WB announces ways to diversify Azerbaijan's agricultural exports

Because of the war in Ukraine and the international sanctions on Russia, the countries in the region, including Azerbaijan, need to diversify their import and export trade to cover other markets, Report informs, citing the Azerbaijan Systematic Country Diagnostic Update (SCD) for 2022.

“This will require greater competitiveness in agricultural products, which amplifies the importance of ongoing efforts by the government to enhance food security compliance and productivity. Until the war in Ukraine, Russia was a readily accessible market that generated good returns for exporters. Transport and logistics links are well established. Exporters were well connected with Russian wholesale markets. Quality and safety requirements were more easily satisfied than in other markets, and most Azerbaijani products enjoyed a high market share.

In contrast, access to export markets in Europe, Asia, Central Asia, and the Middle East is constrained by more complex transport and logistics and more stringent quality and safety regulations. The absence of formal trade agreements with many of these alternative markets limits the ability to establish a strong trade presence. The government has established AzPromo to lead in the quest for alternative export markets. It has made some progress through support for trade missions, participation in international trade fairs, and the promotion of the Made in Azerbaijan brand. Scaling up such initiatives should be a priority of the government in light of the constraint affecting trade with Russia,” says the World Bank.

“To achieve greater commercialization in farming and increase productivity and value addition in the agriculture sector in a sustainable manner, the following actions need to be undertaken: strengthening the link between farmers, especially smallholder farmers, and producers to companies and hence into the value chains, support knowledge and technology transfers, facilitate public and private logistics capacity, promote improved soil management, invest in irrigation infrastructure and water-saving technologies, increase public investments in rural roads, facilitate private investment financing, build capacity to meet international food safety standards, and promote diversification in export markets. Developing smart agriculture that uses water efficiently, green fertilizers, and clean energy may also help the sector to increase productivity while enhancing resilience to climate-related risks and reducing emissions.

Russia has been the largest export market for Azerbaijan accounting for 86.5 per cent of the total exports of fruits and vegetables in 2021. Agriculture is a major contributor to the country’s non-oil economy. It offers significant development opportunities and great potential for stimulating and diversifying future growth, job creation, and food security,” reads the report.