17 June 2003
U.S. Helping to Rebuild Iraq's Agriculture Sector
(Coordinating work with coalition partners, international groups) (3480) Ensuring a continuous flow of food to the Iraqi people and rebuilding Iraq's agricultural sector are the main objectives of the U.S. Department of Agriculture (USDA) in the country, department officials say. Briefing reporters June 16 in Washington, J.B. Penn, undersecretary for farm and foreign agricultural services said purchasing agreements under the oil-for-food program will continue until relevant authority can be transferred to a local administration. Another task is to rebuild the country's Agriculture Ministry and develop a market-based policy for the sector, he said. The United States is coordinating Iraq's agricultural reconstruction with its coalition partners -- primarily Australia -- and international organizations, he added. Another official, Dan Amstutz, senior ministry advisor for agriculture, said he would leave for Bagdad via Kuwait June 17 to assess Iraq's agricultural needs. He said that USDA representative, Lee Schatz, is in Iraq identifying people from the country's Agriculture Ministry with which coalition partners could work. This "management team" already has facilitated the harvest of wheat and barley, Amstutz said. Amstutz, making his second trip to Iraq, said he hopes that eventually a farm cooperative movement could be started in Iraq. Assessing the current situation, Penn said that because of the coalition's pre-positioning of food aid before and during hostilities, "ample" supplies of food commodities are in Iraq to cover the country's basic food needs until September or October. He added that USDA is trying to determine if Iraq has any regulations that would prohibit the import of foods derived from biotechnology. Following are excerpts of the transcript of the press briefing: (begin transcript) USDA Tele-News Conference with USDA Under Secretary for Farm and Foreign Agricultural Services, Dr. J.B. Penn and U.S. Senior Ministry Advisor for Agriculture Dan Amstutz Washington D.C. Monday, June 16, 2003 PENN: Thanks to all of you for being with us today. We last did a briefing on this topic on May 1st, and we indicated at that time that we would do more as developments warranted. Mr. Amstutz is leaving tomorrow for Baghdad, so we thought this would be an opportune time to do another briefing. Before turning to Dan and then to your questions, let me briefly recap the background, if I might. Before and during the hostilities in Iraq there was considerable pre-positioning of food supplies in the region by USAID, the World Food Program, and others. Hostilities then disrupted the oil-for-food program that had been operated by the U.N. and the Saddam Hussein regime. As a result of the pre-positioning and with the supplies already in the country, there are now ample supplies of most basic commodities that make up the ration. So our attention then turns to the two major tasks ahead. First is ensuring the continued flow of food supplies to the Iraqi people. This will be primarily from the oil-for-food program and local production in the future after the donated supplies are consumed. The oil-for-food program was recently extended by the U.N. for six months. The purchasing arrangements already in force will be continued, for the most part, until the purchasing authority is transferred to Baghdad. I want to reaffirm that when new purchasing arrangements begin, we expect them to be competitive and transparent and for all suppliers to have an opportunity to participate. The other task before us is for rejuvenation of the Iraqi ag sector, which contributes significantly to the resumption of a fully functioning national economy. That task has many, many aspects to it. The political policy institutional aspect is an important part. Some of our objectives and those of the Australians thus are focused on rebuilding the Ministry of Agriculture and helping it develop its capacity to provide essential services and to create the appropriate market-based policy for the sector. Then the production, or technical aspect, is another important part of our activity. We know some of what is needed to overcome critical constraints and we're learning more with our ongoing assessment. To repeat what we said earlier, Mr. Amstutz's role is to coordinate USDA's contributions to these essential tasks. He is coordinating with the coalition provisional authorities and with the Australians and other coalition partners. He has been active in discussions with the U.S. private sector, which wants to play a big role in this effort. He has also been in discussions with other agencies of the U.S. government, with the international organizations, such as the World Bank, and now he's going to Iraq. Let me conclude and hand this to Dan with a couple of final points. One is that the U.S. government is very pleased to have the cooperation of our coalition partners in this critical rebuilding