By Suleiman Al-Khalidi

AL DANA, Northern Syria (Reuters) - For the past six months, farmer Hisham al-Zeir's wife and daughters have been up before sunrise each day when it's still cool, baking traditional tanoor bread in a century-old clay oven in their home in Syria's rich agricultural province of Idlib.

Rather than selling all his wheat to the state as he usually does, Zeir decided this year to keep almost a third of it to ensure his wife and six children have enough food to survive on as the conflict in the country spreads.

"I am putting it aside to eat from until Allah eases on his people and things become clearer," Zeir said in the courtyard of his modest farm on the outskirts of the town of Al Dana in Idlib, a region of gently rolling hills and olive groves that supplies a large proportion of Syria's fruit.

Zeir is one of many Syrian farmers who have adjusted production during the crisis in order to grow enough produce for their own consumption and for use in exchange for other goods.

Eighty percent of people in Idlib live in the countryside, compared to only 40 percent of Syria's total population of 20 million, making it the most rural province in the country.

The rural poor have been big supporters of the 17-month uprising against President Bashar al-Assad's rule and their towns and villages have borne the brunt of the army's campaign to crush the rebellion, in which at least 18,000 people have been killed.

Although the Syrian economy has been hammered by the conflict - economists say it could contract by a fifth or more this year, but have no way of knowing for sure - and much of the country's industrial production has been hit, the rural economy has been less affected by the turmoil.

"A subsistence economy in these rural areas has in many cases allowed people to produce their own food needs. People's ability to live off their land has helped in this crisis unlike urban dwellers," Samir Seifan, a prominent Syrian economist.

Enterprising rural communities have during times of conflict taken advantage of an abundance of land to grow cereals, olives and cotton.

The current crisis is reversing a decade-long exodus of rural residents to cities like Damascus and Aleppo, which exacerbated a wealth gap, as many are now fleeing violence in the cities and returning to villages. The conflict is never far away, however.

"A mortar has hit and killed two of my sheep and destroyed our yard," said Omar al-Natour, a day after army shelling at his house in the town of Al-Sahara in Idlib.

Natour, 45, a father of six, is no longer able to go to his job at a state-owned factory producing cement for construction in Aleppo because it lies in an area where army snipers fire at rebel hideouts. Instead, he supplements his meager income by rearing cattle and other livestock.

FOOD AID

Food production has been rising in Syria in recent years despite sharp fluctuations in harvests and bouts of drought. That has helped diversify the economy, and in the present conflict, staved off significant food shortages in the countryside so far, residents and Damascus-based economists said.

They contradict the United Nations' Food and Agriculture Organization and the World Food Programme (WFP) who estimated this month that about 1.5 million people in Syria need immediate food aid and one in three rural residents would need help.

Across the country, agricultural production, which officially accounts for 20 percent of Syria's gross domestic product, continues, despite a shortage of seasonal laborers who once flocked to work in the fields during the harvest period.

This has secured adequate supply of vegetables such as tomatoes and cucumbers, staples of the Syrian diet, as well as grains, even though the high cost of tractor fuel and a lack of fertilizer has reduced the amount of cultivable land.

In Idlib, the erosion of state authority has encouraged the illegal pumping of artesian wells from the Orantes River basin.

Many shops and grocers remain open in towns and villages across Idlib and in the countryside around Aleppo, but most of the confectionary, soft drinks and juices on their typically dusty shelves have long exceeded their expiry dates.

Many shopowners said they have not replenished their stocks for over a year.

"People are managing with the minimum. Don't forget, some people are just barely surviving," said grocer Farouq al-Masous from Hazanoh, a town known for its olive groves.

As the fighting in Syria shows no sign of abating, the populations of some rural towns in Idlib have surged, including Darat Azah and Al Dana, as they have been spared the wider destruction of towns such as Taftanaz and Atareb, where many houses have been pounded to rubble by tank fire.

Across rural Syria, a new breed of private trader has emerged, supplying foodstuffs to now isolated communities.

"The rural resident is not able to get his goods from the city so he is relying on new traders who are buying directly from farmers and selling in local villages," said Saleh al-Shawaf, a former electrician. He now works as a vegetable trader, frequently dodging army checkpoints to go to Aleppo's bigger markets to buy goods he can sell in the villages.

City dwellers have cut down their food consumption much more than rural residents, said Taher al-Guraibi a former housing contractor who has gone back to his family's home town of Binish in the countryside after fleeing the Salaheddine area of Aleppo.

"You used to eat fruit daily, now it's every two days. Consumption of goods has in general gone down ... If you used to buy a kilo of meat every week now you buy half a kilo," he said, referring to life in Aleppo.

HIGHER PRICES

In Darat Azah's bustling market place, traders offer a range of local produce including cucumbers, tomatoes, watermelons and peaches. People consistently complain about higher prices, not shortages, traders say.

Nearby, a butcher hangs up a piece of mutton, which has almost doubled in price in the past year.

"Looking at the market you would not think these people have suffered so much," said Yasser Khudri, a trader.

In al-Qah, a village on the border with Turkey, several clothing shops are open but few customers show up during the Muslim Eid holidays, normally a boom time for shops, as people avoid buying non-essential goods.

To some extent, Syria's highly regulated economy - with its costly government subsidies, which keep electricity prices artificially low, and restrictions on imports - have helped control inflation and stem a further decline in living standards for poor farming communities. Independent economists say inflation has not exceeded 30 percent despite the crisis.

"There are lower quantities of food but no food shortages in Syria ... there are people who are supplying food. As you know, in every crisis, there are those who profit," said a senior Syrian official who works at the state wheat procurement agency.

While living conditions have deteriorated, the authorities continue to pay the salaries and pensions of tens of thousands of civilians in areas no longer under state control and have been reluctant to cut off electricity and water supplies in rebel-held towns, residents say.

State bakeries remain open even in rebel-held areas and officials say no village in Syria has been deprived of bread.

At a private bakery near the rebel-controlled town of Sahara, baker Abu Adnan is surrounded by dozens of men and women jostling to get bread that has just arrived from a bakery in a nearby town that now serves several villages.

"For God's sake ... everyone, just one loaf," Adnan shouts.

Despite long bread queues, prices have barely gone up for a loaf of Arabic bread, on sale for a heavily subsidized 15 pounds.

In a tacit agreement with the government, rebels have not sought to take control of 36 state-owned silos spread across the country that remain in government hands.

"No one has an interest, whether it's a pro-government or opposition ... in the end everyone wants to eat bread," said the senior grains official in Damascus.

($1 = 54.1500 Syrian pounds)

(Editing by Susan Fenton)