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14 A rm e n i a Agriculture Finance Bulletin Agriculture Minister and World Bank Delegation Discuss CARMAC Projects Solar Greenhouse in Shirak Province Funded with Romanian Assistance Armenia has Exported 18,268 Tons of Apricots so far this Year New Agricultural Fairs Opened in Yerevan
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Agriculture Finance Bulletin Edition #14, July 2016
Contents State Initiatives ........................................................................................................... 2 1) 2) 3)
Armenian Agriculture Minister Receives Iranian Delegation .......................................................... 2 Agriculture Minister and World Bank Delegation Discuss CARMAC Projects ................................. 2 Import Substitution Policy under Development in Armenia ........................................................... 2
Foreign Aid ................................................................................................................. 3 4) 5)
New Initiative to Strengthen the Armenian Financial Sector .......................................................... 3 Solar Greenhouse in Shirak Province Funded with Romanian Assistance ...................................... 3
Private Sector.............................................................................................................. 3 6) 7) 8) 9) 10) 11) 12) 13)
Armenia has Exported 18,268 Tons of Apricots so far this Year ..................................................... 3 Raspberry Festival Coming to Aragatsotn ....................................................................................... 3 New Agricultural Fairs Opened in Yerevan ...................................................................................... 4 Armenian-Russian Trade Turnover has Grown 10% so far in 2016 ................................................. 4 Armenian Grape Production Soars, but its Future is Unclear ......................................................... 4 Thawed Russian-Turkish Relations may Hurt Armenian Grape Exports ......................................... 4 Whitefish Population in Lake Sevan can be Increased in 2-3 Years ................................................ 4 Egg Exports Hindered by the Cost of Feed ...................................................................................... 5
Note: The Agriculture Finance Bulletin presents a monthly roundup of headlines and news stories related to investments and financing flows 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. BFC Max-Högger-Strasse 6 CH-8048 Zurich, Switzerland
Phone: +41 44 784 22 22 Fax: +41 44 784 23 23
info@bfconsulting.com www.bfconsulting.com
BFC Agriculture Finance Bulletin
State Initiatives 1)
Armenian Agriculture Minister Receives Iranian Delegation
July 28th, 2016, http://finport.am/full_news.php?id=25617&lang=3
Armenian Agriculture Minister Sergo Karapetyan met with a delegation from Iran to discuss the expansion of bilateral cooperation in the field of agriculture. Tehran is currently seeking an entrance way into the Eurasian Economic Union (EEU) markets and sees Armenia as a strong ally in accomplishing this goal. Minister Karapetyan has suggested establishing joint ventures between the two countries and is ready to fully support initiatives that boost Armenian-Iranian cooperation. The two countries have developed a dynamic relationship in recent years, and visa-free travel has also been an aid to agricultural cooperation.
2)
Agriculture Minister and World Bank Delegation Discuss CARMAC Projects
July 22nd, 2016, http://minagro.am/2016/07/%
Armenian Minister of Agriculture Sergo Karapetyan met with a World Bank delegation to discuss the CARMAC 1 and 2 programs. The Minister noted that the implementation of the Community Agricultural Resource Management and Competitiveness programs has contributed to the development of the livestock sector in Armenia and that the second phase of the project will seek to ensure sustainable development in the sector. During the meeting, various aspects of the program were discussed including the importance of strengthening the capacity of veterinary services and the possibility of restructuring viticulture against Phylloxera.
3)
Import Substitution Policy under Development in Armenia
July 15th, 2016, http://finport.am/full_news.php?id=25536&lang=3
Armenian Economy Minister Artsvik Minasyan is working towards the development of an import substitution policy with respect to all commodities which can be produced in Armenia. The Minister stressed the need to speed up efforts towards import substitution in Armenia, but in a way that it is part of a larger, economic development model that ensures that goods can and will be produced in Armenia. While the policy is being developed, there are discussions of the possible application of non-tariff regulation measures; however, Minasyan noted that a simple ban on other imports would be ineffective due to the same goods easily entering via the EEU markets without customs duties. The idea of such a policy was conceived following an April protest that sought to ban the import of Turkish goods and see contributions to production development in Armenia. In 2015, the trade turnover between Armenia and Turkey dropped over 40%.
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BFC Agriculture Finance Bulletin
Foreign Aid 4)
New Initiative to Strengthen the Armenian Financial Sector
July 13th, 2016, http://finport.am/full_news.php?id=25499&lang=3
IFC, a member of the World Bank Group, is partnering with IAB International Academy of Business to help Armenian banks strengthen risk management systems in order to better provide much-needed finance to Armenian businesses. Given increased volatility, it can no longer be assumed that financial institutions will continue operating as they used to in the past, and additional measures are required to help develop the foundation of the Armenian financial sector and support its growth. To that end, IFC and IAB will be launching a series of workshops for banks on risk management and non-performing loans (NPLs) over the next 12 months which will reinforce the stability of the financial institutions and prevent further NPLs. The initiative also aims to help financial institutions introduce innovative solutions for small and medium enterprises (SMEs), helping banks to expand this line of business and increase lending to smaller businesses. The efforts also aim to help Armenian financial institutions understand their capital adequacy models, especially important in light of increased minimum capital regulatory requirements. Armenia became an IFC member in 1995. Since then, IFC's long-term investment commitments have totaled USD 340 million.
