Azerbaijani cotton harvest: low productivity, high administration, poor profitability
senior analyst of Economic Research Center
According to the State Statistics Committee, as of December 25, in the country have been produced 229, 144 tons of cotton. As compared with the same period of the past year, cotton outputs were up 11,4%. As of January 8, cotton production was 232, 231 tons of cotton. From a year earlier, the figure is up 12,1%.
Under a State Program of July 13, 2017 “On the Development of Cotton-growing in Azerbaijan in 2017-2022”, it was expected to raise the cotton production in the country to 500, 000 tons in 2022.
Official statistics reaffirms that cotton-picking in Azerbaijan continued even in January. Reports from Sabirabad, Imishli, and Hajiqabul say that farmers who failed to implement a January plan were forced to pick remaining cotton from sown areas and thus make up for shortfall through every possible means. It should be remembered that 2/3 of cotton areas in 2018 fell on 7 regions of the country. Note that the most cotton was sown last year in Saatly (15, 815 ha), Imishli (13, 645 ha), Sabirabad (13,055 ha), Bilasuvar (12,000 ha), Agjabedi (10,000 ha), Barda (9, 630 ha), Beylagan (9, 560 ha).
It should be added that cotton areas have essentially expanded and the cotton production intensified through the use of administrative resources. Official statistics say that 35, 000 tons were procured in 2015 per 18, 000 ha; 89, 000 tons per 51, 000 ha in 2016 and 205, 000 tons per 136, 000 ha in 2017.
Productivity far from goals to be sought
It should be stressed that productivity in 2017 failed to reach an appropriate level. Suffice it to say that an average productivity per ha made up 17,4 centers. President Ilham Aliyev specified that average productivity in 2018 was meant to reach 20 centers. Under the latest official reports of the State Statistics Committee, 232, 200 tons of raw cotton was picked up in 2018 from 132, 512 ha. That’s to say that average productivity constituted 17,5 centners per ha.
During a January 29 conference on the results of the implementation of the state program of economic development of the region in 2014-2018 President Ilham Aliyev declared that “we must improve productivity.”
“The productivity is high where the responsibility is serious. For reference, the “MKT” company productivity at cotton fields is 27 centers; “Azərpambıq” - 19 centers. However, productivity is lower in small farms, so the average productivity is low as well. A revision has to be carried out in the area. Appropriate soils have to be identified for effective cotton-growing. Other crops have to be grown on soils with low productivity”, President emphasized.
It must be said that the productivity proved to be comparatively high in 5 regions of the country:
1. Barda - 26 centers
2. Agjabedi – 23 centers
3. Beylagan – 22 centers
4. Bilasuvar – 18 centers
5. Saatly – 19 centers
However, cotton productivity proved to be much lower in 7 regions:
1. Zardob - 14,9 centers
2. Salyan - 14,5 centers
3. Neftchala - 14,3 centers
4. Imishli - 13,3 centers
5. Sabirabad - 13 centers
6. Kurdamir - 12,9 centers
7. Aqdash - 12 centers
In some regions the cotton productivity per ha did not exceed 10 centers:
1. Fizuli - 9,8 centers
2. Hajiqabul - 8,8 centers
3. Agsu - 7,4 centers
4. Ujar - 6,6 centers
When adjusted for the fact that underestimates of independent experts the average farmer’s costs for growing and picking of cotton per ha across the Republic account for 1000 manats, it is safe to say that in 2018 most cotton farmers sustained sizable losses.
It has to be kept in mind that the state provides a 10 qapik worth subsidy to farmers per each kilogram of cotton picked. There are the following tariffs for cotton grades: 650 manats per 1 ton of the 1st-grade cotton; 630 manats for the 2nd-grade cotton; 590 manats for the 3rd-grade cotton; 550 manats for the 4th cotton in 2018.
A share of white gold in export
According to the State Statistics Committee, 54,314 tons of cotton fiber, as well as 9,488 tons of cotton yarn was exported from the country in 2018. The cost of exported cotton fiber made up $80 mln 464, 000 and that of cotton yarn – $ 23 mln 667, 000.
To compare, 24,655 tons of cotton fiber worth $ 33mln 753,000, as well as 7028 tons of cotton yarn worth $ 15 mln 922, 000 were exported from Azerbaijan in 2017.
It should be remembered that the cotton is ranked five in agricultural produce with the highest currency:
- Tomato - $177 mln
- Persimmon - $114 mln
- Cotton and products - $108 mln
- Hazelnut - $100 mln
- Apple - 38 mln
However, figures say that a greater portion of export falls on raw cotton. In his closing speech on January 29, 2019, at a conference devoted to the results of the implementation of the state program of economic development of the region in 2014-2018 President Ilham Aliyev dealt with cotton consumption as saying: “There is a need in constructing a mill on cotton fiber and ready-made textile production. We have fiber production mills. According to the information available, 50% of procured cotton is processed in Azerbaijan to create an added value thus. However, entrepreneurs must know that the potential is great. Well, that’s good. It should be noted that cotton production tends to grow. So I believe that entrepreneurs must care about the construction of fiber production factories”.
This is a very profitable and useful enterprise for the country. This suggests that the cotton will be a branch of top priority in 2019. The cotton production is likely to grow at the expense of administrative resources and expansion of cotton fields blindly. The above-stated is confirmed by regional news at our web-page.