Azerbaijan prioritizes creation of food safety through local production

Economy 23 January 2022 15:25 (UTC +04:00)
Azerbaijan prioritizes creation of food safety through local production

BAKU, Azerbaijan, Jan. 23


An increase in domestic consumer prices on average every two months shows the acceleration of food inflation rate in the world. The acceleration of inflation rate on a global scale was also affected by the shortage of goods in terms of a break in the global supply chain and an increase in tariffs for international transportation, primarily, container shipping. Moreover, energy products are also becoming more expensive.

The average annual inflation rate in Azerbaijan is 6.7 percent, food inflation rate - 8.1 percent, non-food inflation rate - 5.1 percent, annual inflation rate - 12 percent. The consistent steps are being taken to mitigate the consequences of rising inflation in the country.

The volume of subsidies for each ton of flour and flour products sold on the domestic market was increased in 2021. The production and sale of flour and bread were exempted from VAT until 2024. Big wheat importers were provided with soft loans through the Central Bank of Azerbaijan.

Taking into account the rise in prices for main foodstuffs in the world food markets, special attention is paid to the issue of food supply and food safety of the country, the issue of reducing the level of dependence on import.

Azerbaijani MP, economist Vugar Bayramov has commented on this issue.

"Azerbaijan is one of the countries that attach special importance to the process of formation and ensuring food safety," Bayramov told Trend .

The MP said that food safety means meeting the needs for food through local production, the formation of special reserves.

"The government has already developed and is implementing a special strategy in this sphere on the basis of the instructions of President of Azerbaijan Ilham Aliyev," Bayramov said. "The formation of food safety and the increase in local production are the main priorities in the new strategy, which will cover 2022-2026."

The MP said that in this context, these issues become even more relevant, especially during COVID-19 pandemic.

"Taking into account that the global food prices increased by around 38 percent in 2021, this is characterized as the highest price increase during the last 10 years," Bayramov said. "At the same time, the demand for foodstuffs increased in the world market. The growth in demand amid the reduced supply affects the prices, which in turn puts the issue of food safety and provision on a global scale."

The MP stressed that from this point of view, Azerbaijan gives priority to the formation of food safety through local production.

"The land fund of the Azerbaijani territories liberated from the Armenian occupation, in particular, the fertility of these lands, also makes it possible to form the food safety," Bayramov said.

The MP said that the research shows that agricultural products worth 1 billion manat ($588 million) may be produced annually as a result of the restoration of agriculture in the liberated territories after the restoration.

"The formation of food safety will become one of the main priorities in the coming years," Bayramov said. "We will see a bigger supply of consumer demand through local production, which is certainly considered important in terms of eliminating dependence on import."

Deputy director of the Russian School of Economics, professor at the Azerbaijan State University of Economics Elshad Mammadov also expressed opinion on this topic.

"The Azerbaijani government immediately took urgent measures to curb inflation," Mammadov told Trend. "Today inflation is one of the biggest problems both in terms of the global and national economy. It is mainly related to the structural problems in the global economy and disruptions in the transport and logistics production chain."

"First of all, it is necessary to combat inflation through the increase in production, for which it is necessary to increase investments," Mammadov said. "I think that the antimonopoly service must work more actively in terms of combating artificial price hikes, including that in the trade sector and slightly in the manufacturing sector."

The professor added that from the point of view of combating inflation, it is also very important to maintain the exchange rate of the national currency.

"I think that the systemic measures are required to curb inflation," Mammadov said.

All necessary measures were taken in Azerbaijan to prevent flour and bread price gouging in 2021.

The Azerbaijani State Service for Antimonopoly Control and Supervision of the Consumer Market has intensified the control measures and monitors flour sale daily in 68 Azerbaijani districts and cities.

The agricultural potential of the liberated territories of the country is of great importance for Azerbaijan’s economic development.

The sowing work on 100,000 hectares of these territories upon the order of the Azerbaijani President, as well as the processing agricultural products, will support the production growth in this sector.