Subsidy Regulations

President of the Republic of Azerbaijan

                     27th of June 2019


1. General provisions

1.1. This Rule defines the mechanism and conditions for the granting of subsidies to the individuals and companies in connection with the production of agricultural products at the expense of the state budget.


1.2. The following terms are used for the purposes of this Regulation:


1.2.1. Subsidy - free financial assistance to the producers of agricultural products at the expense of the state budget funds;


1.2.2. "Subsidy" information system (hereinafter referred to as SIS) is a subsystem of the "E-Agriculture" Information System that provides electronic reception, processing and response to requests of agricultural products producers for subsidies;


1.2.3. Agrarian Subsidy Board (hereinafter referred to as the Council) - the collegial body established in accordance with paragraph 2.2 of this Regulation and making decisions on the application of subsidies in the agrarian sphere;


1.2.4. Base amount - Stable fund used to calculate subsidies in the field of plant growing;


1.2.5. Agricultural production means - mineral fertilizer, bio-humus, certified seed, sapling and pesticide;


1.2.6. Farmer – an individual or company registered as a producer of agricultural products and registered in SIS (for plant-raising and livestock areas);


1.2.7. Producer - an individual or company who supplies agricultural products and is registered with SIS;


1.2.8. Supplier - an individual or company that sells agricultural production vehicles and is registered in SIS;


1.2.9. Sowing subsidies - subsidies granted to farmers for plant-raising per hectare in the term of compensate part of the cost of purchasing agricultural production tools which is used for the cultivation of agricultural crops in accordance with the designation of these lands in agricultural lands of perennial planting;


1.2.10. Product subsidy – It is granted subsidy per ton of plant product delivered to the suppliers in addition to sowing subsidy


1.2.11. Seed subsidy - a subsidy granted to the sale of certified 1st and 2nd reproductive seeds and seedlings produced in the country;


1.2.12. Animal subsidy - a subsidy granted to each healthy calf that is the result of artificial insemination or embryonic transfer in order to increase the number of animals with high productive genetic potential for improving the breed composition of domestic animals;


1.2.13. Bee subsidy - subsidy given to each bee colony;


1.2.14. Sericulture subsidy - a subsidy granted per kilogram of wet cocoon produced delivered in the country;


1.2.15. Quota - the amount of seeds and seedling to be subsidized on each plant, determined by the Council (kilograms and numbers);


1.2.16. Certified seeds and seedling – Quality of sort and sowing registered in the state register according to the Seed Law of the Republic of Azerbaijan.


1.3. Other definitions used in this Regulation shall have the meanings defined by normative legal acts of the Azerbaijan Republic.



2. Organization of granting subsidies


2.1. Granting subsidies to farmers are carried out in accordance with this Regulation and relevant service regulations.


2.2. The Council, which makes decisions on the application of subsidies in the agrarian sector, is established. The Council includes seven members as follow; Ministry of Agriculture of the Republic of Azerbaijan (2 persons), Ministry of Economy of the Republic of Azerbaijan (1 person), Ministry of Finance of the Republic of Azerbaijan (1 person), State Statistical Committee of the Republic of Azerbaijan (1 person), National Confederation of Entrepreneurs (Employers) and representatives of the local farmers association (1 person). The leadership of the Council is the Minister of Agriculture of the Republic of Azerbaijan. 


2.3. The Council operates on a public basis. Meetings of the Council are competent when more than half of its members attend. At the Council meeting, decisions are made by simple majority of votes through open voting, with a vote of each member. Members are not allowed to remain neutral during the voting process. When the votes are equal, the voice of the presiding judge is decisive.


2.4. On January 15th of each year the Council makes decisions on below mentioned subjects and informs the public:


2.4.1. The approval of the list of plants for the use of sowing subsidies and the sowing ratios applied to them;


2.4.2. Approval of the list of plant products for the application of the product subsidy and the ratios applied to them;


2.4.3. Approval of the list of plant products for the application of seed subsidies and their ratios and quotas;


2.4.4. Submission of proposals on improving the mechanism of application of subsidies to the Ministry of Agriculture of the Republic of Azerbaijan (hereinafter - the Ministry).


2.5. The Council may update the lists, ratios and quotas set out in paragraph 2.4 of this Regulation in accordance with the annual assessment results.


2.6. The organization and coordination of subsidies to farmers (payments to beneficiaries), as well as the activities of the  State Agrarian Development Centers of the Ministry (hereinafter referred to as "DAIM") are carried out by the Agrarian Credit and Development Agency (hereinafter referred to as the Agency) under the Ministry of Agriculture of the Republic of Azerbaijan.


2.7. At the request of the farmer, the Agency will issue a letter of guarantee on the amount of the proceeds of the grant to be used for the payment of agricultural loans.


