The share of agriculture is reduced by background unabated subsidies

In January - April 2014 the share of agriculture (795.6 million manats, including the processing industry) amounted to 4.37% of the gross domestic product of Azerbaijan.

According to the State Statistics Committee of macroeconomic indicators of the country, until May 1 there was produced 18 billion 206.3 million manat GDP, of which 10 billion 41.8 million or 55.16 % came from non-oil sector - mostly construction projects where the investment does not pay off.

According to the expert of the Center for Economic Research Vahid Magerramov, low level of agriculture does not reflect the potential of this segment of the economy. The Government announced as a priority to ensure food security, about 38 % of the working population is employed in the countryside, farmers are given subsidies on fuel, paid half the cost of purchased fertilizers, issued 50-percent payment for insurance, and agricultural producers are exempt from paying taxes. However, these measures do not contribute to radical changes.

The reason is the lack of institutional reforms and systemic approach. This area is dominated by small farms (95 % of total households forming 97 % of jobs in the agricultural sector). The Government has established several pilot farms in the enlarged Aghjabadi and Beylagan regions specializing in the cultivation of food grains, but it is not co-operation of manufacturers, but the dominance of the people close to the official oligarchs. According to CER, each enlarged farm has about 5 000 hectares of land, and the costs of processing are estimated at 25-30 million manat. Today there are no banks willing to bail land in the regions to give loans of this size to hundreds of scattered farms – it is too great a risk. According to the Central Bank, in the last 3 years agriculture has accounted for 4.7-5 % of the loans issued.

So the mass manufacturer has a choice - the land is sold or rented at a local long-term lease to latifundistas that dictate conditions. Officially, the government restricts their participation in the creation of large plots of land in the provision of long-term leases and concession loans (up to 30% of the investment value of the economy). In fact, the money is lent to large public officials and their financial structures.

In addition, in the production chain "field -to-consumer" prices are formed unfairly - peasants (small and medium farmers) get up to 15% for the harvest, the drivers - 5 % of its final value, and the rest falls into the pocket of the dealers, markets administration and representatives of regulatory bodies. Last orders and presidential decrees on improving agricultural market infrastructure have not yet been successful.

According to experts, the government has no deliberate policy in this sector. An illustrative example is livestock breeding. Since Soviet times annually purchased are thousands of heads of pedigree cattle. With the right approach you can reproduce several generations of elite animals adapted to local conditions. In fact, spent tens of millions of standard units of currency, animals are distributed by untrained and unequipped farms, milking them non-stop and hoping for a quick return on investment, resulting in the death of almost all reproductive generation, even without leaving offspring.

Local government does not provide intensive agriculture or livestock, said the expert. In the EU only 5.3% of the population is employed in agriculture, ensuring their needs in production and exporting crop to less affluent regions, while Azerbaijan provides nearly 40% of an average of 60 % of the demand. Some kinds of agricultural products are imported by almost 100%. Even in a difficult economy in 1995 the agricultural sector provided 25.3 % of GDP, and in 2009 as a result of shaft of petrodollars for the first time its share fell to 6.4% with an annual downward trend.

Annually from the state budget to compensate farmers for the costs of fuel and motor oil, as well as for wheat and paddy rice, up to 100 million manat is allocated in order to increase agricultural production. In fact, the situation is getting worse - if at the beginning of independence (as of 1 January 1992) in Azerbaijan there were 37,300 tractors and 4,300 combine harvesters, as of January 1, 2013 , this figure was, respectively, 21 100 and 1 700 units. How could the villagers plow the acreage ready to harvest on time and avoid losses? - 17D-