Food Exports Gone Aground

Baku / 18.05.18 / Turan: Agriculture showed a decline in the first quarter of this year, manifested in comparative figures of imports and exports of food products, Turan was informed by the agricultural expert Vaheed Maharramov. The analysis of statistical data for January-March this year and last year revealed an increase in imports on the most important positions of the consumer basket of Azerbaijanis and the neqative dynamics of exports.

Thus, wheat imports increased in the first quarter of 2018 compared with last year's indicator by 54.7%, vegetable oils - by 37.3%, fresh fruit - by 51.5%, tea - by 18%, and beef - by 29.8%. In addition, import positions continue to grow in the meat and dairy segment: import of meat in live weight doubled, and milk imports increased by 30%.

It is noteworthy that exports in the listed items in the first quarter of this year also decreased to the same period last year. Fresh fruit export decreased by 1.5%, sugar - by 47.5%, tobacco - by 6.5%, tea by 5.4%, and vegetable oils by 20.4%. The decline in production for the most important items of the consumer basket has been observed for several years, but the situation in the sphere of grain production worries agrarians most of all.

Despite state support for the industry, the annual subsidies and state funds allocated to raise grain yields for grain areas - 65-70% of the land suitable for agriculture, the domestic demand for 1.4 million tons of wheat depends entirely on imports. At the same time, the curious situation with import and local production indicators continues - the Ministry of Agriculture insists on domestic production of 1 million 800 thousand tons of wheat, despite the data of the State Customs Committee on the annual import of 1.4 - 1.6 million tons of this cereal mainly , from Russia.

According to Maharramov, the state budget continues to finance the development of seed production, the import of overseas mineral fertilizers, the purchase of European harvesters worth about EUR 100 thousand each and the solution of other technical problems, but the grain yields leave much to be desired. A small fraction of the funds, which accounted for the share of farmers, is not enough to increase productivity in conditions of a rise in price of diesel fuel, gasoline, equipment, mineral fertilizers and pesticides. Thus, an optimal approach is needed to increase the size of subsidies to peasants engaged in grain production. The state finances the development of seed production, but there is no progress in this area, as the peasants are forced to use an improvised seed material. In turn, any quality of seeds does not allow achieving high productivity and good quality of crops, and local wheat is used in animal feed.

Despite the decision of the Cabinet of Ministers to annually take 750 thousand tons of wheat from local farmers to the State Grain Fund, all this volume is imported. In general, such a situation damages the food security of the country, the expert is sure, noting that the protracted problems of the industry can lead to an outflow of labor and will negate the interest of farmers. "According to our calculations, a crop of 20 quintals pays for the farmer's expenses per hectare of fields. Expenditures are growing, and the incomes of peasants are falling, decaying grain production," the source stressed. As it turned out, not the last place in the list of problems is limited access to finance, in particular, bank lending. High interest rates of local financial organizations (24 - 33%) do not leave an opportunity for the development of the industry. For comparison, agricultural loans in neighboring countries - Georgia and Armenia do not exceed 14%.

The loss of farms is caused by the impossibility to follow agro-technical norms due to a number of problems caused by the lack of irrigation water, fertilizers, machinery, etc. Meanwhile, the local grain economy has prospects for development, but this requires attention of the relevant state structures to the industry.

The long-term decline of the industry was manifested in statistics, according to which it can be said that it is no longer painful to fall and it is even nowhere to fall further. So, according to the State Customs Committee, in 1996 Azerbaijan imported 143 thousand tons of wheat for the amount of 28.6 million dollars. Statistics of the agency shows that after 20 years, the volume of imports increased by 10 times. So, in the year before last, 1 million 599 thousand tons of wheat was imported for 295 million dollars. Thus, 20 years ago 20 - 25% of domestic demand was satisfied due to imports, whereas today imported wheat covers 100% of domestic demand. -0-