The President of the Republic of Azerbaijan, Ilham Aliyev, has signed a Decree on improving state support and subsidy mechanisms in the agricultural sector. The Decree introduces amendments to previous decrees concerning the "Regulations on the Agricultural Credit and Development Agency under the Ministry of Agriculture of the Republic of Azerbaijan," "Improving state support to agriculture and leasing activities in the agricultural sector," "Creating a new subsidy mechanism in the agricultural sector," and the "Electronic Agriculture" information system.

The newly implemented reforms serve to establish state support in the agricultural sector on a more agile, targeted, and results-oriented mechanism. The core essence of the modifications is associated with mitigating the initial financial burden encountered by farmers during the production process, stimulating the production and supply chain of agricultural products, expanding global market access opportunities, and strengthening digital oversight within state support mechanisms.

Under this Decree, state support to agriculture encompasses a broader agricultural value chain rather than being confined solely to traditional crop cultivation and animal husbandry sectors. In this regard, incorporating the machinery and technological equipment utilized for executing fisheries, including aquaculture, into the category of concessionally financed agricultural means of production stands as a vital innovation. This modification can stimulate investment activity in the field of fisheries and artificial fish breeding, accelerate the deployment of modern technologies, and facilitate additional opportunities for supplying the domestic market with local fish products.

One of the significant directions of the Decree is the designation of orchard cultivation subsidies as a distinct mechanism. According to the new mechanism, provision is made for compensating a portion of the expenses incurred by farmers during the first year of establishing perennial plantations regarding seedling procurement, agrochemical soil analysis, utilization of agrotechnical services, installation of modern irrigation systems, and phytopathological analyses.

The determination of an advance payment mechanism in the Decree, which envisions farmers receiving a portion of the subsidy beforehand, also carries immense practical weight. Paying an advance not exceeding 60 percent of the cultivation and orchard subsidies will enable farmers to cover their seasonal production expenses in a more timely manner. This approach will not only facilitate farmers' access to initial costs such as seeds, seedlings, fertilizers, agrotechnical services, and irrigation, but will also pave the way for the phased and controlled utilization of subsidy resources.

Furthermore, support instruments in the field of animal husbandry have also been expanded by this Decree. To compensate for a portion of the expenses incurred regarding animal housing, feeding, and breeding operations, provision has been made for an animal subsidy, as well as a livestock product subsidy based on the volume of animal-derived products or raw materials delivered to suppliers.

The compensation of a portion of expenses associated with international certification listed in the Decree is of particular importance from the perspective of enhancing the export potential of agricultural products. The certification subsidy will promote the alignment of farmers' crop and livestock products with international standards. Consequently, this can facilitate the access of local products to foreign markets with higher requirements, and expand the application of quality and safety standards.

In addition to these, another prominent aspect of the Decree relates to bolstering supervision and transparency within state support mechanisms. Prohibiting the export of concessionally financed agricultural machinery from the country for a duration of 5 years from its financing date is aimed at ensuring the targeted utilization of state funds. Transferring real-time information regarding the said machinery to the information system of the State Customs Committee via the "Electronic Agriculture" information system will expand digital oversight capabilities.

It should be noted that the Decree will make a vital contribution to forming a more comprehensive agricultural value chain that is not restricted to isolated stages of the production process, but encompasses land preparation, procurement of production means, crop cultivation, supply, certification, and global market access stages.