BAKU, Azerbaijan, May 8
By Eldar Janashvili – Trend:
Azerbaijan issued a regulation in the first week of 2020 on improving the process of agricultural subsidizing, Trend reports on May 8.
The old system of providing separate subsidies for each agricultural product was changed with a unified system of subsidizing whole areas, such as cotton growing, tobacco growing and livestock breeding.
The new rules strengthened the state support for agriculture, formed its stable and easily predictable mechanism, simplified registration with subsidies and gave farmers the opportunity to prepare a presentable 3-year business plan for their households.
All this reduced the risks during investing in agricultural production and created a favorable environment for attracting additional investments for a period of three years with guarantee support from the state.
The Asian Development Bank noted modern agricultural methods in Azerbaijan in its January review, saying that the innovations will help increase labor productivity and the level of import substitution and food security in the country.
The review once again emphasized that Azerbaijan should adapt its economy to a more sustainable future, relying on renewable resources rather than extracted ones.
Furthermore, in January, Azerbaijan began checking the data entered into the Electronic Agriculture (EAC) information system in connection with the autumn sowing on the basis of integration with the electronic systems of the relevant authorities. On this basis, verification of documents confirming ownership of the land began.
Meanwhile, the number of registered farmers on the portal of the Electronic Agricultural Information System (EKTIS) has reached 460,000 people, and the number of registered land plots - 55,000.
In March 2020, subsidies worth over 110 million manat ($64.7 million) were transferred to cards of more than 30,000 Azerbaijani farmers. In parallel, it was decided to create a project team with the joint participation of the Central Bank of Azerbaijan (CBA) and the Ministry of Agriculture with the aim of developing a mechanism for financing agriculture, agricultural land and farmers' activities.
From early April, leading non-bank credit organizations (NBCOs) engaged in agricultural lending, such as Agrarkredit CJSC, Inkishaf uchun Maliyya LLC, Viator Mikrokredit Azerbaijan LLC and Qafgaz Kredit LLC have started using CLARA, which is online software service designed for banks and NBCOs that provide lending to farmers.
In accordance with the agreement signed by the Azerbaijan Microfinance Association (AMFA) with the International Finance Corporation (IFC), which is part of the World Bank Group, AMFA’s credit organizations volunteered to increase agricultural lending.
Also in April, the term for the repayment of microloans in the agricultural sector was extended in Azerbaijan and the social burden of workers in this sector was reduced, at which the monthly payment rate for compulsory state social insurance varies depending on the area of the land plot.
Earlier, when determining the rate, the number of members of the farmer's family was taken into account, which was not highly effective and overburdened the payer.
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