State programs for the production of wheat do not justify themselves

State Statistical Committee (SSC) released information on the progress of grain harvesting in 2021. The message reads: “Mass harvesting of grain and leguminous crops is close to completion. According to operational data, for August 17, 2021, 960.4 thousand hectares were harvested, or 97.7 percent of 982.6 thousand hectares planned for harvesting winter and spring grain and leguminous crops (excluding corn). 3057.1 thousand tons of products were harvested from the fields, the yield was 31.8 centners. At the same time, 1885.4 thousand tons of the crop or 61.7% fell to the share of wheat, 1146.6 thousand tons (37.5%) - to the share of barley and 25.1 thousand tons (0.8%) - to the share of other grain and leguminous crops”.

It should be noted that the harvesting of wheat in the country has already been completed. According to the SSC, in 2021 the country produced 1,885.4 thousand tons of wheat. 

In search of data on the size of wheat fields required to calculate the wheat yield in the country, I had to turn to the websites of the State Statistics Committee and the Ministry of Agriculture. In 2021, as in the past, the SSC does not report the exact number of wheat crops. The latest information on wheat crops was released by the SSC at the end of December last year. The message says: “Mass sowing of winter crops for the harvest of 2021 is close to completion, and as of December 24 of this year (2020) winter crops have been sown on 976,730.7 hectares, including 594,896.6 hectares with wheat, 367,230.1 ha with barley and 276.0 ha with rye. On June 1, 2021, the Ministry of Agriculture on its website in a note under the heading “Grain harvesting has started in Azerbaijan” wrote that “this year 986 685 hectares have been sown with winter wheat in the country”. 611967.3 hectares of arable land were sown with wheat and 374717 hectares - with barley”. In both sources, information on the sowing of spring wheat is missing. According to the latest information from the Ministry of Agriculture on the sown area of ​​wheat and the report of the SSC on wheat production, this year in the country, from 611967.3 hectares, 1,885.4 thousand tons of wheat were obtained.

APA-Economics reports referring to the package of the state budget of the Republic of Azerbaijan for 2020, it was expected that in 2021 the country would produce 2,218.8 thousand tons of wheat. As you can see, this year the country produced 332.9 thousand tons of wheat less than the government planned. It should also be noted that this year wheat production was 255 thousand tons less than in 2009. Thus, wheat production in 2009 amounted to 2,140.7 thousand tons. Unfortunately, this year the wheat yield has also decreased. Thus, in comparison with previous years, the wheat harvests this year decreased to 30.8 centners (Table 1).

Table 1. Cultivated area of wheat, production and yield. Source - SSC

For example, in 2019 Jalilabad region, which is called the "Ukraine of Azerbaijan", received 37.1 centners of wheat per hectare, in 2020 - 28 centners, and this year the yield fell to 24.9 centners. In the Jalilabad region, which provides more than 10% of the wheat produced in the country, over the past three years, the yield has decreased by 12.2 centners per hectare. This is a very bad indicator. It should also be noted that in September 2019, a republican meeting was held in Jalilabad region on the topic "Grain 2020: the challenges ahead" with the participation of the Minister of Agriculture Inam Karimov. Speaking at this meeting, the head of the Jalilabad region executive power Namig Zeynalov said that state support is being provided to the development of grain growing in Azerbaijan: “Thanks to the expansion of state support, grain growing in the country is developing with every goal. Jalilabad is one of the largest grain regions in Azerbaijan. This year the average grain yield in the region was quite high. We have set a goal to get more products from the fields in the coming years."

As mentioned above, if the average yield per hectare in the region in 2019 was 37.1 centners, then in 2021 the wheat harvest in the region fell to 24.9 centners. That is, this year the productivity has decreased by 12.2 centners. Farmers and villagers told the press that the reason for the decline in wheat yields was the poor quality of the seeds obtained. They also say that they were unable to receive fertilizers and pesticides on time due to delays in the provision of subsidies to the agricultural sector, and that they were unable to comply with agricultural regulations. Although financial resources are annually allocated from the state budget for the development of seed production, the situation in this area does not change. The material and technical base of seed farms in the country is very weak. And since these farms are not equipped with the necessary equipment, the seed materials they offer often do not meet the standards for seeds. Unfortunately, the country has not organized the cultivation and reproduction of new varieties of plants with high yields and stable hereditary traits that are resistant to stress factors and changing climatic conditions. To achieve good results in cereals, it is imperative to grow more productive and stress-resistant varieties of plants.

