11/2017
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30 A rm e n i a Agriculture Bulletin Joint commission studies GMO products ADB to provide USD 6 million loan to help rural Armenia French company interested in Armenian cattle breeding Cattle exports increase five-fold
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Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4) 5) 6)
ACBA-Credit Agricole Bank joins subsidy program .......................................................................... 2 State helps procure 148 units of agricultural machinery ................................................................ 2 Joint commission studies GMO products ........................................................................................ 2 Kamurdj joins subsidy program for agricultural loans..................................................................... 2 State leasing program provides 105 units of equipment ................................................................ 3 Agricultural products to be exported under one brand .................................................................. 3
Foreign Aid ................................................................................................................. 3 7) 8) 9)
ADB to provide USD 6 million loan to help rural Armenia .............................................................. 3 Pilot agricultural insurance program to launch ............................................................................... 4 WB provides additional support for Armenian irrigation................................................................ 4
Private Sector.............................................................................................................. 4 10) 11) 12) 13)
French company interested in Armenian cattle breeding............................................................... 4 Production of high-quality planting material to begin .................................................................... 4 Canned food production up 32.6%.................................................................................................. 5 Cattle exports increase five-fold...................................................................................................... 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. Read more »
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BFC Agriculture Bulletin
State Initiatives 1)
ACBA-Credit Agricole Bank joins subsidy program
November 24th, 2017, http://arka.am/en/news/business/acba_credit_agricole_bank_
The Armenian Agriculture Development Fund and ACBA-Credit Agricole Bank have signed a memorandum of cooperation as part of the ‘Program on Subsidizing Interest Rates on Agricultural Loans’. Under the program, beneficiaries are given loans in the amount of AMD 3-10 million and with an interest rate of 5% (or 3% for those in border communities receiving social assistance). Within the framework of the memorandum, ACBA-Credit Agricole Bank will assist in organizing financial literacy classes conducted by the Fund, leading to increased financial literacy in the country. So far this year, about 1,300 farmers have attended the Fund’s financial literacy courses, which aim to teach participants how to manage cash flow and how to run businesses in the most efficient way.
2)
State helps procure 148 units of agricultural machinery
November 24th, 2017, http://minagro.am/2017/11/%D5%A3%D5%B5%D5
In total, 148 units of agricultural machinery (including 62 tractors and 2 combines) have been procured with the assistance of the ‘State Support of the Financial Leasing of Agricultural Machinery’ program. Under the program, tractors, grain harvesters, collectors-presses, tractor rattles, plows, cultivators, frescoes, sprays and other agricultural machinery can be obtained for a 20% down payment and at a rate of 2% per annum for a period of 3-10 years, depending on the type of equipment.
3)
Joint commission studies GMO products
November 17th, 2017, http://finport.am/full_news.php?id=32337&lang=3
A joint commission composed of representatives from the Ministries of Agriculture, Nature Protection and Health as well as representatives of the public sector gathered to study the issue of transgenic technologies in the Armenian agriculture sphere. Specifically, the group considered issues related to genetically modified organism (GMO) production from the point of view of the bio security of the country. The representatives generally spoke in favor of legislative regulations regarding integrating transgenic technologies in Armenia's agro-sphere, including the setting of a requirement to inform consumers about GMOs in food products via appropriate labeling. The commission also underscored the need to legislatively consolidate the development of organic agriculture in Armenia.
4)
Kamurdj joins subsidy program for agricultural loans
November 9th, 2017, http://minagro.am/2017/11/%d5%bd%d5%b8%d6\
Universal credit organization Kamurdj has joined the government's initiative to issue subsidized agricultural loans. Kamurdj has branches in almost all regions of Armenia, and involving more financial structures in the program makes it possible to expand the territory of the program and create more favorable conditions for credit resources for agricultural enterprises. The expected increase in the
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BFC Agriculture Bulletin
amount of loans will also give farmers greater choice in partners and, ultimately, allow them to make more capital expenditures, helping them to more rapidly develop their own production. Kamurdj becomes the fourth institution to join the program, and there are ongoing negotiations with other institutions about joining the program.
5)
State leasing program provides 105 units of equipment
November 8th, 2017, https://www.panorama.am/en/news/2017/11/08/leasing-agricultural-machinery/1862318
The government adopted a state support program of leasing agricultural machinery in March 2017, with the main purpose of giving broader access to affordable machinery through leasing arrangements. So far, this has led 105 units of agricultural machinery having been provided to farmers within the program. Under the program, agricultural machinery can be purchased with an advanced payment of 20% at a 2% annual leasing rate for a maturity period of 3-10 years, depending on the type of machinery. It was also announced that universal credit organization SME Investments, which has financed 70 investment projects with AMD 3 billion in the past year, has signed an agreement with the Russian Direct Investment Fund to launch the Armenian-Russian Investment Fund, which will work to realize investment projects in strategic sectors of the Armenian economy.
