Closing speech by Ilham Aliyev at the conference on development of cotton-growing in Azerbaijan

17 september 2016, 11:15

Heads of Executive Authorities of six districts made speeches at today’s meeting. These are the largest cotton-growing districts. Representatives of the two companies also made remarks. The reports made provided sufficient information about the work done. I think that it is commendable and we should continue it. Now the main stage of harvesting begins. During the harvesting, we should take all the necessary measures. I will express my opinions and issue the necessary instructions today. But first I would like to inform you about some statistics.

In 1969, when great leader Heydar Aliyev was elected leader of Azerbaijan, cotton production in the country amounted to 300,000 tons, while in 1981 it reached 1,015,000 tons. So over 10 years, cotton production more than tripled. After Heydar Aliyev left for Moscow, cotton production and indeed all spheres in Azerbaijan started to experience a recession, and this is reflected in the statistics. In 1985, cotton production in Azerbaijan dropped from 1 million to 780,000 tons. Subsequently, the decline was even faster. As I mentioned, as a result we picked only 35,000 tons of cotton last year, which is the lowest indicator.

As a result of the measures taken this year, we expect to prepare at least 100,000 tons of cotton, if productivity is around 20 quintals. The speeches made here cited other figures as well. In some places we can get 20 quintals, in others more. Therefore, these figures are, of course, rather conditional. At the end of the season we will get a complete picture of these issues.

We expect to produce even more next year if the yield is 20 quintals. I believe think that it should be higher. Next year we will grow more than 200,000 tons of cotton. I do not want to voice any figures. I do not want to give any specific instructions either. Life will show. But we need to know the sequence of cotton production sequence. I believe that in 2017, if all the orders are executed as they should, we can get 250,000 and even 300,000 tons of cotton.

The figures related to cotton yield show everything themselves. In 1970, the yield per hectare was 17 quintals and in 1981 about 36 quintals. Today it is 18.8 quintals. Quite interesting is the statistics on the share of cotton in the overall structure of areas under crop. In particular, this share was 16 per cent in 1970, 22 per cent in 1982 and 1.2 per cent in 2015. When I say that the cotton in Azerbaijan is declining, this is what I mean.

In 1970, cotton was sown in Azerbaijan on an area of 190,000 hectares, while in 1982 on an area of 305,000 hectares. Last year, this figure dropped to its lowest – 18,700 hectares. This year we sowed it on 52,000 hectares. The goal for next year is 128,000 hectares. If we take the current level, then, as I have already noted, the sowing of cotton on 128,000 hectares of land means at least 250,000 tons of cotton. But let me repeat that we should aim for 300,000 tons.

The cotton statistics by districts is as follows: this year we have sown in Saatli District most of all – 8,100 hectares. Then come Sabirabad with 6,100 hectares, Bilasuvar with 6,000 hectares, Imishli with 5,000 hectares, Beylagan about 4,000 hectares, Agjabadi with 3,600 hectares, Barda with 3,000 hectares and so on. Thus, cotton has been sown in 24 districts.

The goals for the next year are: Saatli District is still in first place with 17,000 hectares. Then come Sabirabad with 15,000 hectares, Bilasuvar with 10,500 hectares, Neftchala with 10,000 hectares against only 1,500 hectares this year, which means that Neftchala District should probably experience the fastest growth, Imishli with 10,000 hectares, Beylagan with 8,500 hectares, Barda with 8,500 hectares, Agjabadi with 8,000 hectares, Salyan with 7,000 hectares. In Salyan, cotton was only sown this year on an area of 2,180 hectares. It was not sown last year. Next year, the sowing area is expected to be 7,000 hectares. So that is also rapid development dynamics, especially when we consider that cotton was not grown at all in Salyan District for many years. In Goranboy District the plan is 5,000 hectares, in Kurdamir 4,000 hectares, in Yevlakh, Agdash, Tartar, Zardab, Agdam 3,000 hectares, Agsu and Ujar 2,500 hectares, Fizuli 1,500 hectares, Hajigabul 1,200 hectares, Goychay 1,000 hectares, Samukh 500 hectares, Jalilabad 500 hectares, Jabrayil 60 hectares. This statistics shows everything – both the state of affairs and our goals. I want to say again – I am sure we will achieve the desired.

What are the goals for the current period? First of all, we should ensure timely harvesting of cotton without losses. Local executive bodies, central executive bodies and entrepreneurs should meet these goals. It has already been stated here that the expected harvest for this year is above 100,000 tons. This is the fastest dynamics. We will raise cotton production from 35,000 to 100,000 tons. During the year, we will triple production. If we consider that we started to deal with this just a few months ago, the performance is quite impressive. We need to ensure safe transportation of cotton by highways to reception centers and processing plants. The Ministry of Internal Affairs and local executive bodies should deal with this seriously. Fire safety measures should be taken. During the harvesting and processing of cotton, processing plants and reception centers should have continuous power supply. This is a very important issue, and "Azerishyg" should meet these objectives.