5)
Solar Greenhouse in Shirak Province Funded with Romanian Assistance
July 1st, 2016, https://armenpress.am/eng/news/853045/solar-greenhouse-to-be-built-in-shirak-province-by-romanianassistance.html
Romania is providing USD 60,000 for the construction of a solar greenhouse in the Shirak Province as part of a United Nations Development Program project. The project aims to aid small Armenian communities with limited opportunities to be able to grow food products for their own needs. A single greenhouse’s production can serve the needs of an entire village of a few hundred people.
Private Sector 6)
Armenia has Exported 18,268 Tons of Apricots so far this Year
July 28th, 2016, http://minagro.am/2016/07/%D
As of July 28, 18,268 tons of apricots have been exported from Armenia, down from the 20,160 tons at the same time last year. Russia, Georgia and Belarus are the main importers of Armenian apricots.
7)
Raspberry Festival Coming to Aragatsotn
July 28th, 2016, http://arka.am/en/news/society/raspberry_festival_to_be_held_in_armenia_/
A regional festival of raspberries will take place on July 30 in Armenia’s Aragatsotn province. Raspberry producers from different communities will gather to treat participants to their alpine raspberries, and companies and individuals will have a chance to purchase raspberries directly from farmers and exchange contacts for future procurement, encouraging domestic producers and spurring economic development.
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BFC Agriculture Finance Bulletin
8)
New Agricultural Fairs Opened in Yerevan
July 20th, 2016, http://minagro.am/2016/07/%d
Two new agricultural fairs have opened this summer in Yerevan and are allowing thousands of farms from various provinces to sell 40 – 50 tons of their own products to end consumers daily. In order to facilitate this relationship between farms and community, farms have free participation in the fairs and are provided with stalls and trolleys at no cost.
9)
Armenian-Russian Trade Turnover has Grown 10% so far in 2016
July 8th, 2016, http://finport.am/full_news.php?id=25433&lang=3
So far in 2016, the trade turnover between Armenia and Russia has grown by 10% and totals USD 450 million, with Armenian exports topping the USD 125 million mark. Russia remains one of Armenia’s main trader partners, and the two sides are continuing talks to deepen cooperation in fields such as energy, transportation, and agriculture.
10) Armenian Grape Production Soars, but its Future is Unclear July 8th, 2016, http://en.a1plus.am/1240566.html
According to Avag Harutyunyan, President of the Union of Winemakers of Armenia, Armenia’s grape harvest is expected to be the highest in the last 3-4 years. Despite this increase in grape yield, factories which purchase grapes are expected to need only around 90% of the harvest. Moreover, Russia’s development of a major winegrowing program threatens to further decrease the Armenian grape market with a decreased demand for cheap, Armenian wine in the Russian market. Mr. Harutyunyan noted that it is time for Armenia to carve out a role for itself in the high-quality, high-price market in order to gain more footing in European markets.
11) Thawed Russian-Turkish Relations may Hurt Armenian Grape Exports July 6th, 2016, http://arka.am/en/news/business/thaw_in_russia_turkey_relations_may_strike_at_armenian_grape_exports_/
Lifting of Russian economic sanctions against Turkey may spell a decreased role for Armenian agricultural exports to Russia, particularly for grape exports. Turkey supplied grapes in huge quantities prior to the sanctions, and Armenian exporters quickly stepped in to help fill the void once Russia imposed economic sanctions against Turkey, exporting 5,000 tons to Russia in 2015 and expecting double or triple that amount this autumn. Anti-Turkish sanctions are expected to come to an end at some point this autumn.
12) Whitefish Population in Lake Sevan can be Increased in 2-3 Years July 6th, 2016, http://arka.am/en/news/business/population_of_whitefish_in_armenia_s_largest_lake_can_be_increased_several_times_in_2 _3_years_expert/
The population of whitefish in Armenia’s largest lake, Lake Sevan, can be increased over the next two to three years with active government cooperation that includes a 12-month ban on commercial fishing and increased anti-poaching enforcement. Bardukh Gabrielyan, director of the Zoology and Hydroecology Research Center, noted that, with these measures and the whitefish’s high reproduction Page 4
BFC Agriculture Finance Bulletin
rate, there will be an increase in the commercial reserve of whitefish up to one thousand metric tons, which can be followed by partial catching under strict control. According to a joint Armenian-Russian study, the lake had more than 10,700 tons of commercial fish reserve in 1983. It had dropped to 625 tons by 2005 and 253.6 tons by 2006. The last estimate, in 2010, was 300 tons of commercial fish reserve.
13) Egg Exports Hindered by the Cost of Feed July 4th, 2016, http://news.am/eng/news/335375.html
Exports of eggs produced in Artsakh (Nagomo-Karabakh) are about twice as expensive to produce as their Russian counterparts due to the cost of importing chicken feed from Russia. The Protection of Economic Competition of Armenia (SCPEC) is actively searching for solutions that will help expand business opportunities for domestic producers.
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Prepared by Business & Finance Consulting (BFC) www.bfconsulting.com In this bulletin, BFC provides extracts from articles that have been published by others and as a result cannot be held responsible for such content. The articles do not necessarily reflect the opinions of BFC, its staff, its associates or its partners. Copyright of articles is retained by their authors.