Economy

GENERAL INFORMATION

After Azerbaijan gained its independence, the development of agriculture in Azerbaijan was not easy, just like other fields of the economy of Azerbaijan. Achievements gained nowadays are the results of being hardworking and sound policies. Our Country does not only provide itself with strategic local products but also, we are a country that export agricultural products to other countries.

Today, with the initiative of President Ilham Aliyev, according to modern requirements, works are going on for the development of agriculture in Azerbaijan. It is no coincidence that after Ilham Aliyev elected the President of the Republic of Azerbaijan in 2003,  firstly, he signed a decree and order in order to develop the agrarian sector. People who were busy in the agricultural sector, became free in terms of paying all taxes, except land tax. They began to receive subsidies for fuel and lubricants, fertilizers, seeds and breeding animals. Also, additional discounts were made to producers of traditional products such as wheat, cotton, cocoons, tobacco, rice, hazelnuts, etc.

Financial support plays a crucial role in the development of the agricultural sector. In addition, today,  along with entrepreneurs working in other fields, farmers are given soft loans in Azerbaijan.

By using these financial supports efficiently, many farmers turn their farms into large farms. So, a number of large farms are operating in the country. The activities of these farms play a crucial role in terms of stabilizing the consumer market, increasing export potential, reducing dependence on imports, and strengthening food security in general.

In the last years, along with the development of the non-oil sector which is one of the important sectors of the economy, agriculture is also developed dynamically and sustainably. This trend increased the employment of the population. Works were done in the efficient use of arable lands and available water resources and thousands of hectares of land have been involved in crop rotation. As a result, it is seen that there is sustainable growth in agricultural production.

Crucial works continued in the country in order to achieve a large increase in the production of cotton, grain, and other agricultural crops and cattle-breeding. Measures were taken such as Improvement of the irrigation system in the arable lands and putting newly irrigated lands into operation. Water reservoirs, pumping stations, main canals, and other water facilities were built and put into operation.

The President of the Republic of Azerbaijan signed a decree No 1897 about approval of the main directions of the strategic road map on the national economy and the main sectors of the economy and the issues arising out of it. With this decree, on the basis of the depth analysis of the economy, the current situation of the production of the agricultural goods and their processing systematically and comprehensively discussed by the relevant government agencies, research centers, and independent experts. The relevant assessment was done and according to these assessments, “Strategic Roadmap for the Production and Processing of Agricultural Products in the Republic of Azerbaijan” was prepared. This Strategic Roadmap reflects the country's long-term development goals for agricultural development.

In order to improve management in the agrarian sector, the Agrarian Services Agency was established under the Ministry of Agriculture of the Republic of Azerbaijan.

Currently, the state provides extensive support for the development of agriculture.

Common government support measures:

• exempt agricultural producers from taxes;
• provide preferential loans to agricultural producers;
• apply customs credit to most of the agricultural and processed imports;
• pay 40% of the cost of the agricultural machinery and equipment sold or leased to agricultural producers by AgroService;
• pay 50% of insurance for agricultural assets and predicted insurable events.

Government support measures for plant-growing:

• provide subsidies worth AZN 50 for each hectare of crop fields in order to pay 50% of the cost of fuel and engine oil consumed for agricultural production;
• provide subsidies to processors of AZN 0.1 for each kilogram of sold cotton and, dry tobacco, and AZN 0,05 for each 10 kilograms of raw tobacco;
• People who are interested in cocoon production are provided with a subsidy of 5 (five) manats per kilogram of all types of wet cocoons (except for spun and "karapaçax" cocoons) accepted by cocoon processing and silk production institutions;
• legal entities which engaged in sugar beet processing and individuals who are engaged in entrepreneurial activities provided with 4.0 manats subsidies without establishing a legal entity for each ton of sugar beet to its producers;
• the price of irrigation water for agricultural producers is AZN 0,5 per 1000 m³;
• pay 40% of the cost of the modern irrigation equipment sold by AgroService;
• pay 70% of the fertilizers, pesticides, and industrial bio-humus;
• provide subsidies for seed and sapling production and sales;
• provide government funding for the application of IPM measures and quarantine for agricultural crops.

Government support measures for cattle-breeding:

• pay 50% of the cost of purebred animals imported and leased by AgroService;
• grant subsidies in the amount of AZN 100 for each calf produced through AI;
• provide relevant infrastructure for AI services;
• implement preventive and diagnostic measures against the 13 most dangerous animal and poultry diseases and infections;
• individuals and legal entities who are engaged in beekeeping for each bee family (hive), provided with 10.0 manats subsidies per year for five years, including 2018.

In connection with the implementation of the Decree of the President of the Republic of Azerbaijan dated December 6, 2016, No. 1138 "On approval of strategic roadmaps for the national economy and key sectors of the economy" for further improvement of business and investment climate in the country, as well as for the purpose of improvement of the system of regulation of entrepreneurial activity and application of effective coordination, increasing the role and competitiveness of small and medium enterprises in the country's economy, facilitation of access to domestic and foreign markets, and agricultural producers to means of production, increase the production of essential food products to replace imports in the domestic market, strengthen food security, increase employment opportunities in rural areas and other areas continues successfully.

Currently, as a result of 44 days of the Patriotic War and the great victory of Azerbaijan over the Armenian Armed Forces, it is started to plan the further development of agriculture in the liberated territories. The liberation of our territories will have a positive impact on agricultural development. The country`s crop field will increase and hundreds of thousands of hectares will be irrigated as a result of the liberation of strategically important reservoirs. Our liberated territories have great potential in terms of viticulture, grain, cotton, and cattle breeding. With the expansion of the agro-processing industry and proper use of these potentials, sustainable development of agriculture will be ensured.