#17 Armenia Agriculture Bulletin, BFC

10/2016

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17 A rm e n i a Agriculture Bulletin Armenian Winemaking Foundation Board Meets Armenian Government Publishes Agricultural Development Program New Grant to Help Set Up Organic Production in Armenia Armenian Sugar Production Up, Flour Production Down

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Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4) 5) 6) 7)

Ministry of Agriculture Urging Farmers to Fight Rodents ............................................................... 2 Armenian Winemaking Foundation Board Meets ........................................................................... 2 Prime Minister to Create New Company to Help Boost Agricultural Exports ................................. 2 New Legislation on Organic Products in Development ................................................................... 3 Armenian Government Publishes Agricultural Development Program .......................................... 3 Agriculture Minister Arakelyan Meets with Argentinian Ambassador ........................................... 3 Minister Arakelyan Calls for Revising Agricultural Subsidy Program .............................................. 3

Foreign Aid ................................................................................................................. 4 8) 9)

New Grant to Help Set Up Organic Production in Armenia ............................................................ 4 Ukrainian Milk Producers Association Holds Training Seminars in Armenia .................................. 4

Private Sector .............................................................................................................. 4 10) 11) 12) 13) 14)

Armenian Grape Processing Enterprises Owe AMD 850 Million to Farmers .................................. 4 Vayots Dzor Company Finds Success in Going Organic ................................................................... 4 USD 15 Million Loan Agreement Signed with ACBA‐Credit Agricole Bank ...................................... 5 Armenian Sugar Production Up, Flour Production Down ............................................................... 5 GDP Growth for Armenian Agriculture and Fishing ........................................................................ 5

Note: The Agriculture Bulletin presents a monthly roundup of headlines and news stories related to Armenia’s agricultural sector.

This bulletin is prepared by Business & Finance Consulting—a Swiss‐based development finance consulting company with a long history of working in Eastern Europe, Central, South and South East Asia and North Africa. Currently, BFC is implementing the “Financing the Agriculture Sector in Armenia” project for KfW. Read more »

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BFC Agriculture Bulletin

State Initiatives 1)

Ministry of Agriculture Urging Farmers to Fight Rodents

October 28th, 2016, http://arka.am/en/news/business/armenian_ministry_of_agriculture_urges_farmers_to_fight_rodents/

The Armenian Ministry of Agriculture said that it has recorded the spread of rodents in several regions and is urging farmers to take swift and adequate measures to fight them and ensure minimal damage to their orchards, vineyards and winter crops in the upcoming months. The Ministry also announced that it is implementing a large‐scale program to combat rodents and prevent possible damages from them.

Specifically, farmers in areas where the rodents are abundant are to be provided with the chemical Rodifakum C as well as instructions for its use free of charge.

The Ministry of Agriculture is advising land users to follow the expert advice in the shortest possible time and complete the fight against the rodents while also strictly observing safety requirements. More information is available from experts at regional centers which promote agriculture and on the Ministry’s official website.

2)

Armenian Winemaking Foundation Board Meets

October 28th, 2016, http://minagro.am/2016/10/%D5%AF%D5%A

At a meeting of the Armenian Winemaking Foundation Board of Trustees, members gathered to discuss Foundation expectations in identifying and solving the problems facing the Armenian wine industry.

Board Chair, Agriculture Minister Arakelyan, spoke about the work being done to include winegrower union members in the activities of the Foundation as well as about the activities of the Ministry of Agriculture in the winegrowing sector. At the meeting, Board members presented proposals to further develop viticulture and winemaking in Armenia, stressing the importance of promoting wine tourism in Armenia and purposed to organize wine‐tasting events and an exhibition center as well as preparing videos about Armenia’s historic wine country. Board members also discussed plans for better organizing the grape harvest and issues related to improving the legislative framework for the industry.

The main goal of the Foundation is to contribute to the development of viticulture, wine production and increase wine exports as well as to improve local wine ratings and to publicize Armenian products in international markets.

