During the meeting of the head of Dagestan Sergey Melikov with the Minister of Economy of Azerbaijan Mikail Jabbarov, a number of issues of trade and economic cooperation were discussed, including the topic of expanding the processing industry in the Republic of Dagestan.
Jabbarov said that Azerbaijan is interested in the development of processing enterprises in Dagestan. In his opinion, this will help create many opportunities, including not only for Russian and Azerbaijani products, but also for transit cargo from Iran and Turkey.
By recycling, you can earn more
As you know, income from product processing significantly exceeds income from the export of raw materials. This also applies to agriculture.
Azerbaijan attaches particular importance to the development of the processing industry in agriculture – in 2018-2022, the Entrepreneurship Development Fund allocated soft loans totaling about 70 million manats for the implementation of projects in the field of processing products of the agro-industrial complex (AIC).
Thus, 73 projects in this area were financed over four years.
Azerbaijan aims to implement a number of programs in the next few years to develop the processing industry in the agricultural sector, including the allocation of incentives and subsidies for the creation of enterprises in the field of processing, as well as the introduction of innovative technologies to reduce costs and increase productivity.
At the same time, the country intends to develop this area by organizing new agricultural parks. The ultimate goal of Azerbaijan is to create a highly competitive, mass production of agricultural products in the form of a canning industry, focused on both import substitution and export growth.
Dagestan may become a center for processing agricultural products
Today, Dagestan is an important point of import to the Russian Federation of agricultural products from Azerbaijan, Iran and Turkey. The creation of a processing hub in Dagestan is quite realistic, given the production capacity of agricultural products in exporting countries, the expansion of customs points in Azerbaijan and Russia, as well as infrastructural work to develop the logistics potential of the two countries.
Thus, at the end of March 2022, Russia and Azerbaijan launched the Green Corridor project, which will improve coordination between customs authorities and speed up logistics cooperation. The project of a simplified customs corridor will ensure the unhindered and accelerated movement of goods between the two countries.
Another important issue is to increase the capacity on the border between Russia and Azerbaijan. After completion of all work to expand the roads and the capacity of the checkpoint, the total capacity at the border will exceed 1,400 vehicles per day.
This will significantly increase not only the volume of supplies of agricultural products from Azerbaijan to Russia, but also expand transit traffic from Iran and Turkey to Dagestan through Azerbaijani territory.
In addition, it is important that work is underway in Dagestan to increase processing capacity in agriculture. Thus, in the republic it is planned to implement a project for the development of the processing industry in two stages, the ultimate goal of which is to increase its contribution to meeting the needs of Russia in canned products.
Thus, one of the points of the state program for the development of agriculture and the regulation of agricultural markets, adopted in Dagestan in 2013, is the development of the food and processing industry. To this end, subsidies will be allocated to reimburse part of the costs of agricultural producers, organizations and individual entrepreneurs engaged in the industrial processing of agricultural products, on investment loans issued for a period of 8 to 15 years.
Advantages of processing in Dagestan for Azerbaijan
According to economist Khalid Karimli, the creation of industrial enterprises for the processing of agricultural products in Dagestan has several advantages for Azerbaijan.
First of all, this is an investment opportunity for the public or private sector of Azerbaijan. In addition, due to the expansion of processing in Dagestan, Azerbaijani exports of agricultural products to Russia will increase significantly, the expert noted.
Thus, by creating an enterprise for processing agricultural products in Dagestan, Azerbaijan will actually expand the market for its agricultural products, he said.
“So, for example, it would be possible to arrange the export of pomegranate to Dagestan and produce pomegranate juice at the same enterprise,” Karimli said.
“The question may arise: why will Azerbaijan create an enterprise in Dagestan, and not on its own territory?
