12/2016
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19 A rm e n i a Agriculture Bulletin Ministry of Agriculture Developing Fertilizer Market Tool EU to Provide EUR 25.2 Million for Two New Programs Armenia to Launch Pilot Agricultural Insurance Program Agrarian Union of Armenia Hopes for Prosperous 2017
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Contents State Initiatives ........................................................................................................... 2 1) 2)
Ministry of Agriculture Developing Fertilizer Market Tool .............................................................. 2 Armenian Agriculture Shows 7.3% Decline ..................................................................................... 2
Foreign Aid ................................................................................................................. 2 3) 4) 5) 6) 7) 8) 9)
EU to Provide EUR 25.2 Million for Two New Programs ................................................................. 2 EFSE Provides USD 10 Million Loan to ACBA Credit Agricole Bank ................................................. 3 NGO Targets Tavush Border Towns for Assistance ......................................................................... 3 New Buckwheat Processing Plant Opens ........................................................................................ 3 EUR 3.3 Million for Armenian Organic Production .......................................................................... 4 Armenia to Launch Pilot Agricultural Insurance Program ............................................................... 4 USD 100 Million for Agricultural Development ............................................................................... 4
Private Sector .............................................................................................................. 4 10) 11) 12) 13) 14) 15) 16)
Domestic Livestock, Poultry Insufficient ......................................................................................... 4 Agrarian Union of Armenia Hopes for Prosperous 2017 ................................................................. 5 Fruit and Vegetable Exports Nearly Double .................................................................................... 5 82.3% of Debt to Grape Farmers Repaid ......................................................................................... 5 Lamb Exports to Iran Flourishing ..................................................................................................... 5 Armenian Organic Foods on Display at 2017 German Fair ............................................................. 6 Tomato Exports to EEU Top 30,000 Tons ........................................................................................ 6
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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State Initiatives 1)
Ministry of Agriculture Developing Fertilizer Market Tool
December 27th, 2016, http://finport.am/full_news.php?id=27769&lang=3
Agriculture Minister Ignati Arakelyan announced that the Ministry of Agriculture is developing a tool to promote the fertilizer market. The tool will help vendors and clients find one another and will also increase competitiveness in the market, helping ensure that prices remain consistent and affordable. The Minister added that the current capacity of vendors does not fully meet demand, meaning that the Ministry will open bidding to companies ready to process and sell fertilizers to Armenia’s farmers.
2)
Armenian Agriculture Shows 7.3% Decline
December 2nd, 2016, http://arka.am/en/news/economy/minister_comments_on_decline_in_armenia_s_agriculture/
The output of Armenia’s agricultural sector amounted to AMD 757.2 billion between January 2016 and October 2016, a 7.3% decline year‐on‐year. The main culprits of the decline were a smaller than normal crop yield, lower prices worldwide for agricultural products and financial problems for farmers. This is part of the reason why the Central Bank of Armenia changed its economic growth outlook for 2016 from 2.8% growth to 1.3‐1.8%. In addition, the VAT for agriculture is expected to fall 0.7‐1.0%.
Foreign Aid 3)
EU to Provide EUR 25.2 Million for Two New Programs
December 19th, 2016, http://arka.am/en/news/business/european_union_will_provide_armenia_with_25_2_million_euro_assistance/
The European Union (EU) and Armenia have signed two financing agreements to assist Armenia in improving its labor market efficiency and strengthening its fiscal governance. The first agreement will create the EUR 15.2 million Better Qualifications for Better Jobs program. The program will seek to improve the efficiency of Armenia's labor market and the employability of its workforce, with a particular emphasis on agricultural employment. It also aims to improve the mechanisms to identify and match labor supply with private and public sector demand through more effective data collection and usage. The initiative places a particular focus on employment perspectives and qualifications for agricultural Vocational Education Training (VET) graduates by developing national apprenticeship schemes and the rehabilitation of agricultural VET centers. In parallel with this program is a EUR 10 million project to support the reform of the Public Finance Policy. It will seek to address accountability, transparency and the effectiveness of public spending so that they are in line with international standards and practices. The program will strengthen the accountability and transparency of the budget through better accounting as well as through auditing practices. The program will also work with civil society and the National Assembly to ensure a more participatory budgeting process. The funding will come through the European Neighborhood Instrument (ENI), the main financial and cooperation instrument through which funding is given to European Neighborhood Policy (ENP) countries, including Armenia. Page 2
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4)
EFSE Provides USD 10 Million Loan to ACBA Credit Agricole Bank
December 14th, 2016, http://www.panarmenian.net/eng/news/228181/
ACBA Credit Agricole Bank and the European Fund for Southeast Europe (EFSE) have signed a loan agreement for the equivalent of USD 10 million in local currency. The loan will allow ACBA Credit Agricole Bank to strengthen its position in the financial and banking system of Armenia and to step up lending to the agricultural sector and small‐ and medium‐sized enterprises, the cornerstone of Armenian economic development. Cooperation between ACBA Credit Agricole Bank and EFSE began in 2013 when EFSE provided the Yerevan‐based institution with two loans to assist in financing micro‐ and small‐sized businesses in Armenia. This is the third loan overall from EFSE to ACBA Credit Agricole Bank.
