By Khadija Ismayilova
“To lay an egg, or not to lay an egg: that is the question,” is a running joke among Azerbaijani Facebook users these days. The reference is connected to a government effort to crack down on an alleged “egg cartel.” The campaign is apparently intended as a show of official concern for citizens’ pocketbook issues, but it is prompting critics of President Ilham Aliyev’s administration to question the government’s handling of the economy.
The commotion started at the end of February, after egg prices soared from 16-18 kepiks (20-22 cents) to 25 kepiks (31 cents) per egg in Baku markets. Media reports started alleging that Baku stores were selling the most expensive eggs in Europe. Producers, wholesalers and retailers blamed each other for the rising prices.
But that was only the beginning. During a March 9 cabinet meeting, just over a week before the start of the Novruz holiday on March 20, President Aliyev blamed an alleged cartel for inflating costs and ordered a criminal investigation. “Why did egg prices increase? … Who does it?” Aliyev fumed during a televised speech. “We are investigating it. There is a monopoly, a production monopoly here. … I ordered that those who inflate prices will be punished, will be held criminally liable.”
A day after Aliyev’s speech, egg prices in Baku stores dropped precipitously. The General Prosecutor’s office launched a criminal investigation into the “egg cartel” for “monopolization and limiting market competition” and “misuse of power.” Potential punishment for those convicted of price-fixing ranges from a 1,000-manat (about $1,261) fine to three years in prison. So far, no charges have been brought against any individuals.
These days, some observers suggest the strong governmental response has forced the price pendulum to swing too far in the other direction. The head of Azerbaijan’s Association of Poultry Producers argues that selling eggs for 11 kepiks per egg is a money-loser for producers; production costs run as high as 13 kepiks per egg, he claims. “We were told not to sell [eggs] for more than 11 kepiks, and we are doing so. Don’t ask who [ordered the lower price], I am not going to tell,” said Aydin Valiyev, who termed poultry producers’ decision to reduce prices as a “humanitarian measure.”
Domestic producers will offer lower egg prices until the end of the Novruz holiday, on March 27, Valiyev added. “Then we will come back to this issue one more time.”
The government, he indicated, has miscalculated both the cost of egg production and the volume of domestic supplies. Azerbaijani producers could not meet domestic demand in 2010 because of an avian flu scare and a ban on importing hatching eggs, he alleged. Increased egg imports, he claimed, led to higher egg prices.
Official statistics, however, do not support Valiyev’s claims about egg imports. Azerbaijan imported 20.4 million eggs in 2010, while backyard chickens supplied a surprisingly high 758.5 million eggs -- 15 percent more than the previous year, according to government data. The alleged increase in backyard output matches the size of the drop in commercial egg production reported by poultry producers.
The Association of Poultry Producers’ Valiyev casts a skeptical eye on the official figures. No logical reason exists for why Azerbaijan’s backyard chickens suddenly increased egg production by 15 percent, he noted. “The figure is not verifiable and it is not clear how they calculate backyard production. They can write there whatever they want,” he said.
Zohrab Ismayil, director of the Center for Support for a Free Economy, a Baku think-tank, agreed that the State Statistics Committee is noted for occasional fanciful figuring. “Most of the imported goods bypass official statistics during customs clearance,” Ismayil alleged.
“It is sad that the government has to build its strategy on fake figures, and it is especially sad that the president gets into the business of dictating prices, instead of liberalizing the economy and opening the market for alternative players,” Ismayil continued.
The State Customs and Statistics Committees could not be reached for comment because of the Novruz holiday. In the past, the State Statistics Committee has rejected criticism about the accuracy of its data.
Since anti-government protests erupted in North Africa and the Middle East, unsettling the established order in those two regions, Azerbaijani officials have taken steps to bolster public confidence in the government in Baku, including the implementation of an anti-corruption campaign. Regardless of the government’s methods, many Baku residents have welcomed the result of the president’s so-called “egg amnesty,” the popular term for Aliyev’s call for cheaper egg prices.
Asli Muradova, a middle-aged Baku resident, says eggs are an important source of protein for her family since meat is too expensive to buy. “It is not usual when the president speaks about eggs, but it was a good present for the holiday, as we need eggs for almost all dishes on the Novruz table,” Muradova said.
Opposition parties and youth groups, meanwhile, are making use of the egg issue as a means of criticizing the government. On March 21, for example, clowns appeared in downtown Baku, holding signs that read: Yumurta ile Ireli! (Forward with eggs!). That saying was a take-off on a pro-government youth-group slogan: Ilhamla Ireli (Forward with Ilham).
Satirist Zamin Haji, however, said the matter has a serious side. “There is a touch of the Soviet command economy in these steps,” he asserted. “Twenty years after independence and declaration of the market economy as a priority, we are still struggling with regulating egg prices.”
* This article was first published at Eurasianet.org