World on verge of food crisis - Azerbaijan ready for any scenario

By Trend

Global domestic food price inflation remains high, Trend reports.

Data from March through June 2022 have shown high inflation in almost all low- and middle-income countries. In 93.8 percent of low-income countries, 89.1 percent of lower-middle-income countries, and 89 percent of upper-middle-income countries, inflation was above five percent, and in many cases exceeded 10 percent.

The share of high-income countries with high inflation also sharply rose, with about 78.6 percent of countries experiencing high food price inflation. The most affected countries are in Africa, North America, Latin America, South Asia, Europe and Central Asia. In real terms, food price inflation exceeded general inflation in 78.7 percent of 160 countries.

The shocks caused by the situation in Ukraine, the COVID-19 pandemic and the climate have begun to put pressure on the fragile food supply chain, pushing this issue to the top of the geopolitical agenda. It’s necessary to look for new ways to ensure food security. This will also entail a shift from dependency to diversification and from globalization to regionalization.

The global rise in food prices also has affected Azerbaijan, since the country hasn’t yet become 100 percent self-sufficient in food products. Nevertheless, consistent measures are being taken in Azerbaijan to achieve this goal, and the results of this activity can be seen in the figures. The country provides itself with meat products by 90 percent, poultry meat - by 80 percent, and milk and dairy products - 85 percent.

The most recent data on agricultural production in the country have suggested that in the coming years the level of food self-sufficiency will further increase.

From January through July 2022, the value of all agricultural products in actual prices in Azerbaijan amounted to 6.39 billion manat ($3.76 billion), of which 2.9 billion manat ($1.7 billion) accounted for livestock and 3.48 billion manat ($2.05 billion) for crop products.

Agricultural production increased by 3.1 percent, including livestock products - by 2.7 percent, and vegetable products - by 3.4 percent.

Among the measures to ensure food security, there should be noted the decree signed by the President of Azerbaijan Ilham Aliyev on July 19, 2022 "On a number of measures to increase the level of self-sufficiency in food wheat."

In accordance with the decree, at the initial stage, as a pilot project for food grains produced by persons who have committed themselves to the production of food wheat on farms using modern irrigation systems and handed it over to the State Reserves Agency of Azerbaijan and to flour mills in accordance with the contract, concluded with the Ministry of Agriculture, starting from 2023, a subsidy for a period of five years will be applied.

Besides, the state purchase price for food wheat will be determined annually until August 1, 2022, and in subsequent years - annually until July 1, given the expenses for production (cost) of food wheat and the possible profit of the producer.

Along with the above, the Cabinet of Ministers of Azerbaijan adopted a resolution "On measures to regulate the export from the country of a number of basic food products included in the minimum consumer basket, and goods used in their production". This decision also became important and timely for the protection of the domestic market.

At the heart of the tasks in the field of ensuring food security, there are six basic principles, especially in the field of providing basic foodstuffs, including grain.

The basic principle is that in food safety, the focus on the main products is mainly shifted to local production. This is a reduction in the cost of production, and an increase in its quantity and quality.

The second basic principle, which follows from the first one, is that the government aims to subsidize production, rather than imports. The third principle is the liberalization of prices for basic foodstuffs, which is an important incentive for entrepreneurs. It’s also necessary, firstly, to prevent an artificial increase in prices, and secondly, to ensure the margin of entrepreneurs.

The fight against the unfair competition will also be intensified. The principle of performance-based subsidies aims to increase transparency in subsidization and stimulation to manufacture more products.

Given the rise in prices for food products, 193 million manat ($113.5 million) was allocated to create a reserve in the field of food security as part of amendments to the state budget for the current year.

Undoubtedly, the liberated lands of Azerbaijan, which have very favorable natural conditions for the development of agriculture, will also contribute to increasing the level of food self-sufficiency in the country.

These territories have historically been leaders in the manufacturing of quality grain, cotton, livestock, tobacco and viticulture products. It’s profitable to grow cotton, grapes, sugar beet, and corn in the Aghdam and Fuzuli districts due to high fertility of the lands in the districts. The mountainous districts, that is, Kalbajar, Lachin and Gubadli, were historically considered zones of animal husbandry. At the same time, there are conditions for the development of fish farming in the liberated territories. On the other hand, vegetables, melons and fodder crops can be grown in these areas. Besides, sugar beet can be planted on these lands and get a good harvest.

At the moment, the most acute issue is the global provision of grain. In Azerbaijan, the coefficient of self-sufficiency in grain at the beginning of 2022 was 62 percent. In order to significantly increase the production of food wheat, a special program has been developed in the country, and new types of subsidies are being applied.

The country's food security is an integral part of its national security. Improving the supply of food products to the population is an important socio-economic issue, the solution of which is of particular importance for the development of the country. Ensuring food security of the population, is one of the main directions of state policy, covering broad national, economic, social, demographic and environmental issues.

As a result of the effective and timely measures taken, as well as due to the extensive development of agriculture in the liberated territories, Azerbaijan will undoubtedly make a big breakthrough in the field of food security in a short time.