FROM PRODUCTION TO CONSUMPTION

Amid the growing prices for agri-cultural produce on the world market, it is probably very important to take measures to ensure a growth in agricultural production in the country. One of the main objective causes of inflation in Azerbaijan are changes in the pricing policy of world food manufacturers, which certainly causes a hike in prices for local products. Of course, if Azerbaijani farmers were capable of perceiving the demand for this or that product at least by 50 per cent, the world processes would not have affected our consumers to such a great extent. However, experts believe that the pace of growth in agriculture is noticeably behind the pace of growth in the gross domestic product, though the government of Azerbaijan thinks that the volume of agricultural produce will total 2 billion manats this year. In January-September 2007, its volume totalled 1.857 billion manats, which is only 4.1 per cent higher than the same indicator in 2006. At the same time, following the growth in prices for grain and bread, the price of cattle-breeding products will probably also steadily increase. How well-founded is this tendency?

Imported forage is more expensive now

Let's address figures for a start. The growth in cattle-breeding products in nine months of this year totalled 6.2 per cent. Specifically, 221,200 t of meat (8.7 per cent more), 1,019,900 t of dairy products (2.2 per cent more), 673.5 million eggs (13.4 per cent more) and 13,500 t of wool (4.6 per cent more) were produced in January-September. For comparison: the volume of plant-growing products in this period increased by 2.6 per cent. According to the results of nine months of 2007, the number of heads of cattle increased and exceeded 2.3 million, and sheep and goats - 7.7 million. Milk production increased as well. As we can see from these examples, there is a growth almost in all spheres, but at the same time, the prices for daily consumption products are increasing as well. So what is the matter?

Currently, domestic production meets the population's demand for meat and meat producs by 80 per cent, while the demand for milk products is secured by imports. Experts point out that one of the main reasons for this is the hike in forage prices and the semi-nomadic nature of cattle-breeding farms in Azerbaijan, which not only puts a brake on development, but is also the most important environmental problem. Azerbaijan's Minister of Ecology and Natural Resources Huseyn Bagirov believes that animals need much more plants than the earth can produce. Thus, the ecosystem of land is disrupted. Touching on the environmental problems of the Abseron peninsula, the minister said that 1.5 billion t of oil have been extracted here in the last 150 years. What is more, primitive methods had been used to develop oil fields, as a result of which 13,000 ha of land are extremely contaminated. This land will be recultivated. More and more land is used for housing construction - more than 90,000 private houses have been built in Baku in recent years. Of course, the natural process of land erosion has a negative impact on the forage base of the Abseron peninsula to develop cattle-breeding. Residents of Baku villages engaged in cattle-breeding are forced to bring forage from rural areas. All this affects the cost and production of both meat and milk.

One litre of fresh milk from a Baku village is 80 qapiks on the market, while milk of the same quality from Salyan or Ali-Bayramli is sold for 50 qapiks. In shops, Russian milk is three times more expensive. "All this is happening because it is almost impossible to reduce the cost of products as long as there is a shortage of nutritious forage," says Nariman Dunyamaliyev, the head of the artificial cattle insemination centre in the village of Mehdiabad in Abseron District. In summer and winter, Lucerne, corn, barley, beetroot and various types of protein additives are brought to Abseron from Russia and other CIS countries. The hike in prices for cattle-breeding products is also caused by growing prices in CIS countries. In Russia, Ukraine and Belarus, prices for beef and poultry have increased by several times. Our interviewee told us about the artificial insemination of thoroughbred cattle. In Abseron, private farms have started keeping cattle in stables, but you need forage for this and there is no forage base in the district. One of the most important tasks of the executive authorities is to help local farms create such a base."

We have to say that Azerbaijan's Minister of Agriculture Ismat Abbasov, scientists and specialists are planning to develop cattle-breeding by means of highly-productive species of cattle. This step is prompted by the shortage of summer pastures in Azerbaijan due to the Armenian occupation of 50 per cent of pastures. In this regard, the Ministry of Agriculture is planning to import highly-productive species of cattle into Azerbaijan from Russia and Holland. In order to implement this project, more than 800,000 manats have been allocated from the country's state budget in 2007.

Primitive approach and speculation

As is known, with the beginning of agrarian reform, Azerbaijan's cattle-breeding sphere was handed over to the private sector. But hundreds of cattle-breeding farms, as the property of former state-run and collective farms, did not fall into private hands. They have not even been privatized, and as a rule, ownerless farms are plundered. Very few of them have survived. One of the best examples is a farm near the village of Qaracala in Salyan District. A modern cattle-breeding complex has been built there, and it is engaged in industrial production with its own forage base. The complex has 18 employees, and all production processes are automated and managed with the help of computers. The cost of one kilogram of meat here is 1.4 manats, while the profitability of the farm reaches 43-44 per cent. Perhaps, if there are more enterprises like that, this sector will become more active.

For the time being, the cattle-breeding sphere in Azerbaijan is quite disunited, and many farmers are not even thinking about up-to-date technologies. The most important thing for them is to achieve a certain stable growth in cattle and make a quick profit from meat and milk. Almost every farm today keeps cattle and poultry to sell in markets of major cities. Of course, such an approach not only does not bring Azerbaijan closer to world standards, but also endangers the future development of the whole sphere. For this reason, experts are talking about urgent assistance to cattle-breeders to stimulate the merger of small farms and create privileged conditions for manufacturing farmers.

It is also necessary to develop pure-strain stock-breeding. Very soon a law "On pure-strain stock-breeding" will be adopted in Azerbaijan. It will define the legal and economic bases to organize and manage pure-strain stock-breeding and regulate relations between subjects of pure-strain stock-breeding. The purpose of the law is to increase the productivity of animals with stable hereditary signs, organize their repeat breeding and effective turnover. It is also planned to create a legal basis for protecting local species, small animal species and intensively develop cattle-breeding. It is planned to train specialists in agriculture.

"In order to meet the demand, meat and milk products are being imported, which mixes and reduces the quality of products. Taking account of the population's demand for cattle-breeding products, it is necessary to increase state control in this sphere. The development of cattle-breeding depends on the development of pure-strain stock-breeding," the chairman of the parliamentary commission on agrarian policy, MP Eldar Ibrahimov, says. He said that in the budget of 2008, it is planned to increase funding for agriculture to 7 million manats compared to 2007.

Of course, there is a need for more manufacturing enterprises. Then cattle-breeders will have an incentive to expand their business. Moreover, it is no secret that the markets are dominated by profiteers and second-hand dealers who sell products at a double price. In other words, in order to ensure real development of cattle-breeding, it is necessary to solve a number of problems standing in the way of progress in order to deliver the end product to the consumer.