By: Vali Koozegar 

Introduction
One of the strategies that some countries have adopted regarding food security is to use the agricultural capabilities of other countries which have sufficient and cheap resources for production. This is known as "extraterritorial cultivation" or in simple words "agriculture in other countries". The goals of extraterritorial cultivation vary from country to country and from company to company. These goals may include creation of food security in the investor country, production of energy through bio-fuels, production in the target country for Export of agricultural products, or a combination of all. So far, numerous benefits have been found for extraterritorial cultivation. Providing part of the country's food security, supplying the country's needs through domestic investors, using extraterritorial resources (water, land, etc.), planning for conservation and revival of internal basic resources, supporting the private sector, creating a safe market for the investors, providing a suitable market to export farming machinery, exporting technical and engineering services, creating a suitable environment for employing agricultural graduates, gaining skills through stable presence of the private sector in the global arena, and Exchange of scientific, technical and executive information with other competitors in the target countries and transfer of experiences to the country are all the significant advantages of this approach.
These considerations are also true about Iran’s agriculture. Despite the strengths and opportunities of the country's agricultural sector, cultivation is grappling with serious obstacles in Iran, including the existence of vast arid and semi-arid regions, climate change, successive droughts and limited water and soil resources. Ninety percent of water resources in Iran are used in agricultural sector and, according to the international reports, Iran is currently in a critical stage in this term. Meanwhile, the country’s agriculture is suffering from soil erosion, salinity and gypsum. On average, we can say that one hectare consumes about 10,000 cubic meters of water. Therefore, each hectare of extraterritorial cultivation can be considered equivalent to 10,000 cubic meters of water conservation. Therefore, extraterritorial cultivation is a kind of virtual water trade in the sense that the crops are produced by the use of another country’s resources, especially water, and because most of the water that is consumed during the production process is not physically present in the final product, it is called “virtual water.” On the other hand, the problems that exist regarding food imports such as the diplomatic equations especially in times of crisis, sharp price fluctuations, and changes in the strategic reserves have made extraterritorial cultivation to gain a significant role as an alternative solution.
So, Due to the lack of water resources in Iran, restrictions on the activities of the agricultural sector and prevent serious problems in stabilizing food security in the country, the Iranian government embraced the extraterritorial cultivation as a way to support the country’s food security. According to article 1 of the regulation of extraterritorial cultivation, this kind of cultivation is defined as "use of resources, factors, capacities and facilities of other countries to produce agricultural products required in order to maintain basic production resources and improve food security and other industrial needs of the country." Article 2 also states that "the Ministry of Agriculture is obliged, with cooperation of Ministry of Foreign Affairs as well as Ministry of Economic Affairs and Finance, to provide the necessary incentives for extraterritorial cultivation in compliance with the relevant laws and regulations."
Following the approval of this regulation At the Cabinet meeting in 2016, the mission of developing extraterritorial agricultural activities was assigned to the Esteghlal Jihad Institute, and it was decided that the above activities would be implemented through the Green Jihad Company and that other subsidiaries of the institute would also support it.
In line with implementation of the regulation and based on different studies, the government nominated a number of countries that were prone to investment. The countries were examined in terms of climate change, average monthly rainfall, renewable water resources, average monthly temperature, vastness and quality of lands, ease of doing business, human resources, transportation infrastructure, distance, and security. Finally, the extraterritorial cultivation working group selected eight countries of Azerbaijan, Kazakhstan, Ukraine, Russia, Indonesia, Ghana, Tanzania and Brazil as the countries that were more compatible with Iranian society. In order to implement the plan, the Ministry of Agriculture, in cooperation with the National Development Fund, the Ministry of Foreign Affairs, the Ministry of Labor and Social Welfare, the Central Bank and the Ministry of Finance started its technical negotiations with the target countries and signed a number of contracts for cooperation, participation and lease of potential lands, which ultimately led to the cultivation of the required products in accordance with the climatic conditions and soil of the target country.
Finally, with participation of the private sector, especially the Iranians that were living abroad, 1,200 hectares in Ukraine, 13,000 hectares in Kazakhstan, and 3,000 hectares in Azerbaijan were planted with crops such as wheat and corn, and the final product were brought into the country. At the same time, some other countries, such as Thailand and Russia, also presented several proposals to host the same extraterritorial projects, which are currently under investigation by the Iranian officials.
