Chapter 7. Fertilizer distribution and services

Cooperatives

Rural farm cooperatives, employing agricultural specialists and technicians, can serve as effective organizations for promoting a sustainable system of agriculture. Farm cooperatives have always acted as lead groups for projects that are designed to improve farming in general, and the application of fertilizers, pesticides and herbicides in particular. Soil laboratories are serving a number of rural farm cooperatives like those of Sabzevar and Kerman.

Currently more than 1 000 rural farm cooperatives have been organized across the country. They cover some 3 million hectares of farmland and claim more than 260 000 farmer members in more than 4 600 rural communities. Crop yields per unit area of farmland in communities that are served by cooperatives are often higher than the yields obtained in the adjacent farms, or in their provinces or the country as a whole. Moreover, the production of field and horticultural crops has increased considerably in those areas.

Central Organization of Iranian Rural Production Cooperatives

The Central Organization of Iranian Rural Cooperatives (COIRPC) aims at the development, extension and strengthening of the cooperatives thus improving marketing and developing rural cooperation services activities. The activities of this organization include teaching, training in management and other courses, personnel training, accounting, purchase and safe storage of produce by companies and cooperatives and their distribution to appropriate markets. This organization also supervises the construction of buildings and utilities such as storehouses, cold storage, shops, factories, offices etc. They organize exhibitions to introduce farmer produce to the market, provide technical assistance and support services. They deal with insurance, the economic supervision of other cooperatives and provide technical and consultancy assistance concerning publicity and marketing.

The rural and agricultural cooperative network has 4 935 branches including the Rural Women's Cooperatives, 340 units, 10 693 shops, and 11 794 units for the distribution of fuel. With around 5 million members, the network covers 98 percent of the villages of the country, with a population of approximately 25 million people.

Farmers' House

The "Farmers' House" was established in order to protect the right of the farmers. Comprising agriculturists, farmers and scientific personnel, it was created in order to represent farmers' interest to relevant officials in the government. Farmers' House endeavours to develop the agricultural sector in the political, social, economic and cultural fields. It aims to eradicate poverty in the rural sector by emphasizing the necessity of legislation and the prevention of the invasion of agricultural land by other sectors. It also aims to convert traditional agriculture into an advanced and sustainable agriculture, using appropriate modern technology with the rational use of agricultural inputs.

Agricultural support services company

The Agricultural Support Services Company (ASSC) is responsible for providing and distributing mineral fertilizers, pesticides, seeds and improved plant varieties. It has played an important and vital role in increasing the quality and quantity of agricultural products. ASSC has distributed 3.1 million tonnes of mineral fertilizers annually on average during the past three years. This compares with an average of 2 million tonnes of mineral fertilizers in the decade prior to 1990. It also distributes pesticides and seeds.

Fertilizer prices and subsidies

Prices

The prices of fertilizers announced by the government in 2004 are shown in Table 18.

TABLE 18
Prices of fertilizers in Iran, 2004

1 US$ = 8 800 Rials (December 2004)

Subsidies

The Government of Iran has subsidized all mineral fertilizers for the past three decades. The amount of subsidy two years ago, when the total production was less than three million tonnes, was US$70 million. The subsidy was paid to the Iranian petro-chemical industry, to permit it to sell fertilizers at reduced prices. Due to an increase in the amount of fertilizer used, i.e. 3 276 and 3 700 million tonnes in the years 2002 and 2004 respectively, and the increased cost of fertilizers, the fertilizer subsidy given by the government now amounts to more than about US$200 million. The subsidy on fertilizer may contribute to the smuggling of fertilizers to neighbouring countries (Statistics and Information Technology Office, 2001/2004).