12/2017
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31 A rm e n i a Agriculture Bulletin Agricultural insurance system planned for 2018 EUR 10 million grant to improve irrigation in Armenia Organic agriculture to be included in school program Armenian exports to Russia increase 239%
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Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4)
Agricultural insurance system planned for 2018............................................................................. 2 New program to improve agricultural knowledge .......................................................................... 2 GMO-containing products to be prohibited .................................................................................... 2 Program on animal identification introduced ................................................................................. 3
Foreign Aid ................................................................................................................. 3 5) 6) 7) 8) 9) 10)
EUR 10 million grant to improve irrigation in Armenia ................................................................... 3 Armenia approves EUR 5.3 million loan from KfW ......................................................................... 3 Cooperation with FAO to expand .................................................................................................... 3 Organic agriculture to be included in school program .................................................................... 4 Donor coordination website under development........................................................................... 4 Ameriabank, FMO sign USD 30 million loan agreement ................................................................. 4
Private Sector.............................................................................................................. 5 11) 12) 13) 14) 15)
Armenian exports exceed USD 2 billion .......................................................................................... 5 Agriculture could drive Armenian economic growth ...................................................................... 5 ‘Organic Agricultural Development’ winners revealed ................................................................... 5 Armenian exports to Russia increase 239% .................................................................................... 5 Bread production declines in Armenia ............................................................................................ 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. Read more »
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BFC Agriculture Bulletin
State Initiatives 1)
Agricultural insurance system planned for 2018
December 19th, 2017, https://www.azatutyun.am/a/28927228.html
The government of Armenian has announced plans to start gradually introducing a national system of agricultural insurance next year. This is increasingly seen as a vital necessity for struggling farmers across the country as thousands of low-income villagers lose their crops each year due to hailstorms, droughts and other natural disasters, receiving little compensation for their losses. Some farmers cautiously welcomed the government plans while also warning that agricultural insurance will not work if it places a heavy financial burden on them or if it is mandatory. According to Deputy Agriculture Minister Armen Harutyunyan, the government will launch a pilot project at the end of 2018 that will insure some farmers growing fruits, vegetables or cereals against one or two types of risks. The government will subsidize the insurance premiums with a special EUR 10 million fund set up for this purpose. German development bank KfW will contribute half of that money through a grant.
2)
New program to improve agricultural knowledge
December 19th, 2017, http://finport.am/full_news.php?id=32835&lang=3
The Ministry of Agriculture and the United Nations Development Program (UNDP) are working to develop an experimental program for the sustainable development of human potential. The ‘Shares of Social Investments’ program, with a budget of USD 400,000, will target the most effective consulting companies and set clear requirements for them to meet before any payment is made. This, along with other active programs in the country, will help improve the quality of specialists and education in the agricultural sector.
3)
GMO-containing products to be prohibited
December 11th, 2017, https://news.am/eng/news/425755.html
A working group set up to ensure the biosafety of the use of genetically modified organism (GMO)containing products has determined that legislative regulations for their use in Armenia should be implemented and guided by the “principle of caution” since their complete safety has yet to be proven, meaning that the working group has essentially decided that the use of such products in Armenia should be prohibited. Members of the working group also underscored the need to increase consumer awareness in Armenia about these products, including creating informational programs for mass media distribution. Agriculture Minister Ignati Arakelyan, who chaired the working group, has called for a draft bill to be created and forwarded to all members of the group for feedback within two weeks.
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4)
Program on animal identification introduced
December 7th, 2017, http://minagro.am/2017/12/%D5%B6%D5%A5%D
The Ministry of Agriculture has developed and presented a program for the identification and registration of agricultural animals. The program was developed by the State Food Safety Service of the Ministry along with the Agribusiness and Rural Development Center and a number of international organizations. The program includes veterinary control and quality improvement. It is expected that, as a result of the program’s implementation, there will be increased animal health care and disease prevention, more efficient food safety management, cleaner breeding, greater capacity building among veterinarians and increased export opportunities. The program envisages the creation of a State Fund for the Identification of Animals, an awarenessraising campaign and a central office in Yerevan with 42 branches in the regions. During the meeting, an agreement was reached to discuss the package of the program with other donor and international organizations.
Foreign Aid 5)
EUR 10 million grant to improve irrigation in Armenia
December 19th, 2017, http://finport.am/full_news.php?id=32833&lang=3
The French Development Agency (FDA) is working with the European Union (EU) to grant EUR 10 million under the ‘Irrigated Agriculture’ program. The program is designed for three years (2018-2020) and has the goal of improving the irrigation system in the Armavir and Ararat regions. The financing will be directed to the introduction of a drip irrigation system, the laying of secondary irrigation canals and the consolidation of land. The funds will be allocated to the Agricultural Development Fund, which will be responsible for implementing the program. The program will also be linked with the program for the construction of the Vedi reservoir. It is expected that, following the implementation of the two programs, it will be possible to resolve the issue of irrigating agricultural lands in the regions.
6)
Armenia approves EUR 5.3 million loan from KfW
December 14th, 2017, http://www.armradio.am/en/2017/12/14/armenian-government
The Armenian government has approved a EUR 5.3 million loan agreement between the Armenian Ministry of Finance and KfW Development Bank. The funds will be used to support a program that hopes to develop an agricultural insurance system in Armenia. According to the agreement, the project will be financed by both Armenia and Germany.
