04/2018
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35 A rm e n i a Agriculture Bulletin State subsidy program for agricultural equipment has begun USD 10.6 million grant for agriculture and tourism
Armenia’s organic potential is great
Latest generation of greenhouse built in Armenia
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Contents State Initiatives ........................................................................................................... 2 1) 2) 3)
State subsidy program for agricultural equipment has begun ........................................................ 2 Possible ban on GMO imports ......................................................................................................... 2 Government to mandate use of agricultural land ........................................................................... 2
Foreign Aid ................................................................................................................. 3 4) 5) 6) 7)
President signs IBRD loan agreement into law................................................................................ 3 OASI video features organic apiculture in Armenia ........................................................................ 3 USD 10.6 million grant for agriculture and tourism ........................................................................ 3 FAO launches dairy sector development project ............................................................................ 3
Private Sector.............................................................................................................. 4 8) 9) 10) 11) 12) 13)
Armenian producers take part at Food and Hotel Asia 2018 .......................................................... 4 Armenia’s organic potential is great ............................................................................................... 4 Latest generation of greenhouse built in Armenia ......................................................................... 5 Drastic rise in fruit and vegetable exports ...................................................................................... 5 Agriculture needs support, not protection ..................................................................................... 5 A decade of agricultural development ............................................................................................ 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)
State subsidy program for agricultural equipment has begun
April 17th, 2018, http://minagro.am/2018/04/903-%d5%b7%d5%
The implementation of a new state program subsidizing the acquisition of equipment for the processing of agricultural products and the construction of greenhouses and dryers has begun. Under the program, loans of between AMD 3 million and AMD 10 million will be provided at a rate of 4% per annum to business entities. In the fourth quarter of 2017, 913 farms were provided a total of AMD 4.24 billion under the state program subsidizing agricultural loans. For 2018, AMD 9.40 billion is planned for 2,100 beneficiaries. AMD 2.03 billion of this amount will be allocated from the state budget for subsidizing interest rates.
2)
Possible ban on GMO imports
April 10th, 2018, http://finport.am/full_news.php?id=34273&lang=3
Armenian officials in the Ministry of Agriculture and the State Service for Food Safety are working together to develop a legislative package to regulate and restrict the import of genetically modified products into the country. Legislation would also restrict the import of the seeds of genetically-modified organisms (GMOs). Officials are also examining the possibility of creating buffer zones for such imported products in order to allow for research on them to continue within the country. A working commission is also planned for mid-November to examine transgenic technologies in the agro-sphere. Commission members will be from the Ministry of Agriculture, state services in the spheres of natural protection and public health, public organizations and scientists.
3)
Government to mandate use of agricultural land
April 9th, 2018, http://finport.am/full_news.php?id=34252&lang=3
The Ministry of Agriculture is moving forward with a legislative initiative aimed at the mandatory use of agricultural land. The proposed legislation would allow for the full use of unprocessed land based on leases that will also not deprive land owners of their ownership rights. Agriculture Minister Ignati Arakelyan also noted that it is important for smaller farmers to group together to take advantage of financial opportunities such as the state program for the leasing of agricultural equipment in order to maximize agricultural production and profitability. The agricultural sector has recorded a decline for two consecutive years. Minister Arakelyan believes that the push to use currently unused agricultural land as well as efforts to bring modern equipment to the sector will enable agriculture to once again begin to grow in 2018.
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BFC Agriculture Bulletin
Foreign Aid 4)
President signs IBRD loan agreement into law
April 27th, 2018, https://armenpress.am/eng/news/931639/
President Armen Sarkissian signed into law a bill ratifying a loan agreement between Armenia and the International Bank for Reconstruction and Development (IBRD). The agreement is for USD 2 million in additional funding for irrigation improvements in the country and was first signed on November 20, 2017, with parliament approving the loan agreement earlier in April 2018. This agreement amends a 2013 loan agreement for funding to improve irrigation systems in the country, which provided USD 30 million as a loan to Armenia and an additional USD 7.5 million in co-financing for the improvement of the mechanical irrigation systems. The additional USD 2 million approved by the more recent agreement, however, is for a completely new program of irrigation improvements.
5)
OASI video features organic apiculture in Armenia
April 19th, 2018, https://www.euneighbours.eu/en/east/stay-informed/news/video
The Organic Agriculture Support Initiative (OASI) has produced a video showcasing the results of promoting organic beekeeping in the Armenia. Organic honey production represents an opportunity for Armenia and has the potential to make Armenian beekeepers and honey producers competitive in international markets. OASI, launched in September 2015, has supported 46 projects pioneering organic agricultural methods in beekeeping, horticulture and the harvesting of natural products. It is also providing assistance to revise legislation on organic agriculture and other similar regulatory documents. The project is expected to continue until August 2018 and is being financed by the European Union (EU) and the Austrian Development Agency.
6)
USD 10.6 million grant for agriculture and tourism
April 5th, 2018, http://arka.am/en/news/business/usa_to_provide_armenia_with
The government of Armenia has approved an agreement with the government of the United States that will help Armenia’s private sector become more competitive and diverse. As part of the agreement, the United States will provide a USD 10.6 million grant that will be used to finance United States Agency for International Development (USAID)-sponsored projects aimed at developing infrastructure projects in agriculture and tourism. Since 2010, the United States, via USAID-sponsored projects, has provided USD 73.2 million to Armenia in financial assistance.
