Our Analytics 30 june — 13:00

Ilham Aliyev's reforms stepped into agriculture (Our analysis)



The large-scale economic reforms carried out in Azerbaijan under the leadership of President Ilham Aliyev are already bearing fruit. This is evidenced by the recent social packages, measured by billions of manats, which cover almost all segments of the population. Nevertheless, the launched mechanism cannot be stopped, especially in the period of dynamic development that has reached the apogee point.

Reforms need to be updated, deepened in order to achieve more and more effect. And the logical continuation of the reforms initiated by the head of state and being implemented in agriculture can confidently be called the decree of Azerbaijani President Ilham Aliyev to create a new subsidy mechanism in the agricultural sector.

Subsidies in agriculture play a huge role in all countries and always. Farmers find it difficult to solve many tasks without some support from the state. At the same time, without such assistance, farmers could not ensure the food security of their country, which is fraught with great dangers. But subsidies should not just be scattered around at random, there needs to be a clear and scrupulous work, it should be allocated so that every penny given to the farmer by the state brings as much effect as possible, and does not disappear into a bottomless barrel of bureaucratic and other obstacles.

In this regard, this decree takes into account all the existing deficiencies in the subsidy mechanism that farmers, district authorities and agrarian specialists, including Azeri Daily's, complained about. In particular, the decree provides for subsidising farmers through a single mechanism.

By the decision of the head of state, an agricultural subsidisation council is being established to rationalise the subsidy mechanism. What this means is well known to specialists. After all, each subsidy must pursue a specific goal. You cannot just take and distribute to all farmers the amount due at the beginning or end of the year, solving all the problems at one time. Time, forms of issuing subsidies, as well as its precisely calculated size, are of great importance.

From now on, not one department will be involved in this process. The Subsidy Council, consisting of 7 people, will include representatives of the Ministry of Agriculture, Ministry of Economy, Ministry of Finance, State Committee on Statistics, National Confederation of Entrepreneurs (Employers) Organisations and Local Farmers Association. And who will, if not these main institutional pillars of the country's economy, be able to achieve the maximum effect of state subsidies. It is the Council that, in all likelihood, will determine the general policy of subsidising the country's agriculture, solving the most important problems in this area.

But the main work in this area remains with the Ministry of Agriculture. So, the Council will be headed by the Minister of Agriculture of Azerbaijan, Inam Karimov. And the provision of subsidies to farmers, the organisation and coordination of the activities of state centres for agricultural development in this area will be carried out by the Agency for Agricultural Lending and Development under the Ministry of Agriculture. That is, the Council consisting of representatives of the main economic institutions of the country will act as a coordinator of activities in the field of subsidies in the agricultural sector. And the Ministry of Agriculture continues to be the executive body.

Moreover, the new rules exclude farmers' contacts with officials as much as possible, the loss of time and other factors interfering with it - the whole process is carried out in electronic form. From 1 January 2020, subsidies will be provided through the Electronic Agricultural Information System (EAIS). Farmers who are not registered in the system will not be able to receive subsidies. The provision of subsidies under the new rules will improve farmers' access to subsidies and prevent loss of time.

Farmers will get access to the personal account in EAIS via mobile phones, tablets and computers, they will be able to apply for subsidies without contacting any institution. Registered farmers will not need any additional documents to receive subsidies. Currently, the process of registering farmers in EAIS continues in the country. Already more than 300 thousand farmers included information on their agricultural activities in EAIS. And by the end of this year, registration of farmers in EAIS should be completed. And next year the subsidies will be calculated using another mechanism.

Inam Karimov implements presidential decree

In our agriculture, there are two types of subsidies. A subsidy for sowing is provided for each hectare of a farmer's sown area to offset part of the cost of the necessary funds for growing crops. A crop subsidy is an additional subsidy for sowing, for every tonne of crop production supplied to suppliers. Farmers will now be able to cash out part of the sowing subsidies, and transfer the rest directly from one account to another when purchasing fertilisers, pesticides and seeds from their registered suppliers of EAIS. This eliminates any overpayments, delays and other negative factors. And in the future it is planned to increase the productivity of the crop subsidy. That is, subsidies are becoming increasingly targeted.

In addition, the new rule provides for the provision to farmers by combining direct and indirect subsidies - state budget funds for the purchase of fertilisers, biohumus and pesticides, fuel and motor oils, wheat, rice, and re-planting - unified plant subsidies. A subsidy for planting compensates farmers for part of the cost of using these materials. The base amount for subsidies is very important, in the field of crop production it is set at 200 manats. But now different coefficients will be applied to it, depending on the relief, fertility and other qualities of the land. The use of different ratios in the base amount is aimed at growing the relevant crops in the most suitable areas for this and encouraging farmers to work in this direction.

The head of state did not leave aside other factors. The envisaged provision of seed subsidies provides additional support to those farmers who are engaged in seed production. Subsidies will be issued only for the purchase of certified and high-quality seeds. Farmers will be able to spend the subsidy provided to them only when they purchase seeds of good quality. The size of subsidies for sowing provided to cooperatives, whose sown area exceeds 50 hectares, will exceed 10%.

In the field of animal husbandry, the new rules do not provide for changes, subsidies for livestock will be applied according to the previously existing rules. Farmers simply have to be registered with EAIS and apply for a subsidy system in time.

In general, for each type of subsidy, the Ministry of Agriculture will approve a maintenance policy that will facilitate the farmer's information and treatment of the farmer. And all this, of course, will facilitate the work of the farmer, increase the efficiency of his work, which, ultimately, will lead to a further strengthening of the country's food security...

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