effort in Iraq. We are pleased to have Australia's cooperation in focusing on the agriculture sector. They have considerable, appropriate expertise and resources to add to our own. But we all understand the ultimate objective of a democratic, market-based economy for Iraq, and our producers and our food companies are prepared to compete right alongside everyone else's. The second issue I wanted to mention is the importation of biotech food products. That has emerged as an issue in the past few days. It still is unclear to us as to what the Iraqi regulations may be or how they may apply. It is unclear whether these were government regulations or perhaps specifications placed in some contract by the state trading enterprises. We are still exploring this. So with this overview, I will turn to Dan and ask him to discuss more of the specific activities he's been engaged in and his near-term plans. AMSTUTZ: As J.B. mentioned, I'll be leaving tomorrow for Kuwait and then on to Baghdad, I hope, immediately. While there, I'll be, of course, meeting with the American complement there and my co-head Trevor Flugge, from Australia, and Iraqi colleagues. Since we last visited, which was about a month ago, I guess, progress has been made. Lee Schatz, our guy in Baghdad, has been working to create a cadre of former Iraqi ag ministry personnel -- which Lee calls his management team -- and Lee thinks we have a pretty good group, pretty good cross-section group to begin this process of restaffing the ag ministry. We have, I think successfully, facilitated the harvest of wheat and barley, which is proceeding very well. Payment for wheat is at $105 a metric ton, and $65 a metric ton for barley. There are, I'm sure, some isolated problems of making payments to farmers because the banking system in Iraq is still not functioning. So all kinds of creative ways of making payments have to be found -- but they are being found. And likewise, the OFF, oil-for-food program, distribution of food aid goes on, employing some 44,000 Asians, as they call them, from the Ministry of Trade, making deliveries of these food baskets to families throughout Iraq. There again I would be surprised if there weren't some isolated instances where deliveries were hampered because of the security situation, but overall we are pleased with what we hear about the success of those deliveries. High on my list of priorities when I get there is beginning this process of working particularly with Iraqis in developing their wish list, their priority list of things that they would like to see accomplished as we restructure their agricultural industry. Our job -- mine and Trevor's -- is to do what we can to facilitate that process, and we are both eager to do that. We are both optimistic about the potential for farm product production in Iraq. You've heard me say before that I think production can be doubled in the very relatively near-term future, and I think Trevor shares that view. As I have said before, just so there's no misunderstanding, even with increased production equal to twice what it has been in recent years, Iraq will still be a net importer of food stuffs, particularly wheat and rice, and perhaps as their animal industry kicks into a higher gear, some feed ingredients. Iraq is likely to be self-sufficient in fruits and vegetables that it produces there, but our hope is that eventually we'll have a truly revitalized Iraqi economy and with much better buying power in the hands of citizens and perhaps create demand for farm products that they don't raise there. We're optimistic about this. We don't think things are going to be done overnight, but we continue to pursue this with a great deal of vigor and enthusiasm. I'll stop then now, and both J.B. and I will do what we can to answer your questions. QUESTION: The question is really for both J.B. and Mr. Amstutz. The contracts that are being extended, the contracts under the Oil for Food, are any of the terms known on those contracts? Has that been made public as to the price and so forth? PENN: There is information on these contracts that's being developed, and this is to be reviewed by U.S. authorities with the U.N. authorities, but I don't think any of that information has been made public yet, and I don't think we've had an opportunity in this office to see any of that yet. But some of the contract information is to be reviewed and discussed with the U.N. authorities, as I understand it. Q: Will it eventually be made public? PENN: I assume it will. I mean, this is still under the auspices of the U.N., and I think that they are the people who have to make the decisions about how they handle the Oil for Food program as it was constituted, but I expect that it will. Q: Do you know how long you will be in Iraq, and is it your thinking that it won't be until fall that the U.S. sellers could begin penetrating the Iraqi market? AMSTUTZ: On this particular trip, I'll bet here for about two weeks, after