Ana səhifə

The world bank


Yüklə 0.52 Mb.
səhifə2/15
tarix26.06.2016
ölçüsü0.52 Mb.
1   2   3   4   5   6   7   8   9   ...   15

1.Azerbaijan Agricultural Development and Credit Project

Background

Agriculture in Azerbaijan

1. Reform and restructuring of the agricultural sector in Azerbaijan is vital to improve the living standards of the rural people, who comprise 46 percent of the country’s population. The sector employs an estimated 36 percent of the labor force in the country, and contributes 26-30 percent of its GDP. It generates about 30 percent of total exports mostly from cotton, fruits and vegetables. Agricultural productivity, therefore, is important and will continue to be in the future (figure --: crop productivity has also been variable). After independence in 1991, agricultural production declined by 13 percent in 1994 following declines of 12 and 25 percent in the preceding two years. Traditionally, agricultural production in Azerbaijan mostly occurred on collective and state farms. Agriculture encompasses nine distinct agro-climatic zones giving rise to a highly diversified crop mix. It is dependent on irrigation and imports of the key inputs such as seeds, fertilizers, pesticides, farm machinery and equipment. About half of the total agricultural land (4.4 million ha) is used for crop production with the remainder being used for natural pastures.
2. A sharp deterioration of agricultural output and the large problem of refugees and internally displaced populations have led to deterioration of living standards in rural Azerbaijan since 1988. The situation was exacerbated by the environmental crises caused by the Caspian Sea. Currently, up to 60 percent of the rural population lives below the poverty line and their situation is even more difficult because of the continuing erosion of access to social services. “With the distribution of land, there is danger of a rapid increase in rural unemployment and poverty, as the new small holdings may often be too small to maintain a family and land concentration is likely to occur. Independently of oil developments, the prospects for a substantial proportion of Azerbaijan’s rural population depend on the recovery of agricultural output and the re-establishment of growth in agriculture and agro-industry” (FAO/CP 1998: vi).
3. The Government of Azerbaijan (GOA) and the Bank agree that the agricultural sector faces two major challenges. The first is the completion of the transition to a privatized system and the second is the potential rural out-migration threat due to the anticipated oil and gas revenues. The GOA has been working with the Bank on a pilot farm privatization project, and has also asked for Bank assistance in supporting its efforts to meet these challenges through a new Agricultural Development and Credit Project.

Legal Framework

4. Soon after gaining its independence (October 1991) from the Soviet Union, Azerbaijan took several important steps towards agricultural reform. The Constitution of the Azerbaijan Republic provides for private land ownership (Article 29) and was adopted by a National Referendum on 12 November 1995. During the few years since independence, important legislation and bills were approved. In this regard, after much debate and time, the Parliament has passed the Land Reform Law (July 16, 1996), which would legalize private land ownership and establish the land distribution procedures.3 The law mainly:

  • Provides for private ownership of land, permanent, temporary and leasing of land and land use types, land owners’ rights, users and leasers;

  • Establishes common land fund, defines types of land which could be privatized and those which would remain under Government jurisdiction;

  • Gives authority to regional and local agricultural reform commissions to implement provisions of land law;

  • Defines principles and procedures to determine the area of land to be allotted to the individual;

  • Provides for exit mechanism with the land or its value for those wishing to leave the farm;

  • Defines eligibility criteria for obtaining land from sovkhozes/kolkhozes;

  • Establishes procedures for determining cost of land; defines buying, selling and mortgaging regulations.
5. The Government is placing high priority on privatization of the agrarian sector. The implementation of the land law has two aspects: (i) administration of the process; and (ii) registration of land of the prospective landowners. The administration of the process is the responsibility of a three-tier system consisting of: (a) federal level commission; (b) rayon level agrarian reform commission; and (c) local commissions at the farm or village level. At rayon and local levels, the concerned population elects the membership to the commission. In most rayons, the commissions have defined the land allocation and distribution procedures. These laws and regulations define the legal framework of agricultural reform activities and play an important role in the ongoing reform effort. However, problems with their effective implementation exist.

