Iraq… From an oil economy to a land economy: A strategic vision for building an agricultural and livestock sector that leads sustainable development

Iraq… From an oil economy to a land economy: A strategic vision for building an agricultural and livestock sector that leads sustainable development

8-7-2026

Researcher Shatha Khalil
Why is agriculture the first step in economic development?
No nation that has achieved comprehensive economic development has ever started with industry or technology alone. Rather, it has always begun by building a strong agricultural sector capable of providing food, stimulating the rural economy, creating jobs, and supplying raw materials for various industries. Agriculture is not merely about producing crops; it represents the true foundation of production from which all other economic sectors spring. Therefore, countries that have succeeded in achieving sustainable development, such as China, have given considerable attention to developing agriculture and linking it to industry, trade, and scientific research, because the strength of the economy begins with the strength of domestic production.

In Iraq, developing the agricultural sector could be the true starting point for building a more diversified and stable economy, especially given the heavy reliance on oil revenues and their volatility. Investing in agriculture means not only increasing food production, but also stimulating a wide range of economic activities that extend from the farm to the factory and then to local and international markets.

One of the first direct results of agricultural development is the creation of widespread employment opportunities. The agricultural sector can absorb large numbers of farmers and provides opportunities for young people, graduates, and women in rural areas, both in agricultural production and related industries. As agricultural activity expands, the need arises for agricultural engineers, veterinarians, technicians, operators, and experts in marketing and management, thus contributing to reducing unemployment and achieving balanced social and economic development.

The importance of agriculture extends beyond mere agricultural production; it also stimulates food industries that rely on agricultural and animal products as raw materials. When milk production increases, dairy, cheese, and yogurt factories expand. Similarly, when livestock production rises, the meat, canning, leather, and wool industries flourish. Expanding the production of grains, dates, and vegetables leads to the growth of flour mills, vegetable oil factories, food canning plants, and animal feed factories. In this way, agriculture transforms from a primary activity into a key driver of national industry, increasing the added value of local products and raising the contribution of the non-oil sector to the gross domestic product.

One of the most important economic effects of agricultural development is reducing dependence on food imports. Iraq spends billions of dollars annually importing wheat, vegetables, fruits, meat, and dairy products, representing a continuous drain on foreign currency reserves. When domestic production increases and covers a larger share of market needs, the import bill decreases, and funds remain within the national economy, thus supporting trade stability and strengthening the country’s economic security.

Agriculture also provides the raw materials needed for the industrial sector, an aspect often overlooked when discussing development. Factories cannot operate without a stable supply of local inputs. Dates are used in the food industry, cotton in textiles, grains form the basis of food processing, and the dairy and meat industries rely on local livestock production. The greater the availability of these materials within Iraq, the lower the cost of industrial production and the greater the competitiveness of factories in both domestic and international markets.

Agricultural prosperity also leads to higher income levels in rural areas, which directly translates into improved living standards and reduced poverty rates. When farmers receive a stable and rewarding income from their land, their ability to spend on education, healthcare, and housing increases, and trade and services within villages and districts flourish. This, in turn, curbs the ongoing migration to major cities, which places a strain on services and infrastructure in Baghdad and the main provinces.

Another important aspect is that developing agricultural production contributes to enhancing food security and price stability. Excessive reliance on foreign markets makes a country vulnerable to global price fluctuations, political crises, and natural disasters that can disrupt supply chains. However, when a country possesses a strong domestic production base, it becomes better equipped to meet the needs of its population and maintain stable prices for essential commodities, even during global crises.

The impact of agricultural development extends far beyond the farm or factory, stimulating the transportation, storage, marketing, veterinary, and logistics sectors. Every ton of crops requires transportation, refrigerated storage, sorting and packing centers, wholesale markets, distribution companies, and quality and food safety inspection services. Livestock production also demands advanced veterinary services, diagnostic laboratories, feed mills, and modern slaughterhouses. Thus, agricultural development drives a long chain of economic activities, creating thousands of jobs beyond the farm itself.

Finally, investment in agriculture contributes to achieving balanced regional development across the provinces. The Iraqi economy remains heavily concentrated in Baghdad and a few other major cities, while other provinces possess vast, underutilized agricultural resources. Establishing agricultural projects and food processing industries in Nineveh, Anbar, Diyala, Wasit, Basra, Dhi Qar, Muthanna, and other provinces will distribute economic activity throughout the country, reduce the development gap between provinces, and enhance socio-economic stability.

Therefore, viewing agriculture merely as the process of cultivating land and harvesting crops is no longer compatible with the requirements of modern development. Agriculture today represents an integrated economic system that begins with scientific research and the development of seeds and varieties, extends through production and agricultural extension, and continues with processing, packaging, storage, transportation, and marketing, culminating in export. For this reason, building a modern agricultural sector should be a cornerstone of any national strategy aimed at diversifying the Iraqi economy, reducing dependence on oil, and establishing a productive base capable of achieving sustainable growth, creating jobs, and enhancing food security.

Economic Unit / North America Office,
Links Center for Research and Strategic Studies

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