Agricultural subsidies are one of the issues that lead to long debates and discussions between academic circles, economists, politicians, entrepreneurs. In particular, the discussions on this topic have become more actualized in the multilateral trade negotiations, especially after the start of the World Trade Organization (WTO).

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Supporters of agricultural subsidies emphasize the importance of the state support, based on the fact that this area is a strategic area for food security. Supporters of free trade claim that the subsidies granted by the government to local producers and producers have a negative impact on the trade between countries due to violation fair competition. Subsidies for both domestic producers and exporters lead to competitive advantage over foreign manufacturers, which contradicts the basic principles of the modern multilateral trade system that has been established within the WTO.

The WTO is now a global organization that regulates international trade relations on the basis of multilateral trade agreements. 164 countries around the world are members of WTO and 95% of global trade turnover belongs to these countries.

A country wishing to join the WTO should first join multilateral trade agreements that form the legal basis of WTO. As you know, our country has been negotiating to join the WTO since 1997. While harmonizing national legislation with WTO requirements and a number of other measures in the past few years, no agreement has been reached on issues related to reducing agricultural subsidy and liberalizing the banking sector.

In our country, more than 36% of the employed population is settled in rural areas. In addition, this area takes crucial role in meeting food needs and ensuring food security. From this point of view the development of agriculture is in the center of attention of the government. Work on stimulation of agriculture continues. Tax exemption, various types of subsidies, preferential techniques, preferential loans, insurance, sale of irrigation water at preferential tariffs and other support mechanisms have been implemented in agricultural sector recent years. The technical park has been significantly renovated. Last year, 5800 vehicles were purchased. Farmers have been exempt from all taxes except for land tax. Fertilizer is provided by 70% of the fuel, 50% of fuel is supplied by the state, the technique is provided by the state and given to farmers on favorable terms. There are also good results in the creation of large farms and agro-parks. According to the program, generally 51 farms and large farms should be created. 17 of them have already been established, and the total area of ​​these 17 aquaparks is 104,000 hectares. In general, the area covered by all agroparks is expected to be about 200,000 hectares. Now it is planned to allocate 2.2 billion manats for the creation of 31 agro-parks. In addition, important measures have been taken by the state to improve irrigation and drainage infrastructure. Over the past years, the National Fund for Support to Entrepreneurship has provided preferential loans to the agrarian sector in large amounts. Due to these concessions, direct and indirect payments are made by the government in large amounts.

Nevertheless, as noted by the head of state at a conference of the Cabinet of Ministers on the results of 2018, the state support was not reflected in real results. We should have even greater production and more developed agriculture in exchange for that support.

The effectiveness of provided subsidies is measured by the extent to which it has a positive impact on the growth of agricultural production. Is there a positive correlation between budget expenditure and production allocated to this area?

The calculations show that over the past few years, adequate development of the sector has not been achieved in exchange for the expenditures allocated to agriculture. Because in recent years there have been major irregularities in granting subsidies. In some cases, subsidies did not reach their destination, and in some cases they were given spontaneously. Fertilizers intended to be purchased on favorable terms by the state were often poor quality.

Now, the government takes over 70 percent of the fertilizer supply. At present, full- fledged e-agriculture system is one of the important issues on the agenda.

I think that measures should be taken to improve the subsidy system. First of all, the discipline should be strengthened, and the effectiveness of subsidies should be increased.

The government&amp;#39;s agricultural policy focuses on improving food security and competitiveness in agriculture. Nevertheless, the sector should be supported at such a level that it can be both effective and accessible to the WTO.