ORDER OF THE PRESIDENT OF THE AZERBAIJAN REPUBLIC

of August 25, 2008 No. 3004

About approval of the State program of reliable providing the population in the Azerbaijan Republic food products in 2008-2015

For the purpose of stimulation of increase in production of agricultural products in the Azerbaijan Republic and further improvement of providing the population with food due to local production I decide:

1. Approve "The state program of reliable providing the population in the Azerbaijan Republic by food products in 2008-2015".

2. To the Cabinet of Ministers of the Azerbaijan Republic:

2.1. together with corresponding central and local executive bodies to take the necessary measures providing execution of the State program;

2.2. following the results of every year to inform the President of the Azerbaijan Republic on course of execution of the State program.

3. This Order becomes effective from the date of its signing.

Approved by the Order of the President of the Azerbaijan Republic of August 25, 2008 No. 3004

The state program on reliable providing the population with food products in the Azerbaijan Republic for 2008-2015

Reliable food supply is the main condition of economic stability and social stability of each country. For this reason permanent implementation of adequate measures for complete satisfaction of need of each member of society for the main food products is represented important.

Because of increase in prices for energy carriers within the last several years, increases in need for food products as a result of the negative tendencies occurring in the financial market of the leading countries, and also growth of population, climate change, limitation of water-supplies and for other reasons of the price of the main food products in the world markets began to grow, the lack of food of some countries turned into real threat.

According to the Organization of food and agricultural industry (FAO) of the United Nations if in 1950-1985 annual increase in production of food constituted 30 million tons, and in 1985-1995 - 12 million tons, then till 2030 this indicator will be at the level of only 9 million tons.

Reliable food supply of the population of the Azerbaijan Republic constitutes one of the main directions of economic policy of the state. Still in the mid-nineties the last century at the initiative of the national leader Heydar Aliyev the land reforms which do not have analogs on space of the Commonwealth of Independent States were undertaken, mechanisms of support of agricultural producers are created, together with the international organizations execution of projects, significant for this industry, is begun. In 2001 the Order of the President approved "The program of food security of the Azerbaijan Republic", and as a result of the works performed within this the Program, production of agricultural and food products considerably increased.

Along with it, accomplishment of the tasks following from "The state program on reducing poverty and economic development in the Azerbaijan Republic for 2003-2005", "The state program on development of small and medium entrepreneurship in the Azerbaijan Republic (2002-2005)", "The state program of social and economic development of regions of the Azerbaijan Republic (2004-2008)" and other accepted documents, including rendering financial and technical support to farmers, development of entrepreneurship, implementation of infrastructure projects in regions provided increase in specific weight of local products in consumption of the population. However it was not succeeded to reach complete ensuring need of the country for the main food products due to local production yet. On the other hand the instability observed in the world food markets exerts the impact on the prices of food products and in Azerbaijan. The current status requires integrated approach to question of the maximum reduction of dependence of the domestic food market on import and creation of food inventories. "The state program on reliable providing the population with food products in the Azerbaijan Republic", prepared according to the Order of the President of the Azerbaijan Republic of May 1, 2008 No. 2786, provides implementation of adequate measures during 2008-2015 for achievement of this purpose.

I. Current status in the field of providing with food products in the Azerbaijan Republic

1.1. Macroeconomic stability and income of the population

One of the main conditions of reliable food supply of the population is achievement of the long development which is based on macroeconomic stability and satisfaction with the income of the population of the requirement which is based on physiological regulations.

The analysis of economic indicators of the last five years shows that Azerbaijan within these years not only kept macroeconomic stability, but even turned into one of the leading countries of the world on economic growth. In 2007 in comparison with 2002 the gross internal product in real terms grew by 2.6 times. This growth became possible as a result of dynamic development, both oil-and-gas sector, and not oil sector. These years the actual growth of not oil sector constituted 76.1 percent. Within these years amount of gross domestic product per capita, having increased by 4.7 times, reached 3692 US dollars.

