To make it an effective chemical weapon the fusing would require an airburst, these fuse types have been around for over a century, so nothing new or too high tech there, they ahve also been employed for airburst shrapnel rounds.

I also recall reading that the Soviets did have a large stockpile of pre-filled chemical rounds in storage, whether it was a good idea or not is another matter, they did many things that we would not consider very bright, Saddam followed soviet doctrine in many military matters, it can be safely said that he is also not the brightest lightbulb around.