THE WORLD AWAITING A GRAIN SHORTAGE

Is Azerbaijan expecting a grain crop shortage and, in particular, a shortage of foodstuff wheat? It is no accident that the public is concerned about this issue and this is connected directly to the forecast by the UN's Food and Agriculture Organization (FAO) for the grain crop harvest in 2007. Although specialists give a positive forecast for grain crops, a number of countries may also face a food crisis due to adverse weather conditions. FAO experts think that around 34 countries will face such a crisis in 2007. The causes may be varied: drought, flooding, fever outbreaks, civil conflicts and also events giving rise to political and economic instability. Azerbaijan is also included in the list of countries where drought conditions are expected. 

In reply to journalists' questions, Minister of Agriculture of Azerbaijan Ismat Abbasov emphasised that the country did not face the danger of a grain shortage as the FAO report notes. The minister said this was because the grain depots built in Azerbaijan have a storage capacity of 500,000 tonnes. Over 2 m tonnes of grain are produced in Azerbaijan every year while the population's requirement is for 1.6 m tonnes. "So there is not, nor can there be a grain shortage in Azerbaijan, "I. Abbasov stressed.  

Bountiful grain fields

Over the years of reform, grain growers learned to grow good quality grain and to harvest high yields from the grain fields. An analysis of the economic activity of private structures shows that they achieve the necessary profitability of their farms and high profits through the introduction of progressive labour methods and technologies. Grain crop production in the country topped the two-million-tonne mark for the first time in 2001. But in the early years of Azerbaijan's independence, grain production in the country fell to 950,000 tonnes due to the weak material and technological base and the lack of the finances so necessary for acquiring and importing mineral fertilisers and plant protection agents and half of the requirement for wheat and flour products was met by foreign imports. From 1991 to 1996, the winter wheat crop yield fell from 21.9 quintals to 16.6 quintals. Over half of fertile land was sown under grain crops as a solution to this essentially crisis situation. Consequently, the crop yield rose sharply from 1997 to 2003 from 17.6 to 25.8 quintals per hectare. The area sown to winter wheat alone began to expand from 1997 and it grew from 537,700 hectares to 589,000 hectares. And as a whole, over this period, the area of land under grain crops grew to 773,800 hectares. The grain crop yield, especially the winter wheat yield, was much higher in 2003 than before. For instance, the average crop yield was almost 35 quintals per hectare in Beylyaqan District, it was over 41 quintals per hectare in Samkir, about 37 in Sabirabad, and almost 35 quintals in Saatli.    

It's true that over the past two years, there has been a certain tendency to reduce the area sown under grain in the republic. One reason for this is the low prices for foodstuff wheat. Cahangir Haciyev, the director of the Ziya peasant farmer holding in Sabirabad District, thinks this has made wheat growing unprofitable for Mugan farmers. So last year, even profitable holdings made a loss. 

"We brought in a good harvest of soft wheat from the grain fields in summer," C. Haciyev says. "It all had to be sold at low prices - 10 qapiks per kilo. We estimate that the Ziya holding suffered a loss of 1,400 manats. When the time came to sow winter wheat, we did not have the money to buy good quality grain. The prices of diesel and petrol have risen sharply as well, in past years and now. That is why we did not sow wheat. If grain growers make a profit at harvest time this year, we also will start producing soft wheat again in the autumn of 2007." 

So in 2006, an area of over 784,000 hectares produced 2,789,000 tonnes of grain in total, yielding 26.5 quintals on average. Last autumn, 653,900 hectares were sown under winter grain crops and this bears witness to the grain field shrinkage. But there are also regions, where, on the contrary, the area of sown fields is growing. For instance, over 11,000 hectares have been sown under wheat and about 5,000 hectares under barley in Goycay District farms, which is 34 hectares more than last year. 

Poor baking qualities are primarily one reason for the low price of the local grain. Generally, many farmers grow grain with a low protein and low gluten content. So local refineries try to buy the amount of soft wheat they need from Russia, Ukraine and Kazakhstan. Although domestic varieties are in no way inferior to their imported counterparts in the right growing conditions, and are often even superior to them.   

The potential of national plant breeding

The regional experiment stations in Tartar, Qobustan, Calilabad, Zaqatala and in the Saki centre of the Azerbaijan Agricultural Scientific Research Institute grew over 1,000 tonnes of seed material in 2006. 

