Contract Farming Resource Centre

Contract farming for hazelnuts in Azerbaijan: discussions and preparations


Discussions have been held and preparations been made to introduce a contract farming component to the project “Catalyzing the efficiency and sustainability of Azerbaijan’s Hazelnut Sector” (UTF/AZE/016/AZE). The project has been developed and jointly implemented by the Food and Agriculture Organization of the United Nations (FAO) (FAO-Azerbaijan) and the Ministry of Agriculture (MoA) in Azerbaijan at the request from the Government of Azerbaijan represented by MoA.

Azerbaijan is one of the world’s top five hazelnut producers along with Turkey, Georgia, Italy, and the United States.  Hazelnut (Corylus avellana) represents one of the most remunerative cash crops of the country. It is a high-value crop with great demand from the export markets. However, in order to increase its competitiveness in the international market, Azerbaijan needs to overcome challenges to increase productivity and production, improve quality and expand its access to international markets.

The main goal of the project is to empower smallholder farmers to adopt good agricultural practices (GAP) to increase production efficiency of hazelnut, with adapted mechanization technologies and services and to increase the quality of nuts produced, with specific focus on reducing the risk of aflatoxin contamination. The project will also empower newly established Government institutes and state agencies while linking to private sector actors.

Various stakeholders in Azerbaijan have expressed their interests in contract farming as an innovative business modality for hazelnuts that can help improve productivity and quality and increase more consistent supply of quality products. Contract farming can potentially be employed to connect traders, processors and producers more closely, introduce new practices and technologies, provides training and technical guidance, produces inputs and productive resources to producers, and introduce more control over the production processes to increase productivity and quality to be aligned with market demand.

As such, discussions have been held to prepare the contract farming component for the project, which will be based on the participatory approach and focuses on capacity development. It consists of (1) the provision of the training and capacity building for contract farming; and (2) the conduct of value chain analysis and feasibility assessment for contract farming for hazelnuts in Azerbaijan. The analysis will help stakeholders make informed decisions on adoption, implementation and upscaling of contract farming as an innovative model. It will include the analysis on the end market, core and extended value chain actors, and enabling environment for the hazelnut sector based on systems approach, identification of needs, challenges and opportunities for value chain upgrading, and assessment of opportunities, incentives, capacities, challenges and disincentives for contract farming. Evidence-based recommendations, therefore, will be provided on piloting and upscaling contract farming and on value chain upgrading and measures to create an enabling environment for contract farming to increase overall competitiveness of the hazelnut sector.

Stay tuned….we will share more about this collaborative work in 2023. 

To learn more, please check out the Background section to learn more about what contract farming is, FAO’s work on contract farming and others.

Please feel free to check out the News section to find out more about our work in different countries and other updates.


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