Fruiful Armenia

Fruitfull Armenia 2 17/9/08 16:58 Página 3

5

Thanks

Fruitfull Armenia would like to thank the persons who havebeen involved in the preparation of this book:

first of all to Mr. Ing. Daniel Alberto Tardito, intel-lectual and material author of this book.

to Mr. Ing. Matías Esteva, who accompanied all theagricultural technical revision.

to Mr. Sebastián Fratto - who under the specificsdirections of Mr. D. Tardito made the research work-and his team: Miss Micaela Garcia Luna, Lic.Ignacio López, Lic. Sabrina Arana, Lic. Carlos Bove,Lic. Luciana Montaperto, Lic. Sergio Spadaro,

for the financial issues, Converse Bank throughtheir representatives Mr. José Luis Pérsico and Mr.Ararat Ghukasyan,

for the legal issues the invaluable unconditional helpof Mr. Armen Ter-Tachatyan, his very patient lawyerMs. Liana Yordanyan, as well as Mr. Vahe Yacoubian,

for the translations into English to Miss ClaudiaCalvosa and Silvana García Calabria, and for thetranslations into Armenian to Mrs. HasmikMkrtchyan, and Lilit Manoukyan, as well as AnnaMnatsakanyan,

for her every day precious work, patience, efficien-cy to Mrs. Dra Georgina Marioni,

for their permanent back-up to Miss ArmineMikayelyan as well as her assistant Miss AstghikChobanyan,

and also to Miss Romina Windholz, to MissMariana Rodriguez, to all the IT group supporting

us Esteban Arias Duval, Fernando Ketchian, DiegoOvide, Estanislao Aleman, to Ma Eva Pozzi,

to Verónica Nuño - creator of 2008 FAF IV image -who works at the Image Department leaded byPatricia Eurnekian, to her and all her team,

to Claudia Akian from Gráfica Akian for acceptingto print this book in such rush circumstances, andto Fabio Massolo the editor, an excellent profes-sional but moreover a wonderful pacient personwho found immediately the right trace for our work,

for their local assistance Mr. Marcelo Wende, Mr.Juan Pablo Gechidjian, Mr. Andranik Shkhyan,

… and of course, to Mr. Eduardo Eurnekian whogave the first kick-off idea and the chance ofbeing part of his team so as to be able to prepareevery year the Fruitfull Armenia gathering

From where I come they say that in your life you have toplant a tree, write a book, and have children …. well, Danieland myself have accomplished the task of writing a book

Thank you

Ana Cristina SchirinianFruitfull Armenia


7

The present research encompasses an analysis and submitsgeneral recommendations for achieving even greaterprogress in the current boom of agribusiness in the Republicof Armenia. The development of a national agricultural pro-posal was one of the goals we have set as a contribution tosupport Armenian growth.

Our experience in this field, the setting up of a top-levelworldwide interdisciplinary team, powered by the more thanfour years of working in the country (“Tierras de Armenia”C.J.S.C., Arevadasht, Armavir), have allowed us to carry out amore accurate diagnosis of the situation. Based on it we havedrawn up a broad plan which considers strategic aspects toallow a sustainable agricultural and agribusiness development.

“Recent years have been of crucial importance in theeconomic and political life of the Republic of Armenia. […]The centralized economic system has been replaced by onebased on the market. […] In the early 1990s the land and themeans of production were privatized and a legal frameworkwas created for different forms of possession, the handlingof production, freeing of prices and development of thebanking system. These reforms created a solid platform fora greater development of agriculture1.”

Production restructuring usually has two triggers: one, acrisis scenario in which decisions need to be adopted on aday to day basis, trying to solve urgent, immediate matters;the other, the generation of medium and long-term strategies.

The current international situation and its forecast for thenext five years present very encouraging prospects withregard to the profitability of the sector. Therefore, any pro-posal to reorganize and transform it will be easier to imple-ment, based on strategic planning.

Armenia’s international dependence when it comes tocovering the gap between basic domestic food consump-tion (e.g. wheat, milk and corn) constitutes a bottleneck forthe national economy. The country will see an annualincrease in its outlay of hard currency to provide the samevolumes, generating inflationary processes and, in extremecases, shortages.

The new international scenario will inevitably lead eachregion to specialize in whatever is allowed by the compara-tive advantages of its soil-climate-water-technology con-junction. This premise will undoubtedly redesign the globalmap of production. The transformation of vegetable proteininto animal protein will be uneconomic in those areas wheregrain production is not efficient, and therefore there will bean increase in the international trade of powdered milk andmeat — mainly beef as it has the lowest conversion rate.

Having determined the current situation and that of themedium and long term, we evaluate production capacity inorder to assess the maximum potential (with currently avail-able technologies) existing in the country. Sustainable agricul-tural production depends mainly on this trilogy: soil, climateand water - natural and therefore unmodifiable resources.

The first step in this research was to establish country’spotential productive area. Secondly, the technology current-ly in use was evaluated, comparing it with that applied inregions with similar agronomic conditions.

The adoption of an environmentally friendly policy is keysince in the near future it will, undoubtly, condition domesticproduction, access to foreign markets and internationalfinancing.

In present proposal it will be possible to have a betterunderstanding of variables that compose the national sce-nario, economic and productivity indicators, naturalresources, strengths and weaknesses of the system as seentoday. At the end, FruitfullArmenia will provide its viewregarding the main matters for the implementation of anational strategic plan.

We do hope this Fruitfull Armenia IV, snapshots: framingthe “next level up” of sustainable agriculture in Armeniawill be the kick-off for a national discussion of all playersinvolved in the agricultural sector: farmers, agribusinesssector, farmers organizations, academic institutions, finan-cial institutions, government, religious institutions, diasporadonors, international organizations ….

Daniel A. Tardito

Introduction

1 Agriculture of Armenia. Brief Outline. Ministry of Agriculture of the Republic of Armenia, Yerevan, 2006.


chapter 1

World SituationTrends andChallenges


Chapter 1 - World Situation. Trends and Challenges 11

1.1 Introduction

This chapter analyzes the main trends and challengespresented by the world situation as regards the market foragricultural raw materials. High food prices over the lastyears are not due to an incidental phenomenon but to atrend of a structural character. The boom in demand in theAsian Pacific region is what characterizes this new phasein the world commodities market. The change in its dietarystructure accompanied by an increase in purchasingpower is translated into a medium term trend which willkeep agricultural commodities at their highest values sincethe nineteenth century.

Therefore, what courses of action are available in theface of this world setting? According to World Bank esti-mates more than thirty (30) countries are negatively affect-ed by high prices of food and around 750,000,000 peoplefind it difficult to nourish themselves. The key to overcom-ing this crisis is not demand -which will keep growing overthe long term- but supply. Countries that produce agricul-tural commodities face the challenge of increasing theirproduction and trade not only to find potential markets butto supply their own population with food. Satisfaction ofdomestic demand appears then as a strategic priorityto avoid negative repercussions of the world food cri-sis. Over the long term, once domestic supply is satisfied,developing the agro-export potential is discerned as one ofthe most urgent courses of action to achieve solvency andcompetitivity within the world setting.

1.2 Medium term trends: population and food

Two trends must be taken into account to analyze theagri-food scenario over the next decades. On the one hand,the constant increase in inhabitants in the world, concen-

trated in emerging regions (particularly, those of the AsianPacific area). On the other hand, the greater consumption offood per capita which has been registered in the lastdecades in central countries and in developing countries.These variables are basic to determining the future and rela-tions of agribusiness to new markets and consumers.

1.2.1 Demographic trendsA basic element for estimating possible scenarios in the

agri-food industry is the constant increase in world popu-lation in the last decades. While this demographic increaseis not homogeneous1, since it occurs mainly in emergingregions, a prospective analysis provides a global under-standing of the phenomenon. In 2007 the total world pop-ulation was estimated at 6.7 billion people. After Asia (60%of the total population), Africa is the most populous conti-nent (14%), followed by Europe (11%), Latin America andthe Caribbean (9%), North America (5%), and lastlyOceania (1%)2. World population grows at a pace of200,000 people per day, with approximately 80.000.000births per year3. According to estimates by the NationalIntelligence Council of the United States, there was afalling trend in the world growth index from 1.7% in theyear 1985 to 1.3% in the year 2000. Likewise, it is foreseenthat the world population will grow from 6,100,000,000 in2001 to approximately 7,200,000,000 in 20154. Theincrease in the world population and future populationprospects emphasize the differentiated evolution of thebirthrate, associated with the different levels of countrydevelopment. More than 95% of the increase in world pop-ulation takes place in developing countries, most of it con-centrated in areas of rapid urban expansion5.

In any case, according to estimates by the UN (UnitedNations World Population Prospects), there will be a cleardifferentiation among developing countries. Eastern Asiawill move towards a negative demographic growth (-0.2%

Chapter 1

World Situation. Trends and Challenges


Fruitfull Armenia - The Proposal12

per year) toward 2045-2050. Contrariwise, the populationof Sub-Saharan Africa will grow 1.2% per year in the sameperiod. Towards 2050, 18,000,000 of the 26,000,000 ofpeople added per year to the world population will live inSub-Saharan Africa6.

The present and potential population growth in emerg-ing regions is a trend that must be taken into account for acareful and close analysis of agri-food industry projections.Figure 1 shows current population distribution per conti-nent while Table 1 shows population trends for developed,under developed and developing countries with regard tothe next five decades.

1%5%9%

11%

14%60%

Asia Africa Europe Latin America and the Caribbean

North America Oceania

WORLD DEVELOPED COUNTRIES DEVELOPING COUNTRIES

Totalin

thousands

Totalin

millions

Totalin

thousands

Annualincrease

in millions

Annualgrowth

%

Annualincrease

in millions

Annualgrowth

%

Annualincrease

in millions

Annualgrowth

%

1950 2524 --- --- 813 --- --- 1711 --- ---

1970 3702 75 2.06 1008 8 0.82 2694 64 2.55

1990 5282 87 1.73 1148 7 0.60 4134 80 2.06

2010 6891 80 1.20 1206 2 0.15 5684 78 1.44

2030 8372 66 0.81 1212 -2 -0.13 7159 68 0.98

2050 9367 41 0.45 1162 -3 -0 .23 8205 44 0.55

POPULATION (%)

YEAR

1999/01 2015 2030 2050

Developing Countries 10.1 6.9 3.9

Sub-Saharan Africa 21.1 12.4 5.8

Excl. Nigeria 25.2 14.7 6.8

Near East / North Africa 7.0 5.7 3.7

Latin America and the Caribbean 6.6 3.9 2.6

Southern Africa 12.1 8.4 4.1

East Asia

17.2

33.3

39.0

10.2

10.7

22.3

11.6 5.8 3.9 2.9

POPULATION (in millons)

Developing countries 811 582 458 290

Sub-Saharan Africa 201 179 140 88

Excl. Nigeria 191 173 135 84

Near East / North Africa 39 36 36 29

Latin America and the Caribbean 55 41 27 20

Southern Africa 299 203 166 90

East Asia 211 123 88 64

Figure 1. Present population distribution per continentsSource: Organization for Economic Cooperation and Development (OECD)

Table 1. Population prospect in developed and developing countries Source: Organization for Economic Cooperation and Development (OECD) The Future of Food. Long Term Prospects for the Agri-food Sector, 1998.

Table 2. Predominance of malnutrition, developing countries Source: FAO



Finally it must be added that according to FAO the rapidincrease in population may continue to be an importantobstacle to make improvements in food safety in somecountries, even if the world population stops growing.Table 2 shows some data on the issue.

1.2.2 Trends toward an increase in consumption Besides world population growth, it is important to note

a second circumstance that will markedly affect agri-fooddemand trends in the future: the considerable growth inthe per capita supply of food among developing countries.

According to a report by the OECD7, food supply indi-cators per capita at the international level in the 1992-1994period were 19% above the indexes registered 30 yearsearlier. In the last four decades the average of 2,280 calo-ries/person/day (1960) increased to 2,800 calories/per-son/day (2001/2003)8. Increase in food consumption inthe last years is mainly due to emerging countries’ increasein demand, given that developed countries already, sincethe mid 1960s, had quite a high level of food consumptionper inhabitant. As regards world population distribution,according to nutritional consumption levels, the report

shows that in the 1992-1994 period 10% of this populationlived in countries with ‘very low’ levels of per capita supply(2,200 calories per day) and 55% lived in countries with‘medium-high’ food supply (over 2,700 calories). These fig-ures show substantial improvement if compared to thoserecorded during the 1970s, mainly due to economic andnutritional progress in China and India.

However, at the same time and according to the sameestimates by the OECD, food supply per capita in develop-ing countries will continue growing. According to the fore-cast by the FAO, food supply per capita in the developingcountries will be of 2,860 calories in the year 2015, 2,960calories in 2030 and, finally, 3,070 calories in the year 2050.

Table 3 shows data on food consumption per capitabetween the years 1969 and 2001 and also includes esti-mates for the years 2015, 2030 and 2050.

1.2.3 Diversification of food consumption and risingincomes

World Bank foresees a 1.9% annual increase in worldpopulation income between 2005 and 2015 exceeding1990s expected growth of 1.2% per year. In developing

YEAR

1969/71 1979/81 1989/91 1999/01 2015 2030 2050

World 2411 2549 2704 2789 2950 3040 3130

Devoloping countries 2111 2308 2520 2654 2860 2960 3070

Sub-Suharan Africa 2100 2078 2106 2194 2420 2600 2830

Idem, excl. Nigeria 2073 2084 2030 2072 2285 2490 2740

Near East/ North Africa 2382 2834 3011 2974 3 080 3130 3190

Latin America and the Caribbean 2465 2698 2689 2836 2990 3120 3200

Southern Africa 2066 2084 2329 2392 2660 2790 2980

East Africa 2012 2317 2625 2872 3110 3190 3230

Industrialized countries 3046 3133 3292 3446 3480 3520 3540

Countries in transition 3323 3389 320 2900 3030 3150 3270

Table 3. Food consumption percapita (calories/person/day)Source: FAO



countries as a whole the per capita growth is expectedto fluctuate from a 3.9% average in the first decade ofthe 2000s to 4.5% and 3.4% in the second and thirddecades mainly as a consequence of growth slowingdown in the region of West Asia and the Pacific9. It isestimated that the average growth of the GrossDomestic Product (GDP) per capita over the first threedecades of the twenty first century (2000/2030) willreach 4.8% in the developing countries. Southeast Asian

countries will jump to the top in growth rates with esti-mated averages of 6%. (See Table 4)

Figure 2 analyzes GDP growth per capita in all regionssince 1980, with estimates for the first decade of the cen-tury (2001-2015).

Income growth, relative price changes, and urbanizationhave altered dietary patterns in both developed and devel-oping countries. When people have more money to spend,they normally add more variety and more expensive and

7

1980

1990

2001/15

6

5

4

3

2

1

-1

-2

T ot al

Wo r

l d

S u b-s

ahar a

n Af r i c

a

M i ddl e

E ast a

nd N

o rt h

A f r i ca

L at i n

Am e r i

ca an

d t h e

Car i

b be a

n

S o ut h

A si a

E ast A

si a an

d t h e

Pac

i f i c

H i g h i n

com e c

o unt r

i e s

E u r op a

and

C e nt r a

l Asi a

0

132

33

4

9

6

60

Cereals Vegetables Roots and Tubers Sugar Legumes Meat Milk Others

19

3

7

56

62

52

Years 1961/1963 Years 2001/2003

Figure 2 (right). GDPgrowth rates per capita(1980/1990/2001-15)Source: World Bank (2006)

Figure 3 (below). Foodconsumption compositionin developing countries. Source: FAO



high-value foods to their diets, although responses differbetween developing and developed countries10.

In developed countries, most consumers can afford thefoods they prefer, therefore, when their incomes raise,changes in their diets and food purchases are relativelysmall. In developing countries, on the other hand, risingincomes have an immediate and pronounced impact ondiets, as people adjust their budgets to include higher-value food items.

Urbanization is another important factor influencingconsumers’ preferences. Urbanization is taking place at ahigh pace and urban dwellers were expected to outnumberrural populations by around 2007. Large urban marketscreate opportunities for the establishment of large super-market chains, and they attract foreign investment andadvertising from global corporations.

Figure 3 shows how food consumption in developingcountries has varied due to income growth in the last fourdecades (1961/1963 and 2001/2003).

When comparing the ingredients of population foodconsumption in developing countries at the beginning ofthe 1960s with current ingredients it should be noticedhow cereals and vegetables have decreased and other ele-ments such as meat, pulses, dairy products and others notspecified have increased.

Table 5 shows changes in food consumption by type ofcountries since the 1960s with projections to 2030 and 2050.

Table 6 shows the same food consumption changes indifferent developing regions over the same period. Thegreatest consumption per capita towards 2050 will be ledby East Asia, Latin America and the Caribbean, the MiddleEast and North Africa.

GNP per capitain US$

ANNUAL GROWTH GAP %

Total GDP at market price GDP per capita at market priceWBAtlas2002

PPP 11

2002 2000- 2030

2030- 2050

1980- 1990

1990- 2000

2000- 2030

2030- 2050

World 5021 7848 3.1 3.2 1.3 1.2 2.1 2.7

Developing countries 1077 3755 4.8 4.6 --- --- 3.6 4.0

Sub-Saharan Africa 450 1700 3.8 4.3 -1.1 -0.5 1.6 2.8

Middle East/ North Africa 2240 5670 4.1 4.1 -1.1 1.0 2.4 3.1

Latin America and the Caribbean 3280 6950 3.4 3.5 -0.9 1.62 2.3 3.1

South Africa 460 2460 6.0 5.5 3.3 3.2 4.7 4.9

East Asia and the Pacific 960 4280 6.0 5.0 5.8 6.3 5.3 5.0

High income countries 26490 28480 2.5 2.5 2.5 1.8 2.2 2.4

Europe and Central Asia 2160 6900 4.3 3.8 0.9 -1.8 4.5 4.5

Table 4. Income growth (2000-2050). Source: FAO based on data provided by the Word Bank



YEAR

Kg/Person/Year 1969/71 1979/81 1989/91 1999/01 2030 2050

WORLD

Cereals, foodCereals, all usesRoots and tubersSugar LegumesOilseedsMeat Milk and dairy products excl. butterOther food (Kcal/person/day)Total food (Kcal/person/day)

Cereals, foodCereals, all usesRoots and tubers

Sugar LegumesOilseedsMeat

Milk and dairy products excl. butterOther food (Kcal/person/day)Total food (Kcal/person/day)



DEVELOPING COUNTRIES

Ídem, excl. China

Ídem, excl. China y Brasil

INDUSTRIALIZED COUNTRIES

COUNTRIES IN TRANSITION

148.7302.883.722.47.66.8

26.175.3216

2411

146.3191.878.861.814.79.24.9

10.710.728.6123

2111

132.3531.174.240.53.4

13.269.7

189.1486

3046

200.5653.0140.241.94.17.4

49.5185.7

3313323

160.1325.073.423.46.58.3

29.576.5224

2549

161.7219.169.659.017.57.86.5

13.712.534.0140

2308

159.4542.067.136.72.8

18.712.534.0140

2308

189.2777.6118.445.931.19.2

62.9181.3

3723389

171.0329.364.523.36.2

10.333.076.9241

2704

173.7238.660.158.419.27.38.6

18.213.631.8171

2520

154.4543.769.432.63.2

18.513.638.1171

2520

179.1767.897.143.43.2

10.270.7

177.2333

3280

165.4308.769.423.65.9

12.037.478.3289

2789

165.7236.067.062,820.76.7

10.426.715.945.9242

2654

162.4591.866.733.13.6

21.590.2

214.0525

2654

168.7499.1103.336.51.6

10.144.4

160.2317

2900

16533175266

164792

3253040

1662686576257

14382667

2852960

15964161724

2499

223525

3520

16461899392

1559

179365

3150

16233975276

1752

100340

3130

1632797780267

16443278

300370

15666557324

24103227580

3540

16868594412

1868

193390

3270

Table 5. Changes incommodities structureSource: FAO



YEAR

Kg/Person/Year 1969/71 1979/81 1989/91 1999/01 2030 2050

SUB SAHARAN AFRICA

Cereals, foodRoots and tubersExcl. Nigeria and GhanaSugar LegumesOilseedsMeat Milk and dairy products excl. butterOther food (Kcal/person/day)Total food (Kcal/person/day)

Cereals, foodRoots and tubersSugar LegumesOilseedsMeat Milk and dairy products excl. butterOther food (Kcal/person/day)Total food (Kcal/person/day)




LATIN AMERICA AND THE CARIBBEAN

SOUTH ASIA

EAST ASIA

115.3193.0184.5

7.811.08.0

10.229.6139

2100

179.316.620.46.27.5

12.668.122.42382

11.894.140.514.26.8

33.584.0240

2465

150.416.920.314.54.6

39.937.0

842066

152.296.65.74.83.59.23.798

2012

114.3175.0182.0

9.89.78.4

10.533.7141

2078

199.726.528.06.3

10.917.384.1277

2834

130.174.348.112.610.140.596.9246

2698

151.119.920.611.35.814.141689

2084

181.480.88.04.34.7

13.25.0121

2317

118.8184.3179.5

8.68.98.59.8

29.8130

2106

211.831.828.28.0

12.519.675.0298

3011

130163.946.010.512.142.894.5258

2869

164.318.723.712.37.25.0

55.1104

2329

199.557.110.52.67.8

22.67.4179

2625

123.3191.2165.910.09.88.98.5

28.3128

2194

203.533.727.76.6

12.121.773.2333

2974

132.663.348.511.211.858.5

108.8272

3826

157.123.525.610.19.75.5

67.6141

2392

186.765.811.62.0

10.639.811.3322

2872

1422111941212121434

1702000

19933297

143590

3703130

1406249111579

136310

3120

16731308

1512

106180

2790

17661172

156221

4053190

1552051911514131838

1852830

19333307

1543

101385

3190

1395847101690

150336

3200

16936327

1818

129200

2980

16253202

177324

4403280

MIDDLE EAST/NORTH AFRICA

Table 6. Changes incommodities structure,developing regions.Source: FAO



1.3 Implications of current agri-fooddemand

Considering the main trends previously identified itcan be foreseen that meeting an increasing demand forfood will require a huge increase in production. Animportant challenge will be to increase those productionlevels while preserving soil, water and the environment.

Among the estimates for future demand for specific foodproducts in developing countries including China, the totaldemand for meat per capita is expected to rise from 17 kgfor 1989-1991 period up to 25 kg in 2010, reaching 30 kgin 2025. Likewise, total demand will rise from 69,000,000tons in 1989-1991 period up to 143,000,000 tons in 2010and to 204,000,000 tons in 2025.12 The production ofmeat will rise from 70,000,000 tons in 1989-91 up to

PERIOD

1961-2001

1971-2001

1981-2001

1991-2001

1999/01-2030

2030-2050

TOTAL DEMAND (all commodities and uses)

World

Developing countries

Idem, excl. China

Sub-Saharan Africa

Ídem, excl. Nigeria

Near East

Latin America and the Caribbean

Idem, excl. Brasil

South Asia

East Asia

Idem, excl. China

Industrialized Countries

Countries in transition

World


Idem, excl. China

Sub-Saharan Africa

Ídem, excl. Nigeria

Near East


Idem, excl. Brasil

South Asia

East Asia

Idem, excl. China

Industrialized Countries

Countries in transition

PER CAPITA DEMAND (all commodities and uses)

2.3

3.6

3.2

2.8

2.6

3.8

3.0

2.6

3.0

4.3

3.6

1.2

0.5

0.5

1.4

0.8

0.0

-0.2

1.1

0.8

0.4

0.7

2.5

1.5

0.4

-0.2

2.2

3.7

3.2

2.9

2.5

3.6

2.9

2.4

3.2

4.6

3.4

1.1

-0.7

0.5

1.7

0.9

0.1

-0.3

0.9

0.9

0.4

1.0

3.0

1.5

0.4

-1.2

2.1

3.7

3.0

3.2

2.6

2.7

2.8

2.2

3.2

4.7

3.1

1.0

-2.1

0.5

1.8

0.8

0.4

-0.2

0.2

1.0

1.4

1.1

3.3

1.3

0.3

-2.4

2.2

3.8

2.8

3.2

3.0

2.7

2.9

2.8

3.0

4.9

2.4

1.1

-2.9

0.8

2.1

0.8

0.6

0.4

0.5

1.2

1.0

1.1

3.7

0.9

0.4

-2.8

1.5

2.0

2.2

2.8

2.8

2.2

1.8

1.9

2.3

1.7

1.9

0.7

0.5

0.6

0.8

0.7

0.7

0.7

0.5

0.8

0.7

1.0

1.1

0.9

0.3

0.7

0.9

1.1

1.3

2.0

2.1

1.4

1.0

1.0

1.3

0.6

1.1

0.4

0.1

0.4

0.5

0.6

0.5

0.6

0.4

0.6

0.6

0.7

0.6

0.8

0.4

0.6

Table 7. Growthin demand (%)Source: FAO



143,000,000 tons in 2010 (leveling meat demand) and to203,000,000 tons in 2025 (causing a 1,000,000 ton short-fall between demand and actual production). As per cere-als, demand in those countries is estimated to rise from940,000,000 tons recorded in 1989-1991 period up to1,443,000,000 in 2010 and to 1,874,000,000 in 2025.Meanwhile, production of cereals will rise from862,000,000 tons in 1989-1991 to 1,296,000,000 in 2010(the shortfall between demand and what is actually pro-duced will be 147,000,000 tons), and to 1,655,000,000 in2025 (increasing the shortfall to 219,000,000 tons).13

Based on these trends and considering the increasein world food consumption and population growth in acontext of decreasing availability of land suitable foragricultural and livestock production, the capacity ofcertain countries to provide food will be seriouslyimpaired. On that basis, Table 7 shows the growth indemand since 1961 with trends and projections until 2050,for every region.

1.4 Mid-term trends: production and trade

1.4.1 Agricultural productionAccording to FAO the value of total agricultural produc-

tion (food and non-food crops and livestock products) hasalmost trebled in real terms since 1961, representing anaverage increase of 2,3% per year well ahead of globalpopulation growth (1.7% per year)14. Much of this growthhas originated in developing countries but it also reflectsthe rising share of high value commodities such as live-stock products and horticulture in the total value of pro-duction15. The composition of the agricultural productionhas changed considerably over the last years. The globaloutput of cereals, oil crops, sugar, vegetables, eggs andmeat has increased more than population growth rates,while the production of pulses and roots and tubers hasdeclined relative to total population growth.

Table 8 shows the global growth rates for products inthe entire world and in developing countries, higher ratesin eggs; meat and oil crops stand out.

The evolution of per capita cereal production worldwide

over the last 25 years has experienced a slight increasefrom 303 kg in 1969/1971 rising to a limit of 342 kg in1984/1986 and declining to 327 kg per capita in 1989/1991and 307 kg in 1993/199516. According to OECD estimatesworld agricultural production will increase at a 1.8% aver-age rate per year until 2010 implying a slower pace than adecade earlier but enough to increase world per capitaproduction due to a lower demographic growth rate17.World cereal production projected for 2010 is2,334,000,000 tons which equals 327 kg per person.Considering production distribution according to countrytype, the production of cereals per capita in developingcountries will continue to grow as part of the trend. In the1989/1991 period a per capita production of 214 kg wasrecorded. It will reach 230 kg by 2010. This will represent a0.8% increase per year. Likewise, it is believed productionper inhabitant in developed countries will grow 0.4% peryear in the same period; i.e., at a lower rate than in devel-oping countries. These production estimates stand in con-trast to the predictions for the evolution in demand indeveloped and developing countries.

Table 9 shows production trends until 2010.A series of conclusions can be drawn from world trends

regarding demographic growth, soil exhaustion, and theproduction and consumption of agri-food. In the firstplace, the increase in world population will raiserequirements and some regions will face an increasedrisk of food shortages. That is particularly the case ofdeveloping countries, since the rate of increase in demandwill be higher than the production rate due to the demo-graphic explosion in those countries, and to the per capitafood consumption increase, which is foreseen as a worldtrend18. According to FAO estimates, in Asia-Pacific, NearEast, Sub-Saharan Africa and Latin America, agriculturaldemand will be more dynamic than in industrialized coun-tries, where the increase in demand will affect mainly thequality, not the quantity, of production. However, localdemand will be higher than production in all regions with-out exception in the period 1990-2010.

In the second place, the increasing pressure on the soilhas resulted in the exhaustion of the production capabil-ity; and due to the effect of excessive pressure, erosion



World

Developing Countries

World


World


World


World


World


World


World


World

Developing CountriesMilk

Meat

Eggs

Vegetables

Legumes

Sugar

Cereals

Rootsand tubers

Oil Crops

1961-76

3.5

3.9

2.9

3.1

3.4

3.1

0.8

0.5

1.3

3.0

1.8

1.9

3.0

4.6

3.5

4.3

1.6

2.7

1977-91

1.8

2.8

4.8

5.0

2.3

3.5

1.5

1.0

0.5

1.6

3.2

4.4

3.4

7.0

3.0

5.3

1.4

3.3

1992-2005

1.3

1.5

4.2

4.9

0.8

1.2

0.9

1.4

1.5

2.2

4.7

6.1

3.6

6.0

2.6

4.8

1.2

3.8

1961-2005

2.2

2.8

4.0

4.4

2.2

2.6

1.1

1.0

1.1

2.3

3.2

4.1

3.4

5.9

3.0

4.8

1.4

3.2

PRODUCTION

ANUAL ACCUMULATED

1970-90 1990-94 1990-2010 1970-90 1990-2010

World

Developed countries


Africa (Sub-Saharan)

Near East / North Africa

East Asia

South Asia

Latin America / Caribbean

2.3

1.4

3.3

1.9

3.1

4.1

3.1

2.9

1.3

-1.2

3.3

3.0

2.0

4.3

2.7

2.6

1.8

0.7

2.6

3.0

2.7

2.7

2.6

2.3

58

32

91

46

84

123

84

77

45

16

71

86

75

75

71

61

Table 8 (above). Global growthrates for different agriculturalcommodities (1961-2005).Source: FAO, State of Food andAgriculture 2007.

Table 9 (left). Total agriculturalproduction growth.In percentages (%) Source: FAO.The Future of Food.



and contamination, soils will not be able to produce atthe pace set by demand. This situation points to the needto search for effective alternatives to solve the limitations onfood supply19. An increase in productivity must be encour-aged as an answer to the increasing demand and as anindispensable condition to guarantee market competitive-ness. Therefore, intensive investment must be encouragedwith the purpose of incorporating new technologies and sci-entific knowledge in the productive development of the agri-food sector. A second alternative, in addition to the latter, isto focus on the promotion of global economic openness inorder to encourage global food trade. Regions and countriesenjoying advantageous natural conditions for agri-food pro-duction will have an outstanding and differentiated place inthe global production structure20.

1.4.2 Agricultural TradeSince the early 1960s, the nominal value of agricultural

exports has increased tenfold; while the share of agricul-tural trade in total merchandise trade has followed a long-term downward trend, falling from almost 25% to less than10% in recent years21.

In this period the net flow of agricultural productsbetween developing and developed countries has reverseddirection. In the early 1960s, developing countries had anoverall agricultural trade surplus of almost US$ 7 billion per

year, but by the end of 1980s this surplus had disap-peared. During most of the following decade and early2000s developing countries were net importers of agricul-tural products. Without Brazil the deficit of the rest of thedeveloping world would have been considerable bigger: itwould have grown from US$ 20 billion22.

The change has been even more pronounced for theleast developed countries, which over the same periodhave changed from being net exporters to net importersof agricultural products. By the end of 1990s imports madeby these countries were more than double their exports.

1.4.2.1 International prices of agriculturalcommodities

In 2007 FAO carried out a report analyzing the worldmarket of commodities over the past 40 years. The follow-ing are some striking features:

Real prices of agricultural products have declined signif-icantly, almost 2% per year.

Real prices have fluctuated considerably around thelong-term downward trend.

Both the fluctuations and the long-term decline havebeen less pronounced since the mid-1980s.

Cereal and oilseed prices have increased recently, driv-en partly by rising demand for biofuels and by weather-related production shortfalls.

700

600

500

400

300

200

100

62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04

Agricultural Exports,Value

Agricultural Exportsin realtion to totalexports of goods (%)

0

Figure 4. Global agricul-tural exports (1964-2004)Source: FAO



Figure 5 shows the fluctuations between nominalprices, real prices and manufacturers export unit value.

A number of factors have contributed to these trends.Trade policy reforms and improvements in transportationand logistics have helped to hold down prices of tradedgoods, including agricultural products23. Technologicaladvances have reduced costs and made it possible, atgiven prices, to expand production at a rate that has out-stripped demand growth despite rising population andincome. These advances have reduced the vulnerability ofsome crops to climatic influences24. Likewise, trade liber-alization has permitted a wider rage of countries to partic-ipate in world commodity markets, reducing the relativeimportance of the supply situation in any one country.Other factors, such as the production and export subsidiesin some countries have also contributed to the downwardtrend in world prices for many agricultural products grownin temperate zones, reducing the export earnings of devel-oping countries that export commodities such as cotton,sugar and rice25.

Even though real prices for all agricultural commoditieshave declined over the past 40 years the rate of declinehas varied from one commodity to another. Prices of tradi-tional commodities such as raw material, tropical bever-

ages, oil crops and cereals have experienced the largestvariation and the steepest decline.

