06/2018
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37 A rm e n i a Agriculture Bulletin State agricultural equipment leasing program to continue AMD 18 billion for 2018 agricultural processor subsidies FAO to continue promoting agricultural development in Armenia Armenian fruit and vegetable exports up
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Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4) 5) 6)
State agricultural equipment leasing program to continue ............................................................ 2 AMD 18 billion for 2018 agricultural processor subsidies ............................................................... 2 Committee on milk harvesting issues established .......................................................................... 2 Agricultural processing subsidy program expanding ...................................................................... 3 State considering options regarding tariff on irrigation water ....................................................... 3 New greenhouse leasing program to launch soon .......................................................................... 3
Foreign Aid ................................................................................................................. 3 7) 8) 9)
Minister Khachatryan meets with GIZ representatives ................................................................... 3 FAO to continue promoting agricultural development in Armenia ................................................ 4 Armenia, IFAD met to discuss cooperation ..................................................................................... 4
Private Sector.............................................................................................................. 4 10) 11) 12) 13) 14) 15)
Vaba LLC to construct anti-hail grid production plant .................................................................... 4 Russia imposes temporary ban on Armenian live animals .............................................................. 5 Armenian fruit and vegetable exports up ....................................................................................... 5 Gross agricultural and fishing output increases .............................................................................. 5 138 domestic vegetables varieties in local markets ........................................................................ 5 Russian association to help SMEs with agricultural exports ........................................................... 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)
State agricultural equipment leasing program to continue
June 22nd, 2018, http://minagro.am/2018/06/%d5%b7%d5%a1%d6%8
A memorandum was recently signed with financial institutions involved in the state agricultural equipment leasing program that will see that the program continues. During the first five months of 2018, 47 beneficiaries were provided with 81 units of agricultural equipment, including 35 tractors. In total, the program has provided 115 beneficiaries with 245 units of agricultural equipment, including 103 tractors and 2 combines. Under the program, agricultural equipment is provided with a 20% down payment, a 9% interest rate (7% of which is subsidized) and a repayment term of up to ten years, depending on the type of equipment.
2)
AMD 18 billion for 2018 agricultural processor subsidies
June 20th, 2018, http://finport.am/full_news.php?id=35027&lang=3
The portfolio of the program for subsidizing the interest rates of loans in the agricultural processing sector has been set at AMD 18 billion, with a maximum loan amount per borrower of AMD 1 billion. As of June 19, 2018, thirteen enterprises had submitted applications under the program to the Ministry of Agriculture, worth a total of AMD 3.06 billion. As of May 31, 2018, banks had approved two applications for AMD 489 million. Last year, 25 applications were received under the program, 20 of which were approved for a total of AMD 1.34 billion. The pilot subsidy program was launched last year. Under terms of the program, agricultural processors receive loans at a 3% per annum interest rate (with the state providing subsidies on an additional 9%). Read More Âť
3)
Committee on milk harvesting issues established
June 20th, 2018, http://minagro.am/2018/06/%d5%af%d5%bd%d5%bf%
Agriculture Minister Artur Khachatryan has met with milk processing companies and representatives of dairy farmers in order to discuss concerns and existing issues related to milk procurement, financial support, livestock productivity and long-term sector development. As a result of the meeting, an interdepartmental commission on milk harvesting issues will be set up and will include a representative from milk processing companies as well as one representing dairy farmers. At the meeting, the Minister also spoke about existing and planned livestock development programs that are designed to help milk producers. More specifically, the Minister spoke about programs for: subsidizing interest rates, the financial leasing of equipment, livestock registration and the construction of pastures and pasture irrigation systems.