High economic growth opened ample opportunities for improvement of social welfare of the population. Within the last five years the average monthly salary grew by 3.4 times, and the income of the population - by 2.9 times. As a result of increase in the country of minimum wage, pensions and benefits, salaries in the organizations financed from the budget, and at the same time use of the mechanism of the address public assistance the average monthly income of the population per capita firmly develops. Noted measures allowed to reduce poverty level in the country to 15.8 percent.

Increase in receipts from oil export seriously expanded financial opportunities of the country. Now Azerbaijan participates in financing of large transnational projects as within the country, and beyond its limits. Increase in financial opportunities for the last five years allowed to increase the income of the government budget by 6.6 times.

Thus, the achieved success strengthened economic bases of the state even more and expanded opportunities for the solution of the available social and economic problems, including for increase in business activity, acceleration of development of not oil sector, spheres of infrastructure, social and economic development of regions, reducings poverty, ensuring food security and implementation of more productive measures in the direction of the solution of other questions. These complex actions will be performed in the approved type with other state programs.

1.2. Current status in the agrarian sector

During 2003-2007 actual growth in the agrarian sector averaged 4.5 percent in year. As a result of the reforms undertaken in this area:

* for development of agrarian and industrial complex, improvement of providing with food first of all the legislation corresponding to the principles of market economy was created;

* land reforms are undertaken;

* on the basis of the privatized lands and property of the sovkhozes liquidated as a result of reforms, kolkhozes and the intereconomic companies also other private structures were created 1191 collectives, 156 agricultural production cooperatives, 2651 family agricultural industries, 843.2 thousand families dulled to activities as physical person;

* since 1999 producers of agricultural products were exempted from all taxes, except for the land tax;

* debts of the business entities liquidated as a result of agrarian reforms, and also subjects in the areas which are under occupation were written off and other privileges were provided;

* with assistance of such authoritative organizations as the World Bank, International Development Association, the International Fund for Development of Agricultural Industry, the International Agency of Development of the United States of America, Society of the Cooperation of Germany, the International Development program of the UN and the Organization for Food and Agricultural Industry of the UN, in the agrarian sector of the country implementation of considerable projects with total cost in 158 million US dollars was provided;

* the state began to pay to farmers 50 interests of the expenses incurred on acquisition of fuel, engine oil and fertilizers issue of subsidies for crops grain began, for improvement of technical supply the Agroleasing Open joint stock company was created, by leasing issue to equipment manufacturers and fertilizers on favorable terms is performed;

* the specific weight of private sector in production of agricultural products reached 99.7 percent.

1.2.1. Use of the earth and water

Use of the earth. The general land fund of the Azerbaijan Republic constitutes 8641.5 thousand hectares from which 4756.5 thousand hectares or 55 percent are suitable for agricultural industry. 1432.6 thousands of hectares or 16.6 percent of the general territory are the irrigated lands. On land balance of 1808.4 thousand hectares of the area, suitable for agricultural industry, are sowing lands. 181.6 thousands of hectares from this area are under occupation. 224.7 thousands of hectares of the land area, suitable for agricultural industry, constitute long-term crops, 117.6 thousand hectares - meadows, 2560.0 thousand hectares - pastures, 45.7 thousand hectares - the zalezhny areas. Personal plots over the country constitute 258.1 thousand hectares (227.6 thousand hectares from them are suitable for agricultural industry), and forest grounds - 1038.8 thousand hectares.

Due to the allocation of lands under nonagricultural objects and private structures because of increase in the population, and on the other hand, in connection with erosion of lands, raising of level of underground waters as a result of raising of level of the Caspian Sea, not carrying out meliorative measures up to standard, violation of agricultural technology and other causes cultivated area decreases by each person every year. If in 1959 cultivated area in 0:36 hectares fell on one person, then in 1970 this figure decreased to 0:23 hectares, in 1979 - to 0:21 hectares, and in 2006 - to 0.155 hectares. 40 percent of lands in the mountain territories underwent to different degree of erosion. About 47 percent of the irrigated sowing lands underwent to different extent of salinization. For this reason of 657 thousand hectares need carrying out meliorative measures.

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