TBY talks to Heydar Asadov, Minister of Agriculture, on the results of the Year of Agriculture, reforms in the sector, and a new electronic system.

Heydar Asadov
Heydar Asadov graduated from the accounting department of the Soviet Trade School, and in 1983 graduated from the Economic Department of the Azerbaijan Institute of National Economy named after D. Bunyadzadeh. In 1987, he received his PhD, and from 1992 to 1995 he was a PhD student at Marmara University in Turkey. In 1995, he was appointed as Deputy Minister of Finance. Between 1996 and 2007, he worked as General Director of the Head State Treasury under the Ministry of Finance and Deputy Minister of Finance. In April 2007, he was appointed as Chairman of the Chamber of Accounts. In October 2011, he was decorated with the Second Degree Order “For Service to the Motherland” and, in October 2013, he was appointed Minister of Agriculture of the Republic of Azerbaijan.

As 2015 was declared the year of Agriculture in Azerbaijan, how would you evaluate the modernization of agricultural production and how can agriculture contribute to economic development in the future?

In order to expand agricultural development opportunities, Azerbaijan entered a new stage of agricultural reform in 2014. In an effort to deepen this reform and expand on the UN initiative to declare 2015 an International Year of Soils, HE President Ilham Aliyev made the decision to declare 2015 the Year of Agriculture in Azerbaijan. Comprehensive measures are being taken to meet new development goals in agricultural reforms. In addition to expanding the scope of state support for agriculture as part of the agricultural development program, new mechanisms for providing state support have been put into place. State support in the concessional sale of fertilizer has been increased from 50 to 70%, a mechanism has been applied to finance 40% of the value of agricultural machinery and state-of-the-art irrigation systems on the part of AgroLeasing, the amount of subsidies for the acquisition of fuel and motor oils has been increased by 25%, and a procedure has been introduced to provide a subsidy in the amount of AZN100 for each head of cattle born through artificial insemination. In addition to strengthening state support for agriculture, approximately 100 regulatory documents have been adopted to substantiate agricultural reforms, complete transparency has been ensured in the provision of subsidies, and public awareness has been improved. As a result of the measures taken in the last two years, the number of producers with agricultural machinery has improved, crops have been collected in a timely and prompt manner with minimum losses, and the difficulties farmers used to face have been eliminated. We are now analyzing the structure of our agricultural depot and its distribution among the districts. This is expected to help us identify the need for specific machinery and equipment in different districts. At the current stage of the agricultural reform, the construction of laboratory buildings in 52 districts and cities is drawing to a close. Along with the administrative staff, these will bring together agro-chemical and seed laboratories, diagnostic offices, seed inspectorates, technical control, and other services. In addition, the establishment of the necessary information technology and infrastructure will facilitate the implementation of our plans. As part of these reforms, a Veterinarian Camp meeting ISO requirements has been set up. The refurbishment of a laboratory of the State Service for Phytosanitary Control is also in its final stages. To ensure the sustainable development of agriculture, work has also been carried out to build up institutional capacity in the area of seed-growing and livestock breeding. The State Seed Fund has been set up to ensure the reliable and uninterrupted provision of producers with seeds on concessional terms. The legal framework of the fund has also been developed. Using the funds allocated from the state budget, the Center for Artificial Insemination has been modernized with the participation of French and German experts. The laboratories of scientific and educational institutions under the Ministry of Agriculture have also been overhauled. The process of establishing farmer houses has begun to address the problems of agricultural producers. The attention in the regions is now focused on the provision of consultation services. Extensive measures have been taken to expand the agricultural infrastructure. The expansion of wholesale markets—for example, a network of “green markets" and farmer shops, the commissioning of modern butcher shops, and the establishment of logistical centers—have enhanced the efficiency of the market infrastructure and created a favorable market environment. Tangible steps have also been taken to set up agricultural parks based on advanced business technologies. In addition to the establishment of Shamkir and Yalama agricultural parks, different sections of the Khizi agricultural park are under way at the moment. These reforms, carried out in accordance with a long-term agricultural development program, have already started to bear fruit. The volume of agricultural production has increased by 6.6% in comparison with last year. This includes an 11.3% increase in the production of crops. The exports of fruits and vegetables, which form the backbone of agricultural exports, have increased by 7.2%, while the exports of cotton have risen by 34.8%. The increase in agricultural production over 2015 was not caused by cultivating much more land or a rise in the cattle head count, but by intensive factors such as an increase in productivity.

