In terms of remarkable potentials in factors of production and resources of the agriculture sector including arable land, diverse climates, and natural resources such as forests and pastures and rich genetic reserves, the sector makes a significant contribution to the GDP and plays remarkable roles in promoting non-oil export and creating jobs for labor force.
 
Financial market of the sector is also of special importance because of its effective role in providing financial resources and capital required for investment and development. The existence of an efficient financial market, which meets the financial needs of farmers with relatively low costs, is deemed as one of the  prerequisites for agricultural development.
 
Iran's Outlook
The climatic condition in Iran is one of the most exclusive ones in the world. Having a four season climate is an advantage for agricultural operations nationwide. The temperature difference in winter between the warmest and the coldest spots sometimes equals  around 50 degrees. In general, Iran is located in an arid and semi arid region of the world with reference to the precipitation level.
 
Iran's Agricultural Outlook
Natural resources cover 135.2 million hectares, about 83.3 percent of the land, as follows:
-        14.2 million hectares of forest (10.5 percent);
-        2.5 million hectares of woodland and shrubs (1.9 percent);
-        86 million hectares of pasture (63.6 percent);
-        32.5 million hectares of desert land (24 percent);
The remaining national areas(about 27 million hectares) include cultivated land, land allocated to residential areas, lakes, and ponds. Out of 162.25 million hectares area of the nation, as of now, 18.5 million hectares (11.4 percent) are included in the production cycle of agriculture.
 
Water Resources
Out of the whole water gained throughout the nation, about 86 billion cubic meters are used for irrigation. In agriculture sector, the amount of water gained is 45 billion cubic meters from water wells (52.3 percent), 18 billion cubic meters from springs (20.9 percent), 8 billion cubic meters from underground canals (9.3 percent), and 15 billion cubic meters from surface running water (17.4 percent). Such amount of water is dedicated to agriculture sector for irrigation of 7.4 million hectares of irrigated lands. The average precipitation in Iran has been 250 mm whereas the share of agriculture sector from the water consumption of the nation is 92 percent.
The average share of the value added in agriculture sector out of gross domestic product (GDP), in current prices, has been about 11.1 percent, and in fixed prices of the year 1997, about 13.5 percent.
 
The average share of exporting agricultural commodities out of non-oil exports of the nation is about 24.3 percent. Dry goods, herbal and livestock products have the highest shares of values in exporting agricultural commodities. The average share of agricultural commodities import out of the total import of the nation has been about 11.7 percent. Importing agricultural commodities during recent years have been fluctuating, for which the most important reason is drought and the need to import them. Grains dedicate the highest share of import values of agricultural commodities by itself.
 
Livestock, Poultry, and Aquaculture Subsectors of Iran
The livestock, poultry, and aquaculture subsectors account for over 27.8 percent of the total value added of agriculture sector and over 2.9 percent of gross domestic product of the nation in current prices.
 
Some of the most important strong points of the subsectors are as follows:

•     Diversities of existing livestock ecotypes and species;
•     Available facilities and equipment, and proper investment in industrialized animal husbandry;
•     Available water resources and fertile lands (both on shore and off shore), climatic diversity, biodiversity aquaculture reserves for their reproduction, fresh waters, salt and semi salty water;

Horticulture
Some of the most significant facilities and capabilities of horticulture subsector include:

    Comparative advantage in export;
    Diverse climates and fertile lands to produce various horticultural products in different parts of the country;
    Remarkable capacities to develop horticulture sub-sector (steep, rocky, salty, and desert lands;
    Germ plasm and variety of horticulture products;
    Proper and unique capacities of the horticulture sub-sector to maintain and create new jobs;
    Ability to grow organic products in horticulture sub-sector;
    Comparative advantage of most of the horticultural products in terms of production and economic value per water unit;  

 
Among horticultural products, pistachio gardens have the highest share of cultivated lands, having about 431 thousand hectares, corresponding to 16.8 percent of the whole gardens nationwide. The next ranks, in order, pertain to grapes products about 302 thousand hectares or 11.8 percent, dates about 244 thousand hectares or 9.5 percent, and apples about 229 thousand hectares or 8.9 percent. The above four products constitute 47 percent of the whole gardens of the country.
 
 
According to FAO's statistics, in 2008, Iran was ranked the first country in the world in terms of pistachios production. It has also been provided with the following world rankings in recent years:

•     Apricots and dates: the fourth
•     Cherries and almonds: the third
•      Walnuts and apples: the fourth
•     Black cherries and figs: the fifth
•      Peaches and lemons: the sixth and
•     Hazelnuts and oranges: the seventh

 
Investment in the Agriculture Sector
The agriculture sector's share in the formation of fixed gross capital (in current and constant prices of 2007) has been around 4.8 percent within the recent years. Although the sector's share is not high, it accounts for 13.5 percent of GDP (constant price in 2007) and more than 18 percent of the national employment. Such a trend indicates the great potentials of the sector on the one hand, and represents the decline in tendency towards investment in the sector on the other hand. Thus, the sector needs fundamental reforms in various aspects including the production structure, pricing policies in order to act more dynamically and to attract required and quality investments.
 
