An Iranian official says Venezuela has agreed to allocate 1 million hectares of agricultural land to Iran’s overseas cultivation projects to ensure food security.
When announcing the agreement last week said Ali Rezvanizadeh Venezuela may offer a better opportunity than Brazil and Russia for Iran’s overseas agricultural projects, including growing soybeans and corn.
Tehran and Caracas last month announced a 20-year cooperation plan in the fields of oil, refining, petrochemicals, defense, tourism and culture, and agriculture during President Nikolas Maduro’s visit to Iran.
Details of the farm deal have not been disclosed and it is not clear whether Caracas has approved the investment by the Iranian government or its private sector.
But Masoud Daneshmand, former chairman of Iran Economy House, a private-sector think tank, says Iranian investment in producing crops like corn and soybeans is in Venezuela not economical due to the very long distance between the two countries and the high cost of transportation.
Experts say that the biggest benefit of growing it abroad for Iran is the preservation of its precious water resources. Iranian agriculture consumes around 85 percent of all available water resources. It would also potentially contribute to the country’s food security, a major concern of Supreme Leader Ali Khamenei, who has been a passionate promoter of agricultural self-sufficiency for the past three decades.
“Although there is water shortage, God willing, the same amount of rainfall as in our country will suffice [producing enough] to feed a population four times their current population and the country needs less of others,” he said in a speech in October 2000. In two other speeches in July and August 2001, Khamenei argued that self-sufficiency in basic products like wheat and rice should be the main target in farming.
Although Iran produces a wide variety of agricultural products, the sector is struggling with severe drought insufficient water resources for years which has led to water tensions in some areas.
According to Rezvanizadeh, Iran needs 7 million hectares of farmland abroad to ensure its food security, but Iranian investment has so far been on a much smaller scale.
The private investors are mainly driven by higher profit margins on their overseas cultivation projects. According to Rezanizadeh, only 7 percent of the 30 million tons of all imported agricultural products come from foreign cultivation projects. This includes investing in crops like bananas and other exotic fruits, which have a much higher profit margin than strategic crops like wheat, corn, rice and oilseeds.
Iran imports around 90 percent of all oilseeds such as rapeseed and soybeans, as well as around 30 percent of the rice used in the country. The country is also a major importer of corn and barley for animal feed.
Investing in agricultural projects abroad also requires financial measures, such as barter agreements, to circumvent obstacles to international banking that result from US sanctions.
Some other countries, officials say, have agreed to make agricultural land available for Iranian projects on a much smaller scale. Russia recently offered to provide 100,000 hectares for Iran’s projects, the official news agency (IRNA) reported on Sunday. According to the report, this is only about 0.8 percent of all cultivated areas in Iran (12 million hectares).
The United States and China are among the countries with the most extensive agricultural production abroad. Iran’s southern neighbors, the United Arab Emirates and Saudi Arabia, have also invested heavily in agriculture in Africa and some Asian countries over the past decade.