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Islamic State uses grain to tighten grip

SHEKHAN Iraq -- For Salah Paulis, it came down to a choice between his faith and his crop. A wheat farmer from outside Mosul, Paulis and his family fled the militant group Islamic State early last month. The group overran the family farm as part ...

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SHEKHAN Iraq -- For Salah Paulis, it came down to a choice between his faith and his crop.

A wheat farmer from outside Mosul, Paulis and his family fled the militant group Islamic State early last month. The group overran the family farm as part of its offensive that captured vast swathes of territory in northern Iraq. Two weeks later, Paulis, who is a Christian, received a phone call from a man who said he was an Islamic State fighter.

"We are in your warehouse. Why are you not here working and taking care of your business?" the man asked in formal Arabic. "Come back, and we will guarantee your safety. But you must convert and pay $500."

When Paulis refused, the man spelled out the penalty. "We are taking your wheat," he said. "Just to let you know we are not stealing it because we gave you a choice."

Other fleeing farmers recount similar stories, and point to a little-discussed element of the threat Islamic State poses to Iraq and the region.

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The group now controls a large chunk of Iraq's wheat supplies. The United Nations estimates land under IS control accounts for as much as 40 percent of Iraq's annual production of wheat, one of the country's most important food staples alongside barley and rice. The militants seem intent not just on grabbing more land but also on managing resources and governing in their self-proclaimed caliphate.

Wheat is one tool at their disposal. The group has begun using the grain to fill its pockets, to deprive opponents -- especially members of the Christian and Yazidi minorities -- of vital food supplies, and to win over fellow Sunni Muslims as it tightens its grip on captured territory. In Iraq's northern breadbasket, much as it did in neighboring Syria, IS has kept state employees and wheat silo operators in place to help run its empire.

Such tactics are one reason IS poses a more complex threat than al Qaeda, the Islamist group from which it grew. For most of its existence, al Qaeda has focused on hit-and-run attacks and suicide bombings. But Islamic State sees itself as both army and government.

"Wheat is a strategic good. They are doing as much as they can with it," says Ali Bind Dian, head of a farmers' union in Makhmur, a town near IS-held territory between Arbil and Mosul. "Definitely they want to show off and pretend they are a government."

The Sunni militants and their allies now occupy more than a third of Iraq and a similar chunk of neighboring Syria. The group generates income not just from wheat but also from "taxes" on business owners, looting, ransoming kidnapped Westerners and, most especially, the sale of oil to local traders. Oil brings in millions of dollars every month, according to estimates by Luay Al-Khatteeb, a visiting fellow at the Brookings Doha Center in Qatar. That helps finance IS military operations -- and is why IS-held oilfields in Syria are targets in U.S.-led airstrikes.

"Islamic State presents itself as exactly that, a state, and in order to be able to sustain that image and that presentation, which is critical for continued recruitment and legitimacy, it depends on a sustainable source of income," says Charles Lister, another visiting fellow at the Brookings Doha Center.

Seizing crops and livestock

In early August, Kurdish farmer Saeed Mustafa Hussein watched through binoculars as armed IS militants shoveled wheat onto four trucks, then drove off in the direction of Arab villages. Hussein says he does not know what became of his wheat. But he knows that IS runs flour mills in areas it controls, and he believes that his wheat was likely milled and sold.

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He had 54 metric tons of wheat on his farm in the village of Pungina, northeast of Arbil, wheat he had been unable to sell to a government silo or private traders because of fighting in the area.

The militants also took 200 chickens and 36 prized pigeons.

"What made it worse was that I was helpless to prevent this, I couldn't do anything. They took two generators from the village that we had recently received from the Kurdish government after a very long process," Hussein says.

Residents are too scared to return even though Kurdish fighters are now in control. "We think the Islamic State laid mines to keep us from going back," says neighbor Abdullah Namiq Mahmoud.

There are scores of similar stories at displacement camps across Kurdistan.

"We escaped with our money and gold but left our wheat and furniture and everything else," says farmer and primary school teacher Younis Saidullah, 62, a member of the tiny Kakaiya minority.

