investment – Syria Report

Since 2022, the Damascus-run Idlib governorate has been organising annual public auctions for investing in lands owned by absentees, including people forcibly displaced from Idlib. The winning investors in these auctions must cultivate specific crops according to the annual agricultural plan approved by the Ministry of Agriculture and Agrarian Reform. This requirement applies to both investors and farmland owners residing in regime-controlled areas. In both cases, the farmers face numerous difficulties in completing the cultivation of their land or in reneging on their investment contracts.

The Idlib governorate declared that its Announcement No. 1075, issued on October 15, 2023, serves as an official notification to all previous auction winners for the 2023-2024 agricultural season, emphasising the need to settle their financial obligations within three days. Failure to comply will lead the governorate to take legal action, including fines for withdrawal or default and re-listing these lands in new public auctions. In case of default, investors risk losing their initial deposits. They may be liable for damage costs, potentially leading to administrative seizure of their properties, as happened with an investor in rural Hama in February 2022.

The Idlib governorate invited investors to participate in public auctions for 18,169 hectares of uncultivated, non-forested land on November 15, 2023. These lands were previously offered for investment. However, they attracted no bidders, or the winners were deemed to have withdrawn due to non-fulfilment of their financial obligations.

A local correspondent for The Syria Report explained that the lack of previous investment in these lands is partly due to their proximity to the front lines between regime and opposition forces, making them relatively dangerous. This has led to some winners withdrawing their investments or failing to complete the required documentation and financial obligations.

The Idlib governorate had divided the lands offered for investment in auctions according to the administrative division of areas under regime control in Idlib. The auctions were held in the last quarter of 2023 at the governorate’s General Secretariat building in Khan Sheikhoun. The winning investors received their contracts from the local contracts office so they could start farming.

The Syria Report’s correspondent reported that the bidding procedures have become well-known and are being repeated for the second consecutive season in Idlib. Typically, agreements are made among investors within the same area to bid for lands owned by their acquaintances or relatives.

However, other reasons prevent farmers, whether they are landowners or investors, from completing the cultivation of their land. These include the obligation to adhere to the agricultural plan set by the Ministry of Agriculture and Agrarian Reform regarding the type of crops and the conditions for obtaining diesel and other production essentials like fertiliser and seeds at government-subsidised prices. Many farmers cannot meet these conditions, leading them to purchase these essentials at market prices, increasing their production costs. This is one of the reasons why some farmers default on completing their investment contracts.

To encourage wheat cultivation, the Idlib Agriculture Directorate has allowed farmers to plant wheat even if they exceed the areas determined by the Ministry’s agricultural plan for the 2023-2024 season in Idlib. The Director of Agriculture in Idlib, in a recorded meeting on October 21, 2023, and published by the Ministry of Agriculture’s Agricultural Media page on Facebook, stated that the plan allocated 18,000 hectares for wheat cultivation in Idlib Governorate, consisting of 4,000 hectares of irrigated land and the rest of non-irrigated land. However, at the same time, the directorate did not provide incentives or facilitation for obtaining official documents that would enable farmers to obtain production essentials at subsidised prices.

Farmers receive specified quantities of diesel, termed “agricultural diesel,” for farming and irrigation purposes, priced officially at SYP 2,000 per litre. This diesel is distinct from so-called “free diesel,” which is available at gas stations at SYP 13,000 per litre. On August 9, 2023, the Agricultural Subcommittee, chaired by the governor of Idlib, decided to provide wheat farmers with 120 litres of agricultural diesel per hectare annually. The distribution of agricultural diesel is automated, using the “smart” family card managed by Integration for Trading LLC (Takamol) Company.

Landowning farmers must obtain an “agricultural organising notice” document based on proof of land ownership. This document allows them to access government-subsidised agricultural essentials like seeds, fertilisers, and agricultural diesel and obtain a crop certificate of origin. The agricultural organising notice is not a deed of ownership in itself. In contrast, investing farmers, either non-landowners or joint owners, must obtain a document called a “physical inspection notice” issued by a committee formed by the Agricultural Extension Unit affiliated with the General Union of Farmers. Based on the “physical inspection notice,” which notes the land surface and specifications, the committee determines the quantity of subsidised agricultural diesel for the farmer.

The General Organisation for Seed Multiplication set the price of wheat seed this year at SYP 3,950 per kilogram. Wheat seed is distributed at 250 kilograms per hectare for irrigated land and 200 kilograms per hectare for rainfed land. This distribution occurs between November 15 and December 15 each year, the optimal period for wheat planting.

Between November 2022 and March 2023, the Hama governorate published lists containing the names of investors in vacant arid lands for the 2023-2024 agricultural season. Vacant lands are those owned by absentees forcibly displaced to opposition-controlled areas in northern Syria. These lands include salikh, or arid, lands not planted with trees.

There are two types of investors: those who won in the public auctions to invest in absentee-owned lands, and relatives whose requests to invest in their absent relatives’ lands were approved by the Hama governorate without having to enter the auctions. Separate lists of investors were issued for each type. In both cases, investors must pay an investment fee called ihala. For auction winners, the fee is the final bid price, while for relatives, it is the initial price set by the governorate.

In October 2022, the Council of Ministers issued Decision No. 12011, which gave priority to first-degree relatives in investing in vacant lands offered for agricultural investment, without requiring these relatives to enter future public auctions. The Council of Ministers also required first-degree relatives to declare the properties they wish to invest in 15 days before the public auctions.

However, contrary to what Decision No. 12011 had stipulated, the Hama governorate’s lists included first- but also second-degree relatives. First-degree relatives are a person’s parents, spouses and children, while second-degree relatives include grandparents, siblings and paternal grandchildren.

According to an announcement posted on January 11 to the Hama governorate’s Facebook page, the central committee, which allocates the farmlands for investment, allowed investors to pay the investment fee in two installments: the first in January and the second in June 2023. This central committee is headed by the Hama governor and includes representatives from the Baath Party branch, Hama police leadership, the Agriculture Directorate, the governorate Executive Office and Legal Department and the Hama Farmers Union. There are also spatial technical committees responsible for counting and identifying absentee lands, which branch off from this central committee.

According to a local correspondent for The Syria Report, the Hama governorate’s General Secretariat delivered more than 2,000 investment contracts to investors through a single window in the governorate building. People can invest in more than one piece of land, each of which has a separate investment contract that includes the property number. Under Decision No. 12011, in order to receive the investment contract, the investors must pay the investment fee and financial guarantees, and provide documents that include a pledge to cultivate the land according to the agricultural production plan determined by the Ministry of Agriculture. Finally, they must also obtain a security approval to invest in the land.

Under Decision No. 12011, absentee landowners with vacant land are considered deceased. Relatives investing in the land must present an inheritance inventory document. The document aims to identify the “deceased” person’s heirs and their degree of kinship, as well as each heir’s shares in the inheritance. The inheritance inventory document has no relation to the deceased’s properties and does not include their assets or real estate. In November 2022, the Hama governorate amended the Council of Ministers decision, allowing first- and second-degree relatives to submit a civil registration extract instead of an inheritance inventory when investing in absentee lands.

According to the correspondent, women make up a large portion of the names on the list of relatives investing in the absentee lands. This is due in part to some forcibly displaced male landowners with vacant lands depending on their female first- and second-degree relatives to invest in their vacant properties. Such arrangements are often done by agreement between the parties which also includes sharing the costs and profits. In most cases, this agreement is made to prevent those outside of their family from seizing and extorting absentee lands.

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