Iran’s government owes wheat farmers approximately 180 trillion rials ($69 million) for crops already delivered, forcing agricultural producers to cover cash production expenses out of pocket. Currency depreciation has slashed the dollar value of these delayed payments by roughly 36%, driving some desperate growers to sell directly to middlemen at a loss.
Delayed Payments Drain Cash Reserves for Iranian Wheat Farmers
Iranian wheat farmers are facing severe financial strain as they wait for the government to settle payments for crops already delivered to state storage facilities. Producers in western provinces like Kermanshah describe having to pay cash upfront for seeds, fertilizer, pesticides, labor, and irrigation while waiting indefinitely for administrative settlements, Iran International reported. “Most of my farming expenses have to be paid in cash, while the government pays us our own money in installments,” a farmer in the Sanjabi area told Iran International. Official figures released on October 9 by the Targeted Subsidies Organization indicate that out of 4,100 trillion rials ($1.57 billion) owed to wheat farmers, the government has paid roughly 3,920 trillion rials ($1.50 billion). This leaves about 180 trillion rials ($69 million) outstanding across various provinces, where Ghadam Borbor, deputy head of Iran’s National Wheat Foundation, estimates between 10% and 30% of payments remain unpaid. Hassan Norouzi, head of the Targeted Subsidies Organization, attributes these holds to administrative record discrepancies between his agency and the Ministry of Agriculture.
Iranian wheat farmers told Iran International that delayed government payments for their previous harvest are leaving them short of cash for autumn planting, while inflation and the falling rial erode the value of money they are still owed.Farmers described having to pay cash… pic.twitter.com/79xgjaBcMl
— https://x.com/IranIntl_En/status/2110289502916747742
Rial Depreciation Shrinks the Real Value of Harvest Earnings
The plummeting value of the Iranian rial has significantly eroded the purchasing power of what farmers eventually receive. Earlier this year, the government set guaranteed wheat purchase prices between 475 million and 495 million rials per metric ton. At an open-market exchange rate of 1,663,700 rials to the dollar at that time, the top rate equaled about $298 per ton. At the current open-market rate of approximately 2.615 million rials to the dollar, that exact same 495 million-rial payment is worth roughly $189. This represents a decline of about 36% in dollar terms, leaving farmers with funds that buy considerably less than they would have at the time of delivery. “By the time they pay us everything they owe for our wheat, gold and dollar prices and inflation will have multiplied, and the value of our money will have fallen sharply,” a western Iranian farmer told Iran International.
Rising Production Costs Force Farmers to Turn to Middlemen
As autumn planting begins, agricultural costs continue to outpace government support. The Ministry of Agriculture has priced wheat seed at between 720,000 and 756,000 rials ($0.28–$0.29) per kilogram, at least 45% above the highest guaranteed government purchase price of 495,000 rials ($0.19) per kilogram for harvested wheat. Faced with mounting expenses and no announced guaranteed purchase price for the 1405–1406 agricultural year (2026–2027), some producers are bypassing state silos entirely. Peyman Alemi, head of Iran’s Chamber of Agricultural Guilds, stated that cash-strapped farmers are selling their wheat to intermediaries for between 380,000 and 440,000 rials ($0.15–$0.17) per kilogram. Alemi warned that these discounted sales sacrifice crucial income and threaten to reduce domestic wheat production and strategic reserves in the upcoming season.