5)
NGO Targets Tavush Border Towns for Assistance
December 14th, 2016, https://news.am/eng/news/362584.html
With financial assistance by the European Union (EU), Support for Noyemberyan, a non‐governmental organization (NGO), will open small food workshops in the border towns of the Tavush province. The EU grant will enable the NGO to purchase equipment for drying fruits, pasteurizing milk and canning food. This equipment will be given to operating farm cooperatives which will join together to form one association. In total, the NGO has received EUR 976,000 in assistance from the EU Pilot Regional Development Program and EUR 244,000 from the government of Armenia. In addition, cooperatives expecting to benefit from the program will invest EUR 407,000 from their future incomes.
6)
New Buckwheat Processing Plant Opens
December 6th, 2016, http://www.panorama.am/en/news/2016/12/06/First‐ever‐buckwheat‐processing‐plant‐opened‐in‐ Armenia/1689821
The first buckwheat processing plant in Armenia has been opened in the Tsovagyugh village (Gegharkunik region). The plant was established by the 105‐member Tsovagyugh Buckwheat cooperative with an investment of AMD 50,000 and one hectare per member. Despite a severe July hailstorm damaging 30% of the crop, an average of 1.5‐1.7 tons of buckwheat per hectare was harvested this year by the cooperative for processing in the plant. The opening of the plant has inspired community residents to expand the area of the cultivated land, increase the production capacity of the plant and increase cooperative staff numbers. The plant was established with the efforts of the European Neighborhood Program for Agriculture and Rural Development (ENPARD). As part of ENPARD’s efforts, free buckwheat seeds and fertilizers were provided and Russian specialists trained local farmers. ENPARD launched its work in Armenia in January 2015 and is expected to continue its work until 2018. The program is designed to support agricultural institutions, encourage the development of farmer associations and improve access to more affordable food in European neighborhood countries.
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7)
EUR 3.3 Million for Armenian Organic Production
December 2nd, 2016, http://armenpress.am/eng/news/870325/18‐armenian‐enterprises‐to‐receive‐funding‐for‐developing‐ organic‐agriculture.html
18 Armenian companies have been chosen to receive EUR 3.3 million in financial assistance from the European Union (EU) Delegation to Armenia and the Austrian Development Agency. The funding is part of the Organic Agriculture Support Initiative grant scheme which aims to develop the organic sector in Armenia. The chosen enterprises represent diverse organic products, including wine, honey, dried fruits and olive oil. There are currently 190 applications under review for the second stage of the grant scheme, 40 of which will be chosen for funding.
8)
Armenia to Launch Pilot Agricultural Insurance Program
December 2nd, 2016, http://arka.am/en/news/business/pilot_agriculture_insurance_program_to_be_developed_in_armenia_next_year/
Deputy Agriculture Minister Armen Harutyunyan announced a preliminary agreement with German Development Bank KfW for a pilot agricultural insurance program to be developed in Armenia next year. The first phase of the pilot will classify farms into large, medium or small, and the size of insurance premiums will be based on these categories. Insurance will cover damages caused by frost, hail, drought, storms, strong winds and floods. Discussions are currently ongoing as to which crops will be included in the pilot program.
9)
USD 100 Million for Agricultural Development
December 2nd, 2016, http://finport.am/full_news.php?id=27365&lang=3
Deputy Minister of Agriculture Armen Harutyunyan announced that international donors have provided nearly USD 100 million for the agricultural programs currently being implemented in Armenia, all of which align with Armenia's Strategy of Sustainable Development of Agriculture for 2010‐ 2020. The Deputy Minister also announced that future programs will have a greater emphasis on the implementation of high technologies in the agricultural sector. The United Nations, the United States Agency for International Development (USAID) and the European Union (EU) are the largest donors to Armenia’s agricultural sector. The French Development Agency, the Austrian Development Agency and the Swiss Agency for Development also contribute to Armenian agricultural development programs.
