Food, Economic and Social Security in Azerbaijan

By Carmelo Gallardo and Ana Estela González, Action Against Hunger, Madrid.

Movement of IDP's and Refugees in the South Caucaus

Carmelo Gallardo holds a Spanish Economy Sciences degree and is currently in charge of the Food Security Department in ACF Madrid for Southern Caucasus Countries (Georgia, Armenia and Azerbaijan). He has worked in Africa (Somalia, Burundi, RD Congo and Ivory Coast), Central America (Guatemala) and Asia (Philippines) with Action Against Hunger and FAO.

Ana Estela González is a Salvadorian agronomist. From September 2003 to January 2004, she worked as a technical consultant for Action Against Hunger in a Project in Agjabedi and Beylagan districts in the Republic of Azerbaijan . She is now working for GTZ (German Technical Cooperation) in Salvador.

The collapse of the Soviet Union in 1991 paralysed the economy leading to widespread unemployment in the region, including Azerbaijan. The population, which were used to government support and subsidy, suddenly discovered that they had to fend for themselves. At the same time, local conflicts started in the South Caucasus Region (Abkhazia-Georgia and Nagorno-Karabath regions between Armenia and Azerbaijan) (see map). These conflicts have persisted to this day, in the sense that the situation can now best be described as 'no peace, no war'.

Since 1994, Action Against Hunger (AAH) has been trying to respond to the immediate and long term needs of vulnerable families affected by both the war and dislocation of ex USSR republics. The initial strategy was to provide urgent assistance to those families directly affected by the war: in particular, exceptionally vulnerable families (elderly persons, families with disabled members, families headed by women), Internally Displaced Population (IDPs) and refugees.

AAH's activities have now evolved into more rehabilitation and development oriented programming -specifically implementing Income Generating Activities to address the needs of the large number of families suffering food shortage (both IDPs and local inhabitants). These families are able to work but lack the means to become productive due to lack of any development agency assistance.
This article comprises internal reflections and continuous lesson learning from AAH programming in South Caucasus. It focuses on our project in Azerbaijan which is funded by the Swiss Development Cooperation (SDC), and shows how AAH has recently worked with several beneficiaries groups to develop a set of multiple activities in order to generate more stable incomes.

General indicators, South Caucasus (Human Development report, UNDP, 2003)
  Georgia Armenia

Azerbaijan

General Data      
Population (millions) 5,2 3,1 8,2
Annual population growth rate (%) -0,7 -0,3 1
Urban population (%) 56,5 53.6 51,9
Human Development index 88 100 89
Socio economic data      
GDP per capita ($ annuals) 2560 2650 3090
GDP growth rate -5,5 0.3 -1,3
Public Health Expenditure (% GDP) 0,7 4.3 -0,6
Public Education Expenditure (% GDP) - 4.0 4,2
Adult literacy >15 years (%) 100 98,8 97
Health Data      
Life expectancy (years) 73,4 72,1 72,2
Infant Mortality (x 1000) 24 38 71
Access to essential drugs (%) 0-49 0-49 50-79
Access to water (%) 79 - 78
Access to sanitation services (%) 100 - 81

Context

With the exception of infant mortality rates, the Azerbaijan context is similar to that throughout the region. Due to the Soviet system, inhabitants have high levels of literacy, relatively high life expectancy, good access to education for men and women, and a modern health care system. However, socio-economic indicators have dramatically declined since political independence. Poverty is the most acute problem for people who, only a decade ago, lived in relative prosperity. Over half of the region's population live below the poverty line. The economic collapse has also restricted the state's ability to fulfil key functions, and as a result, both the health care and education systems have deteriorated.
AAH activities in the Azerbaijan Republic are base in Agjabedi and Beylagan districts. Both are located in the Kura-Araz lowland. Both areas are suffering economic crisis, reflected in bankruptcies of Kolkhozes (collective farms) and Sovkhozes (state farms), factories and companies. The situation has been exacerbated by the arrival of thousands of families escaping from the Nagorno-Karabakh conflict, who are living all around the region in towns, camps, private houses or public buildings.

Principle of activities

AAH programming began as donations to families in 2001/2002, distributing the inputs required for cotton planting in the first year and wheat in the second year. This has evolved into the provision of loans/advances to groups of families (mixed groups of residents and IDPs), where each group has to return in cash the value of the initial inputs supplied by AAH. This type of support is based on a revolving fund principle, which may be represented as:

A Revolving Fund principle means that groups have to be much more effective at making a profit. They must generate enough money to cover their own basic needs and return the advance. Thus, AAH have needed to conduct business and legal training at the outset of these income generating activities. It has proved very important to explain to people how to identify profitable activities, how to work as a team and how to write up and implement business plans. Income Generation Activities are a new concept for most people, who are continuing to learn how to take decisions and assume responsibilities.

Technical and financial planning

The Azeri beneficiaries are not merely recipients of aid. In collaboration with AAH, they have worked as co-authors devising the best combination of agricultural activities in terms of profit, risk, technical knowledge, and local capacity.

