IMPACT OF PRODUCT DUMPING ON THE AGRICULTURAL SECTOR IN IRAQ (2009-2017)

The aim of this work was to check the presence of the dumping from neighboring countries of Iraq, Turkey and Jordan. The margin of dumping was calculated by taking the difference between the normal value and the export price. If it exceeds 2%, then there is dumping. Product dumping in Iraq has increased since 2003, and it is increasing from year to year for many types of agricultural and food commodities. Main reasons are the high rate of imports and the absence of trade policies represented by customs tariffs which in turn control the trade exchange. The research concluded that there is an intentional dumping in the trade of some agricultural commodities with Iraq from neighboring countries. Trade exchange with these countries has negative effects on the domestic product.


INTRODUCTION
Product dumping in international trade has a great importance because it has a different effects on the economies of countries that follow this policy of dumping and countries that suffer from this policy. The adoption of many developing countries of economic liberalization policies including the liberalization of foreign trade, the trend towards market trade, and privatization, has increased the likelihood of being subjected to numerous dumping attempts or applying antidumping measures on their products in foreign markets. In the first case, anti-dumping duty should be used in order to avoid the impact caused by dumping on the national industry, and in the second case will be subject to accusation of dumping. This requires countries to defend their exports in foreign markets and maintain their share of the volume of world trade. In Iraq, after 2003, the gates of the Iraqi border were opened wide for the various types of goods and products from all over the world to get inside the Iraqi market. The market was characterized by a big need for goods and products as a result of the economic sanctions that continued for more than twelve years. The great impact on the Iraqi economy in its various aspects, led to the decline of the industrial sector because of the low competitiveness of Iraqi goods and products, as well as the decline in agricultural production because of the inability of Iraqi farms to keep pace with prices of agricultural products imported from neighboring countries because of lower prices compared to Iraqi products. The problem of this research is that the local agricultural product suffered from intense competition and the unequal with the imported product, especially from some of the neighboring countries of Iraq. The delay of successive governments in taking the necessary actions to address this risk to deepen its roots in the Iraqi economy. In the Iraqi market, the imported agricultural products are available at relatively low prices. The importance of research is in the importance of dumping and the international interest in addressing it. Many laws, legislations and international agreements were discussed to limit this issue because of its negative effects on the economies of importing countries. The study assumes there is intentional dumping policy in trading agricultural commodities with Iraq from some neighboring countries. This policy has negative effects on the domestic product in the Iraqi markets. The objective of the research was to confirm the existence of dumping from neighboring countries and to identify factors that contributed to that problem in the Iraqi market. Also, it is important to develop appropriate solutions to address it by determining the means of protecting products and consumers from this policy. Dumping of agricultural products was the main interest of many previous researches such (1,2,3,4,7,9).

MATERIALS AND METHODS
Dumping is a state when a country exports a product at a price lower than its normal value (less than its local selling price or less than its production costs), or less than the corresponding price of a similar product sold in the country of export. It is a procedure that some exporting companies follow in foreign markets, which is different than a support of a country to the exporting company that sells in the market of another country at prices lower than normal prices, (17). Dumping is faced with the imposition of anti-dumping duties (new fees) or reaching price commitments from exporters. Support is met by imposing additional, or compensatory fees or raising tariffs by the amount of subsidy that has been entered into the value of the subsidized commodity. Dumping has a negative effect to the economies, as it is one of the most unfair forms of competition that causes significant damage to domestic production in the importing country, which requires antidumping action (12). The concept of dumping can represent a form of price discrimination. It is important to mention that in imperfect competition, firms sometimes impose one price for a commodity when it exports it, and a different price for the same commodity when sold in the domestic market (14). Also, there are many definitions of dumping according to researcher's specific point view such as in (11,15,16).

Types of dumping
Dumping includes the following types: 1. Occasional dumping: It can be defined as selling a commodity abroad at less than the cost of production at home for reasons of emergency. 2. Short-term dumping: It happens through temporary reduction of selling prices to prevent the establishment of new projects or to defend against foreign competition. 3. Long-term dumping (continuous): In this type of dumping, long-term goals can be achieved. (13) 4. Permanent dumping: This type of dumping is a result of price discrimination. It is connected to a policy of the monopoly in the domestic market and based on the protection from foreign competition. In this case, it is important to the monopolist to differentiate between markets according to the price and elasticity of demand.Because of the decrease in elasticity of demand in local markets, price will be high, and vice versa will happen in foreign markets. 5. Periodic dumping: which occurs during the period of recession (seasonal dumping) in order to get rid of surplus stock. A detailed classification of different types of dumping was done by many researchers (5,18,21).

