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Cablegate: Gaining Support for Erbil Agricultural Project

VZCZCXRO3301
RR RUEHBC RUEHDA RUEHDE RUEHIHL RUEHKUK
DE RUEHGB #4692/01 3581259
ZNR UUUUU ZZH
R 241259Z DEC 06
FM AMEMBASSY BAGHDAD
TO RUEHC/SECSTATE WASHDC 8699
INFO RUCNRAQ/IRAQ COLLECTIVE
RUEKJCS/SECDEF WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHDC

UNCLAS SECTION 01 OF 02 BAGHDAD 004692

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: ECON ETRD EAGR IZ
SUBJECT: GAINING SUPPORT FOR ERBIL AGRICULTURAL PROJECT

REF: BAGHDAD 3485

1. Summary. During December 11-14 Multi-National Forces-Iraq
Civil Military Office (MNF-I CMO) and Econoff traveled to
Erbil to discuss construction of facilities for honey
production and a farmers' market in northern Iraq with
Multi-National Division-North East (MND-NE) at Camp Zaytun.
The group also met and discussed this project with a
non-governmental organization (NGO) working with beekeepers
in northern Iraqi, farmer unions and officials from the
Kurdistan Regional Government's Ministry of Agriculture (KRG
MoA). MNF-I CMO wanted to determine the support MND-NE, the
local beekeepers' association, and the KRG MoA could provide
for this project. The KRG MoA committed to providing land
once a suitable location was identified. The local
association promised to provide expertise and training to the
project. MND-NE offered to provide heavy construction
equipment. Funding commitments by the parties were not
agreed to during these meetings, but a Memorandum of
Understanding (MoU) is being worked out among the parties.
MNF-I CMO is pushing for the project to begin officially by
January 1, 2007, and break ground for the facility by the
beginning of April. End Summary.

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-----------
Erbil Bound
-----------

2. During December 11-14, MNF-I CMO and Econoff traveled to
Erbil to meet with the CMO office of the Korean military
(MND-NE) at Camp Zaytun, agriculture officials of the KRG,
and the private sector to discuss support for construction of
honey processing and farmers' market facilities in northern
Iraq. The project would include equipment for the processing
of local honey from its raw state to a finished and labeled
product that could be marketed locally. Additional space
would also be provided for a farmers' market with associated
cold storage, public restrooms, and parking. In assessing
the need for these facilities, the local NGO representative,
Mr. Rayan Toma Oghana and officials from the KRG MoA, stated
that approximately 350 metric tons (MT) of honey are consumed
yearly in Erbil. Only 180 MTs are produced locally.
According to Mr. Oghana, locally produced honey sells for
twice the price of imported honey from Iran, Syria or Turkey
due to the greater trust in the quality of the locally
produced product.

--------------------
Preparing the Ground
--------------------

3. The facility would also be a training center and a place
for local farmers to market products other than honey. The
private sector was represented by Mr. Oghana and other
members of the Youth Activities Organization (YAO), a
progressive NGO started three years ago as part of an
Agriculture Reconstruction and Development Program in Iraq
(ARDI) project, and is currently working to develop the honey
industry in northern Iraq. In the initial meetings Mr. Kamal
Abbas represented the KRG MoA.

4. On December 12, the group discussed what contributions to
the project would be made by each participant. The YAO is
ready to provide training for the processing facility, and
the KRG MoA is willing to provide the land. MNF-I CMO
indicated that some modest funding may be available from USG
sources. MND-NE indicated that, although it may be unable to
provide funding, it would be able to provide heavy
construction equipment because it already has this equipment
in-country at its vocational training center (see reftel).

----------------------------
Location, Control and Timing
----------------------------

5. Another area of discussion was the location of the
facilities and whether they would be government or privately
controlled. MNF-I CMO argued for several locations in the
important agricultural areas in northern Iraq, such as the
area just north of Erbil in Shaqlawah, where ARDI, MNF-I CMO,
and YAO have supported honey production projects. The YAO
suggested that the facilities ultimately be controlled by the
local private organizations involved in the project. Mr.
Kamal from the KRG MoA said that the KRG initially should
manage the facilities, until the associations demonstrated
that they could manage the projects on their own. MNF-I CMO
said that an optimum timeline would be for the
ground-breaking for the first facility to take place by the
beginning of April 2007.


BAGHDAD 00004692 002 OF 002


---------------------------
Agriculture Will Rise Again
---------------------------

6. On December 13, the parties met with Mr Abdul-Aziz Taib,
the KRG Minister of Agriculture, who said that his ministry
strongly supports the project. According to Mr. Taib,
agriculture was devastated under the former regime, and the
KRG MoA believes that it is an area of tremendous economic
potential for northern Iraq. MNF-I CMO asked if KRG MoA
would support the project by donating land. The Minister
said that when the details of location were established, the
KRG MoA could provide the land. During the meeting, the
MND-NE suggested putting together an MoU among the parties
(KRG, MNF-I, and the private sector) to establish clearly the
roles and responsibilities of each participant in the
project. MNF-I CMO reiterated its desire to have this
project begin soon (by January 1, 2007) and to have
construction work begin by April 1. Although this timeline
is desirable, MND-NE emphasized that the group should take
the time necessary to ensure the project is well-executed.
MND-NE has completed many similar projects during its tenure
in northern Iraq, and consequently has a solid understanding
of the time required to plan-and-complete a project of this
nature.

-----------
Other Needs
-----------

7. Further issues were raised during the meeting with the KRG
MoA regarding support and assistance in the following areas:
aquaculture, seed cleaning, seed supply, grain silos, cold
storage, grape farming, chicken production, produce
transport, and training courses for all sectors within the
KRG MoA sphere.

8. Later on December 13, the KRG MoA and MNF-I visited two
honey-producing farms in the area. One was close to Erbil in
an area where MND-NE conducted one of its reconstruction
projects called New Village. The other was in the area of
Shaqlawah where MNF-I CMO had supported a bee production
project with ARDI. MND-NE was interested to see if the areas
would be suitable for the production facility. MND-NE it is
concerned that facilities be close to markets and thereby do
not place an undue transportation burden on honey producers.

9. Comment. The project would undoubtedly be important for a
sector of the economy identified as critical by the KRG. It
remains to be seen exactly what the participants' roles and
responsibilities will be in the project. These issues will
be thoroughly worked out in the preparation of the MoU.
Since MNF-I CMO is seeking an aggressive time-table, it is
working to develop the MoU as soon as possible. Periodic
updates on the project will be provided. End Comment.
KHALILZAD

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