ELECTRONIC FARMER

Azerbaijan is to implement large-scale reforms designed to optimize the system of agricultural logistics and facilitate access to markets for producers. Azerbaijani President Ilham Aliyev has signed a decree to develop management and speed up institutional reforms in the agrarian sector. Among other things, it is also planned to create agroparks in the country and develop an "Electronic Agriculture" information system. 

New reforms 

Global processes associated with permanent shortages and rising prices for agricultural raw materials, as well as objective factors such as systemic food inflation influencing from the outside pose a serious threat to food security in Azerbaijan. No lower risks arise from internal factors such as inadequate mechanisms for transportation and warehousing, underdeveloped rural cooperation and its characteristic forms of mass trade and often artificial barriers that prevent small farms from entering markets in large cities. 

In order to stimulate agricultural production, President Ilham Aliyev signed a decree in mid-April this year on the development of management and acceleration of institutional reforms in the agrarian sector. In particular, to ensure the implementation of agricultural policy and measures of government support in the regions as well as effective cooperation between central authorities and local executive structures, it provides for establishing district and city directorates of the Ministry of Agriculture. The Ministry of Agriculture, the Ministry of Economy and Industry have been instructed to draw up proposals for establishing agroparks in this country. Some items of the decree provide for optimizing issues related to privatizing and restructuring the Agriculture Ministry's self-supporting enterprises whose operation is regarded as unviable. 

"A significant part of the services provided today by state agencies and services to domestic agricultural producers will eventually be delegated to private contractors" Azerbaijani Agriculture Minister Heydar Asadov said in this context. According to him, the government's main role is to regulate and control the agricultural market. As regards services, such services are provided to farmers worldwide by commercial structures. By way of example, the agriculture minister cited the use of fertilizers by farmers. Most households in the country do not carry out any studies and calculations and just do not know how much and what fertilizers they need. Farmers have no special examination of their soil despite the fact that appropriate labs and specialists are available. At the same time, such analysis could significantly optimize fertilizer consumption and essentially reduce the villagers' costs. 

In the future, producers themselves should show an interest in this issue and employ the services of private or self-supporting labs to conduct research. The Agriculture Ministry believes that, since the private sector accounts for more than 90 per cent of the country's agricultural output, it is necessary to transfer the entire segment of agricultural services to it as well. First of all it will concern veterinary medicine with the exception of some large-scale epizootic preventive activities that will be provided by the state but on a contract basis as well. The entire field of regulation and control in veterinary medicine will certainly remain in state hands. 

The list of new goals includes efforts to arrange the production of agricultural machinery in this country with the involvement of foreign investors. Measures are planned to improve the activity of specialized labs of the Agriculture Ministry and their international accreditation as well as licensing and organizing the activity of nongovernmental phytosanitary services including the production, import, sale and storage of plant protection products and agricultural chemicals. Expectedly, a system will be set up for registration and identification for farm animals. A draft concept will be prepared for the development of agricultural science and, jointly with the Ministry of Education, the personnel training system for the agrarian sector will be improved. Measures are to be implemented to bring the activities of the "Agroleasing" joint stock company into line with international standards. Meanwhile the joint stock company "Irrigation and Water Management of Azerbaijan" has been tasked to carry out activities to protect and improve soil fertility and reclaim salinated and erodible soils. In turn, in order to attract foreign investors to agriculture, it is planned to use the resources of the "Azerbaijan Investment Company" in the authorized capital of structures involved in agribusiness. 

Electronic management 

The decree gives special attention to the phased development of the "E-agriculture" information system. This mechanism is to take shape over the next three years. It is designed to ensure transparency and accountability of activities implemented to the agricultural sector as state support. "The introduction of E-agriculture will solve many long-standing problems of the industry. This certainly is a large-scale project the full implementation of which will take a considerable period of time. Therefore, in order to accelerate these processes, the Agriculture Ministry is already carrying out monitoring and other measures to optimize available information on farms and lands involved in agriculture. In particular, a comparative analysis has been carried out of our database with those of the state committees on land and cartography and on property issues," said Agriculture Minister Asadov.

According to the minister, this work revealed a number of irregularities by landowners. Their removal allowed to save significant amounts of subsidies provided by the state. At the same time, the funds saved through monitoring were used to increase agricultural preferences for farmers. Thus, a special commission for granting subsidies decided to provide about 150m farmers with free aid totaling 20.15m manats. In addition, more than 4m manats was allocated for preferential procurement of nearly 15,000 tons of mineral fertilizers. 

The policy to subsidize farmers and agricultural cooperatives launched seven years ago was initially aimed at helping farmers achieve their present level of development and ensuring sustainable improvement in this sector. In particular, farmers can buy fuel, motor oil and fertilizers at half price. In addition, farmers are subsidized 40 manats per hectare of area sown with grain and other strategic crops. About 580m manats has been allocated under several programmes of direct government support to farmers over the past decade in the form of subsidies, technical and other free aid. 

Meanwhile, the state supports to farmers growing in size with every passing year ever more acutely exposes the need to revise the mechanism used to distribute subsidies. At the beginning of last year, during a government meeting on the development of the regions, Azerbaijani President Ilham Aliyev touched upon the issue of misuse of funds provided by the state and serious problems with transparency and efficiency of the mechanism for issuing agricultural subsidies. Late last year, the new senior staff of the Agriculture Ministry finally started implementing required reforms in the sphere of subsidies. For this reason, it was decided to launch efforts to create a system of electronic registration of farmers and all other entities in this country's agriculture. Such an electronic database will make it possible to provide subsidies based on the actual amount of work on the farms and record the exact parameters of plots of land involved in agriculture. "Now that the 'E-agriculture' system has been created, the Agriculture Ministry can provide absolute transparency of the subsidy distribution system," Heydar Asadov said. 

It is noteworthy that the new presidential decree is a logical continuation of a directive issued in January 2014 and aimed at developing a modern and transparent production and sale market for agricultural products. In short, a new phase of reforms has been launched in Azerbaijan's rural areas.