Breeding work in Azerbaijan has failed. Because of this, the production of wheat decreases, the yield decreases. The country's dependence on imports is growing. Studies show that over 10 years, wheat imports increased in physical weight from 931.3 thousand tons (in 2009) to 1 million 585 thousand tons (in 2019), that is, by 70.1%. During the same period, the value of wheat imported into the country increased from $ 194.7 million to $ 340.5 million, or 77.4%. Calculations carried out over the past 5 years, from 2015 to 2019, out of 1,353,072 tons of wheat imported into the country in 2015, 65.1% was used for the production of food products, and in 2016 - 72.7% out of 1,599,599 tons of imported wheat. Subsequent dependence on imports in 2017 was 57.25%, in 2018 - 48.8%, in 2019 - 64.4%. Thus, over the past 5 years, the country has provided more than half - 61.6% of its demand for milling wheat at the expense of imported wheat. This means that Azerbaijan is able to meet only 38.4% of its need for food wheat. Those. while Azerbaijan uses up to 35% of all arable land for wheat production, it can satisfy its need for food wheat through domestic production only by 38.4%.

Azerbaijan mainly imports wheat from Russia. The fall in wheat production in Russia this year and the sharp rise in wheat prices pose a serious problem for Azerbaijani wheat importers. According to the Ministry of Agriculture of Russia, from September 8 to September 14, the export duty on wheat will be $ 46.5 per ton. From September 1 to September 7, the duty is $ 39.4 per ton. If a week ago wheat cost $ 256.4 per ton, now it is $ 266.5. The chairman of the board of the Union of Grain Exporters of Russia told the press that the duty would continue to increase. Analysts at ProZerno also say that the tariff will continue to rise and will exceed $ 50 per ton by the end of September. Last week, the price of 1 ton of wheat with a protein content of 12.5% ​​(FOB Black Sea) increased from $ 298 to $ 305. Also, think tanks predict a significant decline in grain production in Russia this year. So, in early August, SovEkon lowered the forecast for wheat production for this year from 82.3 million tons to 76.4 million tons. Last week, ICAR (Indian Agricultural Research Institute) cut its forecast from 78.5 million tons to 77 million tons. The Foreign Agricultural Service of the United States Department of Agriculture (FAS USDA) in its August report predicts that the total wheat harvest in Russia will be 72.5 million tons. The Ministry of Agriculture of Russia predicts a grain harvest of 81 million tons by 2021. This is by  4.9 million tons less than last year, which is associated with a decrease in the area under winter wheat crops by 1.3 million hectares.

In January-July of this year, wheat imports fell by 6% in volume terms, but increased by 10.3% in value terms. So, in January-July 2020, 434.5 thousand tons of wheat in the amount of $ 94 million were imported to the country, while in the same period of this year, 408.8 thousand tons of wheat in the amount of $ 103.7 million were imported. And if the average cost of importing a ton of wheat in January-July 2020 was $ 216.39, then at the beginning of this year, due to the rise in wheat prices on the world market, a ton of imported products cost the country $ 253.83.

In general, the Azerbaijani government must take serious measures to meet the country's demand for food wheat through domestic production. Azerbaijan has ample opportunities and necessary resources for the development of grain production. Azerbaijan can meet its demand for food wheat through domestic production through increased productivity. For this, the country needs to organize the cultivation and reproduction of new highly productive varieties of plants that are resistant to stress factors and changing climatic conditions. To obtain highly productive and quality seeds, it is very important to train highly qualified specialists in seed production. Another important issue is to ensure a constant supply of water for irrigation of crops. In order for farmers and villagers to comply with agrotechnical rules in a timely manner, trainings and courses should be organized in the regions to educate them, improve their knowledge and skills. It is equally important to stimulate the production of local quality wheat. For this, first of all, it is necessary to stop the import of fodder wheat of the 4th and 5th classes with a viscosity of less than 23% into the Republic of Azerbaijan. Secondly, the formation of the State Grain Fund should be carried out only at the expense of local grain. Thirdly, a value added tax should be introduced on imports of wheat and flour products for at least 3 years. them

Wheat production and processing enterprises should be given access to preferential cheap credit resources. The "Rules for subsidizing agricultural production" should be amended - subsidies for wheat producers should be provided depending on the volume of commercial production, and not on the size of the cultivated area.

Vahid Magerramov