06/2017
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25 A rm e n i a Agriculture Bulletin Government approves USD 200 million investment project Agricultural export coordinating entity to be created Japan to fund agricultural data digitization program Agricultural insurance pilot to start in 2018
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Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4) 5) 6)
Plan for Lake Sevan to provide extra irrigation water ..................................................................... 2 Domestic meat sales to be only through slaughterhouses ............................................................. 2 Government approves USD 200 million investment project .......................................................... 2 5% annual agricultural production increase planned...................................................................... 3 Agricultural equipment received under state program .................................................................. 3 Agricultural export coordinating entity to be created .................................................................... 3
Foreign Aid ................................................................................................................. 4 7) 8)
Agriculture Minister Arakelyan meets with SDC delegation ........................................................... 4 Japan to fund agricultural data digitization program ...................................................................... 4
Private Sector.............................................................................................................. 4 9) 10) 11) 12) 13) 14) 15)
Agricultural insurance pilot to start in 2018 .................................................................................... 4 5,000 tons of apricots exported in 2017 ......................................................................................... 5 Chinese markets open for Armenian honey.................................................................................... 5 80% of land in Armenia suffers from degradation .......................................................................... 5 Apiculturists call for greater government support .......................................................................... 5 Ten canneries still owe AMD 187 million to farmers ...................................................................... 6 Agricultural exports to the Middle East set to flourish ................................................................... 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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BFC Agriculture Bulletin
State Initiatives 1)
Plan for Lake Sevan to provide extra irrigation water
June 23rd, 2017, http://arka.am/en/news/economy/government_seeks_to_increase_release_of_irrigation_water_from_lake_sevan_by_100_mil lion_cubic_meters/
The government of Armenia approved a set of amendments that, if approved by Parliament, would allow an extra 100 million cubic meters of water to be pumped from Lake Sevan into the irrigation system. This is in addition to the 170 million cubic meters already permitted by law. Currently, the volume of water in the irrigation reservoirs is 207 million cubic meters less than in 2016, and it is expected that the additional water from Lake Sevan would help save AMD 1 billion in pumping costs this year. The additional release of water would not affect the lake’s ecosystem as its level is 18 centimeters higher than one year ago and the release of water would only decrease the lake’s level by approximately 8 centimeters. Lake Sevan is the main source of drinking water in the region and, at an altitude of 1914 meters, is one of the largest high-mountain lakes in Europe and Asia.
2)
Domestic meat sales to be only through slaughterhouses
June 23rd, 2017, http://finport.am/full_news.php?id=30292&lang=3
Armenia’s State Food Safety Agency has announced that, beginning on July 1, 2018, the sale of all domestic meat must be made through slaughterhouses, with the slaughter of domestic animals in streets and yards no longer allowed. This will ensure greater sanitary and hygienic standards are met within the sector. Currently, there are 15 slaughterhouses in the country; however, the Agency plans to aid in the construction of more to ensure that there are enough slaughterhouses to meet the needs of all regions in country, both in terms of buying cattle from farmers and in terms of having enough meat products to satisfy demand.
3)
Government approves USD 200 million investment project
June 23rd, 2017, http://araratnews.am/karavaruthyuneh-havanuthyun-e-tvel-spayka-i-nerdrumayin-tcragrin/
The government has approved an investment project which was proposed by Spayka and ArmSanpodact LLC. The project calls for the construction of a 110-hectare semi-annual greenhouse complex and mildew cheese plant on the territory adjacent to Noragavit district. At the request of the investing companies, 163.2 hectares of community-owned land located in the area adjacent to Noragavit district will be expropriated for the implementation of the project. An investment of over USD 200 million is envisaged, and the factory is expected to have an annual capacity of 1,000 tons of molded cheese. This will create more than 1,300 permanent jobs, expand production and increase export volumes.
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BFC Agriculture Bulletin
4)
5% annual agricultural production increase planned
June 20th, 2017, http://finport.am/full_news.php?id=30215&lang=3
The government of Armenia has submitted a plan to Parliament for 2017-2022. During this time, the government plans to take measures designed to help Armenian agricultural production increase 5% each year. According to the plan, the government intends to implement a number of programs such as: a program to ensure the availability of a wide range of fertilizers for farmers; a program of state action to create intensive orchards; a cattle-breeding program, including the creation of four large breeding farms; and a large-scale vaccination program. The government also intends to increase the modernization of agricultural machinery by re-equipping the state agricultural park by the end of 2017 and working with the private sector to create machine and tractor stations. During 2018-2022, the government proposes to implement a program on subsidizing loans for the introduction of drip irrigation systems on 10,000 hectares of land as well as for the implementation of anti-hail networks on terms that are accessible to farmers.
