessed an increase in fires on agricultural land, largely due to higher temperatures and stronger winds. That year, almost 85,000 hectares of crops were burned and destroyed. Having to rely on imports instead, cereal imports were estimated at 2.7 million tons, mostly sourced from Russia.

Not only does Syrian agriculture help feed the nation, but it is also an important source of income and livelihood for many Syrians. A 2017 FAO report noted that agriculture accounted for 26% of GDP and provided a critical safety net for 6.7 million Syrians, with over 75% of rural households still growing food for their own consumption.

In fact, the destruction of Syrian agriculture has often been a major cause for migration out of rural areas and subsequent difficulties for those wishing to return to their homes. 

Given the distinctly rural character of the uprisings and the conflict that proceeded, a significant portion of Syria’s rural population either fled to urban areas or left the country. But large-scale infrastructural damage to agriculture (i.e. irrigation systems, seeds, inputs, tractors, pumping stations) has also made it challenging for Syrians to return, especially to eastern Syria. 

Political fragmentation complicates Damascus’ bid for wheat

Syria’s historical breadbasket, the northeastern portion of the country, currently lies outside of government control—instead governed by the Kurdish-dominated Autonomous Administration of North and East Syria (AA). In 2019, 800,000 tons of wheat were produced within the AA territory, almost half of the country’s domestic wheat production for the year.

This year, 72% of all of Syria’s wheat has been planted in the AA-controlled areas, according to the Syria Report, a specialist economic publication. 

As such, Damascus has to compete with the AA to buy wheat from farmers in the northeast; last year the AA bought half of the country’s wheat harvest. This year, in an attempt to outbid the AA, Damascus raised the price at which it will purchase wheat to SYP 225,000 per ton. A few months later, the AA raised its purchase price to match the Syrian government. 

In addition, the AA is reportedly considering increasing its purchase price of wheat, though no final decision to do so has been made, according to the Qamishli-based Rojava Information Center. 

Whether farmers decide to sell their wheat to the AA or Damascus depends on a combination of factors, including political pressure placed on farmers by both political authorities.

“I’m choosing to sell to the [AA] because they gave me a good price,” Salman Muhammad Suleiman, a farmer in Qamishli, told Syria Direct, explaining that he contracts with the AA every year to sell his wheat crop. 

Last year, the AA managed to buy half of the country’s wheat product even though it was buying it at a price SYP 25,000 less per ton than Damascus’, suggesting that it will be able to purchase a similar, if not greater, quantity of wheat this time around. 

Given the increased prices, it’s unlikely that farmers will choose to store their crops and wait to sell in hopes that the price will increase, as many did last year. This would increase the supply of wheat available to both the AA and Damascus, if just marginally. 

“There is no one thinking of waiting until next year to sell their crops. Everyone is poor and the [AA] is paying a lot of money; they can’t store the crops,” Suleiman explained.

Threat of fires looms

Raqqa started its wheat harvest two weeks ago, on May 9. Since then, the harvest has been watched nervously, with pictures of scattered fires in northeast Syria spreading rapidly over Telegram channels and local media. 

The previous year, the AA seemed incapable of stopping the raging fires and theories about those responsible circulated on social media unabated. This year, the AA publicized its efforts to prevent a similar breakout of fires. 

The AA Ministry of Agriculture sprayed around 67,000 liters of “Ground-Up,” a herbicide, along the roads surrounding al-Hasakah in an effort to create vegetation-free strips of earth to prevent the spread of fires, according to a report by AA-affiliated Hawar news. 

Suleiman confirmed that the AA is doing the same in his community. “The Autonomous Administration took precautions this year. They sprinkled [Ground-Up] on the highways and the dirt road, and come to every two, three villages and sprinkle [Ground-up] on the main roads,” he explained. 

In the same Hawar report, the firefighting chief of al-Hasakah city also stated that 20 fire trucks were to be sent to specific areas around Qamishli and al-Hasakah. In addition, committees of volunteers were created in agrarian areas in order to prevent the outbreak of fires. 

Whether or not these efforts will be enough to minimize fire damage to wheat fields and the ensuing harvest this year will be seen in the coming month as temperatures increase and rainfall decreases. 

Already there have been outbreaks of fires in Raqqa, Ain Issa and Deir e-Zor, but they seemed to be contained to small areas, relative to last year’s vast wildfires. 

“This year everyone is careful, but fires are in God’s hands and we don’t know what’s going to happen,” Suleiman said. 

Problems importing wheat amidst rising prices

Recently, the Syrian government announced that it would allocate approximately SYP 450 billion to purchase this year’s wheat harvest, equivalent to approximately 11% of the state’s total budget. But even though wheat production is expected to increase this year to 2.9 million tons, competition with the AA means that the Syrian government will have to still rely on imports to meet local demand, which stands at approximately 4.3 million tons.

In February, the General Establishment for Cereal Processing and Trade (GECPT)—responsible for the purchasing and public marketing of cereals, including wheat—made offers to import 200,000 tons of wheat from Russia, but failed to complete the purchases, most likely due to problems accessing US dollars stuck in the Lebanese financial system.

Since then, the GECPT has tried issuing tenders for the import of wheat, but the results of the tender process remain inconclusive until now. It seems that companies in Lebanon operating as fronts for influential Syrian businessmen are still finding it difficult to finance large-scale imports. However, Syria Report noted that a company called Maga Group Offshore SAL, registered in Lebanon, was awarded a contract to import 475,000 tons of wheat on behalf of the government. 

New contracts, however, will face further difficulties given Russia’s announcement on April 26 that it reached its grain export quota for the April-June period and would halt all shipments of grain until July 1. Moreover, with the value of the Syrian pound in steady decline—now trading at around SYP 1800 to the dollar on the black market—the risk of further inflation is a real concern for most Syrians.  

In the meantime, the government is having to rely primarily on contracts awarded in 2019 and a humanitarian aid deal with Russia that promised the delivery of 100,000 tonnes of wheat. But the shortages have also given space for some to exploit the situation for profit.

According to the Syrian economist Younes al-Karim, merchants and businessmen close to the regime have ramped up the “smuggling of goods and commodities into Syria,” which in turn “raises prices, especially since the regime permits imports without specifying pricing mechanisms or helping to finance them.”

At the same time, the price of fertilizer—a crucial input to not just wheat, but many agricultural products—has fluctuated wildly in recent months. In March, the price of Syria’s three main fertilizers suddenly shot up 25-50%, and then dropped in late April, though prices remain well above pre-March levels. 

Though fertilizer is both imported and produced domestically through the Russian-managed General Fertilizers Company, the recent price rise will inevitably strain the price of bread on the shelf and the government’s ability to maintain the price of subsidized bread provided through the “smart card” program. 

This economic strain could not have come at a worse time, as the unprecedented decline in the purchasing power of the Syrian pound has already left Syrians unable to secure basic goods.

“The value of the lira and its purchasing power is in its worst state. Inflation and shortage of goods will only raise discontent among Syrians,” al-Karim said. 

 

This article reflects minor changes made on 19/05/2020 at 5:00 pm.