WB may accelerate confirmation of agricultural project in Azerbaijan

Source: AzerNews

The World Bank may speed up approval of the project on strengthening the competitiveness of agriculture in Azerbaijan to late September 2013.

"The approval of the project by the bank is scheduled for the end of October, however, depending on the work schedule of the WB Board of Directors, the date can be shifted to the end of September," the WB Baku office told Trend news agency on July 29.

Official negotiations between the Azerbaijani government and the WB have been completed. As a result of the talks, the total cost of the project amounted to $53.2 million; around $34.5 million of the amount will be allocated at the expense of WB loans and the rest falls to the government's share in the project.

The WB loans will be provided in accordance with the provisions of the International Bank for Reconstruction and Development.

The project envisages boosting competitiveness by creating production chains -- ranging from preliminary production of agricultural products to the creation of logistics systems. In order to maintain production and processing enterprises, it is planned to provide grants, and if necessary, loans will be available for achieving the ultimate goal, i.e. the creation of production chains.

Moreover, support for the veterinary system is planned as part of the project. The strengthening and improvement of phytosanitary norms and procedures and veterinary services is essential as well.

In May, the WB presented to the Azerbaijani government its proposals on improving the country's mechanism of subsidizing agricultural producers.

Azerbaijan became a member of the WB in 1992. As of January 1, 2013, Azerbaijan held talks with the bank under 56 projects on financing credit agreements totaling over $3.122 billion. At present, the implementation of 36 projects worth $894.1 million is complete, and the execution of 20 projects worth more than $2.228 billion is underway.

Agriculture is a meaningful component of Azerbaijan's non-oil economy and has significant potential for boosting export revenues of the country. It is a key source of jobs, as 38 percent of the population is employed in agriculture and this sector is a priority in the context of food security.

The Azerbaijani government is therefore taking various measures to ensure the dynamic development of agriculture.

Azerbaijan plans to establish agriculture cooperatives. The Ministry of Agriculture has already made relevant proposals to the parliament. According to the ministry's official Sabir Valiyev, if joint cooperatives are established, the work of farmers will develop fast.

The farmers faced a lack of combine harvesters this year during the grain harvesting. If there are such cooperatives, the problem would be solved, Valiyev believes.

Furthermore, the establishment of cooperatives will give an impetus to production, he said.

Valiyev said that currently people cannot receive loans as banks demand to mortgage property in return. However, if cooperatives are established, they will have their own buildings and facilities; banks will recognize these cooperatives and allocate loans to them.