The Ministry allocated AZN4.8 million for electronic agriculture programs in 2015. What are some of the achievements in this area and how would you evaluate the progress of this initiative?

The development of an electronic information system is one of our priority tasks. The Ministry of Agriculture has already created the necessary institutional capacity with support from the EU. Thanks to these measures, the relevant software and technical infrastructure has been developed in accordance with the EU's integrated administration and control system (IACS) to conduct the identification of land parcels, keep a register of farms, and operate other modules. This system is being designed by an Italian company, while technical support is provided by the EU. The electronic agriculture information system has already been tested and pilot applications of it have been launched in the Khachmaz, Guba, and Goygol districts. Work is currently under way to develop a database of aerial and satellite images of arable lands. We have also designed an electronic register of all leasing transactions carried out by the Ministry's AgroLeasing, including the concessions provided to farmers. The entire system for the registration of agricultural machinery in the country has also been digitalized. In cooperation with the World Bank, we have started working on a system of livestock identification. The initial electronic database of all livestock farms has already been prepared. As part of a project being implemented jointly with the Food and Agriculture Organization (FAO), a continuously updatable electronic database of wholesale and retail prices of all agricultural products has been prepared. This database covers market prices both in Baku and the country's regions. The online database is available for everyone to see.

An EU delegation has visited Azerbaijan and reaffirmed its interest in seeing more Azerbaijani products in European markets. What is the Ministry doing to expand agricultural exports to the EU and other countries?

Unfortunately, EU countries account for only 4.9% of Azerbaijan's total exports of agricultural produce, worth $37.6 million. In addition to the volume of exports being too small, the assortment of goods being exported is not particularly large either. For example, 90% of the agricultural and food products exported to EU countries is made up of nuts, 3% nut butter (chocolate butter), and 4% pomegranate juice. The main reason for that is because our quality assurance system and existing standards are more in line with CIS requirements. Therefore, our products are mainly exported to CIS countries, especially Russia. However, the head of state has recently urged the government to strengthen the country's traditional markets and access new ones to the maximum extent possible. This is why we are now in the process of establishing a network of modern laboratories to align our quality assurance system with European requirements. We have also started procedures to obtain international accreditation of these laboratories. At the present time, most of the public investment allocated to the Ministry of Agriculture is channeled into the modernization of laboratories. The establishment of a quality control system in line with modern requirements is a priority direction in our cooperation with international organizations.

How can the Formula One European Grand Prix bring new benefits to Azerbaijan?

This is certainly an important international event that will promote our country in the world. One of our key missions in the policy of expanding the non-oil sector is to promote and popularize the “Made in Azerbaijan" brand abroad. The government has started the application of new mechanisms for promoting the country in order to enhance our investment attractiveness. From this perspective, the Formula One European Grand Prix due to be held in Baku is one in a series of events serving this goal.

What is the Ministry doing to support and expand the once well-developed cotton industry?

The President of Azerbaijan has issued new instructions in this regard and we have already started implementing them. In particular, meetings have been held with representatives of cotton-producing enterprises, their needs and proposals have been discussed, specific decisions have been made, and new mechanisms have been introduced. For example, in order to facilitate the development of cotton breeding, the transportation costs of processing enterprises will be reimbursed, while 90% of production expenditure will be paid in advance. To achieve this, concessional loans and leasing services provided by the state will be used extensively. In addition, processing enterprises in 2016 will significantly increase the price of raw cotton in comparison with previous years. All these activities will lead to the sowing of cotton on an area 30,000ha more than last year, which represents an increase of 80%. This will double the production of raw cotton by an additional 70,000 tons. The number of people involved in this sector will be twice as high as 2015.

After last year's successful parliamentary election, what are the Ministry's expectations for 2016?

Last year's parliamentary election ended in a victory of the party led by President Ilham Aliyev. This attests to the popular support of the government's policies. Azerbaijan is entering a new period of non-oil sector development, in particular the period of agricultural reforms, and this result is also evidence of people's approval of reforms. This is an important precondition for the success of any reforms. Therefore, the expectations of the Ministry are very positive. We are fully confident that agricultural reforms will be successfully continued and remarkable results will be achieved.