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Main Stakeholders

21. There are a number of important stakeholders in the farm privatization process in Azerbaijan (figure --: stakeholders in farm privatization, need to make corrections in the figure). Following is a short description of these stakeholders:

Central Government. Central Government in Azerbaijan, as represented by the Ministry of Agriculture, State Land Committee, State Irrigation Committee, and Agrarian Reform Commissions, is one of the most important stakeholders in farm privatization. Land distribution laws and processes have to be authorized by it. The Government has passed a number of laws regulating land and farm property distribution, however, specific regulations regarding details of the process are still evolving. In addition to its role in asset distribution, the State is still one of the biggest purchasers of agricultural products from privatized and non-privatized farms.

Local Authorities. Executive Committee leaders in rural areas and municipalities are important stakeholders in the privatization process. Usually local authorities, in cooperation with farm managers, conduct the actual distribution of privatized land. Local administrations, which lost much of their revenue sources during the transition period, have appropriated certain land plots to “municipalities” under the pretext that this land will be used for creating incomes to maintain social assets in rural areas. However, people argue that these assets are not maintained and therefore, there is not a rationale for creating “municipality land.” This is a cause of frequent arguments between local officials and the people, decreasing the transparency and eroding the confidence in agricultural reforms.

Directors of State and Collective Farms. These are the ex-managers of collective and state farms as they existed in the Soviet Union. They usually have experience in managing farms, have better access to agricultural know-how, and are in influential positions to affect the outcomes of the privatization process. Experience has shown that these managers usually have an interest in keeping the farm assets and lands together to preserve their influence and power. In agricultural areas, there are reports of these managers organizing small holders' properties in rural cooperatives and organizations.

Former Workers of State and Collective Farms. There were two types of workers in collective and state farms before privatization. The first group consisted of agricultural production workers including technical experts and agronomists. They are familiar with crops cultivation and technical aspects of agriculture. The second group comprised individuals who worked on non-production parts of the farm such as accounting and management or on highly specific, technical parts of the agricultural production. Privatization usually has a positive effect on the livelihood of individuals in the former group. They received land that they could cultivate; some machine operators have been working the farm machinery for fees to earn incomes. The latter group, on the other hand, lost their salaried positions after liquidation of farms and they, as a group, usually do not have previous cultivation experience. Therefore, they face serious income and livelihood problems due to their inability to work the land. Notwithstanding their current difficulties, individuals in this group are usually better educated with more favorable long-term prospects.

Rural Area Residents. The land privatization law allows every rural resident to obtain land as a result of privatization, and in most places, land distribution is continuing. The term "rural residents" include everybody residing in rural areas. Within those, the SA puts special emphasis on small holders, the elderly, young people, and women. Nonetheless, there are a number of overlaps in these three categories.

Small holders. This group was formed after the land privatization process was completed in some of the rural areas. They include both former workers of state and collective farms and non-technical residents of rural areas such as educational workers, doctors and administrative workers. A significant number of these people have not formerly been involved in operations of state and collective farms and therefore, usually lack the know-how and equipment to engage in agricultural production. The SA has a focus on their coping strategies, current problems, and possible methods to ease their transition from a mainly wage-based economy to a peasant one.

The Elderly. The elderly constitute an important portion of the rural population in Azerbaijan. Rural elderly mostly live together with their extended families and in most cases, have the ownership of household and farming assets. In addition, their pensions, even though payment is usually with delays, make an important contribution to the overall household income.

Young People and Women. The current situation in rural Azerbaijan requires a focus on the special problems of young people and women. Lack of rural employment, combined with the inadequacy of income generation potential, drive young people away from rural to urban areas such as Baku and cities of Russia. These people are usually dedicated to their home villages and send a big portion of their earnings to their families. Women, on the other hand, have been affected adversely during the transition period; they have been the first to be laid-off from collective farms and production facilities and most of them are currently engaged in household chores, garden plot cultivating and occasional work.