Meanwile, Iranian President Rouhani has also repeatedly stressed the importance of extraterrestrial cultivation. For example, in a joint meeting with the minister and senior managers of the Ministry of Energy on December 1, 2018, he said that "we should figure out that whether it is economically true to grow the fruits and vegetables in our own country, or we should turn to the extraterritorial cultivation and cultivate the crops that need a lot of water in the countries that enjoy better water resources. This can have great effects on us. During my visit to Thailand, the country’s prime minister proposed the cultivation of rice in the country's agricultural fields. In Thailand, rice fields are cultivated three to four times a year and we have to calculate whether it serves our interests to grow the rice domestically, or to put it for extraterritorial cultivation."
Mahmoud Hojjati, the then Minister of Agriculture, also repeatedly called the extraterritorial cultivation as one of the priorities of his ministry. For example, at a meeting of the Resistance Economy Coordination Headquarters on April 15, 2014, he noted that the program of his ministry generally revolves around four main axes: increasing the production of strategic crops, expanding the stocks of strategic agricultural products and regulating their markets, developing the exports of agricultural products based on the capabilities of the country, and using the advantages of the extraterritorial cultivation.
Cases like this show that despite the criticisms and oppositions against the extraterritorial cultivation as a program that will lead to the weakening of domestic agriculture, loss of job opportunities, and dependence on foreign countries, the plan is considered by Rouhani’s government as a way to strengthen Iran's economic relations with other countries, share experience and technology, preserve domestic water resources, and prevent soil erosion.

Iran’s extraterritorial cultivation in Kazakhstan
During the recent years, Kazakhstan has signed a number of MOUs and bilateral investment agreements with Iran to make investment in the country’s water infrastructure as well as production of raw materials and agricultural crops during the years of sanctions in parallel with development of transportation, transit, and grain swaps besides oil.
Investigation of the successes and challenges of the private sector in extraterritorial cultivation at a meeting on December 26, 2017, and also Mahmoud Hojjati's emphasis on the agricultural capacities of the two sides, truly proved the correctness of the policies of the Ministry of Agriculture in selecting Kazakhstan as one of the target countries. Hojjati called the extraterritorial cultivation as one of the most important areas of cooperation in the field of agricultural exchanges between the two countries. Due to the significance of agriculture in Iran-Kazakhstan relations, the chairmanship of the joint economic commission of the two countries on the Iranian side was handed over to Iran’s Ministry of Agriculture, something that will have a direct impact on the follow-up and implementation of the extraterritorial cultivation plan in Kazakhstan.
On the Kazakh side, this desire is clearly visible too. Former Kazakh President Nursultan Nazarbayev has repeatedly stressed the high capacity of Iran-Kazakhstan relations. For example, Nazarbayev called agriculture as the most attractive field of cooperation on April 28, 2016, adding that "the Iranian companies that are producing cereals, livestock, meat, dairy, and other processed products will have a great impact on their country’s trade with Kazakhstan." He also called for cooperation of the two countries' private sector in extraterritorial cultivation, animal husbandry, and the establishment of meat production complexes.
Kazakhstan is enjoying a high capacity in extraterritorial cultivation and joint production with Iranian companies. Production of wheat, oilseeds such as rapeseed, safflower, soybeans, and rice (especially in 60,000 hectares of Kyzylorda’s farms), animal feed, dairy, vegetables, and improved seeds are among Kazakhstan's capacities. That is why, following the negotiations and agreements between the two countries' officials, Iranian companies wasted no time to start their activities in Kazakhstan, cultivating more than 13,000 hectares of the country's land. In the recent years, many officials and experts from different provinces of Iran, especially Khorasan Razavi, Golestan and Mazandaran, have made several visits to different regions of Kazakhstan, such as Kyzylorda and Mengestao, which have led to several agreements between the two countries.
