The crisis of the high cost of local food products in Iraq has worsened sharply in recent times. Between the stifling economic crisis and the greed of merchants, the concerns of the Iraqi citizen have risen.

The local market recorded an unprecedented rise in the prices of locally produced food commodities, such as tomatoes, main vegetables, and poultry products such as eggs and meat, forcing citizens to rise up against the campaign to support the national product.

The campaign to support the national product has met with wide resonance among various groups of the people during the popular protests that have swept many Iraqi governorates since October 2019 to stimulate local industries and limit the import of competing foreign goods.

Over the past two years, many activists and civil organizations contributed to the "Made in Iraq" campaign, until this support turned into widespread criticism due to the unjustified high prices, according to the statement of civil activist Ahmed Al-Omari.

Saleh saw that there is an imbalance in the country's trade policy (Al-Jazeera Net)

Reasons for the high price of national products

Professor at the University of Baghdad, Dr. Muhammad Salih, believes that there is an imbalance in the country's trade policy, as large quantities of raw materials used in the local industry are imported beyond their production capacity.

He explains that the higher the quantity of the purchased raw materials, the lower their price, which is what Iraqi factories cannot do due to their weak absorptive capacity, and thus their introduction into the industry, and then the impossibility of reducing the price of the product depending on “the higher the production, the lower the price.”

Mohammed Saleh added: That is why most factories are forced to increase prices in order to recover their money or close their doors due to the difficulty of competing with cheap imported products.

He points out that there are several factors that contribute to the increase in prices, most notably the indirect sale from the producer to the consumer, where goods are traded among many merchants prior to being put on the market, in addition to the high transportation costs, the high cost of labor and the rent of real estate.

Al-Saadoun believes that the sudden suspension of import erased the role of competition between imported goods and their national counterpart (Al-Jazeera Net)

Competition effect

The agricultural economist, Dr. Sabah Al-Saadoun, considered that the lack of competition in the agricultural products market contributed to raising the price of the local product.

He explained that the sudden suspension of imports erased the role of competition between imported goods and their national counterparts, which prompted many local producers to take advantage of the matter and raise prices.

Al-Saadoun points out that this convenience of local producers also affected the level of quality of the national products currently being offered in terms of the unfitness of some of them for use, describing this as an irresponsible behavior of the national factories.

He also believes that the ban on imports harmed some importers, and pushed them to monopolize goods and re-issue them at exorbitant amounts in order to push the authorities to open the door for imports in order to restore their businesses, "which is what happened recently."

Al-Saadoun does not believe that there is a relationship between the rise in dollar prices and the high cost of local products, as foreign currency is not dealt with in local trade.

Al-Omari warned that the current high price of local goods will stop the popular momentum towards national products (Al-Jazeera Net)

End of support campaign

Activist Ahmed Al-Omari warned that the current high prices will stop the popular momentum towards national products if prices do not return to normal, stressing that there is a popular movement on social media platforms towards boycotting poultry and vegetable products after the government allowed them to be imported from neighboring countries recently.

The Iraqi government had allowed the import of some agricultural crops such as tomatoes and cucumbers, in addition to chicken and eggs, from the land border crossings late last month after their prices increased, as vegetables witnessed a doubled increase in their prices, while the prices of local eggs reached 7,000 dinars ($4.8). The price of imported eggs was only 5,000 dinars ($3.4).

Al-Omari added: We had hoped to be like the neighboring countries that benefit from the bounties of their country, but the greed of some traders will cancel the achievements of two years, during which Iraq was able to restore part of its productive health.

He said that the continued rise in prices will erase the Iraqi dream of switching to exporting products, and keep it a consumer country par excellence.

According to the statistics of the Central Bureau of Statistics, the percentage of non-oil products imports for the year 2020 amounted to about 18 billion dollars, while the value of imports in 2019 amounted to more than 34 billion dollars, and 29 billion dollars in 2018, which is a great paradox, according to specialists in economic affairs.

Saja considered the threat to boycott the local product as a natural reaction to the price-raising policy adopted by the merchants (Al-Jazeera Net)

loss of patriotism

Social researcher Saja Khaled believes that the threat of a boycott is a natural reaction to the price-raising policy adopted by merchants.

And she considered that the Iraqi is being pushed to lose his patriotic feeling day after day as a result of the accumulated pressures on him, and the current price crisis is one of the most prominent.

Saja criticized the government for hastening to open the door for imports before studying the aspects of the crisis and knowing the reasons for the rise in prices through the relevant ministries.

One of the stores in Baghdad, where the imported products returned (Al-Jazeera Net)

Solutions to the crisis

Returning to Dr. Muhammad Salih, he sees the need to activate the supervisory role and follow up on prices to reduce manipulation and monopoly products and activate economic laws that support the national product and maintain its price stability, in addition to developing the productive reality in the country by increasing production capacity and allowing producers to benefit from the advantages of production and wholesale .

As for Al-Saadoun, allowing the import of high-consumption goods would restore balance and push local traders and farmers to fix the price of their products, thus maintaining support for local production and controlling the price crisis at the same time.

While activist Ahmed Al-Omari believes that the government should prove its role in supporting the national product financially and morally, whether by facilitating the circulation of products or by providing the requirements for their production, which will maintain the level of local production in a reasonable quantity and price and make the citizen feel the value of his country's bounties.

The cost-price crisis is still raging, and the lives of 40 million Iraqis depend on it, who suffer from the anxiety of their country's economic instability.