Experts Offer Direct Subsidies for Grain Production to Subsidize Grain Imports

The Ministry of Economy held a meeting on August 2 with the participation of the producers of bread and concerned government agencies.

As it became known to Turan, the meeting discussed ways to maintain bread prices at a stable level.

The meeting took place the next day after the retail price of bread rose by 25%.

Turan in its analytical article cast doubt on the validity of price increases, urging the government to declare the formation of the price of bread.

It should also be noted that on January 15 this year, based on the order of Azerbaijani President Ilham Aliyev, the import and sale of wheat, production and sale of flour and bread were exempt from VAT, which led to lower prices for grain and flour. In addition, this year the price of Russian wheat, which Azerbaijan buys, amounted to $ 140 instead of $ 220 per ton in 2015.

The State Grain Fund was created in 2008 to ensure a steady supply of the population with bread and to maintain price stability. Initially, the Fund had to store 200,000 tons. In 2014, the quota was increased to 500 thousand tons, and from 2015, the index was increased to 750 thousand tons.

SGF does not buy local grain, because Azerbaijan practically does not produce food grain of Class 3, which SGF takes. Therefore, all food grain is imported.

SGF is controlled by the Ministry of Emergency Situations, the head of which is involved in the bread business in full and uses the Fund's ability to improve the competitiveness of the family structures in the grain market.

At the same time the Ministry of Agriculture reported on the production of 2 million 999 thousand tons of grain crops and leguminous plants in 2015. And this year it promises to produce exactly 3 million tons.

Experts cast serious doubt on these figures. Azerbaijan generally requires 2.5 million tons of food and fodder grain. And in accordance with the statistics it receives 4.3 million tons, including 1.3 million tons of imports.

The state spends millions of dollars on subsidies for grain production. According to the Ministry of Agriculture, in 2014 the crop was harvested from ​​951,642 hectares. For every hectare, there were subsidies allocated in the amount of 80 AZN, which makes a total of 76 million AZN.

In this case, Turan Agency’s experts, given that the country does not produce bread wheat, offer to stop subsidizing the fruitless project and send most of the money to subsidize grain imports in order to maintain reasonable prices up to the period, when living standards rise to the standards of developed countries. -0 ---