Nakhchivan's major industries include the mining of minerals such as salt, molybdenum, and lead. Dryland farming, developed during the Soviet years, has allowed the region to expand into the growing of wheat (mostly grown on the plains of the Aras River), barley, cotton, tobacco, orchard fruits, mulberries, and grapes for producing wine. Other industries include cotton ginning/cleaning, silk spinning, fruit canning, meat packing, and, in the dryer regions, sheep farming.
Processing of minerals, salt, radio-engineering, farm ginning, preserving, silk products, meat and dairy, bottling of mineral waters, clothing, furniture are the principal branches of Nakhchivan's industry.
The economy suffered a severe blow in 1988 with the loss of access to both raw materials and markets, due to the Nagorno-Karabakh War. Although new markets are emerging in Iran and Turkey this isolation still persists to this day, impairing development. The economy of Nakhchivan is based on agriculture, mining and food processing, however 75% of the republic's budget is supplied by the central government in Baku. Aid is also provided by Turkey and several NGOs.
The Republic is rich in minerals. Nakhchivan possesses deposits of marble, lime and gypsum. The deposits of the rock salt are exhausted in Nehram, Nakhchivan and Sustin. The important molybdenum mines are currently closed as a consequence of the exclave's isolation. There are a lot of mineral springs there such as Badamli, Sirab, Nagajir, Kiziljir where water contains arsenic.
About 90% of the agricultural land is now in private hands. However agriculture has become a poorly capitalized, backyard activity. Production has dropped sharply and large-scale commercial agriculture has declined.
Over two thirds of the land are rocky slopes and deserts, therefore the area of the arable lands is quite limited. The main crops - cotton and tobacco - are cultivated in the PriAraz plain, near of Sharur and Nakhchivan city. Three quarters of the grain production, especially winter wheat is concentrated on the irrigated lands of the Sharur plain and in the basin of the Nakhchivan river.
Vine growing in Nakhchivan is an ancient tradition, in the Araz valley and foothills. Very hot summers and long warm autumns make it possible to grow such highly saccharine grapes as bayan-shiraz, tebrizi, shirazi. Wines such as "Nakhchivan" "Shahbuz", "Abrakunis", "Aznaburk" are of reasonable quality and very popular. Fruit production is quite important, mainly of quince, pear, peach, apricot, fig, almonds and pomegranate.
Cattle ranching is another traditional branch of Nakhchivan farming. Due to the dry climate, pastures in Nakhchivan are unproductive, therefore sheep breeding prevails over other livestock production. Winter pastures stretch on the PriAraz plain, on the foothills and mountain sides to the altitude of 1200 m. But the summer pastures go up on the high-mountain area to an altitude of 2300–3200 m. The most widespread sheep variety is "balbas". These sheep are distinguished by their productivity and snow-white silky wool which is widely used in the manufacture of carpets. Horned and small cattle are bred everywhere, especially in environs of Sharur and Nakhchivan. Buffaloes are also bred here.
Although intentions to facilitate tourism have been declared by the government, it is still at best incipient. Until 1997 tourists needed special permission to visit, which has now been abolished, making travel easier. Facilities are very basic and heating fuel is hard to find in the winter, but the arid mountains bordering Armenia and Iran are magnificent. In terms of services, Nakhchivan offers very basic facilities and lacks heating fuel during the winter.
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