The Republic of Azerbaijan occupies the western part of the South Caucasus on the Caspian Sea shore. It covers an area of 86.6 thousand square kilometers (12% - forests, 1,6% - water basins, 52.3% - agricultural lands, 34.1% - other lands). The Republic of Azerbaijan is bordered on the south by Iran (756 km) and Turkey (13 km), on the north by Russia (390 km), on the north-west by Georgia (480 km) and on the west by Armenia (1007 km). It occupies position 44 in the world for its size and position 42 for the population. There are at least 8400 rivers in the Republic of Azerbaijan. Sown areas occupy 1630.8 thousand hectares of 36.0% of agricultural lands, of which 1102.0 thousand hectares of 67.6% are irrigated. According to regular reports of the State Committee for Statistics of the Republic of Azerbaijan, the population of Azerbaijan totals 8265.7 thousand (as of 01.01.2004), of which 4254.3 thousand (51.0%) are urban population, and 4011.4 thousand (49.0%) - are rural.

The intensification of agricultural works during the last few years has led to rise of employment in the agricultural sector. So, 1112.8 thousand persons were employed in agricultural and forestry industries in 1995, which formed 30.8% of able-bodied population. The figure increased up to 1497.0 thousand persons in 2003 (40.0% of able-bodied population). It should also be noted that while the number of persons involved into economic activities increased by 134.0 thousand persons or 3.7% during the reported period, the number of persons involved into agricultural and forestry sectors increased by 384.2 thousand persons or 34.5%. This means that not only the persons directly involved into agricultural production, but also teachers, engineers, cultural, medical, legal, defense and other workers, also began their activities in various agricultural spheres. Such factors as lack of previous agricultural and management experience, superficial knowledge of of agricultural technologies and agrotechnics, have led to diseconomies in production processes.

However, the Ministry for Agriculture together with other interested ministries, committee and agencies of Azerbaijan, as well as the international organizations, have continuously provided farmers with the essential legal, economic and professional knowledge and implemented tagret programs for increasing awareness.

All these are the results of activities of the Azerbaijan national leader Heydar Aliyev, who initiated, organized and launched the economic reforms as the only way out from economic decadence and towards improvement of social welfare.

The national leader of Azerbaijan - Heydar Aliyev - always considered agriculture as the superior sector of the national econoy and did enormous efforts towards agricultural development at all stages of his power. Among the first steps aimed at the economic development were the implementation of agrarian reforms, provision of lands and liberty to villagers, the establishment of favorable conditions for business development in rural areas, exemption of farmers from all taxes except for land taxes. These measures have increased the interest of villagers to production of agricultural products. So, agriculture has formed 13.1-15.9% GDP during the last few years and this figure increased by 70.5% (1904.3 billion AZM) in 2003 against figures of 1995.

The analysis of gross agricultural product (in actual existing prices) reveals growth by 91.6% during the reported period, including 93.0% in plant cultivation and 89.5% in cattle breeding.

The share of plant cultivation products in gross agricultural product increased from 58.6% in 1995 to 59.1% In 2003, while the share of cattle breeding products decreased from 41.4% to 40.9% during the same period.

It also becomes clear from analyses that private producers increased the production in line with the free market requirements during the last few years and, as the result, 80-85% consumption by local population falls at local-made products, which in turn increases the incomes of farmers and villagers.

The minimum requirements for potatoes, melons and gourds, as well as fruits, are met mostly by domestic production.

The supply of local meat, milk and eggs has significantly improved during the last few years. Azerbaijan has exported sausages, dairy products and eggs to the foreign countries during the last two countries.

According to the State Committee for Statistics report n 2003, 97% agricultural products were manufactured by population and villagers (farmers).

The rise in gross agricultural product has encouraged growth of monthly salaries of employees. The State Committee for Statistics reports that average monthly salaries of agricultural workers increased by 82.2 thousand AZM (in 3.5 times) from 33.5 thousand AZM in 1995 to 115.7 thousand AZM in 2003. This is however 3.3 times lower than average salaries in Azerbaijan, 5.9 times lower than salaries in industries, 6.7 times lower than salaries in construction and 3.8 times lower than salaries in transport industries.

However, individual progressive farmers have average monthly income of 400-500 thousand AZM and more.

The analysis of financial performance of agricultural enterprises demonstrates that 1079 or 47.0% of 2295 agricultural enterprises were unprofitable in 1995. In 2003, 452 out of 1779 enterprises were unprofitable, which means that the specific weight of unprofitable enterprises reduced by 25.4%. The profitability of agricultural products was respectively: -4.7% (losses); 0.9%, including 3.2% in field of plant cultivation, 27.7%, and in the field of cattle breeding - 36.8% (losses); -1.9% (losses).

The researches have demonstrated that even though the agricultural sector was developing recently, there are still urgeny problems of intensification of business development in the regions, efficient utilization of labor resources, natural and economic potential, as well fighting unemployment and poverty reduction.

This is why the decree #24 of the President of the Republic of Azerbaijan of 11.02.2004 "On approval of the State Programme for Socio-Economic Development of the Regions of Azerbaijan during 2004-2008" envisions the increase of gross domestic product in all spheres, including agriculture by 10-15%, raising investments from all sources of financing up to USD 16.8 billion, of which 60% falls at the regions.

The Ministry for Agriculture will further make every effort for regional development, steadier supply of agricultural products to the domestic market and increasing the welfare of population, as well as for the implementation of the decree #24 of the President of the Republic of Azerbaijan of 11.02.2004 "On approval of the State Programme for Socio-Economic Development of the Regions of Azerbaijan during 2004-2008".

 

Source - Azerbaijan Portal (by Heydar Aliyev Foundation)