In March, Iran’s Expediency Council passed a decree titled “Drive to self-sufficiency in industry, agriculture, defense and security,” pertaining to the promotion of local industry and local production. Like other major strategic documents, this decree was signed by Supreme Leader Ali Khamenei, making the implementation of the plan a strategic goal for the government. One of the critical objectives of the document is the achievement of self-sufficiency in agricultural and food production; this has been part of the Iranian agenda since the Islamic Revolution in 1979, but has faced major hurdles.

Although the country has a sizable and significant agricultural sector (about 13% of GDP and 23% of the country’s employment, according to the latest official statistics), Iranian agriculture has suffered from a low level of investment as well as confusing government policies. In this brief paper, we will look at the challenges faced by the food and agricultural sector and how the new government of President-elect Hassan Rouhani can address these issues.

To understand the potential of the agricultural sector, one needs to take into account that only 18 million hectares of arable land are under agricultural utilization;   an additional 10 million hectares remain unutilized, despite their potential. Obviously, the scarcity of water resources is one issue (the agricultural sector uses some 90% of the country’s water resources), but experts believe that the sector has been mismanaged. In fact, alarming data points toward mismanagement: 30% of the country’s agricultural production goes to waste due to inappropriate production, storage and distribution technologies. Another worrying fact is the low rate of water-use efficiency which, according to experts, is 40%; this can be increased through new know-how and equipment. Furthermore, Iran is a major importer of wheat, meat, rice and other basic food products. Though the country is also exporting foodstuffs in other categories, the overall situation can be described as undesirable, particularly considering the regime’s objectives.

According to Sajjad Sanjabi, head of the nongovernmental organization Agriculture Support and Advocacy, the sector suffers from the absence of capable executives, a lack of investment as well as unrealistic minimum purchasing prices that the government has guaranteed farmers. During the 1997-2005 Khatami administration, Iranian farmers had benefited from reasonable guaranteed prices, which boosted the agricultural sector. However, a number of developments changed the economic feasibility of agricultural production in Iran: