The Action Plan approved by the Cabinet of Ministers to implement the Presidential Decree on “Measures to reduce the negative impact of the coronavirus (COVID-19) pandemic and the resulting sharp fluctuations in global energy and stock markets on the economy, macroeconomic stability, employment, and business entities of the Republic of Azerbaijan” identifies the state’s main economic policy priorities in the medium term. These priorities aim to boost economic growth, preserve employment, and create new jobs by expanding domestic demand.
In this context, alongside sectors such as construction, mining, petrochemicals, digital economy, transport, trade and logistics, telecommunications, and domestic tourism, agriculture and the processing industry have been singled out for their strategic importance in ensuring national food security. Commenting on the measures undertaken in this direction, Ramil Huseyn, Deputy Executive Director of the Center for Analysis of Economic Reforms and Communication (CAERC), stated that the COVID-19 pandemic has globally highlighted the importance of developing agriculture and ensuring the population’s food supply through local production. Under these conditions, Azerbaijan has implemented policies that emphasize the development of agriculture and the safeguarding of food security.
In recent years, the subsidization of agriculture has been a key policy instrument to secure the population with locally produced goods. As a result, over the past seven years, Azerbaijan has steadily improved its position in the Global Food Security Index. Last year, the country ranked 53rd in the report and was among the top ten in Asia and the Pacific in terms of ensuring food security.
Huseyn noted that even when GDP declined in 2016 due to global economic trends, growth was recorded in agriculture. Despite expected economic slowdowns in some sectors due to the COVID-19 pandemic, agricultural growth is forecasted to continue. In the first quarter of this year, overall agricultural production increased by 3.7% compared to the same period last year. Agricultural exports also rose by 7%, with vegetable exports increasing by 55% and cottonseed exports by 14.5%. Measures under the Action Plan are expected to further boost agricultural production and exports, strengthening the country’s food security.
Huseyn emphasized that establishing the State Grain Fund was a timely and correct decision to prevent supply issues for staple grains during pandemics or other emergencies. The fund maintains wheat reserves, while Azerbaijan also imports a portion of its food wheat, primarily from Russia and Kazakhstan. Current potato reserves are sufficient to meet domestic demand, with fresh potatoes entering the market soon. Production of onions and other vegetables is also stable. According to the State Statistics Committee, the country’s sugar reserves amount to 395,000 tons, ensuring no shortfalls in domestic consumption in the coming months. Additionally, 7,860 tons of rice were imported in January–February 2020, providing approximately five months’ supply, while demand for meat and dairy products is largely met through local production. Plans are also underway to temporarily exempt certain imported food and medical products from VAT and to provide VAT exemptions for raw materials required for domestic production.
To mitigate the negative impact of COVID-19 on agriculture, the Cabinet of Ministers approved a guideline regulating the movement of individuals involved in agricultural and auxiliary sectors during the special quarantine period. This ensures continuity in agricultural production.
Furthermore, under the Presidential Decree, AZN 30 million has been allocated to the Agricultural Credit and Development Agency for unsecured microloans in the agrarian sector. These funds will support agricultural producers’ financial needs during and after the pandemic. Initiatives such as establishing a commission to ensure the efficient use of water resources will further contribute to agricultural development.
In conclusion, prioritizing the development of agriculture and the processing industry as a key component of state economic policy will enhance local production and increase self-sufficiency in food products.