Trading on Australian Innovation and Experience to Grow Iranian Agribusiness
In a visit to Lorestan Province in western Iran I was struck both by both the quality and the inadequacy of Iranian agribusiness and agriculture. When visiting friends’ families and making new acquaintances I was treated to that very Persian custom: a full platter of fruit to be sliced by hand, an extensive selection of fresh and processed nuts and a sweet tea as a heartily warm welcome. Other times it would be freshly made cream – khameh – with warm flatbread, the like of which I’ve never tasted outside Iran.
But by many fields and orchards, top quality fruit and other fresh produce waste away. Herds of livestock are tended but farmers worry that they are smaller and less profitable than before. Water management and irrigation are hot topics around the country, in cities and countryside alike. The remaining impression is one of great potential and hope for what Iranian agriculture can be.
Iranian agriculturalists, like most Iranians, are proud of their history and culture of innovation: the Persian qanat irrigation system revolutionised human development millennia ago and early animal domestication was an Iranian achievement. Given Iran’s astounding natural and human resources, they hold great hope for future potential. This extends across Iran’s diverse harvests of fruit, nuts, meat, dairy products, aquaculture and fisheries, and into applied research of agribusiness technology.
But amongst the orchards and farms, farmers and pastoralists repeatedly tell how they put fresh produce ‘out to pasture’ due to not being able to reach market – and always having extra surplus for lucky visitors and family. This bounty for the visitor unfortunately comes from the underdeveloped production, storage, and distribution technologies available to Iranian agriculturalists and continuing low productivity – fully 23% of Iran’s workforce is engaged in agricultural production.
Agriculture in Iran is significant and diverse but its full potential remains unrealised. With close to 30% of its land arable, only 56% is cultivated and merely 45% of that is properly irrigated. Iran’s agriculture is diverse across the production of cereals, the most common being wheat, barley, and rice. It is also a world-leading producer in delicacies such as saffron, caviar, dates, and nuts. Iran’s livestock production is equally varied with sheep and goats being most common – and sought after in market – but cattle, buffalo, camels, and mules are also raised. With two productive coastlines on the Persian Gulf and the Caspian Sea, the production and potential of Iran’s fisheries and aquaculture are similarly great.
Importantly for Australian agribusiness, the challenges that face Iranian agriculture are comparable to Australia’s own and offer commensurate opportunity. Iran’s agriculture is heavily dependent on efficient water management of both rainfall and underground watersheds. However, it remains at a low level of water-use efficiency. Its agriculture remains over-sensitive to climate developments, despite major ongoing projects in dam-building, irrigation, and drainage networks. With Australia’s world-leading experience, expertise, and systems innovation in managing agricultural production and systems, Iran and Australia are in the perfect position to enter into mutually beneficial commerce in production techniques, systems, and administration and well as produce trade in all parts of the agricultural sector.
Iran’s agricultural policy administered by the Ministry of Agriculture mirrors its approach to the national economy as a whole: government policy prioritises building self-sufficiency as a first step to developing a long term export capability in world markets. Again, Australia’s particular expertise and willingness to ‘lend a helping hand’ in developing the sector would be well received, building on Australia’s positive reputation and image in Iran. And while Iran is aiming for self-sufficiency, it is a net importer and will continue to import the majority of its crops for the foreseeable future. As it restructures the sector in the medium-to-long term and pursues new biotechnology research and management systems the potential for large-scale produce trade, like Australia’s with other parts of the MENA region, will remain broad.
Australia’s experience with developing world-class productive agriculture in challenging conditions and building a reputation for excellent agribusiness practice and research complement Iran’s needs. As the Australian Trade Commission’s (Austrade’s) industry capability research on Australian agribusiness says, the “Australian agribusiness sector occupies a significant place in the Australian economy and has a strong track record… Competitiveness for agribusiness is derived from locally-developed production methods and technologies and international research and development collaborations. Continual innovation in farm machinery, sophisticated plant and animal breeding programs and intelligent transport solutions underpin the ability of Australian agribusinesses to bring world-class commodities to market… [with] an average agricultural productivity gain of two per cent over the past 50 years.” With such a record and reputation, Australian business is strongly sought after in Iran above competitors.
Iran’s market is welcoming the world as it hasn’t done in decades as sanctions are removed in 2016. The possibility of mutually beneficial cooperation between the Australian and Iranian agricultural sectors is immense, but there is much competition already ahead of Australia. With a proper market entry strategy and incisive commercial intelligence, as well as the necessary cultural awareness, Australia’s experience and know-how can offer what Iranian agriculture is looking for and needs.
To find out more about Iran’s agribusiness sector, join our webinar, Spotlight on Iran: Highlighting emerging business opportunities on Tuesday 19 April, 2016 at 5.00pm AEST. Click here to register.
Author: William B Jenkins
William is Associate and Iran Specialist for Dearin & Associates and Erasmus Scholar at the London School of Economics and University of Leipzig. He was Developer and Lead of the flagship Arabic and Persian Languages Online Programme and a first-class honours graduate in Political Economy, International Relations, and languages (Arabic, Persian, Hindi-Urdu) at the Australian National University. He formerly worked with the Australia-Arab Chamber of Commerce and Industry (AACCI), ACCI Productivity Unit and the Senate Standing Committee on Foreign Affairs, Defence and Trade. He writes on Middle Eastern as well as Central and South Asian business, trade, economics, and history.