This is mainly such varieties of soft wheat developed by Academician Calal Aliyev as Azamatli-95, Nurlu-99, Qobustan, Ruzu-84, and the hard varieties - Barakatli-95 and Tartar. The potential of the Azamatli-95 and Nurlu-99 varieties is very high: a yield of 80-90 quintals per hectare of grain field and of 40-50 quintals per hectare of drylands. Such seeds cost 10 qapiks per kilo and a kilo of super elite seeds is almost 15 qapiks more. 

With domestic plant breeding developing at such a rate, one cannot help asking why the grain crop yield has not reached the three-million-tonne mark yet. 

"We have every possibility for attaining the desired level," Fasil Pasayev, the chairman of the State Commission for Crop Science Product Variety Testing, says. A state order for our grain growers has to be set for this, too. To be frank, it does not pay them yet to work for the local market where grain prices are very low.  The state must undertake at the start of the year to buy grain from farmers at an acceptable price. In our country, prices on the grain market are formed spontaneously. Take any country where grain is grown - fixed prices are set on the purchase of grain there. If prices are higher on the market, the farmer is able to sell his grain at the higher price. If they are not, he gives the grain to the state at the earlier agreed price. 

Enterprises producing the seeds of elite varieties of soft and hard wheat have a weak material and technical base. All the right conditions have to be created for them. We suffer from a very great shortage of water for irrigation. Grain fields need to be irrigated as a rule at least three times over the growing period. We do that just once.  That is why the grain is puny and of poor quality."

According to F. Pasayev's information, besides state enterprises, private farm holdings in 26 regions of the republic are also engaged in growing seed grain. Nevertheless, what they produce is not enough for all the farms in the country. At least 180,000 to 200,000 tonnes of seed material are needed for sowing. So the shortfall is made up from imported seed material. 

As for the procurement of grain, 800,000 to 1 m tonnes of soft wheat are delivered to Azerbaijan every year to see the winter and spring through comfortably and to get through to the next summer harvest. And so it continues from year to year.

Azerbaijan gets foodstuff grain from the Republic of Kazakhstan and from Krasnodar and Stavropol Territories of the Russian Federation. It is generally bought for prices well above the price of local grain. And seeing this difference, our grain growers complain about the officials in charge of procurements who are sponsoring foreign producers.

"Third class foodstuff wheat went for just 100 manats per tonne under domestic contracts which is half the price of imported wheat," Mehman Hasanov, an agronomist at the state seed enterprise in Beylaqan District, says. The reason for this again is that our state agencies and market structures failed to remove surplus grain from the market in time. Supply turned out to be considerably greater than demand. The price of wheat should be higher than its cost price for grain growers to be able to make ends meet.

Are the forecasts so terrible?   

At the start of the article we spoke of forecasts for the grain market given by such an authoritative international structure as the FAO which came to the conclusion that the world price of grain, and in particular, of wheat and maize, was at its highest for decades. And experts think that this may also reflect on the growth of prices for meat and milk. 

According to last year's data, 591.8 m tonnes of wheat were produced in the world which is noticeably less than in 2005 when 624.5 m tonnes were laid in store. In particular, in 2006 Russia produced 43.1 m tonnes of wheat while in 2005 it produced 47.7 tonnes. Ukraine correspondingly produced 13.8 and 18.7 m tonnes. The harvest in Canada fell markedly (26.3 as against 26.8 m tonnes) and in the USA (49.3 as against 57.3 m tonnes), in the states of the European Union (117.6 m tonnes in 2006 as against 123.6 m tonnes in 2005).  In 2006, world expenditure on the import of foodstuffs reached a historic ceiling - 374 billion dollars, 2 per cent more than in 2005. This is international statistical information.

All of this may lead to a rise in the price of grain and grain products in many states. Poor countries will be hit particularly hard.

The Ministry of Agriculture does not want to reconcile itself to the forecasts by the FAO experts. They think here that farmers have laid the foundations of the future harvest and have received good shoots of winter barley and wheat. Agrolizing Ltd has bought and delivered into our country 556 combine harvesters, 834 tractors and 72,000 tonnes of fertiliser. Mineral fertilisers are delivered now to all farms at favourable prices and fuel is supplied at favourable prices as stipulated by the instruction of the president of Azerbaijan, Ilham Aliyev, "On state support for agricultural producers". Minister Ismat Abbasov said that the FAO, a subdivision of the UN, has no idea about the real situation in Azerbaijan or about its agricultural potential. So we should have a rich grain harvest this summer.