which I'll come back here and have a chance to visit with my colleagues here, and assess what I've learned while over there and do what we can to get into motion things that have to be done. I'm not quite sure when I'll return to Iraq after that, after this. It'll depend on things I learn there and what we can accomplish here upon my return. The best information I have, which I've heard from a number of sources because I asked many people the same question, but the best information I have is that Iraq's needs are covered in these basic food commodities until September or October, shipment from origin, and that seems to hold true and, if anything, from what I've learned, it might even be extended somewhat because the reports we have had so far indicate that the wheat crop is really quite good. Q: If you're there two weeks, some of the criticisms from the U.S. industry is that the U.S. leader on this effort, that being you, you're not there that much, and the competition is there all the time, that being Mr. Flugge. Is there a downside to that? AMSTUTZ: Well, let me first say nobody is selling anything to Iraq these days. They're not in the market. There are perhaps small items going in, in small quantities in the private sector that is still existent, but nothing of any magnitude. While here, preparing to go to Baghdad, I've had an opportunity, as J.B. mentioned, to meet with the leader of the World Food Program, I've met with the USAID several times, I've counseled with the House Ag Committee and with the staffers on the Senate Ag Committee. I've met on an interagency basis with other agencies of our government, and all of that has been productive preparation I think. This whole area of reconstruction and revitalization is a complicated task, and it's really a mistake to try to simplify it down to just what businesses is in the offing in the near future. Let me add, too, that I've had an opportunity to meet with Jerry Bremmer, who is in charge of what we call now the CPA, the Coalition Provisional Authority. I've known Jerry for 20 years, back to the days when he was a U.S. ambassador to Holland, and I had J.B.'s job. Q: I'm wondering if you could tell us, I understand Mr. Amstutz is being paid by USDA. Is Mr. Flugge being paid by the Australians? That's my first question. And also, along with that, as I understand it, the Australians have a team in Iraq doing evaluations, sort of like an AID team, and AID here has put out requests for proposals on contracts. How is all of this going to be coordinated? I mean, is it coordinated? Are these issues separate? If you could talk about these two things, also, including who is paying Mr. Flugge. PENN: I don't know who's paying Mr. Flugge, but it's my understanding, it's my impression that the Australian Government is making available a fair amount of resources for this effort. They are providing a team of people, as you noted, and they also are providing, I understand, some funding for the physical rebuilding of the Ministry of Agriculture building, which was severely damaged by looting. So the Australians are providing a fair amount of resources into this effort. Like any big undertaking, as you note, this one is going to require a lot of cooperation and coordination. USAID has the lion's share of the U.S. resources for rebuilding agriculture. They have RFPs [requests for proposals] now for contracts for the agriculture reconstruction. The Australians, and the World Food Program, and the FAO [U.N. Food and Agriculture Organization], and the World Bank and USAID I know are all doing evaluations. So there's going to be a lot of information that's being developed here. The key challenge, it seems to me, is deciding what the most critical constraints are, where we, all of us, need to address our efforts first, and that's sort of the challenge before Dan here is to amass this information and help put it into some priority order and then to mobilize the resources that we have available here in USDA to confront the most critical constraints and at the same time work with USAID, as we're doing now, to develop the resources that are needed for longer term constraints. AMSTUTZ: Yes, before leaving tomorrow, I'll be meeting with the person who has headed up the FAO study of Iraqi agriculture reconstruction, and you are correct that there are many entities involved in this planning process. To sort of add to what J.B. said, there is a meeting of donors, of U.N. donors in New York, at the U.N., on June 25th, to begin this process of determining who the donors will be and the amounts of money and expertise that might be available. As I view it, and the coming together of all of this is indeed a key question, and when you get lots of cooks stirring the pot, it can create all kinds of interesting human relations situations, but the narrow end of the funnel is right there in Baghdad. And when push comes to shove, Jerry Bremmer, and those of us who are working with him, are