Private Sector. The private agriculture sector have an interest in farm privatization. After privatization, it is possible that private investors would be motivated to establish food processing enterprises in rural areas where access to raw materials and products is easier and cheaper. Small, informal private sector activity in the rayons is a major component of the household income structure; a high portion of families derives incomes from market and roadside sales. Rural households demand more private sector involvement in the maintenance of social services, although the extent and feasibility of such involvement are open to debate.

The World Bank. The World Bank is involved in the farm privatization process in Azerbaijan through its Farm Privatization Project in collective farms of Barda, Lenkeran, Salyan, Udjar, Khachmaz and Sharur rayons. In these areas, the Bank provides support services to farm privatization (land registration services, farm information and advisory services, water users’ association and privatized farm credit services); rehabilitation of main irrigation water supply and drainage works; a community development program; and support to Project Implementation Units in Baku and in rayons. In addition, the GOA has asked for Bank support in preparing an Agricultural Development and Credit Project, which is being developed upon the experiences of the Pilot Project.

Internally Displaced People

22. Internally displaced people (IDPs) constitute a large percentage of the population of Azerbaijan; their problems are currently being addressed through the Bank-financed Reconstruction Project. Although the proposed Project will not specifically deal with the needs of IDPs, the capacity created within the agricultural sector will no doubt be of direct support to those who are being re-integrated in liberated areas.
23. The number of displaced people in Azerbaijan is estimated to be 650,000. Some 60,000 of them are accommodated in camps, 300,000 in public buildings and the remaining are living in host communities dispersed throughout the country.6 Accurate estimates of the percentage of IDP currently living in rural rayons are not available, however over half of them are estimated to live in these areas. Prior to their displacement, three-fourths of the IDPs were rural residents and an overwhelming majority of them stated in 1996 that they would like to return to their original communities if land was to be made available; the more prolonged their stay outside their homes the less likely will their potential be for return and thus greater the need for consideration of their productive integration into the host societies.
24. The ongoing Bank-financed Reconstruction project incorporates an agricultural development component to facilitate the re-integration of 40,000 IDPs in Fizuli, Terter and Agdam rayons. The implementation of the agricultural component will be achieved through (a) the provision of a package of essential seasonal inputs; livestock, equipment and machinery; on-farm demonstration of improved agricultural technology practices and marketing support; (b) legitimizing the new owners, in areas where this is possible, by providing them with land titles; (c) rehabilitating critical irrigation infrastructure and organizing water user’s associations to ensure timely and reliable supply of water; and (d) improving public awareness through mass media dissemination of information on a variety of subjects essential to make informed decisions and increase people’s participation in the development process.

Residents of the Caspian Sea Rise Environmental Disaster Area

25. Historically, the levels of the Caspian Sea has fluctuated greatly. In the last two decades, the water has risen by 2 ½ meters and the Sea is expected to rise until about 2020, when it is expected to reach the level observed in 1900. The sea rise, together with the adverse effects of the transition period, has adversely affected the livelihoods of rural communities located on the shore. The World Bank completed a SA in the affected rayons of Neftechala, Lenkeran and Astara in 1997 as part of the Azerbaijan National Environment Action Plan (NEAP) to evaluate the effects of the sea rise in these communities and to help formulate appropriate responses based on people's expressed needs and demands.
26. The SA in the affected rural communities found that rising sea levels are a household priority in these coastal areas and seen as the main reason for unemployment. Rising water is seen as the most important factor causing poor sanitary conditions, deterioration of the basic infrastructure, salinization of agricultural land, destruction of fisheries located at the seaside, and a severe decline in incomes. Participation in wage employment is also lower in the areas affected by the crisis. (figures --: about the Caspian). Currently, as part of the Bank-financed Urgent Environmental Investment Project, a small-scale pilot fisheries component is under implementation in part of the affected areas. The proposed Agricultural Development and Credit Project will not have a specific focus on the coastal communities, however, as in the case of the IDPs, the capacity creation in the agricultural sector will benefit the residents in these communities who heavily depend on subsistence-farming and agriculture to sustain their livelihoods.
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