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Iraq's sagging safety net
In a country with huge potential oil wealth, food rationing and distribution is keeping much of the population alive.
Last Modified: 30 Apr 2012 13:55
Almost half of Iraqis rely on food aid to survive [GALLO/GETTY]
Salina, KS - In February 2011, with grassroots uprisings having toppled the governments of Tunisia and Egypt, unrest was swelling in Iraq as well. In response, the government of Prime Minister Nuri al-Maliki announced that it was postponing a planned purchase of F16 fighter planes from the United States. The money saved by not buying the 18 jets would be used, said al-Maliki, to provide Iraq's poorest citizens with increased monthly rations from the country's public food distribution system (PDS). The cancellation was a stark acknowledgment that when people are hungry, armaments won't keep a country secure.
Iraq's government, like many others, learned long ago about the hazards of exposing citizens' daily food needs to the whims of global markets. Anticipating the political and social tumult that can erupt if people's right to food is not fulfilled, Iraq, like many other countries, routinely buys up and stores staple foods and then sells them through a PDS at subsidised prices. But more than a year after pulling out of the F16 deal, the government was still straining to maintain secure access to food.
For countless families around the world, a ration card or coupon booklet may be all that stands between them and a month or even a life of hunger. Provision of subsidised food rations has been pursued in countries as diverse as Argentina, Bangladesh, Brazil, Chile, China, Colombia, Cuba, Egypt, India, Iran, Iraq, Israel, Mexico, Morocco, Pakistan, the Philippines, Sri Lanka, Sudan, Thailand, Venezuela and Zambia. In those and other nations, we can find examples of PDS programs ranging from excellent to almost nonfunctional, sometimes within the same country.
For more than two decades, Iraq has been running what the World Food Program (WFP) has called "the largest public food program operating in the world today". The system dates back to August 1990, when President Saddam Hussein's army invaded Kuwait. In response, the UN Security Council adopted Resolution 661, imposing sanctions and blocking virtually all trade with the country. The government of Iraq quickly established a PDS to provide food and other basic necessities to all Iraqis. Little did they know the system would remain in place for more than 20 years.
Because sanctions hampered Iraq's ability to sell oil or buy food, hardship intensified in the years following the 1991 Gulf War that ousted Iraqi troops from Kuwait. In 1995, Security Council Resolution 986 created the UN Oil-for-Food Program, and the PDS was expanded. But, through the sanctions period and during the almost nine years of occupation that followed the 2003 US invasion of Iraq, a significant portion of the population remained vulnerable to hunger.
Tenuous access to food
It was not that food wasn't being produced. The nation's farmers produced 56 per cent more wheat annually in 2004-2011 than they did in the 1990s under UN sanctions, and wheat production was 67 per cent higher in the 1990s than it had been during the long war with Iran in the 1980s. Nevertheless, Iraq's total agricultural output is not sufficient to keep the country fed; a whopping 70 per cent of the food supply must be imported. And two decades of continuous economic disruption have made access to food much more tenuous than it should be.
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The 2003 invasion and its long, violent aftermath strained the PDS safety net further. In response, people sometimes decided they’d rather go hungry than accept food aid. In the southern province of Diwaniya, where, in 2005, devastating fighting had raged between US forces and various militia, WFP later brought in large food-aid shipments that included cooking oil. But when the recipients in Diwaniya saw labels indicating that the oil was produced in the US, many turned it down.
Iraqi citizens continue today to depend on public procurement and distribution of food stocks to serve as a buffer against global price fluctuations. The PDS is so large, in fact, that, even in the absence of direct price controls on food, its provision of cheap or free food helps hold down prices of commodities being sold on the open market.
Fifteen per cent of Iraqi citizens still have problems getting enough food, but another 32 per cent would immediately become food insecure if the PDS were terminated. The food system has, in the words of WFP, "prevented famine", and it is not just the poor but the entire country that has felt the food system’s impact. The World Bank observed in 2005 that "the actual role of the PDS goes far beyond providing a safety net for the poor" because most Iraqis saw the programme as "a mechanism to transfer natural resource revenue directly to citizens" - they saw it, that is, as a way of more fairly distributing a portion of the nation’s oil-derived wealth, as had been done under the Oil for Food program.
Food and other goods are distributed to consumers through 45,000 licensed "food and flour agents" throughout Iraq. Each ration-card holder pays the equivalent of 22 US cents to receive a monthly basket of goods for each person covered by that card. Before it was trimmed in 2010, the PDS ration included nine kilograms of wheat per person, three of rice, and two of sugar, along with 500 grams of tomato paste, 250 grams of tea, 250 grams of milk for adults and almost two kilograms for children, a litre of cooking oil, 250 grams of soap and 500 grams of detergents.
Preventing famine?
