BAKU, Azerbaijan, January 5. The Agricultural Competitiveness Improvement Project (ACIP) enhanced seed quality, plant and animal health, supply chains, and access to finance for 6,381 Azerbaijani farmers, Trend reports referring to the report of the World Bank (WB).
According to the WB, ACIP helped boost output by an average of 69.5 percent for the 60 percent of agribusinesses that showed the most improvement. Through project lending, 2,016 new jobs were created at agribusinesses.
The WB noted that this success has generated income for the rural poor and is providing support to a viable non-oil economic pillar for the country.
According to the bank, oil drives the Azerbaijani economy, but in recent decades, the country and its development partners have sought to decrease this reliance by boosting other sectors that could lead to a more diversified economy.
"Agriculture was identified as the strongest candidate, with high potential to alleviate poverty as well: in 2008, over half of the country’s poor lived in rural areas, and most were engaged in agriculture. When the ACIP was appraised in 2013, agriculture employed 40 percent of the Azerbaijani workforce—more than any other industry—but only contributed 5 percent of GDP," said the bank.
"This underperformance was caused by challenges such as lack of improved seeds and productive livestock breeds, outdated processing technologies, a market structure that did not encourage long-term investment and planning, and limited access to funding," the bank added.
The WB noted that two prior WB projects (the Agricultural Development and Credit Projects) began to address these gaps from 1999 to 2012. They laid the groundwork for the ACIP, which was approved in 2013.
"A technically complex implementation, the ACIP spanned multiple interventions with the core objective of commercializing agriculture in Azerbaijan and increasing the sector’s marketed output by focusing on (i) improving plant and animal health and food safety; (ii) developing agribusiness value chains; and (iii) providing financial services to agribusinesses," said the WB.
The WB also noted, that the ACIP successfully provided comprehensive support to the government’s objective to diversify Azerbaijan’s economy and boost the competitiveness of agriculture, creating employment and income-generating opportunities in less-developed areas of the country.
For the project’s core objective, 60 percent of beneficiary agribusinesses and value chains funded by the project’s credit line and grant facilities in 2015–2019 achieved an increase in marketed output (or sales) of 40 percent or more. The average increase among this group was 69.5 percent. Overall, 118 agribusinesses and value chain sub-projects received sub-loans and grants from 2015 to 2021.
In addition, ACIP’s 12 value chain sub-projects had 110 percent higher sales in 2021 than the baseline, and their production increased by 73 percent on average.
The total cost of the ACIP project was $52.86 million, of which IBRD provided $34.42 million in investment project financing. The remaining $18.44 million was contributed by the Azerbaijani government as counterpart funding.
