FOCUS ON EXPORTS

An increase in the role of agriculture in the Azerbaijani economy, the emergence of new business opportunities and attention on the part of the state are helping the flow of investments in the country's agro-industrial sector. Both state and private investments are on the increase. It is also significant that these investments are directed at all elements of the production-sales chain - production, processing and marketing, where major enterprises are being created.

However, there is another side to this development: small farmers and agricultural producers are encountering certain problems and a risk of becoming detached from the important links of this production-sales chain.

A single chain

No one country in the world today has been able to solve all its problems in building an effective agro-industrial chain. In Azerbaijan, competition in the production of agricultural output is higher compared with other spheres. There are many producers operating in the country, but it is still important to develop competition among businessmen engaged in such links of the chain as logistics, processing and the sale of agricultural produce.

"95 per cent of output in Azerbaijan is produced at small farms, and it is important to strengthen cooperation between them and the big holdings," said Azar Amiraslanov, head of the department for agricultural policy of the Azerbaijani president's administration, in a speech at an international forum on attracting the private sector to the development of the food-and-agriculture chain. He said that agriculture in Azerbaijan does not have diversified sales channels and, besides this, there are numerous teams of middle-men between producer and buyer.

"The main objective of the country's agricultural policy today is to ensure that the agricultural chain works effectively. It is important that all obstacles encountered at the various links of this chain are eliminated and that the added value that is accrued when switching from one link to another is fairly allocated. It is also important that the private sector is represented at each link. The chain should be extended to the export of output abroad, and we should not be confined to the domestic market alone," Amiraslanov said.

He said that one of the priority areas is the application of "electronic agriculture", the introduction of which should not be done in a formal way. The head of the department explained that, when speaking about "electronic agriculture" one means carrying out such measures as the electronic registration of farmers and farmland, and so on.

"When speaking about institutional development we mean the creation of agricultural parks and strengthening cooperation. But this does not mean forgetting about the small farms. On the contrary, we are urging them to integrate into holdings and large enterprises," Amiraslanov noted.

In the meantime, Sevinc Hasanova, Deputy Minister of the Economy and Industry, believes, agriculture has become one of the few sectors which have continued to demonstrate growth in difficult worldwide economic conditions, bearing in mind, too, that nearly 100 per cent of agricultural production in the country is provided by the private sector. Now, the priority of the future development of the agro-industrial sector is to build up Azerbaijan's export potential. "To this end major logistics centres are being built in the country and abroad. We are also proposing to build similar facilities in the CIS countries, for example Russia. These projects may find support among international organizations, too, such as the FAO (UN Food and Agriculture Organization) and the Organization of the Black Sea Economic Cooperation (BSEC)," she added.

Self-sufficiency the aim

All these objectives are covered by the new strategy for the development of Azerbaijan's agro-industrial sector, as provided for by President Ilham Aliyev's instruction on additional measures to improve the activity of the market of agricultural and food products. The strategy covers the basic principles of agricultural policy and the strategic aims and priority areas of the development of agriculture.

Specifically, it provides for the creation of specialized farm shops and "green" markets which will operate on a permanent basis in Baku and other large towns and cities in the country, and also function at agricultural markets.

Sabir Valiyev, head of the department for the monitoring of production and the processing of vegetable-growing output at the Ministry of Agriculture, told R+ that farm shops and "green" markets could start to function in Azerbaijan this year at agricultural markets.

The ministry's spokesman noted that private bases for the storage and sale of agricultural produce could already be up and running by this season, which is also covered in the aforementioned president's instruction. "They will be able to deliver Azerbaijani goods to any point of the globe. These bases will beforehand sign contracts with buyers and on the basis of these contracts provide producers with a schedule of purchases. The state will support the private sector in creating these bases," Valiyev said.

Another important element of the agricultural production chain is the processing of agricultural output. As the "Azerbaijan-2020: Future Vision" concept states, sweeping measures will be carried out to increase the production capacities of existing agricultural processing enterprises as a result of the application of state-of-the-art technology and the creation of new enterprises. And, naturally, state support for entrepreneurs engaged in this sphere will be continued. "This support is being provided through the allocation of preferential credits via the National Fund for the support of entrepreneurs and the mechanisms of preferential leasing of agricultural equipment, and also by way of tax holidays and other means," Hasanova said.

Besides this, says Ilham Quliyev, Deputy Minister of Agriculture, in recent years the state has already carried out solid work in the development of the weak links in the value chain of agricultural produce. For example, broad measures have been taken to improve supplies of high-yield seeds, pedigree livestock, mineral fertilizer and machinery and equipment to farmers. "The state is encouraging the participants in the market and is also providing direct support with the aid of the state-owned Agrolizing company. Along with this, the state is offering farmers various kinds of subsidies in order to increase competitiveness," the deputy minister said.

According to the FAO, by 2050 global consumption of food products will have increased by 70 per cent compared with 2006. This makes the question of providing food security even more topical. And all the aforementioned measures are aimed eventually at solving the main task set by President Ilham Aliyev, which is to bring the level of the country's self-sufficiency in foodstuffs to 100 per cent. And if we can develop and stabilize their export then a substantial contribution will undoubtedly have been made to the implementation of the most important objective, namely the diversification of the national economy and the development of its non-oil segment.

FACTS AND FIGURES

The output of agricultural production in Azerbaijan in 2013 increased by 4.9 per cent, amounting to 5244.6m manats. The output of production in the vegetable-growing sphere increased by 4.2 per cent, and in stockbreeding by 5.5 per cent.