7)
FAO launches dairy sector development project
April 4th, 2018, http://www.fao.org/armenia/news/detail-events/en/c/1113858/
The Food and Agriculture Organization of the United Nations (FAO) has launched the new ‘Improving Feed Supply and Enhancing Processing in the Armenian Dairy Sector’ project in Armenia that is designed to help dairy operations in the country take a substantial leap forward. The overall goal of the dairy project is to enhance the productivity of the dairy sector (via improved feed resources) and to support Page 3
BFC Agriculture Bulletin
dairy processing (via better-targeted investments). The project will address strategic development of the dairy value chain, from top to bottom. FAO has also introduced the new Development Coordination Framework Platform, which was developed within the framework of the European Neighborhood Program for Agriculture and Rural Development (ENPARD). The platform is designed for donors active in Armenia and brings them together with all actors in the agricultural sector. Specifically, the platform allows agricultural actors in Armenia to present their businesses, projects and publications to donors. It will help ensure both transparency and visibility in the field.
Private Sector 8)
Armenian producers take part at Food and Hotel Asia 2018
April 26th, 2018, http://finport.am/full_news.php?id=34413&lang=3
The Japanese Development Agency and the National Small- and Medium-sized Enterprise Development Center supported the participation of five Armenian producers in Food and Hotel Asia 2018, Asia’s largest international goods and services exhibition. This is the first time Armenian producers have taken part in the exhibition. Armenia was represented by companies engaged in the production of dried fruits, natural teas, pinecone syrups, canned goods and juices. During the exhibition, Armenian representatives met with the executive director of the Cooperation Organization of Singapore to discuss possible areas for future cooperation, experiences regarding assistance mechanisms for SMEs and ways to establish cooperation between Armenian and Singaporean travel agencies.
9)
Armenia’s organic potential is great
April 16th, 2018, http://finport.am/full_news.php?id=34340&lang=3
Despite the fact that organics make up only 0.01% of total agricultural volume, the potential for organics in Armenia is great both abroad and domestically. In terms of export potential, Armenian organic producers have, this year, signed export contracts worth EUR 200,000, resulting in Armenian organic products such as dried fruits, fruits, honey, olive oil and teas being exported to European markets, the United Arab Emirates and the United States, among others. Moreover, exports of organics should continue to expand as many Armenian organic producers have recently participated at the largest international exhibition of natural and organic products, which was held in London in late April 2018. Domestically, there is a low level of awareness about the benefits of organic production. This, however, is starting to change as there has been a growth in organic consumption domestically in recent years and the space dedicated to organics in stores is growing. The development of organic agriculture in Armenia is being supported by the Organic Agriculture Support Initiative (OASI) of the Austrian Development Agency as well as a planned 2020 government program designed to support transitions from traditional production to organic production, increase organic production, develop new export markets and provide products for domestic consumption. The government program is being supported by EUR 3.3 million, of which EUR 2.8 million is being provided by the European Union (EU) and EUR 0.5 million is being provided by the Austrian Development Agency.
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10) Latest generation of greenhouse built in Armenia April 11th, 2018, http://minagro.am/2018/04/%d5%b0%d5%a1%d5%b5-%d6%
The company Spike has constructed the latest generation of greenhouse on a 20-hectare area in Armenia, with plans to export the agricultural products grown there to European markets. While visiting the new greenhouse, Agriculture Minister Ignati Arakelyan noted that the company has a solid experience in greenhouse farming, in rapidly increasing capacity and in cooperating with international partners. The Agriculture Minister reiterated that the development of greenhouses in Armenia is important for the country’s agricultural sector. He also announced the government’s plan to introduce a new leasing program this year for the construction of small greenhouses, which will allow family farms to increase their income-generating activities.
11) Drastic rise in fruit and vegetable exports April 11th, 2018, http://minagro.am/2018/04/%d5%ba%d5%bf%d5%b8
As of April 11, 2018, Armenia has exported 34,875 tons of fresh fruits and vegetables in 2018, 22,828 tons more than during the same period in 2017. The majority of the fruit and vegetable exports were to Belarus, Belgium, Georgia, Romania, Russia and the United Arab Emirates.
12) Agriculture needs support, not protection April 11th, 2018, http://arka.am/en/news/business/armenian_agriculture_needs_benefits_not_protectionism/
Despite government efforts, many Armenian farmers still face challenges in continued development. Key among these challenges is marketing and overly-complicated taxation. Mary Nikoghosyan, co-chair of the Agricultural Alliance of Armenia, argues that assistance in the marketing of products and simplified taxation will enable farmers to better plan for the future and focus more on urgent problems when they appear. To accomplish this, support is needed beyond just government loans and subsidies. Rather, in order to fully resolve the issues Armenian farmers face, representatives of the agricultural sector need to directly be involved in legislative activities. To this end, the Agricultural Alliance of Armenia has joined an initiative (The Council for Cooperation of Small and Medium-Sized Enterprises) of business and industry bodies under Parliament. It is important that the council not push for the protection of domestic markets or bans on imports. Instead, the council needs to push for support that will enable Armenian agricultural production to compete both domestically and internationally. One such way is to hold regular agricultural fairs that are independent from second-hand dealers.
13) A decade of agricultural development April 10th, 2018, https://armenpress.am/eng/news/929361/
In 2017, agricultural exports were valued at AMD 308 billion, highlighting a decade in which the volume of exported agricultural products has grown ten-fold. Moreover, the share of agriculture in GDP reached 22%. This growth has also been supported by an influx of modern technologies that have allowed producers to grow products in more efficient ways, such as in greenhouses. Additionally, large sums have been allocated over the past decade to implement infrastructure projects such as new and rehabilitated irrigation systems and anti-hail nets. All of these efforts have led to greater stability in terms of the quantity and quality of production as well as the country transitioning to a model of industrial agriculture. 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.