Another unsatisfactory execution of the state program

A report published by the Ministry of Agriculture in November last year states that in 2022, an area of 3194.25 hectares was sown with rice in 9 districts of the republic, and the harvest collected from the plots amounted to 11548.12 tons. The report notes that the average yield of rice is 36.2 c/ha. It was also noted that in 2022, the most rice was sown in the Lankaran (802.3 ha), Agdash (681 ha) and Ujar (678 ha) districts" ([1]).

The Ministry of Agriculture further noted: "In recent years, the development of rice farming in the republic has been given increasing importance, state support for this area has been strengthened, a number of necessary measures have been implemented to increase the acreage and increase the production of rice products. According to the decision of the Council on Agricultural Subsidies, farmers are entitled to a planting subsidy of 360 manats for each hectare of rice sown area."

The country has adopted a state program for the development of rice farming. Unfortunately, the Government cannot fulfill its obligations towards the implementation of this program. We also recall that in previous articles, we noted that the state programs of cotton growing and tobacco growing adopted by the government failed, and the implementation of programs related to cocoon growing and tea growing turned out to be unsatisfactory.

The Food and Agriculture Organization of the United Nations (FAO) predicted that in the 2021-2022 season, world rice consumption will grow by 1.7% compared to the previous year, reaching a record level of 520 million tons. According to the organization's forecast, by the end of the marketing season (2021-2022), world rice reserves will amount to 190.9 million tons, which is 0.9% higher than the 2020-2021 season. In the message distributed by the organization, an increase in demand and supply for rice in the world was noted in 2022. The FAO report also says that in January 2023, rice in the world rose in price.

Studies show that rice consumption in Azerbaijan, as in other countries of the world, continues to grow. Our calculations, based on data from the State Statistics Committee (SCC), show that over the past 10 years, the volume of rice used as a food product has increased by more than 2.3 times. Thus, during the year, rice consumption increased from 27.4 thousand tons in 2011 to 63.4 thousand tons in 2021 (Table 1). However, over the past 6 years, rice production has fallen sharply. If in 2015 15.9 thousand tons of refined rice were produced in the country, then in 2021 production fell by 36.7% to 10 thousand tons (Table 1).

In turn, the growth of demand for rice in the country and the reduction of domestic production led to an increase in imports of the same product. In 2022, 50.2 thousand tons of rice worth $ 42.5 million were imported into the country, which is more than a year earlier in physical weight by 7.4% and by 25.4% in value terms. Since the beginning of this year, rice imports have increased dramatically. Thus, in January 2023, rice imports increased 2.2 times in physical weight compared to the same period of the previous year, and 2.5 times in value terms.

It should be noted that from 2007 to 2022, rice imports increased by more than 3 times. So, if in 2007 16 thousand tons of rice were imported into the country, then in 2022 it increased by 3.1 times, amounting to 50.2 thousand tons.

It should also be noted that the level of self-sufficiency in rice in Azerbaijan is very low. Although the GCS report indicates the level of self-sufficiency in rice in Azerbaijan in 2021 at 17.7%, this indicator is not an indicator of the level of self-sufficiency, but of the share of production in total consumption.

In accordance with the international norm, the annual consumption of rice per capita is 32.8 kg.

The 10 thousand tons of rice produced by Azerbaijan (1 kilogram per person) account for about 3% of the total demand. This means that the level of self-sufficiency in rice in Azerbaijan is about 3%. It should also be noted that in the 2019-2020 season, global rice consumption was 53.9 kg per person.

In general, over the past 20 years, rice production in the country has sharply decreased, and instead, as mentioned above, rice imports have increased. So, if in 2000 22.2 thousand tons of rice were produced in the country, then in subsequent years this indicator decreased by more than 2 times, and in 2021 only 10 thousand tons of rice were produced.

According to the State Customs Committee (SCC), 50.2 thousand tons of rice were imported to Azerbaijan in 2022. If we take into account that in 2021 63.4 thousand tons of rice were used as a food product, then we can assume that in 2022 imported rice averaged 80% of the total amount of rice used in the country as food.

It should be noted that over the past year, the cost of rice imports has increased by 16.7%. So, if in 2021 the cost of importing 1 ton of rice was $725.38, then in 2022 it increased by $121.62 thousand and amounted to $847.00. And over the past two years, the cost of importing rice has increased by 23.7%.

In order to protect its own market from sharp price fluctuations, especially from price increases that often occur on the world food market, the Government of Azerbaijan should consider it its priority to ensure the demand of the population for food products, agricultural products through production.

Unfortunately, the Azerbaijani government has not carried out serious work for a long time to increase rice production. Even the "Strategic Roadmap for the production and processing of agricultural products in the Republic of Azerbaijan" adopted by the Government in 2016 does not provide for any measures related to rice production. The previously adopted state programs also did not pay attention to this area. Only 5 years ago, in February 2018, the "State Program for the development of rice farming in the Republic of Azerbaijan for 2018-2025" was adopted. The presidential decree noted that the purpose of the adoption of the state program is the development of rice production, which is one of the traditional branches of agriculture, meeting the demand of the population for these products, improving the provision of processing enterprises with raw materials, increasing employment and material well-being of the rural population.

