Azerbaijan has solid potential as a future exporter of agricultural products. Before the breakup of the Soviet Union, it was a major supplier of cotton, fruit, and caviar to other Soviet republics. Agriculture produced 19 percent of the country’s gross domestic product in 2000 and employed about 38 percent of the workforce. Cotton is the leading cash crop, followed by wine, grapes, fruit, vegetables, and tobacco. Wheat and barley are the principal grains harvested. Mountain pastures are used for sheep grazing. Tea, citrus fruits, and olives are grown in the subtropical Lankaran Lowland in the southeast. The coastal regions also produce both fish and caviar, while the mountainous regions are large producers of lumbers.

Since the breakup of the Soviet Union, the country has had to deal with other concerns than getting its agricultural economy more exportoriented, though. The war with Armenia over Nagorno-Karabakh consumed more than 33 percent of the country’s budget in 1992 through 1995. As a result, there was little money left to help educate farmers used to a Soviet system of collective farming on how to deal with a freemarket economy. This has led to an imbalance in the type of products brought to market and, in some cases, to foodstuffs rotting in trucks because they were not in demand. At the same time, the country has to deal with other problems in its agricultural industry. The land is polluted from years of overusing pesticides and fertilizers. The country’s packaging equipment is unsuited to today’s rigid export standards, and its transportation system is marred by frequent blockades and stoppages as a result of the dispute with Armenia over the Nagorno-Karabakh region.

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