 
Advantages of Kazakhstan in extraterritorial cultivation
The Republic of Kazakhstan has many geographical, political and economic advantages over other regional countries when it comes to extraterrestrial cultivation. The existence of vast farms (irrigated and rainfed) thanks to the country’s area of ​​2.5 million square kilometers (about three times more than the size of Turkey or Pakistan and about 1.6 times more than Iran), the existence of numerous rivers (Irtysh, Ural, Ili, Zhem and Tobol), the existence of glaciers as sources of water (Alatau and Altai), the existence of multiple lakes (Aral, Zaysan), political stability (the leadership of Nursultan Nazarbayev for 27 years and the peaceful transfer of power to Qasim Tokayev in March 2019), economic growth and development with a GDP of $ 159 billion in 2017 (Central Asia's first economic power), membership in the Eurasian Economic Union (along Russia, Kyrgyzstan, Belarus and Armenia), close and stable relations with Iran during the last three decades, easy access of Iranian exporters to the land route (Turkmenistan-Kazakhstan), connection of Iran-Turkmenistan-Kazakhstan railway (East Caspian railway), direct flight from Tehran to Almaty, sea connection through the Caspian Sea (between Iranian ports and the ports of Aktau and Atyrau) are among the privileges that makes Kazakhstan an interesting destination for the Iranian investors.
Moreover, Kazakhstan's agricultural sector needs urgent investment. About 20 percent of the workforce is formally engaged in agriculture, but only 2.1 percent of the total investments goes to this section. Kazakhstan imports more than 25 percent of its food, despite its low population. Since 2010, Kazakhstan has tried to create an attractive environment for foreign investors based on a new plan called “the Business Roadmap to 2020.” the foreign companies do not need to have a local partner to be able to invest in Kazakhstan and they can directly do that by registering a company. They also can build a property and sell it under the title of a legally registered company. The investor has the right to calculate the damages caused by the illegal actions and the Kazakh government guarantees the stability and validity of the contracts concluded between the investors and state entities. After paying taxes and other legal payments, investors can freely use their income.
So, due to such favorable conditions, More than eight thousand companies with foreign capital are registered in this country. Kazakhstan favorable conditions for investment, such as market economy, favorable taxes, appropriate customs regime and favorable foreign investment protection laws have made the country a good destination for the extraterritorial cultivation. In addition, , the existence of vast rainfed farms with desirable yields, the existence of vacant land capacity and the right to own property for foreign investors are other advantages of Kazakhstan. Low dependence rate on grain imports, low rate of land use, lack of agricultural workers, and lack of mechanization as well as technical knowledge finally led to the approval of a development program in the Republic of Kazakhstan for 2013-2020(Agribusiness-2020) as well as 4.5 times increase in the amount of government subsidies paid to the agro-industry sector in 2020, something that will definitely help the country to attract more foreign investment. Therefore, Kazakhstan would undoubtedly be a unique partner for Iran in the extraterritorial cultivation.
Overall, Iran's entry into the issue of extraterritorial cultivation in Kazakhstan is a positive and new approach to the economic potentials of the Central Asian countries. From an economic point of view, the Republic of Kazakhstan is one of the most important and influential members of the Eurasian Economic Union after the Russian Federation; at the same time, given the implementation of the Free Trade Agreement between Iran and the Union since October 2019, it is necessary to study the products produced in extraterrestrial cultivation in terms of customs and preferential tariffs, exports and imports, and banking in accordance with the provisions of the Free Trade Agreement.
It is worth mentioning that Iran's entry into extraterritorial cultivation in Kazakhstan took place in a relatively favorable political and economic environment in the wake of 2015 nuclear deal. However, after the unilateral withdrawal of the United States, the re-imposition of sanctions against Tehran especially in the banking sector, foreign currencies’ significant increase in price, and lack of subsidized foreign currency for the private sector, it is necessary for Iran to find operational ways to maintain and strengthen the extraterritorial cultivation in Kazakhstan .
Finally, we should notice that De-escalation in the field of water resources is one of the most important achievements of the Central Asian countries in the recent years, which has led to reduce gaps and differences between upstream and downstream states in this region. In such circumstances, Iran can freely abandon the traditional concerns about the reaction of the upstream countries (Kyrgyzstan and Tajikistan) and expand its relations with downstream countries (Turkmenistan, Uzbekistan and Kazakhstan). Therefore, given the experience of Iran in recent years regarding the extraterritorial cultivation in Kazakhstan, there is a possibility for Tehran to repeat this experience in Uzbekistan and Turkmenistan, which requires comprehensive and purposeful planning by the relevant Institutions, especially the Ministry of Foreign Affairs and Ministry of Agriculture.

Vali Koozegar is a senior researcher at the Institute for East Strategic Studies