2.8. DAIM implements the following services for granting subsidies:


2.8.1. Registration of farmers, suppliers and providers in the SIS in cases specified in these Rules;


2.8.2. Carries out checking documents of farmers who apply for subsidies and include their applications in the SIS;


2.8.3. Implements granting of subsidies and informs on the use of SIS;


2.8.4. Explores the problems that arise in the process of granting subsidies and makes suggestions to the Agency regarding their resolution.


2.9. Farmers, suppliers and producers carry out the following activities in the SIS:


2.9.1. Registration;


2.9.2. Information on the use of land plots for agricultural purposes and the agricultural products they produce, information on their agricultural production facilities;


2.9.3. Making applications for obtaining subsidies and filling applications electronically, including subsidy related documents into the SIS;


2.9.4. Obtaining information on subsidies.


2.10. Subsidy is not granted to framer unless registered in SIS. The right to receive subsidies can not be transferred to another person.


2.11. Integration of SIS with other state information resources and systems, as well as organization of exchange of information in accordance with the "Rules of Formation, Implementation, Integration and Archiving of State Information Resources and Systems" approved by Presidential Decree No. 263 dated 12 September 2018 is carried out.


3. Granting of subsidies on crop sector


3.1. The amount of planting subsidy is calculated in the following way (in the case of two or more seedlings in the same year the first declared type of plant in the beginning of year) base amount × crop husbandry ratio = crop husbandry subsidy


  • Crop husbandry ratio - the indicator determined by the Council taking into account the degree of production support for regions and plants.


  1. Seventy percent of the cost of fertilizers and bio-humas received under the subsidy should be paid through crop subsidy and thirty percent by farmer subsidy.


  1. Crop husbandry subsidy that is allocated to a farmer during the calendar year, but not used, can be used for subsequent planting during the same year.


  1. Crop husbandry subsidies for agricultural cooperatives for planting or perennial planting in the area of more than 50 hectares of land is being increased by 10 percent.


  1. Product subsidy is calculated as follows:

   base amount × product ratio = product subsidy

  • product ratio - the indicator determined by the Council for promotion of productivity on some crops.


3.6. Seed subsidy is determined on plant species by applying the ratios to the base amount of each sapling and 1st and 2nd reproductive seeds, which is produced and sold in the country by the Council;

 (Base amount x seed ratio) x Quantity of seeds or saplings submitted to subsidy by farmer x (total amount of seed and seedling is submitted to subsidy / quota) = seed subsidy

  • seed ratio - the indicator determined by the Council for calculating the subsidy amount per 1 kilogram of seeds and a seedling produced in the country.


  1. The amount taken into account in the calculation of the seed subsidies of seeds and seedlings sold to the farmer under paragraph 3.6 of this Regulation shall be determined on the basis of the sowing or planting need of used land field. 


  1. Farmers should submit following documents and information in the SIS for the period of time determined by this Rule to receive subsidies for crop sector:


  1. an electronic declaration (application) on predicted and sown planting areas and perennial plantings;


  1. a document certifying the right to use of land field;


  1. Information on the volume of agricultural production tools used for planting husbandry subsidies and the procurement documents;


  1. Documents, which are confirming the delivery of agricultural products to supplier for product subsidy and sale of seed and seedlings for seed subsidy;


  1. Documents regulating the activity of agricultural cooperatives.


  1. Additional documents from the farmer may be required only in the cases and in the manner prescribed by Article 32 of the Law of the Azerbaijan Republic "On Administrative Execution".
  2. The farmer shall include the documents and data specified in paragraph 3.8 of this Rule directly into the SIS (electronically) or by DAIM.


  1. The supplier taking into account the amount of subsidy when sells agricultural production tools to the farmer. By taking into account the amount of seed subsidy the Supplier within seven (7) business days shall notify the farmer the reasons for the refusal of selling agricultural production tools, in case of non-fulfillment of the conditions set out in paragraphs 3.2 and 3.8 of this Regulation 


  1. With regard to the seed subsidy, the farmer approves an electronic version of the automated formulation and applies for a subsidy, including information on the sowing plan he / she plants during the calendar year. Within 30 (thirty) working days, the Agency submits the information to the farmer via SMS (via SMS, e-mail or directly through the SIS) on the appropriate payment line. The farmer approves the information (notification) sent to him through the SIS, as he uses the agricultural subsidy balance from the card account for the purchase of agricultural production tools. The amount that is in the card account and the appropriate amount of expenditure is automatically transferred to the supplier's account.


  1. According to paragraph 3.12 of this regulation 25 percent of crop husbandry subsidy can be cashed out and 75 percent shall be used for the purpose of production.


  1. 14.With regard to the product subsidy, electron declaration till the 1st of June of each year according to subsection 3.8.1 of this regulation, as 15th of December of the same year documents of the delivering of the products to the supplier (receiving receipts of the product) shall be submitted by farmer to SIS. Suppliers also should include information on the type and amount of agricultural products they received by 15th of December. Payments related to the documents submitted after December 15 is made in the second quarter of next year.


