Mid-Tech Greenhouses
Mid-Tech Greenhouses
Business Model Description
Build and operate mid-tech greenhouses in proximity of food distribution and research centers, growing niche fruit and fresh vegetables such as cherry tomatoes and replacing imported cut flowers such as roses and carnations. The mid-tech greenhouses are characterized by qualities such as arched roof type, ventilation, climate control through time-based automated irrigation systems and soil-grown root environment. The greenhouse production is also associated with better packing practices and may enhance B2B sustainable packaging practices.
Expected Impact
Mitigate imported food inflation and climate change-induced water stress, benefitting downstream agricultural activities with increased production and providing decent work opportunities.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Iraq: Middle Euphrates
- Iraq: Northwestern Iraq and Anbar
- Iraq: Kurdistan Region of Iraq
- Iraq: Southern Iraq and Mesopotamian Marshes
Sector Classification
Food and Beverage
Development need
The climate change-induced weather extremes, droughts, decreasing soil fertility, and increased prevalence of sand and dust storms hinder agricultural production in Iraq. Around 65% of wheat and 90% of rice consumption are met with imports. Iraq would require an additional financing of about USD 41 billion, between 2022-2030, for achieving the SDG 2, Zero Hunger (1, 2, 3).
Policy priority
The National Development Plan (NDP) 2018-2022 aims to achieve sustainable food security, and secure annual demand for water for sustainable uses, including agricultural purposes, in the fields. It sets the objective of increasing the GDP contribution of the sector to more than 5%, achieving a sector growth rate of 8.4% during the NDP period (5).
Gender inequalities and marginalization issues
In Iraq, the poorest 20% of the population has about 10.5 persons, and the poor is disproportionately impacted by the food inflation. Benefits from the use of public goods for agricultural production such as irrigation canals are not equally distributed, as in long canal structures, amid limited water availability, upstream farms could only access adequate amount of water (7, 8).
Investment opportunities introduction
The government invested about one billion dollars during the years 2018-2022, by focusing on supporting production inputs (fertilizers and seeds), final production (subsidizing the prices of cereal crops), as well as attempts to develop irrigation methods that respond to water scarcity (10).
Key bottlenecks introduction
Decades of conflicts and sanctions had a major impact on food production in Iraq. Unstable prices, low water supplies, and lack of security contributed to the inhibited growth of the agricultural sector (6).
Food and Agriculture
Development need
The agricultural land in Iraq is underutilized, as only around 22% of land suitable for agriculture is cultivated. The agriculture production is characterized by prevalence of old farming techniques such as flood irrigation, poor management of post-harvest activities and inadequate large-scale farms. Exacerbated pressure on water supply in Iraq affects irrigation systems (3, 4).
Policy priority
In its Vision 2030, Iraq highlights the need to focus on supporting the producers of crops which are connected to food security, modernize the agricultural sector's infrastructure, adopt technological uses in irrigation and reclamation as well as secure strategic reserves of the staple crops (6).
Gender inequalities and marginalization issues
Women make up 53% of the agricultural workforce but are typically responsible for dairy production, while men are responsible for meat production. The increasing use of technology has resulted in lower participation of women in agriculture. However, there is an emphasis on the potential role of educated women in a capital-intensive agricultural system (4).
Investment opportunities introduction
Increasing productivity and efficiency, expanding market channels, promoting value addition and processing, encouraging sustainable farming practices, strengthening capacity of local actors, exploring agricultural tourism, and enhancing access to finance and credit for smallholders and agribusinesses (9).
Key bottlenecks introduction
Limited access to finance and credit facilities, weak market linkages and information asymmetry, limited access to inputs and technology, poor infrastructure and services, and political instability are the main deterrents to a conducive business environment in Iraq’s agriculture sector, undermining food security and the sectoral growth and development (11).
Agricultural Products
Pipeline Opportunity
Mid-Tech Greenhouses
Build and operate mid-tech greenhouses in proximity of food distribution and research centers, growing niche fruit and fresh vegetables such as cherry tomatoes and replacing imported cut flowers such as roses and carnations. The mid-tech greenhouses are characterized by qualities such as arched roof type, ventilation, climate control through time-based automated irrigation systems and soil-grown root environment. The greenhouse production is also associated with better packing practices and may enhance B2B sustainable packaging practices.
Business Case
Market Size and Environment
> USD 1 billion
Iraq imported large quantities of foodstuffs with an estimated value of USD 8.879 billion in 2020 (13).
In Iraq, the import demand for fresh products is the highest for tomatoes with USD 183 million, followed by potatoes with a projected demand of USD 135 million (16).
Indicative Return
> 25%
The expected ROI is greater than 25% for niche products such as tomato varieties and cut flowers (14).
Investment Timeframe
Short Term (0–5 years)
Mid-tech greenhouses at the scale of 8000 m2 in Iraq is expected to yield positive returns in two to three years based on the product niche (14).
