By Azernews

By Nigar Abbasova

The government of Azerbaijan, which is keen to ensure its economic growth based on the non-oil sector, continues to take weighty steps in this regard. Being among the most important spheres of the economy, agriculture is considered to be one of the primary spheres for reaching the goal.   

The expansion of manufacturing capability of entrepreneurs required improvement of certain mechanisms of the state assistance and promotion of locally produced goods. The creation of a new Food Procurement and Supply Company is also considered among measures to be taken in this direction.

President Ilham Aliyev signed an order on establishment of 'Food Procurement and Supply' Open Joint Stock Company on April 11, 2016. The Company will be run by the Board consisting of five members to be appointed by the country’s president. The Board will consists of the chairman and his two deputies, as well as two independent members.

The Company, which will serve state-owned enterprises, such as hospitals, schools, prisons, army will soon start its activity with the authorized capital of 100,000 manats ($ 61,680).

Main purpose of the organization is purchase of foods from the manufacturers and sellers at sites, their preparation and further transfer to procurement organizations. The state will retain a 51 percent stake in the company, while it is ready to transfer the remaining 49 percent to other investors through transactions on the stock exchange.

Among main objectives of the company are stimulating production and processing of agricultural output, creation of a basis for the social wellbeing of population residing in regions of the country and engaged in agriculture, provision of centralized state purchases of food stuff, holding monitoring on each type of product, etc.

State organizations (law enforcement agencies, army, penitentiary system, social enterprises) currently procure food and agricultural products on the account of the state budget, while big volumes of financial means are allocated from the state budget to provide these state organizations with food stuff.  The establishment of the company will allow to direct the funds to  local entrepreneurs. 

Moreover, most farmers were not able to sell their products, while the consumers were forced to pay expensive price for it, while the difference in prices, by which products are sold directly in the field and to the final consumer, is about 3-5 times. The decision is also aimed at elimination of the problem.

Furthermore, the procedure will be implemented in a centralized manner.

Besides, the recent decision on the creation of a single database of locally produced goods will provide for transparency in the sphere. The database will contain thorough information about domestically produced goods and their manufacturers, including legal address, contact, production opportunities, and partners.