In 2010, tomato paste, tea, adults’ milk, soap, and detergent were officially dropped from the ration. Unofficially, various other items have been dropped as well, with consumers often receiving only two or three of the five items at a time. Many Iraqis complain about quality of some of the foods they receive, and as in Egypt, people are known to sell part of their ration, using the proceeds to buy food on the open market.
"When PM Maliki announced some time back that the PDS was to be abolished in favour of cash, I am sure some of the greedy local shopkeepers were happy... they would have doubled their prices as soon as they heard the news."
- A food-distribution manager in Baghdad, Iraq
In Iraq as in India and Egypt, there have been calls for scrapping the PDS and replacing it with a straight cash transfer to low-income families. But the size of benefit that has been proposed - a bundle of Iraqi dinars worth only five to ten dollars per month - is far less than what would be needed to buy the quantity of food that the PDS provides. And in WFP’s view, any reduction in food access, very likely exacerbated by inflation, could trigger widespread hunger among poorer families. Even among the well-off, WFP notes, "the political ramifications could be destabilising".
A food-distribution manager based in Baghdad told me: "When Prime Minister Maliki announced some time back that the PDS was to be abolished in favour of cash, I am sure some of the greedy local shopkeepers were happy. If that had happened, they would have doubled their prices as soon as they heard the news. And everyone would have blamed the government for the fact they could not buy enough food."
To be effective, the cash transfer would have to be large enough to permit Iraqis to continue buying the same quantities of goods today, and be indexed to inflation or increasingly subsidized to allow them to buy food tomorrow. And that would probably increase, not reduce, government expenditures.
Yet another concern, this one expressed by WFP, is that hauling large quantities of cash on the perilous streets and roads of Iraq would be unwise to say the least (and the 2004 disappearance of entire pallets of shrink-wrapped Iraqi currency notes, with the total loss of as much as US $18 billion, also comes to mind).
Time is running out for Iraq
The idea of conversion to cash is just as unpopular in Iraq as it is in Egypt. When Iraqis were asked in a 2007 survey whether they would prefer to receive cash in lieu of commodity rations, only a tiny share of respondents - five per cent, the same as in Egypt - said they would. Nevertheless, the majority of families are no longer wholly dependent on the PDS. For them, other issues - inadequate housing, unemployment, and poor electricity, water, and sewage service - are bigger issues today. At the same time, families living near or below the poverty line still see the PDS as a top priority.
With the idea of a cash transfer highly unpopular, the World Bank has recommended targeting food rations more directly at the poor, reducing the range of products distributed, increasing the role of the private sector, and streamlining food procurement. The bank further urged that rationed goods be made less attractive or convenient, or that the PDS be converted into a food-for-work program. Another idea was to require all cardholders to certify that they were poor, thereby persuading the non-poor to opt out of the system voluntarily "out of pride and patriotism". Only one of those measures has been adopted; that was when the number of items distributed by the PDS was reduced.
"We are sitting on billions of barrels of oil, but we can't find anything to eat."
- Protesters at Diwaniya, Iraq
In the six months leading up to the political protests that rolled across North Africa in early 2011, the PDS, along with public utilities and other services, was faltering badly - which in Iraq means that the government itself was faltering - and it appeared to be only a matter of time before Arab Spring protests would erupt in Iraqi cities. In Diwaniya, protesters carried lamps and small packets of sugar to symbolise their demands for full food rations and electric service; police fired on the crowd, killing one and injuring four.
The Diwaniya incident and others like it (in one, people displayed banners with slogans such as: "It’s a fodder ration, not a food ration" and "We are sitting on billions of barrels of oil, but we can’t find anything to eat") prompted one member of parliament to warn: "Iraq is boiling and it could blow up at any moment." It was at that point that Maliki promised to beef up the PDS, partly with savings from postponement of the F16 fighter order.
Not long before US troops completed their pullout from Iraq late last year, WFP officials, in a meeting with members of the Anbar Provincial Council, laid out concrete proposals to strengthen the PDS. They offered to "procure, package and deliver" rice, sugar and vegetable oil to ministry of trade warehouses; help manage the PDS supply chain through "procurement, packaging, shipping, pipeline management, warehouse management, monitoring, etc"; and help "improve the tracking of commodities and monitoring (ie: electronic chips and bar codes on packages, SMS messages between warehouses, food agents, beneficiaries and central control authority and other methods)".
But even if Iraq can thoroughly streamline its PDS, the longstanding disruptions that create a need for public food distribution would remain. Citing polls, Irena Sargsyan recently noted in The Atlantic that the percentage of Iraqis who experience hunger daily increased from 38 per cent to 60 per cent between 2008 and 2011. Sargsyan believes that "time is running out for Iraq".
But like many of his fellow Iraqis, the Baghdad food-distribution manager is refusing to give up hope. He told me: "We've been through the Iran war, Desert Storm, the sanctions, the invasion, the occupation, the sectarian fighting ... It's only natural that we see the future as unstable. But all we need is a door to knock on. If we see an opportunity for work and a better life, we will grab it."
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