Azerbaijan able to increase subsidies for agriculture to $310 million a year

Tue 02 September 2014 13:24 GMT | 18:24 Local Time

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Azerbaijan is able to increase subsidied for agriculture at minimum to $310 million a year.

The UN Food and Agriculture Organization (FAO) in its publication on “Countries  in  the  Commonwealth  of  Independent  States  –  Agricultural  Policy  Issues  in the  Context  of  the  World Trade  Organization” considers current subsidies for agriculture in Azerbaijan to be insufficient, Fineko/abc.az reports.

The FAO publication notes that in the case of Azerbaijan, it appears that administered prices are not used for agricultural products, which would obviate the need to calculate market price support in the base data for the WTO accession.

“A large number of input subsidies and output subsidies are provided, including subsidies for fuel, fertilizer, seed, irrigation water, and credit. These policy instruments do not seem to meet the criteria for the green box”, FAO says.

It points out that the wheat seed subsidy amounted to USD 8 million in 2010-12, but it is still small compared to the per-hectare subsidy of USD 31 million to producers of wheat and rice. The resulting AMS calculations would need to distinguish between product-specific and non-product-specific support, and apply the appropriate de minimis percentage.

“If Azerbaijan as a member were to have a non-zero Bound total ams, Azerbaijan could continue the subsidy practices of recent years, but increases in non-product-specific AMS would be limited. As Azerbaijan’s value of production in agriculture had grown to USD 6.2 billion in 2012, the de minimis threshold for non-product-specific AMS would be USD 310 million. Such a threshold would in the future need to be compared to the amount of non-product-specific AMS in order to estimate any Current Total AMS”, FAO says.

At the same time, according to FAO, while improved transportation infrastructure, along with market analysis, would increase the potential for Azerbaijan’s agriculture to capitalize on market openings flowing from WTO membership, there is also unlimited room for green box support to enhance competitiveness.

 

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