04/2017
#
23 A RM E N I A Agriculture Bulletin Agricultural loan subsidy program to be reviewed Domestic production of seeds, fertilizers to increase Armenian tomato exports drastically increase
Spayka LLC to invest USD 70 million
All materials are published “as is� and are the property of their respective owners.
!
! !
Contents State&Initiatives&...........................................................................................................&2! 1)!
Armenia!needs!poultry!investments,!not!more!products!...............................................................!2!
2)!
Agricultural!loan!subsidy!program!to!be!reviewed!.........................................................................!2!
3)!
Minister!of!Agriculture!meets!Belarusian!Ambassador!...................................................................!2!
4)!
Iranians!interested!in!Armenian!agriculture!....................................................................................!3!
5)!
Domestic!production!of!seeds,!fertilizers!to!increase!.....................................................................!3!
6)!
Organic!production!to!be!developed!in!the!Ararat!region!..............................................................!3!
Foreign&Aid&..................................................................................................................&4! 7)!
Agriculture!Minister!meets!with!IMF!delegation!............................................................................!4!
Private&Sector&..............................................................................................................&4! 8)!
Armenian!tomato!exports!drastically!increase!................................................................................!4!
9)!
Spayka!LLC!to!invest!USD!70!million!................................................................................................!4!
10)! Processing!companies!debt!to!farmers!down!.................................................................................!5! 11)! DutySfree!Turkish!produce!still!being!imported!..............................................................................!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$more$»$
! !
BFC Max-Högger-Strasse 6 CH-8048 Zurich, Switzerland
Phone: +41 44 784 22 22 Fax: +41 44 784 23 23
info@bfconsulting.com www.bfconsulting.com
!
BFC$Agriculture$Bulletin$ $ $
State%Initiatives% 1)! Armenia%needs%poultry%investments,%not%more%products% April$27th,$2017,$http://finport.am/full_news.php?id=29466&lang=3$
Speaking! at! the! International! Poultry! Forum,! Sergey! Stepanyan,! chairman! of! the! Armenian! Poultry! Breeders,!stated!that!Armenia!is!not!in!need!of!more!poultry!products!but!rather!serious!investments!in! new! technologies! and! a! place! to! produce! feed! locally.! Currently,! Armenia! is! able! to! satisfy! domestic! demand! for! both! poultry! meat! and! eggs;! the! problem,! however,! is! the! tough! stand! on! a! place! to! produce! feed.! This! tough! stand! has! resulted! in! a! majority! of! the! feed! having! to! be! imported! from! abroad.! ! According! to! Stepanyan,! the! development! of! local! processing! is! more! beneficial! for! economy! of! the! country,! and! that! is! why! the! Armenian! Poultry! Farmers! Union! has! appealed! to! the! government! for! a! development! program! for! the! implementation! of! main! issues! such! as! a! VAT! and! crediting! options.! Stepanyan!believes!that,!if!the!government!pursues!the!correct!course!of!action!now,!poultry!meat!and! egg!production!could!double!by!2025.! ! !
2)! Agricultural%loan%subsidy%program%to%be%reviewed% April$21st,$2017,$http://minagro.am/2017/04/%D5%A1%D5%AF%D5%A2%$
Agriculture! Minister! Ignati! Arakelyan! met! with! Hakob! Andreasyan,! executive! general! of! ACBASCredit! Agricole!Bank,!to!discuss!a!possible!review!of!the!‘Agricultural!Loans!Subsidies’!project!and!the!need!to! soften! agricultural! loan! terms.! Minister! Arakelyan! offered! to! modify! the! terms! and! conditions! of! agricultural! loans! in! order! to! decrease! interest! rates! and! increase! limits.! The! Minister! also! noted! that! farmers!need!to!have!access!to!affordable!loans!which!allow!them!to!expand!farming!activities!and!that! today’s! agricultural! loans! subsidies! are! not! effective! for! this.! Further,! he! proposed! developing! a! new! project!to!support!the!expansion!of!small!and!medium!farms!as!well!as!establishing!set!preconditions!for! agrarian!industry!development.! ! The!government!program!of!agricultural!loan!subsidies!started!in!April!2011.!Under!the!program,!loans! are!provided!at!an!annual!interest!of!14%,!with!the!government!subsidizing!4S6%.!The!loan!maturity!is!3! years.! ! !
3)! Minister%of%Agriculture%meets%Belarusian%Ambassador% April$21st,$2017,$http://minagro.am/2017/04/%D5%B0%D5%B0@%D5$
Agriculture! Minister! Ignati! Arakelyan! met! with! Belarus! Republic! Ambassador! Igor! Nazaruk! in! Yerevan! this! month.! The! two! discussed! possible! directions! of! cooperation,! effective! forestry! management! and! the!possibility!of!Armenian!experts!learning!at!Belarusian!agricultural!universities.!For!his!part,!Minister! Arakelyan!invited!Belarusian!companies!to!participate!in!Armenia’s!agricultural!leasing!program,!which! seeks! to! rehabilitate! and! modernize! agricultural! equipment! used! in! Armenia.! The! program! creates! mechanisms!allowing!farmers!to!choose!what!they!need!for!effective!implementation!in!their!fields.!In! his! turn,! Ambassador! Nazaruk! presented! the! conditions! of! providing! agricultural! facilities! and! also! stressed!Belarusian!interest!in!supplying!mineral!fertilizers!to!Armenia.! ! !
