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DRC* ANALYSIS OF KEY VALUE CHAINS IN THE AGRICULTURE AND FOOD-PROCESSING SECTOR

EXECUTIVE SUMMARY
As Iraq emerges from nearly four years of conflict and displacement, the security context remains
unstable in many parts of the country. The COVID-19 outbreak in early 2020 brought fresh challenges,
including closed borders, curfews and restrictions on movement. Forecasts predict a negative
impact on livelihoods and employment, with the economy expected to contract by 9.7% by the end
of the year  and Small and Medium-Sized Enterprises (SMEs) in the agriculture sector reporting
reductions in sales and incomes. . To tackle some of these challenges and support the recovery of
the agricultural sector in Diyala, DRC is developing a program called “Promoting Diyala’s economic
recovery through market-based support to agricultural value chains”. This program aims to support
targeted local agricultural producers and processing enterprises with small cash grants to enable the
replacement and upgrade of productive assets, promote the transfer of skills and knowledge, create
business development opportunities, reinvigorate the agricultural market, and create decent jobs in
the local area.
This report, analyzing the value chains for tomatoes, dates, pomegranates and dairy cows, will
inform the further development of DRC’s program. It is based on a thorough desk review of project
documents, publicly available data and related secondary literature. Primary data collection
included 85 household surveys (Knowledge, Attitude and Practice KAP surveys), which informed an
assessment of social cohesion and protection issues, barriers to participation of women and People
with Disabilities (PwD) in agricultural value chains, and consumer preferences. 40 Key Informant
Interviews (KII) were also conducted with producers, processors, traders (wholesalers, retailers,
etc.) and key experts from government organizations, to understand the challenges, constraints and
opportunities of the pomegranate, date, tomato and dairy cow sectors.
The analysis shows that supply in all four of the identified agricultural value chains (dairy,
pomegranate, date and tomato) in Diyala is characterized by many smallholder farmers operating
small-scale family farms. Farmers in all of the value chains have suffered losses of equipment,
damage to their land and facilities, and a downturn in production and income, as a result of the
crisis. They all indicated a need for support to help them recover their businesses. Significant
knowledge of traditional farming methods exists in the area, which could be built upon through
targeted capacity-building programs and training. Relevant topics for training might include farm
management, pest control, organic and synthetic fertilizer use, and irrigation techniques.
All of the farmers interviewed mentioned the difficulties associated with obtaining loans, grants or
credit. They reported stringent application requirements, the need for guarantors, and high interest
rates which make commercial banks inaccessible for most. Likewise, there is a lack of government
grants and loans, and farmers were largely unaware of micro-credit organizations working in
the area. As such, providing soft loans or small grants to farmers is likely to be a highly beneficial
component in any future intervention in the identified value chains.
Demand for local dairy, pomegranate, date and tomato products is quite strong. Furthermore,
there is a general perception among consumers and other actors in the value chain, that local Iraqi
products are of good quality, and when the price, quality and availability are good, they are generally
preferred to imported products. There may be opportunities to improve on locally-made products
such as pomegranate and date syrup. Routes from farm to market, either directly to local consumers
or through established relationships with traders, wholesalers and vendors, also appear to be
quite strong and functioning well. The markets in all four value chains are mainly local, with some
products being traded elsewhere in Iraq. Very little currently enters export markets, although for
dates in particular, opportunities may exist. Generally, interventions in any of the four value chains
should focus on improving the quantity and quality of supply, by working primarily with farmers.
Environmental degradation and water scarcity are serious challenges for farmers. A sustainable
approach must include the restoration and the enrichment of soil quality in the long term and
support with water usage and irrigation.

To read the full article, please click on this link

ANALYSIS OF KEY VALUE CHAINS-DAYALA-PROVICE

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