New and discourse-making ideas in Iran’s agricultural governance
According to Webangah News quoted by Mehr News, Hossein Shirzad, an analyst in the field of agriculture and the development of this sector, wrote in a special note for Mehr; Agriculture in Iran has deep roots in the history of the country and in the course of its historical evolution, it needs a new discourse, that is, restructuring and reorganization are necessary in order to rebalance the power in the food system and “strengthen the position of farmers in value chains”.
Iranian agriculture needs the discourse of “innovation-investment” with the help of attracting domestic and foreign capital, which indicates more financialization and technological development based on financial reforms Technology is in changing the agricultural and food system.
Governance of the agricultural sector has been severely damaged due to the lack of stability and management authority and not only lost the past achievements to reach an acceptable level of self-sufficiency in food security. Moreover, by weakening the managements at the macro level of the country’s agriculture, the country’s agricultural management system has led to the point of weakness in governance. For a deeper analysis, food governance should be considered as a package with multiple dimensions, which we will examine below:
1. The first important component of food security is the issue of “weakness and instability of the security of basic production resources”. In our country, in terms of agro climatological conditions; Basic resources, both water resources and soil resources, have suffered excessive exploitation, erosion and depletion, which together with periods of periodic drought, subsidence of the plains, high rate of evaporation and population changes in favor of urban areas, have made the country’s agriculture with problems. has faced a lot. Current geopolitical issues of oppressive sanctions, the Gaza war, the Red Sea crisis, the Russia-Ukraine war, the Afghan refugee crisis, complicate Iran’s generally high inflation rate, which directly affects the costs of agricultural inputs such as energy, fertilizer, and machinery. This phenomenon is also reflected in the emergence of higher prices for food and local chicken and meat products. In addition to the inflationary pressures on consumers, the cost of imported grains has increased, both directly for human consumption and indirectly for livestock feeding, which should be adjusted.
2. The second component of food security is “the lack of resilience and instability in the security of production relations in the agricultural sector”, which currently has many problems due to mismanagement caused by confusion in decision making. Is. Many of the back and front production chains in agriculture are either incomplete or have weak functions.
The relations of production are not complete due to the lack of chain view and suffer from structural-institutional weakness. The existing gap between farmers and governments can be filled by accelerating extension and training services for farmers and maintaining and developing technical skills in the agricultural sector.
This approach will be useful for increasing agricultural productivity and attracting the young generation with more skills, building institutions in villages and creating houses for young farmers, etc.
3. The third component is the discussion of “lack of investment security in the agricultural sector”. Over the past decade, the formation of fixed capital in the agricultural sector has decreased, and for about 12 years, the growth of depreciation in the agricultural sector has exceeded the growth of fixed capital formation. This is a big alarm. Therefore, the security of investment (domestic and foreign) in the agricultural sector is in trouble due to continuous cruel sanctions and low rate of return and low profit margin.
Projects in this sector always face funding shortages. We have only one monopoly bank specialized in the field of agriculture, which is not able to support all micro and macro sector investments in a favorable way. Therefore, “financial security in the agricultural sector is in trouble, so credits and directing investment in this sector are also a serious challenge”.
4. The fourth problem is the problem of “lack of optimal exploitation systems in the country’s agriculture”. In the last 50 years, exploitation systems in the country have undergone a transformation, but the brokers are oblivious. For example, the leasing exploitation system is very popular, but we don’t have any rules and regulations for the leasing system. The exploitation system of greenhouses, fish production in cages, cold water fishes, wood cultivation, even modern grazing systems are still undecided. For this reason, the mechanization affected by the leasing industry has suffered as a result, and the leasing industry cannot find a favorable entry neither in land nor in machinery and structures.
5. The fifth component is “the inability of the agricultural sector to use modern financial tools”. Another sector that the country’s agriculture should be able to benefit from is the provision of new financial tools for financing the value chain of the agricultural sector, which are popular in the world, such as various types of partnership bonds with fixed and non-fixed discount rates, contracts, farms, factoring and types of sukuk which can work very strongly in this area because the risk adjustment tools and the necessary guarantees It is currently designable.
This area is not attractive for the private sector due to the multiplicity and variety of risks, and they usually do not enter this area alone.
6. The sixth component is the security of labor/employer relations in the production of the agricultural sector. The lack of powerful companies that are able to operate in the field of life insurance, disability (partial and total) and general insurance in the field of agricultural operators is quite evident. There is neither a strong social security system for agricultural operators nor a coherent support network.
7. The seventh component is “the lack of security of production structures in the field of agriculture”. If modern agriculture wants to grow, it has to include all the structures of the agricultural sector under insurance to reduce all kinds of risks.
