Syria Wheat-to-Bread Infrastructure in Southern Syria July 2017 Contents Acknowledgements 3 Executive Summary 4 Background 5 Objectives 5 Objectives: Research Questions 6 This survey endeavored to answer the following questions 6 Methodology 6 Limitations 7 ASSESSMENT FINDINGS (Market Mapping) Market Mapping 9 Market environment 9 Types of Flour and Wheat 10 Market chain 11 Bakery Operation Modalities 13 ASSESSMENT FINDINGS (Infrastructure Mapping) Infrastructure Mapping 15 Southeast Dar’a 16 South Central Dar’a 16 Northeastern Dar’a 17 Southwest Dar’a 18 Northwest Dar’a/Quneitra 19 Dynamic Systems 19 ASSESSMENT FINDINGS (Silo, Mill and Bakery Facility Assessments) Silos 21 Mills 21 Bakeries 22 Focus on Fuel 23 CONCLUSIONS Key Observations 26 Further Assessments 27 Programming Recommendations 27 Annex I Price Volatility Monitoring 28 2 Acknowledgements The Regional Food Security Analysis Network (RFSAN) is a joint project between iMMAP and the Food and Agriculture Organisation (FAO) of the United Nations (UN) funded by United States Agency for International Development (USAID)/ Food for Peace (FFP). This survey was conduct- ed with the support of the Syria Food Security Sector – Jordan hub and its partners. Data col- lection was assisted by the Afak field team of enumerators while the FFP funded Food Assis- tance Programme (FAP) II, Acted, and Aurantis provided additional consultations. 2 3 Executive Summary The wheat-to-bread market in southern Syria Further understanding the scope and depth of was critically disrupted when the government the gap in local flour production is crucial to im- cut off services to opposition-controlled areas at proving bread production. Those surveyed indi- the beginning of the conflict in 2011. This supply cated price and unavailability of key inputs, es- severance created shortages of flour and bread pecially fuel, wheat, and flour, to be the major that continue today, compounded by the effects bottlenecks at all steps across the supply chain. of prolonged conflict. Repeated assessments are necessary to refine findings and allow for trend tracking. RFSAN undertook this assessment at the re- quest of the Whole of Syria (WoS) Food Security Sector (FSS) to develop a detailed understanding of the wheat-to-bread market, how this market is manifested through infrastructure, and ascertain the greatest barriers to meeting bread needs in southern Syria. RFSAN enumerators, as well as enumerators from Syrian NGO Afak assessed 63 bakeries, 10 mills and two silos across 94 villag- es in Dar’a, Quneitra, and As-Sweida governo- rates, through key informant interviews, focus group discussions, and consultations with local councils. The assessment found gaps in every step of the wheat-to-bread supply line. The south of Syria does not grow enough wheat to be self-suffi- cient, producing an estimated 80% of its own need in 2016. This gap increases significantly when looking at flour. The assessment sug- gested that local milling contributes only 15% of the flour needed to serve the population while humanitarian aid meets 30-40%. This suggests that as much as half of total flour need is left unmet. All 94 local councils identified the lack of flour as the biggest challenge to meeting bread need. Infrastructure mapping illustrated that bakery systems in the south have proven relatively re- sistant to conflict. Distinct regions of intercon- nected infrastructure centered around private and public bakeries have developed in eastern Dar’a and western Dar’a/Quneitra. As local production remains lacking, large amounts of flour distributed as aid has kept bread prices constant and affordable. However, there are signs that it is distorting the market for flour. While economies of scale were found to exist for all other key inputs, it was not observed in bulk flour purchasing. The lower cost of, and preference for, imported white flour could be hampering local production. 4 Background Prior to the conflict, the wheat-to-bread chain in Maintaining a functional wheat-to-bread supply Syria was largely controlled by the government line is essential in mitigating need gaps for bread due to the centrality of wheat production in na- and flour; fundamental staples of the Syrian diet. tional policy. Government influence over wheat production and marketing continued beyond the liberalization of other agriculture products in Objectives 20071. Not only was wheat classified as one of seven national strategic crops, it was also iden- Upon a request from the WoS FSS coordination tified as the country’s most key food commod- from the Jordan hub, the RFSAN agreed to un- ity for national food security. The government dertake a detailed survey and analysis for the aimed to always maintain wheat stores equiva- bread infrastructure