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4)
Agricultural processing subsidy program expanding
June 20th, 2018, http://minagro.am/2018/06/%d5%a3%d5%b5%d5%b8%
A 2017 agricultural subsidy program is being expanded in 2018. In 2017, a partial subsidizing scheme offered agricultural processing enterprises loans with an effective 3% annual interest rate (with an additional 9% subsidized by the state) for the purchase of raw agricultural goods. Under the 2017 pilot, loans were approved for AMD 1.34 billion. In 2018, the program is being expanded to include a portfolio of up to AMD 18 billion, with a maximum loan amount to each borrower capped at AMD 1 billion. So far, 13 companies have submitted preliminary applications (for a total amount of AMD 3.06 billion) to the Ministry of Agriculture under the program, all of which have been approved.
5)
State considering options regarding tariff on irrigation water
June 13th, 2018, http://finport.am/full_news.php?id=34960&lang=3
The government has expressed concern regarding the tariff for irrigation water in Armenia. Artur Grigoryan, the Minister of Energy Infrastructures and Natural Resources, has stated that possible solutions to the issue are being considered. The current tariff for irrigation water is a heavy burden for farmers, even with state subsidy support. Minister Grigoryan noted that the government is seeking a comprehensive solution that will alleviate the burden on farmers as well as reduce the need for the state to continue to supply subsidies.
6)
New greenhouse leasing program to launch soon
June 1st, 2018, http://finport.am/full_news.php?id=34812&lang=3
A state leasing program for greenhouse farms is expected to be launched in Armenia in the near future. Within the framework of the program, beneficiaries will be able to establish new greenhouses and introduce modern equipment on favorable terms. Interest rates for program beneficiaries will be at 4% per annum. The program is expected to be approved by the government by the end of July 2018, after which it will be officially launched.
Foreign Aid 7)
Minister Khachatryan meets with GIZ representatives
June 19th, 2018, http://minagro.am/2018/06/%d6%84%d5%b6%d5%b6%
Agriculture Minister Artur Khachatryan received representatives of the German International Cooperation Agency (GIZ) in Armenia to discuss current GIZ programs in Armenia as well as further cooperation opportunities. In particular, the meeting focused on efforts in viticulture and winemaking, something the state considers to be important for Armenia. Close cooperation between GIZ and the Ministry of Agriculture have resulted in continuous support for the promotion of wine production in Armenia, including support for the Yerevan Wine Academy as well as for homemade winemakers from several provinces.
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Issues related to the creation of a grape plantation cadaster were also discussed. Once implemented, the cadaster will allow for an inventory of grape plantations and existing grape varieties in the country. It will also allow for better control over winemaking.
8)
FAO to continue promoting agricultural development in Armenia
June 6th, 2018, http://finport.am/full_news.php?id=34865&lang=3
Agriculture Minister Artur Khachatryan met with Raymond Yale of the Regional Bureau of the Food and Agriculture Organization of the United Nations (FAO) for Europe and Central Asia to discuss FAO-assisted programs being implemented in Armenia. During the meeting, Mr. Yale confirmed FAO’s readiness to continue promoting the implementation of programs aimed at the development of agriculture and communities in Armenia. For his part, Minister Khachatryan presented the priorities of the Armenian government, specifically: facilitating small-scale farming, expanding the area of cultivated land, introducing a system of drip irrigation and introducing anti-hail networks. The parties also noted the importance of unifying small- and medium-sized farms, the need to assist in the export of local agricultural products, the need for improved consulting services and the importance of developing organic agriculture.
9)
Armenia, IFAD met to discuss cooperation
June 2nd, 2018, http://finport.am/full_news.php?id=34825&lang=3
Vice Prime Minister Tigran Avinyan received a delegation from the International Fund for Agricultural Development (IFAD) to discuss prospects for cooperation. The goal of cooperation with IFAD is to help overcome poverty by assisting small farmers and the most vulnerable groups of the population, with particular attention being given to irrigation, the development of skills and the promotion of social capital. At the meeting, the Vice Prime Minister presented the priorities of government for the development of the agricultural sector as well as already-planned projects. IFAD also reaffirmed their readiness to develop and implement new joint programs with the Ministry of Agriculture. On January 31, 2018, an agreement was reached to create a working group that will include representatives of the Ministry of Agriculture, the private sector and IFAD. The working group will work to develop both short-term (2019-2020) and long-term (2019-2024) strategies for the development of agricultural production in Armenia.
