Agriculture is an important part of the economy of Azerbaijan. It contributes only 6% of the GDP of the country, but employs 38.3% of the workforce. 21.78% of the total land area is arable land (land where crops can be cultivated (grown)) and 2.1% are used for permanent crops (crops which last for many seasons, rather than being replanted after each harvest). 16.45% of the total land area, which makes up the majority of Azerbaijan's cultivated lands, is irrigated. The major crops for are agricultural cash crops, grapes,cotton, tobacco, citrus fruits, rice, tea and vegetables. Livestock, dairy products, and wine and spirits are also important farm products. Farms in Azerbaijan are organized as state and cooperative farms which employ many farmers, and small private farms which are owned and run by one farmer and his/her family. A leading caviar producer and exporter in the past, Azerbaijan's fishing industry today is concentrated on the dwindling supply of sturgeon and beluga in the Caspian Sea.
Under the Soviet Union, agriculture in Azerbaijan was collectivized in large state farms. Collectivization meant taking the land from owners of all farms and joining it into large farms run by the government. After the collapse of the Soviet Union, economic reforms took place, which led to the rapid changes in the agricultural sector as well, including privatization. After the "Law on Land Reforms" was passed in 1996, land has been given to individuals who are now allowed to own small private farms and sell their farm products. Nevertheless, Azerbaijan's agricultural sector still needs a lot of modernization, if it is to realize its vast potential. Prices for agricultural products are below the cost of labor, because the Soviet-era communist collective farm system discouraged private initiative; equipment in general and the irrigation system in particular are old, and modern technology is still not widespread, especially in small private farms.