Mountains occupy half of the country, and 18% of the land lies below sea level. The country borders the Caspian Sea on the east, and the coastal lowlands are threatened by the rising level of the waters. According to Koeppens classification, the climate is of three types: temperate type on the southeast, along the coast of the Caspian Sea; temperate dry in the centre and in the northeast; and cold type in the rest of the country.
Azerbaijan is an oil producing country, and is using that resource to attract investment and sustain future development.
Arable land and permanent crops cover 1.9 million ha, of which 1.5 million ha are under irrigation; permanent pastures cover 2.5 million ha; and forests cover 1 million ha. The main crops are wheat, barley, potatoes, maize, cotton, grapes, vegetables, fruits, tobacco and tea.
Average daily availability of calories per caput (1995-97) was 2 210. In November 1999, Azerbaijan was one of the 34 countries with shortfalls in food supplies, requiring exceptional and/or emergency assistance.
Agricultural exports are principally cotton and processed tomato products. The labour force participation ratio of women to men was 0.8 in 1998.
Agricultural land is facing serious problems of soil fertility depletion, erosion, salinity and pollution. The quality and yield of wheat produced in the country remain low, although efforts made by private farmers are beginning to produce results in terms of better yields.
So far, the oil resources of the country have not had a significant impact on the development of the agricultural sector. A major obstacle to the overall economic progress of the country has been the conflict with Armenia over the Nagorno-Karabakh region. There are 860 000 Internally Displaced Persons (IDPs) and refugees, and 500 000 vulnerable people in need of humanitarian assistance.
National agricultural policy
Fundamental reforms were introduced in 1997, based on liberalization of producer prices, trade and marketing. State trading organizations were privatized or liquidated, including agro-industries. The former state input supply organization, Agrochimia, was transferred to the State Property Committee for privatization. The Land Market Law of 1999 provided for the sale and purchase of land. The tax law was modified to provide more incentives to domestic producers, with farm enterprises liable for only the Land Tax.
Privatization and land distribution was nearly complete at the end of 1999 (1.3 million ha of cultivated land distributed to 790 000 holders. The resulting average size of private farms was below 5 ha; the range is between 3 and 10 ha.
Timely access to farm machinery is difficult and losses at harvest are high. Rural markets are oversupplied with perishable commodities, with limited access to urban or external markets.
Rural household are increasingly producing food for their own consumption; they are kept on the margin of urban areas where food supplies depend on imports. To redress the situation, a diversification of agricultural production and an improved marketing system would be needed.
Availability of irrigation water is inadequate or uncertain. There is little working capital to purchase yield-enhancing inputs. Credit at affordable cost is not available. Use of fertilizers and agro-chemicals has fallen in recent years. Operational machinery is obsolete and unsuitable for small plots. Domestic production of fertilizers has practically ceased, and that of seed was reported lately as inadequate, resulting in shortages of quality seed.
Overall food supplies
In November 1999, Azerbaijan was among the 34 countries with a shortfall in food supplies requiring exceptional and/or emergency assistance.
The country has already received support from the World Bank, UNDP, FAO and other bodies. Further support would be required, including south-south cooperation (e.g. with Turkey in the area of seed production and distribution). WFP continues to support 485 000 vulnerable people through a three-year Relief and Recovery Operation.
In view of the poor state and performance of the sector, attention has been directed toward the changes that are required to adjust and strengthen it. On this point, both FAO and the World Bank analyses concluded that farmers needed immediate access the best seed varieties available, including international supply. Control mechanisms should be reduced concerning protection against critical diseases; seed legislation should be reviewed and improved; and there should be consultation with and participation from the intended beneficiaries (farmers and other stakeholders in the seed industry) in the establishment of priorities and policies for seed development and regulations.
The policy of building a government seed industry should be reversed, because it would not serve producers efficiently. Services relating to quality control and certification, which are bound to remain within the public sector, require upgrading. Azerbaijan has an Agricultural Research Institute and an Institute of Botany of the Academy of Sciences in Baku.