SYRIAN ARAB REPUBLIC Ministry of Agriculture and Agrarian

SYRIAN ARAB REPUBLIC Ministry of Agriculture and Agrarian Reform National Agricultural Policy Center Food Security and High International Market Prices Issues of Concern for Syria Atieh El Hindi Director NAPC International Workshop, Damascus 1 -2/7/2008

1. Introduction o Food security has been one of the main objectives of the development strategies applied in Syria. o The policies and plans aimed at increasing self sufficiency of the main food staples. o These policies were accompanied with support actions such as input and output subsidies and agricultural services o Since mid 80 s a process of gradual subsidies elimination/reduction was initiated.

food security strategy applied in the Syrian Arab Republic 1. Improve the purchasing power §Produce food commodities that have competitive advantage. §Improve agricultural marketing services and increase agricultural trade flow. 2. Ensure accessibility to food by vulnerable segments. 3. Ensure price stability. 4. Improve food products quality.

3. the main achievements made in the process § The contribution of agriculture to GDP was 25% with an annual growth rate of 4 -5%. § Despite the general improvement of agricultural production, it witnessed variation due to rain fall fluctuation. § Agricultural trade growth rate during 2000 -2006 was 8. 9%. § Agricultural trade contribution was 12 -20%. § Economic growth had a positive impact on food security in general (3200 calories on average). § The per capita calorie intake is acceptable in general terms.

4. Evolution of international prices § significant increase in the agricultural commodities prices § accelerated dramatically during 2007 and the first months of 2008 § Due to various reasons: ØReduced production of main food commodities Øunfavorable weather conditions, recurrent droughts, Increased income in India and China which resulted in the increase of food and fodder consumption.

Ø Considerable increase of international oil prices Ø Population increase, particularly in poor countries Ø The use of agricultural products for bio-fuel Ø Emergence of huge production companies and international monopoly Ø the FOB price index of the main food products in 2000 -2007 ranged between 123 -226%, regardless of the transport cost increase Ø Further increase in the first months of 2008

5. Local price increase § Considerable increase in 2007 and the beginning of 2008 due to international prices and unfavorable weather conditions. § average price increase between February 2007 and February 2008 was around 50%

Local price increase result from§ Trade openness § and import of many inputs from the international markets § Increase of Syrian products exports as a result of the international price increase § Demand increase due to the increase of visitors from other countries § Cost of production increase

6. impact of price increase on food security § statistics indicate the Syrians spend 42% of their income on average on food § Flexibility of changing other expenses is quite limited (housing, education, health care, communication and other services) § The price increase had a negative impact on food security, particularly for vulnerable segments § The situation worsened further due to the diesel price increase which accounts for 15 -25% of the cost.

7. actions taken by the government to mitigate the impact of price increase on food security 1. Income increase and price control measures: • Public employees’ salaries and wages were increased by 25%. • Local currency was linked to the foreign currencies basket. • The role of the state in the provision of main food stables was enhanced • Strict control was imposed on agricultural exports • Export of main food staples were suspended

Legislations Legislative decree no. 29 of 2008 was issued to establish an agricultural subsidies fund that will cover the following: - production inputs: § improved seeds distributed by the public institutions; § seedlings (fruit, forest, and pastoral); § veterinary medicines, artificial requirements and vaccinations; insemination

prices of some agricultural products - strategic crops: wheat, cotton, barley and sugar beet; -plant and livestock products whose production should be enhanced by the government The agricultural subsidy fund will be operationalized at the beginning of 2009. Currently, actions are taken to assign its management board and director.

Actions taken to ensure delivery of produced crops to the state companies 1. increase of the strategic crops prices § producers were offered better prices to ensure delivery of their products to the state companies in order to replenish the strategic stock, particularly for wheat New price Former price Item 17 11. 8 Durum wheat 16. 5 10. 8 Soft wheat 15 9. 5 Barley 17 12 Maze 41 + 3000 SP/dunnum 30 Cotton 2. 25 Sugar beet 3. 75

Decisions issued to guarantee delivery Several decisions were made to ensure delivery to the state companies for considerations related to food security. The main objectives of these decisions were to • prevent private trading of wheat, prevent farmers form keeping a stock that exceed their household consumption needs • prevent illegal movement of wheat between governments so as to control smuggling.

Thank You