Page!2!
BFC$Agriculture$Bulletin$ $ $
4)! Iranians%interested%in%Armenian%agriculture% April$20th,$2017,$http://vestnikkavkaza.net/news/Iranian@businessmen@ready@to@supply@Armenian@tomato@paste@to@EEU.html$
Agriculture!Minister!Ignati!Arakelyan!met!with!a!group!of!managers!from!Iranian!companies!engaged!in! the! construction! of! greenhouses! and! the! production! of! tomato! paste.! At! the! meetings,! the! Iranian! businessmen! expressed! their! interest! in! cooperating! with! Armenia! in! the! field! of! agriculture.! In! particular,! they! expressed! a! desire! to! establish! a! tomato! processing! plant! in! Armenia,! with! the! aim! of! exporting! the! finished! products! to! the! Eurasian! Economic! Union! (EEU).! In! his! turn,! the! Minister! expressed!his!readiness!to!assist!Iranian!entrepreneurs!and!proposed!that!the!Iranians!submit!a!detailed! business!plan!for!further!consideration.! ! !
5)! Domestic%production%of%seeds,%fertilizers%to%increase% April$12th,$2017,$ http://arka.am/en/news/business/armenia_to_replace_imported_fertilizers_and_seeds_with_locally_produced_ones/$
Prime!Minister!Karen!Karapetyan!has!announced!that!the!government!will!begin!substituting!importing! agricultural! goods! with! domestically! produced! ones,! specifically! noting! two! areas! for! stimulating! local! production! —! the! production! of! mineral! and! biological! fertilizers! and! seeds.! In! this! regard,! the! Prime! Minister!has!directed!Agriculture!Minister!Ignati!Arakelyan!to!conduct!a!study!of!the!activities!of!seed! stations!and!companies!and!submit!proposals!for!their!development.!The!Prime!Minister!also!expressed! the!need!to!find!and!encourage!investors!to!boost!the!production!of!fertilizers!in!Armenia.! ! Additionally,! the! Prime! Minister! noted! the! importance! of! preventing! the! spread! of! infectious! diseases! among!livestock!in!farms.!Given!the!possible!risks!of!spreading!diseases,!the!Prime!Minister!has!directed! the! appropriate! agencies! to! look! into! the! possibility! of! creating! mobile! veterinary! groups! for! the! vaccination!of!domestic!animals.! ! !
6)! Organic%production%to%be%developed%in%the%Ararat%region% April$7th,$2017,$http://minagro.am/2017/04/%d5%b0%d5%b0@%d5%a$
The!Ministry!of!Agriculture!is!discussing!programs!with!potential!beneficiaries!in!the!Ararat!region.!The! programs! are! aimed! at! organizing! organic! production! and! processing,! including! dried! fruit! production! and!a!milk!processing!plant.! ! This!year,!the!Ministry!plans!to!implement!USD!120!million!in!investment!projects!around!the!country.! Investments!made!by!the!Ministry!will!be!for!such!projects!as!the!creation!of!intensive!gardens!and!the! modernization!of!brandy!production,!among!others.!Investment!funds!are!also!expected!to!be!used!for! the!development!of!each!region.! ! ! ! ! ! ! ! !
Page!3!
Foreign%Aid%
BFC$Agriculture$Bulletin$ $ $
7)! Agriculture%Minister%meets%with%IMF%delegation% April$5th,$2017,$http://minagro.am/2017/04/%D5%B0%D5%B0@%D5%A3%D5%B5$
Agriculture! Minister! Ignati! Arakelyan! met! with! the! head! of! an! International! Monetary! Fund! (IMF)! delegation! to! discuss! the! main! directions! of! government! policy! on! developing! agriculture! in! Armenia.! More! specifically,! the! two! sides! discussed! ways! to! make! the! state’s! subsidizing! of! agriculture! and! agricultural! areas! less! risky,! more! profitable! and! more! beneficial.! They! also! exchanged! views! on! the! promotion! of! agricultural! cooperatives,! insurance! systems! and! other! ways! to! reduce! losses! due! to! natural!disasters.! ! Minister!Arakelyan!noted!that!the!main!purposes!of!the!state’s!subsidy!program!were!to!introduce!antiS hail! nets! and! drip! irrigation! systems! as! well! as! support! a! program! of! agricultural! machinery! leasing! to! farmers!at!a!2%!per!annum!rate.!The!Ministry!is!also!working!to!subsidize!fertilizers!and!has!programs! for! granting! seeds! and! providing! superior! services! to! farmers.! The! Ministry! is! also! negotiating! with! international!donor!organizations!for!the!introduction!of!a!GIS!remote!sensing!space!system,!which!will! enable!the!sector!to!have!realistic!and!reliable!assessments!and!make!predictions!based!on!them.! ! !
