GRAIN BY GRAIN

Perhaps not many  will disagree that in the unusually hot weather in Azerbaijan this summer, farmers had the hardest time - despite the stifling heat, they continued to work selflessly in the fields, trying to save at least some of the crops to avoid bread shortages for themselves and for the whole country.  Now the summer is drawing to an end.  The winter crops of barley and wheat have been harvested from fields in the plains, mountains and foothills, and combine harvesters are working on the last remaining hectares on mountain slopes.

According to the Azerbaijani State Statistical Committee, as of 9 August 2010, the grain crops had been harvested from 95% of the land, 1.85 million tons of grains were produced, of which 1.3 million tons are food-grade wheat.  The average productivity of wheat fell to 1.99 tons per hectare, which is much less than last year.  At present, the farms are starting to harvest corn and beans and in the autumn farmers will harvest the rice.

Specialists forecast that grains crop will reach about 2 million tons.  Compared to last year's rich harvest, this is 1 million tons fewer.  However, the Agriculture Ministry insists that Azerbaijan will have enough bread if all produce is used rationally.

Flood and drought

The country's wheat farmers who completed the harvest are unanimous in saying that the crops this year were poor.  And they are right - the agrarian sector always faces risks from the environment and nature, and this year, Azerbaijan experienced two unfavourable phenomena at once - floods and drought.

During the spring freshets, the Kura and Araz rivers flooded wheat fields in Sabirabad, Saatli, parts of Imisli, Zarda, Kurdamir, Salyan and other agricultural districts.  The average yield in those districts was 2-2.4 tons per hectare.

"In late April, when snow started to melt in the mountains, the water level in mountain rivers rose dramatically," said Sabir Valiyev, head of the Agriculture Ministry's crop farming department.  "After the spring freshets, the main rivers, the Kura and Araz flooded almost 60,107 hectares of pasture and crops.  To be more specific, of this number, 26,255 hectares had winter barley and wheat, 2,667 hectares contained potatoes, 2,400 hectares had vegetable crops; there were 710 hectares of gourds, 80 hectares of sugar beet, 22,838 hectares of alfalfa and 3,735 hectares of pasture."

In Imisli District, for example, where crops were growing on an area of more than 11,000 hectares, some 30,000 tons of produce were harvested.  The average yield in the district fell to 2.42 tons per unit area compared to last year.  Learning the lessons of the natural disaster, farmers in the district plan to increase the area under grain crops to more than 20,000 hectares.

In neighbouring Saatli District, grain farmers harvested winter barley and wheat crops from an area of about 19,000 hectares.  More than 58,000 tons of produce were harvested and the average yield in the district was 2.94 tons per hectare.  Almost 11,000 hectares were flooded; about 6,000 hectares of these were areas under crops.

In addition, according to information from specialists at the plant farming department of the Agriculture Ministry, rain showers affected some of the farms in the Aran Valley; the result was that brown stripe disease blighted some of the grain crops in some areas.  To reduce losses from this disease to the minimum, agroindustrial measures were taken which minimized the damage.

However, besides the natural disasters, poor grain crops were also caused by a number of other factors.  For example, the areas under wheat were reduced initially by 156,000 hectares.  This was due to the fact that after harvesting almost 3 million tons of wheat, farmers were unable to sell it in the domestic market.  Private farms which sustained losses refused to grow wheat and chose other crops.  Following this logic, grain production was reduced by almost 350,000 tons from the very outset.  At the same time, agriculture specialists hope that next year, farmers will not encounter these sorts of problems.  This hope stems from the fact that regional logistical bases were built in Saki and Sabirabad; in Xacmaz and Samkir these bases are ready for implementation and in Calilabad and Barda, the construction of new warehouses has begun.

There are problems of a local nature too:  for example, on farms in the Aran economic region, rodents destroyed crops in the Agcabadi, Barda, Beylaqan and other districts because of the failure to spray the appropriate chemicals.  This happened despite the fact that the services and affiliates of the Agroleasing Joint Company deployed 1,110 combine harvesters to harvest crops in 2010, including 990 vehicles supplied by the company and 240 modern combine harvesters supplied by other sources.  And this was 236 more than the number of new combine harvesters used in last year's harvest.  However, despite the speed of the harvest and farmers' current preferences in buying mineral fertilizers (according to the Agriculture Ministry, farmers were issued 58,000 tons of mineral fertilizers worth a total of AZN 20 million), production was not great.

There will be no crisis

As is known, natural disasters affected wheat farmers not only in Azerbaijan, but also in European countries, Russia and Ukraine.  For example, the pessimistic estimate for the wheat harvest in Russia this year is for only 60 million tons of wheat, instead of 90 million tons.  The shortage of wheat forced the Russian Government to suspend wheat exports.

The international wheat crisis also alarmed the UN, and Secretary General Ban Ki-moon urged the governments of wheat producing countries not to limit exports to states experiencing wheat shortages.  According to the UN Food and Agriculture Organization (FAO), the wheat harvest in 2010 will be 4% less than was expected in June - 651 million tons instead of 676 million.  As a result, wheat prices have increased by more than 50% since June and fluctuate today between $230 and $240 per ton.  It is good that at least Ukraine's export potential this year will be 15 million tons of wheat, and so will Kazakhastan's, and Kazakhstani Executive Secretary of the Ministry of Agriculture, Yevgeniy Aman, said that no measures will be taken to reduce exports.

At the same time, foreign analysts say that grain and barley price forecasts might lead to increased bank discount rates, a crisis in commodity markets, greater inflation and mass unrest in developing countries.  However, UN experts note that the international wheat market is stable and conditions are not the same as in the crisis scenario of 2007-2008.  Globally, grain production was high for two years and strategic reserves have been accumulated.  They total 187 million tons, according to the International Grains Council.  This is enough for 107 days of worldwide consumption (by comparison, in 2008, there were 124 million tons, or 73 days, in reserve).

As for Azerbaijan, independent expert O. Axverdiyev says that 1.5 million tons of baking wheat, soft and hard, are needed for domestic consumption, not counting the wheat needed for sowing this autumn.  The reserves contain 250-300,000 tons of baking wheat.  Lessons were learned from last year and, from 1 July, the State Grains Fund started to take in high-quality wheat.  Accumulation will continue until 1 September 2010.  Wheat is accepted by processing enterprises like the Davaci-Dayirman, Karat-Holdinq, Fatoglu, Baki-Taxil imeni N. Quliyev, Araz OAO, Aveta, EL KM, Baxtiyar and Neon.  One ton of high-quality grain is bought for AZN 160.  Only wheat which meets all the parameters specified in the quality standards in effect in the republic is accepted.

The government is also taking measures to prevent a hike in bread prices.  Agriculture Ministry officials say that the ministry proposed that the cabinet cancel VAT on imported wheat in connection with the situation which has arisen in international markets.  And the Economic Development Ministry is already monitoring bread and bakery product prices closely.  In combination, all this should keep bread supply in Azerbaijan stable at least until the next harvest.  We can only hope that next year the weather will not let the farmers down.