7)
Cooperation with FAO to expand
December 12th, 2017, http://minagro.am/2017/12/%D5%A
Agriculture Minister Ignati Arakelyan met with a representative of the Food and Agriculture Organization of the United Nations (FAO) to discuss increasing the effectiveness of the FAO-supported programs in the agricultural sector. After the meeting, two memorandums on bilateral cooperation were signed. Page 3
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The first memorandum was signed under the ‘Strengthening Food and Nutrition Capacity in Selected Countries in the Caucasus and Central Asia’ program. The goal of the program is to create a favorable environment for food security and nutrition as well as increase social protection for the most vulnerable groups. Under this program, greenhouses will be built at schools to improve school nutrition and reduce malnutrition. The program will pilot different sizes of greenhouses in order to understand their effectiveness. The second memorandum was signed within the framework of the three-year ‘Conservation and Development of Breeds in Eastern European Countries’ program currently being implemented in Georgia and Ukraine. The purpose of the program is to prepare a concept for the conservation and use of genetic resources.
8)
Organic agriculture to be included in school program
December 8th, 2017, http://araratnews.am/dprocakan-tcragrum-knerarvi-organakan-gyughatntesuthyan-modul/
The European Union (EU) and the Austrian Development Agency are financing a training module on organic agriculture that will be introduced into the system of secondary vocational education in Armenia. The training module, including manuals and guidelines, is being developed in close cooperation with the Ministry of Education and Science, the National Center for Vocational Education and the best Austrian experience. The training is expected to also include collaborations with colleges, universities and farmers in order to include observations into the curriculum. The training is expected to promote the advancement of the newly emerging but competitive organic agriculture sector in Armenia as well as increase the number of highly-qualified organic specialists in the country.
9)
Donor coordination website under development
December 1st, 2017, http://times.am/?p=230828&l=am
The Ministry of Agriculture hosted a discussion with the head of the European Union (EU) delegation to Armenia and international development and finance organizations regarding the potential for an online platform for donor organizations. Such a platform would contain information on development programs, specific works being conducted and results achieved. This would help donor organizations increase coordination efforts as well as increase transparency, reduce repetition, promote compliance with government objectives and promote sustainable development goals. The Ministry of Agriculture has begun creating a website to this end and expects the site to be launched in early 2018.
10) Ameriabank, FMO sign USD 30 million loan agreement December 1st, 2017, http://www.panarmenian.net/eng/news/249411/
Ameriabank CJSC and the Dutch development bank FMO have signed a USD 30 million loan agreement. The loan, aimed at young entrepreneurs and younger retail clientele, will help increase lending to smalland medium-sized enterprises (SMEs), help develop SMEs in Armenia, increase the competitiveness of SMEs (both locally and internationally) and support job creation in Armenia. SME and retail business development is a strategic priority of Ameriabank. Page 4
BFC Agriculture Bulletin
Private Sector 11) Armenian exports exceed USD 2 billion December 20th, 2017, http://www.panarmenian.net/eng/news/250156/
In January-November of this year, exports from Armenia amounted to USD 2.013 billion, up 23.5% yearon-year and marking the first time Armenian exports topped USD 2 billion. In January-October 2017, 30% of exports were shipped to countries of the Commonwealth of Independent States (CIS), including 26.8% to Russia alone. Another major recipient of Armenian products was the European Union (EU), which imported mineral products, ready-made food products, precious and semi-precious stones and precious metals.
12) Agriculture could drive Armenian economic growth December 18th, 2017, http://arka.am/en/news/business/armenian_expert_names_sectors_which_can_secure_double_digit_growth/
Gagik Makaryan, head of the National Union of Employers, has identified agriculture as one of the sectors that has the potential to serve as a locomotive for Armenian economic growth. The expert noted that investments in agriculture would significantly expand local production as well as increase exports and develop the processing industry. In recent years, investors, including those from Gulf countries, have shown a growing interest in Armenian agriculture, particularly in the creation of greenhouses and intensive gardens.
13) ‘Organic Agricultural Development’ winners revealed December 15th, 2017, https://en.168.am/2017/12/15/22238.html
The results of the 2017-2018 ‘Organic Agricultural Development’ program being implemented by ACBACredit Agricole Bank and the Nature and Biodiversity Conservation Union of Germany (NABU) have been announced, and 15 of the 70 applicants have been chosen. It is expected that 70 new jobs will be created as a result of these selections. Priority was given to entrepreneurs that, after receiving certification, demonstrated a large potential for exporting products and creating new jobs. Priority was also given to entrepreneurs operating in border communities. The annual ‘Organic Agricultural Development’ program has been implemented since 2015 and, thus far, has supported 30 entrepreneurs in receiving organic certification and helped to create 50 new jobs. The program also provides training to project beneficiaries from German specialists.
14) Armenian exports to Russia increase 239% December 13th, 2017, http://times.am/?p=231843&l=am
Armenia's exports to Russia in January-October 2017 amounted to USD 428 million, a 239% increase as compared to 2015. The total commodity turnover between Armenia and Russia in January-October 2015 amounted to USD 989.7 million; in the same period of 2017, it amounted to USD 1.34 billion. This includes exports to Russia increasing from USD 179 million in 2015 to USD 428 million this year as well as imports from Russia increasing from USD 810 million to USD 908.6 million this year. In 2017, 62% of the Armenian goods exported to Russia were agricultural products. Page 5
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15) Bread production declines in Armenia December 4th, 2017, https://www.panorama.am/en/news/2017/12/04/Bread-production-Armenia/1873849
226,800 tons of bread were produced in January-October 2017, a 2.4% year-on-year decline. Flour production also decreased to 135,200 tons, a 3.1% year-on-year decline. At the same time, the production volumes of confectionary goods increased 16.9% to a total of 14,628 tons. Pasta production volumes also increased from last year’s 2,662 tons to 2,708 tons this year.
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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.