Cotton farmers in Azerbaijan are facing financial difficulties, despite years of government support aimed at boosting cotton production as part of a non-oil sector development strategy.
Despite government support and investment, many cotton producers are finding it increasingly difficult to turn a profit.
Rising Costs Weighing on Farmers
Cotton farmers across Azerbaijan have been grappling with rising expenses over the years. From the cost of seeds and fertilizers to irrigation and machinery, the financial burden has only increased. Shahmurad Imanov, a farmer in Saatli district, shared how cultivating 10 hectares has become an expensive endeavor. He reports spending up to 20,000 AZN per ten hectares, with steep costs in pesticides, irrigation, and rented land.
“A hectare of arable land varies between 400-500 AZN, and irrigation costs 100 AZN per hectare annually. Fertilizer alone costs 30 AZN per bag, while seeds cost 5.50 AZN per kilogram,” Imanov explained.
The price of fuel and other essential resources has surged in recent years, but subsidies from the government have not kept pace. The current subsidy of 0.19 AZN per kilogram of cotton—190 AZN per ton—has barely changed, even as production costs skyrocket. Even with a planned increase in subsidies for next year, most farmers say it won’t be enough to cover rising expenses, especially for those not equipped with modern irrigation systems.
Climate Challenges and Poor Yields
In addition to financial difficulties, farmers face unfavorable climate conditions, which further affect their productivity. Imanov notes that pests are a major problem, with low-quality pesticides proving ineffective. “As cotton growers, we are hand in hand with pests. Half of our costs are due to these low-quality pesticides, yet they don’t work effectively,” he said.
Farmers like Imanov also report that the region’s harsh climate exacerbates these issues. The quality of cotton production has suffered, with productivity rarely exceeding 4-5 tons per hectare, far below expectations. In 2022, Azerbaijan produced 322,000 tons of raw cotton from 104,000 hectares—well below the 500,000-ton target set by the state’s cotton development program.
Flood irrigation, commonly used in cotton fields, further complicates matters. Experts warn that the method causes soil salinization, damaging the land’s fertility. The lack of modern irrigation systems leaves many farmers unable to adequately water their crops, impacting their overall yields.
Allegations of Corruption
Adding to the burden is the suspicion of corruption in the cotton sector. Economist Akif Nasirli and other experts point to mismanagement in state funding and procurement processes.
Large sums of money have been allocated to purchase cotton farming equipment, with over one billion AZN spent in recent years. Yet, Nasirli argues, the procurement of machinery and supplies is plagued by corruption, with officials allegedly benefiting from inflated prices and low-quality inputs.
“The purchase of machinery at state expense presents wide opportunities for corruption,” Nasirli said. “Farmers receive only a small portion of their subsidies in cash, while the rest is deposited onto cards that must be used with specific companies. These companies sell substandard seeds, herbicides, and pesticides at inflated prices.”
Furthermore, the economist suggests that there is a long-standing issue of falsified production reports, with some officials allegedly exaggerating cotton output to claim higher government subsidies. Nasirli also notes that cotton is not a particularly profitable crop for the country’s economy, with annual revenues far below the nation’s overall import demand for food products.
Farmers are calling for a review of the subsidy system and better oversight in the procurement of farming inputs and equipment. With cotton farming remaining one of Azerbaijan’s key non-oil industries, these issues should be addressed to ensure the sustainability of the sector and the livelihoods of those who depend on it.