Private%Sector% 8)! Armenian%tomato%exports%drastically%increase% April$26th,$2017,$http://finport.am/full_news.php?id=29449&lang=3$
The! export! of! Armenian! tomatoes! increased! nearly! 30! times! to! 36.2! thousand! tons! in! 2016,! with! earnings!increasing!14!times!to!USD!22.9!million.!Of!this,!99.4%!went!to!the!Russian!market,!an!increase! of! 31.8! times.! Tomato! processing! totaled! 298.1! thousand! tons! in! Armenia,! a! fall! of! 6.9%.! Exported! tomato! pasta! was! at! 1.2! thousand! tons,! an! increase! of! 2.4! times! yearSonSyear! and! worth! USD! 1.2! million.! ! 281.1!tons!of!tomato!pasta!was!also!imported!into!Armenia,!a!53.2%!decline!yearSonSyear.!Armenia!also! imported!195.3!tons!of!potatoes,!an!increase!of!5.4!times!and!valued!at!USD!530!thousand.!The!bulk!of! the!imported!potatoes!can!from!Turkey!(72.5%).! ! !
9)! Spayka%LLC%to%invest%USD%70%million% April$19th,$2017,$https://news.am/eng/news/385476.html$
Spayka! LLC,! a! leading! regional! agroSholding! in! Yerevan,! is! planning! to! make! USD! 70! million! in! investments! this! year! in! Armenia,! which! will! help! create! 390! new! jobs! in! the! country.! The! company! plans! on! developing! milk! production! and! processing! and! to! continue! investments! in! orchards! and! greenhouse!construction.!The!company!is!also!working!to!create!the!‘Armzone’!online!shop,!an!online! market!targeting!Russian!consumers!which!will!allows!Armenian!products!to!be!sold!in!Russia!without! intermediaries!and!supermarkets.! ! By! the! end! of! the! year,! Spayka! LLC! will! have! invested! a! total! of! USD! 154! million! in! Armenia! and! will! employ!1,316!people.! ! ! Page!4!
BFC$Agriculture$Bulletin$ $ $
10)! Processing%companies%debt%to%farmers%down% April$10th,$2017,$http://arka.am/en/news/business/armenian_processing_companies_$
As!of!April!7,!2017,!6!Armenian!processing!companies!have!completely!paid!their!debts!to!farmers!for! delivered!agricultural!products!in!2015!and!2016.!There!are!still!14!companies!which!owe!a!total!of!AMD! 452.5! million! in! outstanding! debt! to! farmers.! This! is! down! from! the! 20! processors! which! owed! more! than!AMD!1.6!billion!earlier!this!year.!The!Ministry!of!Agriculture!has!met!with!the!remaining!companies! and!has!set!up!a!debt!repayment!schedule!for!them.!The!repayment!process!is!being!administered!by! the!Ministry.! ! !
11)! DutyRfree%Turkish%produce%still%being%imported% April$5th,$2017,$https://news.am/eng/news/383025.html$
Following!a!December!2016!meeting!with!the!Ministry!of!Agriculture,!Armenian!agricultural!producers! were!assured!that!the!problem!with!the!“black”!import!of!Turkish!cucumbers!and!tomatoes!would!be! taken! care! of.! However,! the! dutySfree! import! of! the! Turkish! produce! continues! to! occur.! Agriculture! Minister! Ignati! Arakelyan! is! expected! to! discuss! the! issue! with! representatives! of! the! Association! of! Greenhouse!Facilities!of!Armenia!and!Trade!Union!of!AgroSindustrial!Sector!Workers!in!the!near!future.! ! The! Turkish! produce! should! not! threaten! Armenia’s! locally! produced! goods! if! imported! properly.! The! cost!of!transporting!the!produce!via!Georgia!coupled!with!the!VAT!should!mean!that!the!products!are!in! line!with!the!prices!of!locally!grown!varieties.!As!it!is,!however,!the!price!for!the!Turkish!products!is!half! that!of!locally!produced!ones.!This!has!led!to!a!situation!where!local!producers!must!sell!the!products!at! a! lower! price! to! “push! forward”! the! market,! even! if! this! means! taking! a! loss.! Currently,! only! large! Armenian!industrial!facilities!can!endure!such!pressure,!leaving!smaller!ones!to!suffer.! ! !
Page!5!
Prepared by Business & Finance Consulting (BFC) www.bfconsulting.com Articles are taken directly from local sources without any fact-checking; they are provided as a convenience and for informational purposes only. Business & Finance Consulting (BFC)’s editing is limited to providing a short summary in English of the texts, highlighting the main points of the original articles. All rights reserved by the authors. BFC takes no responsibility and does not make any representation or warranty, express or implied, or assume any responsibility whatsoever for the content, accuracy, and reliability, or completeness of any of the articles.