3)

Prime Minister to Create New Company to Help Boost Agricultural Exports

October 22nd, 2016, http://www.panarmenian.net/eng/news/223863/

In visiting ArmProd Expo 2016 at the Yerevan‐Expo Center this month, Prime Minister Karapetyan announced that a special company will be created and tasked with finding new markets for Armenian agricultural products. The Prime Minister stressed the importance of employing modern technologies in the production process and asked domestic producers and processors involved in agriculture to also submit proposals for additional ideas to help the government grow the agricultural sector.

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BFC Agriculture Bulletin

4)

New Legislation on Organic Products in Development

October 21st, 2016, http://news.am/eng/news/352847.html

The International Federation of Organic Agriculture Movements (IFOAM) is providing experts to assist Armenia in improving organic certification regulations and developing new legislation regarding organic products. The legislation, expected to be ready in spring 2017, will mean that products marketed as “bio”, “organic”, or “eco” must meet very specific organic criteria.

5)

Armenian Government Publishes Agricultural Development Program

October 19th, 2016, http://finport.am/full_news.php?id=26647&lang=3

The government of Armenia has published a program for the development of the agricultural sector of the country. According to the program, a roadmap is to be developed within three months which will increase food safety and implement reforms in forestry to protect and ensure forest regeneration. The program also stresses the importance of continued growth of the Armenian wine industry, particularly in regards to its standards and international reputation.

The program will also focus on organizing agricultural cooperatives and will stress the importance of organizing professional trainings for farmer enterprises aimed at agriculture development. The program will also work to create new gardens and will implement a subsidy program for the use of mineral fertilizers and diesel fuel.

6)

Agriculture Minister Arakelyan Meets with Argentinian Ambassador

October 17th, 2016, http://news.am/eng/news/352178.html

Armenian Minister of Agriculture Ignati Arakelyan met with Argentinian Ambassador to Armenia Gonzalo Urriolabeitia to discuss the state of bilateral cooperation between the two countries in regards to the agricultural sector and ways in which that cooperation might be deepened in the future. The Argentinian Ambassador expressed his country’s willingness to support Armenian agriculture with Argentine’s experience and technological progress in agriculture and noted the visit of Argentinian specialists to Armenia coming in November. The Ambassador also noted the visit of representatives of the Regional Consortium for Agricultural Experimentation to discuss issues concerning milk production and growing tomatoes.

7)

Minister Arakelyan Calls for Revising Agricultural Subsidy Program

October 4th, 2016, http://finport.am/full_news.php?id=26407&lang=3

In a meeting with deputies and other officials of the Ministry of Agriculture, Agriculture Minister Ignati Arakelyan stated that both villagers and processing plants are dissatisfied with the current government subsidy programs in the agricultural sector, meaning that the programs are not working properly. The Minister has called for the programs to be revised with the idea in mind of optimizing profits in the entire chain, from producer to market. Minister Arakelyan also expressed the need to create a fund via which loans will be provided to the agricultural sector on affordable terms.

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BFC Agriculture Bulletin

Foreign Aid 8)

New Grant to Help Set Up Organic Production in Armenia

October 22nd, 2016, http://news.am/eng/news/353080.html

The European Commission and the Austrian Development Agency are allocating EUR 3 million for a grant as part of a project to help develop the organic industry in Armenia. The grant will be used to help transition 30 to 40 small‐ and medium‐sized companies and farms to organic production. In addition, two other components of the project will help raise awareness of organic products and assist Armenian producers in better penetrating international markets.

9)

Ukrainian Milk Producers Association Holds Training Seminars in Armenia

October 18th, 2016, http://news.am/eng/news/352289.html

The Association of Milk Producers of Ukraine conducted theoretical and practical training courses and seminars in Armenia. The seminars were held in Spitak town and Tsepatagh village in the Lori Province as well as Verdenis town in the Gegharkunik Province. The seminars were organized in conjunction with the European Bank for Reconstruction and Development (EBRD) and within the framework of the second phase of a project working towards improving the productivity of dairy farmers in Armenia.