"Everything we built for 20 years using my salary and our farming -- it's all gone. We are back to zero," he says, sitting on the floor of a tent at a United Nations-run camp on the outskirts of Arbil.

A silo under attack

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One target was the wheat silo in Makhmur, a town between the cities of Mosul and Kirkuk. The silo has a capacity of 250,000 metric tons, or approximately 8 percent of Iraq's domestic annual production in 2013.

IS attacked Makhmur on Aug. 7. But even in the weeks before that, the group had found a way into the silo and the Iraqi state procurement system.

Abdel Rizza Qadr Ahmed, head of the silo, thinks IS forced local farmers to mix wheat produced in other, IS-controlled areas into their own harvest. The farmers then sold it to Makhmur as if it all had been grown locally. In the weeks before the attack, the silo purchased almost 14,000 more metric tons than it had in 2013. That extra wheat is worth approximately $9.5 million at the artificially high price Baghdad pays farmers.

Ahmed thinks IS was looking to make money from the wheat and ensure there was bread available for Sunnis in the areas it controlled.

Ahmed says it was not his job to investigate the source of the grain, just to buy it. "We just take the wheat from the farmers, and we don't ask 'Where did you get this from?'" he says.

Huner Baba, local director general of agriculture, says he too thought traders and farmers had sold wheat from outside the region.

But Baghdad usually pays its wheat farmers around two months after they deposit their produce, so wheat farmers around Makhmur -- and therefore IS -- had not yet been paid by the time IS militants entered the town on June 7 and, according to Baba, headed for the silo.

The militants were met by Iraqi Kurdish fighters, known as Peshmerga, and fighters from the Kurdistan Worker's Party (PKK). After IS took the silo, Baba says, they installed snipers there. He speculates the militants believed U.S. warplanes would not strike the facility, which is in the center of town.

"They want to get people on their side especially the Arabs. Maybe that's why they didn't do anything to the wheat, not to anger people," he says.

IS held Makhmur for three days before the Kurdish fighters and U.S. air strikes on IS positions -- though not on the silo -- drove them out. U.S.-led air strikes did hit grain silos in the northern Syrian town of Manbij on Sept 28. A group monitoring the war says the aircraft might have mistaken the mills and grain silos for an Islamic State base. There was no immediate comment from Washington.

The year ahead

The big worry now is next season's crop. In Nineveh province, home to the capital of the group's self-declared caliphate, 750,000 hectares (1.8 million acres) should soon be sown with wheat and 835,000 hectares with barley, an Iraqi agriculture ministry official says.

The official says the province normally has 100,000 farmers. But thousands have fled.

Iraqi farmers normally get next season's seeds from their current harvest, keeping back some of the wheat for that purpose. IS controls enough wheat so finding seeds should not be a problem. It also controls Ministry of Agriculture offices in Mosul and Tikrit, which should have fertilizer supplies.

But getting the seeds and fertilizer into the right hands will be a problem. Mohamed Diab, director of the World Food Program's Regional Bureau for the Middle East, North Africa, Central Asia and Eastern Europe, says it is "highly unlikely" that displaced farmers would return.

"The picture is bleak regarding agriculture production next year," he says. "The place where displacement has happened is the main granary of the country."

That's especially true for non-Sunni Arab farmers. Those who have remained on their land just outside IS-held territory fear the militants will soon take their villages, and their harvested but unsold crops.

Even if that does not happen, they say, they will not plant after the first rain, which typically comes at the end of September or in early October.

Farmers in the town of Shekhan, nestled among sun-bleached wheat fields, say they have no hope of getting the seeds, fertilizer and fuel needed to plant because the provincial government in Mosul is under IS control.

"The real problem is how to get seeds to those inside Mosul and surrounding areas," says Nineveh Governor Atheel Nujaifi, who believes production will drop next season.

Bashar Jamo, head of a local farmers' cooperative, is also worried. "The most important thing to us is agriculture, not security. Maybe (IS) will have a state, maybe an army, but all we need is to be able to farm."

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