I have already noted that the purchasing price of cotton has increased from 40 to 50 gapiks. Of course, this is a very serious increase. But having tackled this, we have to see the possibility of raising the purchasing price again. Of course, the focus should be on people's income here. At the same time, we need to ensure economic viability of the business. As I mentioned in my opening remarks, we need to encourage the farmers to get actively involved in this work.

Purchasing companies should pay the farmers without delays. It has already been mentioned here, and I think there are no complaints about that. If there are, I need to know about that. This year, more than 60,000 people have been engaged in this work. This is a good indicator, but we must try to increase the number of people involved in cotton growing, because it is also a social issue and means the creation of jobs. Large companies should take social issues into account here. Of course, every company tries to optimize its work.

The transition to modern technologies in the developed world certainly reduces the demand for manpower. This is natural, as it stems from technological progress. However, our companies, of course, should also feel social responsibility. Therefore, in parallel with optimization, the social issue should not be ignored. Of course, the more people are involved, the better. I have been provided with some figures. It is estimated that two people work on each hectare on average. Some say that this a lot. I think that the social issue should be in the foreground here. Next year, cotton production will lead to the creation of more than 100,000 jobs. As we expand our acreage, this figure will grow. If we sow cotton on 200,000 hectares in the future, this would mean that about 350,000-400,000 people will be provided with jobs.

Those working in cotton fields should have good conditions. Of course, should be field camps everywhere. They need to be provided with the necessary food and drinking water, so that the conditions for workers conditions are good. After all, cotton-growing is a difficult sphere. We all know about this. People should be looked after well. This issue should constantly be in the spotlight of both large procurement companies and local authorities.

This year, to ensure rapid development of cotton-growing, we have purchased 3,700 units of agricultural machinery, including more than 100 cotton harvesters. In the first half of October, we will import more than 100 harvesters. Next year we will buy 60 more harvesters. Some people said here today that the supply of machinery should improve further. All this will be taken into account and, as I said in my opening remarks, major funds in foreign currency have been allocated from the state budget.

We are already working on a long-term strategy for the development of cotton-growing. There are preliminary figures. Of course, we should verify them to make no mistake. However, preliminary calculations show that if we follow this path – and we certainly will – and with the necessary financial support, will be able to sow about 200 thousand hectares with cotton by 2020. So having set this primary objective, we should do all the necessary work in this direction.

With regard to the expected yields, it is probably a little too early to talk about it now. But we need to carry out these calculations, which should be based on the future action. As already mentioned here, there are new technologies. In particular, a pilot system is already being applied to irrigation. With this pilot system, yields can reach the level of 35-45 quintals. Open irrigation can produce yield of 20-30 quintals. We should try to use the pilot system in Azerbaijan as much as possible. If cotton is sown on 200,000 hectares in 2020, at least a third of this should be achieved by the pilot system. In this case, we can significantly increase the yields. This will have a positive impact on people's income, as they will be able to earn almost twice as much from the same area. We should try to bring the average yields to the level of peak performance of 1980-81 – about 35 quintals. With such an average yield, 200,000 hectares will provide 700,000 tons of cotton. This will mean a full recovery of cotton production, and at a modern level.

To ensure efficient organization of this work, there should be very serious coordination in the future. This year, we managed to achieve this in a short time. Overall coordination was assumed by the Presidential Administration. Zeynal Nagdaliyev is personally involved in these matters. As I have already noted, heads of executive authorities have worked hard. All state agencies – the Ministries of Agriculture, Economy, Internal Affairs, Emergency Situations, local executive authorities, the companies "Irrigation and Water Management", "Azerishyg" and "Azeravtoyol" should work in good coordination. I want to say again, and the experience of previous years shows, that if we entrust the development of cotton-growing only to businesses, we will lose it, as we have done. Therefore, there should be serious policy, and the state is playing a major role here. The role of the state is not limited to coordination. The state spends money, imports machinery, takes ameliorative measures, creates substations, provides electricity infrastructure, etc. We are doing all this at the expense of the state so that the farmers could earn more and lived better.

I want to note once again that cotton-growing combines a number of important factors. It means rapid development of agriculture, the creation of hundreds of thousands of jobs, the development of our export potential and represents a manifestation of the government’s attention and support for the private sector. Therefore, coordination is necessary. The entire work should be managed from a single center. Only in this way can we meet our objective.