  1. Related to seed subsidy, predictions related to seed subsidy until June 1 of the current year and as 15th of December data and documents related to the sales of seed and seedling will be required to submit by farmers and agency affirms these predictions as provided in paragraph 3.8.1 of this Regulation.


  1. After confirmation of the information in accordance with the conditions set out in paragraph 3.8 of this Regulation, the subsidy payment of the farmer on the plant husbandry will be transferred to his / her account at the end of that month.


  1. The amount of subsidy not used during the calendar year will be returned to the budget.


  1. There is no subsidy granted for planting on the lands of residential areas.


  1. Granting subsidies on animal husbandry


  1. Animal subsidy is determined in the amount of 100 (one hundred) manats per healthy calf. 


  1. Bee subsidy is determined by the amount of 10 (ten) manats per calendar year for each bee colony and is given until 2023 to farmers who are dealing with bee keeping.


  1. Sericulture subsidy is given to farmers who are produced and delivered to supplier in the amount of 5 (five) manats per kilogram for the wet cocoon ( Spun and karapacha cocoon is not included)
  2. The following conditions are established for obtaining subsidy on livestock sector:


  1. Artificial insemination in this direction is carried out by specialists who have successfully completed the re-training of the personnel, received a special certificate and diploma, and has been registered in SIS;


  1. Imported animal semen by the individual or companies that are registered in the SIS or as well as created in artificial insemination centers is used for this objective.  


  1. Identification of the animal born as a result of artificial insemination, as well as bee colonies, and the inclusion of information related to this matter by DAIM into SIS;


  1. Including documents on delivery of wet cocoon to supplier by farmer and data of received amount of wet cocoon by supplier to SIS till 30th of June.


  1. Artificial insemination is carried out in a paid manner on the basis of mutual agreement between the specialist and the animal owner.


  1. The subsidy payment on animal husbandry is carried out within 15 (fifteen) working days after the approval of the SIS in accordance with the regulations approved by the Ministry in accordance with the conditions mentioned in paragraph 4.4 of this Regulation.





5. Monitoring and Evaluation


5.1. In order to ensure the effective functioning of the subsidy mechanism, the Agency intends to carry out monitoring in the following forms:


5.1.1. Cross - Comparing electronic declaration data with other information contained in SIS;


5.1.2. Surface surveillance – By using satellite and other technical capacities identification of plantings and perennial plantings and their confrontation with electronic declaration data;


5.1.3. Observation on the spot - Implementation of monitoring and evaluation activities of DAIM specialists in planting areas or livestock farms by selection method.


5.2. The planting husbandry subsidy is given as follows if the amount calculated based on the declared planting area and perennial plantings exceeds the amount determined by monitoring:


5.2.1. If the difference does not exceed 5%, the subsidy will be given for the field as a result of monitoring;


5.2.2. If the difference is more than 5 percent and less than 20 percent, the amount of subsidy to be reduced is 30 percent;


5.2.3. If the difference is 20-50 percent, no subsidy will be paid to the farmer during the current year;

5.2.4. If the difference is more than 50 per cent, no subsidy will be paid to the farmer during the current year and the following year.


5.3. If the amount calculated according to the declared number of bee colonies exceeds the amount determined by monitoring, the bee subsidy is paid as follows:


5.3.1. If the difference does not exceed 10 percent, the subsidy is paid based on the number of bee colonies identified as a result of the monitoring;


5.3.2. If the difference is 10-30 percent, the beekeeper will not receive payment for the current year;


5.3.3. If the difference is more than 30 percent, the beekeeper is not paying subsidies for the current year and following year.


5.4. If the monitoring results are different from what is stated in the farmer's declaration, the farmer will be notified via SMS and email. If the farmer does not object to a notification within 15 (fifteen) days after the notification has been filed, then the requirements of paragraphs 5.2 and 


5.3 of this Regulation shall apply to him. The complaint is evaluated by the observer on the spot with the participation of a farmer, and the result is included in the SIS. The agency decides on the final decision and informs the farmer about it.


5.5. If the amount of subsidy used by the farmer for the current year exceeds the amount determined in accordance with paragraphs 5.2-5.3 of this Regulation, it shall return to agency by farmer. If this amount is not refunded, the amount will be taken from the amount of subsidies to be paid in the following years. 


5.6. The Agency provides assessments of the impact of subsidies on the production of agricultural products.


5.7. In accordance with the results of the monitoring and evaluation of the subsidizing mechanism the Agency once a year submits to the Ministry and the Council a report on the current status and upgrade proposals, as well as the quota and crop rates for the next year, 


6. Final provisions


6.1. Officials of the Agency have administrative or criminal responsibility for non-use of allocated state budget funds for subsidies.


6.2. Disputes arising out of the implementation of this Regulation shall be settled through administrative and judicial proceedings.

The list of subsidized farmers on the district (city) and villages is posted on the Agency's official website no later than December 25 of each year.