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Profile: The Fund for Mitigating the Effects of Drought and Natural Disasters on Agricultural Production

11-09-2024/in Analysis & Features, HLP /by Rand Shamaa

The Fund for Mitigating the Effects of Drought and Natural Disasters on Agricultural Production was established by Decree No. 114 of 2011. It operates under the Ministry of Agriculture and Agrarian Reform and has a dedicated directorate within the ministry. The fund’s headquarters is located in the capital, Damascus, with branches in the governorates.

Decree No. 114 of 2011 specifies that the fund’s mission is to compensate those affected by material losses due to damage to their agricultural or livestock production caused by drought, natural disasters, or adverse climatic, environmental, or biological conditions. This includes frost, heatwaves, floods, dust storms, hail, strong winds, heavy rain, insect infestations, and disease outbreaks affecting crops or animals.

According to the decree, compensation is provided only if losses exceed 50 percent of the affected party’s agricultural or livestock production, and the damaged cultivated area must cover more than 10 percent of the administrative unit’s land area. Compensation is limited to production costs only. Because the area requirement for compensation was too large, decree No. 21 of 2013 amended Decree 114 of 2011, reducing the affected area to 5 percent of the total cultivated area with the same crop within the approved administrative unit, which could be a village or a town. Decree 21 of 2013 also authorised the Prime Minister to modify the percentages of losses and the area.

Although Decree No. 114 of 2011 does not explicitly state the purpose of establishing the fund, it emerged in the context of official government reports and studies that began to seriously address climate change issues after long periods of neglect. Between 2006 and 2010, Syria was hit by a severe drought, exacerbated by the government’s chronic mismanagement of water resources and the liberal economic policies implemented as part of the “social market economy” paradigm adopted by the government from 2005. These policies led to the cancellation of farmer subsidies in 2008 and 2009, which doubled the price of diesel and fertilisers, threatening the livelihoods of millions, particularly in the Euphrates Basin. The failure of the state and its institutions to respond to the resulting humanitarian crisis caused hundreds of thousands of Syrians to flee the Euphrates Basin to major cities such as Aleppo and Damascus. This displacement is believed to have contributed to the motivations behind the 2011 revolution.

Decree No. 114 of 2011 defines drought as a reduction in rainfall below normal levels or its poor distribution, resulting in water and agricultural resource shortages, environmental degradation, and direct financial losses in agricultural production. Natural disasters are defined as unavoidable events caused by climatic, environmental, or biological factors deviating from their normal levels, leading to losses in agricultural or livestock production.

The fund is managed by a Board of Directors, chaired by the Minister of Agriculture, with members including the fund’s director, representatives from the Ministries of Finance, Local Administration and Environment, and Water Resources, as well as representatives from the Planning and International Cooperation Commission, the Agricultural Cooperative Bank, the Directorate of Plant Production, and the Directorate of Animal Production—both affiliated with the Ministry of Agriculture. Additionally, there are two representatives from the General Farmers’ Union.

The responsibilities of the Board of Directors include proposing policies, plans, and work programmes for the fund, and recommending the principles, conditions, and level of the fund’s contribution to compensating those affected. The board has the authority to accept donations, grants, assistance, bequests, and contributions in accordance with applicable laws and regulations. It is also responsible for proposing the fund’s annual estimated budget and approving its periodic accounts.

The fund’s director, appointed by a decision of the Minister of Agriculture, acts as the authorising officer for expenditure and contracts on behalf of the fund. The director’s duties include developing the operational programmes for the fund’s plans, implementing its general policies, representing the fund in external affairs and legal matters, preparing the annual budget proposal, and submitting regular reports on the fund’s activities.

The fund also operates an Early Warning Unit, which is concerned with disaster forecasting. This unit issues bulletins for monitoring drought and climate changes, and provides advice on precautionary measures that can be taken to mitigate the effects of disasters on agricultural and livestock production, using agricultural media outlets.

Decree No. 114 of 2011 specifies 11 sources of financial resources for the fund, including annual allocations from the general budget, 0.5 percent of the value of strategic crops delivered to state institutions annually, 0.5 percent of the value of agricultural exports and imports, one percent of fines for encroachments on state property, and one percent of fines for violations of the agricultural plan collected by the ministry. However, there is no mention of any compensation provided by the fund before 2013, and thus it is likely that none of the previous percentages were paid into the fund’s budget, except for SYP 25 million, which were provided as a one-time contribution by the General Union of Farmers. The amendment issued by Decree No. 21 of 2013 limited the fund’s resources to the allocations designated for it annually from the general budget. In no case may the total annual compensation paid by the fund exceed 80 percent of its total general balance.

The fund’s budget in 2013 amounted to SYP 1.7 billion, rising to SYP 14 billion in 2022, SYP 50 billion in 2023, and is expected to exceed SYP 88 billion in 2024. (The exchange rate of the Syrian pound relative to the dollar fluctuated significantly during these years. At the end of 2013, the rate was SYP 140 per dollar, while at the end of 2022, the rate settled at SYP 2,500, rising to SYP 13,000 in 2023. Currently, the dollar stands at around SYP 15,000).

