Agriculture

Seeds of Change

Agriculture

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Seeds of Change

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Seeds of Change

By 2010, agriculture was Azerbaijan’s third biggest industry after oil and gas and construction and the principle employer, providing jobs for over 40% of the population. As a result, it […]

By 2010, agriculture was Azerbaijan’s third biggest industry after oil and gas and construction and the principle employer, providing jobs for over 40% of the population. As a result, it has become a powerful tool for both reducing rural poverty as well as adding depth to the Azerbaijani economy.

Within the sector, Azerbaijan is aiming at food independence in several segments, including grain and poultry. According to the Ministry of Agriculture, Azerbaijan currently produces 70% of the farm products it consumes annually. Investments and land reforms are aimed at increasing this figure by 5% to 6% by 2015.

There are currently over 1,208 agricultural producers. In sharp contrast to 16 years ago, today 99.98% of these are privately held. In addition there are 78,648 cottage farms dealing with the production, processing, and sale of agricultural products.

As of 2009, agriculture and related services accounted for 6.4% of GDP. Despite a setback in export demand during the financial crisis, the sector has grown at an annual average rate of 10% since 2000—one of the highest sustained growth rates ever registered.

Annual capital investments in agriculture reached approximately AZN300 million in 2010, up from less than AZN20 million in 1996. Production has grown in tandem. In 2005 the sector yielded AZN1.7 billion. By 2009 that figure was AZN3.6 billion.

Blessed with a diversity of climatic zones in combination with rich farmland, Azerbaijan produces a broad range of crops. Grapes, cotton, and tobacco account for half of all agricultural production in Azerbaijan, while fruits and vegetables account for an additional 30%. Azerbaijani fruits, vegetables, wines, and brandy have earned origin-brand recognition abroad, particularly in Russia and other countries in the CIS region.

VEGETABLES

Over the last decade vegetable production has grown exponentially thanks to an increase in cultivated area. There are currently almost 100,000 hectares utilized for vegetables compared to just 39,000 in 1991. Accordingly, there were 1.2 billion tons of vegetables produced in 2009 compared to a 500,000-ton annual average throughout the first half of the 1990s.

The epicenters of Azerbaijan’s vegetable industry are the Lankaran-Astana area in the southeast and Guba-Khachmaz in the northeast, both of which have ideal soil and climatic conditions for a range of vegetables. Azerbaijani fresh vegetables such as tomatoes, greens, melons, and cucumbers have earned a strong regional trademark. Refrigerated vegetables are exported predominantly to the large Russian market.

FRUITS

Azerbaijan’s tradition of fruit growing is centuries old and highly respected in the region. Today, over 125,000 hectares are cultivated for this purpose, approximately 100,000 of which hold crops of fruit-bearing age. Gross harvest in 2009 was 718,000 tons with an average yield of 7,100 kilos per hectare.

The leading fruit crops are grapes and citrus fruit. Apples and pears along with quince drupaceous (plum, cherry, sweet cherry, peaches) and subtropical cultures (figs, grenade, persimmons) are also prevalent. Strong scales, particularly nuts, hazel nuts, and almonds, have been produced for generations throughout Azerbaijan and still make up a staple of the country’s commercial crop portfolio.

The fruit industry is a major focus of Azerbaijan’s drive to boost the commercial value-added of its agricultural products. New projects such as the NAA Agrotara, a fruit drying facility in Samukh inaugurated in 2011 by President Ilham Aliyev, are providing are the engine of commercial transition. The company, the first in the CIS area, is capable of drying 12 tons of fruit daily. It will employ 150 workers on a permanent basis with an additional 60 on a seasonal basis. The adjoining cold-storage warehouse has a capacity of 25,000 tons.

GRAINS

According to the Ministry of Agriculture, Azerbaijan is targeting a grain production level of 2.5 million tons in 2011, an increase of 500,000 tons compared to 2010. Of this total, milling grain volumes will be 1.7 million tons. The ultimate goal is to eliminate the country’s dependence on grain imports.

Currently, domestic consumption is 3 million tons, with imports from Russia and Kazakhstan filling the gap. Azerbaijan nearly met all demand with a bumper crop in 2008, but flooding in the central part of the republic in 2010 put a large amount of sown area underwater, and production volumes dipped significantly below the demand mark.

“In 2011 we must try to reach the level of 2009 or higher,” President Ilham Aliyev said at World Food Azerbaijan 2011, the 17th Azerbaijan International Food Industry Exhibition, and one of the most important events in the region’s food industry. “Certain steps may be taken to establish large farms because we have completed land reform. I believe that Azerbaijan holds a leading position in the CIS in this area as it has conducted very progressive reforms. At the same time, we should take extra measures to cultivate previously unused lands.”

POULTRY

As part of a sweeping medium-term plan to reduce food import dependency, Azerbaijan has recently outlined a comprehensive plan to increase its poultry production to 80,000 metric tons annually by 2015. In 2010 the country produced 50,000 metric tons of poultry. The planned increase in poultry production is the centerpiece of a broader goal to increase overall agricultural production by 2015.

“In poultry production… there is a potential for complete self-sufficiency,” said President Aliyev at the Word Food 2011 exhibition. “I think we must resolve this issue in 2011-2012.”

Azerbaijan’s main chicken meat producer is Davachi Broiler, of which OJSC Azerbaijan Investment Company owns 25%. The company has announced that investments and joint ventures are currently in the offing.

Following its full recovery from an outbreak of the H5N1 virus in 2011, the poultry segment is a major target of the Azerbaijani National Fund for Entrepreneurship support. By the end of 2010 the Ministry of Economic Development had received 12 proposals for an incentivized tender to set up poultry meat production and broiler farms or to reconstruct existing production facilities through the introduction of modern technology.

THE FISHING INDUSTRY

Modernization of the industry over the last decade has helped to maximize the commercial potential of fishing. Today the focus is on regulations to protect the dwindling stocks of Caspian sturgeon from over-fishing, and Azerbaijan is taking a strong leadership position on the issue.

The beluga sturgeon was recently named by the Marine Stewardship Council as one of the most endangered species of fish on the planet. However, with a kilogram of beluga caviar starting at over $1,000, illegal fishing is a serious challenge.

In 2011 the heads of the five littoral Caspian states met in Baku and introduced a moratorium on sturgeon fishing. As part of the agreement, they have also built the largest and most modern hatchery, allowing them to support the sturgeon population by releasing 15 million fry per year. Baku is also helping to lead the charge in the development of a common legal framework governing fishing in the Caspian.

The development of aquaculture production in Azerbaijan has proved a crucial step in preserving the sturgeon while allowing the fishing industry to prosper. Aquaculture production, including freshwater, now exceeds 120 million metric tons, far outstripping the annual average capture of marine fish.

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