Production, Imports Grow, Growing Crop Disappears Somewhere

According to the State Customs Committee, the value of food products imported into the country in January-October this year amounted to 1 billion 332 million 904 thousand US dollars. For 10 months of this year, the share of food products in the total volume of imports of the country amounted to 15.2%, for the same period last year this figure was 11.7%. In January-October this year, imports of basic food products increased - meat and meat products, milk and dairy products, fruits and vegetables, vegetable and animal fats, rice and other products, despite the fact that the demand for food products did not increase. Thus, the situation that arose earlier this year in connection with the coronavirus (COVID-19) pandemic caused a serious decline in the country's tourism sector. According to the State Border Service, in January-October 2020, 720.3 thousand arrived in Azerbaijan from 155 countries of the world, or 3.7 times less foreigners and stateless persons compared to the corresponding period of the previous year. That is, over 10 months of this year, compared to the same period last year, the number of foreigners and stateless persons decreased by more than 2 million 665 thousand people. In this regard, it can be said that in January-October this year, the demand for food in the country did not increase, but, on the contrary, decreased. For the same reason, the purchasing power of the population has decreased.

Despite the fact that the demand did not increase, nevertheless, from the statistics presented by the State Customs Committee, it can be seen how the import of basic food products, agricultural products has increased significantly compared to the same period last year. Thus, the import of fats of vegetable and animal origin increased in physical weight by 8.3%, and in value terms by 17.8%, milk in physical weight by 18.6%, and in value terms by 17.6%, butter in physical weight by 22.9%, and in value terms by 18.5%, although the import of meat in physical weight decreased by 13.4%, and in value terms increased by 2.8%, mainly the growth took place in value terms (14.2%) for live cattle imported for slaughter. This means that the import of meat also increased in physical weight. From crop production, imports of vegetables and fruits increased by 0.6% in physical weight, and in value terms it increased by 3.6%, tea imports in physical weight increased by 2.1%, and in value terms - by 5, 8%, while rice imports increased by 19.4% (Table 1).

Table 1. Imports of food products in January-October 2019 and 2020 (quantity in tons, value in thousands of dollars). Source: State Customs Committee

Within ten months, there was also an increase in imports for other groups of goods. So, if in January-October 2019 the cost of imports of dairy products of animal origin, not named and not classified elsewhere, amounted to 107 million 359 thousand dollars, then over 10 months of this year, imports for a group of goods with the same name increased by 15, 2% and amounted to 126 million 524 thousand dollars.

In January-October this year, compared to the same period in 2019, finished products from grain, flour, starch or milk increased by 5.8%, finished products from meat, fish or crustaceans, molluscs or other aquatic invertebrates - by 13.8% , and other various food products - by 6.6%.

For 10 months of this year, wheat imports amounted to 1 million 141 thousand 608 tons. Although this amount of wheat is not much compared to the previous year, it represents more than half of the total wheat used for food production in 2018. In general, there are obvious confusion and contradictions in the figures provided by the State Statistics Committee in relation to the production, import and use of wheat. While in 2009-2015, that is, over 6 years, the volume of wheat used for the production of food products increased by 247.7 thousand tons, over the past 4 years the growth in the volume of used wheat amounted to 383.4 thousand tons (54.7% more). And over the past year, the volume of wheat used increased by 247 thousand 975 tons compared to the previous year. This is the first time this has been observed. It should also be noted that if in 2019 wheat production increased by 122,456 tons compared to the previous year, then in the same year, the country imported 1,584 thousand 998 tons of wheat. And this amounted to more than 504 thousand tons compared to the previous year.

Wheat imports to the country, together with its production in 2019, was 626,548 tons more than the total production and imports in 2018. That much wheat should have increased the residual volume by the end of the year, and in 2020 also reduce the volume of imports. But that did not happen. The increased harvest has disappeared. Naturally, wheat imports are expected to grow in the coming months of this year.

As noted, in January-October this year, compared to the same period last year, the volume of major export goods has significantly decreased. According to the State Customs Committee, the export of food products has significantly decreased (Table 2). So, in January-October this year, compared to the same period last year, the export of fruits and vegetables decreased by 0.8%, from traditional export products, the export of hazelnuts decreased by 23.4% in physical weight, and by 14.4% in value terms, apples - by 27% in physical weight and by 26.3% in value terms, persimmons - by 24.7% in physical weight, and by 25.6% in value terms.

In January-October of this year, imports of fats and oils of vegetable and animal origin increased by 10.2 thousand tons in physical weight compared to the same period last year, to $ 22.6 million in value terms, while the export of products with the same denomination increased by 7.2 thousand tons in physical weight, and in value terms - by only 4 million dollars. Also, the volume of tea imports into the country is many times higher than the physical weight of exported tea.

Table 2. Exports of agricultural products in January-October 2019 and 2010 (quantity in tons, value in thousands of dollars). Source: State Customs Committee

While the export of cotton fiber and cotton yarn in January-October last year amounted to $ 116 million 371 thousand, during the same period of this year, cotton fiber and cotton yarn were exported in the amount of $ 109 million 429 thousand, which is 6% less (mainly production in 2019), although in 2019 the production of raw cotton increased by 61.7 thousand tons compared to 2018. That is, in fact, this year the export of cotton fiber and cotton yarn produced in 2019 should not have decreased, but, on the contrary, should have seriously increased.

I believe that the reason for the significant increase in food imports in January-October this year was the decline in domestic yields. And the decline in production is associated with a drop in agricultural yields. Speaking at a meeting on the six months of this year, the Minister of Agriculture said that the biggest risks that could affect productivity are drought and water shortages. At a meeting on the state of the water sector, the Minister of Agriculture said that due to lack of water and drought, there is a decline in the cultivation of some crops that require more water. According to him, if it was planned to sow 7.5 thousand hectares with sugar beet, then the actual sowing was carried out on 4.8 thousand hectares, and the forecast for sowing 4 thousand hectares with rice did not come true, and 3 thousand hectares were sown.

According to the Minister's forecast announced at the meeting, "If irrigation is not enough, the yield of fodder plants may significantly decrease. In addition, due to the decrease in precipitation, there is a weak development of natural grass cover in pasture areas, which can create obstacles for the development of animal husbandry." Although the Ministry does not admit that this year there is a serious lag in the production of meat, milk, butter, fruits and vegetables, and potatoes. This is evidenced by an increase in imports and a decrease in exports of products from the group of goods with the same name.

I want to once again note with regret that financial resources worth more than $ 1.5 billion, which are allocated annually to our farmers and peasants, increase the incomes of entrepreneurs, farmers and peasants in other countries, expand their business and improve their social status.

Once again, I should note that Azerbaijan has the opportunity to fully satisfy the demand for food products, agricultural products through domestic production. The country's export potential is also high. Resource opportunities and favorable soil and climatic conditions of Azerbaijan make it possible to develop the agricultural sector and compete with developed countries.

I believe that the Azerbaijani government should seriously analyze the current situation in agriculture and take serious measures to eliminate the existing problems in this area.

Vahid Magerramov