Agriculture in Azerbaijan

[1] After the demise of the USSR in 1991, Azerbaijan's economy underwent rapid “petrolification” with the share of the oil sector rising from 16% of GDP in 1995 to 64% in 2023.

Forests occupied 12% of Azerbaijan's territory, representing 1 million hectares, according to the annual agricultural report by the State Statistics Committee in 2023.

However, the share of crops in Azerbaijan's Gross Agricultural Output (GAO) steadily decreased since independence from over 60% in 1990 to slightly less than 50% in 2023.

[6] The recovery of cotton production may be due in part to the approval, in July 2017, of the State Program for the development of cotton-growing in Azerbaijan in 2017–2022.

By quantities of wine, cognac, and champagne produced from its grapes, Azerbaijan ranked fourth in the USSR after Russia, Ukraine, and Moldova.

Then came the collapse phase that was triggered, still during the USSR era, by internal clashes with the Armenian minority and the war with Armenia in Nagorno-Karabakh, events that severely disrupted Azerbaijan's economy.

The collapse was arrested in 1997 after the cease-fire with Armenia had been signed (in 1994) and President Aliyev's 1995 farm-structure reforms began to have the expected beneficial effects.

After 1997, came the steady, almost linear growth fueled by President Aliyev's agrarian reforms and the overall improvement of the economic climate as a result of the 2020 ceasefire agreement with Armenia and the oil exploration contracts signed with Western companies.

[1] Such duality of farm structure, anchored to state ownership of all agricultural land, was a hallmark of the Soviet economic system.

International institutions and Western economists urged the Government of Azerbaijan to embark on a process of land reform, including land privatization and farm restructuring, with the ultimate objective of bringing Azerbaijan's agriculture in line with the practice of market economies and improving its efficiency through better utilization of the country's agricultural potential.

As of January 2001, the individual sector - the traditional household plots and the newly created family peasant farms - produced 97% of agricultural goods in Azerbaijan.

The share of crops in the GAO of farm enterprises plummeted from 80%-90% during the first decade of independence (1990–1999) to a low of 20% between 2003-2008 and eventually rebounded to around 50% in the 2020s.

If this was the outcome of the State Program for the Development of Cotton-Growing,[7] its effect was not long-lasting as already in 2023 cotton exports collapsed to $163,000, a drop of 40% in just two years.

Azerbaijan's agricultural exports show clear long term growth (in current U.S. dollars), despite the uneven year-to-year changes, displaying both positive and negative outcomes.

The government of Azerbaijan plays an active role in the development of agriculture by applying various measures that include grants, tax exemptions to producers, subsidies of machinery (combines, tractors, harvesters, and irrigation equipment), pesticides, and fertilizers.

As a result of these promotions, the Azerbaijani government aims to increase productivity, stimulate technical and technological renewal, growth and diversification of agricultural exports, an efficient organization of state support, improvement of the mechanism for subsidizing, development of large farms, provision of support to small farms, etc.

In an attempt to arrest and reverse the decline of some of Azerbaijan's traditional agricultural products - citrus, tobacco, tea, cotton, rice, sericulture, viticulture, winemaking - the government has approved a series of state programs encouraging the development of the corresponding prioirity branches of agriculture within specified time frames ranging from 2017–2018 to 2025–2027.

One of the priority tasks explicitly specified in government documents is the rehabilitation of the agricultural sector in Nagorno Karabakh, which had been outside Azerbaijan's control for nearly 30 years until the signing of the 2023 ceasefire agreement that ended the war.

[24] The Food Safety Agency of the Republic of Azerbaijan established by Presidential decree in 2017 is the central executive authority conducting veterinarian and phyto-sanitary control at all stages of the food chain, including primary production, procurement, processing, packaging, storage, transportation, and trade (including import-export operations).

[26][27][28] In this legislation, agricultural goods of plant and animal origin were recognized as the subject matter of agrarian insurance throughout the supply chain, including import and export transactions.

Prices for agricultural products did not rise as fast as the cost of inputs; the Soviet-era collective farm system discouraged private initiative; equipment in general and the irrigation system, in particular, were outdated; modern technology had not been introduced widely; and administration of agricultural programs was ineffective.

The varied climate allows for the cultivation of a wide variety of crops, ranging from peaches to almonds and from rice to cotton.

The conflict in Nagorno-Karabakh, the site of about one-third of Azerbaijan's croplands, substantially reduced agricultural production beginning in 1989.

This drop was attributed mainly to cool weather, which reduced cotton and grape harvests, and to the continuation of the Nagorno-Karabakh conflict.

[32] The Ministry of Agriculture of Azerbaijan runs procurement centers dispersed throughout the country for government purchase of most of the tobacco, cotton, tea, silk, and grapes that are produced.

It was estimated that in 2012, $247 was spent from the state budget per hectare of land suitable for agricultural production, including both crops and livestock.

Additionally, the volume of direct and indirect subsidies allocated by the government to the agriculture sector in 2012, was around 611 million AZN (more than US$778.3 million- 100 US Dollars = 78.5000 Azerbaijani Manats on 12/31/2012).

The 791239 m3 wooden material, objects, and empty containers of 13863 tonnes technical load was neutralized by the Republic Quarantine Expertise Center fumigation department.

In 2016, 23.3 tonnes of fruit and vegetable products were removed from sales and destroyed due to not being within the limits of standards provided by the Republic Quarantine Expertise Center.