Summer 1995 (3.2)
Pages 26-28, 78
Azerbaijan's "White Gold"
and Its Agricultural Resources
by Svetlana Turyalay
Back in October 1993 I was with a group of journalists heading out to the war front and we came upon a sight I had never seen in my entire life-an exodus of dozens and dozens of farm trucks, tractors and wagons streaming down the highway. But instead of being loaded down with farm products from that very fertile region, they were bulging with household goods that had been hastily gathered and crammed into their vehicles. Everyone feared an imminent attack by Armenian troops and was frantically fleeing their homes and communities around the town of Jabrayil near the southwestern tip of Azerbaijan close to the Iranian border.
But in the midst of all this, quite suddenly the army officer who was escorting us stopped the car and pointed to the cotton fields which stretched as far as we could see. "Take a look at that!" he said. "There's Azerbaijan's currency-all going to waste."
The cotton was ready for harvesting. But there was no one to pick it. And the people who had labored so much to cultivate these fields were being forced to abandon them at this final stage. The cotton which might have brought some economic currency and stability to the country, was, of necessity, being left in the fields to rot.
I walked down to the fields and picked a few of the white fluffy pods. To this day, I keep them on a shelf in my apartment as just one more reminder of the destructive power of this war. A few days later, Jabrayil and Fizuli were both captured and, today, two years later these towns still remain under Armenian occupation and not a single Azerbaijani lives there.
According to the Minister of Agriculture, Irshad Aliyev, it's impossible to estimate how much damage and loss to farm productivity has occurred since Armenians began their occupation of Azerbaijan's territory. "Those captured lands, which comprise some 20% of Azerbaijan's territory, included some of our most productive regions and favored a wide cultivation of products including cotton, wheat, tobacco, grapes, tomatoes, and other fruits and vegetables."
Wide Range of Climactic Zones
When people speak about the potential of Azerbaijan's economy, they usually refer to oil and gas. No doubt from a politically strategic point of view, these are the resources which will bring independence and prosperity to the nation. But in addition to "black gold", the Republic has the potential to benefit from "white gold"-cotton-as well. Despite how small our country is (approximately the size of Austria or the state of Maine), we have an extremely wide range of climatic zones that exist inside our borders. Of eleven that have been identified throughout the world, Azerbaijan enjoys nine. With the Cacausus mountain ranges in such close proximity to the Caspian Sea, every climactic zone except tropical and arctic is found here. This means there's a tremendous possibility of cultivating an extremely wide range of vegetation-all types, including plants which are subtropical and frost-resistant.
Cotton as Major Crop
During the Soviet regime especially in the 1980s, the primary emphasis in agriculture was placed on cotton cultivation. In 1981, for example, we produced a record harvest of 831,000 tons of cotton. Since then, production has declined. Collective and state farms were required to report their "fulfillment" and "overfulfillment" of the Agricultural Plan to the Communist Party. But no one took into consideration the tremendous labor that such production goals required. Fulfilling quotas, despite any handicap or condition, was always required. But the agricultural industry lacked adequate machinery, equipment, and technology and, thus, cotton cultivation and harvesting was very outdated.
Furthermore, there were never enough laborers. There were times when high school and university students were pulled away from their studies and sent to the fields to assist the collective farmers. This "volunteer" labor actually saved the harvest on numerous occasions.
The "white gold" used to bring enormous profit to certain mafia groups of the "black market" economy which used to report false figures, and thus cheat and rob the Government. Collective farmers, involved with producing the cotton, however, received relatively little compensation.
Now that the USSR has collapsed, each of the 15 Republics has inherited rights and responsibilities along with the problems of developing its own economic potential. Cotton still remains a strategic product for Azerbaijan. Nevertheless, the extent of cultivation has diminished considerably. The reduction of the cotton cultivation can also be blamed on internal politics since independence. In 1992, political leaders in Azerbaijan branded cotton cultivation as slavery, and, subsequently, the mass media launched an "anti-cotton" campaign oblivious to the importance of cotton for the country's economy. Today's government clearly realizes that the strength of the economy to a great extent depends not only on "black gold", but on "white gold" and other products as well.
Need for Building World Markets
The national economy of the USSR used to operate as a single organism and the break has drastically affected the economy of each of the former republics. For example, during the Soviet period, Azerbaijan received cotton machinery from Uzbekistan and, in turn, sent harvested cotton to factories in Russia and the Ukraine where it was converted into thread. The Republic used to receive fertilizers and chemicals for pest control. Azerbaijan now lacks fertilizers although there is a superphosphate plant in Sumgayit which could supply us with phosphorous fertilizer if there were raw material for its production. But this network no longer exists. Because of the war with Chechnya, the Russian government has closed its borders with Azerbaijan, making it impossible to transport cotton and other products to Russia and other CIS countries.
