Not oil alone: Baku expands agrarian cooperation
Caliber.Az review

ANALYTICS  14 November 2023 - 16:08

In recent years, as part of the policy of diversification of agricultural exports, local agro-industrial enterprises with the active support of the Azerbaijan Export and Investment Promotion Agency (AZPROMO) have significantly strengthened their positions in the markets of the Middle East, North Africa and China. For Azerbaijani food enterprises, the expansion of supplies to Eastern and Southern Europe is no less promising.

Another goal is to attract European investors to our country's agriculture. The recent visit of the delegation of Azerbaijan’s Agriculture Ministry to Poland and Northern Macedonia was another step in this direction: as a result of the negotiations, Memorandums of Cooperation in the field of agriculture were signed, as well as agreements on the establishment of working groups for the exchange of experience and innovations in the field of agro-industry.

Amidst the unprecedented imported inflation and food crisis observed in the last two years, which have become a real threat to the security of many developing countries of the world, Azerbaijan has accelerated work on the reform of its own agro-industrial complex.

The key objective of these reforms is to increase the volume of agricultural production, reducing costs by switching from extensive farming methods to intensive agro-technologies and multiplying productivity levels. To this end, about fifty agro-parks have been created in the country, including large grain-growing and greenhouse farms; in some of these clusters, processing of raw materials has been established along with production.

Economical irrigation systems are being actively introduced, and it is planned to expand land with modern irrigation solutions from 50,000 to 200,000 hectares soon. Projects on digitalisation of the agricultural sector are also being implemented, sectoral clustering is underway, cooperative forms of farming are being introduced, the system of leasing of agricultural equipment has been reformed, and transparency in subsidies has been ensured. Agrarian projects have also been implemented in the Karabakh region over the past three years.

However, the pace of sectoral development is still not high enough: for example, for the three quarters of 2023, the volume of agricultural production in Azerbaijan, amounting to 9.996 billion manats ($5.88 billion) in actual prices, increased by only 3%, which does not fully meet the challenges facing the country.

One of the important points slowing down the dynamics of agricultural production is the relatively small capacity of the local market. To expand exports, another challenge is to significantly increase investment and attract new technologies in the agro-processing and food-processing sectors.

By multiplying the share of packaged and processed agricultural products that meet international quality standards and are certified accordingly, it is possible to ensure a tangible increase in added value, and most importantly, to increase the competitiveness of processed agricultural products in foreign markets.

Our country has made tangible progress in the geographical diversification of Azerbaijani agricultural exports in the recent period: if seven years ago over 90 per cent of agricultural supplies from Azerbaijan went exclusively to Russia and the markets of other post-Soviet countries, today this proportion has been changed. With the active support of AZPROMO, agricultural exports to non-CIS countries are increasing, in particular, to Türkiye, the states of the Persian Gulf, Middle East and North Africa - Tunisia, Egypt, Jordan, Iraq, UAE, Saudi Arabia, Bahrain, Qatar, as well as to China.

To expand exports in these countries, an extensive system of trade and wine houses is being formed, the resources of trade missions at embassies are used, Azerbaijani companies are involved in exhibitions, and advertising and promotion campaigns are organised in leading retail chains to promote domestic agricultural products under a single brand Made in Azerbaijan.

"Azerbaijan aims to further diversify export markets for agricultural products, 60 per cent of which are now supplied to CIS countries. In the last three years, there has been a steady growth in exports and currently, our country exports 326 items of agricultural products to 88 countries," Tural Hajili, Advisor to the Executive Director of AZPROMO, noted recently.

The effectiveness of this work is also evidenced by recent data from the Centre for Analysis of Economic Reforms and Communications (CAERC): thus, in January-October this year, exports of domestic agricultural and agro-industrial products totalled $733.8 million, which is 9.2% higher than in the first ten months of 2022.

The most important task for AZPROMO for the foreseeable period is to expand agricultural supplies to the markets of Eastern and Southern Europe and the EU region as a whole. The first steps in this direction were taken in 2018-2019 as part of the first stage of the trade diversification policy, during which trade and wine houses of Azerbaijan were established in Poland and Latvia, and these countries became a kind of hub for further transhipment of food products to the vast European market. And in 2020, agreements were reached to establish systematic supplies of Azerbaijani food and wine products to the Polish retail chain Carrefour in several Polish cities.

As a result, the Polish market is now considered the most capacious in the EU for the sale and re-export of Azerbaijani agricultural goods, including hazelnuts, juices, compotes, jams, tinned fruit, narsharab, wines and brandy, as well as lavender and olive oil and tinned olives.

Recently, negotiations have been held on supplying the European market with ecologically pure honey produced in the territories liberated from occupation under the general brand "Karabakh". The prospects of supplying juices and wine made of Azerbaijani pomegranates to the European market are very high, and our country occupies one of the best positions in the global market in the export of persimmon and hazelnut.

In particular, a year ago, Azerbaijan took second place in the world in terms of export of fresh and dried persimmons, second only to Spain, and in the supply of hazelnuts it ranks third, with Switzerland, Italy, Poland and other European countries being major buyers of this nut.   

It is noteworthy that the interest of Polish companies in the Azerbaijani market is also very high, including very successful Polish suppliers of hard cheese, sausage and confectionery products, frozen and fresh fruit and vegetables, and baby food. Polish companies also supply agricultural machinery, refrigeration equipment to Azerbaijan, and negotiations are underway on joint endeavours to create innovative warehouses for storing "green" perishable products and meat processing enterprises.

Poland has assisted Azerbaijan in joining the EU's common agricultural policy related to the registration of farms and the creation of a system of identification of farm animals, and this spring the Polish Embassy studied the prospects of supporting Lankaran State University in the development of modern educational disciplines in the agricultural sector.

Aspects of technological cooperation in the agro-industrial sector, as well as the provision of know-how, and implementation of joint projects in the field of education, were recently discussed during the visit of the delegation of the Ministry of Agriculture of Azerbaijan headed by Minister Majnun Mammadov to Poland and Northern Macedonia.

"During the visits, the prospects of developing partnership relations in various areas of the agrarian sphere, as well as increasing mutual trade in agricultural products between the countries were discussed. Among other things, the possibilities of joint scientific research were considered, best practices in the field of land consolidation, introduction of agrarian innovations, digitalisation of agriculture were reviewed, aspects of cooperation in the field of education, training of specialists in the agrarian sphere and other topics were discussed," Azerbaijan's Agriculture Ministry said.

During the visit, the Azerbaijani delegation familiarised itself with the activities of Poland's leading agricultural enterprises, exchanged views on waste reduction in the processing of agricultural raw materials, efficient use of water and land resources, and innovative environmental solutions. Following the talks with Polish Minister of Agriculture and Rural Development Robert Telus, an agreement was reached to set up an Azerbaijani-Polish working group on cooperation in the agricultural sector.

The trip to Northern Macedonia, where agriculture and the food industry traditionally occupy leading positions in the country's economic structure, proved to be very effective. During the meeting with the Minister of Agriculture, Forestry and Water Management of Northern Macedonia, Lubcho Nikolovski, the prospects for cooperation between the two countries in the agricultural sector were discussed and the relevant Memorandum of Cooperation was signed: the document envisages the establishment of a joint working group on agriculture, expansion of cooperation in crop and livestock farming, agricultural education, and training of relevant specialists.

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