2024-04-14 18:49:57
The Ministry of Agriculture of Azerbaijan has made an interesting proposal to the countries of the Organization of Turkic States. The head of the department, Majnun Mamedov, speaking at a meeting of UTC ministers of agriculture in Kazakhstan, proposed launching a pilot project related to the production of agricultural and food products under a single brand of the Organization.
“Undoubtedly, these plans have a solid foundation in organizational terms. If you look at the agricultural sectors of the countries of the Organization of Turkic States (OTS), you can see that they have a common field in export markets,” he said, commenting on this idea in in a conversation with Day.Az, Doctor of Philosophy in Economics, leading researcher at the Institute of Economics under the Ministry of Science and Education of the Republic of Azerbaijan Emin Mammadzade.
Thus, Russia is the third country for the export of agricultural products for Turkey, next to Azerbaijan and Kazakhstan, Uzbekistan, Kyrgyzstan, Russian Federation in first place. At the same time, the leader in exports to Russia in absolute terms is Kazakhstan, whose export volume to this country in 2023 amounted to about 4.8 billion US dollars. Azerbaijan and Turkey have approximately $500 million each. Others have even less.
Another common partner in the region for the export of agricultural products among the UTC countries is Iran. Türkiye is the leader here – about 450 million dollars. Another important market for agricultural products for UTC countries is China. Kazakhstan is the leader in export operations with China by a wide margin – in 2023 it exported products worth $2.3 billion. For comparison, Azerbaijan exports agricultural products to China worth only $15 million.
These figures indicate that the production of agricultural products under a single brand in the UTC countries will allow, in the event of successful cooperation, agricultural producers in these countries to use each other’s competitive advantages in order to increase the share of their products in foreign markets, including among the countries that I mentioned above .
A single brand will allow us to combine the capabilities of rural entrepreneurs from UTG countries in order to achieve a synergistic effect. Thus, it is known that Türkiye carries out large exports of tomatoes and apples to the Russian Federation. Based on the integration of production ties and the release of a single brand, for example, Azerbaijan could offer Turkish entrepreneurs and tomato exporters services for the production and processing of tomatoes on its territory and then sell them in the form of agro-industrial complex products (agro-industrial complex – ed.). That is, it is possible to organize the sale not of the tomatoes themselves, but of canned food and tomato paste, which are also in great demand on the Russian market.
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It should be added that repurposing the exports of Turkish agricultural producers will provide an opportunity to create new added value for their products. That is, these will no longer be just tomatoes for sale, but canned tomatoes, which will undoubtedly increase the income of both Turkish and Azerbaijani producers. It is obvious that the batches of tomatoes supplied to Russia are not only products intended for the end consumer. They are also raw materials for Russian agro-industrial complex enterprises. And therefore, the possibility of repurposing the export component in agriculture opens up wide opportunities for cooperation between UTC countries. At the same time, I note that these opportunities will be opened precisely with synergistic joint participation in the production of agricultural products.
Such synergy can be observed not only between Turkey and Azerbaijan, but also to a greater extent between all UTC countries.
It would not be out of place to emphasize that the production of agricultural products under a single brand will allow OTG sell their products to countries under sanctions pressure. For example, Russia and Iran, which are one of the main trading partners of the Turkic countries. For example, Turkey cannot supply eggs or tomatoes to Russia in the same volume due to tightening sanctions. Violation of sanctions will lead to irreparable costs for the Turkish economy. However, violation of these sanctions by Kazakhstan or Uzbekistan will not be so fatal, since these countries are not associated with the collective West, which has declared sanctions against Russia the same obligations as Turkey is associated with NATO. We know that Turkey is negotiating the supply of F-16 fighter jets with the United States, and also hopes for EU membership. Both of these issues, despite the rhetoric of the Turkish authorities, are sore points of Turkish diplomacy. But, let’s say, Uzbekistan does not have these kinds of problems and obligations. Therefore, it will be profitable for Turkey to transport the same tomatoes to Uzbekistan or Azerbaijan under the Maid in OTC brand. Yes, otherwise it can be called “parallel export”. Which, by the way, is used very effectively by countries outside the UTC space, such as neighboring Armenia.
In the conditions of turbulence of political processes in the world, life requires integration not only politically, but also economically. In this regard, I consider the calls of the Ministry of Agriculture of Azerbaijan to create the production of agricultural products under a single brand in the space of the UTG countries absolutely adequate and corresponding to the challenges of the present day.
The agricultural sector of the UTC countries has enormous potential for agricultural production. The agriculture and livestock sector is one of the fastest growing in Central Asia. Kazakhstan, which is currently one of the world’s largest exporters of wheat (the republic sells more than 9 million tons annually), also has the potential to become an influential global exporter of beef and lamb.
Uzbekistan has a large production base of agricultural crops and cotton plantations, which has been steadily increasing its agricultural exports since 2017. Kyrgyzstan and Tajikistan have rapidly growing beef and dairy industries, increasingly targeting markets in Central Asia and beyond. Of course, all these indicators are very encouraging.
I would especially like to mention Azerbaijan.
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Agriculture is a traditional industry in Azerbaijan. Historically, viticulture, sericulture and fruit growing are widespread here. Since most of the country has mountainous terrain, livestock farming has always played an important role in the lives of the people living here. In turn, the development of cattle breeding led to the development of crafts and carpet weaving. In the old days, high quality wines, carpets, leather, silk products, etc. departed from Azerbaijan along trade routes to both the West and the East.
Today’s export potential of the agricultural sector of our country is quite wide. We export mainly early-ripening products to the Russian market, among which it is worth mentioning potatoes grown in Jalilabad, Tovuz, Shamkir and Gadabay. We supply about 300 thousand tons of early ripening potatoes to the Russian market. Second place goes to tomatoes. Thus, the export of tomatoes brings Azerbaijan an annual income of more than $200 million. Tomatoes supplied from Azerbaijan are very popular on the Russian market. This, unfortunately, is often taken advantage of by local scammers who sell their products under the guise of Azerbaijani or Baku, as they are called, tomatoes not only in Moscow, but also in the regions of Russia. Tomatoes grown in Kyrgyzstan, Uzbekistan and Turkey are passed off as Azerbaijani. Our pomegranate and persimmon are also popular with Russian consumers. Hazelnuts, growing in Azerbaijan, have won Russian and world markets with their excellent quality. Hazelnut exports bring the country more than $100 million a year. Now, due to the growing demand for eggs in Russia, the export of this type of agricultural product has also increased.
In general, Azerbaijan has great prospects in terms of growth in agricultural exports.
Returning to the topic of a single OTG brand, I note that products to be branded must be produced in all or most countries of the Organization. I propose to concentrate on the production of a single brand – tomato products. It can also be melons and fruits, such as apples. The total potential for the production of a similar range of agricultural products will make it possible to quickly apply new technologies at production sites, exchange economic experience, and also cooperate with financial capabilities in order to quickly reach new markets.
Leila Tariverdieva