Ticket Size
USD 1 million - USD 10 million
Market Risks & Scale Obstacles
Capital - CapEx Intensive
Business - Supply Chain Constraints
Impact Case
Sustainable Development Need
About 47% of suitable for agriculture land in Iraq is underutilized (17). The need for demining and clearing of soil is persistent. Poor irrigation and reclamation technologies and insufficient management of post-harvest activities add another burden to the agriculture development (4).
Unfavourable weather conditions such as prolonged droughts or sandstorms affect the crop yield. Additionally, the two main rivers in country are expected to lose 50% of their flow by 2030 and the supply-demand gap in water resources is expected to reach about 11 million cubic meters by 2035 (3).
Iraq’s severe economic and environmental fragility is exacerbated by water loss which accounted to 60% in 2021 due to climate extremes such as drought and high temperatures, as well as external limitations on water flows from transboundary river systems (32).
Gender & Marginalisation
Food inflation disproportionally affects the poor, internally displaced persons, returnees. In Iraq, the poorest 20% of the population typically have large families, averaging around 10.5 people per family. Additionally, shared resources such as irrigation canals are distributed unevenly (7, 8).
Due to established gender norms, although women make up around 25% of the agricultural workforce in Iraq, they are often not included in off-farm activities that require leaving the farm grounds, such as processing, marketing, and retail sale (31).
Expected Development Outcome
Mid-tech greenhouses are associated with better packaging and may benefit the quantity and quality post-harvest management.
Mid-tech greenhouses minimize the exposure to bad weather conditions and poor soil fertility.
Mid-tech greenhouses reduce water consumption due to use of modern techniques such as drip irrigation, low level of evaporation and proximity of plants to each other (18).
Gender & Marginalisation
Mid-tech greenhouses reduce the dependence on seasonal cycles and bad weather conditions, hence, improving food supply, through public distribution system, to poorer communities.
Mid-tech greenhouses create better employment opportunities for women who constitute only 11% of total direct employment in agriculture (19).
Primary SDGs addressed
2.1.2 Prevalence of moderate or severe food insecurity in the population, based on the Food Insecurity Experience Scale (FIES)
2.3.2 Average income of small-scale food producers, by sex and indigenous status
2.4.1 Proportion of agricultural area under productive and sustainable agriculture
In 2020, there were approximately 920,000 food-insecure Iraqis (20).
In 2020, the average monthly income for farmers in Basra surveyed by the Norwegian Refugee Council (NRC) was only IQD 280,000 or USD 191 (21).
About 5 million ha are currently used for agricultural production (22).
In its Vision 2030, Iraq aims to achieve 0% of food unsecured population by 2030 (6).
N/A
Iraq has approximately 9.5 million ha of suitable for agriculture production (22).
8.6.1 Proportion of youth (aged 15–24 years) not in education, employment or training
According to the results, around 36.7 percent of the youth population was not in education, nor in employment or training (19).
N/A
12.3.1 (a) Food loss index and (b) food waste index
Five subnational food waste studies in Iraq give an insight into the possible range of household food waste, from 75 to 163 kg/ capita/year (23).
N/A
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Public sector
Indirectly impacted stakeholders
People
Planet
Public sector
Outcome Risks
If constructed greenhouses are covered in plastic materials, such as polyethylene, which have low lifespan and may create a negative effect on the environment due to non-recovery.
If the energy needed for ventilation and operations of the greenhouses are supplied by diesel generators, the environmental impact would be negative in terms of aggravated air and noise pollution.
Investments in agricultural activities in Iraq may aggravate the expansion of informal economy unless workers are formally registered.
Impact Risks
If greenhouses are not built with proper heating considerations, the operation of greenhouses will rely on the local unstable energy supply, severely reducing the impact of the business model.
Mid-tech greenhouse solutions with higher energy and water efficiency may create a competition for smallholder farmers and push the latter out of the market, thus limiting the impact of the IOA.
Impact Classification
What
Mid-tech greenhouses increase food security in the country, improve packaging practices, strengthen supply chain and contribute to reducing import reliance.
Risk
Improper heating systems and the need for energy supply as well as technologically advances of greenhouses can limit the expected impact from the business model.
Contribution
Mid-tech greenhouses improve availability of domestically-grown vegetables and fruit, saving energy and water resources, that is otherwise replaced by imports.
Impact Thesis
Mitigate imported food inflation and climate change-induced water stress, benefitting downstream agricultural activities with increased production and providing decent work opportunities.
Enabling Environment
Policy Environment
Vision 2030: is a comprehensive sustainable, and green development roadmap. The key areas of focus in agricultural sector are supporting the producers of the crops which are connected to food security, improve the farmers' access to the final goods and supply markets (6).