It is also noted in the introductory part of the program that "In recent years, a number of important measures have been taken in rice farming, which is one of the traditional areas of agriculture, in the direction of developing satisfaction of the population's needs for rice and increasing rice production, positive results have been achieved." The developers of the state program, noting the positive results in meeting the demand for rice and increasing rice production, tried to hide the existing problems in the industry. In reality, the Government has not taken any measures to increase rice production for a long time. It is for this reason, as mentioned above, that within 20 years the country's rice production has more than doubled (from 22.2 thousand tons in 2000 to 10 thousand tons in 2021), and imports have increased 2.8 times (17.8 thousand tons in 2000, 50.2 thousand tons in 2022).

The adopted document notes that "the purpose of the state program is to stimulate the development of the rice growing sphere in the country to better meet the needs of the country's population in rice, import substitution, the development of the rice processing industry and increase the level of employment of the rural population." To achieve the goal set in the program, the implementation of measures such as expanding acreage and increasing rice yields is provided, increasing the level of import substitution for rice products. Our research has shown that those responsible for achieving the goals set in the state program cannot cope with their work and responsibilities. Despite the fact that the program provides for the expansion of rice acreage, which before the adoption of the program in 2017 amounted to 5.1 thousand hectares, in 2018, when the program was already adopted, decreased by 24.3% (1000 hectares) to 4.1 hectares.

Further in 2022, the sown area of rice decreased by 1,909 hectares compared to 2017 (Table 2). Speaking in July 2020 at a meeting on the state of water management, Agriculture Minister Inam Kerimov said that due to water shortage and drought, there were forced reductions in the cultivation of some crops that are larger they need water. So, with a forecast of 4000 hectares, it was possible to sow 3000 hectares of rice. However, the state program adopted by the government provides for such measures as improving water supply and reclamation of rice fields, repair and restoration work, reconstruction and construction of water facilities. As you can see, while the state program provides for the expansion of rice acreage, after the adoption of the document, rice acreage decreased by 37.4% until 2022.

One of the goals set in the state program was to increase the yield of rice. But unfortunately, as follows from the data presented by the State Statistical Committee (Table 2), rice yield decreased by 15.4 c in 2021 compared to 2000. Rice production in 2022 decreased by 28.8% compared to 2017 and by 48.3% compared to 2000.

Although the purpose of the adoption of the program is, among other things, a significant increase in the level of self-sufficiency in rice, reducing dependence on imports, 50.2 thousand tons of rice were imported into the country in 2022, which is 400 tons more than the import indicator for the year when the program was adopted (2018).

It is also worth noting that in January of this year, compared with the same period of the previous year, rice imports increased in physical weight by 2.2 times.

The program notes that as a result of the implementation of the state program in 2025, the acreage under rice will be brought to 10 thousand hectares, and the volume of production to 40 thousand tons with an average yield of 40.0 kg / ha. And although the document was adopted in February 2018, the goals set do not correspond to reality. Firstly, in 2017, before the adoption of the program, the annual consumption of rice in the country was 60 thousand tons, and next year - more than 60 thousand tons. With this trend, it should be expected that by 2025, demand will grow significantly. Having produced by 2025 40 thousand tons of rice, as stipulated by the state program, will be able to satisfy only part of the demand. And this does not mean, as stipulated by the program, "a significant improvement in the level of self-sufficiency in rice." And secondly, getting a 40-cent crop from (1) ha in the future is not at all a good indicator for 2025. Back in 2000, the average yield from (1) ha in the country was 50.2 c, and in the Astara region - 74.5 c. In 2005, the yield in the Lenkaran-Astara economic region it increased to 73.2 c per ha, and in the Lenkaran district - to 85 c. Modern technologies make it possible to obtain 80-100 kg of rice from (1) ha. Azerbaijan has fertile soil and climatic conditions and other resources to increase yields at least twice.

The goals set in the state program are not great at all. Suffice it to say that 50.3 thousand tons of rice were produced in Azerbaijan in 1937 by primitive methods. And in the same year, the yield was 30.4 c per ha. And the current government has set a goal to bring by 2025, with the use of modern technologies, the yield of rice to 40 c, and production to 40 thousand tons.

5 years have passed since the adoption of the state program. But the government is not able to cope even with the responsibilities to achieve the set small goals. Therefore, it is doubtful that in the next three years it will be possible to increase rice production to 40 thousand tons.

In fact, the state program for the development of rice farming for 2018-2025 has been developed unprofessionally and superficially.

SUPPLEMENTS

Supplement 1

Table 1.  Stocks and consumption of refined rice (in tons). Source – State Staistical Committee

Supplement 2

Table 2. Rice acreage, production, yield. Source - State Staistical Committee

[1] https://agro.gov.az/az/news/celtikcilik-2022-orta-mehsuldarliq-ve-istehsal-hecmi-2022-ci-ille-mueqayisede-artib