Azeri Nut Trade Faces Crunch

Rumours, health warnings and powerful business interests drive Azerbaijan’s nut farmers and traders to the brink of ruin.

Azeri Nut Trade Faces Crunch

Rumours, health warnings and powerful business interests drive Azerbaijan’s nut farmers and traders to the brink of ruin.

Friday, 3 November, 2006
Persistent reports in Azerbaijan that the European Commission is restricting the import of nuts from the country due to contamination with cancer-causing aflatoxins, are hitting farmers hard. However, the ban from Brussels is not a total one, and other more mysterious forces appear to be responsible to disrupting exports.

In July, the EC moved to restrict import of nuts from Turkey from October 1 because of concerns over the presence of aflatoxins. This led to untrue reports that the EU had imposed a total ban on walnuts and hazelnuts from Azerbaijan, which sells much of its nut production to Turkish buyers.

Sabir Veliev, head of the Azerbaijani agriculture ministry’s department for crop production and regulation, told IWPR, “Reports about a ban imposed by European countries on walnuts and hazelnuts originating in Azerbaijan are untrue. If such a document existed, the agriculture ministry would have been notified with an official letter.”

Veliev insisted exports to EU member states had never stopped. “Currently, Turkish companies are stocking up on walnuts and hazelnuts in Zakatala, Kakhi and Baku and exporting them,” he said.

“Azerbaijan is not affected by EC restrictions due to aflatoxins but has to comply with EU legislation on aflatoxins (maximum levels),” Frans Verstraete of the European Commission’s Health and Consumer Protection Directorate-General confirmed to IWPR by email. This means that nuts from Azerbaijan are subject to checks on the levels of toxin, but not banned.

Some toxins are being found. Jafar Ahmedov, deputy head of the health ministry’s quarantine service, told IWPR that aflatoxins really had been found in walnuts and hazelnuts exported from Gusar district to Russia, and that 30 tons of Azerbaijani hazelnuts had been sent back from Italy.

“Only specific consignments have been banned,” he insisted, noting, “Aflatoxins and other toxins have received heightened attention in recent years. The poison develops because of poor storage and transportation conditions.”

Aflatoxins are generated by certain fungal growths on foodstuffs, particularly nuts and nut products, grown in warm humid conditions.

Even if the restrictions are selective, however, all the nut farmers of Azerbaijan’s mountainous districts are under pressure. The northern Guba-Khachmaz and north-western Sheki-Belokan regions are heavily dependent on exports of nuts. There are hundreds businesses sorting and processing nuts, and tens of thousands of people rely on the trade for their living.

Ilham Isayev, a young farmer from the village of Ilisu in the northwest of Azerbaijan, decided to go into the lucrative business of storing and selling nuts this year. But rumours of an EU ban have hit him hard. He told IWPR that wholesale firms were offering less than one US dollar for a kilogram of nuts in their shells this year, compared with around three dollars last year.

Previously, a farmer could afford to buy a house or an expensive car from selling 30 tonnes of hazelnuts or walnuts, but that is no longer the case. Falling prices have had a particularly damaging effect on small-time wholesale buyers, who are teetering on the brink of bankruptcy, said Isayev.

Many in the countryside believe the reports of contaminated nuts have been invented by powerful figures in Baku who control large parts of Azerbaijan’s economy and who may be trying to drive wholesale prices down.

Farmers recall how billboards appeared in the Kakhi district this spring advertising confectionery containing nuts. “If nuts are banned, what are these billboards for?” asked one farmer, laughing. Another said, “We’ve been eating nuts all our life and never contracted a disease from them. Maybe it’s because we didn’t know they contained poison.”

Those involved in the nut business disagree about the extent of the problem and what should be done about it.

“Export problems affecting the walnuts and hazelnuts produced in Azerbaijan are frequently artificial in nature,” said Economic Development Minister Heidar Babayev. “The ministry of economic development is already taking action. We are negotiating with the European Union to stop the artificial obstruction of our exports.”

Eyub Huseinov, who chairs Azerbaijan’s Independent Consumers’ Association, said he had seen nuts being produced in unhygienic conditions in the Guba district, and this was the root of the problem.

“I’ve seen fruit being grown under the wrong ecological conditions,” he said. “I’m afraid the contaminated product which the Europeans have spurned has been sold to the public in Azerbaijan, as we don’t usually have foodstuffs checked for safety here. We want rejected goods to be destroyed.”

What seems certain, though, that the fluctuations affecting the Azerbaijani nut trade are not just about health issues.

A senior official in the agriculture ministry, who asked not to be named, confirmed that toxins did occur in particular consignments now and then, as a result of poor storage. But he added that major players in the market exploit the resulting uncertainty to send wholesale prices plummeting downwards, so that they can buy up supplies for next to nothing.

Kemal Ali is senior editor of the weekly newspaper Birzha Plus in Baku.

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