Private Sector 10) Armenian Grape Processing Enterprises Owe AMD 850 Million to Farmers October 22nd, 2016, http://finport.am/full_news.php?id=26725&lang=3

Armenia’s grape processing enterprises currently owe AMD 850 million to farmers, including AMD 500 million for grapes procured during the 2015 season. This season, 106,000 tons of grapes have been procured and many enterprises have paid farmers for the grapes in cash and on time. There is, however, still an issue with back payments as highlighted when residents of the Aghavnadzor village protested non‐payment by blocking the entrance into the school, the kindergarten and the rural administration building.

Prime Minister Karapetyan has strongly criticized the handling of payments to farmers and instructed that a long‐term concept for policies and procedures for grape and other agricultural product procurement be developed and adopted to avoid situations like the one many Armenian grape growers find themselves in.

11) Vayots Dzor Company Finds Success in Going Organic October 20th, 2016, http://arka.am/en/news/business/acba_credit_agricole_bank_keeps

Founded in 2005, family‐run Mega Ararat is a business in the Vayots Dzor region of Armenia that has found success in taking advantage of the popularity of organics and the use of traditional herbs. The company started modestly and has grown to now be engaged in the delivery of seven species of plants and herbs: thyme, peppermint, chamomile, St. John's wort, linden, hawthorn and wild rose. The company benefits the local population by purchasing the raw supply for its products from locals and then selling their products in markets outside the local region so as not to hinder other local companies’

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BFC Agriculture Bulletin

sales. Exports of the company’s product quickly found a home in Russia; however, finding a niche in European markets proved to be a much greater challenge.

ACBA‐Credit Agricole Bank suggested the company participate in a program of organic certification and introduced the company to a delegation of German businesses. Since meeting with the German delegation, Mega Ararat is now negotiating a deal to bring its products to the German market and the company’s production has grown several times from the annual 15‐20 tons it produced prior to organic certification.

12) USD 15 Million Loan Agreement Signed with ACBA‐Credit Agricole Bank October 18th, 2016, http://arka.am/en/news/business/dutch_development_bank_fmo_and_acba_credit_agricole_bank_sign_usd_15_million_loan _agreement_to_boost/

The Dutch Development Bank FMO and Armenia‐based ACBA‐Credit Agricole Bank have signed a USD 15 million loan agreement at the FMO‐organized Future of Finance conference. The loan will be channeled into the development of Armenia’s small‐ and medium‐sized enterprises as well as the agricultural sector. The loan is multi‐currency, meaning that funds will be available both in US dollars and Armenian drams.

ACBA‐Credit Agricole Bank began its cooperation with FMO in 2012 when FMO acted as a second creditor to the bank alongside the European Bank for Reconstruction and Development (EBRD). FMO has invested a total of EUR 8.9 billion in the economies of developing countries around the world and is one of the largest financial organizations in the world stimulating private sector development.

13) Armenian Sugar Production Up, Flour Production Down October 17th, 2016, http://armenpress.am/eng/news/864163/sugar‐production‐soars‐in‐armenia.html

Through the first eight months of 2016, Armenia has produced 54,119 tons of sugar, an increase of 2.6 times against the same period in 2015. During the same period, flour production has dropped by 14.4% from 122 million tons in 2015 to 104 million tons this year.

14) GDP Growth for Armenian Agriculture and Fishing October 3rd, 2016, http://armenpress.am/eng/news/862412/armenia‐records‐gdp‐growth‐in‐agriculture‐and‐fishing.html

According to the National Statistical Service, Armenia’s August 2016 GDP in agriculture and fishing amounted to AMD 167.52 billion. Fishing amounted to AMD 1.63 billion (with 1,138.1 tons produced in August 2016); crop production amounted to AMD 138.80 billion; and livestock production amounted to AMD 27.94 billion. In total, this represents a 9.7% year‐on‐year growth.

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Prepared by Business & Finance Consulting (BFC) www.bfconsulting.com In this bulletin, BFC provides extracts from articles that have been published by others and as a result cannot be held responsible for such content.

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