BAGHDAD, Iraq/ABU DHABI, United Arab Emirates (Reuters) — Sunni militants bent on creating a hardline Islamic state in the Middle East now control another powerful economic weapon — wheat supplies.
Fighters from the Islamic State, or ISIS, have overrun large areas in five of Iraq’s most fertile provinces, where the United Nations food agency says around 40 percent of its wheat is grown.
Now they’re helping themselves to grain stored in government silos, milling it and distributing the flour on the local market, said an Iraqi official. ISIS has even tried to sell smuggled wheat back to the government to finance a war effort marked by extreme violence and brutality.
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International officials are drawing uneasy comparisons with the days of hardship under dictator Saddam Hussein, when western sanctions led to serious shortages in the 1990s.
“Now is the worst time for food insecurity since the sanctions and things are getting worse,” said Fadel El-Zubi, the United Nations Food and Agriculture Organization representative for Iraq.
While Iraq faces no immediate food shortages, the long-term outlook is uncertain.
Hassan Nusayif al-Tamimi, head of an independent nationwide union of farmers’ co-operatives, said ISIS militants were intimidating any producers who tried to resist.
“They are destroying crops and produce, and this is creating friction with the farmers. They are placing farmers under a lot of pressure so that they can take their grain,” he said.
Many farmers have joined the hundreds of thousands of Iraqis who have fled the Arab and foreign fighters’ advance.
Those who remain have not been paid for the last crop, meaning they have no money to buy seed, fuel and fertilizers for next year.
Iraq’s trade ministry says 1.1 million tonnes of wheat it bought from farmers this harvest season is in silos in the five provinces. This represents nearly 20 percent of annual Iraqi consumption, which the U.S. Department of Agriculture puts at around 6.5 million tonnes, roughly half of which is imported.
Amidst the chaos of northern Iraq, it remains unclear exactly how much wheat has fallen into ISIS hands.
However, a source at the agriculture ministry who requested anonymity, confirmed about 30 percent of Iraq’s entire farm production, including the wheat crop, is at risk.
ISIS already has extensive business dealings. It is selling crude oil and gasoline both in Iraq and Syria, where it is fighting president Bashar al-Assad’s forces to create a cross-border caliphate.
So far, it has largely used energy and food resources under its control as a fundraiser rather than an instrument of siege.
A senior Iraqi government official said the militants had seized wheat from government silos in the provinces of Nineveh and Anbar, which both border Syria.
These included 40,000 to 50,000 tonnes taken in Tal Afar and another Nineveh town, Sinjar, where tens of thousands of local people from the Yazidi religious minority have fled the militant onslaught.
Hassan Ibrahim, director general of the Grain Board of Iraq, said ISIS had tried to sell wheat stolen from Nineveh back to the government via middle men.
“For this reason I stopped purchasing wheat from farmers … ,” said Ibrahim, whose trade ministry body is responsible for procuring wheat internationally and from local producers.
Bread prices are stable in Baghdad due to imports and crops in areas still under government control. In Baghdad and nine other southern provinces, the trade ministry has bought nearly 1.4 million tonnes from farmers this season.
It is not clear whether the government’s import needs will rise dramatically, given that it will probably not try to supply areas no longer under its control.
Iraq’s wheat harvest began in May, the month before the militants and their allies launched their assault, taking the cities of Mosul and Tikrit in days when resistance from thousands of U.S.-trained government soldiers collapsed.
The harvest begins in the south and moves north, meaning that farmers began delivering wheat to government silos in rural areas around Mosul in early June, just two weeks before militants stormed the city.
Zubi said the government usually pays the producers two months in arrears. Therefore an estimated 400,000 farmers have no hope of being paid for the wheat they delivered before the offensive.
“No farmer received his money,” he said, meaning they will not be able to start planting next month.
John Schnittker, a former USDA economist who advised the trade ministry for three years before USDA pulled its staff out of Baghdad in 2012, said a number of factors would “severely test” the ability of farmers in northern Iraq to grow crops next year.
These included threats to irrigation water due uncertainty over control of the Mosul dam, the government’s inability to get fertilizer and fuel to farmers in areas controlled by ISIS, and the fact that many producers fled their homes.
Meanwhile, the “public distribution system” — the government’s means of supplying subsidized flour and other goods such as vegetable oil, sugar and rice — has broken down in militant-held areas.
Schnittker said its breakdown poses a huge hardship to northern Iraq’s rural population and would eventually push more into refugee status.
Although the system is corrupt and wasteful, impoverished Iraqis de-pend on it.
Schnittker said its breakdown poses a “huge hardship” to northern Iraq’s rural population and would eventually push more people into refugee status.
