Page 51 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.75, # 2, 2018, pp. 47-63

2. AGRIBUSINESS SUPPORT POLICY

Being an industrial-agricultural country, Azerbaijan attaches high importance to the
advancement of sustainable agriculture as one of the priority fields in the non-oil
sector development [L.Almas and N.Hajiyev, 2014]. The fertile lands, abundance of
water and advantageous climatic diversity create favorable conditions for agricultural
productivity. The existence of 9 climatic zones in Azerbaijan allows the country to
produce a variety of organic agricultural products and provides favorable
opportunities for the introduction of new kinds of agricultural goods. The agriculture
of the country is mainly specialized in the cultivation of fresh vegetables and fruits,
cotton, tobacco, as well as livestock, poultry, wine-making, silkworm breeding, sheep
breeding and dairy. [FAO, 2014]. In Azerbaijan, mainly annual or permanent plants
are produced organically [FAO, 2017].

As an upper-middle income country, Azerbaijan is keen to further develop its
agricultural potential and food industry for import substitution, as well as for export-
led growth. The agricultural sector is a significant contributor to Azerbaijan's non-oil
economy and has a great potential for stimulating economic growth, job creation and
ensuring food security. Agriculture is Azerbaijan’s largest employer, with roughly
40% of the working population making some part of their living in agricultural sector.
The percentage of lands suitable for agriculture is more than 55% [FAO, 2017], almost
40% of the active labor force is employed in the agricultural sector, approximately
45% of population lives in rural areas [World Bank, 2017], roughly 1/4 of household
income in rural areas is derived from agriculture, and nearly all of agricultural produce
is generated in the private sector [FAO, 2012]. Azerbaijan possesses approximately
4.8 million hectares of agricultural land. Crop production accounts for around 47% of
agricultural production with livestock farming making up the remaining 53%. Food-
processing sector constitutes an important component of the agriculture and accounts
for over 38% of total manufacturing industry.

Azerbaijan trades intensively in agricultural and food products. Traditionally the main
destination and the largest consumer of agricultural and food exports have been the
CIS market, but in recent years this market has expanded to include many other
countries in Europe, Asia and the Americas. The main export products are fresh
vegetables and fruits, vegetable and animal oils, sugar, tea, processed agricultural
products, beverages, tobacco products, cotton and others.

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