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Role of Government in Agriculture

Government involvement in agriculture was minimal prior to Syria's union with Egypt. Although state intervention in the agricultural sector increased following the union, the government avoided playing a direct role in cultivation. In 1984, private farmers tilled 74 percent of the cultivated land, cooperatives 25 percent, and public organizations (essentially state farms) 1 percent.

Government involvement arose indirectly from socialist transformation measures in various parts of the economy and directly from government efforts to fill the void in the countryside caused by land reform. As an example of the former, the Agricultural Cooperative Bank, a private bank established in the eighteenth century but inherited by the socialist regime, in the mid-1960s became the single source for direct production credits to farmers (see Banking and Monetary Policy , this ch.). The bank had limited funds and confined itself almost completely to short-term financing, the bulk of which went to cotton growers. Part of its lending was in kind--primarily seeds, pesticides, and fertilizers at subsidized prices. Although the bank appeared effective, there was insufficient credit through the 1960s and early 1970s for farmers who did not grow cotton and for long-term loans for such needs as machinery or capital improvements. In the mid-1970s, the flow of funds to the bank increased, thus allowing it to expand its lending to the agricultural sector. The bank became an important influence in shaping farmers' production decisions, particularly in cotton.

In the 1960s, government marketing organizations for the major agricultural commodities were established. The Cotton Marketing Organization, as noted, had a complete monopoly. Organizations for tobacco and sugar beets had purchasing monopolies, set the farm purchase prices, and supervised the processing and marketing of their respective commodities. An organization for grains set prices, purchased some of the farmers' surplus, and supervised the marketing of the remainder through private dealers. The government also set prices for several other agricultural commodities, most imports, and many consumer items.

Some economists attributed part of the stagnation in agriculture to the government's pricing of farm produce. Farm prices remained unchanged over long periods and by the 1970s and 1980s were quite low relative to world prices. Some smuggling out of farm products for sale in Turkey, Iraq, and Lebanon resulted as well as some black marketing in controlled commodities. Pricing also was not coordinated to achieve agricultural goals. Although the Ministry of Agriculture attempted to get farmers to increase wheat production, the government's desire to keep basic food costs low for urban consumers imposed low grain prices for farmers. The ministry also urged farmers to shift irrigated areas from cotton to wheat at the same time that the farm price of cotton was raised relative to that of wheat.

Aware of the problems, officials made efforts to improve pricing policy. By 1977 prices paid to farmers had risen substantially and favored grains and some industrial crops over cotton. In fact, the 1977 prices (when converted to dollars at the official exchange rate) paid to farmers for wheat, soybeans, and sugar beets were substantially higher (more than 100 percent for wheat) than the prices paid to American farmers for those products. In 1985 the government again raised procurement prices for a variety of crops. Prices for hard wheat rose by 9 percent, soft wheat by 14 percent, red lentils by 13 percent, white lentils by 18 percent, and barley by 22 percent from the preceding year.

When land reform was introduced, those receiving expropriated or government land were required to join farm cooperatives. Cooperatives were expected to furnish the organization, techniques, credit, and joint use of machinery to replace and expand the functions supplied by the landowners and managers of the large estates. Syrian farmers' individualism and aversion to cooperatives may explain their apparent preference for renting land from the government rather than buying the land and having to join a cooperative. Whether the cause was aversion by farmers or an inability by the government to organize and staff cooperatives, as some economists suggest, the cooperative movement grew slowly until the early 1970s, but accelerated thereafter. In 1976 there were 3,385 agricultural cooperatives with 256,000 members--more than double the number and membership in 1972. By 1984 there were 4,050 agricultural cooperatives with 440,347 members. Statistics do not distinguish between cooperatives for farmers receiving expropriated or government land and voluntary cooperatives of established landowners.

Officials expected cooperatives eventually to mitigate, if not eliminate, two serious agricultural problems. First, farmers tended to specialize in certain crops without practicing crop rotation. Second, substantial amounts of arable land were left fallow each year. In the 1970s, government extension workers and cooperatives strongly urged farmers to rotate cropping in a pattern that would maintain the fertility of the soil and avoid having cultivable fields left fallow. Cooperatives were also expected to facilitate the use of machinery after land reform reduced the average size of farms, partly by cooperative ownership of equipment and partly by pooling small plots into an economically sized bloc that would then be cultivated as a single unit in the cropping rotation. By 1986 it was not clear how much success cooperatives had achieved in crop rotation or mechanization, but statistics showed an accelerated use of farm equipment by the agricultural sector after the October 1973 War.

Data as of April 1987

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Syria Table of Contents