Calculation of dumping:
To determine the existence of dumping, the difference between the normal value (the selling price of the commodity in the domestic market in the origin country) and the export price was calculated. There will be dumping if the normal value exceeds the export price by 2% of the export price. Amount of dumping=Normal value-Export price. The price of the product in the country of origin (the normal value) is the value paid or the price payable for the similar product when it is directed to consumption in the domestic market of the country of export or country of origin, and it is often calculated at the factory gate (9). Export price: is the price of a trade transaction that was based on the sale of the product by the exporter in the country of export to the importer in the country of import, or, in other words, the price that exporting the product from one country to another was done according to it(20).The margin of dumping: It is the base of the process of defining dumping, it is the price range to which the product in question is sold at a price below the price of local products. To find this margin, we determine the normal value (the price of the product in the country of origin) and the price of the product that was exported or dumped. The margin of dumping is calculated according to the following formula (10,6). Margin of dumping = amount of dumping / export price The neighboring countries of Turkey and Jordan were selected (because of the big trade size and for a long time). Dumping was calculated to see if there was dumping was done by those countries or not. Various agricultural commodities were selected for instance chicken, egg, eggplant for the period (2009 -2017).

Dumping policy in the Iraqi market First: chicken:
Meat is considered the main food and favorite for most people because of the protein and many benefits especially chicken, which is not very different from other meat, but it is more desirable because the low price compared with the rest of the other meat products. This is why its consumption rates are high. The problem is not in the quantities consumed but in the imported quantities, which are priced at very competitive prices. As this led to the impact on local production and the shutdown of many fields, although the quality of local meat is much better than the imported. As a result, imports of poultry meat were studied for the period 2009-2017. Source: Prepared by the researcher based on Ministry of Planning data / annual import reports, FAOSTAT * Available for consumption = imported quantity + local production ** Dependency ratio on the outside = Quantity imported / available for consumption * 100(7) Table 1 shows that each of the imported quantities of chicken was in 1000 tons and valued at one million Iraqi dinars. Local production was also in 1000 tons and the percentage of dependence on abroad was calculated as (20.4%). While, the highest quantity of imports was (370.76) thousand tons in 2015. The dependency ratio was (83.45%). As for domestic production compared with the imported, year 2010 was the lowest year in terms of production (53.00) thousand tons. The decline in production was due to the import of poultry meat and competition of domestic production. In addition to the unwillingness of producers to raise poultry because of the lack of quality of production requirements. In addition, these factors of production were not subject to quality control, causing repeated loss of producers. Then, production quantities increased in the years 2011-2014, which amounted to (99.6, 90, 90, 87) thousand ton respectively. The reason for that rise was the stability of the security situation, especially in the areas of the Euphrates, the middle and the south, in addition to access to high productivity and short duration of breeding which did not exceed a maximum of 40 -34 days per group. Later, in the last years of study 2016 -2015, production gradually decreased to (69.4, 73.5). This decline was due to the recent security situation that has hit two-thirds of Iraq from the destruction caused by terrorism, one of the most obstacles of production. It was found in table (1) that the year 2015-2016, the import rate was more than double the production, which led to the reduction of domestic production because the markets were full of imported chicken with low prices. In 2017 despite the return of the rise domestic production to about (96.0) thousand ton, the imports were high, with the quantity imported (324.82) thousand tons and a rate of dependency on the imported quantities (77.18%).

Second. Eggs
Egg is an essential product to consumers because of its great nutritional benefits. The United States is the largest exporter of eggs in the world. Eggs are a low-cost food source and widely available. The study discussed the imported quantities of eggs for the period of 2017 -2009 and their effect on the market and local production. Table (2) shows the quantities imported and the local production. It is obvious that domestic production in 2009 was low compared with the rest of the study years. It is one of the reasons for the reduction of domestic production as a result of dumping the Iraqi market with large quantities of imported eggs at low prices compared to the prices of locally produced eggs. That encouraged consumers to tend toward imported eggs for lower prices, which negatively affected domestic production. Domestic production reached a peak in 2012, where production was estimated at (55.20) thousand tons compared to a significant decline in imports, where the quantities imported in the same year to (33.08) thousand tons. That was one of the reasons of the increase in production. Source: Prepared by the researcher based on Ministry of Planning data / annual import reports, FAOSTAT * Available for consumption = imported quantity + local production ** Dependency ratio on the outside = Quantity imported / available for consumption * 100 (7) Third: Eggplant Eggplant is grown in most areas of Iraq in open fields as well as in protected agricultural houses and plastic tunnels. The importance of eggplant comes from its contribution to supplying the human body with important energy compounds, as well as the good economic returns of its producers.  Table 3 shows that the highest level of imports of eggplant in 2015 was 67.84 thousand tons and the value was (14357) million Iraqi dinars. While the lowest amount of imports was in 2013, (0.12) thousand tons and a value of (22) million Iraqi dinars. The domestic production of eggplant reached the highest level in 2011 and 2013 (452.00 and 511.00) thousand tons respectively. The reason for this increase in quantities produced was the launch of the agricultural initiative that offered easy loans and subsidized prices of inputs such as fertilizers and seeds. While the lowest local production of eggplant in 2017, amounted (94.48) thousand tons. That was due to the dumping in the Iraqi markets and the surplus in the local market. That led to unwillingness of the Iraqi farmer to grow this crop, as well as the lack of support for the farmer and water scarcity.