1.4.3 Global food product context Although prices’ downward trend continued for almost

four decades at present the situation is totally different. Therising trend in international food prices continued and evenaccelerated in 2008. USA wheat export prices rose fromUS$ 375/ton in January to US$ 440/ton in March and Thairice export prices increased from US$ 365/ton to US$562/ton26. This came on top of a 181% increase in globalwheat prices over the 36 months leading up to February2008, and an 83% increase in overall global food prices overthe same period27. The observed increase in food pricesis not a temporary phenomenon but likely to persist inthe medium term. The World Bank expects that food cropprices will remain high in 2008 and 2009 and then begin todecline as supply and demand respond to high prices; how-ever, they are likely to remain well above the 2004 levelsthrough 2015 for most food crops 28. (See Table 10)

According to FAO scenarios, historical trends towardsincreased food consumption per capita globally and par-ticularly in developing countries will continue in the nearfuture. However, they will continue at a slower rate than in

200

180

160

140

120

100

80

60

40

20

062 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04

NominalValues

Real prices

MUV(Manufacturerexport unit value)

Figure 5. Agricultural com-modity prices (1964-2004)Source: FAO



the past as more countries approach medium high levels.The average of the developing countries may rise from thecurrent 2.650 kcal per person per day to 3.070 kcal by2050. By the middle of the twenty-first century morethan 90 percent of the world’s population may be livingin countries with per capita food consumption of morethan 2,700 kcal per day compared to 51% at presentand only 4% three decades ago. As in the past, greatimprovements in China, India and other populous coun-tries will continue to play a significant role in these devel-opments. However, the present sustained rise in agricul-tural commodity prices results not only from higher percapita consumption but from factors related to energy (sit-uations generated by the so called "bio-fuels" and by theincrease in oil prices), to speculation and to a lack of suit-able land for agriculture and livestock.

1.4.3.1 Bio-fuelsIncrease bio-fuel production has partially contributed to

the rise in agricultural commodity prices. Concerns over oilprices, energy security and climate change have promptedgovernments to take a more proactive stance towardsencouraging production and use of bio-fuels29, encourag-ing speculation conducts by certain investors. Numerouscountries have set standards or targets for use of bio-fuels.The European Union has set a goal of 5.75% of motor fueluse from bio-fuels by 2010. The USA has mandated theuse of 28.4 billion liters of bio-fuels for transportation by2012. Brazil will require that all diesel oil contain 2% bio-

diesel by 2008 and 5% by 2013 and Thailand will require10% ethanol in all gasoline starting in 2007. India man-dates a 5% ethanol blend in nine states, and China isrequiring a 10% ethanol blend in five provinces30.Increasing use of bio-fuels by many countries has led toincreased demand for bio-fuel raw materials such aswheat, soy, maize and palm oil and increase competitionfor cropland.

Almost all of the increase in global maize productionfrom 2004 to 2007 (the period when grain prices rosesharply) went for bio-fuels production in the USA, whileexisting stocks were depleted by an increase in globalconsumption for other uses. Other developments, such asdroughts in Australia and poor crop in the European Unionand Ukraine in 2006 and 2007, were largely offset by goodcrops and increased exports in other countries. Only a rel-atively small share of the increase in food productionprocess (around 15%) is due directly to higher energy andfertilizers costs31.

1.4.3.2 Increase in oil pricesThe price of oil has broken through the barrier – unthink-

able until recently – of US$ 130 per barrel. The cost of sucha fundamental input directly influences the final price ofagricultural commodities that require machines for sowingand harvesting, trucks for the transportation of goods andindustry to manufacture end products. It is estimated thatone-third of the final food price is formed by energy-relat-ed costs.

Maize

Wheat

Rice

Soy

Soybean oil

Sugar

2007

141

157

132

121

138

135

2008

179

219

201

156

170

169

2009

186

211

207

150

162

180

2010

176

204

213

144

153

190

2015

155

157

192

127

119

185

Table 10. Index of projectedreal food crop prices in US$/ton. Source: World Bank.2004=100



1.4.3.3 Speculative factorsThe most powerful global investment groups have been

anticipating the increase in food value and have decided tobet on it. They have made strong investments in food pricefutures and have driven input suppliers to increase theirprices. Many funds for real estate development and hightechnology companies seek security in agribusiness todiversify their portfolios and obtain better financial results32.

1.4.3.4 Shortage of land suitable for agriculture andlivestock

The possibility of raising agri-food production in view ofthe increases in world population and food consumption islimited as a result of the difficulty in increasing cultivatedareas. The effects of erosion, floods, salinization and con-tamination of the land contribute considerably to a pro-gressive reduction of soil productivity33. Regarding landdegradation particularly, it is estimated that almost1,964,000,000 hectares in the world are considereddegraded. This represents more than 22% of the total agri-cultural land, pastures, forests and jungles on the planet inAsia alone there are 450,000,000 hectares affected by thisproblem. When analyzing the causes of degradation,deforestation and the intensive use of pastures for animalfood stand out and are responsible for one third of totaldegradation34. These estimates are even worse in the spe-cific case of land degradation for agricultural production.In Asia 30% of agricultural land is classified as “more orless degraded”. In the case of China, 466,000,000hectares (or 50% of the country's land) suffer from somekind of soil degradation. The data show a truly dramaticsituation according to the World Resources Report of theWorld Resources Institute. The above mentioned reportstates that soil degradation in China is an extremely seri-ous problem: 73.000.000 hectares of the country’s totalland are affected by moderate degradation and 86.000.000hectares by strong degradation. If only 50% of this total ispresent in agricultural lands (probably a low estimate) thenaround 80.000.000 hectares (or more than 60%) of culti-vated land is affected by some kind of soil degradation,either moderate or strong35. In the case of the Republic ofArmenia the report states that from its total agricultural

land (estimated in 2002 at 560,000 ha), the country obtainsone of the highest per capita food production rates in Asia(114.636), exceeding those of the United States (97.8) andChina (109.1)37.

1.5 Food crisis: Impact on countries

a) International inflation and domestic inflationRising global food prices are contributing to high food

inflation in many countries throughout the world. However,the pass-through of rising global prices does not translateinto an immediate and proportional rise in domestic costsdue to various factors that intervene at the time of absorb-ing that effect. The domestic infrastructure and price stabi-lization policies are some of the main tools. While the extentof global price transmission varies, over the last year therehave been significant surges in domestic food price inflationin countries such as Sri Lanka (34%), Costa Rica (21%) andEgypt (13.5%). In many countries and regions food priceinflation is higher than aggregated inflation and con-tributing to underlying inflationary pressure on thenational economy. For example, in Europe and Central Asiatotal inflation in 2007 averaged 10%, food inflation 15% andcereal inflation 23%. This compares to 6% overall inflationand 6.4% food inflation in 200638.

b) Terms of trade and the balance of paymentHigher agricultural commodity prices have generally

been mitigated by rising non-food commodity prices,although these averages mask significant impacts on thebalance of payments for certain countries39. When all pri-mary commodity price changes are considered, the terms-of-trade impacts become large and more positive forresource rich countries with exports of oil and other miner-als than for countries exporting only agricultural commodi-ties. The trade balances of many countries are adverse-ly affected either because imports increase or becausethe value of the commodities they sell to other coun-tries is depreciated. The countries with the largest nega-tive terms of trade impact in 2007 include Lesotho, Eritreaand Gambia.



c) Distributed impact and povertyDistributional impacts of rising agricultural commodity

prices can be serious even in countries where the bal-ance of payments has not been adversely affected40.While some households benefit from higher prices (sincethey experience increases in purchasing power becausethey have links to raw material exports), others are hurtby them, depending on whether they are net food pro-ducers or net consumers and the extent to which wagesadjust to higher food price inflation. In general, poor peo-ple, especially in urban areas, suffer due to rising foodprices. Using a sample of household data for nine lowincome countries, a recent paper41 analyzes the impactsof higher prices of key staple foods on poverty taking intoaccount direct impacts from changes in commodityprices and impacts on wage rates for unskilled labor.Results show that in six of the nine countries consid-ered, price increases in staple food commodities wereassociated with a significant rise in poverty. Averagingacross these nine countries, the increase in food pricesbetween 2005 and 2007 is estimated to have increasedpoverty by 3 percentage points. A recent assessment inIndonesia shows that over three-fourths of the poor arenet rice buyers, and an increase in the relative rice price

by 10% will result in an additional two million poor peo-ple (1% of the population)42.

For many countries and regions where progress inreducing poverty has been slow, the negative povertyimpact of rising food prices risks undermining the povertygains of the last 5 to 10 years, at least in the short term.For example in the case of Yemen, estimates show that thedoubling of wheat over the last year could reverse all gainsin poverty reduction between 1998 and 2005. Over thelong term, the impact on poverty of higher food and othercommodity prices will also depend partly on how econom-ic growth responds to increased wealth accumulation andproductive investment. Table 11 shows related estimates:

1.6 The Armenian case

In order to understand the food crisis’ impact on theArmenian economy it is necessary to take three items, men-tioned previously, into account in the analysis: inflation, thetrade balance, and distributive impact and poverty.

a) InflationThe Armenian economy’s inflation was 6.6% in 2007. Of

IN MILLIONS POPULATION %

1990 2002 2015 1990 2002 2015


Idem, excl. China

Sub-Saharan Africa

Middle East and North Africa


South Asia

East Asia and the Pacific

Idem, excl. China

1216

841

227

6

49

462

472

97

1001

821

303

5

42

437

214

34

614

603

336

3

29

232

14

2

31.0

30.2

44.6

2.3

11.3

41.3

29.6

21.1

24.2

26.9

46.4

2.4

9.5

31.3

14.9

10.8

12.3

14.8

38.4

0.9

6.9

12.8

0.9

0.4

Table 11. Poverty estimatesand projections in thousandsof persons and percentages(%). Source: FAO on the basis ofdata by the World Bank



that aggregate, 53% was due to food prices increase,29.9% to services inflation, and the remaining 16% to priceincreases in other goods. The highest increase was regis-tered in bread, cereals, fruits and vegetables43. However,compared to other countries in the Community ofIndependent States, Armenia has recorded the lowest infla-tionary index, due to efficient fiscal and monetary policies.

b) Trade balanceThe trade balance has recorded rising deficits in the last 5

years, due to a considerable excess of imports over exports. In2007, the trade deficit reached US$2,100,000,000. Total value ofexported merchandise reached US$1,200,000,000 in 2007,16.7% more than in 2006. Precious stone exports representedmore than 50% of total export income. Likewise, merchandiseimports increased by 49.7% in 2007, to US$3,300,000,000.Higher prices for energy and agricultural commodities (par-ticularly grains) had an influence on the increase in imports.

c) Distributive impact and povertyIn Armenia, the rate of people living under the poverty

line decreased from 55% in 1998 to 34% in 2005. Currentestimates are 30%. Only 4.6% of inhabitants in the coun-try were considered extremely poor in 200744. There aren’tsufficient data to infer that the food crisis is worseningpoverty conditions in Armenia. Various programs (amongwhich the ones fostered by the World Bank stand out) havebeen coordinated by the Department of Labor and SocialAction promoting a considerable improvement in the fightagainst poverty. Even though the world food crisis is neg-atively affecting many countries with medium and low percapita income, Armenia isn’t yet being severely affected inthis manner by the food scarcity trend.

1.7 Conclusions

What is expressed in this chapter intends to describethe current international setting in relation to the worldmarket for agricultural commodities. The trends and chal-lenges that this setting presents for emerging countries’economies are of a structural character and require state

3,5

2,5

2

1,5

1

0,5

02003 2004 2005 2006 2007

Exports Imports

3

Figure 7. Armenian trade balance (2003-2007). Total exports andimports in billions of US$. Source: Republic of Armenia Ministry of Finance.

25

20

2119 20 20

1211

15

10

5

7

0

Figure 6. CIS inflationary index in 2007.Source: International Monetary Fund (IMF)



policies that emphasize strategic sectors and mitigatenegative outside factors. Armenia has an agribusinesspotential suited to the new global requirements. Knowinghow to boost and channel it for correct projection isthe challenge.

Armenia is only affected by one of the three conse-quences (high inflation, trade balance deficit and negativedistributive impact) that the world crisis is causing devel-oping countries. Armenian inflation has been of only 6.6%in 2007 (the country with the lowest index in the CIS). Morethan half the inflationary pressure was due to foodprice increases. Efficient stabilization policies have miti-gated and counteracted inflationary tensions and havegiven rise to excellent results last year.

The Armenian trade balance has been negative forthe last 5 years. The growing deficit is basically due to

the raise in two commodities, energy and grains, andstands as the most negative impact of the internation-al price increases.

Lastly, poverty has constantly decreased over the last10 years, showing that the many social plans applied wereefficient. The food price world situation does not seem tohave any serious negative effects on Armenian citizenswith fewer resources.

In short, the continuing trade deficit is the worst nega-tive impact that the Armenian economy presents as a con-sequence of the current situation. Increasing productionand productive investment and meeting domesticdemand is the challenge. Therefore, the avoidance of thenegative effects of the present food crisis and ensuring thelong term solvency of the economy are the main chal-lenges for sustainable development in Armenia.

1 While trends indicate population will grow in developing coun-tries, growth rate will become negative in developed countries.2 OECD-ECOWAS (Organization for Economic Co.Operation andDevelopment / Economic Community of West Africans States).Atlas on Regional Integration in West Africa, 2007.3 Source: United Nations Population Information Network. 4 Global Trends 2015: A Dialogue About the Future withNongovernment Experts. National Intelligence Council, December2000.5 Global Trends 2015: A Dialogue About the Future withNongovernment Experts. National Intelligence Council, December2000.6 FAO, World Agriculture: Towards 2030/205, Rome, 2006.7 Organization for Economic Cooperation and Development8 FAO, Food and Agriculture World status, Rome, 2007.9 World Bank. Global Economic Prospects 2008: Long-termProspects and Poverty Forecasts.10 Purchasing Power Parity is an economic indicator introduced atthe beginning of the 1990s by the IMF in order to compare differentcountries’ standards of living in a realistic manner, taking into con-sideration the GDP per capita in terms of purchasing power in eachcountry.11 Ibid.. pp. 138 ff.12 Ibid. 13 Agricultural statistics and environmental issues. Based on the

results of the study "Long-term Scenarios of Livestock-Crop-LandUse Interactions for the Assessment of Environmental Indicators inDeveloping Countries," FAO, Rome, 1995.14 FAO, Agricultura and Food World Situation, Rome, 2007, p. 134.15 Ibid.16 Haen, Alexandratos and Bruinsma17 Reza Lahidji, Wolfang Michalski and Barrie Stevens. The Futureof Food: An Overview of Trends and Key Issues. OECD. The Futureof Food. LongTerm Prospects for the Agro-Food Sector, 1998.18 Inter-American Institute for Cooperation on Agriculture -IICA–Strategic Planning Institute. Op. cit., p. 10.19 Ibid.20 Ibid.21 FAO, Agriculture and Food World Situation Rome, 2007, p. 141.22 Ibid.23 Ibid.25 Ibid.25 Ibid.26 Aniston, B. World Economic Growth: 200827 World Bank, Rising Food Prices: Policy Options and World BankResponse, 2008.28 Ibid.29 Ibid.30 Ibid.31 Ibid.

Notes



32 The Economist, Cheap no more, 6/12/0733 IICA – IPE. op. cit., p. 5.34 Ibid.35 Heilig, G.K., China Food. Can China Feed Itself? (IIASA:Laxenburg, 1999).36 This rate shows food production in a country in relation to the1999-2001 period. The per capita food production rate covers alledible agricultural products containing nutritional substances; coffeeand tea are excluded. During a given year, the rate is calculated con-sidering the available average production of all food raw materials byweight or volume and dividing it by the average production in 1999-2001, and then multiplying it by 100. In other words, value rates indi-cate higher levels of per capita food production than 1999-2001 iftheir values are higher than 100. Dates range from 1983 to 2003.37 UNDP, World Resources Report 2005. The Wealth of the Poor.

38 World Bank, Rising Food Prices: Policy Options and World BankResponse, April 2008.39 Ibid.40 Ibid.41 The eight countries analyzed are Bolivia, Cambodia, Malaysia,Madagascar, Nicaragua, Pakistan, Peru, Vietnam and Zambia.42 Ivanic and Martin, Implications of Higher Global Food Prices forPoverty in Low-Income Countries, 2008.43 IMF, Nienke Oomes, Inflation in Armenia: What is Happening toArmenian Prices, 2007.44 World Bank, Armenia: Benefist of undergone reforms, February2007.


chapter 2

NaturalResourcesin Armenia


Chapter 2 - Natural Resources in Armenia 31

2.1 Introduction

Previous section was intended to demonstrateincrease in commodity prices is the result of a series ofinterrelated variables. Nothing indicates this situationmay change in the short term. On the contrary, many ana-lysts state the tendency is irreversible and agriculturalcommodities costs instead of showing a decreasing trendwill continue to increase. In fact, World Bank PresidentRobert B. Zoellick said this orientation will be maintainedat least until 2015.

Food prices after falling in real terms for more than fivedecades have been clearly on the rise for some years now.This price climb threatens to reverse the so-called “greenrevolution” progress forcing thousands of people to reducefood consumption and making basic basket unaffordable toothers. At national level this situation makes low incomecountries should bear heavy burdens on imported foodcosts, currency drain, imported inflation1 and growthstoppages, among other negative external influences.

Hence countries strategic need to develop agriculturalsector and achieve self-supply so as to do not depend onexternal price fluctuations. However, such a developmentcan only be obtained keeping in mid a clear understandingof related country’s physical and environmental character-istics. This is the reason why this chapter aims to analyzeArmenian resources for agricultural production.

2.2 Physical geography

The Republic of Armenia is located in Caucasusregion between 51ã and 41° 18´ latitude north andbetween 43° 29´ and 46° 37´ longitude east. It borders tothe north with Georgia, to the east with Azerbaijan, to thesouth with Islamic Republic of Iran and to the west with

Chapter 2

Natural Resources in Armenia

Turkey, covering a total surface of 29,800 km2 renderingit the smallest country in terms of surface in Caucasusregion. Territory’s basic feature is its high altitude aver-age particularly in the high plateau but also valid formost country’s lands. This is an ancient characteristic forArmenian lands, having developed present featuressince Cenozoic period, most particularly after Mioceneperiod, five million years ago, bearing as of today intensetectonic activity.

The country may be divided into four large geographicalregions:

1) The mountain chain and valleys in country’s north-east area close to Kur River basin. This great erosionregions includes Virahajots, Batumi, Pambak,Gougarats, Aregouni and Sevan mountain ridges.

2) The Asia Minor regions of volcanic origin, includingAshotsk, Aragats, Geghama, Vardenis and Sunikmountain chains. This area’s characteristic is surfacecovered with volcanic material, has little evidence oferosion, long rivers and deep valleys.

3) The series of mountains adjacent to Arax Riverforming Minor Caucasus mountain system. Thisregion is prone to great erosion.

4) The Ararat valley, in the lowest part of Ararat depres-sion. The lowest altitudes in the country belong tothis region.

2.3 Climate

The Republic of Armenia territory is landlocked andextremely mountainous. In fact, it is the most precipitouscountry among the Caucasus republics. The land ofArmenia acquired its present characteristics by means of aprocess initiated 25million years ago, when a geological



upheaval pushed up earth’s crust to form the ArmenianPlateau, creating the complex topography of modernArmenia. This circumstance makes temperatures inArmenia depend upon elevation. Mountain formationsblock moderating climatic influences of the sea. The alti-tude, with an average height of 1,800 m and a maximumheight of 4,095 m above sea level (corresponding to thesummit of Mount Aragats) also intervenes in the climateformation process. Mountains prevent humid winds frompassing. This is the reason why Armenia has a continentaltype climate characteristic of regions isolated by mountainchains hindering maritime influence.

A high thermal range is verified throughout the territoryaffecting potential crops. It must be noted such disparityvaries according to the observed area; in the plains, win-ters are long and severe, summers are short and hot, whileon the mountains climate is cooler and weather conditionsare much more extreme in winter.

According to the Republic of Armenia HydrometeorologyDepartment (Armhydromet) average temperature recorded

during 1961-1990 period was 5.5°C, while average temper-ature for year 2002 was 5.9°C2. Calculations indicate ther-mal average in the country will be 1.7% higher than presentin year 2100.

However, previous data is not homogeneous throughoutthe country. Moreover, topographical factor brings about aconsiderable temperature difference among regions. As anexample, we list here below climatograms of Yerevan city(1,000 m above sea level) and Gyumri city3 (1,500 m abovesea level) separated only by 120 km distance.

20

10

˚C

-10

Month

2002 1961-1990

0

1 2 3 4 5 6 7 8 9 10 11 12

Average temperatures inArmeniaSource: Armhydromet.

°F °C

MONTH Min Max Min Max

January 15 29 -9 -2

February 18 34 -8 1

March 30 50 -1 10

April 42 6 6 19

May 50 76 10 24

June 57 87 14 31

July 63 93 17 34

August 64 92 18 33

September 55 83 13 28

October 21 69 7 21

November 34 50 1 10

December 26 38 -3 3

Average temperaturesSource: Own chart with data from Armhydromet

1961-1990

2002

Jan.

-6.8

-7.2

Feb.

-5.8

-2.8

Mar.

-1.4

1.3

Apr.

4.9

3.4

May

9.6

8.1

June

13.4

13.5

July

17.1

17.3

Aug.

16.7

16.7

Sept.

13.2

15.2

Oct.

7

10

Nov.

1.5

3.1

Dec.

-3.9

-8.4

Average

5.9

5.9

Average Temperatures, YerevanSource: ArmenianPages.com, drawn up with data published by RAMinistry of Agriculture.



˚C

mm

60

50

40

30

20

30

25

20

15

10

5

-5

010

0

Precipitation (mm) Temperature (˚C)

Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec

Monthly average

Precipitation (mm)

Temperature (ºC)

Jan.

26

-3,5

Feb.

27

-1

Mar.

34

5,8

Apr.

49

13

May

52

18

Jun.

26

22

Jul.

8

26

Aug.

11

25

Sept.

15

21

Oct.

22

13

Nov.

23

6,5

Dec.

29

0,2

322

12,1

Monthly average

Precipitation (mm)

Temperature (ºC)

Jan.

25

-8,7

Feb.

27

-7

Mar.

36

-1

Apr.

61

5,8

May

81

12

Jun.

71

15

Jul.

62

19

Aug.

35

19

Sept.

37

15

Oct.

39

8,8

Nov.

26

3,4

Dec.

33

-4

533

6,4

Yerevan

˚C

mm

60

70

80

90

50

40

30

20

25

20

15

10

5

-5

-10

-15

0

10

0

Precipitation (mm)

Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec

Temperature (˚C)

Gyumri

Source: Own chart with data from Armhydromet



Annual average precipitations vary according to topog-raphy, fluctuate between 250 mm per year recorded inArarat Valley and Araks River valley area – country’s mostarid region– up to 1,000 mm per year in country’s higherprecipitation places4. Furthermore, rain gauge records donot have constant levels. The period with more rains isfrom April to June (summer) while the period with less rainsis from December to February (winter), national averagebeing 526 millimeters per year5.

Indeed, highest regions receive more rain compared tovalleys. In fact, there are around 100 lakes in considerablyhigh areas, which could be used as watering resources forlowlands by means of hydraulic works. Perennial snows onmountains located 1,300 m above sea level may also be apotential source of fresh water6.

During last fifty years rain’s annual average decreased5.8%. Should this trend continue rains will be 10% lower in2100 year7.

Yearly average humidity8 is around 60%: 44% in sum-mer 80%9 in winter.

Large region water masses effect on climate behaviormust be underlined. Lake Sevan and lakes Urmia (NorthIran) and Van (Turkey) are climate moderators, together withother smaller lakes and rivers flowing throughout Armenia.

Armenia is in a westerly winds zone, flowing at highspeed some kilometers above sea level, encircling theearth globe and affecting local winds in the regionsthrough which they pass, particularly North America andAsia10. These winds interaction with country’s topography

ALTITUDETYPE

Low level

Medium level

High level

AVERAGE TEMPERATUREIN SUMMER

24° -26°C

15° -20°C

10° -15°C

ANNUAL PRECIPITATIONSIN MILLIMETERS (mm)

250-300

400-600

700-1.000

Source: Republic of Armenia Ministry of Nature Protection.

is one of the main factors in air flows distribution, aprocess having in turn an influence on climate structure invarious regions of Armenian territory and Caucasusregion11. Westerly winds influence is mainly verified fromOctober to March during northern hemisphere winter sea-son while in warmer periods12 winds are considerably lessrigorous. In turn, temperature difference recorded duringsummer season between higher and lower altitudes pro-duces different winds pressure gradient and distributionthroughout the country.

Solar radiation is very intense in all Armenia. At middaythe surface receives an average of 1.46 calories per cm2 inthe lands close to Ararat Valley. These values increase asaltitude rises, reaching an average of 1.54 calories per cm2

in areas 3,000m above sea level. There is sunlight for anaverage of almost 3,000 hours in Ararat Valley and LakeSevan basin while in the mountainous northern territoriesannual average lowers to 2,000 hours13.

2.3.1 Agro-ecological zonesArmenia is located on sub-tropical area northern border,

at latitudes characterized by having continental type cli-mate. Due to its specific topographical conditions, there aredifferent climates varying according to the area under analy-sis. For instance, Ararat valley area has an arid and conti-nental climate but only 10 km up north, at Mount Aragats(Aragatsotn marz), mountain tundra appears with differentglacier formations14 and a much more humid climate.

This is the reason why six different agro-ecologicalareas in the country in terms of altitude can be listed,namely: (i) semi desert, (ii) steppe, (iii) steppe-meadow(iv) forest, (v) alpine, and (vi) sub-alpine.

• (i) Semi desert zone.- Surface covered by this zone is236,000 hectares15, formed by Ararat valley, lowlandsadjacent to foothills, as well as small tracts in thesouth-east at altitudes between 600 up to 1,300 mover sea level. Major characteristics are low precipita-tion (not above 250 mm per year) and high air temper-ature (hot summers) resulting in rapid evaporation ofsoil moisture, leading in turn to salt accumulation insoil upper levels. This is the reason why vegetation isscarce, mainly two families may be found: the xero-



phytes i.e. Hordeum crinitum, Kochia, Euphorbiamarschalliana, Astragalus, Bromus inermis, Androsace,Festuca sulcata, , the ephemerals family i.e.Bromustectorum, Bromus squarrosum, Androsace, Geraniumtuberosum, Hordeum crinitum, Poa bulbosa,Chenopodium humile, Carex stenophilla16. In intensesalinization areas vegetation is Salsola.

• (ii) Steppe zone.- Occupies territories between 1,000and 2,200m altitude above sea level covering a totalarea of 242,00017 hectares. Climate is mainly dryand warm. In terms of temperature effects, two sub-zones canbe identified:

- the upper or moderately warm sub-zone, at above1,800m altitude, with lower temperatures, and - the lower or warm sub-zone, characterized by ahigher temperature in summer and a longer dura-tion of its growing period18.

In both sub-zones annual precipitation is 450 mm to600 mm, distribution being uneven. Maximum precip-itation level is in spring and beginning of summer. This zone is typically agricultural19, presenting a highlydeveloped scenario in wheat, barley, and oats grains aswell as fruit-growing and livestock-raising . Livestockbenefits from fodder production and pastures.

• (iii) Steppe-meadow zone.- Forms a transitionbetween steppes and meadows, occupying a consid-erable surface at a range of 1,500–1,800 m above sealevel, although in some parts this agro-ecologicalzone reaches 2,000 to 2,300 m. Annual precipitation level exceeds 600 mm, reachingin the upper zone up to 700 mm20. Soil types are varied and good for agriculture, maincrops being cereals and potato. Stonier slopes areused only for grazing. It has extremely diverse vege-tation such as the Festuca sulcata, Phleum phleoides,Agropyron, Bromus, Phleum pratense Dactylis glomer-ata and Festuca pratensis, among others.

• (iv) Forest zone: Occupies 712,000 hectares althoughactual area covered with trees is only 288,000hectares. This is so since trees were not adequatelyprotected in the past and exploitation was not regu-

lated. Armenia has the largest forests in Caucasusregion although their distribution is not even: there isa large surface in the northeast of the country andthen a series of smaller zones throughout the territo-ry, except in its central part .Forests may be found on mountains at 500 m up to2,300 m altitude above sea level21 as well as the val-leys; they do not develop on the plateau or meadows.Climate enabling forests to develop is relatively coldwith few fluctuations throughout the year.Precipitations in this ecological zone range from 400mm up to 800 mm per year22.In this exozone a great variety of species such asQuercus, Fagus, Carpinus (these last three beingthe most important ones), Tilia, Acer, Ulmus,Fraxinus, Carpinus orientalis, Betula, Pinus andJuniperus exists.

• (v) Sub-alpine zone: Found at an altitude of 2,300m upto 2,800m above sea level. Summer here is moder-ately cold and brief while winter is long and harsh;annual precipitation levels typically exceed 700 mmper year. In these ecological zones moderate slopesand meadows are scarce. The Zangezur chain zone isespecially famous for its rugged relief and steepslopes. While soil in this region is distinguished by ahigh level of humus unfortunately agriculture isexcluded as a result of severe climate and sparsevegetation. Pastures growing here are typically usedfor pasture.

• (vi) Alpine zone. This ecozone may be found at an alti-tude of 2,700 up to 3,500 m. covering together withsub-alpine zone 629,000 hectares of the country23.Alpine zone environmental conditions are uniquedue to climate harshness. Abrupt temperature vari-ations between day and night (in summer), consid-erably high level of precipitations, high humiditylevels (particularly in spring and fall), strong windsare alpine climate basic characteristics. Farminghere is impossible since no field crop can growunder such severe environmental conditions, eitherdue to scarce height or bad quality of pastures, andsometimes both24.



2.4 Water resources

Armenia is in a relatively favorable situation in terms ofnatural reserves of water resources. Taking into account allavailable water resources in the Republic, annual waterresources per capita25 are about 2,500-2,700 m3. The coun-try receives 18.400 million m3 of water per year26 throughrainfall from which unfortunately most of the volume is lostdue to evaporation27.

However, 200 streams lay the territory with different flowvolumes. Many of them can be used not only for consump-tion and irrigation but also as an hydroelectric energy sourceestimated at 1.7 million kilowatts28. This fact becomes veryimportant in an international setting where oil price reachesnew higher levels every day. The majority of those streamsare fed by melting snows, springs and underground water.

When analyzing national water system, country’s lakesand rivers must be considered as well as underground watersources29. Therefore, it is worth to mention, the enormousaquifer lying underneath Ararat valley, a water source formany area inhabitants, a substitute for the lack of rain in theregion, Kasakh River, with a length of 89km, Hrazdan Riverflowing along 146km, Azat and Vedi Rivers, 56km and 58kmlong respectively, are some of the water courses flowingalong this valley feeding many irrigation channels. Naturalwater resources of underground water in Armenia30 are esti-mated at around 4,017,000,000 m3.

There are two large river systems in the country:

• The Kur basin. 7,890 km2 of water from various rivers(Debet, Pambak, Agstev and Tavoush among the mainones).

• The Arax basin. This basin has major tributary rivers:Akhourian, Kasakh, Metsamor, Hrazdan, Azat, Vedi,Arpa and Vorotan, among others, widely used by localpopulation and for agricultural development on asmaller scale. Watershed volume of sweet water is21,900 km3.

Taking into account these two systems together withremaining water courses (around 200 not exceeding 10 km

in length have been listed), average density tributaries rangebeing of 0,4 km/km2.

Armenian rivers have 7 km3 per second flow average vol-ume although this figure may decrease down up to 5 km3

per second depending on the season31.In order to satisfy water demand in periods of low flow 74

small reservoirs have been built throughout the country, withan approximate useful volume of 1.16 km3 32. Currently,about 10 new dams are being built, which will add approxi-mately 400,000,000 m3 to the water system.

Flooding risks exists in certain country’s low parts due torapid snow melting in summer together with hard rains thatmay occur in the same season. May has the highest possi-bilities according to statistics, lowering to its minimum lev-els as from September.

Lakes are another important water resource. Armenia hasa series of lakes that vary in volume, among which LakeSevan located in the eastern province of Gegharkunik.

Lake Sevan occupies 5% of Armenia’s surface, locatedalmost 2,000 m above sea level, close to Gegham, Areguni,Sevan and Vardenis mountain chains forming one of thelargest alpine lakes in the world, covering 940 km2. This sys-tem is fed by 28 rivers and streams. Only 10% of the wateris drained through Hrazdan River, while the remaining 90%evaporates. This lake is important for the country sincealmost 80% of total national water resources are there, con-taining 58.5 km3 of water.

Lake Sevan system’s importance was noticed long ago.In fact, since late XVIIIth century discussions so as to findout the best way to benefit from it were held, considering itsaltitude, proximity to the arid but fertile Ararat Valley, need ofwater, among other issues. In 1910, Armenian engineerSuqias Mannaserian suggested a series of measures butonly in 1933 an overall project came into light. Moscowauthorities prepared a program of measures seeking toreduce evaporation levels six times by lowering lakes´ waterlevel 50 meters. Drained water would be used to providedrinking water to the region and produce energy with 6hydroelectric plants, at 500 megawatts capacity. System’sconstruction started in 1933, was completed in 1949, butdid not produce the expected results. By the 1960s the eco-logical and economic consequences of its misuse became



so evident people understood they should stop using theresource as it was done since 1933.

The lake had at that time a volume of 240 km3, almostone fourth of the capacity it had in 1920, and changes in thelake temperature (a 2% decrease on the surface), eutrofiza-tion and acidity increase were among other undesired sideeffects. Therefore, in 1963 construction of a 48 km long tun-nel began to connect the lake with Arpa River so the riverwould supply the lake with water, increasing lake’s volume.

Since 1981 this project has allowed 250 million m3 waterflow each year from Arpa river to Lake Sevan. In 1975, whenMetsamor nuclear plant opened, hydroelectric productionwas stopped and from that moment lake’s ecological situa-tion has been improving. Government has since then beencommitted to lake’s protection, carrying out active policiesfor Lake Sevan system’s defense. In 1978 Lake SevanNational Park was established in order to protect the lakeand for country’s and future generations benefit.