6)
Agricultural products to be exported under one brand
November 3rd, 2017, http://minagro.am/2017/11/%d5%b6%d5%b8%d6%
The newly state-created Armenia Prod company will begin exporting Armenian agricultural products under one brand. The objective of the company is to export Armenian agricultural products to foreign markets under one brand in order to make them more presentable and recognizable in other countries. The company will brand products, organize exports, conduct marketing research abroad and hold negotiations between local small- and medium-sized agricultural producers and potential buyers.
Foreign Aid 7)
ADB to provide USD 6 million loan to help rural Armenia
November 15th, 2017, http://www.finca.am/%D5%B6%D5%B8%D6
The Asian Development Bank (ADB) and the universal credit organization FINCA have signed an agreement that will provide FINCA with a USD 6 million loan and a USD 200,000 grant for technical assistance. The loan will help FINCA expand financing opportunities for micro-, small- and medium-sized enterprises and farmers in rural areas, helping increase income and employment and reduce poverty. ADB’s technical assistance to FINCA will help to introduce a new credit scoring system and to obtain an international SMART Certificate for Client Protection in Financial Institutions.
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BFC Agriculture Bulletin
8)
Pilot agricultural insurance program to launch
November 15th, 2017, https://armenpress.am/eng/news/912459/farmers-to-be-insured-from-natural-risks-in-armenia.html
A KfW pilot program for agricultural insurance is scheduled to be launched in December of this year. The government of Germany will provide EUR 5 million in assistance for the project, while the Armenian government will allocate EUR 5 million for partial subsidies. Initially, the insurance package will cover hail, frost damage, storms and floods. In 2016, agriculture in Armenia comprised nearly 16% of GDP, with 34% of the economically active population being employed in the agricultural sector.
9)
WB provides additional support for Armenian irrigation
November 14th, 2017, http://www.worldbank.org/en/news/press-release/2017/11/14/
More than 630 Armenian farmers will benefit directly from improved water service delivery thanks to a USD 2 million loan for the ‘Additional Financing of the Irrigation System Enhancement’ project. The financing, being provided to Armenia as a result of World Bank (WB) intervention, aims to further assist government efforts to ensure efficient, cost effective and sustainable irrigation through reduced energy use and improved timing of the water supply. Expected outcomes include energy savings of about 36.4 million kilowatt hours annually, equivalent to about 30% of the total irrigation needs in Armenia. The rehabilitation of selected diversion canals will also lead to improvements in the conveyance efficiency of outlet canals by reducing water losses by about 23 million cubic meters annually. The ‘Additional Financing of the Irrigation System Enhancement’ project comes with an International Bank for Reconstruction and Development (IBRD) loan with a variable spread, a 14.5-year grace period and a repayment period of 25 years.
Private Sector 10) French company interested in Armenian cattle breeding November 17th, 2017, http://minagro.am/2017/11/%d6%86%d6%80%
Agriculture Minister Ignati Arakelyan hosted representatives of the French company Jean Paul Bois to discuss cooperation opportunities in the field of livestock, particularly within the framework of the main state program for breeding farms. Following the meeting with Minister Arakelyan, the representatives also met with representatives of a number of Armenian livestock companies. The head of Jean Paul Bois noted Armenia’s favorable geography and mountain pastures for cattle breeding. Cattle breeding is of great importance for Armenia as it makes up around 50% of Armenian agriculture.
11) Production of high-quality planting material to begin November 16th, 2017, http://henaran.am/325616.html
The government has adopted a decision which will grant the territory of Armenian Fruit OSJC to Noratqun CJSC free of charge. Noratqun plans to, among other things, establish a nursery farm, provide targeted and rational use of the land, develop appropriate infrastructure and hold production and vocational training courses. The company also plans to develop cooperation with foreign nurseries, Page 4
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scientific institutions and international organizations for the introduction of new horticultural technologies and the exchange of experience. As a result, it is envisaged to create a demonstration nursery equipped with modern technologies that will be able to produce 100,000 seedlings annually starting from 2019, with a cost of 30-50% lower than equivalent planting material imported from abroad. The company undertakes to make an investment of AMD 77 million within two years after the entry into force of the contract.
12) Canned food production up 32.6% November 13th, 2017, https://www.panorama.am/en/news/2017/11/13/Canned-vegetables-production-Armenia/1864673
Canned food production output totaled 14,629 tons in January-September 2017, a 32.6% increase from last year. A total of 7,313.7 tons of canned vegetables were produced in this period (a 75.1% year-onyear increase), and canned fruit production comprised 3,927.8 tons (a 17.8% year-on-year increase). Canned fish production was 206.9 tons (a 76.2% year-on-year increase); canned crab production was 16.5 tons (an 81.4% year-on-year decrease); and canned meat production was 319.2 tons (a 27.5% yearon-year decline). Canned tomato paste totaled 2,247.4 tons (a 12% year-on-year increase), and 328.4 tons of ketchup were produced, down from the 348.4 tons produced during the same period last year.
13) Cattle exports increase five-fold November 8th, 2017, http://novostink.ru/economics/218225-zhamanak-v-2017
In the first half of this year, cattle exports from Armenia have increased about five-fold year-on-year. In January-June of 2016, 1,400 head of cattle worth USD 550,000 were exported; in January-June of this year, 6,900 head of cattle worth USD 2.735 million were exported.
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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.