RESULTS AND DISCUSSION
The amount of dumping, the margin of dumping of various products imported from Turkey and Jordan were calculated as follows: Table 4 shows the margin of dumping of goods in Iraq with Turkey for the years 2009-2017. If the margin of dumping is more than 2%, there is dumping. Otherwise, if it is less than 2%, there is no dumping. The percentages of the dumping margins of imported chicken from Turkey (257, 324 , 16 , 247, 269 ,123 , 126 , 165 , 23) respectively. shows that in all years of study there is dumping. The lowest margin was (16%) in 2011 and the highest one was (324%) in 2010. As for the percentage of dumping margin of imported egg from Turkey, the values were (110. 6,127,9,122,104,124,29)   Source: Prepared by the researcher based on Ministry of Planning data / annual import reports, FAOSTAT Export price, product price of country of origin, * product price of country of origin -export price ** Amount of dumping / export price, *** (amount of dumping / export price) * 100 2-Calculating the margin of dumping of agricultural commodities imported from Jordan: Table 5 shows the imported products from Jordan and the comparison of the normal value of the products with the export price for the period 2009-2017. The calculation of the margin of imports of chicken meat shows that there is a difference in prices (399, -11, 111, 151, 89 ,147 ,12, 208) respectively. The ratios show that in all years of study there is dumping except in 2011 where the margin was (-11). In years of dumping, lower margin was (12)   Source: Prepared by the researcher based on Ministry of Planning data / annual import reports, FAOSTAT Export price, product price of country of origin, * product price of country of origin -export price ** Amount of dumping / export price, *** (amount of dumping / export price) * 100

Calculating margin of dumping of agricultural commodities imported from Turkey:
It is clear from the above table that there is an intentional dumping from Turkey and Jordan during the study period, and that had negative and positive effects. Some of which is positive is the ability of Iraqi consumers to access goods that are not available locally at competitive prices, which satisfies the level of satisfaction of goods necessary for life and achieve commercial relations with neighboring countries reflected the existence of economic relations. As well as the development of the commercial sector, especially when the dumping policy continues and is fixed in the sense that it does not end with the achievement of a specific goal of the exporting country and thus places the importing country in shortage or inability to meet domestic demand due to the non-growth of a local industry or agriculture covering the demand. Dumping policy may lead to a situation of competition by local producers and to optimize resource utilization. The negative effects on the local situation is that dumping policy by neighboring countries causes pressure on producers and the inability to compete with imported products at low prices. This leads to the unwillingness of producers to produce, causing the repeated loss of producers to abandon their agricultural land and look for other occupations other than agriculture. As well as causing economic losses to the country and the dependency on the outside and the lack of food security. Possible explanations for the neighboring countries' policies may be based on their desire to compete to fill the shortage in the Iraqi market. Or to link their markets to foreign markets for political or economic purposes. This behavior may be to create external markets for these countries to expand their exports through the principle of price differentiation that requires the producers to sell at a low price in a more flexible market. The political and economic conditions that Iraq has experienced recently have caused the opening of borders to import without restrictions or conditions to fill the deficit and raise the welfare of the people after the years in which Iraq suffered economic sanctions from 1990 to 2003. Furthermore, the rise in per capita income in recent years which encouraged consumers import to meet the needs of the community. But, the Iraqi producer appeared to suffer from the policy of dumping, which requires putting solutions and developing policies to help the Iraqi producer. Iraq is considered one of the countries that have multiple resources and able to fill the shortage locally. What is important is only the sound policies and concise planning. Solutions to Dumping Policy 1. Activating anti-dumping laws such as the previously established tariffs, which were stipulated in Law No. (23) of 1984 and its amendments. They were intended to protect the national product from unfair competition by foreign goods, and to implement the 2009 law aimed at building a national industry by avoiding damage to certain activities 2. Working on the formation of specialized supervisory committees at customs to control the entry and the exit of imported and exported goods 3. Supporting production factors in the main agricultural production and encouraging private investment in agriculture 4. Developing strategic plans for industrial and agricultural development, which are part of a general strategy for economic development aimed at rehabilitating and developing the industry in order to enhance the role of the economic development process. In addition, giving the role to the government in this regard to beside the private and other sectors

Recommendations
The results showed the low levels of food security and the increase of the country's dependence on abroad in meeting its external goods needs. The percentage of dependency on imported chicken from abroad reached (20.1%), eggs (58.72%), and eggplant (8.12%) respectively in 2009. Dumping rates changed during 2017 to become for chicken (77.18%), egg (53.4%), and eggplant (13.54%), The hypothesis has been proved that there is intentional dumping practiced in the trade of some agricultural commodities with Iraq by Turkey and Jordan and this policy has negative effects on the domestic product. The opening of the border and the absence of supervision on controlling customs and imposing tariffs after 2003 led to the deterioration of the agricultural sector in a significant way.. The study recommended the need to increase the real investments of the agricultural sector and use them in a way to increase and develop the productive capacities of the agricultural sector and paying attention to the development of infrastructure in the agricultural sector and overcome the problems and obstacles that prevent the process of agricultural production. Activating trade policies such as customs tariff system, quotas and restrictions in order to support the domestic product and increase the contribution of the agricultural sector in the composition of GDP.