Add to this inflation. The prices of machinery have skyrocketed to such an extent that it is impossible for collective farms to purchase basic equipment. In 1994 the cotton fields yielded only approximately 15% of their capability.
Furthermore, water presents a huge problem as the irrigation of cotton fields in the Ter-Ter and Jeranboy regions depend upon the Sarsang reservoir which is now under Armenian occupation. Other crops such as grapes in the Gazakh region in the northwest have been totally devastated as rivers leading into Azerbaijan from Armenia have been diverted.
Outlook for 1995
But Azerbaijanis are optimistic, believing that all difficulties can be overcome if there is a will to do so. For 1995, 400 thousand tons of cotton is anticipated which should bring $190 million to Azerbaijan. The UK, USA and other countries are willing to buy our cotton as the quality is very high. Presently, the UK is the greatest importer. Nevertheless, the revenue would be even greater if cotton could be converted into thread locally. But there are only two such factories in Azerbaijan, one in Mingyachevir and another in Baku which together have a total capacity of 30,000 tons of cotton. If Azerbaijan were able to produce thread and fabrics, they could realize 2-2.5 times more income than from raw cotton alone. Paradoxically, despite the high quality of cotton that Azerbaijan produces, there are no quality fabrics here. All must be imported from abroad which costs considerably more.
Azerbaijan has inherited another unfortunate situation from the Soviet system that will take considerable time to change. Recently, an expert of the TACIS program (Technical Assistance of the European Community to the CIS countries) in Azerbaijan, Jean Anri, was amazed to see that Baku was overflowing with apples imported from Iran when choice quality apples were left to rot on trees in Guba in the north of Azerbaijan. The same situation exists for tea. Shops are full of various sorts of tea imported from India, Ceylon, Turkey, Iran despite the fact that we cultivate tea ourselves. In fact, in 1942 during World War II, Azerbaijan was the second largest supplier of tea for the Soviet Union. But today the quality is not considered very good. Nor do the local tea-growers have the possibilities of taking advantage of the technological advances in tea-growing. They desperately lack equipment and fertilizers and that's why a number of tea plantations have closed. In 1987, for example, 34,000 tons of tea were harvested while in 1994 only 19,500 tons were produced.
The equipment in tea factories is obsolete and needs to be replaced with new equipment which is very expensive. Because of its current relatively low quality, Azerbaijani tea is difficult to sell not only to the foreign market but on the local market as well.
Under the Soviet system, tobacco was as profitable as cotton, and production was second only to Moldova in the entire Soviet Union. Now cultivation has fallen off drastically in comparison. Many tobacco fields are located in occupied territories of Zangelan, Gubadli and Kelbajar. State-owned tobacco factories are not able to purchase the tobacco grown by the native inhabitants. Therefore, people find ways to take it out illegally to the neighboring countries such as Georgia, Iran, and Russia.
Possibly, after the Azerbaijani-Turkish Joint Venture on Tobacco Processing is finally established there will be more cigarettes made in Azerbaijan. Various brands of cigarettes are imported from Dubai by the hundreds of tons. Philip Morris is marketing directly in Azerbaijan.
Need for Privatization
At a time when Azerbaijan has the potential to cultivate everything, it essentially produces very little. Basically, the solution to the problem lies in privatization. According to Irshad Aliyev, Azerbaijan's Minister of Agriculture, the most critical task is to establish privatization and then help producers gain access to financial credit and provide opportunities and connections to compete in the world market.
"Azerbaijan has the factories to process 2 million tons of grapes. This past year we took in only 200 thousand tons-only one tenth our capacity. We could grow 69 thousand tons of tobacco, 1.5 million tons of grain, 800 thousand tons of vegetables and 250 thousand tons of fruit. We also have silk production of very high quality."
The most urgent agricultural needs involve acquiring fertilizers, equipment, machinery and insecticides. But the possibilities are vast in developing the agricultural sector since labor is quite inexpensive especially for foreign investment.
Land and property are now being registered and will be divided into state and private property. When the land is given to the people who work on it, and when the collective and state farms are re-organized into joint-stock communities and farms, then the levers of the market economy will begin to work. Parliament must adopt legislature protecting the interests of internal producers as well as the local consumer market from being dominated by imported goods which could be produced in Azerbaijan. That's when cotton and all these other agricultural products will begin to bring actual profit to Azerbaijan.
Svetlana Turyulay is a correspondent for Azerbaijan International living in Baku.
From Azerbaijan International (3.2) Summer 1995.
© Azerbaijan International 1995. All rights reserved.