It is necessary to take measures related to the fertility of land. In order to increase fertility and productivity, we should switch to the system of alternating sowing - cotton, clover, corn. Agriculture experts are well aware of this. In order to switch to the system of alternating sowing, of course, it is necessary to accurately establish both the existing and the future land fund. In the future, the land fund will increase considerably. This has been noted in some speeches. I support the suggestion that in the next season we should not provide subsidies for areas under crops, but for the harvest. Relevant bodies should work on this issue and submit their proposals. This would be more appropriate and fair.

Private enterprise develops fast in Azerbaijan. In recent years, entrepreneurs have received low-interest and preferential loans amounting to over one billion manats. These loans helped create hundreds and thousands of agricultural and processing enterprises. We have largely ensured our food security, because these loans are of particular importance to farmers and entrepreneurs. They receive preferential loans and are in contact with the government. They know that even if the state reproaches them in some cases, it will always support them. Sometimes entrepreneurs can’t make payments on time. But if they deal with a commercial bank, which is also necessary, of course, they may face very harsh penalties. The state, of course, is the best partner for entrepreneurs.

The vast majority of the granted loans are repaid. For example, soft loans are provided again this year. The vast majority of these were issued at the expense of previous loans. So the money issued in the form of a loan of one billion is already in circulation and brings revitalization. Given this positive experience, we should provide preferential loans also for the development of cotton-growing. This was not the case before. So the Ministry of Economy should take note of this and then report to me what percentage of the allocated loans will cover the development of cotton-growing.

I want to note again that we have to use lands very efficiently. We do not have vast land. We can engage new land only using new technologies and land reclamation measures. For example, in a recent meeting with cotton-growers in the field during my visit to Salyan District, I saw that vast cotton fields had been created on once saline lands. It is possible, and we have quite a lot of saline land that is unsuitable for farming. But crops can be grown there too. When returning from Salyan to Baku, I noticed that there are vacant lands to the left and right of the road before Garadagh. Nothing is sown there. These lands should also be engaged. We simply need to bring in new technologies, set up an irrigation system and take other measures, because our main goal is the rational use of land. We know what the current land fund is. As I have already noted, unused lands should be returned into circulation. The lessee of the land must work on it, not keep it as a deposit. At the same time, there should be regionalization – what crops bring more income and are more profitable in what districts. We must consider that, and appropriate instructions have been issued. I believe that we should switch to the regionalization system in respect of the subsidies too. I recently visited Masalli District and asked the head of the executive authority what their productivity in grain production was. He said: 20 quintals per hectare. The country’s average is 30 quintals, but there are farms that get 40-50 quintals of grain per hectare thanks to new technologies and climate conditions. Therefore, grain subsidies in Masalli may not be necessary. They should be provided for vegetable and tea growing. Such instructions have been given. I have repeatedly talked about this and issued specific instructions. Proposals should be made. It is necessary to provide subsidies for the regions, which in itself will lead to stimulating agriculture. We are fortunate to live in such a beautiful country with nine natural climatic zones. We can grow everything – from tea to cotton, from grapes to fruit and vegetables. As I have already noted, vast hazelnut orchards will be set up in the northwest. So we only need a rational approach and farmers should be provided with serious help.

I am returning to this issue again. The market economy has, as it should, resolved many issues, but it can’t resolve all of them. If we were to work only on the principles of a market economy, we would not allocate money for any social projects. Look at the large social projects being funded by the state in Azerbaijan. Roads, drinking water and sanitation, construction of schools, hospitals, creation of jobs – all this work is social in nature. In particular, while talking of economic development, I have always said that our economy must be socially oriented, because people are at the center of our policy. Everything we do we do for the people of Azerbaijan. We are developing cotton-growing for people to live better and earn more. Therefore, the social sphere should certainly be a priority. However, this is not the case in countries living in a market economy. There are earthquakes there too, but does the state pay victims a single manat or dollar? No. We had an earthquake, and thousands of homes were restored by the state. We have created conditions ten times better than before. This is done by the state. So we should keep the focus on social issues when it comes to economic development. Therefore, the role of the state in economic development is indispensable. If everything were left to the market economy and we had not adopted the first regional program in 2004, where would we be now? Remember our situation then – there was no light, no gas, no water. There were no roads and jobs. People living in these regions will remember that. We adopted the program, attracted financial resources, invested them and there was a recovery. All our regions thrive, the appearance of our cities is improving, jobs are created. The chaos ongoing in the world, the crisis, anarchy, clashes and recession have the least impact on us. Why? Because we conduct correct policies! Our policies are centered on the people of Azerbaijan. We are developing our country. Its interests are above everything else for us.