National Development Plan, 2018-2022: sets an objective to achieve sustainable food security, increasing the agricultural sector share in GDP from 4.5% in 2015 to 5.2% in 2022, achieving growth in the agricultural sector (5).
National Nutrition Strategy 2012–2021: defines a comprehensive framework for improving health and nutrition. The strategy ensures safe food availability and provision of food security for all (24).
Financial Environment
The three-year federal budget (2023-2025) repurposes Agricultural Loan Fund for Farmers and Small Farmers, established in 2009 and attached to the Ministry of Agriculture instead of the Ministry of Finance, facilitating the launch of soft loans to support farmers and small farmers (28).
Fiscal incentives: Investment projects are eligible for tax exemptions up to 15 years, outlined by the Legal Guide to Investment in Iraq by the National Investment Commission (33).
Other incentives: Government of Iraq (GoI) plans to form smart green cities in Mosul, Diwaniyah, and Thi-Qar to ensure food security and support private sector initiatives to build agricultural cities (29).
Regulatory Environment
Law No.2 on the Emergency Support for Food Security and Development, 2022: aims to transfer public funds (USD 17.14 billion) to meet the urgent needs of Iraqis for food security, particularly in staple food supplies, alleviating poverty, and achieving financial stability (25).
Law No. 46 Agricultural Materials Handling, 2012: organizes trade for agricultural materials, import control, sale of agricultural materials; increasing farm income by encouraging the cultivation of seeds and the use of appropriate fertilizer (26).
Law No. 50 on Seeds and Seed Tubers, 2012: aims at organizing and encouraging seeds production in both the public and private sector (27).
Marketplace Participants
Private Sector
Sofy Group, World Horti Center, Green Eastland, Al Oweis, Noor Al-Kafeel, Green Iraq, Zakko Group, Vano Group, Al Awrad, Bakhteyare, Debbane Saikali Group, Nawras Tarım Ürünleri Tic. Ltd. Şti.
Government
Ministry of Agriculture, Ministry of Planning, Ministry of Health and Environment, Ministry of Higher Education and Scientific Research, Ministry of Trade, Ministry of Industry and Trade, Kurdistan Regional Government
Multilaterals
Food and Agriculture Organisation of the United Nations (FAO), International Trade Centre (ITC), United Nations Environment Programme (UNEP), United Nations Development Programme (UNDP), World Food Programme (WFP), World Bank
Non-Profit
Islamic Relief, Caritas Iraq, Al-Khiamiat, Al-Bayan Center for Planning and Studies.
Public-Private Partnership
Ministry of Education (MoE) is set to take over the School Feeding Programme, which has been provided by the World Food Programme (WFP) since 2013. Firms are contracted as service providers for sourcing, warehousing, and packaging the main food items (34).
Target Locations
Iraq: Middle Euphrates
Iraq: Northwestern Iraq and Anbar
Iraq: Kurdistan Region of Iraq
Iraq: Southern Iraq and Mesopotamian Marshes
References
- (1) Ministry of Planning, Republic of Iraq and UNDP. 2022. Financial Gap Analysis of Agenda 2030 and SDGs in Iraq. Baghdad.
- (2) International Trade Administration. 2021. Iraq – Country Commercial Guide. https://www.trade.gov/country-commercial-guides/iraq-agriculture
- (3) World Bank Group. 2022. Iraq Country Climate and Development Report (CCDR). https://documents1.worldbank.org/curated/en/099005012092241290/pdf/P1776390cfceae0d908ff8073b7e041bea6.pdfand Business Landscape Magazine, Issue 9. 2023. The Urban Violation: The Eradication of Green Spaces in Baghdad. https://www.kapita.iq/content/issue/business-landscape-magazine-issue-9
- (4) FAO. 2021. Agricultural value chain study in Iraq – Dates, grapes, tomatoes and wheat. Bagdad. https://doi.org/10.4060/cb2132en
- (5) Ministry of Planning of the Republic fo Iraq. 2018. National Development Plan 2018-2022. https://andp.unescwa.org/index.php/plans/1139#:~:text=The%20National%20Development%20Plan%202018,ecological%2C%20psychological%20and%20spiritual%20levels.
- (6) Ministry of Planning of Republic of Iraq. 2019. "The Future We Want". Iraq Vision for Sustainable Development. https://andp.unescwa.org/sites/default/files/2021-05/The%20future%20we%20want-Iraq%20vision%20for%20Sustainable%20Development%202030.pdf
- (7) World Bank Group. 2023. Altered Destinies: The Long-Term Effects of Rising Prices and Food Insecurity in the Middle East and North Africa.https://openknowledge.worldbank.org/entities/publication/bb648ce6-7265-4290-8ffc-52292de35065
- (8) Foltyn, Simona, Eki Rrahmani and Jake Corbett. 2023. People and Power: Iraq’s Water Wars. Al Jazeera International. https://www.aljazeera.com/program/people-power/
- (9) Food and Agriculture Organization. 2017. Iraq –Agriculture damage and loss needs assessment. http://iraqieconomists.net/en/wp-content/uploads/sites/3/2017/09/Report-Iraq-Agriculture-Damage-and-Loss.pdf
- (10) Ministry of Planning, Department of Economic and Financial Policies. 2022. Development Performance of the National Development Plan 2018-2022. Baghdad.
