FROM DEFICIT TO ABUNDANCE

Ensuring food supplies is one of the seven priorities of the Azerbaijani government in dealing with the economic crisis and in 2009 the Cabinet of Ministers has initiated a policy to fully provide the population with strategic food products. The country has much to do in this direction, including meeting the demand for greater volumes of grain imports. The most effective measures in this case are the issuing of subsidies to farmers and the provision of fertilizers on special terms. The aim is to increase the volume of wheat production.

Bread is the most essential item in the food basket. It determines the prices of other food products. The expansion of grain fields and grain production is at the heart of the state programme to supply the population with food products. This involves not only central and regional executive authorities, but also labourers, numerous farms and private free market entities in its implementation.

The global decline

According to international organizations, the wheat harvest in the current marketing year will total 684 million tonnes. It should be noted that this prediction has increased by 1.6 million tonnes. For example, in Canada the growth in production last year totalled 1.3 million tonnes, in Brazil - 0.4, in the EU - 2.7-0.3, and in Serbia - 0.1 million tonnes. Britain also registered a growth in its harvest, despite strong rains at harvest time. Argentina registered a decline of 0.5 million tonnes, due to a drought lasting several months.

As for the main "grain" countries of the CIS, the grain harvest in Kazakhstan will total 16-17 million tonnes. In autumn, the cost of one tonne of Kazakh grain is expected to be 200 dollars, while the price of bread will remain the same. The situation is different in Ukraine, which hopes to gather a harvest of 45 million tonnes but, in any case, this is 18 per cent lower than last year's level.

While in 2008 the harvest in Russia exceeded 100 million tonnes, this year it will fall to 90 million tonnes. According to the president of the Russian Grain Union, Arkadiy Zlochevskiy, the harvest has been affected negatively by the financial crisis, as the world grain market and export opportunities are shrinking. The more grain you have today, the lower the price - the higher the losses.

Experts in international agencies forecast that this year the import and export of wheat will fall considerably. This is related to the decline in world wheat consumption. US Development Agency (USDA) experts believe that the export and import of fodder crops will fall. World exports will fall by 2.3 million tonnes. Only Brazil, Canada, Serbia and Russia will increase their exports. The consumption of fodder crops will fall by 7.4 million tonnes; the reason being a fall in the use of ethanol in the USA. International analysts believe that world wheat trade in 2009-2010 may fall by 7 million tonnes - to 112 million tonnes. A decline in imports is expected in all major supply regions. The export of wheat to Middle Eastern countries may fall more significantly (by 3.2 million tonnes). The fall in procurement by Syria, Turkey and Iran will only be compensated by an expansion of imports by Saudi Arabia to an insignificant extent. It is also expected that countries of North Africa and South Asia will reduce imports.

Along with the decline in the imports of bread wheat, it is also planned to reduce the foreign purchase of fodder wheat, which will, first and foremost, affect the demand for Ukrainian grain.

Optimistic forecast

Against the background of these expectations, the situation in the Azerbaijani grain harvest appears more than optimistic. According to the head of the plant growing and processing department of the Azerbaijani Ministry of Agriculture, Sabir Valiyev, in this financial year the production of soft types of wheat will totally meet the requirements of bakeries. Moreover, state enterprises will buy excess wheat from farmers and keep it in grain elevators and other granary containers. In this case, enterprises will become customers of the state. In a word, the production of grain will always be under control. In the next few years, the republic will have a chance to export grain to countries with high demand. According to information available, it is planned to buy about 250,000 tonnes of high quality products from farmers in the new season and keep it at Ministry of Emer-gencies terminals.

We should note that since autumn 2007 the country's grain growers have increased their crops of bread grain considerably. This has had a noticeable influence on the grain harvest, as its output reached a record level last year. As we know, collective farmers and private farms produced about 2.5 million tonnes of bread wheat, fodder crops and leguminous plants on an area of 904,700 ha in 2008. The average harvest increased, totalling almost 27,600 quintals per hectare. According to statistics, 67 per cent of the 2008 harvest, or 1,677,500 tonnes, were bread wheat. Last year alone, grain sowing areas increased by 22.3 per cent, compared with 2007, which is about 165,200 ha of land.

Private farms allocated 1,052,000 ha of land for the production of winter barley and wheat in November and December last year, as well as spring leguminous crops. Incidentally, this is 19 per cent more than in 2007. The Ministry of Agriculture reports that more than 807,000 ha of land are used for growing soft wheat and 245,000 ha for barley and fodder crops. These fields are sprouting well, while specialists of the Ministry of Agriculture who have visited the regions say that a good harvest is growing in the grain fields.

Benefits and seeds

One of the main factors in the growth in production was a measure taken by the government - the issue of subsidies to the tune of 80 million manats. This has interested farmers in reviving this sector.

A second factor having a positive influence on the growth in wheat production was the introduction of elite types of soft wheat from the Academician Lukyanenko Agricul-ture Institute (Krasnodar Territory of the Russian Federation) last autumn and distributed among farmers engaged in seed growing. This summer so much seed grain will be grown in the country that the farms will be able to provide themselves with sowing material. It must be noted that the number of private farms engaged in cultivating productive types of grain is growing year by year and today there are 50. Among them are recently created cooperatives - voluntary unions of free labourers.

For example, in the village of Axisxa in Sabirabad District alone, five cooperatives have been set up, with a total area of 700 ha. According to the deputy head of the Sabirabad District executive authority for agrarian affairs, Heydar Yaqubov, farmers understand that it is profitable to work in larger areas, to which various methods of progressive technology, irrigation and cultivation can be introduced. "You can get a big harvest not from one or two hectares of land, but from 500 and more. What is more, international organizations are only ready to deal with big farms," said Yaqubov.

A good harvest is expected from farms in the Imisli District. For several years now, grain fields have been expanded here and today they cover about 20,000 ha. "The production of crops is a priority of our district's agriculture," says the deputy head of the district executive authority, Farrux Mirzayev. Last year local farmers grew and produced more than 54,000 tonnes of grain. Productivity reached 33.2 quintals per hectare. Last autumn, more than 19,000 ha were allocated for winter barley and wheat, which is much more than in previous years. "All land plots were sown with promising types of soft wheat. The plants were successfully watered and fertilized, and herbicides and pesticides were used. This will allow our farmers to increase productivity to 35 quintals and, according to our forecasts, wheat production may increase to 60,000-65,000 tonnes," Mirzayev pointed out.

Quite recently, the government adopted another important decision aimed at stimulating the production of crops in the country. As is known, a year ago the Azerbaijani Cabinet of Ministers decided to exempt grain imports from VAT, due to the shortage of grain. From 1 May 2009, the government will introduce VAT on imports of bread wheat and flour. Of course, this will have a beneficial effect on the grain market and farmers will be able to sell their harvest at good prices, i.e. this will help protect Azerbaijani grain producers from the impact of foreign market prices.