AAH and beneficiaries have approached the task sequentially as follows:,

  1. Identifying the theoretical advantages of different activities
    A priori, both livestock and agricultural activities have their advantages, as outlined in table 1:
  2. Assessing financial viability
    Based on conditions and local prices, an estimated budget was calculated for each activity, for livestock and for vegetable production. This led to an estimate of profitability for each activity. Workshops and interviews were organised with group leaders and experts, to obtain all the necessary information.
    Table 2 shows the different proposed activities, ordered from best to worst in terms of profitability (percentage return in relation to invested monetary unit). The percentages are based on one projection calculated using the information provided at the group workshops.
  3. Choosing the best option
    When it came to choosing the best option with the beneficiary groups it emerged that preferences did not necessarily accord with profitability criteria. Groups appeared more interested in animals than in vegetables. Favoured activities were those that were perceived to be best in terms of savings and flexibility in physical movement and liquidity (not having to wait for a harvest in the event of needing cash urgently). Hence, milk cows and sheep were popular. Preferred crops were wheat and cotton and those used for cattle fodder, (e.g. corn and lucerne), rather than orchard or human food crops.

Food, economic and social Security in Azerbaijan

The preferences expressed by the groups confirmed findings in much of the literature on rural development. Families in the beneficiary groups prioritised future security over short-term benefit, i.e. food security and food availability was more important than cash. Poor families always opted for risk reduction. Thus opting for vegetables as a last choice, in spite of their greater profitability, is a reflection of: lack of knowledge regarding a new activity, lack of knowledge of the market, and fear of harvest loss due to poor pest control.

Accounting for both profitability and food and economic security, the following classification system emerged:

 

Table 1 Advantages of animal and vegetable based activities
Animals Vegetables
  • Livestock activity is very common in this region
  • Limited risk (certain market)
  • Have knowledge of caring for animals
  • Increase the number of animals (investment)
  • In the case of cows, there is substantial produce, e.g. milk, cheese and butter to sell or to give to the members of the group
  • Could sell the animals at any time (flexibility)
  • Easy to feed in summer (graze from the municipality land) and winter (production of alfalfa)
  • Healthy food option
  • Good price
  • Short term crop
  • For sale and food for family
  • Small space to cultivate
  • More profit than others in a short time
  • Marketed all the time
  • Many kinds of crops . Greater productivity from smaller area

 

Table 2 Profitability of proposed activities, in descending order
Activity Period to produce benefit (months) Annual profit in percent
One box bee* 12 328 %
Tomato 5 297 %
Onion (autumn) 7 267 %
Watermelon 5 171 %
Onion (spring) 5 167 %
Cotton 8 161 %
Garlic 8 157 %
Sugar beet 7 152 %
Cabbage 5 146 %
Corn 5 145 %
Poultry 3 103 %
Potato 8 79 %
Wheat 9 83 %
Alfalfa 24 81 %
Cow (income after 2 years) 24 65 %
Ewe (income after 2 years) 24 49 %
One ram 4 41 %
Turkey 3 32 %
One bull 4 17 %
Barley 9 16 %

*For example, for each $100.00 invested in a bee-hive the activity will generate approximately $328.75 net income after 12 months. This is based on an average production of a 30 kg honey/box, subtracting the $100.00 investment.

Conclusions

In order to guarantee food security and simultaneously generate income in a short period of time, it is necessary to combine different kinds of activity, i.e. to reduce the risk of failure one needs to combine IGAs that generate immediate and long-term returns.

One example of combined AAH activities that will be initiated in the next few months in Azerbaijan that follow this principle involves

  1. purchasing milk cows for food produce (milk, meat and butter);
  2. bull fattening which generates a quick cash flow and, at the same time allows sale at a reasonable price in case of any emergency;
  3. planting vegetables like onions and tomatoes for which there is a profitable market and does not need much investment or physical effort;
  4. Bee keeping as a sedentary activity that does not require too much space and has high profitability; and
  5. Planting crops that guarantee food for cattle in winter, like Lucerne.

Furthermore, cattle manure can be used like vegetable manure, increasing soil quality and decreasing the use of synthetic and expensive chemicals.

Some groups only manage to achieve subsistence farming instead of income generation. This is mainly due to low production so that most of the produce is eaten rather than sold. In these cases, more technical assistance and training is needed for beneficiaries to implement their activities in an efficient way. The groups also need to manage themselves more effectively.

Based on our experiences we propose combining short and long term activities with varying degrees of flexibility, risk and profitability. By doing this we can improve the food security of families, guarantee the cash flow necessary for basic needs, and sustain the environmental, social and economic base of beneficiary groups. It is clearly evident that food security programmes have to take account of the economic and social context.

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Reference this page

Carmelo Gallardo and Ana Estela González (2005). Food, Economic and Social Security in Azerbaijan. Field Exchange 24, March 2005. p11. www.ennonline.net/fex/24/food