5)
Agricultural equipment received under state program
June 9th, 2017, http://minagro.am/2017/06/%d5%a3%d5%b5%d5%b8
In late March, Armenia began accepting applications for the purchase of agricultural equipment through leasing. According to a program approved by the government, farmers will have opportunity to purchase agricultural machinery through leasing at a rate of 2% per annum, with another 7% subsidized by the state. As of now, 17 tractors and 8 other pieces of agricultural equipment have been received as part of the program. Additionally, 13 applications have been approved and another 19 are under consideration. At present, credit organizations Investments in Small and Medium Business, Card Agro Credit and AGBA Leasing are involved in the implementation of the program. The government is also studying the investment program of two companies that are interested in creating machine and tractor stations throughout the country for a total cost of AMD 350 million.
6)
Agricultural export coordinating entity to be created
June 7th, 2017, http://finport.am/full_news.php?id=30035&lang=3
The Ministry of Agriculture is planning to launch a new pilot project by the end of 2017 which will establish a separate entity to coordinate the export of agricultural production. The goal of the entity will be to support agricultural processing enterprises in expanding and promoting Armenian agricultural products in external markets by consolidating and creating entire export supply chains, from production to entry into foreign markets. Products will be manufactured under one single brand but will also be marked with the label of manufacturing company. Once the new entity becomes self-sustainable, government authorities will step aside to let the entity operate independently. Government authorities also plan to support the measure by providing assistance for bringing the production of small- and medium-sized businesses into accordance with international standards.
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BFC Agriculture Bulletin
Foreign Aid 7)
Agriculture Minister Arakelyan meets with SDC delegation
June 27th, 2017, http://minagro.am/2017/06/%D5%B7%D5%BE
Agriculture Minister Ignati Arakelyan met with a delegation from the Swiss Agency for Development and Cooperation (SDC) to discuss SDC’s support for Armenia’s agricultural sector. At the meeting, Minister Arakelyan highlighted the effects of SDC projects in Armenia, emphasizing both the satisfaction Armenian companies have expressed with SDC support and the increase in domestically-produced highquality cheese. The Minister also noted the positive work done in regards to registering and tagging livestock in the country. From the SDC side, Elisabet von Kapellere, head of the delegation, reiterated the Agency’s support for helping the private agricultural sector develop and its interest in implementing new investment projects. The Swiss side also expressed its readiness to support production, especially in regards to improving the quality and quantity of dairy and meat exports.
8)
Japan to fund agricultural data digitization program
June 16th, 2017, http://minagro.am/2017/06/23942/
Agriculture Minister Ignati Arakelyan met with the Japanese Ambassador to Armenia, Hagia Tegucchi, and representatives of the World Bank to discuss the ‘Agricultural Policy Monitoring and Evaluation Capacity Development Program’, which is scheduled to launch in September of this year. The program seeks to help Armenia develop a system of geographical digitalization which includes the analysis of space imagery, remote sensing, spectral analysis, damage assessment and agricultural data collection (land status, cultivated lands, water resources, types of crops grown, etc.). The program is being supported by a USD 1.8 million grant from the government of Japan via the World Bank. For his part, Minister Arakelyan expressed gratitude to Japan and the World Bank for helping support Armenia’s desire to digitize all indicators and data related agriculture and create an aggregated agricultural database for the development of the agricultural sector. The Japanese Ambassador noted that the launch of this project is a very important step for the development of Armenian agriculture and is seen as an important part of Japan’s mission to support Armenia’s social and economic development.
Private Sector 9)
Agricultural insurance pilot to start in 2018
June 29th, 2017, http://times.am/?p=217874&l=am
Last year, agricultural losses from natural disasters amounted to an estimated AMD 32-36 billion. In order to help alleviate such losses in the future — both for the private sector and for the government, the Ministry of Agriculture is planning the launch of a three-year pilot agricultural insurance program. Although the program is scheduled for launch in 2018, Agriculture Minister Ignati Arakelyan has promised to try to push the pilot’s start to be earlier. Natural disasters, on average, affect less than 5% of agricultural production per year, creating favorable conditions for insurance companies to offer agricultural insurance products.