World Bank Pilot Farm Privatization Project

6. The World Bank Poverty Assessment4 points that “…in agriculture, there are good prospects for rapidly increasing output by bringing yields per hectare back to the levels of a few years ago. This will require better access to inputs (including crop credit), adequate marketing facilities, and price incentives. Over the medium and longer run, still larger gains – in both output and the creation of productive employment opportunities – can be realized as a result of the privatization and restructuring of the state and collective farms.”
7. Until 1991, the farming structure in Azerbaijan consisted of 983 collective farms and 820 state farms, cultivating a total of 1.46 million hectares. The Government intends to privatize around 70 percent of this land, however, the progress in creating necessary conditions and implementation has been slow. In addition to formal steps, local initiatives by voluntarily created groups are being taken for the division and distribution of agricultural lands of state and collective farms at the village level. These steps include, but are not limited to, carrying out an inventory and valuation of farm properties, defining eligibility criteria for land and property receipt, and organizing lotteries for land distribution.
8. The Government chose six representative farms in rayons of Barda, Lenkeran, Salyan, Udjar, Khachmaz and Sharur to accelerate the process of land privatization and farm restructuring and to try alternative supporting mechanisms and to determine the levels of resources needed for farm restructuring. Total farm area ranges from 715 ha in Lenkeran to 5,400 ha in Khachmaz consisting of medium and heavy soils. Farm members in these farms have retained their private garden plots, which range from 600 to 1,200 m2. Most of these plots are meticulously maintained and the quality of produce is usually better than on other collectively managed farms.
9. The project farms also face significant problems. The irrigation systems in these farms were built in the 1960’s and 70’s; due to lack of maintenance in recent years have deteriorated. The poor status of irrigation and drainage canals is a major constraint to farm productivity and without reconstruction, would further erode farm profitability. The neglected state of most machinery and equipment poses a serious constraint for farm operations. Most of the farms are facing liquidity constraints and are not able to purchase inputs. In addition, the discontinuation of social services such as health facilities, child care, schooling, drinking water and sanitation facilities, which once belonged to farm operations, have rendered people living in these farms somewhat vulnerable.
10. The World Bank has been providing assistance to the GOA's farm restructuring program through its Pilot Farm Privatization Project. The main objective of the Project is to accelerate the Government's program for land privatization and farm restructuring in representative farms in a systematic manner and to provide models that could serve as a basis for wider geographical replicability. This objective would be achieved through the provision of: (i) essential support services such as land registration, farm information and advisory services, credit services, and rehabilitation of critical irrigation and drainage infrastructure which are necessary to sustain privatized agriculture; (ii) an enabling environment which would help build linkages between key institutions of Ministry of Agriculture, State Land Committee, State Irrigation Committee, Agrarian Reform Commissions and agricultural banking institutions; and (iii) community based social services and formation of village groups in support of land privatization and farm restructuring.
11. Most of the farm population in the five project farms could be classified as vulnerable as a result of the collapse of the centrally managed system of production, trading blockage, unsold products, unpaid salaries and withdrawal of state support, particularly in relation to social service delivery. Among those, there are two categories of people: (i) people with low or no working capacity who are in permanent need for assistance (handicapped people, invalids, elderly living alone, single parent families and pensioners) ranging from 15 to 46 percent of the total and (ii) people with working capacity, including unemployed and unpaid workers, ranging from 55 to 62 percent of the total. The Community Development component of the Pilot Project was aimed at providing assistance to the rural communities. It consisted of four major activities: (i) mass information campaign on the privatization process; (ii) development of local capacities in participatory community development; (iii) rehabilitation of critical community infrastructure; and (iv) provision of training in a variety of new skills and creation of new types of employment opportunities in the project area.
12. The Pilot Project activities are regional and farm specific in nature and have been designed to be replicable. At the rayon level, the project would support the land registration system, advisory services, credit delivery mechanisms, and re-orientation of the department of agriculture functions to service privatized farms. At the farm level, the project was expected to develop a business-oriented outlook in the privatized farms by providing advisory and credit support to those activities which are financially and economically viable; rehabilitate the main water supply works and field level irrigation and drainage works, and initiate new concepts of field level water management through the formation of water user's associations and implementation of cost recovery mechanisms. The project area consisted of representative state and collective farms chosen from the rayons of Barda, Lenkeran, Salyan, Udjar, Khachmaz and Sharur in Nakhchevan Autonomous Republic.
13. The Pilot Project is currently under implementation and a major goal of the SA was to provide inputs to a follow-up agricultural project through social impact monitoring of the pilot rayons. However, due to unforeseen constraints, the SA could not assess the conditions in pilot farms adequately. Nonetheless, the GOA has asked for Bank support in preparing a larger scale Agricultural Development and Credit Project. The SA, therefore, focuses on issues that need consideration for the proposed project and makes recommendations pertaining to the project design.
1   2   3   4   5   6   7   8   9   ...   15


Verilənlər bazası müəlliflik hüququ ilə müdafiə olunur ©atelim.com 2016
rəhbərliyinə müraciət