Cotton Industry in Azerbaijan Capstone Project

Cotton, a worthwhile raw material and a core of the textile manufactures, has been the most crucial resource for many centuries and still keeps its top placement. Cotton has a very ancient history in Azerbaijan as well and the first burned cotton skein and cotton seeds were found Mingachevir region. This report is going to provide the general condition of the cotton sector in Azerbaijan, how was it in the past and what has been done to develop it, what is currently doing, and which policies the country should apply to get better results. Apart from being famous in Europe and Asia in past, cotton has a lengthy history in Azerbaijan as well, and it is called the “White Gold” of the country. Above mentioned history is referred to the 1980s which was the starting of the early production of cotton in the Soviet republic. Certainly, Azerbaijan was the leading country in the high production level of it and almost fifteen percent belonged to this country. Formational changes happened at the end of the 20th century because the collapse of the Soviet Union and war conditions resulted in the losing the main role in the economy. After that oil boom happened that keep cotton a bit far from the previous production and only the independent Azerbaijan Republic has tried to take back the cotton industry. Policies that focus on the development of the non-oil sector came to the center of attention after 2015 and agriculture, especially cotton production has planned to be increased 6-7 times. The government called these policies “give new life” for cotton manufacturing because the development of sections could prosper agriculture and the economy significantly. According to the Food and Agricultural Organization of the United Nations (FAO), several groups of foreign experts have been invited to the country in 2017, and the main aims were: identifying possible risks, pointing out challenges of the sector, effective policy consultations for the future. The research paper will also discuss the economic targets, such as touching the unemployment issue, moving down the exports of the country, and building economic relations through cotton. But what is the main point that allows making all of these targets real? It is fact that cotton itself is a drought-resistant plant, and it will not be profitable when it is grown in a cold environment. Even in the low temperatures, it will not tolerate and for this aspect, Azerbaijan is on the lucky side. As paper realizes, necessary investment also should be high enough for taking a huge volume of products because there is high demand for cotton. Paper also approaches from the money aspect and it is obvious that Azerbaijan takes huge profits from the sector in comparison with the neighboring countries. Not only in the textile industry but also in other parts of it such as the chemical industry, raw materials, fabrics and the production of artificial fibers will be good examples. To sum up all the positive points, this research paper will confirm that cotton could bring millions of dollars to our country. Apart from all of these, the advantages and disadvantages of “The company system” will be analyzed in broad content. Since efficiency is an important factor for the government but the rights of farmers are more crucial for the country. In the literature part, the paper will also inform about one of the main issues of the cotton sector, which is mechanization. From one aspect, mechanization is at a very slow rate in our country and production needs labor to accomplish necessary tasks. Another aspect is related to the unemployment issue among women in rural areas. Since females in the Aran region work mostly in cotton harvesting and shifting to mechanization will make these workers unemployed. In addition, the main task of this research paper is finding the answer for the improvement of cotton production in Azerbaijan by creating packages in which several improvement techniques were mixed. After all, it is almost the end of the oil era and the development of the cotton sector is crucial. Comparing these technological enhancements with similar cotton-producing countries and giving the best solution with the econometric analysis along with cost-benefit estimations is another purpose of this paper. In the methodology part, the paper will use time-series data with a 15-years intervals adding some independent variables. In brief, analyzing the current situation, finding the ways to improve cotton production, comparing similarities with the neighboring countries, and using the combination of cost-benefit analysis and the econometric model to provide sufficient policies are the cores of this research paper.<br><br>