The 8th Steering Committee Meeting took place on June 22nd, 2021

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The 8th Steering Committee Meeting (SC) of the project took place on June 22, 2021.

Due to travel restrictions related to the pandemic, the SC meeting was organized online via Zoom platform in order to allow the participation of the Members located in the EU.

Azerbaijani staff and the RTA Mr. Riccardo Passero participated from the AKIA office in Baku.

RTA presented the 8th Quarterly Report covering 1^st of February 2021 – 30^th of April 2021 and state of play of the project by 30^th June 2021. SC members discussed the next steps in the Twinning project. The expert missions carried out during the 8^th Quarter covered activities 2.2, 3.2, 3.2, 1,1 and 1.2 involving 10 STEs, for a total of 57 working days. Consequently, at 30/04/2021, the 72.5% (348/480) of STE working days were spent, and the total number of working days left for the project was 132 (27.5%).

Concerning the activities implemented during the 8^th quarter, three indicators of achievement were completed: Activity 1.1 Indicator 1.4, Activity 2.2 Indicator 7.1, Activity 3.2 Indicator 9.2. The webinar for Activity 1.1 according to Indicator 1.4 “Training plan developed and delivered on policy evaluation methodology/frameworks, WTO knowledge and AoA negotiation and reporting, and issues to be considered when changing from coupled to de-coupled support”, under the title “Methodology and practice for Monitoring/Evaluating the impact of Agricultural Policy” was carried out and the benchmark achieved in the quarter. The training was conducted as a part of a Zoom online webinar. Over 20 participants from MoA, AKIA and ARC participated in the webinar with positive feedback of 100% satisfaction in the survey filled at the end of the event.

Activity 1.2 Indicator 2.3 “Alternative options proposed for transition from current to a future subsidy regime including corresponding institutional changes” was carried out. The draft of alternative measure fiches and proposal on institutional updates for transition from current to a future subsidy regime were prepared. The reform of the planting sowing subsidy has been designed and the impact assessment has been made. Two new schemes were proposed by Twinning in a detailed Report: the Small Farmer Scheme (SFS) and the Single Payment Scheme (SPS), both for arable crops.

•              Small Farms Scheme (SFS) for farms under 2ha. The SFS is a simplified direct payment scheme for farms under 2 hectares that aims at enhancing the competitiveness of small farms, cutting the administrative burden and promoting the vitality of rural areas. Such a scheme would allow farmers to receive a minimum safety income. To qualify for SFS, a farmer has to cultivate arable crops (cereals/oilseeds/protein crops/vegetables) and maintain the agricultural activity in the declared area.

•              Single Payment Scheme (SPS) for farms over 2ha. SFS is a simplified direct payment scheme for farms bigger than 2 hectares. A single payment would be provided for farms growing arable crops (cereals/oilseeds/protein crops/vegetables), specifically chosen because they are feasible for rotation. Crop rotation is important for soil fertility and is successfully implemented in EU countries with policy support. To qualify for SPS, a farmer has to cultivate the mentioned arable crops and maintain the agricultural activities in the declared area.

The suggested proposals for Small Farmers Scheme (SFS) and Single Payment Scheme (SPS) are mostly designed to encourage land consolidation and simplify the management and control of area-based subsidies, while ensuring a reinforced public support. Small farmers will be motivated to enter in the Single Payment Scheme (SPS) due to a higher support. A specific premium for land consolidation targeting the small farms was also presented by RTA.

In the framework of Activity 2.2 according to Indicator 7.1 the “Action Plan underlining legislative/administrative strategy and actions to enable successful implementation of the EU Rural Development approach in Azerbaijan, adapted to local conditions” was drafted. A recent meeting was held in Baku by RTA Mr. Passero with the Deputy Minister of Agriculture on 15^th of June to discuss Twinning’s proposals on establishing a Rural Development (RD) framework in Azerbaijan.

RTA briefly presented the RD concept based on EU Rural Development Model to the SC members and introduced the programming process in Rural Development and hierarchy of objectives in RD programming and Monitoring and evaluation. He further explained that Rural Development is a package of measures: only their joint action can create development. To improve farm productivity/competitiveness, or create jobs, or enhance rural income and sustainable development: one measure is not enough. Based on EU experience, the necessary package of Rural Development interventions was presented in detail by RTA.

RTA also presented the justifications for the introduction of rural development framework in Azerbaijan:

1. Lower level of income in the agricultural sector and rural areas in Azerbaijan compared to the rest of the economy/country.
2. Absence of a public and consistent rural development policy over time.
3. Need to complement the subsidies with rural investments.
4. Need to modernize farms following EU rural development logic and delivery model.
5. Food processing is very weak in Azerbaijan (especially at the level of small/medium enterprises) due to lack of Rural Development (RD) intervention.
6. Diversification of farm activities is low in Azerbaijan.
7. Short supply chain project involving small/medium farms are few in the country due to lack of specific intervention.
8. Cooperation projects among small/medium farmers are few in the country. Cooperation among farmers is very important to solve the structural problem of Azerbaijani agriculture that is the high land fragmentation (80% of farms own less than 2 hectares).

RTA further proposed two institutional scenarios for the future introduction of Rural Development (RD) Programme in Azerbaijan and further presented the RD Measures that are proposed to be implemented in the “short term” and “medium term” in Azerbaijan, based on local needs as well as based on the experience carried out in Turkey and Georgia thanks to EU support. These neighbouring countries have a similar rural situation to Azerbaijan and successfully managed, with the help of EU and with direct involvement of local Ministries, to establish a stable and consistent Rural Development approach and RD policy in their respective countries. Their experience should be taken in account as an interesting example for Azerbaijan.  

As a result of Activity 3.2 Indicator 9.2 “Review report on ISSP and Action Plan on ISSP and preparing further recommendation and proposals for the improvement of ISSP structure and procedures for subsidy controls/payments” the Twinning proposals concern:

• the procedures (stages and rules) for creating land use/land cover maps for the entire country (i.e., how to define the “land use” and how to introduce those parameters in the future orthophoto and for subsidy simplified implementation).
• initial and current GIS data update workflow (Initial LPIS update & Current LPIS).
• suggestion of a new checklist.
• proposals for solving the issue of updating reference boundaries and solving the problems of misalignments of subsidy declarations in Azerbaijan (i.e., inconsistency between land cadastre, property rights and reality on the field).

RTA emphasized that for Component 3, Twinning concentred so far on how to improve the current system and optimize controls for the current area-based subsidies (i.e., planting/sowing subsidy).

At the end of the meeting SC members approved the 8^th Quarterly Report, thanking the RTA for the job conducted so far.