We don’t have a powerful insurance that can cover all structures in the agricultural sector (especially high-risk structures). In “Production Logistics Security” what we call insurance of modern docks, cold chains, trade corridors, transit areas of agricultural products and specialized cargo is urgently needed. The agricultural sector is especially in the way of establishment and arrangement of dignity in the border areas of the country.
8. The eighth component is “the lack of a fleet of transit and agricultural air cargo”. . The transit fleet of the agricultural sector is worn out and needs to be improved and modernized. There is no cargo company, a national agricultural transport company, especially in the geographical areas where we have surplus production. Especially at this time when policies are focused on maximizing agricultural production, the presence of these institutions is very important. In addition, old fleets also need modernization of structures and low interest loans for renewal.
9. The ninth component is “the discussion of the modernization of the agricultural market with the help of the committed national bourgeoisie and active businessmen in the agricultural chambers and the support of private institutions and presence in the national and international commodity exchanges.” The foundation’s entry into new market relations is discussed. Our market relations are very old” such as the types of purchases that we have that basically no one in the world enters in this way (guaranteed, agreed purchases, types of support purchases, custom cultivation). These issues have taken the breath of the private sector. It is the non-governmental institutions that can use the capacities of the debt market and apply the delay processes in the new market relations, the government can only use the internal resources of the banks, special credit lines or capacities rentier use the market.
10. The tenth component is the presence of “lack of strong institutions in the discussion of the country’s strategic reserves” in at least 4 major imported products of agricultural livestock and poultry inputs. Non-governmental organizations can take over the security of strategic reserves by establishing strategic hubs ; such as hub oil, hub barley and part of strategic reserves in the field of strategic imported products to take over.
Although many of our institutions bear the name of union, cooperative, central union, confederation, assembly and national association or similar names, but due to weak structure Traditional thinking and powerlessness and historical isolation of organizations in the field of agriculture, the conventional function of a powerful organization or union do not play a significant role in power relations in the agricultural sector. Some of them have become appendages of the bureaucracy system over the years. This institutionalization has structural weakness and planning problems, it is weak, it has no bargaining power. It hardly takes responsibility and is not accountable to the members and the country. These institutions must fundamentally change their structure and program in the new governance.
11. The 11th component is “the issue of security in production relations in exploitation systems”. Iran’s agriculture has a paradox that it does not know what to do with it; One is the purpose of production and the other is the pattern of cultivation, because there is no balance between small-scale production and large-scale ownership production. Also, 96% of the production of our agricultural sector is family production. Conventional governance has not been able to create a balance between real and legal personalities active in this field.
Modern institutions and specialized joint-stock companies can introduce new corporate relationships in this area and transfer part of these family productions to legal entities with a strong balance sheet structure and Specific shareholding composition, direct.
12. the twelfth component; “Instability in security is in the field of agricultural technology and knowledge, or the technology gap”. We have two types of syndromes in the field of agricultural technology, the syndrome of technological backwardness and the syndrome of technological obsolescence. These two types of complications are different from each other. If these two types of dignity balance are disturbed, a technology gap will arise, which is currently disturbed.
A discussion that the new governance should immediately enter into is the discussion of presence in the field of high-risk technologies and various types of risky investments in the agricultural sector. The establishment of a high-risk investment fund for the agricultural sector with powerful resources and high leverage ratios can adjust the portfolio risk of technology investment in the agricultural sector due to the trust of the banking system.
13. The 13th component is “the lack of coherent planning in trans-territorial cultivation or the question of seeking food security beyond the territorial production areas of the country, which is trans-territorial cultivation”. It is known as “Land Grabbing” in the world. The presence of private and private companies in the two sectors of production and silage and tratshipping of agricultural products in the host country, just like the model of Saudi Arabia or China, is an important issue that must be followed.
14. The fourteenth component is the discussion of “low productivity and low production efficiency in Iran’s agriculture”. The new governance can introduce the element of efficiency into the production system with the help of the establishment of precision agriculture companies and smart agriculture and play a role as the gateway to the new third and fourth generation agricultural technology and culture for the transformation of the country’s agriculture.
15. The fifteenth component, “Lack of food and agriculture diplomacy, lack of regional food agreements with neighbors, insecurity of surplus export of agricultural products with the help of branding, standardization of transformation in storage and silage systems of agricultural reserves, construction of huge export terminals in the border areas of the country” with the help of Establishment of agricultural export management companies (not agricultural trading companies) but agricultural products export management companies to regional target markets that currently do not exist in the country.