Despite these figures, the total compensation paid by the fund from 2013 to the present, according to the fund’s director in an interview with the state-run Tishreen newspaper published on July 10, amounts to SYP 34 billion, distributed to 350,000 families. This implies that the average compensation per family is approximately SYP 100,000. These figures do not provide a timeline of payments that would allow for an accurate estimate in US dollars. Additionally, it is unclear why the director used the term “family” instead of “farmers” or “livestock breeders.”

The director mentioned that compensation does not cover actual losses and is calculated based on categories related to the extent of damage. It starts with a five percent compensation for 50 percent crop loss and goes up to 10 percent for total loss. The damage assessment is based on production costs rather than the market value of agricultural or livestock products.

In practice, to access the fund’s compensation, affected farmers or livestock breeders must submit a damage compensation request to their local guidance units within 15 days of the damage occurring, or they forfeit their right to compensation. The application must be accompanied by personal and agricultural regulation documents. A committee then assesses the damage, determines the extent, and compiles a list of affected individuals. This list is sent to the provincial Drought Fund Directorate, where it is reviewed to ensure the applicants meet the criteria: losses must exceed 50 percent of agricultural or livestock production, and the affected cultivated area must cover more than 5 percent of the total cultivated area with the same crop within the approved administrative unit. After determining the compensation amount, the lists are sent to a central committee for review before being presented to the fund’s Board of Directors in Damascus, which then decides the final compensation amounts.

Explained: Distribution of State-Owned Land to Farmers in the Al-Ghab Plain

04-06-2024/in Analysis & Features, HLP /by Rand Shamaa

The conditions for distributing state-owned agricultural land to farmers were established by Decree No. 166 of 1968, but the distribution of state-owned land to farmers in Al-Ghab Plain, Tar, Al-Ala, Al-Asharna, and Al-Rouj Plain was carried out under a special legislative decree a year later under Decree No. 66 of 1969.

These areas are considered extensions of Al-Ghab Plain and are administratively part of Hama Governorate, except for Al-Rouj Plain, which belongs to Idlib Governorate. These areas were originally swamps that were drained in the 1950s, transforming into fertile agricultural plains known for growing strategic crops such as cotton, sugar beet, sunflower, wheat, and tobacco.

Decree No. 66 of 1969 stipulated that the land distribution to farmers would be free of charge, provided the irrigated land does not exceed four hectares and the rain-fed land is not less than two and a half hectares. These areas are smaller than those distributed to farmers under Decree No. 166 of 1968, which was based on Article 13 of the Agrarian Reform Law No. 161 of 1958. Article 13 stipulated that the land area should not exceed eight hectares for irrigated or tree-planted land, and between 30-45 hectares for rain-fed land, depending on the annual rainfall rate.

Decree No. 66 of 1969 set conditions for distribution in Al-Ghab Plain, Tar, Al-Ala, Al-Asharna, and Al-Rouj Plain, including that the beneficiary must be a Syrian citizen, of legal age, primarily engaged in agriculture, and without sufficient income from other owned or invested agricultural land to support their family. These conditions are almost the same as those specified in Decree No. 166 of1968.

In addition to the above conditions, Decree No. 66 of 1969 prioritised distribution based on certain categories, giving preference to those licensed to benefit from agricultural land in those areas and the current tenants of state-owned land in the regions specified by the decree, who do not have another source of income.

Following this, the decree gave priority to “gardeners,” though it did not clearly define them, typically referring to those who care for trees. They are followed in rank by those who replaced absent licensees or worked on vacant lands, provided they have farmed the land for at least one agricultural season. Agricultural workers are at the bottom of the priority list.

Specialised committees appointed by the Minister of Agriculture and Agrarian Reform are responsible for the distribution process in the specified areas. These committees include farmers among their members. Their decisions only become effective after approval by a higher committee chaired by the Minister of Agriculture. This higher committee also includes representatives from the General Union of Farmers, the Ministry of Public Works and Housing, and the Distribution and Survey Director of the General Directorate of Cadastral Affair.

Beneficiaries of the land distribution must cultivate the land themselves, adhere to the investment and production plans set by the Ministry of Agriculture, and reside in the areas designated by the ministry. Failure to meet these conditions results in the forfeiture of the land, which is reclaimed and re-registered in the state’s name, with no right to claim compensation for the beneficiary’s effort and expenses.

Beneficiaries are prohibited from transferring the land or establishing any property rights on it, such as usufruct or easement rights for others, under penalty of distribution cancellation. However, the beneficiary may mortgage the land in exchange for a loan from the Agricultural Bank.

If the beneficiary of the land passes away, their heirs may assume the right to use the land, provided they meet the aforementioned conditions. If the heirs do not meet these conditions, the right to use the land transfers to the cooperative association to which the farmer belongs in the area. However, the heirs will be reimbursed for any investments and improvements made by the deceased on the land.

The distribution deeds serve as legal documents enabling the farmer to register the distributed land in their name in the land registry, whenever the Ministry of Agriculture decides. This means that the right to use the land (usufruct) can become full ownership, contingent on a decision by the Ministry of Agriculture, without specifying a timeframe. Consequently, some farmers possess ownership deeds for their land in the area, while others still hold beneficiary status.