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BFC Agriculture Bulletin
10) 5,000 tons of apricots exported in 2017 June 26th, 2017, https://armenpress.am/eng/news/896455/apricot-export-process-go
So far in 2017, Armenia has exported 5,000 tons of apricots, 3,000 tons of which were exported during the last 2 weeks of June. The Russian Federation is the main importer of the Armenian apricots, with only 129 tons being imported to other countries (128 tons by Georgia and 1 ton by the United Arab Emirates). Although apricot exports are going smoothly overall, prices are lower this year due to a 10day delay in the start of the season this year, which has allowed competing apricots from Uzbekistan and other countries to enter the Russian market and drive down prices.
11) Chinese markets open for Armenian honey June 24th, 2017, http://en.aravot.am/2017/06/24/196079/
In a visit to Tavush province, Roza Tsarukyan, president of the Beekeeping Federation of the Republic of Armenia, confirmed that China has opened its borders to Armenian-produced honey via partnerships with Chinese businesses. It is expected that the Armenian embassy in China will help support this by disseminating information on the quality and price of Armenian honey to potential Chinese partners. Ms. Tsarukyan also noted during her visit that Armenian honey is in great demand in the United Arab Emirates.
12) 80% of land in Armenia suffers from degradation June 16th, 2017, http://shamshyan.com/hy/article/2017/06/16/1070090/
At a meeting of the United Nation’s Convention on the Fight against Desertification, Armenian national coordinator Ashot Vardevanyan spoke of both the positive and the negative trends regarding land degradation in Armenia. On the positive side, Vardevanyan noted that 5,000 more hectares of perennial gardens have been planted, providing a stable income for many locals. On the negative side, Vardevanyan pointed out that arable land has decreased in the country, forests have been reduced by 6,000 hectares and industrial land has decreased by around 8,000 hectares. Moreover, 80% of land has been subjected to varying degrees of degradation, affecting their biological and economic properties. The largest issue is that around half (220,000 hectares) of all arable land in the country is susceptible to water erosion.
13) Apiculturists call for greater government support June 13th, 2017, http://arka.am/en/news/business/nearly_half_of_armenian_bee_colonies_die_every_year/
The National Union of Beekeepers of Armenia is appealing to the government to help reinvigorate their industry. In particular, they are calling for help on three main fronts: (1) improving all factors to meet European Union (EU) quality standards, (2) growing and maintaining a healthy bee population and (3) providing investments in modern technology. In regards to growing and maintaining a healthy bee population, nearly half of the bees in Armenia die each year due to disease, chemicals used to treat fields and frequencies used by cellular operators which interfere with bees’ navigation and communication. The Union would like the government to provide funding and appropriate regulations to overcome these issues and bolster the bee population. Moreover, they are calling for support in obtaining modern equipment that will increase production quality and quantity. The Union feels that, once these issues are overcome, apiculture and Armenian honey can once again rise to great levels and become an important industry in the country. Page 5
BFC Agriculture Bulletin
It should be noted that, in 2016, Armenian beekeepers produced a total of 3,500 tons of honey, with the annual output of one bee colony at 7-10 kilograms. This is down from 30-40 kilograms per bee colony produced during the Soviet times.
14) Ten canneries still owe AMD 187 million to farmers June 7th, 2017, http://arka.am/en/news/business/armenian_canneries_still_owe_187_million_drams_to_farmers/
According to Deputy Agriculture Minister Robert Makaryan, ten Armenian fruit and vegetable canneries still owe AMD 187 million to local farmers. AMD 50 million is owed for fruits and vegetables purchased in 2015, with AMD 137 million owed from fruits and vegetables purchased in 2016. The Ministry has been working with these companies on a daily basis and expects the debt to be fully repaid in the near future.
15) Agricultural exports to the Middle East set to flourish June 5th, 2017, http://finport.am/full_news.php?id=29992&lang=3
Economic Minister Suren Karayan has signed a memorandum of understanding with Norair Aghayan, director of Janfida Agri Holding. The memorandum is aimed at organizing the export of Armenian agricultural production to the Middle East as well as the promotion of Armenian brands there. Janfida Agri Holding plans on exporting at least 500-600 tons of agricultural products from Armenia to Gulf countries. In particular, the company sees a huge potential for Armenian agricultural products of high quality in the United Arab Emirates (UAE) market. The two sides also discussed organizing more transportation to Gulf countries for potential exporters to use, including the possibility of transportation by cargo plane. According to the National Statistics Service data, the foreign trade turnover of Armenia with the UAE in 2016 was USD 199.3 million, an annual growth for 2.3 times. More specifically, exports grew 7 times to USD 63.8 million. In the first quarter of 2017, foreign trade turnover between the two countries increased 2.7 times year-on-year to USD 43.9 million.
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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.