Private Sector 10) Domestic Livestock, Poultry Insufficient December 29th, 2016, https://news.am/eng/news/365525.html
According to recently published agricultural census results, farm animals and domestic birds are being kept on 181,500 family farms in Armenia, meaning that a little more than half of the total number of family farms engaged in agriculture in the country have domestic livestock or poultry. In addition, many of the country’s livestock farmers limit themselves to a small number of cattle due to forage and feed Page 4
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problems as well as animal diseases. The results of these facts are that livestock farming productivity is strong in Armenia and that a large portion of livestock and poultry byproducts must be imported instead of being satisfied from domestic sources.
11) Agrarian Union of Armenia Hopes for Prosperous 2017 December 26th, 2016, http://finport.am/full_news.php?id=27758&lang=3
Hrachya Berberyan, chairman of the Agrarian Union of Armenia recapped the struggle of 2016 for the agricultural sector while also expressing hope for the coming year. In 2016, the agricultural sector in Armenia faced problems with transportation, which hindered export shipments, as well as adverse weather which impacted crop growth and issues from wild animals which caused harm in the Ararat, Armavir and Lori provinces. Overall, the volume of gross products of the agricultural sector from January 2016 through November 2016 decreased 6.1% to AMD 836.1 billion. Mr. Berberyan called on government officials to work to help the sector in 2017 by better understanding the realities of the sector and its needs.
12) Fruit and Vegetable Exports Nearly Double December 22nd, 2016, http://arka.am/en/news/economy/armenia_s_fruit_and_vegetable_exports_doubled_in_2016/
143,000 tons of fresh fruits and vegetables were exported from Armenia in 2016, nearly doubling last year’s 73,700 tons. If weather conditions remain favorable, Agriculture Minister Robert Makaryan expects that 2017’s exports will increase even more. 85% of fruit and vegetable exports were sent to Russia, the traditional consumer of the bulk Armenian fruits and vegetables.
13) 82.3% of Debt to Grape Farmers Repaid December 7th, 2016, http://finport.am/full_news.php?id=27458&lang=3
Work towards repaying the debts owed to grape farmers continues. As of December 7, 2016, farmers have been paid AMD 675 million of the AMD 820 million debt. The remaining AMD 145 million is to be paid from nine processing plants, and the Ministry of Agriculture is strongly urging the plants to make good on the debt before the end of the year.
14) Lamb Exports to Iran Flourishing December 5th, 2016, http://arka.am/en/news/business/armenian_exports_of_lamb_to_iran_more_than_double_/
Armenian exports of lamb to Iran have increased significantly over the past two months. As of December 2, 2016, lamb exports to Iran amounted to 2,200 metric tons, up from 681 tons for the whole of 2015. More than 1,000 tons of the 2,200 were exported after September 22, 2016. In addition to these promising numbers, Armenian Agriculture Minister Ignati Arakelyan met with Iranian Ambassador Seyed Kazem Sajjadi to discuss increasing cooperation in the fields of animal husbandry and floriculture as well as the development of greenhouses and fisheries. A group of Iranian experts also recently visited Armenia, looking to expand cooperation with fisheries and poultry producers. Page 5
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15) Armenian Organic Foods on Display at 2017 German Fair December 2nd, 2016, https://news.am/eng/news/360567.html
Armenian organic foods will be on display at the 2017 BIOFACH Fair in Nuremberg, Germany. The Armenian Ministry of Agriculture is also working to arrange the introduction of Armenian organic foods at three or four additional international exhibitions. It should be noted that “bio” and “eco” descriptions are often used by Armenian companies that do not have the respective certifications. To help combat this and make it easier for Armenian organic products to be exported, the Armenian Ministry of Agriculture is setting up a working group to develop new legislative principles by May 2017.
16) Tomato Exports to EEU Top 30,000 Tons December 2nd, 2016, http://www.lragir.am/index/eng/0/economy/view/36579
Through the first three quarters of 2016, tomatoes were the second most exported product to Eurasian Economic Union (EEU) countries by volume, trailing only alcoholic products. In total, 30,369 tons of tomatoes were exported to the EEU, amounting to a value of USD 19.78 million. 30,169 tons of that total, representing USD 19.73 million, were exported to Russia.
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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. The articles do not necessarily reflect the opinions of BFC, its staff, its associates or its partners. Copyright of articles is retained by their authors.