The statistical study of foreign investments in Iran indicates that the agriculture sector has been the least successful sector of the economy in attraction of foreign investments. The following table displays the statistics of foreign investments, protected by Foreign Investment Support Act (FISA) within 2003-2008. As the table indicates, during the above-mentioned period, only seven agricultural projects, to the value of 20,483 thousand USD, have been executed through foreign investments, accounting for only 0.06 percent of the total foreign investment throughout the country. Introduction of investment opportunities in the agriculture sector to domestic and foreign investors will undoubtedly increase the investment trend in the sector.
 
Investment Supporting Entities in the Agriculture Sector of Iran
1. Agricultural Products Insurance Fund (APIF)
The Agricultural Products Insurance Fund (APIF) was establishedaimed at supporting farmers and livestock producers incurring loses and damages in their products due to unexpected natural disasters.  
 
Chief among the functions of the fund is as follows: providing various farming, livestock, poultry, honeybees, silk worms, and aquacultural products; as well as projects of forestation, ranching and watershed with supporting and insurance coverage against losses and damages incurred due to unexpected and natural disasters such as: hailstorms; storms and hurricanes; drought; earthquake; flood; frost and freeze; fire; thunderbolts; general and quarantine plants diseases; and pests; as well as general and quarantine contagious diseases of animals, aimed at achieving the objectives and implementing the policies in the sector.    
 
2. Investment Guarantee Fund
Most of the entrepreneurs in different economic fields of the country, due to lack of adequate collaterals, do not have access to credit facilities and, thus, they have not been able to execute their planned projects and realize their ideas. Accordingly, Investment Guarantee Fund, as a financial and legal entity involved in credit guarantee, is among those organizations, which can initiate operation in capital and money markets and partially or entirely resolve the existing problems.
 
One of the most important forms of transactions guarantee in financial markets is credit guarantee, which covers business risks of granted credit facilities to those banking customers lacking adequate collaterals. Most of the credit guarantee projects are aimed at two major objectives:
-        Increasing accessibility for a target sector to financial services though reduction of risks and transaction costs;
-        Encouraging the banks to provide credit facilities to those customers who have little access to financial and banking services or entrepreneurs who have innovative and new projects but lack adequate collaterals.
 
Investment Guarantee Fund was established in 1994 aimed at solving the problems (such as lack of adequate collaterals) applicants of investment projects face.
 
Foreign Investment Encouraging and Supporting Policies in Iran  
Attraction of capital and investment is a way to facilitate the movement of economy towards development and job creation. It can also be used as leverage for accelerating economic growth and development.
 
Studies indicate that foreign direct investment (FDI), conducted in any ways, will have considerable impacts on macro economy variables including decline of interest rates; reduction of foreign currency rates; boost of economic growth; increase in government's tax revenues; decrease in government's debts; improvement of income distribution; enhancement of technology transfer; rise of employment; exports promotion; imports fall; and positive effects on balance of payments.   
 
Foreign investment would lead to reforms in management system, exchange of economic experiences and utilizing modern technologies. In Iran, there has been a great effort to gain a large volume of global capital transfer and many of the obstacles and restrictions have been removed. However, Iran's share of global capital is not that much yet.
 
Iran is considered an appropriate country for business and enjoys various specifications suited for investment:
 
1. Strategic Location: An exclusive location in the heart of the intersection where Middle East, Asia and Europe meet and an area, which owns an immense significance because of business, customs, and tax arrangements as well as regional and cross-regional investments;
2. Facilities of domestic markets and vicinity to other markets: The vast domestic markets, with an ever-increasing population of 70 million, and quick accessibility to neighboring populated markets;
3. Labor force advantages: A huge reserve of trained, efficient and economical human forces in a diverse economy with multiple industry and services sectors;
4. Developed substructures: A network of massive substructures nationwide in underlying fields such as roads, railways, etc.;
5. Low costs of production and public services: A diverse range of energy, telecommunication, transportation, and public services;
6. Abundant natural resources: Enormous and various reserves of natural resources, crude oil, and gas as well as metals and nonmetals indicating easy access to raw materials;
7. Climatic conditions: Enjoying four-season weather as an advantage for agricultural activities throughout the country and all over the year;
8. Financial encouragement: Adjustment of rates of corporate income tax by 65 percent and stabilizing a rate of 25 percent;
9. Variety of tax exemption as follows:
 
 

                                                                                  Important Tax Exemption

Activity	Activity Percentage	Activity Duration
Agriculture	100	Permanent
Industry and Mines	80	4 Years
Industry and Mines in Deprived Regions	100	10 Years
Tourism	50	Permanent
Exports	100	Permanent

10. New Investment Act: The new legislation of foreign investment encouragement and support to replace the previous act of foreign investment attraction and support, aimed at providing security and full support of foreign investment based on international standards and transparency. The new act holds some specifications and stipulates many facilities for foreign investment. It is hoped that following the execution of the act, the attraction of capital in the country and specifically in the agriculture sector would be promoted. Some of the significant specifications and advantages of the act are outlined as follows.
Investment Priorities and Opportunities in Agriculture and tourism Sector of Iran
Backed by  civilization ,long history of agriculture and animal husbandry, natural and historical attractions, special environmental conditions , having access  to the sea, existence of valuable animal species ,…..etc, Iran  have  unique  opportunities for investment in agricultural activities. The following   investment opportunities are some examples in Iran's agriculture sector.
 
