Increase in cognac production by 8.5 times - much or little?

In the first quarter, Azerbaijan produced food, beverages and tobacco products worth 646.3 million manat. Most increased the production of brandy – 8.5 times in comparison with the same period last year, accounting for 78.9 decaliters (1 million 278 thousand bottles in absolute terms).

"This is due to several factors - primarily with the problem of aging brandy to 3 years or more," said Vahid Maharramov, a specialist in agriculture of the Center for Economic Research (CER). According to him, in 2009-10 in several areas there were reconstructed and commissioned idle specialized enterprises. The country also has a problem with purchasing the crop from the villagers - all plants with extensive plantations of grape wine varieties belong to the local ministers - oligarchs. So, Gilan Holding (the family of the MOE head Heydarov) includes JSC Gabala Sherab, LLC Agroazerinvest and LLC Alcoa, which owns more than one thousand hectares of vineyards in Gabala , Yevlakh , Khanlar , Samukh , Tovuz and Lankaran.

The expert also expressed doubts as to the State Statistics Committee figures – the figures will be higher if we take into account unreported products, as evidenced by discrepancies in the Russian and Azerbaijan customs data. Subordinated to the Ministry of Agriculture, there are several Russian producers that leased factories Azervinzavod where from 60 to 85 years they produced brandies such as Shirvan and Russian Millennium (15 years’ exposure), Moscow (10 years’ exposure), Baku, Gey-Gel and Ganja (8-10 years). There are special cognacs Three Stars and Five Stars, whose names speak about the years of exposure. By the way, in 2013, Azerbaijan exported to Russia products worth $ 1.077 billion (4.5 % of total exports), where wine and beverages are not the last.

Development of the industry is regulated by the law "On the viticulture and winemaking" adopted on 19 October 2001, last amended 28 October 2008. According to Article 13 , in the manufacture of vintage cognacs ( over 5 years old ) are not allowed to mix wine with sulfur trioxide , but production for local consumption , these requirements are not met . Article 20 of the law does not allow a ban on exports, but the "barrage" Agriculture contradict instructions document.

By the end of 2012 , in Azerbaijan in 1,774 processing farms ( legal entities) the total area of crops was 1.65 million hectares, while vineyards fell minuscule – 16,327 hectares with an average yield of 88.6 tons per hectare (total 144,660 tons).

According to Wahid Magerramov, until 1986, when the "dry law" was adopted, viticulture and winemaking employed about 2 million of the 7.5 million inhabitants of the country, with 40 % of the budget formed in this industry. There were 274,000 hectares of vineyards with a total yield of 2,136,000 tons, with a fifth of wine and brandy in the former Soviet Union accounted for the Azerbaijan.

In 2012, the President signed a decree approving the State program on development of viticulture on the 2012-20 years. At the same time, Azerbaijan became the 45th member of the International Organization of Winemaking Countries, with its headquarters in Paris. According to the monitoring by CER, currently the CIS and the Baltic States and Poland have a need for brandy and wines from Azerbaijan. In addition, local wine is exported to France, Spain, Turkey and China, where there is high value environmental performance. On the exports of cognac there is no sense to speak in high tones, but the outlook is encouraging.

The most important reason for the lag of production and sales of cognac Magerramov believes lack and poor quality of raw materials, as well as low productivity, which increases the cost of production. Profitability of production does not reach 10 % and in 2011 it was at 3.8 %. This factor affects the agricultural loans - banks lend money to farmers at an average of 25-30% per year, and low profitability of the industry does not allow the villagers to get rid of the yoke of the credit, even in 10 years.

According to experts, the majority of land depends on the irrigation system, which is not debugged at the governmental level. In addition, there is not enough space, fertilizers and chemicals protecting against pests - birds and insects. The main problem is the lack of a scientific approach and skilled workers – at many plants with high-tech equipment they work in the old manner. -17D-