USAID/Azerbaijan Rural Enterprise Competitiveness Program

September 2003 to Present

The purpose of the five-year Rural Enterprise Competitiveness Program (RECP) is to raise rural incomes and agriculture productivity in Azerbaijan . The program will increase the volumes and quality of fresh and processed agricultural product so that the volume of value added products sold in domestic and export markets increases, providing income benefits for a broad range of producers and processors, and will enable Azeri agricultural products to displace imports and reach export markets by introducing the competitiveness paradigm in the agricultural and agri-business clusters of Azerbaijan’s economy.

In order to achieve these objectives, the project will focus on two primary tasks, as envisioned by USAID. The objective of the first task, improving domestic product quality, is to reduce processed agricultural imports by increasing the quality, range and volume of processed Azeri agricultural goods able to compete with imports on local markets. Increased sales of these value-added products shall result in higher incomes in rural communities and additional good-wage employment in processing and associated businesses. RECP designed and launched a “Buy Azeri” campaign to promote the purchase of locally produced products. The second task is to expand the focus of the agribusiness sector on competitive products. To do so, RECP has created a local association, the Azerbaijan Agribusiness Marketing Council, which will focus on competitiveness, trade, and investment issues facing the sector as a whole. Success is measured by RECP’s ability to create jobs, attract domestic and foreign investment, and increase domestic and export sales.

The RECP project has created a local entity, the Azerbaijan Agribusiness Center (AAC), through which to implement its activities. This was done to ensure the future provision of support activities to the agricultural sector – the AAC will continue to provide services to the Azerbaijan agribusiness community on a sustainable basis after the RECP project has ended. These services include:

Production: High value production (greenhouse, High Value Horticulture); machinery service supply; extending market windows through innovation; introduction of new products; improving links to processors; formalization of market linkages; and modernization of production techniques and inputs.
Marketing: Market research (domestic & export); market surveys, plans and strategy; market identification & introduction; competitive product identification; participation in trade shows and market events; and introduction of stable contracts for sustainability.
Processing: Linkages to supply; improvement of raw materials; improvement of process efficiency and equipment; food safety & quality, HACCP; packaging; competitiveness compared to imports; and targeted value addition (e.g., cut chicken, fruit yogurt, baby food, processed nuts, tanning).
Logistics: Collection and distribution centers; terminal wholesale markets; catering and institutional food supply; airline and cargo company infrastructure; transport and machinery custom service; and transport standards and pooled transport service supply.
Finance and Credit: bankable deals; agribusiness development foundation; alliances or partnerships for development; facilitation of leasing; trade and contract finance mechanisms; asset registration; and machinery and facility targeted credit and investment.

Above all, the project’s aim is to provide demand driven services, focusing not only the production aspect, but on the needs of the marketplace. In other words, all products and services will be designed based not on what the Azeri agribusiness sector can produce or process but what the customer wants. While these topics will be detailed in subsequent sections, it is important to note the focus on marketing, market linkages, and value addition along the chain, in keeping with the demand-driven philosophy that guides all AAC activities.

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