Iraq set to pay high price for bumper wheat harvest

Iraq is facing a significant challenge after experiencing a bumper harvest and creating a surplus of 1.5 million metric tons of wheat, thanks to favorable rainfall and generous government subsidies. This surplus, which is expected to result in a government loss of approximately $458.37 million, is welcomed by farmers but poses a dilemma for a government already strained by climate change impacts on agriculture, conflict disruptions, and reduced oil prices. The government's strategy of paying farmers more than the global market rate to encourage wheat cultivation in arid conditions has led to the need for a large subsidy budget, which is putting pressure on the government's financial resources. Furthermore, the decision to retain the surplus wheat within the country to support local millers could lead to negotiations for lower selling prices, given that millers may be able to import wheat at lower costs. This situation highlights the need for the government to strike a balance between supporting farmers and managing its financial resources efficiently to ensure food security and economic sustainability.