Private Sector 10) Vaba LLC to construct anti-hail grid production plant June 21st, 2018, http://arka.am/en/news/business/vaba_llc_to_invest_2_5_billion
According to a recently-passed government decision, Vaba LLC will be provided with a set of customs duty benefits that will allow it to work closely with Italian company Carmac Group to build a plant for the production of anti-hail grids in Vanadzor, Armenia’s third-largest city. The plant will produce three types of anti-hail grids: for vineyards, for intensive gardens and for traditional gardens. The benefits stipulate that Vaba LLC will be exempted from the payment of VAT on imported goods for a period of three years.
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The company plans on investing AMD 2.25 billion in the construction of the plant, of which AMD 102.9 million will be for the purchase of necessary equipment. The plant will also create 24 jobs, with an average monthly salary of AMD 320,000.
11) Russia imposes temporary ban on Armenian live animals June 15th, 2018, https://ru.armeniasputnik.am/economy/20180615/12671327/russia-
Rosselkhoznadzor, Russia’s state service for veterinary and phytosanitary protection, has imposed a temporary ban on the import of all live animals from Armenia in order to protect itself from dangerous diseases. There is an exception for owners of up to two pets (dogs, cats, ferrets, minks, parrots and canaries), provided that are for personal use only and will not be sold within the Russian Federation.
12) Armenian fruit and vegetable exports up June 15th, 2018, http://arka.am/en/news/economy/some_14_700_tons_of_a
So far this year, Armenia has exported 14,752 tons of apricots, 26% more year-on-year. In total, Armenia has exported 67,294 tons of fresh fruits and vegetables, up from the 33,819 exported during the same period last year. Russian markets have received 64,178 tons of these exports, with the remaining exports going to Belarus, Belgium, Georgia, Iran, Iraq, Kazakhstan, Romania and the United Arab Emirates (UAE). According to national data, Armenia’s exports totaled USD 764.4 million for the period of January – April 2018, a 25.7% year-on-year growth.
13) Gross agricultural and fishing output increases June 9th, 2018, http://henaran.am/371003.html
In the period of January – April 2018, the gross output of agriculture and fishing amounted to AMD 143.6 billion, a 2.1% year-on-year increase. Agricultural production increased 2.2% (to AMD 129.46 billion in value), with crop production increasing 40.3% (to AMD 16.6 billion in value) and cattle breeding decreasing 3.1% (to AMD 112.8 billion in value). The fishery sector recorded an increase of 1%, amounting to AMD 13.6 billion in value.
14) 138 domestic vegetables varieties in local markets June 7th, 2018, https://www.panorama.am/en/news/2018/06/07/Armenian-potato-back-to-markets/1960758
The Ministry of Agriculture’s Scientific Center of Vegetables and Industrial Crops has been working to preserve domestic varieties of Armenian agricultural products as well as create new ones for open field cultivation. In total, the center has identified a rich assortment of approximately 400 domestic varieties, 138 of which are licensed and circulating in local markets. For example, the center currently produces and distributes to farmers a variety of domestic tomatoes, helping increase the production of domestic varieties of tomato seeds by 15-20% annually.
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15) Russian association to help SMEs with agricultural exports June 3rd, 2018, http://finport.am/full_news.php?id=34832&lang=3
The Association of Small- and Medium-Sized Exporters of the Russian Federation (ASME) is considering the creation of a structure in Armenia that would stimulate the export of Armenian agricultural products to the Russian market. ASME director, Yuri Shurygin, noted that Armenian agricultural products are wellknown in Russia for their high quality and excellent taste. The goal of the association would be to help small- and medium-sized enterprises (SMEs) in Armenia with exports, increasing the volume of Armenian products available in Russian markets.
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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.