in south Syria. The follow- lent to a years’ worth of national consumption. ing survey set out with the goal of mapping the To achieve this goal, the government encouraged existing wheat-to-bread infrastructure in south- wheat production by giving relatively high prof- ern Syria. The intention of the mapping exercise it margins to wheat farmers and setting wheat was to provide an understanding of where the prices significantly above global averages. On current gaps, bottlenecks, and barriers to suffi- average, farmers would sell approximately two- cient production exist, including a rapid damage thirds of their crops to the government, while the assessment of the infrastructure. In addition to remainder would be kept for consumption, seed laying this contextual foundation, the assess- stores, and be sold to private mills and traders. ment also intends to update previous work on Generally, however, pre-conflict the government market flows. controlled the pricing of wheat, flour, and bread throughout the public and private market chains, In future assessments, the survey methodology subsidizing bread prices at an average of 20% used to provide these broad baselines outlined below production cost across the country when below should be further refined and repeated to conflict arose in 20112. track and analyze trends over time. This founda- tional understanding of existing systems, infra- In the south before the conflict, the govern- structure damage, combined with multiple iter- ment organized the majority of flour production ations of data collection (and subsequent trend and distribution via a large (now inactive) mill in analysis) aims to aid the humanitarian commu- Dar’a al Balad. The flour was then distributed nity in structuring its existing interventions and to village bakeries to be baked and sold at sub- inform future planning. sidized prices. Other small-scale private mills existed across the south but operated with tradi- tional stone-milling technology and served local farmers and families. The wheat-to-flour system across the south was critically disrupted when the government cut off these services to oppo- sition areas and the Dar’a al Balad mill was ren- dered non-operational due to conflict. Since the government severed services to op- position controlled areas, local councils and hu- manitarian actors have worked to fill the gaps created by the breakdown of the previous sys- tem, while also combating additional stresses of conflict, access challenges, choked supply lines, and infrastructure damage and deterioration. 1 Agricultural Damages and Losses Needs Assessment (DLNA), the Syrian Arab Republic. March 2017. Consultation Draft. 2 SYRIA: 2012 Wheat Production Report. June 2012. United Stated Department of Agriculture, Foreign Agricultural Service 4 5 Objectives: Research Questions Methodology The survey collected data via key informant inter- This survey endeavored to answer the following views covering 63 bakeries and 10 mills across 47 questions: villages in Dar’a, Quneitra, and As-Sweida gover- norates. Enumerators identified an additional 11 • Wheat-to-bread Market System nonfunctioning mills and 47 nonfunctioning bak- • How does the wheat-to-bread system eries existing in the target area but these were function in southern Syria, specifically not fully assessed due to elongated inactivity, as through the silo to mill to bakery infra- well as two functioning bakeries that elected not structure? to participate. Additionally, enumerators gath- • How does humanitarian aid fit into it and ered bread needs and gaps information from 94 what effect does it have on that system? local councils and conducted three focus group • Wheat-to-bread infrastructure discussions to verify findings. • How interconnected is the wheat-to- bread infrastructure in southern Syria? Completed Surveys • Are there certain key areas or points of infrastructure that can be targeted with Functioning Non-Functioning aid to boost bread supply in the entire region? Bakeries Mills Bakeries Mills • Conversely, are there certain places that are more vulnerable to supply shortag- es, high prices, and bread insecurity? • Barriers to meeting need • What are the major bottlenecks in meet- ing the bread need in southern Syria? 58 7 5 3 • What are the major factors contributing to these bottlenecks? Additional Facilities Identied Functioning Non-Functioning In response to these questions, this report will provide: Bakeries Mills Bakeries Mills 1. A market map showing the wheat-to-bread market environment, supply chain, and vital infrastructure including identifying humanitar- ian aid inputs into the system. 2. A wheat-to-bread infrastructure map of south- ern Syria with an outline of the scope of inter- 2 0 47 11 connectivity across