LAKENAME

KARI

AKNA

ARNOT

GAZANA

KAPUTAN

AL

SEV

ARPI

AIGHR

LOCATION

Close to Mount Aragats summit

Close to MountAgzdahak

Mount Geghamaeastern side

Geghi River headwaters

Kajarants Riverheadwaters

Mount Gharabagh

Mount Ishkhanasar

Ashotsk RiverEastern basin

Ararat Valley North

ALTITUDE (meters above

sea level)

3.190

3.030

2.350

3.590

3.300

2.990

2.666

2.025

860

SURFACE (km )

0.12

0.8

0.04

0.06

0.1

0.6

2

22

0.07

VOLUME IN THOUSANDS

OF cm

357

2.500

206

360

1.500

180

9.000

100.000

310

MAXIMUMDEPTH

(in meters)

8

15

12.6

10

22

4.5

7.5

8

9.4

AVERAGEDEPTH

(in meters)

3

6

5.2

-

-

3

5

4.2

4.3

Lakes in ArmeniaSource: Republic ofArmenia, Ministry ofNature Protection, 1999

Next page: Irrigationtechniques on 285,649ha.Source: Own chart basedon FAO information



Likewise, some smaller lakes may be found. Since in itsterritory there are more than a hundred smaller lakesAssyrians called Armenia “Nairi”, which means “land oflakes and rivers”. Among those lakes, only Arpi and Sevanhave been intensively studied.

Hereunder you will find a list of the most significantsmaller lakes:

2.4.1 IrrigationMost country’s agriculture depends on irrigation, 70% of

cultivated area requiring water systems to be able to devel-op. National irrigation structure was designed to providewater to 286,000 hectares per year33. Even though the situ-ation varies according to each marz, almost 60% of farmershave access to the water resource at an average of 0.7hectares to be irrigated per farmer. Currently, almost190,000 hectares are under this system while 96,000hectares are not irrigated because various pumping stationsand channels have inadequate conditions34 after 1988´shuge earthquake. Due to land unevenness, irrigation strong-ly depends on previously mentioned pumping stations, notvery appropriate for present Armenian agricultural situa-tion35 characterized by small farms. Currently, a plan is

under development to render the system more efficient byusing gravity as a means of transport and improving the var-ious channels structure.

The following table shows present distribution of irrigatedarea (in thousands of hectares) for each marz:

There are three main methods for irrigation in Armenia:

• by gravity, • mechanically and • dripping

The bad condition of the watering system contributes tothe loss of a great volume of water. In spite of the successof many projects by international donor organizations 36

there are only few watering networks in good condition. Thisis due to leaks in the pipes, damaged infrastructure andwater escapes among other problems. These losses areincluded in the rate paid by farmers for water, therefore, theyare paying a higher rate for watering than they would with anadequate system. Thus, if users’ associations are financedand water rates are according to real volumes used, farmerswill have greater chances to reduce cultivation costs andincrease their income. Together with water loss another rel-

AGRICULTURAL LANDS

MARZ

Ararat 51.3 32.8 29.8 27.2 22.9 21.2 3.7 3.6 3.6 3.5 3.5 3.5 3.3 0.7 0.3 13.6 2.0 1.2

Armavir 64.6 46.1 42.7 40.8 37.3 34.9 3.5 3.4 3.3 3.7 3.7 3.7 1.3 1.2 0.8 15.4 0.4 0.1

Aragatsotn 108.6 24.5 16.5 52.9 16.5 10.9 2.8 2.7 2.5 2.3 2.3 2.3 4.8 1.2 0.6 45.8 1.8 0.2

Kotayk 80.6 17.5 9.1 38.6 13.7 5.6 3.3 3.1 2.9 0.6 0.6 0.6 8.9 0.0 0.0 29.0 0.1 0.0

Gegharkunik 153.4 6.9 2.1 76.7 6.9 2.1 0.1 0.0 0.0 0.0 0.0 0.0 21.0 0.0 0.0 55.5 0.0 0.0

Tavush 69.4 19.6 4.2 28.8 17.3 2.7 0.5 0.5 0.4 1.2 1.2 1.1 10.6 0.2 0.0 28.2 0.3 0.0

Lori 142.4 9.8 5.5 43.3 9.1 5.1 0.8 0.5 0.4 0.1 0.1 0.1 33.3 0.1 0.0 65.0 0.0 0.0

Shirak 130.5 18.8 12.4 75.8 18.6 12.2 0.1 0.1 0.1 0.0 0.0 0.0 11.1 0.0 0.0 43.5 0.0 0.0

Vayots Dzor 51.5 6.1 4.9 15.4 4.1 3.0 0.9 0.9 0.8 0.7 0.7 0.7 4.8 0.5 0.4 29.7 0.0 0.0

Syunik 129.7 8.7 3.0 44.4 7.3 1.8 1.2 1.1 1.0 0.2 0.1 0.1 7.1 0.1 0.1 76.9 0.0 0.0

Total 981.9 190.8 130.2 443.9 153.7 99.6 16.9 15.9 14.9 12.3 12.3 12.0 106.2 4.0 2.1 402.9 4.7 1.5

ARABLE LANDS ORCHARDS VINEYARDS HIGH LANDS PASTURES

Irrig

ated

Non

-rr

igat

ed

Non

-rr

igat

ed

Tota

l

Irrig

ated

Tota

l

Non

-rr

igat

ed

Irrig

ated

Tota

l

Non

-rr

igat

ed

Irrig

ated

Tota

l

Non

-rr

igat

ed

Irrig

ated

Tota

l

Non

-rr

igat

ed

Irrig

ated

Tota

l



evant factors to be taken into account are lands expansion,land use planning, and soil use cost analysis.

It is also worth mentioning that the idea of changing allwatering system from a pumping system to one employinggravity is not sustainable. In many cases it is highly appro-priate to use alternative and much modern methods moreprofitable and less expensive.

Currently, more than 90% of the area equipped to obtainwater do so by gravitational irrigation37. Even though water-ing by flooding is considered inefficient due to the fact thathalf the water is not absorbed by the fields, either due tonon-desired drainage or to evaporation, and therefore wast-ed, in Armenia this method continues to be used in 46% ofthe cases, as it is the least expensive and fastest method.Drip Irrigation, however, is used only in 10% of the cases.Other methods have a marginal level of development.However, due to the need to protect this resource in recentyears an increase in the utilization of more efficient methodsfor water use has been observed.

Irrigation potential is estimated at 653,651 hectares38.Investment in the sector is required in order to reach that fig-ure, as well as a comprehensive plan taking into accountfarms specifics various needs as well as each marz or ruralcommunity different characteristics.

2.5 Topography

Republic of Armenia territory acquired present character-istics through the process started 25 million years ago,when strong geological upheavals made the earth crust rise,originating the Armenian plateau and creating the complexcurrent topography.

As previously stated, Armenia is the most mountainouscountry among Caucasian republics, with an average altitudeof 1,800 m above sea level. Altitude of almost 90% total ter-ritory is above 1,000 m sea level, highest recorded point beingMount Aragats (4,095 m), while lowest areas are situated nearMargi gorge (with an average height of 380 m above sea level)and Araks and Debet valleys (located north, with an altituderanging from 380 up to 430 m). The elevations do not allowmoist winds from passing; this is the reason why Armenia’sclimate is continental, a mountain chains isolated regionscharacteristic, preventing maritime influence.

Approximately only 3% country’s total surface isbelow 650m and nearly half the territory is located2,000m above sea level or higher. However, if we analyzethe percentage of territory at 1,000 m above sea level, wecan notice 90% has this characteristic

The following table shows Armenia’s territory altitude range:13%

12%75%

By gravity By sprinkling Others (dripping)

Irrigation techniques on 285,649 ha.

ALTITUDE ABOVESEA LEVEL (meters)

AREA (km ) %

Up to 500

501 to 1.000

1.001 to 1.500

1.501 to 2.000

2.001 to 2.500

2.501 to 3.000

3.001 to 3.500

Above 3.501

TOTAL

20

2900

5430

9300

7290

3800

970

30

29740

0.1

9.8

18.3

31.3

24.5

12.6

3.3

0.1

100

Source: Own chart based on FAO information

Source: Republic of Armenia, Ministry of Nature Protection, 1999



Moderating agents coming from Mediterranean Sea andBlack Sea are affected by this topography generating amarked seasonal difference in climate as regards to annualtemperatures. Due to its mountain chains height, Armeniahas a distinct dry continental weather and a wide climaticrange between the two main seasons. This situation pro-duces short and hot summers, long, cold and harsh winters.

Furthermore, slopes position and gradient have importantimplications for country’s biodiversity distribution. Thesteepest slopes are found on mountainsides, their use iscomplex, but in contrast, slopes with a 12° gradient (74% ofthe land, i.e. 21, 000 km2) are easy to cultivate and havegreat yield potential39.

Among the ridged mountains and valleys of Minor



Caucasus, most forests occur on north-facing slopes.Pambak mountain ridges (Lori region, north of the country,close to Georgia border; with Mount Tezhler one of thehighest peaks of this mountain ridge, reaching 3,101mabove sea level), Vardenis heights (east Lake Sevan, closeto Azerbaijan border) and Zangezur ramifications (south ofthe country, being the natural border with Azerbaiajn, andin which heights average 2,400m) are natural barriers toclimate behavior there are. These elevations separate nar-row fertile valleys. One of the most important valleys – thewide and fertile Ararat Valley – is located south, on AraksRiver left bank, forming the natural border with Turkey.Mount Aragats northeast land and close to Lake Sevan inthe east, land are extremely stony, hindering but not pre-venting agricultural sector development. Lastly, in south-eastern zone some small valleys may be found very appro-priate for the development of the sectors surrounding thelarge mountain ridges.

The mountain chain of this country is formed by theCaucasus system starting north of the country, splitting ina southeastern direction, between Lake Sevan andAzerbaijan. It also covers Armenian-Azerbaijani frontier upto Islamic Republic of Iran. Still undergoing tectonic move-ments, constantly readapting its tectonic plates, this situa-tion generates devastating earthquakes. Last one tookplace in December 1988 with epicenter in Spitak region,measuring 7.2 magnitude in Richter scale. killing about50,000 people according to unofficial figures, injuring,destroying, one of the most lethal in history.

Armenian plateau corresponds to Anatolian tectonicplate, therefore small mountains and dormant volcanosexist in the zone. As soil formation is volcanic, its edafolog-ical classification is very good consequently highly appro-priate for agriculture. Due to sloping ground and rainsaction, the edafological material surplus flows gently to thevalleys, consolidating these soils quality.

2.6 Soils

Armenian scenario as far as soils is very varied. Everytype of zonal soils may be found formed in Great Caucasusmountain regions 40. Over the territory there are five class-es, fifteen genetic types and thirty-three different subtypesof these type of soil ,covering 91% of the territory. Intrazonaland nonzonal types cover a marginal surface, equivalent to9% of Armenian lands41.

There are many Chernozem type soils covering 50% ofarable land42. In general, they are moderately fertile, haveorganic substances high content, good water retentioncapacity43, are in a medium altitude range (from 1,300 m to2,400 m above sea level).

Chestnut soils cover 14% of arable land; are typicallyfound at lower altitudes (from 700 to 1,700 m), are shallowand stony, contain little organic substance and very low pro-duction potential44.

Mountainous soils are found at heights above 2,000 m;they contain much organic substance but are mainly usedfor grazing45.

Almost 40% of total country’s surface is not appropriatefor agriculture46. Of the lands that may be used for this busi-ness activity (1,394,400 hectares47), 494,300 hectares arearable (35.5%), 63,800 hectares are covered with evergreenplants (6.4%), 138,900 hectares are meadow (10%) and694,000 hectares are pastures (49.9%)48.

0%Zona Intrazona Nonzonal

20%

40%

60%

80%

100%

Soils percentage in Armenia

Source: Own chart with data by Robert Tumanian in Armenia,Country Pasture Forage Resource Profiles



According to different research works about 44%Armenian lands are exposed to erosion49, Located mainly inAragatsotn, Kotayk, Lori, Syunik and Vayots Dzor marzes.

Natural as well as artificial factors leads us to a situationwhere 94,000 hectares of total 464,300 hectares arablelands are eroded (20,3%). One of the main land deteriorationcauses is overgrazing. Natural meadowlands occupying 1.4million hectares in 1940 have decreased currently as a resultof said praxis, stretching out today along a 804,500 hectaressurface50.

Certain factors contribute to reduce soil quality, as- landslides occurring over 2% of the territory, mainly in

Akhuryan river valley area and Debed, Vedi, Getik andVorotan rivers basins; - soil salinization, especially in Ararat plain, where 10% oflands are salinized; - deforestation, reaching relevant levels in the country,and - earthquakes, among other factors51.

According to the “National Action Plan to FightDesertification”, about 24,353 km2 (81.9% of the total),excluding Lake Sevan and water reservoirs surfaces are, todifferent extents, exposed to desertification: 26.8% of thelands faces extremely severe desertification; 26.4% severe

desertification, 19.8% moderate desertification; and 8.8%slight desertification, only 13.5% (499 km?) of the territorynot being exposed to it52.

Lands with different degrees of degradation can be foundin 281 communities of the marzes53. According to theUnited Nations Economic Commission for Europe (UNECE)data, over 1978-1998 period there were 640 stretches ofland degraded, with a total surface of 7,530 hectares, main-ly by actions of the mining industry, 3,780 hectares of whichwere used as agricultural lands before degradation. Overthese degraded lands total surface area, mining activitieshave been halted on 3,037 hectares. These lands could berestored for agricultural use, while the remaining 4,493hectares are still being used for mining activities. It shouldbe noted mining industry is an important source of wealthfor the country, but at the same time one of the most pollu-tant. Its operation typically produces strong environmentalimpact, natural soil destruction and creation of new soils,the so called anthrosols, featuring strong physical, chemicaland biological limitations making vegetation reinstallationdifficult. As an example, land surrounding Alaverdi copperplant in a radius of 3 km is polluted by heavy metals withconcentrations 20 to 40 times above tolerable limits; a sim-ilar situation exists in the land adjacent to Ararat gold plant.Kadjaran, Kapan and Agarak and their surroundings are also

0

ArableLands

Evergreenplants

Land use

Meadows Pastures

10

20

30

40

50

(%)

60

30,0%

25,0%

20,0%

15,0%

10,0%

5,0%

0,0%

Extremelysevere

Severe Moderate Slight No Deterioration

Land Deterioration Rates

Source: FAO in “A Strategy for Sustainable Agricultural Development”

Source: Own chart with data provided by the National Action Planto Combat Desertification



polluted by this kind of enterprises but statistical data is notavailable to determine toxicity level54.

Another harmful source of erosion reducing soil qualityare pollutants with agents used for agriculture. Certainchemical fertilizers, herbicides and pesticides used duringlong time in the country having a residual effect, intensifiedthe problem. A paradigmatic case is Dichloro-Diphenyl-Trichloroethane (DDT), a toxic chemical product greatly usedduring the XXth century as a pesticide, but after variousinvestigations claimed a potential risk for consumers; its usewas prohibited in many parts of the world55. The SovietUnion did the same in the 1970s; the regulation was adopt-ed by the Republic of Armenia at that time. Even thoughmore than three decades have passed, certain areas of thecountry still suffer from its effect.

The abusive exploitation, using non specific fertilizers foreach crop, the inappropriate use of machinery –oftentimesobsolete- are other factors that generate edaphic erosionand require many years to recover.

2.7 Human Resources

This section will take into consideration data from 2007Human Development Index (HDI 2007) by United NationsDevelopment Program (UNDP).

HDI is a compound indicator measuring a country aver-age advance in three basic dimensions:

• Long and healthy life (“health” indicator).• Access to knowledge (“education” indicator).• Decent standard of living (”standard of living” indicator).

These dimensions are measured, according to:

• Life expectancy at birth.• Adult literacy rate and combined gross enrolment ratio

for elementary school, high school and college.

Gross Domestic Product (GDP) per capita andPurchasing Power Parity in United States of America Dollars(PPP in US$).

2.7.1 General considerationsHDI evaluates 177 countries performance related to

human development, and ranks them. The countries,according to the results are classified in High HumanDevelopment countries (HDI ? 0,8), Medium HumanDevelopment countries (0,5 ≤ HDI < 0,8) and finally LowHuman Development countries (HDI < 0,5).

According to HDI 2007 Armenia ranks 83 and has medi-um human development (HDI 0,775).

In general, the country presents life expectance of 71.7years. Regarding education it has 99.4% adult literacy rateand 70.8% gross enrolment ratio for elementary school, highschool and college. Finally the GDP per capita adjusted byPPP is US$ 4,945.

Table 1 shows the Armenian position within the formerSoviet Socialist Republics.

Table 2 analyzes the evolution of the HumanDevelopment Index for the same countries since 1980. Dataavailable for Armenia for 1990 show a 0.737 index. Saidindex drops in 1995 to 0.701; later, years 2000 and 2005recorded an increase if 0.738 and 0.775 respectively.

HDI also evaluates human development by group ofcountries and sets a world average.

Table 3 shows the main indicators. Developing countrieshave a life expectancy of 66.1 years; a 76,7% literacy rateand 64,1% gross enrolment ratio for elementary school, highschool and college. Lastly, GDP per capita adjusted by PPPis US$ 5,282.

Table 4 summarizes demographic trends by group ofcountries and calculates world scenario for 2015. In devel-oping countries population percentage under age 15 will fallfrom 30.9% to 28%, while population over age 65 will rep-resent 6.4%. In addition, data shows fertility rate hasdropped abruptly over last 30 years, a trend that will contin-ue in the near future.

Table 5 estimates demographic trends of Community ofIndependent Sates (CIS) member countries and BalticStates. In the Republic of Armenia demographic growth rateis expected to be 0.1% in the 2005-/ 2015 decade, a figureentailing population stagnation. In the same period popula-tion percentage under age 15 might fall from 20.8% to17.5% and population aged 65 or older will drop from 12%



COUNTRY RANKING LIFEEXPECTANCY

AT BIRTH (years) 2005

ADULT LITERACYRATE

(% persons 15 years or

older) 1995-2005

GROSSENROLMENTRATIO FOR

ELEMENTARYSCHOOL, HIGHSCHOOL AND

COLLAGE EDUCATION(%) 2005

GDPPER

CAPITA (PPP US$)

2005

LIFEEXPECTANCY

INDEX

EDUCATIONINDEX

GDPINDEX

HUMAN DEVELOPMENT

Lithuania 0,831Estonia 0,842Latvia 0,821Byelorussia 0,730Russia 0,653

MEDIUM HUMAN DEVELOPMENT

Kazakhstan 0,728Ukraine 0,705ArmeniaA 0,651Georgia 0,587Azerbaijan 0,653Turkmenistan 0,609Moldavia 0,508Uzbekistan 0,505Kirgizstan 0,557Tajikistan

4243446467

7376839698

109111113116122

0,8620,8600,8550,8040,802

0,7940,7880,7750,7540,7460,7130,7080,7020,6960,673

72,571,272,068,765,2

65,967,771,770,767,162,668,466,865,666,3

99,699,899,799,699,4

99.599,499,4

100,098,898,899,1

-98,799,5

91,492,490,288,788,9

93,888,570,876,367,1

-69,773,877,770,8

14,49415.47813.6467.918

10.845

7.8576.8484.9453.3655.0163.8382.1002.0631.9271.356

0,7920,7700,7840,7280,702

0,6820,7110,7790,7610,7020,6270,7240,6960,6620,689

0,9650,9680,9610,9560,882

0,9730,9480,8960,9140,8820,9030,8920,9060,8650,896 0,435

HUMANDEVELOPMENT

INDEX (HDI) 2005

COUNTRY

Lithuania

Estonia

Latvia

Byelorussia

Russia

Kazakhstan

Ukraine

Armenia

Georgia

Azerbaijan

Turkmenistan

Moldavia

Uzbekistan

Kirgizstan

Tajikistan

1980

-

0,811

0,797

-

-

-

-

-

-

-

-

0,700

-

-

-

1985

-

0,820

0,810

-

-

-

-

-

-

-

-

0,722

-

-

0,705

1990

0,827

0,813

0,804

0,790

0,815

0,771

0,809

0,737

-

-

-

0,740

0,704

-

0,703

1995

0,791

0,792

0,771

0,755

0,771

0,724

0,756

0,701

-

-

-

0,684

0,683

-

0,638

2000

0,831

0,829

0,817

0,778

0,782

0,738

0,761

0,738

-

-

-

0,683

0,667

-

0,640

2005

0,862

0,860

0.855

0,804

0,802

0,794

0,788

0,775

0,713

0,708

0,700

0,696

0,673

Table 1 (above). Human Development Index,former Soviet Socialist RepublicsSource: UNDP, Human Development Report 2007-2008

Table 2 (below). Trends in Development index:1990-2005.Source: UNDP, Human Development Report 2007-2008

Table 3 (p. 44, above). Human Development IndexSource: UNDP, Human Development Report 2007-2008

Table 4 (p. 44, below). Demographic Trends(1975-2005)Source: UNDP, Human Development Report 2007-2008

Table 5 (p. 45, above). Demographic Trends: for-mer Soviet Socialist RepublicSource: UNDP, Human Development Report 2007-2008

Table 6 (p. 45, below). Gender-related develop-ment indexSource: UNDP, Human Development Report 2007-2008



HDI RANK HUMANDEVELOPMENT

INDEX (HDI) 2005

LIFEEXPECTANCY

AT BIRTH(years) 2005

ADULT LITERACYRATE (%

de persons 15years or older) 1995 - 2005

GROSSENROLMENT RATIOFOR ELEMENTARY

SCHOOL, HIGHSCHOOL AND

COLLAGE EDUCATION (%) 2005

GDP PER CAPITA

(PPP US$) 2005

LIFE EXPECTANCY

INDEX

EDUCATIONINDEX

GDPINDEX

Developingcountries

Leastdeveloped countries

Arab States

East Asia andthe Pacific


South Asia

Sub-saharan Africa

Central and EasternEurope and the CIS

World total

0,691

0,488

0.699

0,771

0,803

0,611

0,493

0,808

0,743

66,1

54,5

67,5

71,7

72,8

63,8

49,6

68,6

68,1

76,7

53,9

70,3

90,7

90,3

59,5

60,3

99,0

78,6

64,1

48,0

65,5

69,4

81,2

60,3

50,6

83,5

67,8

5.282

1.499

6.716

6.604

8.417

3.416

1.998

9.527

9,543

0.685

0.492

0,708

0,779

0,797

0,646

0.410

0,726

0,718

0,725

0,519

0,687

0,836

0,873

0,598

0,571

0,938

0,750

0,662

0,452

0,702

0,699

0,740

0,589

0,500

0,761

0,761

TOTAL POPULATION

(in millons ofinhabitants)

ANNUALPOPULATION

GROWTH RATE (%)

URBANPOPULATION

(% of total)

POPULATIONUNDER AGE

OF 15 (% of total)

POPULATIONAGED 65

AND OLDER(% of total)

TOTALFERTILITY

RATE (Birthsper women)

HDI RANK


Least developedcountries

Arab States

East Asia and thePacific

Latin America andthe Caribbean

South Asia

Sub-saharan Africa

Central and EasternEurop and the CIS

World total

1975 2005 2015

2,972,0T

357,6 T

144,4T

1.312,3T

323,9T

835,4T

314,1T

366,6T

4.076,1T

5.215,0T

765,7T

313,9T

1.960,6T

556,6T

1.587,4T

722,7T

406,2T

6.514,8T

5.966,6T

765,7T

313,9T

1.190,6T

566,6T

1.842,2T

913,2T

396,6T

7.295,1T

1975- 2005

2005- 2015

1,9

2,5

2,6

1,3

1,8

2,1

2,8

0,3

1,6

1,3

2,3

1,9

0,7

1,2

1,5

2,3

-0,2

1,1

1975 2005 2015

28,5

14,8

41,8

20,5

61,1

21,2

21,2

57,7

37,2

42,7

26,7

55,1

42,8

77,3

30,2

34,9

63,2

48,6

47,9

31,6

58,8

51,1

80,6

33,8

39,6

63,9

52,8

2005 2015

30,9

41,5

35,2

23,8

29,8

33,6

43,6

18,1

28,3

28,0

39,3

32,1

20,6

26,3

29,5

41,7

17,4

26,0

2005 2015

5,3

3,3

3,9

7,1

6,3

4,7

3,1

12,8

7,3

6,4

3,5

4,4

8,8

7,7

5,4

3,2

12,9

8,3

1970- 1975

2000- 2005

5,4

6,6

6,7

5,0

5,0

5,5

6,8

2,5

4,5

2,9

4,9

3,6

1,9

2,5

3,2

5,5

1,5

2,6



TOTAL POPULATION(in millons ofinhabitants)

ANNUALPOPULATION

GROWTH RATE (%)

URBANPOPULATION

(% of total)

POPULATIONUNDER AGE 15

(% of total)

POPULATIONAGED 65

AND OLDER (% of total)

TOTALFERTILITY RATE

(Births perwomen)

COUNTRY

1975- 2005

2005- 2015 1975 2005 2015 2005 2015 2005 2015

1970- 1975

2000 - 2005

Lithuania

Estonia

Latvia

Byelorussia

Russia

Kazakhstan

Ukraine

Armenia

Georgia

Azerbaijan

Turkmenistan

Moldavia

Uzbekistan

Kirgizstan

Tajikistan

1975 2005 2015

3,3

1,4

2,5

9,4

134,2

14,1

49,0

2,8

4,9

5,7

2,5

3,8

14,0

3,3

3,4

3,4

1,3

2,3

9,8

144,0

15,2

46,9

3,0

4,5

8,4

4,8

3,9

26,6

5,2

6,6

3,3

1,3

2,2

9,3

136,5

16,3

43,4

3,0

4,2

9,0

5,5

3,6

30,6

5,8

7,7

0,1

-0,2

-0,2

0,1

0,2

0,2

-0,1

0,2

-0,3

1,3

2,2

-

2,1

1,5

2,1

-0,5

-0,3

-0,5

-0,6

-0,5

0,7

-0,8

-0,1

-0,7

0,8

1,3

-0,6

1,4

1,1

1,6

55,7

67,6

64,2

50,6

66,9

52,6

58,4

63,6

49,5

51,9

47,6

36,2

39,1

38,2

35,5

66,6

69,1

67,8

72,2

73,0

57,3

67,8

64,1

52,2

51,5

46,2

46,7

36,7

35,8

24,7

66,8

70,1

68,9

76,7

72,6

60,3

70,2

64,1

53,8

52,8

50,8

50,0

38,0

38,1

24,6

16,8

15,2

14,4

15,7

15,1

24,2

14,7

20,8

18,9

25,3

31,8

20,0

33,2

31,0

39,4

14,0

16,0

14,2

14,4

15,9

24,9

13,9

17,5

15,9

20,6

27,0

17,2

28,3

27,3

33,6

15,3

16,6

16,6

14,4

13,8

8,0

16,1

12,1

14,3

7,2

4,7

11,1

4,7

5,9

3,9

16,8

17,3

17,7

13,7

13,1

7,5

15,9

11,0

14,4

6,8

4,4

11,8

4,4

5,1

3,5

2,3

2,2

2,0

2,3

2,0

3,5

2,2

3,0

2,6

4,3

6,2

2,6

6,3

4,7

6,8

1,3

1,4

1,2

1,2

1,3

2,0

1,2

1,3

1,5

1,7

2,8

1,5

2,7

2,5

3,8

GENDER-RELATED

DEVELOPMENTINDEX (IDH)

LIFEEXPECTANCY

AT BIRTH (year) 2005

ADULT LITERACYRATE (% aged 15

and older) 1995-2005

COMBINED GROSSENROLMENT RATIOFOR ELEMENTARY

SCHOOL, HIGH SCHOOLAND COLLEGE EDUCATION

(%) 2005

ESTIMATED EARNEDINCOME

(PPA EN US$) 2005

HDI RANKMINUS

GDI

COUNTRY

Lithuania

Estonia

Latvia

Byelorussia

Russia

Kazakhstan

Ukraine

Armenia

Georgia

Azerbaijan

Turkmenistan

Moldavia

Uzbekistan

Kirgizstan

Tajikistan

CLASIF. VALUE

38 0,861

41 0,858

44 0,853

57 0,803

59 0,801

65 0,792

69 0,785

75 0,772

- -

87 0,743

- -

97 0,704

98 0,699

102 0,692

106 0,669

WOMEN MEN

78,0 66,9

76,8 65,5

77,3 66,5

74,9 62,7

72,1 58,6

71,5 60,5

73,6 62,0

74,9 68,2

74,5 66,7

70,8 63,5

67,0 58,5

72,0 64,7

70,0 63,6

69,6 61,7

69,0 63,8

WOMEN MEN

99,6 99,6

99,8 99,8

99,7 99,8

99,4 99,8

99,2 99,7

99,3 99,8

99,2 99,7

99,2 99,7

- -

98,2 99,5

98,3 99,3

98,6 99,6

98,6 99,6

98,1 99,3

99,2 99,7

WOMEN MEN

97 87

99 86

97 83

91 84

93 85

99,8 97

87 86

74 68

77 75

66 68

- -

73 67

72 75

80 76

64 77

WOMEN MEN

12.00 17.349

12.112 19.430

10.951 16.842

6.236 9.835

8.476 13.581

91 6.141

4.970 9.067

3.893 6.150

1.731 5.188

3.960 6.137

6.108 9.596

1.634 2.608

1.547 2.585

1.414 2.455

992 1.725

4

2

0

3

3

1

0

0

-

0

-

1

1

0

1



to 11% . Fertility rate fell from 3 births per women in 1970/75to 1.3 in 2000/05.

Table 6 analyzes gender-related development in thesame group of countries. Ranking for Armenia is 75 (of 177countries). Life expectancy is 74.9 years for women and68.2 for men; literacy rate in both cases is over 99%, whileenrolment in every level is higher for women (74%).Estimated earned income for men is (US$ 6,150) and (US$3,893) for women.

2.7.2 “Health” IndicatorsTable 7 summarizes main heath indicators: 92% of

Armenians have access to drinking water, while this percent-age drops to 83% regarding sanitation facilities. Lifeexpectancy is estimated in 72 years and fertility rate is 1.3, faraway from the 2.1 considered for population renewal in vari-ous generations. Urban population growth rate is negative(1.4), showing migration from urban areas to rural ones.

2.7.3 “Education” IndicatorsTable 8 shows main indicators. It is important to outline

youth literacy rate (from 15 up to 24 years old is absolute.The number of phones per 100 inhabitants is 30 and thenumber of Internet users per 100 inhabitants is 5.

Female school enrolment rate is higher than male schoolenrolment rate and it is also higher in high school than in ele-mentary school.

Armenia society is well-known for its education and for thehigh quality of its scientists and researchers56, it stands out inareas such as physics, electronics, geology, seismography,applied mathematics, astrophysics, biotechnologies, chem-istry and pharmacy only to mention a few. Armenia’ high edu-cational institutions are one of the most outstanding in theregion, but transition to a market economy has had negativeeffects on the activities of many institutions. Some had tocancel research projects. Those organizations that did survivedid so as a result of grants from foreign organizations andstate subsidies57. The economic situation also had an influ-ence on the total volume of scientific work and on the deci-sion to emigrate to the West taken by many engineers.

At present the situation in the area of applied research isstable. Certain positive tendencies can be observed58:

• Including universities and small-scale laboratories thetotal number of scientific organizations operating inArmenia is 88.• The budget for this activity is 1,519.1 million ArmenianDrams .• According to the National Statistic Agency Report thenumber of scientists and researchers in 2000 was 7.309.

According to the United Nations Economic Commissionfor Europe, UNECE, the main obstacle for an efficientdevelopment of sciences in the country lies in the absenceof lasting links between scientific institutions and the pri-vate sector.

Tables 9 and 10 summarize the educational system com-pared to Baltic States and Community Independent States(CIS) and by type of countries.