Processing and Complementary Industries of Agriculture Sector

•     Processing Industries and production of dates by-products (dates liquid sugar, dates syrup, dates concentrate);
•     Processing Industries and production of pistachios by-products (processing, rating, pasteurization and shell splitting);
•     Establishment of Standard Export Terminals;
•     Construction of Industrial Bread Factories supported by government to promote bread quality and reduce bread waste;
•     Construction of factories producing MDF out of sugarcane bagasse;
•     Investment in production of organic fertilizers from agricultural, livestock and poultry wastes;
•     Production of disposable dishes, plates, … from plants instead of polymers;
•     Production of sea foods;
•     Construction of wheat silos;
•     Livestock slaughterhouses; meat packaging and protein materials;
•     Corn drier;
•     Cleaned and fillet packaging;
•     Processing Aloe Vera products;
•     Dairy products packaging;
•     Freezing services to conserve food stuff;
•     Saffron grading and packaging;
•     Production and packing  variety of herbal essences;
•     Mineral water processing;
•     Vegetables and fruits processing;
•     Packaging of dried fruits, cereals and dried vegetables;
•     Production of MDF from palm branches;
•     Production and packaging of fruit juice;

Farming

•     Establishing large greenhouse complexes based on topology studies and anticipations of associated industries such as packaging and processing products;
•      Growing variety of herbal plants;
•     Growing Aloe Vera plants;
•     Producing variety of seeds;

Horticulture
. Investment in fundamental horticulture sector, which includes tissue, cultured plants
- Construction of  large  gardens  using tissue cultured plants  by predicting ,  collecting , sorting and storing  equipments and installations  as well as supplying  their product
- Construction of tissue culture production units
Livestock and Poultry

    Cultivation and animal husbandry farms with 5000  cattle heads  relying on importing original livestock;
     Breeding dairy cows and oxen;
    Fattening calves;
    Turkey breeding;
    Quail breeding;
    Partridge breeding;
    Breeding heifer (pregnant heifer);
    Establishment of breeding center for Iranian thorough-bred horses;
    Equipping veterinary clinics;
    Establishing livestock and poultry equipping laboratories;

Fisheries and Aquaculture

•     Establishment of fish farms for cold and warm water fish and fish fry;
•      Development of industrial fishing and using fishing ships, with post-fishing processing equipment;
•     Establishing and equipping fisheries and aquaculture laboratories;
•      Breeding aquarium fish;
•      Breeding sturgeon fish;

Tourism Potentials in Iran

•     The existence of cold and warm spas with therapeutic properties e.g. Ramsar warm spa;
•     Sahand, Sabalan, Damavand and Taftan mountains play an important role to make warm spas. So Ardabil province, East and West Azarbaiyejan, Mazandaran, Kerman and also Sistan & Balochestan province have required potentials to exploit the touristic and therapeutic use of warm and mineral spas;
•     More than 8,000 plants species in Iran, self growing herbal plants with many curing qualities (such as chamomile, cumin seeds, rosemary, London rocket seeds , spearmint , lavender, garden thyme,….) ;
•     Wildlife sanctuaries;
•     Forests;
•     Mountains;
•     Hunting zones;
•     Natural attractions;
•     Climatic variation (4 seasons) and over 300 days with adequate sunshine annually;
•     Different climatic regions with possibility of traveling to different locations in the country (deserts, mountains, beaches, plains) at the same time of the year and using recreational facilities;
•     Historic and religious ancient buildings and inner-city cultural centers (in Yazd, Kerman, Isfahan, Tehran, Hamedan, Semnan,…) as well as outer city attractions (such as villages along Karaj river, Jajroad, Kelardasht), etc. Plains (Azerbaijan, Golestan, … Provinces) and deserts (like Kashan and Garmsar), Riverside and Lakes (like Karoon Riverside in Khuzestan ,Zayande Rood in Isfahan and Neor Lake in Ardebil, Gahar Lake in Lorestan and Zarivar Lake in Kurdistan), springs (Dameghan Cheshme Ali ) and waterfalls, National Parks, Uromiyeh Lake, etc.

Investment Opportunities in Iran's Tourism

•     Topnotch tourist spots;
•     Accommodations like hotel, motel and camping …;
•     Roadside recreational centers;
•     Ecotourism and tourist attraction villages;
•     Handicrafts malls and markets;
•     Restorable historic places;
•     Hydrotherapeutic (hydrotherapy centers);
•     Investment in sea resorts;
•      Investment in tourism services;
•     Investment in free trade zones and special economic regions;
•     Agri–tourism investment;
•     Wildlife safaris (birds, aquatic animals,…);
•     Production and sales of antiques and handicrafts in religious centers;