Why is food getting more expensive in Azerbaijan?

Amid concerns about rising food prices in Azerbaijan, data published by the State Committee for Statistics (GKNB) shed light on the main factors contributing to this phenomenon. In February 2024, the consumer price index for food, beverages and tobacco products in Azerbaijan increased by 100.7% compared to the previous month, a similar trend was observed in January-February, recording an increase of 100.2% compared to the corresponding period of the previous year.

Delving into the data, the report highlights the significant increase in the consumer price index for food, beverages and tobacco products in February 2024 compared to the same period of the previous year. In particular, the food price index increased by 99.2%, while alcoholic beverages and tobacco products saw an increase of 102.0% and 111.7%, respectively.

Meat imports increased earlier this year. In January alone, Azerbaijan imported 4,410 tons of meat worth 8 million 542 thousand dollars, which indicates a significant increase of 63.8% compared to the same period last year. This sharp increase in imports, especially frozen meat from India, has put upward pressure on domestic food prices.

Expert Wahid Maharramli's comment sheds additional light on the situation. In the "Difficult Question" program, Maharramli explains the constant increase in food prices in Azerbaijan by two main factors: insufficient domestic agricultural production and monopolization of the food market. He argues that the country's inability to comply with per capita consumption norms exacerbates price volatility, exacerbated by the low purchasing power of the population.

In addition, Maharramli emphasizes the dominance of monopolists in the food market, giving examples of sharp price increases organized by importers who take advantage of market inefficiency. He emphasizes that farmers are marginalized in this system, deprived of fair access to markets, while trade intermediaries make significant profits at their expense.

Turning to potential solutions, Maharramli emphasizes the role of government in stimulating agricultural production and curbing monopolistic practices. He advocates targeted measures such as interest-free loans to introduce modern farming methods, subsidies for agricultural products, and strategic interventions to regulate market dynamics.

However, Maharramli also warns against inefficient allocation of government subsidies, noting cases where subsidies primarily benefit large landowners rather than small farmers. He emphasizes the importance of empowering individuals with practical agricultural knowledge and skills to make meaningful changes in the sector.

As Azerbaijan faces the challenge of rising food prices, Maharramli's findings highlight the need for concerted efforts to address systemic problems and create a more equitable and sustainable food ecosystem. By prioritizing investments in domestic agricultural production and implementing effective regulatory measures, Azerbaijan can mitigate the effects of rising food prices and ensure greater food security for its citizens.