HEALTH INDICATORS VALUE

Total percentage of population with access to drinking-water 92%

Total percentage of population using sanitation facilities 83%

Estimated number of people with HIV, in thousands 2.9

Life expectancy, 2006 72 years

Fertility rate, 2006 1.3

Urban population annual growth rate (1990/2006) -1.4%

Infant mortality rate (under 1), 2006 21

Percentage of children under five suffering from underweight(moderate or severe)

5%

Table 7. Source: UNICEF



EDUCATION INDICATORS VALUE (%)

Youth (15 - 24 years) literacy rate, 2000/2006, male 100

Youth (15 - 24 years) literacy rate, 2000/2006, female 100

Number of phones per 100 inhabitants 2005 30

Number Internet users per 100 inhabitants 2005 5

Elementary school enrolment ratio 2000/2006, gross, male 77

Elementary school enrolment ratio 2000/2006, gross, female 81

Elementary school enrolment ratio 2000/2006, net, male 99

Elementary school enrolment ratio 2000/2006, net, female 98

High school enrolment ratio 2000/2006, net, male 83

High school enrolment ratio 2000/2006, net, female 86

High school attendance ratio 2000/2006, net, male 93

High school attendance ratio (2000-2006), net, female 95

ADULT LITERACY

RATE (% aged

15 and older)

YOUTHLITERACY

RATE (% aged15-24)

NET PRIMARYENROLMENT

RATE(%)

NET SECONDARYENROLMENT

RATE (%)

CHILDRENREACHINGGRADE 5

(% of grade 1students)

TERTIARY STUDENTSIN SCIENCE,

ENGINEERINGAND CONSTRUCTION

(% of tertiarystudents)

RANK HDI

Lithuania

Estonia

Latvia

Byelorussia

Russia

Kazakhstan

Ukraine

Armenia

Georgia

Azerbaijan

Turkmenistan

Moldavia

Uzbekistan

Kirgizstan

Tajikistan

1985-1994 1995-2005

98,4

99,7

99,5

97,9

98,0

97,5

-

98,8

-

-

-

96,4

-

-

97,7

99,6

99,8

99,7

99,6

99,4

99,5

99,4

99,4

-

98,8

99,8

99,1

-

98,7

99,5

1985-1994 1995-2005

99,7

99,9

99,8

99,8

99,7

99,7

-

99,9

-

-

-

99,7

-

-

99,7

99,6

99,8

99,8

99,8

99

99,8

99,8

99,8

-

99,9

-

99,7

-

99,7

99,8

1991 2005

-

99

22

86

92

89

80

-

97

89

-

89

78

92

77

89

95

88

89

-

91

83

79

93

85

-

86

-

87

97

1991 2005

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

91

91

-

89

-

92

79

84

81

78

-

76

-

80

80

1991 2004

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

99

-

-

-

-

-

-

-

-

-

-

-

-

-

1999-2005

25

23

15

27

-

-

27

7

23

-

-

-

-

17

18

Table 8 (above). MainEducation Indicators,ArmeniaSource: UNICEF

Table 9 (below). Literacyand enrolment Source: UNDP, HumanDevelopment Report 2007-2008


Project Fruitfull Armenia50

Rank HDI ADULTLITERACY RATE

(% aged 15and older)

YOUTHLITERACY RATE(% aged 15–24)

NET PRIMARYENROLMENT

RATE(%)

NETSECONDARYENROLMENT

RATE(%)

CHILDRENREACHINGGRADE 5

(% of grade1 students)

TERTIARY STUDENTSIN SCIENCE,

ENGINEERING,MANUFACTURING

ANDCONSTRUCTION

(% of tertiarystudents)


Least developed countries

Arab States

East Asia and the Pacific

Latin America andthe Caribbean

South Asia

Sub-Saharan Africa

Central and Eastern Europeand the CIS

World total

1985-1994 1995-2005

68,2

47,4

58,2

-

87,6

47,6

54,2

97,5

76,4

77,1

53,3

70,3

90,7

89,9

59,7

59,3

99,1

82,4

1985-1994 1995-2005

80,2

56,3

74,8

-

93,7

60,7

64,4

-

83,5

85,6

65,5

85,2

97,8

96,6

74,7

71,2

99,6

86,5

1991 2005

80

47

71

-

86

-

52

90

83

85

77

83

93

95

87

72

91

87

1991 2005

-

-

-

-

-

-

-

-

-

53

27

59

69

68

-

26

24

59

1991 2004

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

1999-2005

-

-

-

-

-

-

-

-

-

2.7.4 “Standard of living” indicatorsTable 11 synthesizes GDP per capita earned by national

inhabitants (US$ 1,930 per inhabitant in 2005); growth rateper inhabitant (5.2% in the last 18 years); percentage ofpopulation below US$1 per day (less than 2% of the totalpopulation).

Table 12 measures inequity in income and expenditure in

the Baltic States and in those of the Community IndependentStates (CIS). The richest 10% in Armenia concentrates42.8% of total income, while the poorest represents 3.6%.Armenia holds a 33.8 index indicating that the richest 10%exceeds approximately 8 times the poorest 10%.

Table 13 shows the main features on human and incomepoverty in the same group of countries.

STANDARD OF LINVING INDICATORS VALUE

GDP per capita (U$S), 2006 1930

GDP per capita average annual growth rate, 1990/2006 5.2%

Percentage of population below U$S 1 per day, 1990 / 2005 <2%

Table 10. Literacy and Enrolment, in general. Source: UNDP, Human Development Report 2007-2008

Table 11. Standard of livingindicatorsSource: UNICEF



SHARE OF INCOME OR EXPENDITURE (%) INEQUALITY MEASURESCOUNTRY SURVEYYEAR

Lithuania

Estonia

Latvia

Byelorussia

Russia

Kazakhstan

Ukraine

Armenia

Georgia

Azerbaijan

Turkmenistan

Moldavia

Uzbekistan

Kirgizstan

Tajikistan

2003

2003

2003

2002

2002

2003

2003

2003

2003

2001

1998

2003

2003

2003

2003

POOREST10%

POOREST20%

RICHEST10%

RICHEST20%

2,7

2,5

2,5

3,4

2,4

3,0

3,9

3,6

2,0

3,1

2,6

3,2

2,8

3,8

3,3

6,8

6,7

6,6

8,5

6,1

7,4

9,2

8,5

5,6

7,4

6,1

7,8

7,2

8,9

7,9

43,2

42,8

44,7

38,3

46,6

41,5

37,5

42,8

46,4

44,5

47,5

41,4

44,7

39,4

40,8

27,7

27,6

29,1

23,5

30,6

25,9

23,0

29,0

30,3

29,5

31,7

26,4

29,6

24,3

25,6

10,4

10,8

11,6

6,9

12,7

8,5

5,9

8,0

15,4

9,7

12,3

8,2

10,6

6,4

7,8

6,3

6,4

6,8

4,5

7,6

5,6

4,1

5,0

8,3

6,0

7,7

5,3

6,2

4,4

5,2

RICHEST 10% TO

POOREST 10%

RICHEST 20% TO

POOREST 20%

GINIINDEX

36,0

35,8

37,7

29,7

39,9

33,9

28,1

33,8

40,4

36,5

40,8

33,2

36,8

30,3

32,6

POPULATION BELOW INCOME POVERTY LINE

COUNTRY PROBABILITY AT BIRTHOF NOT SURVIVING

TO AGE 60 (% of cohort) 2000-2005

50% OF MEDIANINCOME

2000-2005 US$ A DAY2000-2004

LithuaniaEstoniaLatviaByelorussiaRussiaKazakhstan UkraineArmeniaGeorgiaAzerbaijanTurkmenistan MoldaviaUzbekistan Kirgizstan Tajikistan

20,021,419,812,715,931,126,517,619,124,531,324,225,926,925,9

-12,4

--

18,8----------

36,633,226,315,845,356,744,780,561,985,979,464,719,672,584,7

Table 12 (above). Inequity inincome and expenditureSource: UNDP, HumanDevelopment Report 2007-2008

Table 13 (below). Human andincome poverty: former SovietSocialist RepublicSource: UNDP, HumanDevelopment Report 2007-2008



2.7.4.1 Human ResourcesThe household’s human capital is comprised of those

individual characteristics of its members, both qualitativeand quantitative, helping them generate income59. The maincharacteristics of human capital are age, education andgender and household size.

According to a study made in 2003 60 household headaverage age is 54 years old; all household members averageage is 35 years old. Household size average is 4.6 persons,of which 2.8 are of working age between 16 and 65; 53% ofthem are women61.

Impoverished households62 are significantly larger (5.0members) and have more dependants on the householdincome; their average dependency ratio – defined as theshare of household members younger or older than workingage (16-65) - is 0.41, compared to 0.36 for non-impover-ished households63.

The highest level of education completed in householdnormally is secondary; women having slightly more oftengeneral education, while men have professional activity-ori-ented education. Illiteracy is virtually absent.

Other human capital aspect is the presence of a house-hold member eligible for receiving a pension. Having a pen-sioner in the household implies access to an important

source of income and can be consistently viewed as part ofa household’s human capital. Half households in this sam-ple included one or more pensioners. Impoverished house-holds have 48% of pensioners while non- impoverishedhouseholds have 54%64. There are significant differences inincomes if the household is in an urban or rural area,

Table 14 analyzes the structure of average rural house-hold income in Armenia.

2.7.4.2 Social Capital Social capital may be defined as “actors ability to secure

benefits by virtue of membership in social networks or socialstructures” (Portes and Sensenbrenner, 1998). Considered afundamental tool to promote improvement in the standard ofliving of a modern society this concept cannot be extrapolat-ed nor implemented by governments since personal interrela-tion is present in the values of society, in its modus vivendi.

Several characteristics can be considered to analyze theArmenian social capital according to a study done in 200366.

First, only 7% of households participate in a professionalagricultural organization, with no significant differencesbetween the poor and non-poor. Second, nearly half (43%) ofhouseholds take part in co-operation activities in some farm-ing-related area, most often in irrigation (27% of households),

INCOME AVERAGE CONTRIBUTIONTO TOTAL INCOME

%

HOUSEHOLD WITH THISINCOME BEING THE

MAIN FUNDING SOURCE %

Food production

Salaries

Social payments

Assets sale

Remittances

Other non-farm activities

Non-farm activities

Total income

62

10

13

4

4

4

3

100

96

39

61

18

20

26

15

---

Table 14. Structure of house-hold incomes per householdSource: Rural Livelihoods inArmenia.65



followed by joint use of machinery and equipment (9%).Virtually no cooperation was reported in production, process-ing or input purchasing. Non-poor households are 55% moreengaged in cooperative activities than poor households.

A third way to measure social capital is the incidence ofmutual help in hard times, which may reduce household’svulnerability in affected households (Dudwick, 2003).

Approximately 45% of respondents reported they had expe-rienced a serious economic crisis that had endangered thewell-being of their family over the past 5 years. About a fifth(21%) of these households had received help from relativesduring and after the crisis, and 5% had received help fromothers (a state agency, charitable organization or church)67.However, 73% had received no help at all.

1 This expression is used to describe a country’s inflation directlyinfluenced by international price increase. 2 These figures were gathered by means of data processing from46 meteorological stations throughout the country.3 These cities were chosen since the first meteorological observa-tions were made in 1843 in Gyumri and in 1844 in Yerevan. 4 As an example of this, 1,000 mm per year are recorded at MountAragats.5 United Nations Disaster Relief Coordinator- UNDRO-UN,Multisectoral Study on Disaster and Management Planning inArmenia, New York, 19906 Bedoukian, P., Geography of Armenia, Geneva, 2005, p. 297 Source: United Nations Economic Commission for Europe(UNECE).8 Relative Humidity.9 Republic of Armenia, Ministry of Environmental Protection, FirstNational Report to the Convention on Biological Diversity, Yerevan,1999, p. 910 Elliott, D; Schwartz, M; Scott, G; Haymes, S; Heimiller, D;George, R; Wind Energy Resource Atlas of Armenia, 2003, p. 2811 Op. cit., p. 2812 From April to September13 Tumanian, Robert, Armenia, Country Pasture/Forage ResourceProfiles, 200614 Ibid.15 National Report on the State of the Environment in Armenia in2002, Yerevan, 2003, p. 3116 Tumanian, Robert, Armenia, Country Pasture/Forage ResourceProfiles, 200617 Republic of Armenia National Report on the State of theEnvironment in Armenia in 2002, Yerevan, 2003, p. 3118 Tumanian, Robert, Armenia, Country Pasture/Forage ResourceProfiles, 200619 Ibid.20 Ibid. 21 However, in some regions they may be found at 2,600 m or moreabove sea level.

22 Ibid.23 Republic of Armenia National Report on the State of theEnvironment in Armenia in 2002, Yerevan, 2003, p. 3124 Ibid.25 National Report on the State of the Environment in Armenia in2002, Yerevan, 2003, p. 2626 According to data by the United Nations Development Program(http://www.waterwiki.net/index.php/Armenia) (accessed May 7,2008)27 Republic of Armenia, Ministry of Environmental Protection, FirstNational Report to the Convention on Biological Diversity, Yerevan,1999, p. 928 Source: Republic of Armenia, Ministry of EnvironmentalProtection29 Annual underground water refilling is estimated at 3.8 billion m3,1.3 billion m3 of which reappear as springs in the country. Of theremaining 2.5 billion, 0.7 billion m3 are extracted from wells andused for domestic, industrial and irrigation uses. 30 Source: United Nations Development Program (UNDP).31 According to data by FAO Information System on Water andAgriculture (AQUASTATS)32 Source: United Nations Food and Agriculture Organization (FAO).33 USAID/Armenia, Armenia Agricultural Assessment, 200234 Ibid.35 According to the United Nations Economic Commission forEurope (UNECE).36 World Bank, International Fund for Agricultural Development36,Armenian Social Investment Fund among others, ASIF37 Hayjirnackhagits Institute, The Program of Utilization of WaterResources within the Republic of Armenia, 199338 According to data by Water and Agriculture Information Systemof United Nations Food and Agriculture Organization FAO.39 Republic of Armenia, Ministry of Environmental Protection, FirstNational Report to the Convention on Biological Diversity, Yerevan,1999, p. 840 Tumanian, Robert, Armenia, CountryPasture/Forage ResourceProfiles, 2006

Notes



41 Ibid.42 Republic of Armenia, Ministry of Agriculture with the support ofFAO, A Strategy for Sustainable Agricultural Development, Yerevan,2002, p. 943 Ibid.44 Ibid.45 Ibid.46 Source: United Nations Development Program (UNDP).47 Republic of Armenia, Ministry of Agriculture with the support ofFAO, A Strategy for Sustainable Agricultural Development, Yerevan,2002, p. 948 Ibid.49 Source: United Nation Economic Commission for Europe(UNECE) 50 National Report on the State of the Environment in Armenia in2002, Yerevan, 2003, P. 3151 Ibid.52 Ibid.53 Source: National Action Plan to Combat Desertification, 2005 54 Republic of Armenia, Ministry of Environmental Protection,National Report on the State of the Environment in Armenia in 2002,Yerevan, 200255 In 1962 writer Rachel Carson published a book “Silent Spring”where she stated all the ecological danger from the use of DDT. Sheeven expressed all the birds of the world would disappear if the

use of such pesticide continued. As from that moment a worldcampaign began so as to ban the use of such agent. Nowadays thebook is venerated by the environmentalism since it expressed thehorrors of progress and dangers of chemical compounds to publicopinion.56 United Nations Economic Commission for Europe (UNECE),“Towards a knowledge-based economy. Armenia: country readi-ness assessment report”, New York and Geneva, 2002, p. 13. 57 Ibid.58 Ibid.59 Bezemer y Lerman, Rural Livelihoods in Armenia, DiscussionPaper No. 4.03, The Hebrew University of Jerusalem, 2003.60 The study’s empirical base is a sample of rural houses inArmenia, made in 1998 by the Sustainable Social and EcologicalDevelopment Unit of the World Bank. The sample covered 75towns and 7000 people in 1500 households.61 Ibid.62 Poor and non-poor households are considered according to theArmenian government poverty line.63 Ibid.64 Ibid.65 Bezemer y Lerman, Rural Livelihoods in Armenia, DiscussionPaper No. 4.03, The Hebrew University of Jerusalem, 2003.66 Ibid.67 Ibid.


chapter 3

ArmenianAgriculturalScenario


Chapter 3 - Armenian Agricultural Scenario 57

Chapter 3

Armenian Agricultural Scenario

3.1 Introduction

Natural resources –minerals, soil, animals and plants- arenature given elements and forces man use as wealthsources. Fuels, wind and water can also be used for energyproduction. But their best utilization depends on the knowl-edge man has on laws governing the conservation thereof.

Each country relies on certain resources to enable itsinhabitant’s progress. But their exploitation must be madetaking into account future needs, should growth be detri-mental to the entire society all its legitimacy is lost. That iswhy development must be sustainable, it being under-stood as an integral process requiring from different soci-ety actors´ commitments and responsibilities in economic,political, environmental and social model implementation,as well as in consumption patterns determining life quality.To compete in domestic and foreign markets productivesector must incorporate sustainability in its operations,relations with workers and the community.

Furthermore, resources available for a country deter-mine which products can be produced and exploited. Inother words, a single country can obtain from its naturalenvironment only what circumstances and technologyallow it. That is why in the previous chapter several factorsdetermining Armenian agricultural potential and their gen-eral physical characteristics were analyzed. Bearing inmind, elements such as water, topography and climateinfluence decisively in shaping country’s agricultural profilethis sectors´ production in Armenia can be analyzed con-sistently only when the foregoing is duly considered.

Considering previous statements, we are now ready topresent this chapters´ goal. We will review current Armeniaagricultural scenario taking into account previous sectionassertions.

Understanding agricultural sectors´ hallmarks willenable to make a comprehensive analysis of such eco-

nomic activity status representing one fifth of the ArmenianGross Domestic Product.

3.2 Soils in Armenia

The Republic of Armenia has a total surface of2,974,000 hectares, 311,000 hectares of which are underspecial protection1.

The country has an important range of soils throughoutits territorial extension. Their common feature is lack ofhumidity, due to the mountain shield absorbing on its hill-sides the water transported by the winds coming fromBlack Sea. Total number of soils type is fourteen: clay soilsprevail in Ararat valley where land is generally very rocky;mountain grasslands have instead the greatest amount ofhumus - up to 12% with an overall average of 9%, veryfavorable given humus content since in other areas suchas forests it ranges from 4% to 9%, and in predominantlydesert areas up to 2%.

14%

12%

10%

8%

6%

4%

2%

0%

MountainGrasslands

Forests

Deserts

Percentages of humus in main soils.Source: Own chart with data from the Republic of Armenia Ministryof Natural Protection.



Erosion has strongly affected countrys´soils. Natural aswell as caused by man’s action factors led to this situation,the latter being the most harmful, leaving sequels still seentoday throughout the country.

3.2.1 Armenian agricultural areasTaking into account environmental and economic condi-

tions together with production specialization, eight agricul-tural areas can be identified2: (i) Ararat valley (ii) AraratValley piedemont, (iii) Sevan basin, (iv) Northeasternarea, (v) Lori-Pambak region, (vi) Shirak, (vii)Daralagyaz, (viii) Zangezur territory. In general, an agri-cultural production area represents a combination of areasspecialized in certain agricultural productions types distin-guished by a specific combination of agronomic activitiesand lands` use, made not only of merely natural categoriesor soil conditions, but of agricultural ancient cultural her-itage having left its mark and cultural power over hundredsof years in that particular place.

Ararat valley piedmont is an area dedicated to wine andfruits production, having an important development indairy products manufacture as well as cattle, pig and poul-try breeding for industrial purposes3. Population living atthe top of the mountains is now involved in sheep breed-ing, cereal crops and tobacco cultivation. Central area hasan important dairy products, meat industry and sheep rais-ing development. According to its climate, the area isdivided in dry steppe, 1,400 to 1,800 meters above sealevel, and dry mountain-steppe in areas with an altitudehigher than 1,800 m above sea level.

Sevan basin is an area favorable for livestock and pota-to farming, in sharp growth these last years, in addition toother tubers. Main occupation among livestock activitiesincludes dairy and beef production. At zones´ bottom,between 1,400 and 2,100 meters above sea level, there arefruit trees typical of the area with a high percentage of landspecies including walnuts and almonds varieties. From1,400 to 2,500 meters above sea level livestock breedingprevails. Over 2,500 meters above seal level there are openlands used for grazing4.

In northeastern zones tobacco cultivation, cattle risingand fruit´s cultivation prevails together with wine industry

and breeding hog’s development. The zone includes two-sub-zones, the plain located up to 900 meters above sealevel and the forest, located above 900 meters height. Theplain is mainly an agricultural zone in a drought area: pota-toes cultivation is done, being the soughtest area for live-stock outdoor feeding.

Lori-Pambak area has two sub-zones: the mountainforests up to 100 meters above sea level and the moun-tain-steppe over 1,500 m above sea level.

Shirak is an area engaged in dairy, beef production andsheep wool. This land occupies republic´s northwesternside, being, in turn, divided into two sub-zones: drysteppe at an altitude up to 1,800 meters above seal leveland mountain-steppe, at an altitude above 1,800 meters.Irrigated agriculture prevails in the first sub-zone, secondone being dry land.

Daralagyaz is a developed area dedicated to wine pro-duction industry and fruit growing.

In turn, at Zangezur territory, Syunik is known for cat-tle and sheep breeding being as well a developed pole fortobacco cultivation and wine production5. This territory islocated in Armenia´s southwest border. The area is dividedinto three sub-zones: lowlands, with a maximum altitude of1,400 meters above sea level, wooded steppes, located1,400 up to 2,000 meters above sea level, and mountain-steppe, at over 2,000 meters above sea level.

3.2.2 Geographic Distribution of AgriculturalProduction

3.2.2.1 WheatWheat grows in almost all marzes since it is the only

means of ensuring food safety in agricultural households.However, this does not mean wheat production level issimilar in all districts. Indeed, while main wheat producingmarzes are Shirak, Syunik and Gegharkunik the highestproductivity marzes per hectare are those of Ararat andArmavir.

Approximately, 70% of wheat is produced in the fivemarzes mentioned above. As far as national wheat seedsproduction is concerned, its cultivation is carried out inSyunik (30.5%), Lori (30.3%) and Shirak (18%) marzes.



Wheat Production Geographic Distribution, 2004.



3.2.2.2 Corn Corn production is very concentrated. The two most

important areas are Tavush in the northeast (producing30% to 35% of Armenian corn) and Ararat and Armavirmarzes (producing 43% to 48 % of domestic corn). Therest of the corn is mainly produced in Lori marz and also –but in much lower quantities- in some other marzes.Nevertheless it is worth to point out corn is not producedfour marzes: Shirak, Siunik, Vayots Dzor, Aragatsorn.

Corn Production Geographic Distribution, 2004.



3.2.2.3 Fruits

3.2.2.3.1 ApplesApples grow in almost all Armenian areas being country´s

most extended fruit cultivation. However, its cultivation forindustrial purposes is concentrated only in some areas pro-ducing 65% to 70% of the whole, main regions beingAragatsotn lowlands (1,200-1,800 m) 20% to 25%, Kotayklowlands (1,000-1,500 m), Nairi and Abovyan regions 18 to23%, Lori marz 10% and Syunik marz 12% each.

Apple Production Geographic Distribution, 2004.



3.2.2.3.2 ApricotApricot requires specific growth conditions, for such

reason we found it only in some marzes. This crop has anearly stage flowering, is extremely sensitive to low temper-ature and frosts. Production is concentrated almost entire-ly in Ararat Valley and Aragatsotn and Kotayk lowlands(600-1,500 meters above sea level), almost 95% ofArmenian apricots being produced in these regions.Apricot offer lasts several months, harvest time starting inJune in Ararat Valley, in July or early August in Aragatsotnand Kotayk highest elevations.

Apricot Production Geographic Distribution, 2004.



3.2.2.3.3 PeachAs it is the case with apricot, peach cultivation is also

focused on Ararat Valley and the two neighboring marzeslowlands. This zone produces 83% up to 88% of Armenianpeaches, however, unlike apricot, there are peach orchardsin lowlands and in other country´s sunny areas like Tavush,Vayots' Dzor (Arpa Valley) and Syuniks Meghri and Kapanregions. Peach cultivation is especially developed inTavush where about 150 hectares of orchards were plant-ed in the framework of an International Fund forAgricultural Development (IFAD) project6.

Peach Production Geographic Distribution, 2004.



3.2.2.3.4 PlumWhile plum is cultivated on a small scale, orchards for

its production spread throughout the country. The threemain areas are located at Armavir, Lori, and Shirak, each ofthese marzes producing 20 to 22% of it. Ararat, Kotayk,Syunik, and Aragatsotn marzes produce 5% to 8%. Theseorchards fragmented nature is due to the fact there are nobig areas cultivated with industrial purposes plums gener-ally growing in family plots and forests.

Plum Production Geographic Distribution, 2004.



3.2.2.3.5 Cherries and Morello cherriesCherries and Morello cherries require similar conditions

to apricot and peach ones being consequently, cultivatedin the same regions, 80% to 85% of cherries in Ararat val-ley and Aragatsotn and Kotayk lowlands. Most importantorchards are located in Armavir and Ararat marzes.

Unlike cherries, Morello cherries are stronger crops.Orchards distribution is equally divided among Armavirand Ararat marzes occuping 50 to 100 hectares in thecountry. As for plums, there are no large industrial Morellocherries orchards, growing mainly in family plots.

Cherries and Morello Cherries Geographic Distribution, 2004.



3.2.2.3.6 FigsThere are only two places in Armenia where conditions

are available for fig crop, a subtropical one requiring par-ticular climatic conditions:

Tavush marz at altitudes of up to 800 meters above sealevel producing 25% to 30%; and,

Meghri region, Syunik marz, heights of up to 400 meters-500 meters above sea level producing 50% to 55% of it.

Small quantities of figs are cultivated in Armavir and Araratmarzes representing 7% to 8% of the total production.

Fig Production Geographic Production, 2004.



3.2.2.3.7 Dried FruitsAmong dried fruits nuts are the most widespread ones grow-

ing in practically all Armenian marzes. However, there are nowalnut plantations for industrial purposes since nut orchardplanting is one of the less attractive activities, walnut trees occu-ping large spaces and taking a long time to reach maturity.

Walnut trees generally are planted in small farms orgrow wild in forests.

Nut is harvested mainly in Aragatsotn (18% to23%), Syunik(18% to 23%), and Vayots' Dzor (13% to 18%) marzes.

Hazelnut is the second most common dried fruit. Likenuts, hazelnuts are not cultivated in orchards. These are col-lected mainly in Syunik (60%) and Tavush marzes (30%).

Dried Fruit Production Geographic Distribution, 2004.



3.2.2.3.8 BerriesBerries grow in all Armenian marzes, however harvest is

minimal at high altitude marzes such as Gegharkunik andShirak. In examining berries production, it is worth consid-ering cultivation areas and production volumes distribu-tion, since marzes with large cultivated fields not necessar-ily achieve high productivity7.

Strawberries mainly grow in Ararat Valley andAragatsotn and Kotayk marzes lowlands. About 75% ofArmenian strawberry fields are located in these regions,achieving 80% to 85% of the total production.

Raspberry is more widespread than strawberry; 70% to75% of it is cultivated in Goris and Kapan regions, Syunikmarz, Hrazdan region in Kotayk marz, Tumanyan region inLori marz, Tavush marz and Aragatsotn marz lowlands.

Gooseberry is mainly cultivated in Lori, Syunik,Aragatsotn and Tavush marzes.

Mulberries occupy berries cultivation fourth place inArmenia, concentrated in Kapans forests and Gorisregions in Syunik marz, Tavush marz, and Tumanyan regionin Lori marz. More than 80% of the total mulberry produc-tion derives from such regions.

Geographic Distribution of Berry Production, 2004.



3.2.2.3.9 GrapevineGrape cultivation is concentrated in 3 places:- Ararat valley and Aragatsotn and Kotayk marzes low-

lands, concentrate 84% of Armenian vineyards and 92% oftotal grape production.

- Tavush marz, where 9% of country´s vineyards pro-duce 5% country´s total vine production.

- Vayots' Dzor marz, where 7% of country´s vine-

Grapevine Production Geographic Distribution, 2004.

yards produce 3% of country´s total vine production."Kangun", "Garan Dmak", and "Itsaptuk" vines varieties

are concentrated in Ararat Valley. "Rkatsiteli", "Banants",and "Lalvar" varieties are cultivated in Tavush, while"Areni" is cultivated in Vayots' Dzor.

Very small quantities of grapes are also cultivated in Loriand Syunik marzes lowlands, but their volume is not signifi-cant for industrial purposes.



3.2.3 Micro-organisms present in the soilIt is worth highlighting diverse Armenia landscapes and

climates support awide micro-organisms diversity. Theyhave been well studied compared to other countries,through field investigations, analysis and surveys carriedout by the RA Institute of Microbiology of the RA NationalAcademy of Sciences, the RA Republican Center forMicroorganism and the RA Institute of Biotechnology ofthe Republic of Armenia Ministry of Industry. Following aresome of the microorganisms present in country´s soil:

- Nitrogen fixing micro-organismsThey are the best studied group. Distributions of different

species have been described from various soil types in theterritory and from plants root systems Even a new specieshas been described: Azotobacter Nigricans. Tuber bacteriapresence has been detected from soil and species recorded

from different plant groups including Rhizobium simplex,Rhizobium leguminosarum, Rhizobium meliloti, Rhizobiumphaseoli, Rhizobium lupinus, and Rhizobiu trifoli.

- Sulphate removing bacteriaDetected and studied in Ararat valley region, where they

occur in damp soils with high levels of sulphate and organ-ic matter. Soil treatments (such as sulphur acid washing)have achieved a decrease in the bacteria quantity andaffected its sulphate removing role.

- Bacteria supporting extreme conditionsThey are those tolerating heat, cold, salinity and alkalin-

ity. Deeply studied in Armenia, Micro-organisms StateBank keeps hundred of them.

Soil use is conditioned by its potential. Data from coun-try lands needing to be improved is listed herebelow:

LAND, PER DEGRADATION TIPE IN HECTARES

TYPE OF LANDACCORDINGTO ITS GOAL

TOTAL AREA

INHECTARES

EXPOSED TOEROSION

SALINIFIED SECONDARYSALINIZATION

DEGRADED EXCESSIVEMOISTURE

ROCKYAND

POLLUTED

WATER-LOGGED

DESER-TIFI-

CATIONEOLICEROSION

AQUATICEROSION

1762438.7 4275 9170 864 700 1941 1163 33742 8080 34981. Agriculture andForests (total)

464261.6 1765 2816 790 700 119 528 3477 8060 13951.1 Arable lands

42896.0 - - - - - - - - 4501.2 Evergreen plants

136892.4 2 1572 74 - 1356 620 5540 20 1531.3 Meadows

633532.7 2412 4714 - - 466 - 24660 - 15001.4 Pastures

484856.0 96 68 - - - 15 65 - -1.5 Others

179209.0 440 186 270 - - 80 - 2 -2. Irrigated Agr. Lands

233324.0 82 22 - - - - 210 - -3. Protected areas

226518.0 82 22 - - - - 210 - -3.1 Natural

910.0 - - - - - - - - -3.2 Entertainment

1912.0 - - - - - - - - -3.3 Historic-cultural

3984.0 - - - - - - - - -3.4 Others

371326.0 116 68 - - - 15 65 - -4. Forests

222687.0 15 65 - - - 15 65 - -4.1 Forested Lands

149114.0 - 5 - - - - - - -5. Water courses

963343.0 155 12 - - 331 - 1350 - 126. Reserve Lands

Lands Needing Improvements.Source: Republic of Armenia “National Report on the State of the Environment in Armenia in 2002”, Yerevan, 2003, page 32.



EXPLOITATIONS

Total

Aragatsotn

Ararat

Armavir

Guegharkunik

Lori

Kotayk

Chirak

Siounik

Vayots Dzor

Tavouch

332.598

37.139

52.482

50.331

46.133

32.542

37.611

28.151

12.707

11.010

24.492

AREA INHECTARES

458.642

51.939

31.893

41.665

68.426

59.492

53.409

66.730

38.679

16.052

30.357

FARMABLELAND

353.173

43.840

23.004

29.312

51.682

34.692

38.170

63.885

33.697

11.380

23.511

ORCHARDS/VINEYARDS

32.928

6.107

8.128

11.903

48

1.034

4.588

41

978

2.504

2.967

REAPINGFIELDS

67.171

1.992

761

450

16.696

23.766

10.561

2.804

4.004

2.168

3.879

Land Private Exploitations.Source: Republic of Armenia,National Statistics Service.

19%

2%

3%

8%

12%

1%

55%

55%: Reserved Land 19%: Land devoted to agriculture

2%: Settlements 3%: Industry and other uses

8%: Protected Areas 12%: Forests

1%: Water mirrors (excluding Sevan Lake)

Land Distribution in Armenia.Source Republic of ArmeniaNational Report on the State ofthe Environment in Armenia in2002, Yerevan, 2003, page 30.



3.3 Cultivations

Agriculture has a long history in Armenia with recordsdating from two thousand years ago. In fact, plateau´s vol-canic soil fertility made this region one of the first sites ofthe world having had a true agricultural development.

Today agriculture represents only one fifth of nationalincome providing employment to nearly 50% of the population.This situation is basically due to the fact that after 1991 a sig-nificant number of economy sectors crashed during the com-plex transition towards a market economy, after 1991, generat-ing the depicted situation. Thus, agricultural sector absorbed amass of loose workers from other areas. The largest impactwas reflected in transition first five years. The sector rose from389.000 workers in 1991 to 586.000 in 1996, stabilizing on aplateau of around 560.000 towards 1998 followed by a similartrend in the early years of new XXIst century.

389000

600000

500000

400000

300000

200000

100000

01991 1996

Rural workers

586000

Development in the number of rural workers 1991-1996.Source Institute of Social Studies, Netherlands.

As a result of the transition towards private farmsthere are more than 335.000 family-managed farms,producing 98%of total agricultural incomes.

Each farm´s land surface for agriculture can be calculat-ed in about 1.37 hectare with an average of three plots ofland, of which only one is irrigated.

It is estimated 30% of farmers do not grow all theirland; the portion of the ground remaining without farminguse is around 15%, although this data varies depending onthe region. 88% of the farms covering less than twohectares8 use 77% of land’s total area for production pur-poses; 12% of the farms have more than two hectares anduse 23% of the land for production purposes9. This is dueto poor soil types but also to the difficulty of addressingcosts, lack of water or to distances separating farms fromdistribution or consumption centers10. In any case, aver-ages vary according to regions ranging from 0.61 hectaresin Ararat area up to 3 hectares in Syunik area, having thelargest amount of crops and livestock.

Small landholdings produce for family feeding and mar-ket sale purposes; 40% to 50% is sold and a small portionexchanged for other goods or allocated for barter purpos-es, which only happens on an informal base between cer-tain regions and neighboring communities. Most farmowners sell their crops to consumers at direct sales mar-kets, although in limited portions some firms channel theirsales to other enterprises needing various agriculturalproducts. Due to sectors´ scarce development and primaryproduction processing absence, small farms still dependon market operations according to the season11.

Following the agrarian reform, the collapse of the foodindustry, the loss of export markets and the abrupt declineof population income, agricultural models have radicallychanged since the 1991 independence. A major shiftoccurred towards basic subsistence crops (cereal andpotatoes) with a gradual withdrawal from grains for live-stock food cultivation as well as for industrial processes.About 20% of the farms cultivate only grains and only 2%of them specialize in crops for livestock. At present, grains(wheat and barley) account for 59% of total cultivated area,followed by potatoes and vegetables (13%), grapes andfruits (8%) and pastures (remaining 20%)12.



