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Azerbaijan 2016 | AGRICULTURE | FOCUS: THE YEAR OF AGRICULTURE

Various policies enacted by the government have expanded and repositioned the agricultural sector, creating a framework for future growth.

In a message released at the close of 2015, President Aliyev offered some congratulatory words on the success of the progress of the country over the span of the year. He included in this message that the agricultural sector had grown by almost 7% compared to the previous year, responsible in part for the 8.4% growth of the non-oil sector contribution to the national GDP. As a powerful domestic industry, the agricultural sector comprises almost 40% of the domestic labor force.

Declaring 2015 as the Year of Agriculture was a great way for the government of Azerbaijan to focus its attention on this issue. In its history as part of the USSR, Azerbaijan had always possessed the capability of satisfying domestic agricultural demand. Due to the division of labor among the states during these times, Azerbaijan was never given the task to fully develop its agriculture. President Aliyev touched on the importance of food security and remarked that meeting 100% of domestic demand is a very reachable goal. In addition, he went on to state that agricultural produce, once the industry is expanded to the extent envisioned, will be one of the chief exports of the country alongside oil and gas. President Aliyev appropriately pointed out that while food security is certainly valuable, beyond that lies even more potential, namely the possibility that Azerbaijan could become a major agricultural exporting nation. This elucidates the implications of what a fully developed agricultural sector will bring to the country.

Over 2015, important infrastructure projects were put in place. The year 2015 saw 300 artesian wells drilled, providing many villages with a source of clean drinking water and with treatment plants. The impressive Shamkir Agropark has been continuing its development by signing MoUs with experienced international firms. In addition, the government started to draft a bill to create robust agricultural insurance policies, seeking the assistance of international partners more experienced in this field. The state currently deals with agricultural insurance, but on a marginalized scale. A developed insurance regime strengthens industry development and provides much needed support to local farmers. The current lack of insurance in this field stems from legislative inexperience, a lack of knowledge on behalf of farmers, and a domestic insurance market that lacks the necessary infrastructure.

In terms of the depth and performance of the reforms of 2015, Azerbaijan managed to achieve impressive agricultural growth. One successful reform improved the electronic agricultural system, increasing effectiveness and transparency in management. Also, tens of thousands of hectares of land were cultivated for the first time. The meat and animal husbandry efforts of the country were increased and livestock breeding farms were established to decrease dairy imports. The country also saw the highest total grain yield and the highest average yield per hectare in its history. Interestingly enough, these record-setting yields took place farming less acreage of grain than last year, meaning the true cause of these astronomical numbers was due to an increased level of production on existing land and not because they simply enlarged the area of land available. This is significant because it lies at the crux of the mission of 2015. The Year of Agriculture has worked to direct the correct amount of focus to these important areas and enact some concrete changes to agriculture in Azerbaijan.

With the rapid expansion of agricultural products made possible due to these initiatives, markets eager for Azerbaijani agricultural products are in no short supply. Russia is the largest market available and is eager for Azerbaijani exports, especially as they try to fill the holes created by their ban against Turkish agricultural products. Agricultural expansions in 2015 also included the constructing of a logistics terminal in Aktau, Kazakhstan, which will undoubtedly facilitate the exportation of food products to the Kazakh market. Another pillar of the strategy to help strengthen agriculture included directing FDI flows to this sector. The majority of FDI coming from the UK, the largest FDI contributor for Azerbaijan, was focused on agriculture as well.