Imported Cattle No Bovine Boon For Azerbaijan

BAKU -- They were supposed to be Azerbaijan's cash cows. But the imported cattle apparently had other ideas.

Over the past three years, the government in Baku has spent $23 million importing some 4,500 pedigree cows from Germany and Austria in an effort to improve livestock quality and boost milk production.

In Europe, pedigree cows produce as much as 40 liters of milk a day, as opposed to the meager nine yielded by Azerbaijani cattle. The government hoped the more productive European cows would boost milk yields to 2.5 million tons by 2015, up from the 1.6 million tons produced in 2011.

But it hasn't exactly worked out that way.

'We Need Help'

As it turns out, the vaunted foreign cattle aren't producing as much milk as expected.

The authorities say the reason is that farmers are not caring properly for the imported cows, which apparently require a certain degree of pampering.

"Farmers cannot take care of the cattle brought from abroad because they require high-quality feed and special hygiene," Vahid Maharramov, a Baku-based agriculture analyst, says.

Farmers, on the other hand, say providing for the imported cows' extravagant needs is not cost effective and would lead to a steep increase in the price of milk.

Tarbiya Yusifova, a farmer in Azerbaijan's northwestern district of Samukh, invested in the imported pedigree cows and hoped they would produce 35 liters of milk per day. But meeting the cows' special requirements is pricing her milk out of the market.

"The price of the milk we produce is expensive for most customers because the hay we buy for the cattle is very expensive," Yusifova says. "That's why we need subsidies from the government. We can't buy hay and other feed for the cattle. We need help."

Hidden Costs

Farmers participating in the program lease cows from the state-controlled firm Agrolizinq. Initially, the government and the farmers each pay half the price of the cow. The farmers then have three years to pay off the remaining half.

In order to participate in the program, farmers are -- in theory -- required to have their own sowing area and adhere to strict guidelines for their barns. The humidity and lighting needs to be just right, and their diets and hygienic conditions should remind the European cattle of home.

But that's far from the case when RFE/RL visits a farm in the western village of Qushchu.

The farmer, Firudin Hasanov, says he initially leased 30 pedigree cows from Agrolizinq. But unable to upgrade his cow sheds, eventually he had to ship most of the cows off to a relative in the Baku region.

The few remaining on his farm live in a squalid barn that looks like it hasn't been cleaned for months. It is littered with manure, spiders climb the walls, and flies buzz around the feed containers.

Hasanov says he couldn't afford to upgrade his barns because in the countryside he can't sell his milk for much more than 32 kopeks (about $0.40) a liter.

"We get 22-23 liters of milk from a cow," Hasanov says. "There's no other way but to send [most of the cows] to Baku and they sell it there for 80 kopeks (about $1) a liter."

Adding to the problems, farmers remain liable to Agrolizinq for the cost of animals that die prematurely. At least 260 of the imported cows have died since 2009, equal to around $1.3 million in losses.

Big Business Somewhere

Moreover, agricultural analyst Maharramov notes that the prices Azerbaijani farmers are being asked to pay for the pedigree cows is significantly higher than in other countries.

According to figures compiled by RFE/RL's Azerbaijani Service, pedigree cattle imported from Austria cost $5,000 per head, as opposed to around $3,000 in Turkey.

Agrolizinq cites three little-known companies as having won its tenders to import the pedigree cows to Azerbaijan: Rista Alliance, Ninox Alliance, and Swisspoint Merchants Limited.

Swisspoint Merchants Limited was registered in New Zealand from 2009 until 2011.

The website of the New Zealand commercial registry says the firm was directed by a Latvian citizen named Inta Bilder. A search of the same registry shows Bilder as the director or shareholder of hundreds of companies.

Earlier this year, the Ukrainian newspaper "Dzerkalo Tyzhnia" reported that one of those companies, Falcona Systems, was linked to an alleged fraud worth more than $150 million involving state-owned companies.

Maharramov, for one, is suspicious.

"Considering that the government directs budget resources [to buy cattle from abroad] hastily and without any preparation," Maharramov says, "you can suspect that there were some other intentions in this."

RFE/RL correspondent Antoine Blua contributed to this report from Prague