Grains

Industrial Crops

Potatoes

Vegetables

Forage

Fruits

Grapes

200,8

13,1

25,7

53

27,2

32,3 1,3

Planted Area, in thousands of hectares.Source Republic of Armenia, Ministry of Agriculture, 2006.

Crops results in figures are reduced due to agriculturalinputs small quantities and qualities and inadequate orobsolete sectors´work start-up practices.

Irrigation is important 60% of the farmers having accessto technology, with an average of 0.7 hectare per irrigatedfarm13.

3.3.1 Crops Characteristics Wheat cultivation is relatively inefficient in most coun-

try´s farms. A great amount of wheat is planted in non irri-gated lands, since land with water resources is mainlyused for orchards andvineyards. Production levels of thenon irrigated lands are therefore comparatively minor. It isworth mentioning harvest rotation lack. If wheat is grown inthe same land for several years on an uninterrupted basis,it causes a decline in production, spread of pests andreduction of land nutrients, while harvest rotation allowsenriching earth with nutrients and removing the undesir-able elements from previous crops. This rotation is onlycarried out in large farms, growing wheat for commercialpurposes and not for individual consumption.

Crops rotation can be carried out in lowland areas. Inthose lands, Winter wheat collection begins in July; conse-

quently it is possible to plant in the same land vegetablesmaturing by October and November. Furthermore, rotationis possible in the same year, around mid- Autumn Winterwheat can be sowed again.

Same year rotation is not possible in higher areas, wherewheat is collected in August and September and farmers canhardly have time to prepare the land for sowing Winter wheat.

Other subjects to consider regarding wheat cultivationare harvested lands fertilization and chemicals use. Theseprocesses have been recently intensified in the Republicbecause large farms having financial means are undertak-ing this type of treatments.

This crop is planted in the traditional way: lands wherewheat is harvested are firstly plowed and then sowed, theprocess being implemented mostly with machinery. Mainsowing way is in rows; however there are exceptions, sincein some communities we do not found this type of sowinglands being manually harvested.

The referred sowing method also takes place in thoseplaces where corn and wheat grow in small and dispersedlands. Sowing these lands with tractors is more expensivetherefore not profitable for farmers.

Each farmer is responsible for transporting and storing itsown harvest. There is no centralized transportation or stor-age system many farms being small. Some produced wheatis acquired by processors (mills and liqueurs producers)while most of it remains in the farms and is consumed bytheir dwellers. Larger farms store their crops in barns whereventilation and dryness are assured. Fruit plantations havetaken place in Armenia since ancient times; a wide range offruit -cultivated and exotic- are found throughout the territo-ry. This includes four apples varieties, seventeen pearstypes, ten common rowan varieties, four plums varieties andfour almonds types. More than 70% of country´s plantationsare located in lands with an altitude ranging from 400 metersup to 1,000 meters above sea level, 5% in areas from 1,500meters to 2,000 meters and a 2.5% at more than 2,000meters above sea level14.

Moreover, different species and varieties of peaches,quinces, nuts, pomegranates, figs and melon, as well asRibes genre varieties and species (including blackcurrant),Dospyros, Cerassus, Pistacia (including pistachio and tur-



pentine), Elaeagnus (including mulberries), Fragaria, andRubís are cultivated. Fruits are produced by 482 facilitieslocated among agricultural areas of the Republic15.

Fruit demand by local consumers, processors andexporters has increased in recent years. This meant anincentive for farmers outstretching the cultivation in theirorchards. Agricultural activities increase requires regular irri-gation, increased use of fertilizers and chemicals and anadequate land treatment, elements present in the nationalproduction. In this case, moreover, intense cultivation isexclusively developed by well organized and large commer-cial farms. Their intensive approach negatively impacts onproducts ecological purity, however, it ensures better pro-duction and better appearance, something particularlyimportant for fruits. Land treatment in large farms is made bymechanization, while in small farms cultivation is manual.

As for dried fruits, there are no great productionorchards since they grow in individual and very small plots.Their marketing is limited due to:

- The space required for orchards: dried fruit trees havewider leaves requiring more space to grow than fruit trees.

- The period of time until maturity: compared to fruittrees, dried fruit trees require more time to mature.

Traditionally, figs also grow in individual plots. As in thecase of dried fruits, there are few fig orchards wheresophisticated agricultural techniques are not used.However, situation began to change in recent time sinceRepublic of Armenia Ministry of Agriculture andInternational Fund for Agriculture Development (IFAD),planted some orchards of important features in Meghriregion, Syunik marz.

A wide variety of edible wild plants have been picked upin the territory for a long time and some of them have beencultivated creating profits and competitive advantages tosmall and medium-sized farmers. Among red edible fruitspossible crops, only strawberries, raspberries and goose-berry are cultivated applying certain agricultural techniquessuch as plague control, fertilization and irrigation for produc-tion. Not more than 20% of individual farms cultivating themfor non-commercial purposes treat their crops. Generally,they are planted as hedges between terrains.

A great variety of cereals are found in Armenia. Thereare as much as thirteen species and around 360 varietiesof corn, three of which are globally recognized: TriticumBoeoticum, Tricticum Urartu and Tricticum Araraticum:plus nine Aegilops genus corn species. There are substan-tial rye species types, such as Secale cereale sub species,Secale vavilovii wild varieties and about 36 Secale species.Barley cultivations such as Hordeum distichon, Hordeumintermedium and Hordeum vulgare are done by plantingthem while another eight wild species with intra-specificdiversities, including Hordeum sponteanum and HordeumBulbosum, grow wildly.

Regarding forage, Armenia has many cultivations par-ticularly the Fabaceae including among others Medicagowith 10 species /different varieties, Trifolium (30 species),Onobrychis (6 species), Vicia (36 species), and Poaceaeincluding species of Agropyron, Arrhanuterum, Dactylis,Festuca, Lolium, Pleum, and Bromas.

As for the oilseeds cultivation, it is worthy mentioningcertain wild species are grown with good results, includinglinseed, hemp plant, (called faked flax), several species ofmustard, carthamus and poppy, among others.

In terms of vine cultivation, around 80% of Armenia'svineyards are located in areas requiring orchards to beburied, such as Ararat Valley, in its central areas, andVayots Dzor region. During Soviet times grape cultivationfocused on large farms thus allowing agricultural equip-ment centralization. During privatization period, largegrape vines were divided into smaller ones. Currently, vine-yards average size is 0.4 hectares in Ararat, 0.22 hectaresin Vayots Dzor, and 0.16 hectares in Tavush. As a result, itis virtually impossible in such lands to use tractors for cul-tivation. Manual labor prevails. Pest control and fertiliza-tion are not made as required. Vine cultivation is very hardin Armenia due to huge temperatures differences in sum-mer and winter. However, winegrowing is among the mostdeveloped areas of Armenian agriculture and among prin-cipal sources generating significant trade incomes fromexports. But current promising scenario is radically differ-ent from the one prevailing just ten years ago, when only13,000 hectares were allocated to vine cultivation, a sur-face markedly smaller to the 37,000 hectares cultivated in



1981. Two factors led to the reduction of cultivated sur-faces: Mijail Gorbachov´s encouragement to remove vinesroots in all Soviet Countries so as to fight alcoholism andthe economic difficulties after 1991 independence leadingto the abandonment of a large number of vines.Privatization of legendary Yerevan Brandy Company(“YBC” Pernord Ricard), producer of the renowned “Dvin”(Mr. Winston Churchill former Great Britain Prime Ministerbeing a regular consumer of it) marked the beginning of aseries of investments (such as Vedi-Alco company pur-chase) in the sector and an increase in cultivated landwhich currently covers 21,800 hectares, 85% of them usedfor high quality cognac production.

Currently, there are about seven companies producingbrandy and twenty-five companies producing wine, whichin 2004 year purchased 79-100 tons of grapes.

The table below shows the main companies and grapepurchase percentage:

COMPANY GRAPEDEMAND

TONS

PERCENTAGEOF DEMAND

“Yeveran BrandyCompany”

19,000 24.0%

“Yeveran AraratBrandy-Wine-Vodka Factory”

8,820 11.2%

“Artashat Wincon” 8,000 10.1%

“AKZ” 6,500 8.2%

“MAP” 5,520 7.0%

“Vedi-Alco” 2,000 2.5%

Others 29,260 37.0%

TOTAL 79,100 100.0%

Grape demand per company, 2004.Source Alpha Plus Consulting.

Brandy production is specially developed. Today,Armenia produces higher volumes than in 1990. YBC andGreat Valley had greatly contributed to this development.However, Great Valley imports alcohol while YBC useslocal raw material. YBC does business with around 4,000Armenian farms cultivating grapes. In 2004, it purchased19,000 tons of grapes and sold 4.000.000 liters of brandy.This represents 56% of the total volume produced in thecountry during that year.

Most of the brandy produced by Armenian manufacturersis exported. As a token of this, it should be stressed 90% ofYBC and Great Valley production is traded in the foreign mar-ket, Russia, Ukraine and Byelorussia being major importers.

As for wine production, the leading company is Vedi-Alco,controling 19% of Armenian wine market. Vedi- Alco isamong the few Armenian companies striving for raw materi-al self-supply. The company planted over 100 hectares ofvineyards in Vayots Dzor marz mostly using Areni grapes.Other two major wine producers are ljevan Wine Factory andYerevan Champagne-Wine Factory, holding 13% and 11%of the market share, respectively. Wine producing compa-nies are also focusing on exports, nearly 50% to 70% oftheir production volume being exported.

In contrast to wine production which has grown steadi-ly with certain fluctuations, sparkling wine production isdecreasing. In 1999, 938 decaliters of sparkling wine wereproduced compared to only 569 decaliters in 2004.Consumption of sparkling white wine (champagne) is limit-ed, the product being highly priced since cultivatinggrapes for this type of beverage is expensive.

Finally, it should be noted orchards lands surfaces havesignificantly grown over recent years. This is basically due to:

- organization of new processing companies,- increase in dried fruit exportsincrease in processed fruit exportsincrease in the number of exports destinations - need to renew orchards after 2003 frost

Vegetables cultivation has been extended throughout thecountry, covering 14% of total arable land16. There are sev-eral cultivated species such as onion, cucumber, radish, gar-



lic, cabbage, spinach, tomato, pepper, aubergine, cauli-flower, turnip, watercress, parsley, gherkin, basil, zucchini,pumpkin, horseradish and a series of different wild speciescultivation, including beet, carrot, coriander, mint, asparagusand leek. New orchards were planted by large commercialfarms (owners of hundreds hectares of land) and by individ-ual farms. Large orchards are mechanically operated, mainlyby land drillers,, while smaller ones are manually planted.

New orchards currently planted are based on intensivecultivation method. By applying high density plantationtechniques, a large production may be picked up over ashort length of time17. On the other hand, orchards withlarger plantations are prone to be infected and need con-stant fertilization and pest control reducing productionecological purity to a certain extent.

As for investments costs, specialists estimate to plant ahectare of vineyard or orchard needs around US$5,000,this amount of money representing a significant one foraverage farmers, and become more complicated due to:

- Difficult access to financing. The financing problemused to be related to small loan amounts, high interestrates, short revolving periods, and in certain instances, tothe complex evaluation procedures involved. Today insti-tutions such as ACBA or Converse Bank are dealing withthe subject, reaching farmers so as to understand theirparticular needs and provide a specific product and aneasier access to it.

- Long waiting terms before picking up: meaning atleast three years without generating any profit, frozensfarmers wishes to plant new vines. To sum up, there is agreat variety of cultivation, basically winter and summercereals, potatoes, pumpkins, vegetables, horticultural andfruit cultivation, grapes applied to brandy production, inaddition to grains for cattle raising industry, and to a less-er extent, grains for industry18. Industrial cultivation pro-duction is also developed with different production rangesdepending on the region, although this activity onlyaccounts for less than 1.5% of country’s total seeded sur-face, among which its worthy of mention are geranium,beet sugar and tobacco.

The chart above shows the self-sufficiency strategyapplied by most small farmers. Grain production signifi-cantly fluctuated over last ten years since crops resultsdepend on rains or in case of lack of it, on irrigation sys-tems operation not always in proper conditions. Most ofthem rely on Diasporapatrons’ good will that, in coopera-tion with marzes administrations, provide assistance toachieve efficiency in specific zones.

It should be noted so called "high value, low volume"production follows a complex mechanism related to craftysystems for seeding, irrigation, harvest and production ofworldwide renowned products. Under this scheme, evenrenowned brandy grapes suffered complications. In viewof the impossibility to send their products abroad, toobtain credit, in addition to inputs prices, certain winegrowing producers in Vayots Dzor marz were forced to rootup their vines plantations in order to plant wheat and turntheir production to domestic market19. This also occurredin Ararat and Armavir marzes. In this process, old highlyvaluable vineyards had no seeds nor does vine shoot. Theyare unlikely to be replaced, although significant sectorsrepresentatives remain in winegrowing areas.

600

700

500

400

300

200

100

0

1991 1995 1998 1999 2000 2001 2002 2003

Grains

Potatoes

Vegetables

Watermelon

Fruit trees

Grapes

Cultivation indicators, in thousands of tons.Source: International Social Studies, Netherlands.



3.3.2 The Concept of Organic AgricultureOrganic agriculture is new in Armenia since the first dis-

cussions on this method that disregards intensive cultiva-tion and mineral and chemical fertilizers use started tobe´held in 2000. Organic agriculture defines strict require-ments for each and every stage of agricultural activity, fromsoil composition to crop transport, storage and process-ing. First FruitFull Armenia meeting subject was on organ-ic agriculture in Armenia, Organic and Organic Farming inArmenia, towards partnership and sustainable growth,gathering together all agricultural Armenian community,being one kick-off for the legislation approved later on.

There are many discussions in Armenia on the term“organic” since many scientists and producers prefer theterm "ecologically clean" whose definition is wider than theone for “organic” term. Thus, obtaining ecologically cleanagricultural products does not fully discard fertilizers andchemical products use; however, it defines a strict controlover standards of use. It prevents accumulation of danger-ous substances such as nitrates, heavy metals and otherchemical elements in final products. True organic agricul-ture utterly rejects chemical measures uses for plant pro-tection, mineral fertilizers and intensive cultivation sincefertilization and control are made through natural sub-stances20. Organic agriculture strongly applies plant rota-tion, secures soil high biological activity and takes meas-ures against nitrate high levels in the soil.

3.3.2.1 Opportunities for Organic CultivationTo trace opportunities development for organic food

production in the Country, the issue must be viewed fromtwo perspectives: (i) production or supply on the one sideand (ii) sale or demand on the other.

After 1991, mineral and chemical fertilizers use signifi-cantly decreased and in some areas was fully interrupted.This situation continued until 2001-2002. e21.

However, organic concept is quite new in Armenia anddue to high market price of these foods, demand is limit-ed. Best illustration is Shen products sales example. In2005, apricot production being highly abundant in thecountrys processing companies purchased them all for thesame price - AMD 50 per kilogram- whether or not they

were organic. Production losses are another major reasonfor which many farmers reject this kind of cultivation, sinceit may be significantly reduced when no mineral fertilizersand contemporary and efficient treatment substances areused, having as a result profits reductions. Therefore,organic products sale might be done focusing on exportmarkets. Organic products prices are 20% to 50% higherthan those of common products. Sales in export marketswill not only allow for recovery of losses in the yield oforganic cultivation but will also secure additional profits.

According to estimations made by the ArmenianOrganic Agriculture Foundation (AOAF), following organicproducts may be produced and sold in the country:

- Fruits: apricot, peach, cherry, plum, nut, pomegran-ate, fig, quince, tomato.

- Vegetables: onion, radish, garlic, cabbage, tarragon,asparagus, spinach, capsicum, bean, aubergine, carrots,basil, mint.

- Berry: strawberry, raspberry, raisin, blackberry.- Herbs and medicinal plants: hawthorn, mallow, nettle,

wormwood, buckthorn, immortelle, chamomile, mint, saffronand other medicinal plants, herbal teas, diet supplements.

- Apiculture Products: nectar, sweet juice, pollen, honey

3.4 Yield

First years after 1991 independence of Armenia werevery harsh for farmers, agricultural infrastructure havingsuffered serious deterioration. Under soviet system, sup-plies quality required for crops (seeds, young trees, fertiliz-ers and chemical products) was reasonable and providedby the State. Upon deterioration of government control onsupplies process and provision, farmers used low qualityand obsolete materials, affecting adversely productions.By 2000 situation improved up to a certain point since sev-eral private and public entities started to import supplies ofa relatively better quality22. Due to these improvements,productivity of almost all crops increased substantially.

Currently, 170,000 hectares to 195,000 hectares of cul-tivable lands are sowed with cereals, 85% of which are



wheat and barley. Wheat is used for bread and barley forbrewery. Low productivity is the result of lack of an ade-quate agricultural technology.

Production of winter wheat ranges from 18 up to 22quintals per hectare, but in 2000 due to a serious droughtand to lack of an adequate irrigation network dropped to5.9 quintals per hectare.

Winter barley productivity ranges between 11 to 17quintals per hectare, while spring barley ranges between6.7 to 13.1 quintals per hectare23.

WINTER WHEAT 18 to 22 QUINTALS/Ha

WINTER BARLEY: 11 to 17 QUINTALS/Ha

SPRING BARLEY: 6.7 to 13.1 QUINTALS/Ha

As regards the foregoing, average production in Amavirand Ararat regions ranges between 3 to 3.8 tons perhectare, being the highest indicator in Armenia. In Shirakregion, the largest wheat area cultivated, production is 2.5tons per hectare. This results from seeds low quality andirrigation problems.

REGION 2001 2002 2003 2004

Yeveran 3.50 2.40 3.01 3.21

Aragatsotn 1.53 2.14 1.57 2.21

Ararat 2.86 3.08 3.13 3.51

Armavir 3.52 3.76 3.10 3.04

Gegharkunik 1.34 1.99 1.72 2.25

Lori 3.05 1.85 1.11 1.87

Kotayk 1.21 1.42 0.92 1.94

Shirak 2.14 2.38 1.15 2.32

Syunik 1.13 2.05 1.51 2.08

Vayots Dzor 1.04 1.99 1.44 1.75

Tavush 2.06 1.61 1.04 1.30

ARMENIA 2.31 2.42 1.73 2.35

Winter wheat production per region, 2001-2004 in tons/hectare.Source: Alpha Plus Consulting.

Corn production also varies significantly depending onthe region. Significant amounts of corn are cultivated in fourregions: Lori, Ararat, Armavir and Tavush. Higher levels ofcomplete and ripe corn are observed in Armavir and Ararat(7 to 9 tons/hectare) as a result of lands better quality andirrigation availability in these regions. Most of the lands forcorn cultivation are located at Tavush (58% of corn cultiva-tion total lands). Average yield ranges between 4 to 5tons/hectare as a result of the lack of irrigation. It representsa very low level for corn since currently there are hybridseeds securing 16 to 18 tons of corn in only one hectare.Over last years, several organizations holding large landshave imported high quality corn seeds from the UnitedStates of America. It is expected this grain cultivation willincreased in the next years, not only due to the cultivatedlands surface but also for production levels improvements.

Main cultivated vegetables are, as mentioned above, toma-to, cucumber, aubergine, capsicum, onion, garlic and carrot,and to a lesser extent, pumpkin, watermelon and melon.

In mountainous regions potato is one of the main culti-vations covering each year a surface ranging between32,000 hectares up to 34,000 hectares with an averageproduction of 515,000 tons almost 54% of which is pickedup in Gegharkunik marz. Other marzes play an importantrole in root crop: Armavir produces around 44,000 tonsannually and Lori 38,000 tons a year. In 2006, increase inproduction accounted for 13% in Gegharkunik, 41% inKotayk and 10% in Ararat, while in the rest of the marzesfigures were lower than in previous years. However, for thistubercle cultivation, representing up to 70% of agriculturalproducers income in the above mentioned areas, no ade-quate production techniques to maximize yields for sowingwith established international quality standards have beenapplied yet. Fertilizers, pesticides and herbicides shortageand high prices also affect productions costs. Potato pro-ductivity ranges between 87 up to 134 quintals perhectare24.

POTATOES 84 to 134 QUINTALS/Ha



It is estimated that by applying another technique, aver-age as per quintal would reach 180 in the foregoing zones.

Each year around 3,000 to 4,000 hectares are plantedwith cabbage. Main cultivation is obtained in Ararat valleyand some in the mountainous regions. Mean cabbage yieldper hectare ranges from 167 up to 248 quintals/ hectare25.

CABBAGE 167 to 248 QUINTALS / Ha

As for fruit production levels, it should be noted officialinformation collection on harvest productivity started in2004. However, that year is regarded as a poor reference toanalyze fruit production levels since almost half of the pro-duction was damaged by late spring frosts. Therefore, pro-duction levels for certain fruits varieties suffering greaterdamage were very low (see next chart). According to theRepublic of Armenia Ministry of Agriculture, these frostsdamaged national crops in the following percentages:

- 20%-25% of low lands planted with apple orchardsand 5%-10% of high lands (mountainous) planted withapple groves.

- 90%-95% of apricot orchards.- 90%-95% of early ripen peach orchards and 25%-

30% of medium and late ripen peach harvests.- 65%-75% of sweet cherry orchards in low lands and

10%-15% in mountainous land orchards. - 85%-95% of dried fruit orchards.

FRUITS PRODUCTION TONS/HA

Apple 7.30

Apricot 1.00

Peach 4.51

Plum 3.24

Sweet Cherry 4.01

Cherry 3.05

Fig 1.28

Raspberry 2.33

Fruit Yield Indicators, 2004.Source: Alpha Plus Consulting.

During a favorable year, average apricot production is 7tons/ha. In 2005, apricot production was 9 tons/ha, estab-lishing a record. Unlike the foregoing, during a favorableyear for fig harvest, average production is 2.5 to 2.6tons/ha, and for dried fruits harvest average may rangebetween 2 to 2.5 tons/ha.

When analyzing fruit production level, it must be takeninto account production is affected by trees age and sizeas well as by their number in a specific piece of land.Therefore, yield may significantly vary, even among neigh-boring orchards. Considering these variations, data aboutfruits and dried fruits must be read as an average.

Armenia is well-known worldwide for the finest varietiesof grapes and apricot. Year 2004 was not a regular periodfor vine production since vineyards were also damaged byfrosts. This was preceded by worse frosts in 2002 and2003 resulting in a significant production reduction. Duringa favorable year, average grape production rangesbetween 12 to 15 tons/ha. This may significantly varydepending on grapetype, plantation volume, location, irri-gation possibilities and cultivation conditions. Thus,"Banants" (mainly cultivated in Tavush region) is the high-er productivity technique variety, might yield up to 20 to 25tons/hectare. On the other hand, “Rkatsiteli” and “Lalvar”varieties (better quality than “Banants”), may yield between10 to 12 tons/ha.

The area allocated to grapes covers 21,800 hectares,around 13% of the total cultivated surface26. Due to agri-cultural companies´ low purchasing power to continuedeveloping this kind of production, several territories suit-able for grape cultivation, were destroyed and transformedinto arable lands. Currently, there are 15,000 hectares ofvineyards in the country. Mean yield per hectare rangesbetween 61 to 78 quintals27



MARZ

Yeveran

Aragatsotn

Ararat

Armavir

Gegharkunik -

Lori

Kotayk

Shirak -

Syunik

Vayots Dzor

Tavush

ARMENIA

2001

4.91

2.12

11.63

10.66

-

3.81

1.15

-

7.68

4.67

6.39

8.14

2002

4.35

4.02

11.85

11.07

-

0.80

0.67

-

3.91

1.72

1.01

8.28

2003

1.76

0.95

14.68

6.26

-

5.26

0.36

-

3.47

1.40

6.87

7.14

2004

4.60

3.83

15.77

14.63

1.00

2.04

1.35

4.61

5.36

10.89

Grape Productivity as per region, 2001-2004 ton/ha.Source: Alpha Plus Consulting.

VINE 61 to 78 QUINTALS / Ha

One of the main previous conditions for cattle raisingdevelopment and animal production is forage base exten-sion. For these purposes forage cultivation is essential.

Green corn yield ranges between 109.3 to 189.6 quin-tals/ha, while grain yield ranges between 22.3 to 46.2 quin-tals/ha28. Cattle in remote zones do not feed from pas-tures; particularly milk cows eats green forage as well aspasturage in nearby pastures.

GREEN CORN 109.3 to 189.6 quintals /haGRAIN 23.3 to 46.2 quintals /ha

Some exploitations use oat grass for silage. Mean yieldranges between 27.2 to 97.1 quintals/ha. With agricultureexpansion, yield is decreasing year after year. Edible rootsare cultivated for milk cows. Mean yield ranges between141.7 to 264.8 quintals/ha. For milk cows Brassica napus29

ALFALFA 150 to 160 QUINTALS/Ha HAY 32.9 to 53 QUINTALS/Ha

is cultivated in early Spring in Ararat Valley. Forage cultivation is basic perennial: Medicago sativa,

Onobrychis viciifolia, Trifolium pratense, Dactylis glomera-ta, Festuca pratensis and Phleum pratense. Vegetables areplanted separately and mixed with herbs while grass culti-vation is mixed. In low lands where cultivations get heatand water, basic cultivation is alfalfa, harvested 4 to 5times during vegetation term, obtaining 150 to 160 quin-tals/hectare. Sainfoin is cultivated in arid non-irrigatedregions; sainfoin and clover are cultivated in high moun-tainous regions. Hay is used for winter, its mean yield rang-ing between 32.9 to 52.8 quintals/ha30.

During the Soviet period, along with seeds production,forage seeds production was developed. Special attentionwas given to exploitations involved in seed production astheir main activity. Generally, Armenia has been alwaysknown for its seeds and plants; however some of them

(particularly leguminous seeds) were imported from otherformer Soviet republics. After land privatization, wholeagricultural seeds production collapsed. Only a few privateestates began to produce alfalfa and sainfoin seeds31.Recently, alfalfa seeds production has increased in thecountry starting to supply local market. Imported seedsprice is quite high and most of the farmers cannot afford it.This led to a reduction in forage cultivation surfaces.Currently, main forage sources include natural pasture-lands and pastures.

Fluctuations in Gross Agriculture Production occurredsince transition to an open economy begun: it suffered asignificant drop by 16.3% between 1991 and 1993, eventhough t comparing year 2006 to 1990 -when the countrywas still a Soviet republic - shows a drop of only 2%. In thepreceding decade, 1998 was a good year for agriculturalproduction followed by a new drop in Gross AgricultureProduction due to Russian crisis consequences.



1998 1999 2000 2001 2002 2003

Total GrossAgricultureProduction

402.1 311.7 281.2 351.0 377.6 410.1

GAP ofCultivation

245.6 180.0 136.2 208.0 226.6 228.7

GAP ofCultivationfor Animals

156.5 131.7 145.0 143.0 151.0 181.4

Gross Agriculture Production, 1998-2003In billions of Armenian Drams.Source: Republic of Armenia, Ministry of Agriculture.

Agricultural production had a fresh impetus after 2003. Thissituation was particularly reflected in vegetables (27%increase), potatoes (22.5% increase) and fruits (17% increase).Grain harvest had a moderate decrease, while forage andindustrial cultivation production continues decreasing.

Hereunder main crops with their production percentages,surface area covered and average yield from 2000 to 2004 ispresented (according to data provided by Armenia, Countrypasture/forage resource profiles by Mr. Robert Tumanian):

Source: Armenia, Country pasture/forage resource profiles.

Cultivation

Winterwheat

WinterRye

WinterBarley

SpringWheat

SpringRye

SpringBarley

Oats

Spelt

Corn forgrain

Peas

Kidneybean

Chickpea

Lentil

Tobacco

Flax

Potato

Cabbage

Cucumber

Tomato

RedBeet

Carrot

Onion

Garlic

GreenPea

OtherVegetables

Pumpkin

EdibleRoot

SilageCorn

AnnualHerb

PerennialHerb

PerennialHerbfor Hay

For GreenForage

ForSeeds

Sainfoin

Alfalfa

NaturalPastureland

Haying

GreenForage

Fruit andSoft Fruit

Main

Hard

Dry

Sub trop

Red

Grape

2000

YIELD (quintal

/ ha)

AREA(ha)

79657 22.6

7 14.3

2485 17.0

13183 12.1

5 30.0

74970 13,1

1765 9.8

7513 12.7

1967 22.3

17 22.3

1968 23.9

211 10.7

62 6.0

19 12.3

108 -

32645 129.6

4091 194.6

1984 141.6

5995 262.5

482 173.8

704 172.6

2056 166.1

690 86.4

77 45.2

4958 197.4

3814 158.9

310 223.1

537 121.6

31646 91.7

3211 70.0

67227 52.8

309 88.2

144 4.1

59 0.5

139384 26.7

105 75.2

19544 50.4

19544

14213

50.4

44.4

209 14.0

135 33.5

38 56.6

21850 73.1

2001

YIELD (quintal

/ ha)

AREA(ha)

100434 16.2

191 9.6

2140 14.4

13120 12.3

216 9.3

72025 7.8

1605 7.5

5307 9.4

2070 46.2

99 13.5

1606 20.8

137 13.3

38 9.9

35 11.9

36 4.1

32875 109.4

3961 196.0

1865 112.9

5486 241.3

404 142.2

770 133.8

3805 162.9

705 65.8

69 34.5

4637 171.1

3593 172.8

259 199.3

189 189.6

18620 59.1

3532 41.0

55221 36.8

1226 73.4

41 4.9

89 7.2

134609 21.3

1036 54.4

15293 37.5

15293

9117

37.5

58.9

233 17.0

256 66.6

42 16.1

17758 61.4

2002

YIELD (quintal

/ ha)

AREA(ha)

112840 20.2

80 7.0

1625 11.5

11467 11.8

7 10.0

62403 11.5

928 13.8

5305 9.8

2277 25.3

33 15.4

1569 18.1

141 13.1

16 9.8

117 19.0

38 10.5

32736 134.6

3364 245.9

1911 129.0

4959 230.2

443 157.2

757 215.9

2283 167.3

827 68.7

54 104.7

4674 216.2

3271 185.4

188 246.8

223 181.2

16364 27.2

2336 43.9

43390 45.0

436 104.4

223 4.1

107 4.3

132239 22.7

903 40.3

12040 52.7

12040

9053

52.7

71.6

248 26.8

254 95.3

9 102.7

15785 69.4

2003

YIELD (quintal

/ ha)

AREA(ha)

104323 20.0

120 8.3

1356 14.2

8079 11.3

15 20.0

50531 12.9

914 12.4

5435 9.0

2856 40.3

105 8.5

1746 20.4

91 9.8

8 5.9

820 22.6

33 5.9

31963 130.6

3809 247.9

2125 154.5

5788 261.8

534 130.8

813 226.1

2203 183.8

913 76.7

42 37.6

4587 186.5

4225 209.4

281 198.5

287 153.5

14098 30.5

2678 40.4

60602 40.0

15688 87.3

126 5.6

--

107728 22.8

5872 46.7

11968 40.2

11968

9992

40.2

39.9

273 30.1

219 87.5

22 86.6

15768 74.7

2004

YIELD (quintal

/ ha)

AREA(ha)

101369 17,9

92 8.2

1303 15.7

13118 5.9

13 20.0

54439 6.7

601 6.4

5107 7.4

2799 23.2

26 9.9

2029 19.3

90 8.9

- -

2538 18.1

35 3.9

34202 87.3

3103 167.2

1985 148.0

5594 257.1

531 131.1

833 82.9

1950 161.1

874 70.1

178 70.2

4864 205.4

3386 156.1

337 141.7

348 109.3

11465 40.0

2960 58.2

45209 32.9

1278 57.9

60 4.2

- -

108525 19.5

1828 42.6

12166 39.0

12166

9764

39.0

87.1

492 36.2

177 80.2

197 20.4

15027 78.0



Cultivation

Winterwheat

WinterRye

WinterBarley

SpringWheat

SpringRye

SpringBarley

Oats

Spelt

Corn forgrain

Peas

Kidneybean

Chickpea

Lentil

Tobacco

Flax

Potato

Cabbage

Cucumber

Tomato

RedBeet

Carrot

Onion

Garlic

GreenPea

OtherVegetables

Pumpkin

EdibleRoot

SilageCorn

AnnualHerb

PerennialHerb


For GreenForage

ForSeeds

Sainfoin

Alfalfa

NaturalPastureland

Haying

GreenForage

Fruit andSoft Fruit

Main

Hard

Dry

Sub trop

Red

Grape

2000

YIELD (quintal

/ ha)

AREA(ha)

79657 22.6

7 14.3

2485 17.0

13183 12.1

5 30.0

74970 13,1

1765 9.8

7513 12.7

1967 22.3

17 22.3

1968 23.9

211 10.7

62 6.0

19 12.3

108 -

32645 129.6

4091 194.6

1984 141.6

5995 262.5

482 173.8

704 172.6

2056 166.1

690 86.4

77 45.2

4958 197.4

3814 158.9

310 223.1

537 121.6

31646 91.7

3211 70.0

67227 52.8

309 88.2

144 4.1

59 0.5

139384 26.7

105 75.2

19544 50.4

19544

14213

50.4

44.4

209 14.0

135 33.5

38 56.6

21850 73.1

2001

YIELD (quintal

/ ha)

AREA(ha)

100434 16.2

191 9.6

2140 14.4

13120 12.3

216 9.3

72025 7.8

1605 7.5

5307 9.4

2070 46.2

99 13.5

1606 20.8

137 13.3

38 9.9

35 11.9

36 4.1

32875 109.4

3961 196.0

1865 112.9

5486 241.3

404 142.2

770 133.8

3805 162.9

705 65.8

69 34.5

4637 171.1

3593 172.8

259 199.3

189 189.6

18620 59.1

3532 41.0

55221 36.8

1226 73.4

41 4.9

89 7.2

134609 21.3

1036 54.4

15293 37.5

15293

9117

37.5

58.9

233 17.0

256 66.6

42 16.1

17758 61.4

2002

YIELD (quintal

/ ha)

AREA(ha)

112840 20.2

80 7.0

1625 11.5

11467 11.8

7 10.0

62403 11.5

928 13.8

5305 9.8

2277 25.3

33 15.4

1569 18.1

141 13.1

16 9.8

117 19.0

38 10.5

32736 134.6

3364 245.9

1911 129.0

4959 230.2

443 157.2

757 215.9

2283 167.3

827 68.7

54 104.7

4674 216.2

3271 185.4

188 246.8

223 181.2

16364 27.2

2336 43.9

43390 45.0

436 104.4

223 4.1

107 4.3

132239 22.7

903 40.3

12040 52.7

12040

9053

52.7

71.6

248 26.8

254 95.3

9 102.7

15785 69.4

2003

YIELD (quintal

/ ha)

AREA(ha)

104323 20.0

120 8.3

1356 14.2

8079 11.3

15 20.0

50531 12.9

914 12.4

5435 9.0

2856 40.3

105 8.5

1746 20.4

91 9.8

8 5.9

820 22.6

33 5.9

31963 130.6

3809 247.9

2125 154.5

5788 261.8

534 130.8

813 226.1

2203 183.8

913 76.7

42 37.6

4587 186.5

4225 209.4

281 198.5

287 153.5

14098 30.5

2678 40.4

60602 40.0

15688 87.3

126 5.6

--

107728 22.8

5872 46.7

11968 40.2

11968

9992

40.2

39.9

273 30.1

219 87.5

22 86.6

15768 74.7

2004

YIELD (quintal

/ ha)

AREA(ha)

101369 17,9

92 8.2

1303 15.7

13118 5.9

13 20.0

54439 6.7

601 6.4

5107 7.4

2799 23.2

26 9.9

2029 19.3

90 8.9

- -

2538 18.1

35 3.9

34202 87.3

3103 167.2

1985 148.0

5594 257.1

531 131.1

833 82.9

1950 161.1

874 70.1

178 70.2

4864 205.4

3386 156.1

337 141.7

348 109.3

11465 40.0

2960 58.2

45209 32.9

1278 57.9

60 4.2

- -

108525 19.5

1828 42.6

12166 39.0

12166

9764

39.0

87.1

492 36.2

177 80.2

197 20.4

15027 78.0

Cultivation

2000

YIELD (quintal

/ ha)

AREA(ha)

2001

YIELD (quintal

/ ha)

AREA(ha)

2002

YIELD (quintal

/ ha)

AREA(ha)

2003

YIELD (quintal

/ ha)

AREA(ha)

2004

YIELD (quintal

/ ha)

AREA(ha)



3.4.1 Production Volumes Main factors affecting total harvest production volume

are as follows:- size of harvested lands or orchards.- productivity per hectare.

