Sell Oil, Buy Meat and Butter
2017 October 27 ( Friday ) 13:56:46
Baku / 27.10.17 / Turan: This year Azerbaijan doubled import of meat and other food products. According to the State Customs Committee, in the first nine months of this year, food products worth 971.8 million manat were imported into the country. In this segment of trade, in nominal terms, growth was recorded in the annual comparison at 2.3%.
During the reporting period, meat imports increased by 91.57% to $ 46.552 million, milk - by 69.02% to $ 9.720 million, butter and other dairy products - by 27.65% to $ 49.065 million, tea - by 29.89% to 39.236 million dollars, and fruits and vegetables - by 0.22% to 91.465 million dollars. At the same time, wheat imports decreased by 34.57% to 136.361 million dollars, and sugar - by 5.96% to 124.467 million dollars.
The data cited clearly demonstrate the difficult situation in the domestic agrarian sector announced by President Ilham Aliyev as a priority direction of the non-oil sector. Judging by the statistics, it has not become the dominant component of the economy. Import dependence on the basic parameters of food is steadily increasing, as are the prices of basic necessities.
The reasons for the rise in price of food products, both imported and locally produced, are the topic of a separate study. The question is urgent, why the agrarian sector did not reach the declared rates of food production, despite a solid investment? Why is our trade so dependent on imports of meat, milk, cheese, sour cream, etc? Where are the modern livestock complexes that are shown to the people on AzTV daily?
"The fact is that the priorities in the structure of agricultural exports have changed, and this has led to the fact that the technical crops are now planted in huge areas. It is cotton, grapes, tobacco, and hazelnut gardens. Until recently, there were pastures in these territories, where farmers grazed cattle. Moreover, the fodder base for cows and sheep has also declined. Where can I get hay if the land is planted with vineyards and cotton? Today in the regions of the country, farmers are forced to buy one bale of hay to feed livestock for 4 manat instead of 1.2 manat as it was the year before last. All these factors made the business in livestock production unprofitable," the independent economist Natig Jafarli said.
There is a curtailment of the livestock development program in favor of increasing the production of cotton, creating new cotton plantations, as Agriculture Minister Heydar Asadov recently said. By the way, the Ministry of Agriculture ignored the recent appeal of the farmers of the Sabirabad region, who complained that the local authorities forced them to plant cotton, although there is no irrigation system in these areas. As a result, this territory has come to be unsuitable for grazing livestock, and cotton harvest is also under big question.
According to Jafarli, the situation in the agrarian sphere is aggravated not only by the unintelligent tactics of sowing areas, or red tape, but also by the insufficiency of loans for entrepreneurs, the inaccessibility of modern technologies, and the authorities" inertness in attracting foreign investors to this sector. Interest rates on loans in banks are quite high, which frightens off farmers. In order to raise the agrarian sector, it is necessary to invest billions of manat in this industry. Under current conditions, the government does not undertake such expenses, counting on the enterprise of the villagers.
"The development of agriculture in Azerbaijan is hampered by three problems: lack of fertile land, lack of finance, and lack of a clear food supply program. And until they are resolved, the country will remain import-dependent. Monitoring of the market showed that 50% of food production in the local market is imported. Attempts by the government to increase the production of local products and establish import substitution have not yet produced the desired effect," the expert on agrarian economy Vahid Maharramov said.
As the specialist noted, to normalize the situation, it is necessary to attract investors to the country, but for this it is necessary to liberalize the legislative base, reduce tax rates, and improve the business climate. Otherwise, the agrarian sector will not be able to become a full-fledged alternative to the oil and gas industry and to compensate for the current decline in the economy. -0-