Azerbaijan Increase Subsidies in Agrarian Sector for Food Safety

Business Materials 15 April 2008 14:34 (UTC +04:00)
Azerbaijan Increase Subsidies in Agrarian Sector for Food Safety

Azerbaijan, Baku, 15 April / Trend corr. I.Khalilova / Heydar Babayev, Minister of Economic Development of Azerbaijan, stated that the Azerbaijani Government is to raise subsidies for agricultural housing in order to provide food safety in the country. The new subsidy mechanism will be more effective that the previous one.

"Most international experts report on the increasing poverty in world bringing about inter-governmental conflicts because of food," the Minister said. This is the start of the process therefore, we need to supervise the situation carefully, he noted.

Presently, the mode of subsidy is being considered in the Government. Subsidies, according to Babayev, may be allocated as an additional tax privilege. There are plans to extend the suspension term on tax payments by agricultural producers from 2009, by releasing them from payment of other taxes, excluding land tax. According to the Minister, extending the term on release of grain import from GDP is also an actual issue. "We are planning to introduce more complicated subsidies," the Minister stated.

The Minister considers it important to establish a Grain Fund, as most countries face difficulties to purchase seeds. Economic Development Ministry and Agricultural Ministry are to develop proposals and submit them to the Government.

The Agricultural Ministry has already submitted its proposals to increase the size of subsidies for agrarian sector approximately to AZN 100mln. For this purpose AZN 80mln was invested in the State Budget for 2008. The quota for grains made up 8,000 tons in 2007 and 16,000 tons in 2008.

Furthermore, there are plans to fulfill additional subsidies to produce stocks for harvest, the Ministry said. The farmers appealed to us with requests to allocate additional funds because of the increase in prices of most productions by 50%.

In 2007, production by farmers totaled 100,00 or 200,000 tons, and it is expected to exceed 1mln ton in 2008. The weather conditions had a favorable effect on agricultural production in 2008. Land for grain harvest is expected to be increased by 130,000 hectares. In total, sowing areas were increased from 734,000 hectares to 828,000 hectares in 2008.

In 2007, the State Budget allocated AZN 68.9mln subsidies to compensate 50% of purchased fuel and mineral fertilizers to farmers. Some 596,806 individuals and 12 juridical entities received financial aid to purchase fuel, motor oil and mineral fertilizers.

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