When calculating wheat and corn production volume, itshould be taken into account major variation occurs in totalproduction area and not in cultivated land size, since somecultivated area may be damaged by natural disasters. Theseincidents are more frequent with corn than with wheat. Over2001-2004 period, total wheat production surfaces werebarely smaller than total cultivated areas. Losses rangedfrom 0.8% in 2002 to a maximum of 3.3% in 2004. The fol-lowing table shows corn and wheat production levels:

Cultivation

Winterwheat

WinterRye

WinterBarley

SpringWheat

SpringRye

SpringBarley

Oats

Spelt

Corn forgrain

Peas

Kidneybean

Chickpea

Lentil

Tobacco

Flax

Potato

Cabbage

Cucumber

Tomato

RedBeet

Carrot

Onion

Garlic

GreenPea

OtherVegetables

Pumpkin

EdibleRoot

SilageCorn

AnnualHerb

PerennialHerb


For GreenForage

ForSeeds

Sainfoin

Alfalfa

NaturalPastureland

Haying

GreenForage

Fruit andSoft Fruit

Main

Hard

Dry

Sub trop

Red

Grape

2000

YIELD (quintal

/ ha)

AREA(ha)

79657 22.6

7 14.3

2485 17.0

13183 12.1

5 30.0

74970 13,1

1765 9.8

7513 12.7

1967 22.3

17 22.3

1968 23.9

211 10.7

62 6.0

19 12.3

108 -

32645 129.6

4091 194.6

1984 141.6

5995 262.5

482 173.8

704 172.6

2056 166.1

690 86.4

77 45.2

4958 197.4

3814 158.9

310 223.1

537 121.6

31646 91.7

3211 70.0

67227 52.8

309 88.2

144 4.1

59 0.5

139384 26.7

105 75.2

19544 50.4

19544

14213

50.4

44.4

209 14.0

135 33.5

38 56.6

21850 73.1

2001

YIELD (quintal

/ ha)

AREA(ha)

100434 16.2

191 9.6

2140 14.4

13120 12.3

216 9.3

72025 7.8

1605 7.5

5307 9.4

2070 46.2

99 13.5

1606 20.8

137 13.3

38 9.9

35 11.9

36 4.1

32875 109.4

3961 196.0

1865 112.9

5486 241.3

404 142.2

770 133.8

3805 162.9

705 65.8

69 34.5

4637 171.1

3593 172.8

259 199.3

189 189.6

18620 59.1

3532 41.0

55221 36.8

1226 73.4

41 4.9

89 7.2

134609 21.3

1036 54.4

15293 37.5

15293

9117

37.5

58.9

233 17.0

256 66.6

42 16.1

17758 61.4

2002

YIELD (quintal

/ ha)

AREA(ha)

112840 20.2

80 7.0

1625 11.5

11467 11.8

7 10.0

62403 11.5

928 13.8

5305 9.8

2277 25.3

33 15.4

1569 18.1

141 13.1

16 9.8

117 19.0

38 10.5

32736 134.6

3364 245.9

1911 129.0

4959 230.2

443 157.2

757 215.9

2283 167.3

827 68.7

54 104.7

4674 216.2

3271 185.4

188 246.8

223 181.2

16364 27.2

2336 43.9

43390 45.0

436 104.4

223 4.1

107 4.3

132239 22.7

903 40.3

12040 52.7

12040

9053

52.7

71.6

248 26.8

254 95.3

9 102.7

15785 69.4

2003

YIELD (quintal

/ ha)

AREA(ha)

104323 20.0

120 8.3

1356 14.2

8079 11.3

15 20.0

50531 12.9

914 12.4

5435 9.0

2856 40.3

105 8.5

1746 20.4

91 9.8

8 5.9

820 22.6

33 5.9

31963 130.6

3809 247.9

2125 154.5

5788 261.8

534 130.8

813 226.1

2203 183.8

913 76.7

42 37.6

4587 186.5

4225 209.4

281 198.5

287 153.5

14098 30.5

2678 40.4

60602 40.0

15688 87.3

126 5.6

--

107728 22.8

5872 46.7

11968 40.2

11968

9992

40.2

39.9

273 30.1

219 87.5

22 86.6

15768 74.7

2004

YIELD (quintal

/ ha)

AREA(ha)

101369 17,9

92 8.2

1303 15.7

13118 5.9

13 20.0

54439 6.7

601 6.4

5107 7.4

2799 23.2

26 9.9

2029 19.3

90 8.9

- -

2538 18.1

35 3.9

34202 87.3

3103 167.2

1985 148.0

5594 257.1

531 131.1

833 82.9

1950 161.1

874 70.1

178 70.2

4864 205.4

3386 156.1

337 141.7

348 109.3

11465 40.0

2960 58.2

45209 32.9

1278 57.9

60 4.2

- -

108525 19.5

1828 42.6

12166 39.0

12166

9764

39.0

87.1

492 36.2

177 80.2

197 20.4

15027 78.0

Cultivation

2000

YIELD (quintal

/ ha)

AREA(ha)

2001

YIELD (quintal

/ ha)

AREA(ha)

2002

YIELD (quintal

/ ha)

AREA(ha)

2003

YIELD (quintal

/ ha)

AREA(ha)

2004

YIELD (quintal

/ ha)

AREA(ha)

CULTIVATION

Wheat, including

Winter wheat

Spring wheat

Corn, including

for grain

for food

2001

231,114

10,565

9,865

4,018

2002

277,695

6,976

12,156

3,009

2003

207,984

8,714

15,241

3,172

2004

241,679 284,670 216,698 291,556

283,877

7,679

13,882 15,165 18,413 27,028

19,321

7,707

Wheat and Corn Production Volume, 2001-2004, in tons.Source: Alpha Plus Consulting.



The analysis of corn and wheat production volume for 2002-2004 period indicates most important variable consists inexerted on production levels impact. Fluctuations in productionlevels are high, resulting in 2003corn production volume reduc-tion, despite cultivated areas expansion during same year.

As already mentioned, 2004 levels cannot provide a refer-ence for fruit production volumes. This is particularly true forapricot: while throughout 2004 only 8.000 tons were produced,in the 2005 first semester, 55.000 tons had been harvested,and only on the following month 30.000additional ones.

Despite frosts and natural disasters, which may endan-ger fruit production, many farmers continue expanding cul-tivated areas resulting in produced volumes quantitativeincrease. This is the case with apricots, peaches, sweetcherries and figs, whose demand and sale opportunitiesgrow each year. Production volumes for other types offruits are comparatively stable.

Statistical information about dry fruits and strawberriesproduction volumes must be carefully monitored sincethere might be an underestimation of produced volumes.These underestimations derive from the fact these treesoften grow under wild conditions (mainly in woods) andthereforecannot be counted. Furthermore, there are pre-sumably32 more dry fruit trees and strawberry bushes cul-tivated in farms than those mentioned in official data andcurrent dry fruit production volume should be 1.5 to 2times higher than available figures, that is, 4,500 to 6,000tons per year. As for strawberries, potential production isestimated at 4,000 to 5,000 tons/year.

There is no clear trend for grape production volumes,since they substantially vary from year to year. After anunexpected low yield in 2003 (81,600 tons), 150,000hectares were produced in 2004 - the best harvest in pre-ceding eight years. Most widespread varieties are “Kangun”and “Rkatsiteli”, used for cognac production, growing main-ly in Tavush region. “Areni” variety grows in Vayots Dzorregion, but is also harvested in Ararat and Armavir regions;however, their quality is not equal to those harvested inVayots Dzor region. Also worthy of mention is the fact new"Areni" vineyards have been planted in the three regionsmentioned above. A greater yield in vineyards is expectedfor the next years since those damaged by adverse weath-

er conditions during previous years have been restored togood condition and new vineyards have been planted.

3.4.2 Prices and ProductivityFarm products retail sales prices have increased faster

than producers’ prices. This is mainly due to internationalmarkets grain prices increase but also attributed to pro-cessing and production high cost and to the lack of effec-tive tools for product storage. In 2007 compared to 2003,prices have even risen in agribusiness. In both cases,increases are mainly determined by wheat price increase inthe international and local markets, leading in 2005 to arelevant increase in bread industrially produced for domes-tic consumption price.

Exchange terms for agricultural sector did not improvebut production did it significantly. Both the price and theindex decreased in 2000 although they started recovering insubsequent years33. Agriculture price index remainedunchanged despite marked fluctuations occurred overrecent years. Therefore, most of the increase in agricultureproduction value may be attributed to production increases.The chart below shows the dramatic increase in agriculturalvolume index over the referred years. Although surface foragriculture has only increased about 2% compared to 1999,there was around an 18% increase in agriculture production.

120

140

100

80

60

40

20

01999 2000 2001 2002 2003

Quantity index Real index Commercial terms

Index of Agribusiness Prices, Volumes and Commercial Terms.Source: Republic of Armenia Annual Statistics Book, Armenia 2004.



3.5 Conclusions

3.5.1 Armenian Agriculture Exporting PotentialArmenia has all the necessary strenght to be a compet-

itive producer in several areas34. It has exporting potentialin certain agricultural sectors, main products being vegeta-bles and fruits (specifically processed vine). Some of theseproducts have a major demand by Armenian Diaspora,mainly from Russia, where largest Armenian communityliving abroad in the world is concentrated. Basturma andother air-dried cured beef, brandy and traditional cheeseare exported to these markets, although other productssuch as high value vegetables (for instance asparagus andbroccoli) might be exported in great volumes representingnew market opportunities.

Currently, the Armenian Diaspora represents productsgreater market issue. In addition to exports to Russia, sig-nificant numbers of beef, greens and primary manufac-tured food such as oils, grapes and nuts are exported tothe United States of America and to some places inWestern Europe. These clients currently represent a rele-vant source of revenue for exporters, but they are definite-ly fragile since their targeted consumer is switching itstastes as generations switch their national origin feeling toa clear social transformation according to their environ-ment. Furthermore, these products are expensive in thosemarkets compared to their equivalents or substituenteswhen preparing traditional folk meals. Therefore it is rec-ommended those exports do not become the sole corpo-rate income source, companies having to search for a vari-ety of products to be consumed by a greater number ofindividuals35. For that purpose, on one side, quality stan-dards of potentially exportable products must beincreased as well as on another side global proposalsallowing the country to be positioned with a brand imagethrough active policies strength in international food,tourism, culture and education fairs should continue to bedeveloped. But these dynamics cannot rely onGovernment actions only: private companies inter-relationwith focused proposals to the administration have beenthe source opening the way to development and growth ofagro exporting companies worldwide.

Not less important is exports diversification so agribusi-ness does not depend on only one marketable product. Itshould be reminded alcoholic beverages such as wine, beerand brandy account for over 80% sectors´ exports havingdramatically increased over last years. From 1995 to 2005,beer exports increased 31,000% with a turnover of US$550,000, wine exports increased 138% with an averageturnover of US$ 514,000 and brandy exports increased by2,059% during same period with US$ 43,000,000 turnover.In 2005, these products total export volume exceeded US$60.000.000, 50% more than in 2002. It should be noted thebrandy sector accounts for 80% of revenue resulting fromalcoholic beverages exports.

30000%

35000%

25000%

20000%

15000%

10000%

5000%

0%Beer Brandy Wine

138%2059%

31000%

Increase of Alcoholic Beverages Exports 1995-2005.Source: Annual Statistics Book, Armenia 2004.

An improvement in processes and an active promotionpolicy in the sector will allow this country to hold a muchmore important position than the one held today as far asagribusiness. This dynamic will also allow Armenian popu-lation to enjoy national products with higher qualities thantoday´s ones.



Notes

1 Republic of Armenia National Report on the State of theEnvironment in Armenia in 2002, Yerevan, 2003, page 30.2 Tumanian, Robert, Armenia, Country Pasture/Forage ResourceProfiles, 20063 Ibid.4 Op. Cit.5 Op. Cit.6 Op. Cit7 An example of this it is worth to mention Aragatsotn marz, havingapproximately 15% of berries fields, produces 35% up to 40% ofcountry´s total production. Moreover, Lori has also 15% of berriesfields, but produces only 5% to 8% of the total. These productivitydiscrepancies are the result of prolificity differences between differ-ent berries types growing in a particular marz.8 Republic of Armenia Ministry of Agriculture with support of FAO,Food and Agriculture Organization, A Strategy for SustainableAgricultural Development, Yerevan, 2002, page 10.9 Ibid.10 Ibid.11 Ibid.12 Ibid.13 Ibid.14 Republic of Armenia Ministry of Agriculture with FAO´s support,A Strategy for sustainable agricultural development, Yerevan, 2002,page 13.15 Ibid.16 Republic of Armenia Ministry of Agriculture with FAO´s support,A strategy for sustainable agricultural development, Yerevan, 2002,Page 12.17 Four to five years18 Source: United Nations Food and Agriculture Organization (FAO)19 Akopián, Z. Reforms in the New Independent States, Paris,1996, p.213.20 Soil is solely fertilized using organic fertilizers (manure andmanure fluid, peat, bio-humus, vegetal manure, poultry manure,vegetal ash, etc.) and bacterial. Pest and disease control is madethrough biological means, such as organic pesticides use, com-bined cultivation of different plants (herbs and control of diseasesthrough another plant), predator rising (hedgehogs, toads), etc. Thefollowing pest control measures are applied: plant insects hand col-lection, plant atomization with natural infusions (tobacco, onion,garlic, capsicum extract) and liquid soap, use of pheromone traps,catchment area application, strong or repulsive smell crops cultiva-tion, among others.21 Such plants are mainly located near Yerevan and in mining areas(Agarak, Qajaran, Kapan, Alaverdi, Metsamor), which may beexcluded from the organic cultivation projects.

22 Such as seeds, young plants, fertilizers and agrochemical products.23 Tumanian, Robert, Armenia, country pasture/forage resourceprofiles, 2006.24 Ibid.25 Ibid.26 Source: United Nations Economic Commission for Europe(UNECE).27 Tumanian, Robert, Armenia, country pasture/forage resourceprofiles, 2006.28 Ibid.29 Ibid.30 Ibid.31 Republic of Armenia Ministry of Agriculture with FAO´s support,A strategy for sustainable agricultural development, Yerevan, 2002.32 Alpha Plus Consulting, “The State of Armenian Agriculture, aquantitative and qualitative analysis”, 2005.33 According to data issued by the Food and AgricultureFoundation, Netherlands.34 Republic of Armenia Ministry of Agriculture with the support ofthe FAO, A strategy for sustainable agricultural development,Yerevan, 2002, page 9.35 Russell, T., The Armenian Diaspora, Washington, 1994


chapter 4

Logistics


Chapter 4 - Logistics 91

Chapter 4

Logistics

Introduction`

This chapter will treat different independent subjectsrelated to agriculture but where farmers are not directlyinvolved nor their lands nor the cultivations itselves eventhough their improvements will have impact on the sectorswealth. First one will be country’s infrastructure regardingtransportation means: roads, rail and aviation. Followed bythe standards quality and their connection to food safety,and by weights and measures situation. Finally we willpresent post- harvest management and processing status.

4.2 Infrastructure

The overall elements and services necessary to createand operate any organization constitute its infrastructure. Allsectors – and particularly the agribusiness sector underanalysis in this work – need an appropriate infrastructure toflourish, not only because it contributes to efficient productmarketing but also because the nature of the products –most of them perishable – so requires. We are basicallyreferring to means of transportation in good condition, eitherland (roads, railroads), air, or water transport, as well as tointermediate facilities such as adequate storage for efficientpost-harvest management (silos, cold stores, cold storagewarehouses) in order to prevent negative externalities(pressed crops) which would result in reduced income.

4.2.1 Means of Communication The Republic of Armenia is located in a landlocked

mountainous enclave and therefore sea transport is not aviable option. The development of appropriate and acces-sible routes and roads as well as of railroads and air routesbecomes crucial.

4.2.1.1. Network of roadsThe Republic of Armenia has a relatively well designed

network of roads1 made up of 7700 linear kilometers2 with1400 km of interprovincial roads, 2520 kilometers ofregional roads and 3780 km of local roads3, representingan average of 257.6 linear kilometers of road every 1000square kilometers of territory. Most cargo and passengertransport is by road.

Three roads lead to the border with the Republic ofGeorgia: Bavra/Jdanovi, Gogavan/Guguti andBagratashen/Sadakhlo4, essential for cargo transportsince they connect with Poti port in the Black Sea, mainprovider of sea transported merchandise to arrive to or tobe sent by Armenia. On the other side, Agarak/Tabriz roadleads to the border with the Islamic Republic of Iran5.

Local routes to access from towns to markets are in badcondition in many areas of the country and they must berepaired to improve the standard of living of the inhabitantsand their communities. Travelling is slow on those roads,and is many times interrupted due to seasonal causes or

11%

61%

GoodNormalPoor or very poor

28%

Condition of Rural Roads in Armenia.Source: FAOSTAT, 2004.



to deterioration6 even when according to the RA Ministryof Transport and Communications 89% of the national net-work of roads is paved. Deterioration of rural roads is aGovernment concern: land communication is frequentlyinterrupted, generating a barrier that separates rural com-munities from regional centers.

The following index is formed by marzes GDP per capi-ta, their regional economies, and their exports as well asdistances that separate them from urban centers and fromthe capital city. The higher the indicator, the greater is thetendency of the community to poverty.

DISTANCES(In km)

From regionalcenters

From the capitalcity

UNDER20 KM

11.9

33.8

20-30KM

20.9

46.2

30-40KM

33.7

109.2

40-50KM

47.2

162.9

50-60KM

76.6

266.9

60 KM OR OVER

85.4

237.6

Rural roads connecting rural communities to national orinterstate highways constitute in many cases the only pos-sibility of a community to survive and the capacity to tradewith the rest of the country. It is the so-called Lifeline7, a playon words that refers to the road as the line that divides com-munities that will survive from those under critical condition– virtually isolated – that will not. Due to the lack of a road,for not getting improvements on their road infrastructure,small villages will are not able to communicate with theregion, with the rest of the country, the world, life8.

Interstate roads and regional highways are administeredand managed by the government entity “SSCC ArmeniaRoads”. Owing to the technical support timely received,this entity is now technically competent and capable ofcarrying out most of its civil works, including design engi-neering and contract supervision9.

State financing for route maintenance and rehabilitationis still limited and as there is no roads’ fund, State alloca-tion to this item is highly restricted. However, the situationwill be reversed, since considerable foreign funds are tar-

Ratio between poverty anddistance to urban centersSource: UNDP

geted to the improvement of routes with an ambitious planto up-grade the network and create new roads (with thesupport of international organizations such as the LynsiFoundation, the Millennium Challenge Account, and theAsian Development Bank). The start up of the “MillenniumChallenge Account” plan shall assign among other invest-ments, US$ 67,000,000 to repair 321 km of national high-ways, 622 local roads and 19 bridges. The WTO estimateda total of US$ 90,000,000 necessary to rehabilitate the net-work of roads in order to allow loaded trucks to transit theroads at an average speed of 60 km/h10. The investment in

infrastructure to rehabilitate rural and connection roadswith local or international routes is top priority.

Secondary routes, road junctions and inner fields, havereceived almost no money from these funds for the lastdecade. Rural infrastructure study estimates that totalexpenditures on rural roads have increased to approxi-mately US$500,000 with approximately half funded fromthe community budgets11.

The following table summarizes the status of communi-ty roads in each marz12 taking into account the interiorroutes of the country. Road condition was evaluated basedon the maximum speed a vehicle may attain and rating asgood roads where 60 km/h may be attained, as standardthose where vehicles may be driven at 40 to 60 km/h, aspoor where scarce 20 to 40 km/h may be attained and,finally as very poor those roads with a maximum speedlimit of 20 km/h.

Some rural roads are totally untransitable. From thetotal length of 3692 km of roads connecting rural commu-nities with main roads 2250 km (61%) are classified as



poor or very poor, 1033 km (28%) in fair condition and only406 km (11%) in good condition. Furthermore, only 597 km(16%) of these roads are totally passable during the wintertime, while 748 km (20%) are completely impassable.

At the same time, the country is undergoing rapidgrowth in the number of vehicles causing traffic safety andtraffic congestion in capital centers - among other prob-lems - with subsequent increase in traffic accidents.Therefore, signaling improvement and driving trainingemerged as a new need and resulted in the creation in2005 of the Traffic Safety Department.

The increase in the number of vehicles estimated in30% for the period 2003-2004 resulted in 38% growth ingoods carried by road and 61% in passenger transport.

4.2.1.2 The Railway SystemThe railroad structure in the Republic of Armenia is

formed by 845 km of railroads with 1520mm electrifiedgauge, 3Kw DC. Only 736 km are still in operation whilethe remaining 110 km are not, due to border closing, land-slides and other reasons13.

The network of railroads managed by state company“Armenian Railroads” (AR) required major investments togo back to load volumes registered in the last years of the

GOOD STANDARD POOR VERYPOOR

MARZES WITHAVAILABLE PUBLIC TRANSPORTATION

Aragatzotn 2% 29% 65% 4% 57%

Ararat 69% 27% 3% 0% 99%

Armavir 8% 41% 51% 0% 85%

Gegharkunik 1% 43% 50% 6% 60%

Kotayk 18% 62% 20% 0% 100%

Lori 2% 24% 68% 5% 64%

Shiraz 1% 21% 69% 9% 90%

Syunik 0% 17% 83% 0% 75%

Tavush 2% 43% 45% 9% 44%

Vayots' Azor 9% 85% 6% 0% 24%

Total 11% 34% 51% 3% 73%

Roads situation in each MarzSource: Rural InfrastructureStudy, 2004.

Soviet era, since most of the rolling stock should bereplaced, the main track from Yerevan city to the borderwith the Republic of Georgia should be restored, the elec-tric systems renewed and damaged bridges refurbished14.The system lags well behind similar European railway sys-tems15 causing many citizens who used this means oftransport to travel or to carry goods – to use other alterna-tive means of transport or preventing them from travelling.Railroad freight in 1991 was 12,000,000 tons anddecreased since then to 2,600,000 tons in 2005. The num-ber of passengers also decreased from 3,500,000 at thebeginning of the 1990s to 700,000 in 2005.

At the beginning of 2008, the President of RussianRailroads, Vladimir Yakunin, and the Ministry of Transport ofArmenia, Andranik Manukyan, entered into a vertical con-cession according to which the Russian railroad companywill manage the Armenian railroad network. According to theagreement, the infrastructure is still owned by the Nationand the licensee operates and manages the structure. Thelicense shall be for thirty years, with a twenty year extensionright after the first twenty years of operation. SouthCaucasus Railroads, an affiliate company of RussianRailroads, especially created for this contract in Armenia,shall take on the management of Armenian Railroads.



In accordance to the agreement, Russian Railroads shallmake a down payment of ?3,500,000 together with anannual 2 percent of the income (excluding income for pas-senger transportation). Furthermore, the licensee shall pur-chase all the rolling railroad stock of Armenia. The initialinvestment plan foresees that Russian Railroads shall bebound to contribute with ?284,000,000 for thirty years forthe development of the railroad infrastructure in the repub-lic of Armenia. It is also foreseen it invests approximately?120,000,000 to update the rolling stock. RussianRailroads shall guarantee the investment. The licenseeshall start to manage the Armenian railroads in the secondsemester of 2008. Furthermore, this company shall be incharge of the construction of a railroad track to Iran.

Consequently, Georgia, whose railroad is the only onethat links Armenia to the world but which at the same timesuffers a transport blockade by the Russian Federation hasannounced that in March 2008 it will eliminate discounts inArmenian goods freight rates through its territory.

0

2

4

6

8

10

12

14

16

1990 1991 1992 1993 1994 1995

Passengers Weight (tn)

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Railroad transportarion (mil-lions)Source: The ArmenianEconomist.

4.2.1.3 Aviation Network.Aviation industry remains Armenia's most reliable trans-

portation link to the outside world. Being one of the formerSoviet republics located in the Southern Caucasus, Armeniais landlocked country mainly due to the lack of efficient roadand railway communication with other countries and itdepends on the effective and well organized aviation indus-

try. Even during the soviet era Armenia aviation sector andZvartnots airport were among the most sophisticated proj-ects implemented by that time.

Currently Aviation is one of the industries where theArmenian Government applies all efforts to develop it andbecome competitive in the region, giving a special priority toall projects presented in the sector since it may have signifi-cant potential and play an important role in maintaining polit-ical and economic independence of the country.

The aeronautical scenario grew dramatically towardsmodernization with the kick-off given by the governmentwhen privatizing Zvartnots International Airport (EVN). ByDecember 2001 decision was taken, approved early 2002allowing the took over to happen on June 2002. “Armenia”International Airports” CJSC was founded based on theConcession Agreement signed between the Government ofthe Republic of Armenia and “Corporación América SA”. Thecompany was granted with the right to manage and operateYerevan’s “Zvartnots International Airport for a period of30 years, with possible quinquenial renovations and later in2007 Gyumri’s “Shirak” International Airports.

The strategic goal of the company is to implement themaster plan approved by the government in 2002 accordingto which Zvartnots International Airport must reach by 2010standards applied in similar airports around the world, con-tributing to the plan of transforming the airport into a region-al HUB in order to take advantage of Armenia’s strategic



location between Europe and Asia, increase passenger’straffic as well as airlines frequencies. These goals havebeen already reached by concessionaire quite in advance ofthe due date.

The first objective was to renovate the existing runwayand platforms so as to make it safe and secure for all flightsin all weather conditions. Currently Zvartnots InternationalAirport runway has the following parameters 3850-meterlong, 60-meter width. The lighting system was fully renovat-ed with IDMAN lighting system, including center line, touchdown zone, and its permanent maintenance in due condi-tions. Therefore the airport was assigned ICAO category II,being able to handle any type of commercial, cargo and mil-itary aircrafts.

Full reorganization plan implemented on airport safetyand security levels upgrade as well as runway full recon-struction allowed market expansion. These goals weredirectly interlinked with the objectives of developing the exist-ing infrastructure of the airport and constructing a new termi-nal. Yerevan`s geological situation was a challenge duringthe initial stage of the design process for the new terminalsince it is situated in a high risk seismic area, grade 4.Concessionaire looked for the newest technology on the

subject, which happened to be the base isolation, with theapplication of rubber lead seismic isolators very new for theregion, implemented considering the specifications of thearea as well the strategic significance of the building.Completely new “prenova slab” system, reducing the slabsweight and the building total mass, was applied during theworks as a new approach and technology in the construction.Mainly used to keep the building as light as possible, one ofthe design challenges of this New Terminal Building, a spe-cial system of pre cast prefabricated slabs with polyethylenespheres was developed, making the structural system amuch lighter overall element in order to achieve better seis-mic resistance. The structural design was adjusted andreduced to minimum possible sections. The technologyallows reducing vulnerability with a 65 % limitation of seismiceffects and increase anti-seismic durableness. DoubleGlassed Façade of the building was installed following ener-gy saving technologies, increasing the efficiency of the build-ing operation by means of providing thermal comfort regulat-ing heat lost / heat gains, reducing weather impacts.Intelligent Building Management System is another innova-tion applied in the country targeted to increase safety andsecurity of the building, allowing to have smart control over

Zvartnots International Airport,New Terminal Building inaugu-rated 25 May 2007, Yerevan.



the building by means of integration of such systems asCCTV, Firefighting, Security locks, air-conditioning etc. intothe one centralized computerized server, which will immedi-ately react on any irregularity observed in the building.

On May 25th, 2007 new terminal’s arrivals and departuressterile area was put into operation, a wonderful modern build-ing, transparent, with full view to Mount Arart. Up to now it hasbeen consumed about 150 million US dollars, from the total of220 million US dollars planned for the term concession.

As a result aircraft movement growth for the period from2001-2007 was really strong, 40% increase recorded in thenumber of aircraft movement.

Local airline Armenian Airlines bankruptcy influenced andrequired from Armenian airline industry more modern andmore efficient fleet. Routes left void by the referred compa-ny were took over by a new formed one – Armavia - as alocal alternative replacement with Airbuses A320 deliverypartially replacing the Russian fleet operated on the men-tioned routes, as well as allowing to start operation of newflights to Europe.

In 2003 two new airlines started to operate regular sched-uled flights to “Zvartnots” International Airport. The Europeanair carrier Czech Airlines operated with its Prague-Yerevanflight twice a week and Fly Air, a Turkish airline, operatedscheduled flights Istanbul-Yerevan twice a week. British

January

February

March

April

May

June

July

August

September

October

November

December

2001

739

1,511

2,399

3,256

4,162

5,156

6,279

7,559

8,705

9,760

10,744

11,816

2002

804

1,609

2,512

3,429

4,419

5,405

6,489

7,643

8,626

9,559

10,502

11,620

2003

840

1,685

2,638

3,500

4,457

5,500

6,561

7,808

8,892

9,982

10,991

12,092

2004

920

1,903

2,977

4,090

5,310

6,519

7,909

9,367

10,636

11,825

12,970

14,216

2005

1,008

1,937

3,054

4,005

5,082

6,327

7,650

9,087

10,359

11,651

12,830

13,792

2006

1,030

1,876

2,846

3,837

4,843

5,945

7,178

8,470

9,689

10,911

12,118

13,489

2007

1,076

2,088

3,277

4,504

5,779

7,165

8,602

10,219

11,692

13,102

14,462

15,910

EVN Aircraft Movement.Source: AIA.

Airways decided to operate to Yerevan on a non-stop directbasis from London. The operation of new routes and airlinecompanies in Armenia resulted in noticeable enlivening in theactivity of already operating companies in the market, whichcontributed to increase flights frequency to Armenia. Forinstance, Austrian Airlines’ Yerevan-Vienna flight increasedfrom three (3) weekly scheduled flights in 2003 to five (5) in2004 and seven (7) in 2007. Years 2004-2006 were develop-ment ones of new and already existing directions, due to thefact that the first phase of the master plan presented by AIAand targeted on both safety and security standards and newterminal construction arrival level were completed. As a resultin June 2005 Lufthansa Airlines started operation toYerevan from Munich with two weekly flights. Two new inter-national air companies started their operation to Yerevan in2006 Air France from Paris and Air Arabia. In 2008´s firstquarter the tendency to increase flights frequencies has beenconfirmed when Lufthansa and Czech airlines requested toup-grade their flights to four (4) weekly scheduled ones andAir Baltic started two (2) weekly flights to Riga.

The best route with maximum loading passenger factor isstill Yerevan-Moscow, with the four daily flights operated byboth Armavia and Aeroflot and S7 are also increased duringthe high season to 5-6. During the years 2006-2007 the air-lines were operating about 34 CIS and international routes



0

2000

4000

6000

8000

10000

12000

14000

16000

2001 2002 2003 2004 2005 2006 2007

Aircraft Movement Annual Accumulated.