The development of agriculture is our future. What do countries rely on? On exports. No country can survive without exports. What do developed countries export? Intellect and technologies. They export machinery, equipment, tools and modern technologies. Thus, these countries achieve great development. What can we export? We can’t and probably won’t be able to export technology. It is impossible to keep up with major states. They have thousands of think tanks dealing with progress and technological development. They have the most advanced and progressive scientists, Nobel Prize winners. Can we export? Frankly speaking, of course, not. Therefore, newly independent as we are, having faced great challenges, we should live at the expense of natural resources as a first step. Therefore, thanks to the great leader's vision, we have implemented the oil strategy and obtained major funds.

At present, Azerbaijan is going through a process of industrialization. We are doing a lot to create industrial enterprises. We develop the processing industry and agriculture. We need to access new markets to export agricultural products, and we are doing that although it is not so easy. The world is fighting for markets now. Accessing European markets is fraught with many problems. In my opinion, it is a very difficult issue. We are accessing regional markets. But Azerbaijan should manufacture products that would not depend on markets. Cotton is one such product as it is sold on world markets. Cotton does not have direct buyers – it is sold on stock markets. We will soon start the creation of large steel holdings. Thanks to the operation of Dashkesan mines and some future factories, we will have export potential worth hundreds of millions of dollars. We are setting up a Chemical Industrial Park in Sumgayit. A polymer plant will be launched in 2018. It will also create export potential of hundreds of millions of dollars. A fertilizer plant is under construction in Sumgayit. After 2018, we will be self-sufficient with fertilizer. This will have a positive impact on the agricultural development because we will not depend on imports and can export our products. So cotton-growing is also on this list. We should try to grow more products, sell them on external markets both in the form of raw and finished products. I will share my views about that shortly.

The development of cotton-growing will have a very positive impact on the development of our industry as a whole. In the near future, we will lay the foundation of new industrial holdings in Mingachevir. Mingachevir is an industrial city. We have specific plans related to its development. I think that Mingachevir should become one of the industrial centers of Azerbaijan, just as Baku and Sumgayit are the largest industrial cities not only of Azerbaijan but also of the entire South Caucasus today. The process of industrialization in the city of Ganja is powering ahead. I believe that the development of light industry in Mingachevir should remain a priority. In the coming years, there are plans to create several factories in Mingachevir. The volume of investment there should exceed 100 million dollars. Thousands of people will work in construction. To ensure the functioning of the plants, 2,000 jobs will be created at the first stage and 7,000 later on. There will be a cotton spinning, wool spinning and other factories there. The main supply base of these plants will be cotton-growing.

So we have to be ready for that. At the same time, as long as we plan to rapidly increase the production of cotton, then perhaps, as mentioned in one of the speeches, we should build additional processing enterprises. Relevant bodies – the Presidential Administration and ministries – should determine where and how many enterprises should be established, what their capacity will be and even the modern technologies they will operate. The launch of these enterprises should lead to the development of cotton-growing, so that when we achieve this goal, these enterprises are ready.

By bringing some of the statistics to your attention, I wanted you and all the people of Azerbaijan to have a complete idea of where we were, where we are and where we want to be. I also wanted to show how things are going in a particular district.

There used to be competition mechanisms between districts. I think that we need to revive them in a natural way. We should revive them so that our people could know how much land is available, how much cotton is harvested in a given district and what the yields are. I think that our districts should compete with each other for these three parameters. Of course, it should be a healthy competition. I believe that such competition will encourage district leaders and cotton-growers. I remember such information being regularly published in the Azerbaijani media. In the 1970s, our newspapers published a table reflecting the statistics for cotton and grape harvests. It showed how much was produced in each district. District residents watched this. Those who were in the lead felt proud. Then there were bonuses. Unfortunately, these positive principles are either forgotten or erased from history. We should reexamine and restore this.

I also believe that a new medal should be established in Azerbaijan. Several new medals have been established on my orders recently. Our highest award is the Heydar Aliyev Order. It was followed by Order "Sharaf" and Order "Dostlug". I believe that we should also establish Order "Emek". We need to reward people demonstrating good performance in various sectors – both private and public – with orders and medals. I think that we need to restore this tradition. I am asking the Presidential Administration to submit proposals on this issue. Order "Emek" may have multiple degrees. If there are good results, we can give the first order to cotton growers.

In short, I believe that today's meeting is of great importance. It is a return to our wonderful history. As I have already said, I am pleased that we are gathered in Sabirabad. We will probably meet elsewhere for further meetings. This day will go down in the history of our modern country as a significant day, because we are reviving the glory of cotton-growing. I want to express my gratitude to you for all the work done. We are now entering an active phase – the harvesting. I wish you good luck. Thank you!