Azerbaijan, Baku / corr Trend I.Khalilova / Adalat Muradov, the Authorized Secretary of the State Commission regarding arrangements for Azerbaijan's Admission to the WTO, announced that during Azerbaijan's admission to the World Trade Organization (WTO), the amount of financial support offered to the agriculture sector will decrease to a maximum of 10%.
As per the WTO's requirement, the country can maintain financial support to the amount of 10% of the Gross Domestic Product (GDP) in agriculture. Today this figure is 1.4bln in Azerbaijan (share of agriculture in GDP is 7%), and respectively, the annual amount of grain-in-aid of this sector could fluctuate around AZN 140mln," Muradov said.
Respectively, 50% of the compensation for equipment and fertilizer acquired by farmers can be maintained. In this respect, this year the public budget will allocate AZN 80mln.
These restrictions will depend upon the status of Azerbaijan's admission to the WTO. Should the country be admitted as a developing country, then the amount of financial support for agriculture may be 10%, but should it be considered as a developed country, this must be reduced to 5%.
In order to avoid prices of agriculture to increase and farmers being unable to withstand the rivalry, the government has extended its suspension of tax with respect to the development of the Agrarian sector. In this respect aid may continue in future as well, the Government said.
Data provided during the past three years has shown that over the first year the amount of subsidies comprised 49%, which was linked with the writing off of all debts in agriculture, whereas over the subsequent year it decreased from 13-14%.
At present one of the problems in the talks with the WTO countries is the grants-in-aid with regards to services. "We would like to retain the right to apply for subsidies, although the WTO will consider each sector separately," Muradov stressed. For instance, the privileged credits allotted out of the National for Business Support, the compensation for flights to the Nakhchivan Autonomous Republic and Ganja and privileges in the sphere of communications will be accepted as grants-in-aid. "Unless these issues are coordinated, the application for subsidies as a requirement will be admitted as a violation of the WTO principles," Muradov noted.