16. The sixteenth component is “the lack of powerful companies or the establishment of companies that can either import current technologies such as vitamins, micronutrients, seedlings, fertilizers and poisons that the country depends on and play a role in the chain of backward or forward agricultural processes” or the degree of dependence Minimize or objectify self-sufficiency. The second discussion is entering the topic of future technologies in 20-year perspectives. In the sea-oriented economy, in the production of all kinds of algae and the production of all kinds of insects with high protein for animal, poultry and aquatic feed, in any case, each of the above issues needs a road map and planning, which hopefully will be addressed in the next government. /p>
What is the solution?
The shift in economic power is evident in the rise of powers like China and other BRICS economies. “International relations of food production and consumption in the forms of accumulation widely distinguishing periods of capitalist accumulation” and to work on the investments of corporate governance of agriculture in Iran we need to use non-western value chains.
1. Iran’s agriculture should attract financial investments. The underlying logic of this discourse stems from the marriage between Big Ag and Big Tech. The so-called “ag tech” investments for agricultural technologies increasingly come from Big Finance, including asset management and private equity firms, further entrenching the power of corporate governance and private influence in the global agricultural system. Agriculture is profitable. Iran’s agriculture is suffering from the lack of venture capitalists and private investors, public financial institutions, public wealth funds, social security and pension funds should be channeled towards agriculture.
2. Commodification of farmers’ knowledge, commercialization of agricultural research data is another issue. This requires institutionalization through strengthening the organization of the agricultural engineering system, capacity building, empowerment, along with the need for investment, data and knowledge transfer, and consulting services in the reconstruction of the food system. The discourse of “Innovation-Investment” in the field of food is based on the concept of the structure of finance in the agriculture of countries and is a narrative of technologies that must be provided in connection with financial markets. Alignment of financing and technological processes along with strong political lobbying is one of the defining features of food policy and agricultural policy that should not be neglected in the country’s agriculture.
3. Digital Transformation in Agriculture The most promising new opportunity for food companies today lies in the digitization of agriculture and the agri-commodity logistics value chain. This process is still in its early stages, but it is increasing and will eventually cover all areas of production. Soon, virtualization, blockchain, fintechs, artificial intelligence will replace the human user in the supply chain, and drones will take over the task of spraying pesticides. Livestock will be equipped with sensors to track milk amounts, movement patterns and feed intake. The tractors are controlled by GPS and the planters are evaluated with a soil quality control program to determine the optimal spacing between rows and plants. To maximize the benefits of these new technologies, companies that already dominate the value chain are starting to collaborate.
Now is the time to join forces. The confluence of big soil and weather data, new agricultural technologies, genetically modified seeds and new advances in agrochemistry will help firstly companies and secondly the country’s agriculture to save costs with higher profit margins, protect natural resources and Maximize product performance throughout the provinces.
4. Changes in the subsidy regime: Changes in subsidies affect agricultural and food products in Iran in several ways.
Government should continue to financially support farmers and agribusiness, higher energy prices (electricity and fossil fuels) affect the uptake of agricultural machinery and pressure irrigation systems. And it potentially leads to the phasing out of expensive infrastructure and equipment, and may even reduce per capita agricultural productivity and optimize water use.
High investment is expected in the development of pressurized irrigation systems and water management, development of improved cultivars, low interest loans for local greenhouse production and use of modern machinery and power. A person with high skills will provide better conditions to adapt to climate changes in the long term and geopolitical risks and logistical bottlenecks for the agricultural sector.
5. Development of new laws appropriate to the development of businesses in agriculture: legislation to protect water and soil rights, rights of sector producers, protection of intellectual property rights in the agricultural sector and changes in policies and regulations to reform value and supply chains, for example, the seed industry And seedlings and transplants will help to create more innovation in the private sector. This means a significant improvement in the innovation and development environment of the seed industry. As the competitiveness of private companies increases, they invest more in research and development.
Changes in the laws and statutes of state institutions and companies in order to deal with “zombie companies”, improving the performance of state companies in agriculture and optimizing the structure of their services and products are mandatory. Is. Currently, the economic structure of these companies is not reasonable. Purification and exit of some state-owned companies, restructuring and integration of some [structural reform through integration] and innovation and development of others.
In this way, quality and efficiency should be observed as the main goals and the renovation should be looked at comprehensively. Another critical concern for maintaining sustainable agricultural production is the strict implementation of existing laws to protect agricultural land from excessive urban encroachment and continuous pursuit of efforts to control land degradation. On the other hand, contract farming and trans-territorial cultivation and removing interferences in land ownership need new efforts for new legislation.
