State Duma deputy says products from Azerbaijan have no equal

State Duma deputy says products from Azerbaijan have no equal

In the current environment, when there is a Russian ban on imports of European food, Azerbaijan can offset the shortage of such products, State Duma deputy, deputy chairman of the Duma Committee on Financial Markets Dmitry Savelyev said. 

 

"Today the loss to Europe from the prohibition of supply of agricultural products to Russia are estimated at 5-6 billion euros. Azerbaijan could capture an important part of this volume of product exports - to the mutual benefit of both our countries," Rosbalt cited him as saying.

 

"For the Russian consumer, fruits and vegetables from Azerbaijan by price-quality ratio are second to none. There is no doubt that they are more attractive in taste and environmental quality than similar products from Asia, which are often stuffed with chemicals, or even the European fruit and vegetable products, which are cultivated in conditions unnatural for humans," the deputy chairman of the Committee said. 

 

As experts point out, there has always been a high demand for agricultural commodities of Azerbaijan in neighboring countries. But now, fruit and vegetable exports in the country occupy a particularly important place. Over the past 10 years the growth rate of agriculture in Azerbaijan amounted to 48.9%, which is much more than the global level. Azerbaijan declares 2015 as Year of Agriculture, which shows how high the government puts the agrarian sector. Households use the latest technologies, purchase purebred cattle, constantly work on previously used land. In addition, farmers only pay land tax, the state lifted the rest of the tax burden from them.

 

According to experts, it is notable that over 60% of soft loans, approved in 2014 by the National Entrepreneurship Support Fund, have been issued for the production and processing of agricultural products. At the moment, Azerbaijan is 76-98% self-sufficient for most types of products, and fruits and vegetables are grown in abundance. In 2014 exports of fruits and vegetables in the country amounted to $291 million, which is 16.1% more than in 2013. And this year Azerbaijan intends to more than double the volume of exports to Russia, and the range of exported goods will increase 50%. According to experts, the expansion of the non-oil sector of Azerbaijan's economy, which is based primarily on agriculture, plays a particularly important role in the face of declining oil prices. So exports of fruit and vegetables, on the one hand, are a significant source of revenue to the state budget, while on the other, they will reduce dependence on oil prices and, thirdly, it will have a positive impact on the country's export potential. Russia, in its turn, under the embargo is also counting on Azerbaijani agricultural products. Despite the fact that in 2015 alone, 250 billion rubles will be allocated to the development of agriculture, Russia hardly will be able to fully implement the strategy of import substitution in this sphere. Imports from Azerbaijan are much more profitable than cooperation with countries in Africa, Asia and South America, not least because of low transport costs, experts believe. Azerbaijani investors have already received from the Russian authorities an offer to participate in the creation of logistical centers for agricultural products in the south and in the central region of Russia.

According to experts, it is notable that over 60% of soft loans, approved in 2014 by the National Entrepreneurship Support Fund, have been issued for the production and processing of agricultural products.

 

At the moment, Azerbaijan is 76-98% self-sufficient for most types of products, and fruits and vegetables are grown in abundance. In 2014 exports of fruits and vegetables in the country amounted to $291 million, which is 16.1% more than in 2013. And this year Azerbaijan intends to more than double the volume of exports to Russia, and the range of exported goods will increase 50%. 

 

According to experts, the expansion of the non-oil sector of Azerbaijan's economy, which is based primarily on agriculture, plays a particularly important role in the face of declining oil prices. So exports of fruit and vegetables, on the one hand, are a significant source of revenue to the state budget, while on the other, they will reduce dependence on oil prices and, thirdly, it will have a positive impact on the country's export potential.

 

Russia, in its turn, under the embargo is also counting on Azerbaijani agricultural products. Despite the fact that in 2015 alone, 250 billion rubles will be allocated to the development of agriculture, Russia hardly will be able to fully implement the strategy of import substitution in this sphere. Imports from Azerbaijan are much more profitable than cooperation with countries in Africa, Asia and South America, not least because of low transport costs, experts believe. Azerbaijani investors have already received from the Russian authorities an offer to participate in the creation of logistical centers for agricultural products in the south and in the central region of Russia.

 

Azerbaijani expert Oktay Akhverdiyev confirmed that the main market for agricultural products in Azerbaijan since the Soviet era is the Russian one. "Even in Soviet times, fruit and vegetables of the Azerbaijani SSR went mainly to the Russian market. And today 90% of this production is directed towards Russia. And in connection with sanctions and the embargo we have increased exports to Russia," he said. 

 

According to Ahverdiev, one of the reasons for the active exports is overproduction of agricultural products, as well as imports of the same kinds of fruit and vegetables from other countries, which further increases the level of overproduction. 

 

"In general, we have obtained a large oversupply. Therefore, our capacity to supply fruit and vegetables to Russia is quite large, so Azerbaijan was mentioned in the Duma," the expert said. 

 

It is important that such a long trade cooperation between the countries implies a scheme of deliveries and sales, making it easier to work together. "Trade cooperation between Azerbaijan and Russia has been operating a long time, not only with Russia, but also with the hinterland. This is already a well-established scheme, which increases its scale and capabilities from year to year," he said.

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