Under Law No. 61 of 2004, which amended the agrarian reform laws, beneficiaries become full owners of the land, whether it is state-owned or agrarian reform land. Ownership is retroactively effective from the date of land distribution and is recorded in the land registry based on a request from the Directorate of Agriculture in the governorate. This is not the case in Al-Ghab Plain, Tar, Al-Ala, Al-Asharna, and Al-Rouj Plain.

Decree No. 66 of 1969 required landowners in the decree’s jurisdiction, who were not beneficiaries of the distribution, to adhere to the agricultural investment plans set by the Ministry of Agriculture. This is seen as a restriction on the owner’s right to manage their agricultural property, particularly since they did not benefit from the distribution process.

Law Regulating Taxation of State Agricultural Land May Impact HLP Rights

26-03-2024/in HLP, News /by Rand Shamaa

Law No. 4 of 2024, issued in February, lifts penalties and interests accrued since 2012 on unpaid fees related to agricultural reclamation, irrigation, occupancy, and utilisation of state properties, provided that the fees are paid within a year.

Firstly, Law No. 4 exempts those liable for agricultural land reclamation payments from penalties for delayed payment and the associated interest. According to the Agricultural Land Reclamation Law No. 29 of 2012, reclamation comprises activities aimed at preparing the land for cultivation, including irrigation, with the objective of enhancing the land’s agricultural productivity and economic value. These activities include constructing irrigation channels, developing agricultural roads, and removing stones to make the land suitable for plowing. The decision for land reclamation is made by the Minister of Water Resources in consultation with the Minister of Agriculture and Agrarian Reform, after seeking the opinions of the General Union of Farmers and the executive office of the concerned governorate. The decision includes a declaration of public benefit in reclaiming the land in question. The law does not require landowners’ consent for reclamation decisions, nor does it grant them the right to object.

The landowner or beneficiary of the reclamation process is required to pay the reclamation costs annually for 30 years. Those owning reclaimed land must adhere to the agricultural plan and are prohibited from constructing buildings on it that do not comply with relevant laws. The Ministry of Water Resources is responsible for notifying the Ministry of Finance about the beneficiaries of reclamation and the instalments due, which the latter will collect. The law prohibits any transfer of ownership of these properties before the reclamation costs, as determined by the Prime Minister’s decision, are paid. Therefore, a compulsory insurance marker is placed on the Land Records of these properties to prevent transactions involving them, which can only be removed after the due amounts are paid.

Secondly, Law No. 4 exempts those liable for irrigation fees from penalties for delayed payment and the associated interest. The Ministry of Water Resources imposes irrigation fees on owners and occupants of agricultural land in exchange for access to water from government irrigation projects. According to the Agricultural Land Reclamation Law No. 29 of 2012, farmers are charged an annual fee for each hectare of their land irrigated with water from government irrigation projects. This fee is paid in return for the cost of securing water for their land, and the operating and maintenance expenses necessary for irrigation and drainage facilities. The Prime Minister, based on a proposal from the Minister of Irrigation, determines the fee amount. In cases where water is used for non-agricultural purposes, the fee is determined based on the volume of water used, measured in cubic metres.

Thirdly, Law No. 4 of 2024 exempts occupants of state properties, under lease, investment contracts, or equivalent rent, from penalties and interest due on delays in paying occupancy fees. Occupants of private or public state properties, under such contract terms, pay an annual occupancy fee to the Directorate of State Properties and Agrarian Reform, which is part of the Ministry of Agriculture and Agrarian Reform.

Individuals extorting, without any proper justification, agricultural land belonging to the state can submit a settlement request to the Directorate of State Properties in the relevant governorate. Then, the Directorate imposes what is known as “equivalent rent” after creating an official report that acts as a formal lease or investment contract. Equivalent rent is the rental value of a similar property in the same area, assuming it was leased or invested in officially. In some cases, the Directorate may impose double the equivalent rent as compensation for missed rents due to the unauthorised extortion of the property. Double the equivalent rent may also be imposed if the property includes a structure, such as a dwelling or a well, among others.

To regularise the extortion of a property belonging to the state, the occupier must be a Syrian farmer, at least 18 years of age. If they already own or rent other agricultural land, they must demonstrate that their occupation of the new property will not increase the total area of land they benefit from beyond what is called the utilisation ceiling. The utilisation ceiling varies by region and whether the land is irrigated or rain-fed, ranging from three to 20 hectares. The occupier must be a resident of the village or live there permanently, not be a state employee, and be free of any outstanding dues for equivalent rent and its double. In the event of the occupier’s death, the same property can be leased to their heirs.

There is concern that Law No. 4 may entrench the current status of occupants (and the unsettled extortion by unauthorised occupiers) of state properties, who have replaced the absent occupants, including those displaced or forcibly moved to opposition areas. This could potentially extinguish the absent occupants’ usufruct right over the property. At the same time, new lease and investment contracts (as well as the newly settled equivalent rent) can serve as formal documents proving their occupation and leasing of state properties.