Azerbaijan is underlying agricultural products exports with ever increasing importance, and agriculture development is one of top priority sections in the State Program on 2014 2018 Socio-Economic Development.
Recent changes in the political relations between many countries in the region, especially those neighboring Azerbaijan, greatly affected the economic ties as well. In contemporary situation the country can benefit new opportunities. For instance, sanctions on Russia enable to increase trade with the European Union and lifting sanctions on Iran allow increasing the exports to Iran. Kazakhstan, with an economy by low crude prices, is also interested in more trade with Azerbaijan. Lately the country constructed a large refrigerator on Russian border to store the export products which otherwise were spoiled due to long period of delays in border crossing.
Government support to agriculture is expected to push forward production in this very important field of economy. MP Eldar Ibrahimov, the chairman of the Agricultural Policy Committee, said $1.2 billion tax revenue concessions were made to the farmers over the past 10 years. Government also allocated more than $629.8 million paid to farmers in subsidy from 2007 to 2015 to cover the fuel costs, wheat and rice cultivation, pesticide and seed purchase expenses.
More than 5,100 entrepreneurs received loans on favorable terms in amount of $8.1 million in 2015. Currently wheat is being grown by 29 large farms in 19 regions and 40,000 hectares of land with 58-60 centners of productivity obtained from each hectare. A total of $31.9 billion was spent on 2 socio-economic development programs, with $10.07 billion for the first and $21.8 billion for the second program. Further $464.4 million was allocated to the development of agriculture at the presidential decree.
Azerbaijan, which enjoys better climatic conditions and productive soil, is able to meet its needs for the most of the agricultural products independently, including 64 percent of its demand for wheat, largely reducing the imported amount of the agricultural products from abroad.
Ibrahimov said the government is keen to eliminate the dependence on imports absolutely and increase the exports of agricultural products. Last year non-oil exports of Azerbaijan amounted to $944.7 million, of which $380.4 million, or 41.3 percent, fell on agriculture products – $10.7 million worth of tea, $13.1 million worth of potato, and $121.3 million worth of fruits.
He eagerly gave an example of a 4,800 hectares big enterprise in Agjabadi, specializing not only in growing wheat but also breeding cattle with annual 6,000- 7,000 litres of milk supply. Among all agricultural products, cotton has peculiar place. Azerbaijan used to produce 1 million tons of cotton before. Last year $17 million worth of exports of cotton were made. MP also noted that 50 large enterprises are to be created to increase cotton production.
Ibrahimov especially stressed the need for cooperatives to increase the efficiency. Small farms with only a few hectares of land are not productive and there is a need for integrating large farms and various players in production chain to form scales of production. Such cooperatives will allow marketing the final product rather than just unprocessed raw materials. It will increase the revenue stream as well. Finally Ibrahimov told about the draft Law on Cooperatives to be discussed in the session of the National Assembly.