- (11) Food Security Cluster. 2016. Agricultural Market Assessment: Al Shikhan. https://fscluster.org/sites/default/files/documents/goal_and_big_heart_agricultural_market_assessment_-_al_shikhan_-_march_2016.pdf
- (12) Green Eastland. 2023. [Homepage]. https://www.greeneastland.com/)
- (13) Arab Organization for Agricultural Development. 2020. Agricultural Statistics Yearbook- Volume 41.
- (14) UNDP SDG Financing in Iraq project team consultations with private stakeholders in Iraq, in September 2023.
- (15) AlJazeera. 2023. Iraq's Water Wars - Part 1. https://www.aljazeera.com/program/people-power/2023/9/20/iraqs-water-wars-part-1
- (16) International Trade Center (ITC). 2021. Identifying agricultural and agrifood products with potential for production and commercialization in Iraq. https://iraq.un.org/en/download/73589/136471.
- (17) Oxfam. 2022. Unfarmed now. Uninhabited when?Agriculture and climate change in Iraq. https://policy-practice.oxfam.org/resources/unfarmed-now-uninhabited-when-agriculture-and-climate-change-in-iraq-621360/
- (18) Nevada Irrigation District. 2023. The Benefits of a Greenhouse for Water Sustainability. https://www.nidwater.com/the-benefits-of-a-greenhouse-for-water-sustainability
- (19) International Labour Organisation. 2021. Iraq Labour Force Survey 2021. https://www.ilo.org/wcmsp5/groups/public/---arabstates/---ro-beirut/documents/publication/wcms_850359.pdf
- (20) USAID. 2020. Foos Assistance Fact Sheet - Iraq. https://www.usaid.gov/food-assistance/iraq#:~:text=
- (21) Norwegian Refugee Council. 2022. From farm to fork with Iraqi farmers in Basra. https://www.nrc.no/perspectives/2022/from-farm-to-fork-with-iraqi-farmers-in-basra/
- (22) World Business Council for Sustainable Development. 2021. Processed food and its role in nutritious and sustainable diets. https://www.wbcsd.org/Programs/Food-and-Nature/Food-Land-Use/FReSH/Resources/Processed-food-and-its-role-in-nutritious-and-sustainable-diets
- (23) UNEP. 2021. Food Waste Index. Report 2021. https://wedocs.unep.org/bitstream/handle/20.500.11822/35280/FoodWaste.pdf
- (24) FAO. 2012. National Nutrition Strategy 2012-2021. https://faolex.fao.org/docs/pdf/irq163152.pdf
- (25) FAO. 2022. Law No. 2 of 2022 on the Emergency Support for Food Security and Development. https://faolex.fao.org/docs/pdf/irq214128.pdf
- (26) FAO. 2012. Law No. 46 of 2012 regulating Agricultural Materials Handling. https://faolex.fao.org/docs/pdf/irq149794.pdf
- (27) FAO. 2012. Law No. 50 of 2012 on Seeds and Seed Tubers. https://www.fao.org/faolex/results/details/en/c/LEX-FAOC145545
- (28) Amwaj.media. 2023. Deep Dive: Will Sudani’s three-year budget bring stability to Iraq’s economy? https://amwaj.media/article/deep-dive-will-iraq-s-three-year-budget-come-to-fruition
- (29) National Investment Commission. 2022. Investment Map of Iraq 2022. https://investpromo.gov.iq/wp-content/uploads/2022/07/investment-Map-2022-English.pdf
- (30) Rudaw. 2019. How tenable is the boom in Kurdistan Region greenhouse farming? https://www.rudaw.net/english/business/25072019
- (31) International Trade Centre. 2021. Climate change risks and opportunities in Iraqi agrifood value chains. https://intracen.org/file/saavireportpdf-0
- (32) OECD. 2022. States of Fragility 2022. OECD Publishing, Paris. https://doi.org/10.1787/c7fedf5e-en
- (33) National Investment Commission. 2016. Legal Guide to Investment in Iraq [Access: October, 2023]. https://investpromo.gov.iq/wp-content/uploads/2016/10/legel-guide%20-final.pdf
- (34) United Nations Iraq. 2022. On International Day of Education, WFP and the Iraqi Ministry of Education launch expansion of school meals. https://iraq.un.org/en/169432-international-day-education-wfp-and-iraqi-ministry-education-launch-expansion-school-meals