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Livestock Production Becomes Unprofitable

Livestock Production Becomes Unprofitable
Markets Review 

2017 July 27 ( Thursday )  12:06:17
Print version
Русский Azərbaycan

Why Azerbaijan cannot do without imported meat and milk?

With the beginning of the devaluation, double-digit inflation hits the consumer's opportunities of the population, but the most worrisome is the rise in price of meat and milk. With the beginning of the devaluation, price tags on meat stalls almost doubled, and the quality of meat products, on the contrary, is deteriorating.

As an agriculture expert Vahid Maharramov said, there are many factors affecting the price cycle, but all of them end up converging at one point - a low level of domestic production and monopoly on food imports.

"According to WHO per capita standards, 85 kg of meat is laid, which on an annual basis in Azerbaijan means about 850 thousand tons per 10 million of our population. However, we produce only about 300 thousand tons, which means that local production accounts for only 38% of domestic demand," Maharramov estimated.

Official data on local production is much higher. So, according to the State Statistics Committee, in the first half of this year, domestic meat production amounted to 237.8 thousand tons (an increase of 2.9%). If we consider the slaughter of imported cattle on the territory of Azerbaijan as domestic production, it goes without saying that the figures grow in an arithmetic progression. In addition, it was found that milk production reached 1 million 3.5 thousand tons (an increase of 0.8%), and the production of eggs reached 879.4 million eggs (an increase of 6.7%).

"Judging by the data of the State Customs Committee, 3 kg of meat and products processed from meat is annually imported per capita, while aggregate figures do not satisfy even half of the demand," Maharramov estimated.

"As for dairy products, WHO estimates 360 kg of milk and dairy products consumed per capita. At the same time only half of the demand is met by domestic production, 1.7 million tons out of the required 3.4 million tons. It turns out that the supply on the market does not cover the demand, and imports are monopolized. For this reason, the prices for meat and milk are not available to the general population."

Meanwhile, demand against the background of rising prices has declined and continues to fall. Production is also gradually declining, and we are beginning to depend more and more on overseas products. Imports of meat and milk in monetary terms have increased to $ 107.3 million, which is almost three times more than it was last year. With the data of the State Statistics Committee, it is also difficult to agree on the growth of domestic production, as the reduction in the feed stock of livestock and a rise in the cost of feeds have significantly affected the ability of Azerbaijani farmers.

As you can see, the import figures are not lame at all; we import up to one million tons of milk only, which is not surprising: with annual demand of the population for raw milk exceeding 3 million tons, Azerbaijan produces 1 million 700 thousand tons of this product. All this leads to the forced purchase of dry milk powder from neighboring countries, mainly Belarus, which is rightfully considered the leading producer. According to our interlocutor, the problems of the dairy industry also stem from extensive livestock farming, when the livestock population (and it was 1 million 300 thousand before the mass transfer of natural pastures for cotton crops) cannot ensure productivity. The expert cited the example of Spain, which has five times the population of Azerbaijan. There are only 800 thousand dairy cattle there, but the yield of the Azerbaijani farmer in 1.3 tons is incommensurable with the productivity of the Spanish farmer who receives 8 tons of milk from a cow. The Israeli farmers have achieved more tangible results and are planning to increase the figure to 10 tons.

Extensive livestock breeding in itself has greatly reduced productivity, which is based not on a qualitative but on a quantitative approach. The livestock of cattle has reached 2 million 700 thousand, and the livestock of small cattle has reached 8,500,000 head, but due to lack of pasture and low level of daily allowance the surplus in weight in the first case does not exceed 500 grams. For comparison, in an intensive approach, cattle add weight by up to a kilogram per day. In the opinion of the expert, the problem of low productivity was always connected with the lack of feed. As a result of the reduction in the feed base, this approach became completely unprofitable. -0-