January

February

March

April

May

June

July

August

September

October

November

December

2001

39,161

75,942

117,374

161,935

211,996

280,644

358,403

457,377

529,772

593,749

652,672

723,714

2002

46,977

91,328

142,238

198,592

258,443

332,601

420,145

529,713

611,152

682,570

749,509

826,170

2003

47,990

92,296

144,055

198,781

267,784

349,399

436,681

552,901

641,032

721,657

796,113

882,368

2004

57,114

111,824

174,370

248,666

332,344

434,515

554,727

702,163

810,777

909,502

995,328

1,089,677

2005

63,775

120,063

187,255

265,525

355,818

466,027

594,071

746,656

863,187

960,663

1,045,787

1,119,677

2006

60,285

114,644

182,428

263,072

343,963

439,261

561,605

703,622

820,805

928,292

1,024,899

1,125,708

2007

77,479

147,414

232,493

330,318

428,983

551,704

706,203

885,340

1,029,275

1,154,311

1,269,029

1,387,081

EVN Passenger movement .



0

200.000

400.000

600.000

800.000

1.0000000

1.200.000

1.400.000

2001 2002 2003 2004 2005 2006 2007

Pax Movements Annual Accumulaited.

0,0

Janu

ary

Febr

uary

Mar

ch

Apr

il

May

June

July

Aug

ust

Sep

tem

ber

Okt

ober

Nov

embe

r

Dec

embe

r

100,0

200,0

300,0

400,0

500,0

600,0

700,0

800,0

2001 2002 2003 2004 2005 2006 2007

Mail Annual Accumulated.



and have code-share agreements for two internationalroutes operated by other carriers. The destinations to Russiaby cities are Krasnodar, Perm, Orenburg, Min Vody, Saratov,Samara, St. Petresrburg Anapa, Moscow, VladikovkazRastov, Voronezh, Volgograd Astrakhan Nizhni Novgorod,Stavropol, Ufa, Ekaterinburg, Chelyabinsk, Novosibrrsk,Tumen,). The CIS countries served are Ukraine, Uzbekistan,Georgia, Turkmenistan. As for the Western Europe countrieswe should mention France (Paris, Aéroport Roissy Charlesde Gaule), England (London Heathrow airport) Germany(Munich International Airport - F.J. Strauss), Austria (ViennaInternational Airport), the Netherlands (Schipol), Greece(Athens), Turkey (Istanbul). Flights also serve MiddleEastern and Gulf countries United Arab Emirates (Dubai),Islamic Republic of Iran (Teheran), Republic of Lebanon(Beyrouth), Syria Arab Republic (Damasc).

Real passenger movement growth for the period from2001-2007 has been strong, 92 % increase was recorded inthe number of passengers served. Passenger traffic increase

January

February

March

April

May

June

July

August

September

October

November

December

2001

55,4

109,1

168,6

225,8

281,3

332,3

391,1

449,2

497,3

552,5

619,4

704,4

2002

49,5

103,4

159,9

210,7

259,5

303,0

347,0

396,1

436,8

483,4

534,2

601,9

2003

57,3

92,9

126,3

156,7

187,1

214,5

246,2

276,9

308,0

334,5

367,9

409,6

2004

31,5

57,8

85,7

112,2

138,1

163,2

190,6

218,1

244,7

271,0

309,7

346,4

2005

38,1

65,0

93,1

119,5

148,8

175,4

204,6

234,1

261,5

293,7

329,5

366,2

2006

35,1

64,6

97,2

128,2

159,2

191,6

225,7

261,3

294,6

330,4

373,1

426,0

2007

40,7

76,9

114,9

152,2

188,3

225,6

263,0

301,3

341,7,4

385,4

431,7

490,9

Cargo Handled Merchandisesin Tons.



0,0

Janu

ary

Mar

ch

May

July

Sep

tem

ber

Nov

embe

r

2.000,0

4.000,0

6.000,0

8.000,0

10.000,0

2001 2002 2003 2004 2005 2006 2007

Cargo Movements Annual Accumulated.

both on account of improved services for existing carriers aswell as on the account of competitive edge development andattraction of new carriers and geographic connections,including evaluating transit zone were within the primary tar-get of the company in its first three years.

The airport has an important cargo building where mailand other cargo are dealt with.

Cargo handled merchandise has had an erratic behaviorduring the years of the concession. No reliable data wasfound for previous years. This is due mainly on internation-al foreign aid which happened to very important in the start-ing years of the independency so as to mitigate conse-quences of lack of electricity or earthquakes. The volumenot being sufficient for regular cargo aircrafts to install sched-uled frequencies, alternatives are looked for. Neverthelessthe airplane cargo is served by Armenian cargo line fromGermany airport, on a weekly basis, helping a lot

In 2007 the concession agreement was amended and“Armenia” International Airports” was granted with the rightsto operate “SHIRAK” international airport located in the coun-try’s second city Gyumri, it will be mainly used as alternativeairport for Zvartnots International Airport. It started operatingin 1961, annually serving about 46.000 passengers. After fullreconstruction of runway (3.220 meter long, 45 meter width)and assignment of new lighting system (2007) “Shirak”

Airport assigned with ICAO category I, which gives opportu-nity to international air companies to make use of the air-port’s services. Currently, there are two regular flights oper-ated on weekly basis to SHIRAK from Moscow by S7 airline,and one flight per week from Sochi operated by Aeroflot-Donair company, negotiations are in the process to have regularflights to two other destinations in Russia (Krasnodar,Chelyabinsk).

4.3 Standards for quality

Standards are a vehicle for the sharing of knowledge,technology and good practices: an essential component ofthe world-wide industrial and post-industrial infrastructuresupporting economic activities, societal needs and moreequitable opportunities – in other words, sustainabledevelopment.

The key role of standards has been implicitly recognized,since a long time, in the education programmes covering abroad variety of technical fields. However, it is a more recenttrend the increased awareness of educational institutions allover the world of the importance of standardization activitiesin a more general sense: for the contribution that they cangive to trade of products and services, to promoting good



business practices and to fostering technological innovation.One of the most relevant worldwide institutions in the

standardization field is the International Organization forStandardization. Because "International Organization forStandardization" would have different acronyms in differentlanguages ("IOS" in English, "OIN" in French forOrganisation internationale de normalisation), its foundersdecided to give it also a short, all-purpose name. They chose"ISO", derived from the Greek isos, meaning "equal".Whatever the country, whatever the language, the short formof the organization's name is always ISO.

ISO considers the above referred trend of utmost impor-tance and believes in the fundamental contribution that edu-cational institutions can give on teaching what internationalstandardization is and what can be achieved through it. ISOis keen to support these institutions in their efforts and toencourage them to share their knowledge, experience andexpertise. Also, considering that education and research areoften linked, ISO wishes to promote studies and surveysrelating to the macro- and micro-economic benefits of stan-dardization.

Other organizations such as USDA have their own quali-ty standards based on measurable attributes that describethe value and utility of the product. For example, Beef quali-ty standards are based on attributes such as marbling (theamount of fat interspersed with lean meat), color, firmness,texture, and age of the animal, for each grade. Standards foreach product describe the entire range of quality for a prod-uct, and the number of grades varies by commodity. Thereare eight grades for beef, and three each for chickens, eggs,and turkeys. On the other hand, there are 38 grades for cot-ton, and more than 312 fruit, vegetable, and specialty prod-uct standards.

GOSSTANDARD, a standard rule issued by the govern-ment of the Soviet Union, followed by the RussianFederation, serves as protection for the user and the adher-ence of existing standards. In this framework the quality andstandards of goods and services are certified, not only forimported goods, but products manufactured in RussianFederation. Certificates for products are issued for either oneor three years. The existence of an ISO document facilitatesthe certification by the Russian Authorities.

Why standards matter? Standards make an enor-mous and positive contribution to most aspects of ourlives.

Standards ensure desirable characteristics of productsand services such as quality, environmental friendliness,safety, reliability, efficiency and interchangeability - and at aneconomical cost.

When products and services meet our expectations, wetend to take this for granted and be unaware of the role ofstandards. However, when standards are absent, we soonnotice. We soon care when products turn out to be of poorquality, do not fit, are incompatible with equipment that wealready have, are unreliable or dangerous.

When products, systems, machinery and devices workwell and safely, it is often because they meet standards.When standards are absent, we soon notice.

What standards do ?

• make the development, manufacturing and supply ofproducts and services more efficient, safer and cleaner• facilitate trade between countries and make it fairer• provide governments with a technical base for health,safety and environmental legislation, and conformityassessment • share technological advances and good managementpractice • disseminate innovation• safeguard consumers, and users in general, of prod-ucts and services • make life simpler by providing solutions to commonproblems

Who standards benefit? Standards provide techno-logical, economic and societal benefits.

For businesses, the widespread adoption ofInternational Standards means that suppliers can developand offer products and services meeting specifications thathave wide international acceptance in their sectors.Therefore, businesses using International Standards cancompete on many more markets around the world.

For innovators of new technologies, InternationalStandards on aspects like terminology, compatibility and



safety speed up the dissemination of innovations and theirdevelopment into manufacturable and marketable products.

For customers, the worldwide compatibility of technolo-gy which is achieved when products and services are basedon International Standards gives them a broad choice ofoffers. They also benefit from the effects of competitionamong suppliers.

For governments, International Standards provide thetechnological and scientific bases underpinning health, safe-ty and environmental legislation.

For trade officials, International Standards create "alevel playing field" for all competitors on those markets.The existence of divergent national or regional standardscan create technical barriers to trade. InternationalStandards are the technical means by which political tradeagreements can be put into practice.

For developing countries, International Standards thatrepresent an international consensus on the state of the artare an important source of technological know-how. Bydefining the characteristics that products and services will beexpected to meet on export markets, International Standardsgive developing countries a basis for making the right deci-sions when investing their scarce resources and thus avoidsquandering them.

For consumers, conformity of products and services toInternational Standards provides assurance about their qual-ity, safety and reliability.

For everyone, International Standards contribute to thequality of life in general by ensuring that the transport,machinery and tools we use are safe.

For the planet we inhabit, International Standards on air,water and soil quality, on emissions of gases and radiationand environmental aspects of products can contribute toefforts to preserve the environment.

The importance of standards for international trade lieson seven basic issues:

• They enable to efficiently organize international trade byoffering a homogeneous language to producers, pack-agers, buyers and consumers. • They are essential to solve any possible controversybetween buyers and sellers.

• Standardized quality levels are the bases of informationmanaged and published by marketing services, enablingto win or loose potential markets for products from vari-ous nations. • They are necessary to truly compare prices. • Allows for a more transparent market; an advantage forall the marketing chain. • They aim at keeping those products whose quality is notidentified out of the market. • Quality improvement is their objective since by increas-ing product quality an increase in value is usually verified.Therefore, producers tend to improve their products inorder to increase their income.

4.3.1 National SituationThe first Standards Bureau in Armenia was established in

1931, while inside of the Soviet Union, as a branch of the for-mer Gosstandard system. It carried out activities in the fieldsof standardization, calibration of measuring devices, and,applied metrology.

In 1998 the Institute "Armstandard" was established, butin 2004 by Decision of the Government of the Republic ofArmenia the Institute was reorganized into the NationalInstitute of Standards (SARM). The Institute is a closedjoint-stock company operating under the Ministry of Tradeand Economic Development of the Republic of Armenia, sit-ting on Komitas Avenue 49/2, AM-0051 Yerevan, tel: +37410 23 70 20, Fax: +374 10 28 56 20, e-mail: [email protected],Web: www.sarm.am

Works on development and examination of Armenian(AST) and Interstate (GOST) standards, classification (AC)as well as scientific and methodological works in the field ofstandardization are carried out by the Institute. The Institutehas been accredited as a product, services, quality and envi-ronmental management systems certification body and car-ries out conformity assessment activities in the mentionedfields. Activities on standardization and conformity assess-ment are performed according to the Laws "OnStandardization" adopted by the Parliament of Armenia in1999, amended in 2004 and "On Conformity Assessment"adopted by the Parliament of Armenia in 2004. In accordance with the Law "On Standardization", the nation-



al standards are voluntary, but a part of them containsmandatory requirements. SARM is a member body of ISOsince 1996. Armenia agribusiness processes are at very dif-ferent points on the path to ISO and HACCP (HazardAnalysis and Critical Control Point) accreditations16. Nocompany has the volume of fresh produce exports to the EUto warrant investment in the comprehensive and stringentprivate sector EUREP-GAP accreditation or British Retailer’sCode of practice. Many fresh and processed food companiesin Armenia lack the infrastructure and organization that isneeded to meet the basic requirements for GoodManufacturing Practices (GMP) as recognized in the EU orthe USA (the reference standard chosen by the Armeniangovernment for harmonization purposes). The majority usesan incremental approach, improving their facilities, equip-ment, and practices as their business volumes grow.

However, many agribusiness processes operate in build-ings that were bought during the privatizations of the 1990s.Most of these buildings were not designed as facilities ableto process food in compliance with international quality stan-dards. Most of these facilities have insufficient water supplyand are inadequate for workers, they even lack solid and liq-uid waste management in compliance with the internationalstandards of the twenty-first century.

4.3.2 Connections with food safetyMeeting food safety standards is another way to strength-

en the competitiveness of Armenia’s agribusiness. Tostrengthen its competitiveness, the agricultural sector andthe agribusiness will need to equip themselves to cost effec-tively respond to domestic consumers preferences for foodsafety and match food quality standards being at the sametime competitive in the international market17.

These standards will become increasingly relevant toagriculture and agribusiness. Domestic demand remains theprimary driver for food safety and quality improvements formost producers and processors. Higher quality imports pen-etrating the market already point to the need to raise localstandards simply to maintain the domestic market share, andachieve import substitution or establish export markets.

International experience suggests that implementation ofquality standards needs to be driven by the private sector

rather than imposed by the government. However, the gov-ernment has an important public role to play in providing sup-port to skills development of veterinary staff and advisoryservices that assist producers and processors to meet foodsafety standards. The Government also needs to take a leadto develop the legislative and regulatory framework thatallows the development of adequate standards while notimpeding on Armenia’s small and medium enterprise sector.

When introducing safety standards, the challenge is howto face interventions as the formal food sector grows, withoutdriving out informal activities that serve an important eco-nomic function. The formal market should be precisely ori-ented while by providing incentives and better public infor-mation on safety standards, the informal market is expectedto improve by itself.

The costs of introducing or carrying out food safety sys-tems can be large and prohibitive, therefore excluding manyproducers. A phased and differentiated implementationstrategy would give time to producers to adjust practices andenable public institutions to develop and refine their controland enforcement capacity.

Safety and quality insufficiencies in the agri-food sectortogether with inconsistent supply continue to remain themain barriers for increasing the exports of agro-processedproducts from Armenia to European and U.S. markets. Toreverse this situation the focus should be set on developingsustainable agricultural practices, and on producing safe andhigh quality export products of sufficient quantity whichwould be competitive in the respective markets.

Armenia’s small quantity of exported agro-processedproducts, low-valued product, and negative safety and qual-ity reputation make it a likely price-taker instead of being aprice setter18 . It has limited access to higher end markets.One option for Armenia to improve its export position is to dif-ferentiate its products in specialty markets, such as ethnicmarkets, produce organic agro-processed products.Alternatively, Armenia can get access to demanding marketsby improving the safety and quality of its agriculture.

Importing countries frequently require guarantees thatexports are derived from areas that are free from certainpests and diseases, that minimum standards of hygienehave been applied in the manufacture, packaging and distri-



bution of food products or that residue of pesticides, veteri-nary medicine, environmental contaminants or naturallyoccurring contaminants not exceed the standards set by thecompetent body. The exporting country and the exportindustry must have capacity to comply with these require-ments and in many cases also to prove that compliance hasbeen achieved19.

Food safety and agricultural health management capaci-ty is important not only to meet requirements for export mar-kets, but also to facilitate effective controls on imported agri-cultural and food products and on domestic production.Indeed, in certain contexts (e.g. tourism sector) these con-trols may be of great importance20.

A number of international and local organizations areactive to enhance Armenia’s opportunities to benefit frominternational trade. Within agriculture these efforts are large-ly focused on supporting Armenian agro-processors to pro-duce better quality and safer products, and to enableGovernment to comply with WTO rules on Sanitary andPhytosanitary Standards (SPS). There has been consider-able support by some donor organizations, such as USDA orUSAID, to improve the quality and safety of products of indi-vidual agro-processors (dairies, slaughterhouses, foodprocessors etc.). Donor activities are mainly targetedtowards assisting companies to receive ISO certificationsand implement HACCP standards. In addition, FAO justrecently launched a project for strengthening and updatingthe performance of the food control systems in Armenia andGeorgia. In response to recent queries from the WTO’s sec-retariat, the Armenian government has formed a workinggroup to recommend changes in the current food safety andphytosanitary laws and regulations, needed to bring theseinto conformance with the Codex Alimentarius.

Even if there has been improvement in many aspects thereis still a lot to be done. Armenia lacks an independent refer-ence laboratory certified by the WTO that will monitor adher-ence to international testing and little has been done to estab-lish a food safety system compliant with WTO principles.

Within the framework of the requirements to finally jointhe WTO, on June 2006 the commission appointed byArmenia together with delegates from the Republic ofKyrgyzstan and Moldavia submitted a petition to the

Agricultural Committee of the WTO requiring the flexibility ofcertain measures so as to be included in a shorter period,based on the fact that they are low income transitioneconomies, and for a matter of survival, especially for thepurpose of helping their respective towns to adapt and adjusttheir businesses to a fast pace of free trade, considering thatthis would enable them access to new markets.

The concerns stated in the above mentioned proposalare considered vital and real, and are based on an objectiveanalysis of the national economic and social situations andof the position in the multilateral trade system in terms of thecommitment regarding access to market and preparation ofstandards and obligations assumed by those countries afterjoining WTO. With no intention to generate a new subcatego-ry of countries within members of the WTO, flexibility isrequired in order to allow the economy of these countries toachieve better quality and extend diversification and produc-tion to comply with the standards required and take part inthe multilateral trade system in the medium term.

4.3.3 Armenia and the WTOThe World Trade Organization (WTO) is the only global

international organization dealing with the rules of tradebetween nations. At its heart are the WTO agreements,negotiated and signed by the bulk of the world’s tradingnations and ratified in their parliaments. The goal is to helpproducers of goods and services, exporters, and importersconduct their business.

The republic of Armenia requested becoming a memberof the WTO and became member no. 145 on February 5,2003 and therefore, since that date it had to harmonize thenational legislation with the principles of this internationalentity, the implementation of which, as well as the infrastruc-ture for their application, required more attention since thattime. It also had to create within the Government the capac-ity to participate as full member of the WTO.

Armenia was allowed an application term after joiningdate due to two requirements: The constant technical regu-lations for product standard certifications (December 31,2004) and the conversion of the present VAT exemption tofarmers for the sale of agricultural products within the sub-sidy program (December 31, 2008)



Compliance with international product certifications has-n’t yet been fully achieved21. The Armenian standard systemhas not been harmonized with international standards andthe Government has to take the necessary measures toenforce the WTO Codex Alimentarius. As Armenia’s maincommercial partners (such as Russia) start to adopt theaforementioned Codex it will be more necessary for theArmenian Government to implement its plans to harmonizewith international standards22.

After the master agreement, preexisting valid GOST stan-dards were eliminated without establishing an alternativestandard system.

Subject to the agreement between Armenia and theWorld Trade Organization concerning the elimination of VATexemptions for agricultural producers, Parliament has enact-ed a law that would eliminate the current tax exemption onaggregate value for national agricultural production sold byproducers and for the sale of veterinary products23 as fromDecember 31, 2008. Present VAT exemption reaches onlyup to the point of sale. Once the agricultural products leavethe farm they are subject to this tax.

The debates that arose after joining the WTO empha-sized the importance to support the agricultural sector in itscurrent level of development and emphasized the need ofpromoting a support system based on subsidies instead ofVAT exemptions. This implies the development of a flexibletax and subsidies system to avoid adversely affecting thesector. However, so far very little has been done to achieveagricultural support. WTO after the adhesion evaluationpoints out that Armenia will require an accounting systemthat would enable to fix the agricultural production levels ofindividual farmers and an agricultural tax system that will notturn into an additional administrative burden to farmers andlocal governments.

Even though it is easier to deal with agri-businessmen,production nature, lack of frequency and door to door salemake added value estimation difficult and tedious, especial-ly for small farmers. Often countries exempt small business-es from VAT or if companies are below a certain size, theyare treated differently with a fixed tax fee. Although the sys-tem has some difficulties, it exempts farmers (and local gov-ernments) from excessive compulsory costs. As VAT paid on

inputs cannot be credited it produces a cascade in lower pro-duction phases and erodes the system’s intentions for nodistortion. For example, for small farmers, prevailing inArmenia, purchased inputs may be so little that added valuein the agricultural level is a large part of gross value. As aresult, the anticipated farmer’s tax amount for value addedoutweighs VAT credit that will be credited to the farmer forVAT payment on inputs used in agricultural production.Therefore, at present, farmers are net beneficiaries of thesubsidies. However, since farmers are increasingly usingagricultural inputs, incidence on net subsidy decreases.

The Government needs to evaluate options within theobligations undertaken with the WTO24. Within the currentadministrative structures and schemes it seems very difficultto introduce VAT control for farmers without substantialincrease in administrative burden to producers as well as tolocal governments. Therefore, the Government should makeit clear the extent and limits within which agricultural produc-ers may continue to be VAT exempted and how a fixed taxfee system on agricultural gross sales can be used.25.

Within the framework of the requirements to finally jointhe WTO, on June 2006 the commission appointed byArmenia together with delegates from the Republic ofKyrgyzstan and Moldavia submitted a petition to theAgricultural Committee of the WTO requiring the flexibility ofcertain measures so as to be included in a shorter period,based on the fact that they are low income transitioneconomies, and for a matter of survival, especially for thepurpose of helping their respective towns to adapt and adjusttheir businesses to a fast pace of free trade, considering thatthis would enable them access to new markets.

The concerns stated in the above mentioned proposalare considered vital and real, and are based on an objectiveanalysis of the national economic and social situations andof the position in the multilateral trade system in terms of thecommitment regarding access to market and preparation ofstandards and obligations assumed by those countries afterjoining WTO. With no intention to generate a new subcatego-ry of countries within members of the WTO, flexibility isrequired in order to allow the economy of these countries toachieve better quality and extend diversification and produc-tion to comply with the standards required and take part in



the multilateral trade system in the medium term.

4.4 Weights and measures

The International Metrology System is formed mainly bythe Metric Convention of 1875. This Convention createdthree main bodies to act in issues related to conversion ofthe international standards for weights and measures:

• International Bureau of Weights and Measures(BIPM)26, • International Committee for Weights and Measures(CIPM)27

• General Conference on Weights and Measures28

(CGPM)

The CGPM is made up of 51 Member States and 27Associate States, including developed and developingnations. Armenia is not a separate State in this Agreement.Armenia is not a member or an associated state in theInternational Organization of Legal Metrology29 (IOLM).

However, the Republic of Armenia since February 5,2003, the day it became a member state of the World TradeOrganization, had to standardize weights and measures forthe agricultural production pursuant to the international stan-dards required by said organization; On several occasionsArmenia required flexibility for this and other requirementsbased on the lack of adequate equipment to comply withsuch standardization.

Among other drawbacks, Armenia doesn't have enoughscales whether public or private, and the existing ones don'tcomply with the general standards required by the BIPM.Therefore, sales are mainly volumetric, causing significantinconveniences to the marketing chain. For example:

• Impossibility to know the exact production magnitude.• Lack of efficiency compared to other producer countries,which results in potential market loss. • Impossibility to set a strict price since the exact weightis unknown.• Existence of an informal economy based on barter due

to the lack of reference prices in many areas of the coun-try, especially those further away from large consumercenters.• Difficulties in obtaining bank loans, making the develop-ment of the sector impossible.• Factual impossibility by the Government to prepare atrade record.

Since weights and measures are not standardized, theagribusiness activity suffers from the lack of standards: mar-kets require safe and convertible exchanges. The result isthe lack of guidelines, long term plans, process optimization,method and criteria to be followed, as well as the impossibil-ity to access credit and finally the lack of price, quality, vol-ume, confidentiality and availability standards.

4.5 Logistic implementation in Armenia

Field studies made by the UN, FAO, World FoodProgram, Forum for International Agricultural Research andother international organizations30 show that Armenia does-n't have a logistic development according to the country’sneeds. Likewise, from different non-government areas, localrepresentations are encouraged to spread the need of mak-ing structural improvements as a mean of maximizing pro-ducers’ efforts, increase their profitability, contribute to satis-fy local population food needs and in a subsequent process,sell certain agricultural products abroad.

4.5.1 Status of agriculture, post-harvest managementand processing

The agricultural sector is the main supplier of food andraw materials for international markets, and provides a sig-nificant source of export earnings, thereby contributing sub-stantially to economic growth in the region31. Despite its sig-nificant economic contribution, the sector is plagued with anumber of problems32.

Most agricultural products reach the consumer’s table inan unprocessed state. During the privatization process,many large-scale processing plants - fruit and vegetableplants, mills, wineries, fat and oil processing plants and other



factories- were either destroyed or restructured. The smallworkshops which replaced them were unable to guaranteethe necessary volume and quality of production, resulting indecreased output of processed products, decreased employ-ment, and a reduction of added value. Most agricultural prod-ucts consequently reach the consumer’s table in anunprocessed state33.

Lack of infrastructural development and coordinationamong countries of the region, has made the shift to inter-regional and world markets difficult. Consequently, small pro-ducers can't have direct access to local markets; the agricul-tural sector is therefore dominated by many intermediatetraders who prevent products from reaching consumers direct-ly and increase their original price causing - according to theireconomic value - the local consumers demand to be satisfiedwith imported products which are often lower in price. 34.

Crisis within the agricultural sector and processing indus-try is the consequence of a steep reduction of the resourcebase. The provision of techniques, technologies and equip-ment has been reduced and these facilities have begun todeteriorate35:

Equipment is old and worn, with low productivity. At least40% of all the equipment in the processing industry is over10 years old.

Machinery used by farmers during the Soviet regime wasthought and designed for large stretches of land. Once pri-vate capital owned the land, this machinery became inade-quate due to their size and input costs didn’t answer theneeds of small estates; their old technology even becameobsolete. Moreover, spare parts were not produced anymore due to the shut down of Soviet plants.

Due to wear and the removal of the main productionparts, serviceability of the machinery has been surpassed:one-third of the equipment has been in use for more than twoamortization periods; enterprise labor productivity for pro-cessing agricultural raw materials has diminished 2-3 timesas compared to similar enterprises in developed countries,and more than 50% of food processing operations are car-ried out manually; drying of fruit and berries is carried outwith the use of traditional labor methods

Lack of refrigeration equipment remains one of the mainproblems for the fruit and vegetable industry.

With the appearance of so-called “small enterprises” inthe oil-fat industry more than 20 % of oil seeds areprocessed only by pressing without extraction, with conse-quent losses of oil.

Due to the absence of a packaging industry and theunavailability of packaging materials, over 40% of local foodproducts and agricultural raw materials enter the retail mar-ket in an unpackaged form. Perhaps the most glaring exam-ple is that of the fruit and vegetable canning industry whichtoday is still equipped with antiquated canning facilities forpacking fruit and vegetable into 2-3 liters cans.

The lack of capacity to produce fruit and vegetable juicesand pack them in small containers, convenient for the con-sumer, has led to post-harvest losses in fruits and vegeta-bles.

With the land privatization process, farmers started to cul-tivate small plots of land. The lack of tools and machinery,fertilizers, seeds, chemical products, wood and fuel had anegative effect on the land and in many cases it becameeroded in different areas of the country.

Insufficient financing for scientific research has led to areduction in the scientific potential of agro-industrial com-plexes. This has had a negative impact on both basic andapplied science, as well as on the implementation of scientif-ic and technological advances and particularly in the post-harvest sector36.

Specialized scientific institutions engaged in the develop-ment of technologies for the processing of local raw materi-als are however operational in countries of theCommonwealth of States such as Kyrgyzstan and Tajikistanwith optimum results in the creation of new products andlocal demand satisfaction, with a few exports to theEuropean Union.

4.5.2 International organizations recommendations Considering the situation framework previously described

the different organizations advice to follow certain policies37,among the following:

•Post-harvest management objectives should be focusedon generating income, profitability for small enterprisesand small actors, and food safety.



STRENGTHS WEAKNESSES OPPORTUNITIES THREATS

- Favorableclimaticconditions

- Skilled andinexpensivelabor

- Scientificpotential

- Beneficial taxand customslegislation

- Lack of fundingfor post-harvestactivities

- Small landholdings and lackof co-operation

- Weak marketing

- High cost oftransportationtariffs and highenergy costs

- Use of scientific potentialfor the development of jointinterregional projects

- Settings up of informationnetworks to satisfy the post-harvest needs of the region

- Production of high value-added products - highquality wines, cognacs,brandies, natural aromatics,spices, and cigarettes tosatisfy the demand in the region

- Use of improved germplasmin order to ensure high qualityraw materials

- Application of scientific andengineering potential to servethe needs of the post-harvest sector

- Unsettled ethnicconflicts

- Protectionism

- Environmentalconcerns

- Potential threat ofglobal energy crisis

- Cross-border ecological disasters (locust´s migration,penetration of plantdiseases, etc)

Strength, weaknesses, oppor-tunities and threats (SWOT) areanalyzed as follows.Source: GFAR, “RegionalWorkshop on Post-Harvest inCentral Asia and the Caucasus”, Almaty.

•Large investments should be focused on spreading exis-tent knowledge for the adequate use of current technolo-gies instead of on applying significant resources to devel-op new technologies. Research results should be morewidely shared than they are now. •Private active participation should be emphasized.•Tools are needed to help less scale agents select theadequate technology for their situation. Study trips andvisits to similar or larger companies in other areas arerecommended. • Improvement of technology for a reliable and uniformproduct is the key factor for producers to be competitive. Production capacity should be encouraged. Technologyrelated to small enterprises’ capabilities should bestrengthened.

4.6 Processing

4.6.1 Harvest pressureWithout an adequate grain and fruit storage structure,

agricultural producers must sell their production before itrots. Moreover, when all the producers of the same sectorharvest at the same time, crop prices drop due to the largeoffer.

An adequate storage structure releases producers fromharvest pressure, helps plan their production, maximizes andincreases their profitability levels. Presently Armenia lacksintermediate structures appropriate for its production levelsthat would prevent these situations in order to avoid econom-ic damage to producers.

4.6.2 Importance of storage in place of originCertain Republics of the Commonwealth of

Independent States38 are encouraging the Origin storage 39

practice since storage at the producer level enables:



To manage different nature batches in a differential man-ner. More and more specific demands are only satisfied ifbatches are managed without losing their identity by mixingdifferent quality grains.

To reduce post-harvest costs not only by performingconditioning and conservation work on the same field butalso because a more rational use of transportation can bemade to access lower price freights away from the peakharvest period.

To have the goods on farmers’ own fields to sell them atthe appropriate time, that is to say, when prices are higherthan during harvest time.

At present Armenia lacks a precise policy regarding thisissue.

4.6.3 Processing levels in ArmeniaIn clear correlation with all technical implementations in

the sector, processing levels are close to the country’s aver-age. The percentage of silos and storage structures isn’t rel-evant in the republic’s agriculture40.

According to the above mentioned the construction ofintermediate structures is essential in order to allow agribusi-ness gain in efficiency and enable the following41:

- Operational results:Plants enable to anticipate crop, plan daily reception and

take advantage of the best time to harvest.Regarding transportation, neither water nor foreign bod-

ies are carried to ports (false freights) and cargos may bepostponed and get better distribution.

- Commercial results:When there is a storage facility the different marketing

channels and sale forms can be planned during the cam-paign, purchasers and destinations may be evaluated andfarmers may become independent of board rates.

Benefits for quality products, and storage and mainlyfreight differential tariffs can be obtained due to their dropaway from harvest time.

- Economic results: By adding value to processed grains, crop gross margin

may be improved and in this way a good return rate can beachieved for the investment in fixed capital.

In short, growth in storage at origin will enable:

•To make better use of transportation.•To operate with lower freight tariffs.•To decompress port reception and plants in full harvest time.•To stabilize the offer during the year achieving morebalanced prices and improving grain quality in place oforigin.

Current food consumers seek product quality as a decid-ing factor when purchasing. Therefore, storage will play anessential role at the time of winning new markets, eitherinternational or domestic.

4.7 Conclusions

Armenia’s logistic sector faces multiple challenges inorder to reach the levels of development enjoyed by othercountries in the region.

Taking into consideration the recommendations of inter-national organizations present in the country, considerablefunds and an integral plan are needed to answer require-ments from different areas of the country. Therefore, atpresent different valuable initiatives are in the implementa-tion stage from various institutions which main objective isto accompany the government in striving to improve theexisting infrastructure. To that respect the following institu-tions should be mentioned, among others: the LynsiFoundation which invested US$138,000,000 over period2002-2007 for “Road Rehabilitation and Construction”, theAsian Development Bank with a projected investment ofUS$ 30,600,000 for the period 2008-2011, the World Bankwhich program “Armenian Roads” reports to have investedUS$ 39,000,000 between 1995-2000 while the“Transportation Project” informed an approximated invest-ment of US$ 49,200,000 from 2000 to 2004 and finally theMillennium Challenge Account, which in one of the plans forroad improvement foresees an investment of US$ 67 mil-lion until 2011.



In turn, it is necessary to improve the food quality stan-dards in order to comply with the obligations assumed at themoment of joining the WTO. This not only implies improve-

ment in industrial manufacturing processes but also promo-tion efficiency in the post-harvest management, and invest-ments in the metrology area.