going to have to make the final decisions. And as you heard me say time, and time, and time again, the decisions have to be in keeping with what our Iraqi colleagues see as their future and see as the direction they would like this to take, but I'm confident that we can work out all of these complications of duplication, which undoubtedly exists now. I'm glad that so many are bringing their talents to bear on it. Q: This meeting in New York on the 25th, is that just agriculture or is that all donors to Iraq for all areas? AMSTUTZ: I think it's all donors for all areas. PENN: That just reminded me of one thing I wanted to say is that we do owe a debt of gratitude to Lee Schatz. We haven't said much about him thus far, but Lee has been engaged in this endeavor since early January, right from the very beginning when all of the contingency planning was being undertaken, and now he's been in Baghdad for going on two months, and the conditions have not been ideal, neither the living conditions or the security conditions. And he has been providing us a lot of invaluable, on-the-ground information, a lot of suggestions as to what needs to be done. He's been dealing with Dan, and with Mr. Flugge, and the other Australians, and we do want to acknowledge the critical role that he has played thus far in this endeavor. Q: There is no real umbrella structure under which everyone is functioning and to which everyone must answer; is that correct? PENN: Are you talking about for all activities or just for agriculture? Q: Well, I'm tempted to say, yes, but let's just say for agriculture, J.B. PENN: Well, I think Mr. Bremmer is clearly the person in charge and that all decisions ultimately reside with him. And each area of what would be a fully functioning Iraqi government is being developed. I mean, there's the Treasury Department, and we know a lot of the people that are involved in that. There's an Energy Ministry, an Environmental Ministry, an Education Ministry, you know, and on, and on, and on, and all of these areas are being addressed. And I think Mr. Bremmer is the Chairman of the Board and Chief Executive Officer for this undertaking, and that includes agriculture as well. Q: A question for Mr. Amstutz. You mentioned earlier that you were working with folks trying to identify those in the Iraqi Ag Ministry. I think the phrase you used was the management team. Has there been any attempt made yet to try to identify farm groups that may have existed in Iraq prior to Saddam's removal or identify opinion leaders/farmers out in the countryside who could help you in the reconstruction effort? AMSTUTZ: The problem, to date, has been inability to get out and about in the countryside, with the exception of the Northern Kurd area, and so we really haven't had the kind of contact we hope to. I personally hope that part of this revitalization will be the strengthening and perhaps even creation of a farm co-op movement in Iraq. That can do wonders in strengthening an industry like agriculture, and my hope is that that kind of thing is interesting to the Iraqis. We might add that in conjunction with this, most of the land in Iraq is state owned, and most of us involved with this process, and when I say "most of us," I mean most countries involved in this process, if not all countries, hope that we can have private Iraqi ownership of the land resources. Q: J.B., I want to go back to your reference to biotech rules. I mean, aren't any previous specifications or rules sort of wiped off the boards by the war? Aren't you starting from scratch? So why should it be a concern what their policies or specifications were before the war? PENN: Well, Jim, I'm getting way outside my area of expertise, but I think what you just suggested is not the case. I think, under the Geneva Convention, I'm told that occupying powers have certain responsibilities, and if there were certain kinds of laws on the books before the beginning of hostilities, that the occupying powers have to respect those. There is a limit to what they can change and not change. Now, you know, you could logically ask who's going to take you to court if you change them? I mean, who's going to slap you on the wrist? But, again, we're trying to find out just what the situation was. So very few countries in the world have a genetically modified product regulatory system that I would be terribly surprised if the Iraqis had given much thought to this before the war. But nonetheless, we're looking to see what the regulations may have been and, as I said, or whether it was just an afterthought in some contract specifications, but we'll try to determine what it is, and we'll try to follow the rules as best we know them. Q: And then maybe change the rules afterwards? AMSTUTZ: I've labeled that a hurdle we must deal with down the road. Thank you all. (end transcript) (Distributed by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)
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