Notes

1 Samuelián, G. Economic Armenia, Atlanta, 2005, p. 103. 2 CIA. World Fact book, Armenia.3 According to data provided by the World Bank. 4 According to data provided by the United Nations EconomicCommittee for Europe.5 According to data provided by the United Nations EconomicCommittee for Europe.6 Jones, D., Infrastructure and Transport Costs, London, 2006, p. 87.7 Those secondary roads and community connections critical forrural commerce and community development. 8 UNDP, Situation Report, 2005.9 The World Bank, Road Management and Safety Project inArmenia, 2006.10 WTO, Towards an Economy for Development in the Caucasus, 2006.11 The World Bank, Armenian Agriculture, from Transition toDevelopment, 2005.12 Source: Rural Infrastructure Study, 2004. 13 Source: Armenia Rail Concession.14 “World Bank's Country Assistance Strategy”, 2006.15 Ibid.16 World Bank, Armenian Agriculture, from Transition toDevelopment, 2005.17 World Bank is carrying out an assessment of Armenia’s foodquality and SPS management. This chapter contains some ofthe findings, conclusions and recommendations by internationalentities. 18 Davrizhetsi, P; Food Quality and Development: WTO and itsrules, Rome, 2005 p. 457.19 Generally by international quality certificates.20 FAO. Strategies to sustainable development, June 2005.21 WTO, Situation Report, 2007.22 Part V of this report has a more detailed description of presentArmenian practices and recommendations for food securityimprovement.23 Amendment of VAT law, Law No 420-N enacted October 21, 2002.

24 World Bank, Situación del Cáucaso 2007.25 World Bank, op, cit. p. 125.26 World metrology coordinator.27 Administrative Committee meets annually at the BIPM and sub-mits reports that are the basis of the Conference’s decisions.28 It is the decision making body of the Metrology Convention. It isin charge of issues related to metrology, and issues especially relat-ed to the International System of Units (SI). The CGPM is made upof representatives of member states and associates from theMetrology Convention and meets every four years. 29 This treaty was signed in 1955 to harmonize metrology legal pro-ceedings.30 Cahen, T, Euro-Asian logistics, Geneva, 2003 p.19.31 FAO/GFAR, Regional Workshop on Post-Harvest in Central Asiaand the Caucasus, Almaty, 2002 p.4.32 Ibid.33 Ibid.34 Ibid.35 FAO/GFAR, Regional Workshop on Post-Harvest in Central Asiaand the Caucasus, Almaty, 2002 p.5.36 FAO/GFAR, Regional Workshop on Post-Harvest in Central Asiaand the Caucasus, Almaty, 2002 and FAO/GFAR, Global Post-Harvest Systems Initiative for the 21st Century: linking farmers tomarkets, Rome, 2003.37 FAO/GFAR, Regional Workshop on Post-Harvest in Central Asiaand the Caucasus, Almaty, 2002 and FAO/GFAR, Global Post-Harvest Systems Initiative for the 21st Century: linking farmers tomarkets, Rome, 2003.38 Ukraine and Byelorussia among the main ones.39 Johansen, T, Policies and Trends in the Agricultural Sector,Washington, 2006, p. 231.40 World Bank, S. and ff, The Caucasian Tiger: sustaining econom-ic growth in Armenia, Washington, 2007, p. 306.41 Pursuant to data provided by International Organizations men-tioned before.


chapter 5

Agribusinessand Marketing


Chapter 5 - Agribusiness and Marketing 115

5.1 Introduction

Industry currently represents 16.6% of the Armeniannational Domestic Gross Product being the fourth mostimportant sector after services (31.1%, including transportand communications), construction (24%) and agriculture(19.6%)1. The industrial sector reached its peak in the 1970sand 1980s specializing in the manufacture of trucks, tires,electronic devices, manufactured goods, chemical prod-ucts, petrochemicals, fertilizers and construction materials2.Many scientists were formed due to the need of experiencedtechnicians for the sector; therefore, today the Republic ofArmenia has the largest number of professional specialistswith a university degree and is the second country with morescientists in all the Community of Independent States (CIS)3.

Agribusiness current circumstances are not ideal. Twomain factors become responsible for this situation: 1988earthquake (30% of industrial infrastructure was destroyedor damaged, further on not enough resources were investedto achieve reconstruction4, food processing being one ofthe most harmed sectors) and the collapse of Soviet block.Food imports increased dramatically since 1991 so as tocompensate shortage in national food processing compa-nies’ production (only in one year, from 1991 to 1992agribusiness productivity decreased by 58%5).

Privatization of state owned companies related to theagricultural sector allowed sector competitiveness consider-able improvements. Yet much still has to be done so asnational industry recovers former year’s productivity levels.

5.2 Rural Economy Characteristics

Total population is about 3,500,000 inhabitants. Thirty-sixpercent (36%) of it, about 1.200.000, are rural areas inhabi-tants6 in many cases dependent on subsistence agriculture to

complement scarce income from other sources7, from whichapproximately 581.000 are women and 573,000 men8.Aragast region has the largest rural population in the countrywith 195,200 inhabitants, followed by Armavir region where181.400 people live in non-urban areas. Vaiots Dzor has thesmallest rural population with 36,500 inhabitants9. Over 934communities 871 are located in rural areas10.

Agriculture sector is the main income source for ruralareas inhabitants, representing about 51% of home incomein spite means of subsistence fragility for many of them11.Activities related to agribusiness represented 26% oftotal national Domestic Gross Income12. Together withsectors related to agriculture processing activities, thisas a whole represents the greatest employer (34.7% in200113) and the most important export income tax-payer(12% en 200314). Population involved in agriculture propor-tion increased up to 35.7% in 200615 after being almost con-stant in the 1990s (around 30%) and in the 1980s (20.9%)16.However, this increase is not due to domestic nor to foreignincentives, nor to comprehensive promotional policies of thesector nor to new investments in the farming area. This phe-nomenon happened due to the lack of alternatives in urbancenters, driving many people to marginal regions enablingsome kind of production so as to achieve a better quality oflife. Currently 335,000 homes depend on the agricultural pro-duction, with a land average of 1.4 hectares17.

Farms small sizes mean few producers are able totake advantage of potential scale economies in agricul-ture. Although agriculture activities provide rural homesmain incomes, it’s insufficient to allow consumption needssatisfaction for most of them unless they get involved inother economic activities. With few labor opportunities out-side the farm rural homes fragility becomes huger

Rural population is country’s most vulnerable population;48.7% of non-urban areas inhabitants being below pover-ty line concentrated along bordering territories in mountain-

Chapter 5

Agribusiness and Marketing



ous areas prone to earthquakes18. Shirak, Lori and Kotaykmarzes hold largest rural population living in poverty.According to International Fund for AgriculturalDevelopment (IFAD) current scenario is the result of policiesapplied at the time of Soviet Union collapse, 600 collectivefarms having been transformed in 330,000 plots reduced toensure a minimum supply of food to thousands of familiesrelated to agricultural sector so as to take up workers ofclosed down or privatized industries. Many new farmerswere awarded lands where natural conditions limited pro-ductivity, and many of them lacked technical knowledgeand/or necessary skills so as to cultivate efficiently thelands. Technology and infrastructure inherited from the pre-vious period being useless for reduced scale agriculture,helped to worsen the situation.

Table 1 shows real GDP growth for economy as a wholeand by sectors during 1998-2003 periods. There are threemain items: (i) national economy great development duringall the period driven by construction, industry and tradegrowth none of which are direct contributors to the mitigationof poverty in rural communities; (ii) growth marked volatility inagricultural sector reflecting sector vulnerability to exoge-nous events such as the 1999/2000 fall and 2003/2004frosts; in the former, about 15% farms lost their total produc-tion and a larger percentage suffered considerable losses19

(iii) slow sector growth considering national GDP.

Due to problems inherited from previous system and inorder to get producers used to market economy require-ments rural sector had to face considerable reforms overlasts 17 years. These reforms tried to make emerging farmsstrive to supply raw material to the country in order to satis-fy national need for food. The present global economicsituation with higher raw material demand (particularlyfood) and increasing prices shall be an incentive to pro-duce a second generation reforms that may enhanceefficiency and achieve producers’ competitiveness innational and international markets.

5.2.1 Marketing CharacteristicsIt is estimated that farmers sell 40% to 50% of their pro-

duction in the market, the remaining being for family con-sumption. However such percentages have its overtonessince smallest farms are used by their owners mainly for sub-sistence while large farms are trade-oriented. Farmers onlyrely on two different channels for marketing their products:direct sale to consumers and private traders and businessfirms’ sales20. State purchases and consumption coopera-tives are not important any more for agricultural productsmarketing. Producers associations or marketing coopera-tives role is virtually zero in present circumstances. One ofthe factors explaining farm prices unfavorable developmentcompared to industrial and consumption prices is probably

PBI

Agriculture

Industry

Construction

Transport &Communication

Trade

Other services

1998

7.2

12.9

-2.2

10.6

1.4

6.7

2.6

1999

3.3

1.3

5.2

7.7

0.8

9.8

4.5

2000

6.0

-2.3

6.4

28.4

-0.6

8.3

9.1

2001

9.6

11.6

3.8

14.5

16.0

15.5

5.3

2002

12.9

4.4

14.2

47.0

6.0

15.2

7.2

2003

13.9

4.3

15.4

44.4

8.2

14.5

7.6

Table 1. Real GDP Growth Aggregated and by Sector. Percentage changes over the previous year 1998-2003.Source: National Statistics Service of the Republic of Armenia (2003)



farmer’s wrong organization to sell their agricultural produc-tion. During 1996-1999 annual average growth of consumerprice index was 10.3%; Industry Price index increased 14%per year while agriculture price index only increased at a1.8% annual average21. This shows producers are not in agood position to trade their products, and have moderateinfluence to negotiate prices with traders, intermediariesor transformation companies. Lack of cold storage capac-ity is also a negative factor since most farmers sell their prod-ucts at the same time:, consequently at low prices. Farmerscould get better prices if they were able to store their produc-tion until a more convenient time.

In order to reach a more balanced situation it is necessaryto increase competence -whenever possible- compared totraders and intermediaries and reduce fragmentation at thelast supply stage so as to increase farmer’s marketing influ-ence and commercialization possibilities forming producer’smarketing groups. Recent efforts have been devoted to cre-ate marketing cooperatives supported by donor’s communi-ty in dairy, fruits and vegetables sectors22.

Land privatization by means of small farms entailed agri-cultural production trade great fragmentation with highadverse effects for food processing industry, loosing veryquickly its former raw material suppliers as well as its mar-kets for their products. Processing companies are suppliedwith raw material by their own buyers-suppliers, intermedi-aries as well as by producers. Long term contractual rela-tions between producers and processors have not beenestablished yet. These conditions seldom exist since theparties are not aware of these contractual relations advan-tages. As for processors, farming contracts would allow fortheir activities better planning and producer’s raw materialsupply quality improvement. As for producers they wouldface less risk in price fluctuations and enjoy better condi-tions for inputs purchase. The raw material supply for prod-ucts manufacture organization may also be optimized byestablishing marketing cooperatives.

There are no real wholesale markets in the Republic ofArmenia. In general, wholesale activities are carried out atnight in various permanent markets. There are three markets,one in Yerevan and other two in Gyumri and Armavir. The cre-ation of a great wholesale market in the national capital with

many linked markets in the main farming regions supportedby private capitals is frequently suggested. It is argued thatcreation of a formal wholesale space would contribute toimprove purchases, packaging, quality control, storage andmarketing of farming products in the national and foreign mar-kets. However, in order to reach the expected benefits for thenew wholesale markets, it is necessary to achieve a strongconsensus and commitment by all pertinent agents - not onlyby local and national authorities- but also by enforcement ofapplicable law. Otherwise a new infrastructure will be createdwhich will only be used by market user as it was demonstrat-ed by the interrupted project for Yerevan wholesale marketcreation in mid 1990. The most favorable proposal is to carryout small scale projects with the participation of all interestedagents, oriented to improve markets operation with adequateinvestment. If creation of a wholesale space is foreseen in thefuture, evaluation of needs and size of investment should beanalyzed in-depth, and the lesson learnt – the interruption ofthe previous project – should be considered.

Domestic market intelligence is carried out by ASCs23

coordinated by Agribusiness Development Center process-ing and diffusing all information gathered by ASCs. In spiteof these efforts it cannot be stated that a real market infor-mation service has been created in the country enabling allagents involved -including farmers- adequate access todata on prices becoming an incentive to encourage the mar-ket to operate in an efficient and transparent way. An inte-gral system should be established with a clear strategy onobjectives, users and coverage as well as a frequent public-ity in the media. Creation of a Market Information Service inthe Republic of Armenia should bring positive results,among others, small traders lacking resources to watchmarkets on a regular basis entrance in the market

5.3 Food Processing Industry

The food processing industry was developed mainly dur-ing socialist period as a means to make best use of nation-al potential and generate agricultural production surplusesin order to transform them into exportable goods. Under thispolicy many state-owned food processing industries were



established for transformation of local production. Therewere more than 630 agricultural companies in the countryengaged in processing a wide range of products, mostlyunder Ministry of Food and Acquisitions (now nonexistent)control24. It is not clear if any of those plants actually oper-ate to their full capacity, however they had the possibility toprocess large quantities of food each year (around 90,000metric tons of meat and more than 320,000 metric tons ofmilk). Almost all these facilities have been privatized and/orclosed. Companies continuing to run nowadays do so wellbelow their designed capacity25.

This policy legacy was creation of great processingcapacity in main agricultural production areas, but lackof investment during 1980s and part of 1990s left theseprocessing plants with obsolete technology, equipmentin poor condition of preservation and lack of adequateequipment to face market economy challenges. Thisprocess became more complicated due to most managersmarketing experience and knowledge lack in existing com-panies26. In many cases products quality and range offeredare neither suitable for western demanding markets nor tocomply with other market economies requirements, noteven competing efficiently within the national territory withimported goods27.

Over last years a large number of machinery was pur-chased abroad in order to establish new processing plantswith state of the art technology. Other renewed facilitieswere updated using parts of equipment saved or relocatedfrom older plants28. However, in any case they are seldomused in full. Some managers’ state main obstacle is rawmaterial supply. For example, a meat processing plant sell-ing both in Armenia and in foreign markets, currently importsall the meat although they plan to start a local meat produc-tion farm29. Recent reports by different international organi-zations on economic trends show a positive aspect: foodindustry has been constantly increasing over last years(in value as well as in volume) and currently represents athird of manufacturing production. In turn it should benoticed that even though processing facilities number hasdecreased in approximately two thirds, there is still spareprocessing capacity with greater use depending on avail-able markets and/or inputs supply to be processed30.

5.4 Agricultural Trade

For more than a decade trade balance produced anegative result regarding agricultural sector. Exports offresh and processed products such as fruits, vegetables,wines and cognac have not compensated expenditures dueto import of forage and food grains, meat, sugar, milk anddairy products. Over last years country’s self-sufficient foodproduction improved as a result of considerable decrease inimports of certain products due to consumer’s income falland substitution of local manufactured products for moreexpensive imported products31.

5.4.1 Development of exportsFollowing privatizations, most processing plants directors

lacked experience in corporate management and productmarketing32. Most of them were food engineers that neverhad to look for markets for their products since the othersRepublics in the Soviet Union USSR absorbed the produc-tion surplus without considering price or quality. Followingtransition traditional export markets collapsed. Getting newbuyers or recovering previous markets requires an adequateknowledge of their needs and demands, products diversifi-cation and adaptation as well as strong efforts in marketing.Active sale strategies should substitute passive approachesoften full of inflexible pricing policies33. Among main con-straints on exports food industry level should be men-tioned34:

• Small export surplus for bulk products not alwaysallows to respond to large buyers needs. This also con-cerns several niche market products whose exportsurplus needs to be developed so as to make availablea sizeable quantity supply;

• Reliability of deliveries (in quantities, quality and timelydelivery);

• Lack of acceptable quality assurance and standards ofhygiene;

• Price policies and competitiveness: for bulk products,Armenia is a price taker and therefore needs to adjustto international price levels.

• Fresh products, in particular fruits, are in high demandin several markets, particularly in the European Union.



Perishable products may not survive long transit timesor fragile conditions. In addition, for fresh productsthere is an increasing tendency in Western EuropeanMarkets exporter does some functions (e.g. ripening,quality control, packaging and re-packaging, prepack-aging and labeling) in the country of origin.

• Development of exports, not only of food products, isconditional on an array of factors that can facilitate orimpede it. This includes exchange rates and othermacro-economic policies, transport infrastructure anddiplomatic efforts aimed at the conclusion of tradeagreements to facilitate access to foreign markets.“Trade diplomacy” should also focus on addressingtrade facilitation with countries in the region (combat-ing corruption, diminishing non-tariff barriers, harmo-nizing standards, abandoning transit taxes, etc.)

Donor’s community in food sector has made great effortsto improve products quality, brand and packaging to supplyassessment of foreign markets, to increase sanitation andset forth guarantee quality systems, mainly by the USDA -Marketing Assistance Project, USAID - ArmeniaAgribusiness Small and Medium Enterprise MarketDevelopment Project (ASME) and the World Bank -Agricultural Reform Support Project (ARSP)35. In order todevelop exports it is necessary to provide a coherent groupof incentives that may include tax refund for export relatedactivities (market research, quality control, etc.) and to setan allowance system according to which part of incurredexpenses in exports development may be paid by the sys-tem36. Government may also be a means to promote highquality food national marketing strategy development,based on production quality and official certification incompliance with the accepted international standards.

5.4.1.2 International TradeCustoms authorities must approve food exports and

imports based on required certificates. Two listings covercertain food products that must be approved byGovernment when exporting or importing a product. One listincludes products that must be accompanied by aCompliance Certificate issued by the Department ofRegulations, Metrology and Certification (SARM) of the R.A.

Ministry of Industry and Economic Development. Secondlist includes products that must be accompanied by aphyto-sanitary certificate issued by Ministry of Agriculture.Some products appear in both lists and require two inspec-tions and two certificates37. Inspection fees paid by bothcertificates differ significantly as well as other considera-tions. There is an additional list developed by the Chamberof Commerce related to Certificate of Origin requirementsfor certain products. This complicated situation impliesshipping documents must be issued by two or three differ-ent bodies using different criteria and fees, confusingtraders, causing additional costs and shipping time fortransportation inside and outside the country.

In the absence of a modern and international accept-ed legislation on certificate control, food products capa-bility for foreign markets is limited. With the purpose ofprotecting consumer’s health, enable trade and access ofArmenian products to foreign markets, standards, rules andcontrol procedures should be brought into harmony withinternational standards. The continuous use of outdatednorms and control systems hinders progress in this impor-tant stage of the economic development.

5.4.2 Value and Analysis of the Supply ChainValue chains represent the cost of each good as it goes

through the supply chain until it reaches final consumers38.The analysis of this connection may reveal important obsta-cles and inefficiency in agricultural economy, particularly ina transition economy, as structures and links in supply chaincontinue to develop to replace definitively soviet productionand distribution system. Like in many other countries, tradebetween producers and processors or distributors is con-trolled by the Government39.

Transition to a demand economy has been productionsystem serious fragmentation cause. When production basechanged from being owned by the state to being owned byagriculture workers, market infrastructure and systemdemand collapsed over night. Impact on agricultural trans-formation industry shows consequences of this disorder40.As agricultural processing facilities shifted to private handsthey were devastated with debts, obsolete equipment, lackof capital and market collapse. Many of recently privatized



plants were still immerse in a Soviet style management sys-tem and continued to produce according to previousdemand levels. They bought raw materials without analyzinghow they would repay them; they weren’t able to sell theirproduction, meaning the impossibility to comply with pay-ment obligations aroused from inputs bought to producers.Industries failure to pay in addition to a growing inflation andloss of non rural agricultural activity income, led the produc-ers to change their production towards first need food in aneffort to guarantee food security. Marketing problems con-tinued and increased due to import of meat and dairy prod-ucts at lower costs.

More than a decade after the end of the soviet system,agricultural supply chain is being developed ad hoc mainlyby businessmen owning enough capital to finance the pur-chase, process and shipping of basic agricultural prod-ucts.41 A detailed analysis of value chain basic agriculturalproducts shows intermediaries currently capture a great partof transactions value.

5.5 Conclusions

Agribusiness should be updated in a profitable way inorder to strengthen its competitiveness and fulfill food qual-ity and security demands by local consumers. In turn, saidrequirements are the two most important sector barrierspreventing products marketing in most demanding foreignmarkets. That is why modernization not only implies upgrad-ing facilities with suitable machinery but also to develop asustainable and integral agricultural plan allowing betterqualities (and quantities) of processed agricultural productsso they will be competitive in the internal market and, in afuture stage, in the international market.

It should be noted that Armenian products could coverpart of national demand of agri-food products. Imports ofthis kind of products have constantly decreased over thelast years together with Armenian agri-food exportsincrease. National demand and increasing productioncapacity are the main drivers of this trend.

1 According to data by Republic of Armenia Ministry of Economy andFinance and RA National Statistics Service; data as of October 2007.2 Source: Foreign and Commonwealth Office, UK.3 Source: Country Studies/Armenia. United States ArmyDepartment, 1998.4 Idem5 Idem.6 Source: NSSA, 2003.7 Tenenbaum, Y, Rural Population Worldwide, New York, 2007, P.371.8 UNSD Demographic Yearbook Database September 2007.9 Source: ARKA News Agency.10 World Bank, Rural infrastructure in Armenia: Addressing Gaps inService Delivery, September 2004.11 FAO- Ministry of Agriculture of the Republic of Armenia, AStrategy for Sustainable Agricultural Development, Yerevan, 2002.12 Source: World Bank, 2004.13 According to data of the Census performed in 2001, RA NationalStatistical Service (NSSA). 14 Source: World Trade Organization.15 Tenenbaum, Y, Rural Population Worldwide, New York, 2007,P. 372.

16 The World Bank, Rural infrastructure in Armenia: AddressingGaps in Service Delivery, September 2004.17 According to World Bank estimates.18 Source: “Rural Poverty Portal”, based on data from theInternational Fund for Agricultural Development (IFAD).19 WTO, Caucasus, Challenges and Obstacles for emergingeconomies, 2007.20 Tenenbaum, Y, Rural Population Worldwide, New York, 2007, P.372.21 Ministry of Agriculture of the Republic of Armenia, A Strategy forSustainable Development, Yerevan, 2002.22 United States Agency for International Development (USAID),Armenia Competitiveness Assessment, Arlington, 2004.23 Agricultural Support Centres24 World Bank (2001), , Prices and Poors Need Technical PaperNº.497, Washington DC25 World Bank, (2004), , Armenia at first sight, statistical summarycompiled by the Permanent Office in the Country.26 Mitra, S and others, The Caucasian tiger: Sustaining economicgrowth in Armenia, Washington, P. 349.27 FAO, Bio-technology and Bio-saftety in Balkan´s and Caucasuscountries 2005

Notes



28 Ibid.29 FAO-GFAR, workshop on Post-Harvest in Central Asia andCaucasus, 200530 WTO, Caucasus, Challenges and Obstacles for emergingeconomies, 2007.31 UNDP (2002) Poor communities at armenian marzes, SocialTrends, Analytic Newsletter , Yerevan.32 World Bank, idem, 200533 UNDP (2006), Most Vulnerable Population in Armenia, ArmenianSocial Tendencies, Analytic Newsletter, Yerevan. 34 World Bank: Armenia Rural Economy –From Transition toDevelopment. Central Europe and Asiatic Region SocialDevelopment and Substantial Environment Department. August2005.

35 World Bank, Armenia Public Expenses Audita, Washington DC,200636 World Bank, Armenia: Poverty Evaluation (two volumes) VolumeII: Conclusions Summary s", Unit of the Human DevelopmentSector, Europe and the Central Asia Region, Washington, 200537 GFAR-FAO Global propositions and initiatives for XXI century:connecting farmers to the markets s, 200638 Recursos de la tierra y suelos en Armenia: Estado del Arte yPolítica de Medidas, Armenia, 2008.39 UNDP (2002), Poor communities at armenian marzes, SocialTrends, Analytic Newsletter, Yerevan.40 World Bank: Armenia Rural Economy –From Transition toDevelopment. Central Europe and Asiatic Region SocialDevelopment and Substantial Environment Department.41 Idem


chapter 6

AgribusinessSectorFinancing


Chapter 6 - Agribusiness Sector Financing 125

Chapter 6

Agribusiness Sector Financing

6.1 Introduction

The development of the financial system is an indicator ofthe efficiency and openness of a market economy as bank-ing and financial intermediation is essential to reach highstandards of living in a nation. Investment – foreign as wellas domestic – is also a means to ensure global developmentto economic sectors above all those sectors with potentialwhich has not been completely developed to the full.

The Republic of Armenia agribusiness sector has shownremarkable signs of recovery over the last 15 years. All theindications are that, by means of proper and effectiveinvestment policies, the sector will show even greatersigns of growth.

This chapter describes the country’s’ present financialand banking system and then it focuses on the systems’main risks. Finally, it develops the features of agribusinessgrowth, aiming at potential investment, credit, and, poten-tial capabilities.

6.2 Financial System: general considerations

The main function of banking entities is financialresources intermediation, sustained by raising depositsand granting credits. The result of this activity is the finan-cial intermediation cost or spread, usually defined as thedifference between the cost debtors pay for receivingfunds (known as the lending rate) and the compensationdeposit owners receive (borrowing rate)1.

In the Republic of Armenia financial system banksappear as the leading actors. In spite of the major reformintroduced in the banking sector and the extended periodof macroeconomic stability and strong economic growth,financial intermediation in the Republic of Armenia has fall-en behind compared to other countries going through a

01995 2000 2003 2008

Armenia

Medium-low income countries

10

20

30

40

50

Graph 1. Bank spreads (%) in the Republic of Armenia andMedium-Low Income Countries.3

Source: author’s elaboration based on World Bank and Republic ofArmenia Central Bank data.

period of transition in Central and Eastern Europe (SeeGraph 1). It should be noted that interest rates haveremained high in relation to most of these countries, at12%2 average approximately.

The scarce development of the financial system repre-sents a considerable obstacle for the economy sustainablegrowth. While within the entire financial system the bank-ing sector is the one with the highest development, non-banking credit entities and capital market entities financingis still underdeveloped. As in other countries undergoingtransitions, the banking system structure has sufferedsevere changes during the last decade. The systemrestructuring and privatization have been accompanied bythe introduction of new foreign banks into the market, byrevision and re-adaptation of the legal and regulatoryframework providing ground for advancement. However,financial intermediation continues to stay low comparedwith regional standards.

Graph 2 compares the financial development of variouscountries undergoing transition, most of them from formerSoviet Union. The two variables taken into account to deter-mine this development are the total amount of money in the



economy as a GDP percentage (x) and the percentage of pri-vate sector credit in relation to the GDP (y). As the graph indi-cated, Republic of Armenia’s position is low for both variableseven though it shows an evident increase from 2004 to 2006.

Graph 3 shows the difference between personal loaninterests and rates on deposits. The higher that percent-age, the higher the spread banks charge for lending moneyand what they pay for deposits. The higher the percentage,the higher the system risks. Towards 2006, that percentagewas stable and decreasing.

Graph 4 also analysis banking spread (x) and the credit per-centage to the private sector in relation to GDP (y). The higherthe banking spread, the lower the credit percentage of GDP, theless the financial system development will be. Changes from2004 to 2006 indicate a remarkable development towardslower spreads and higher private credit percentages / GDP.

Courses of action tending to improve transparencyrankings, bureaucracy and quality of financial services arereal challenges for the financial sector. These elements areessential to generate more efficiency and confidence in thesystem. It should be noted that, according to a researchproject by the World Bank4, 52% of Armenian companiesconsiders limited access to financial products one of the

Financial Deepening

Broad Money/GDP

Priv

ate

Sec

tor

Cre

dit/

GD

P

70

60

50

40

30

20

10

00

TJKAZE

GEO

KAZ

ROM

RUSMKD POL

MOL

LIT UKRSLK

HUN

LAT EST

SLV

CRO

BUL

CZE

BERARM`06

ARM`05ARM`04KYG

10 20 30 40 50 60 70 80

Graph 2. Comparison of regional financial growth, 2005Source: Era Dabla Norris and Holger Floerkemeier, op. cit.

Domestic Currency Lending-Deposit Spreads (in percent)

1/ Western CIS includes Belarus, Moldova, Ukraine.

Dec-02 Jun-03 Dec-03 Jun-04 Dec-04 Jun-05 Dec-05 Jun-06 Dec-06 Jun-07

Armenia

Source: IFS0

5

10

15

20

25

30

GeorgiaAzerbaijanRussia

Baltics

West. CIS 1/

Graph 3. Personal loans – Deposit Spreads (%). RegionalComparison Source: Era Dabla Norris and Holger Floerkemeier, op. cit.

Financial Deepening and Interest Spread

Interest Spread

TJKAZE

GEO

ROMRUSPOL

MOL

LITUKRSLK

HUN

LATEST CRO

CZE

BER

ARM`06 ARM`05 ARM`04

70

60

50

40

30

20

10

020 4 6 8 10 12 14 16

Priv

ate

Sec

tor

Cre

dit/

GD

P

Graph 4. Financial Development & Banking Spreads. RegionalComparisonSource: Era Dabla Norris and Holger Floerkemeier, op. cit.



main obstacles to the operational capacity and growth oftheir business activities. Therefore, all public policies thatseek to improve aspects of the system based on confi-dence values and decisional transparency are necessaryand decisive to improve results and thus bring nationalperformances to more advanced international standards.

6.2.2 The Banking SystemThe Republic of Armenia banking system is made up of a

Central Bank of Armenia which is a centralized, unified andindependent5 legal entity, and commercial banks. After the90s banking crisis, the Government engaged in a privatiza-tion process and a reform of regulations, adapting financialrules to international standards. At the beginning of 1990many banks were created. However, gradual regulationsmade for the sector and several bank failures occurredbetween years 2000 and 2002, reduced their number from74 in 1994 to 21 banks at present (See Table 1).

The Government of Armenia does not hold any interestsin banks any more. All banking entities belong to the privatesector, showing the success of privatization process andmarket openness. Majority of banks currently functioning inthe Republic of Armenia are controlled by foreign investors.

Nowadays, there are two problems which must be faced:on the one hand, the small size of the banking system, andon the other hand, the slowness of reforms in the economy’sreal sector6. Therefore, the banking system, although small,is more developed than other sectors in Armenia, whichbrings about some problems for its development7. In spiteof its size, the Armenian banking system has demonstratedan outstanding improvement regarding competitiveness.The larger number of banks and the lower concentration ofcapital ownership and the shortness of loans extensions areindicator factors of it. One of the parameters to measure thelevel of concentration and competition of the system is theHerfindhal-Hirschman Index (HHI). This is a generallyaccepted measure to assess market concentrations and it iscalculated by adjusting the market share of each competingcompany (in this case, a banking entity). The HHI numbermay vary from almost zero to 10.000.

Regarding the Republic of Armenia banking system con-centration, during year 2006 a decrease has been observed

2005 2006

1 VTB Bank Armenia 101 982 Ardshininvestbank 51 513 Armeconombank 39 434 Artsakhbank 12 145 Converse Bank 16 166 ACBA – Credit Agricole Bank 12 167 Unibank 27178 Anelik Bank 6 89 Areximbank 4 8

10 Inecobank 4 411 HSBC Bank Armenia 1 212 Prometey Bank 3 213 Armimpexbank - -14 Armenian Development Bank - -15 Armbusinessbank - 116 Mellat Bank - -17 Cascade Bank - -18 International Trade Bank 2 419 Investbank BTA 1 220 Ararat Bank - 321 Armswissbank - -

TOTAL 269 299

2005 20061 Banco Armenia VTB

101 982 Ardshininvestbank

51 513 Armeconombank

39 434 Artsakhbank

12 145 Converse Bank

16 166 ACBA - Banco de Crédito Agrícola

12 167 Unibank

27178 Anelik Bank

6 89 Areximbank

4 810 Inecobank

4 411 HSBC Bank Armenia

1 212 Banco Prometey

3 213 Armimpexbank

- -14 Banco Armenio del Desarrollo

- -15 Armbusinessbank

- 116 Banco Mellat

- -17 Banco Cascade

- -18 Banco Internacional de Comercio ITB

2 419 Investbank BTA

1 220 Banco Ararat

- 321 Armswissbank

- -TOTAL

269 299

Table 1. Banks in the Republic of Armenia and number of branch-es (2005-2006).Source: Republic of Armenia National Statistical Service (NSS)Statistical Yearbook, 2007.

especially on the deposits demand concentration, from per-sonal customers and legal entities. The Herfindhal-HirschmanConcentration Index is relatively low for all the banking system,which indicates its reduced concentration8 (See Table 2).

Table 2. Concentration Index9

Source: Herfindhal – Hirschman Index (HHI) Republic of ArmeniaCentral Bank

INDICATORS 31.12.04 31.12.05 31.12.06

Total Assets 0.09 0.08 0.08Total Liabilities 0.10 0.09 0.09Total Capital 0.06 0.06 0.07Total Loans 0.09 0.08 0.08

account 0.18 0.17 0.15

Persons and Legal EntitiesTerm Deposit 0.11 0.10 0.10



5000

4500

4000

3500

3000

2500

2000

1500

1000

500

0

I ndu s

t ry

A g ri c u

lt ure

C o nst r

u ct i o

n

T rans

p . &

Co m

.

T rad e

P u bli c

sec t o

r

F i na n

c i al s

ect o

r

C o nsu

m p ti o n

M o rt g

a ges

T ot a l

In order to go in depth into the analysis, we must con-sider the graphs following hereunder carefully, explain theirscales, and weigh up their results.

Graph 5 shows the development of concentration index(HHI) among assets, credits and deposits of the bankingsystem during 2002 and 2006. In this case the measuringscale goes from 0 to 1,500. The highest values showgreater concentration levels, while the lower values pres-ent lower concentration levels. The whole system changeto lower concentration levels is clearly seen.

Graph 6 represents the average of concentration indexby sectors during a 4-year period (2002-2006). In this case,the scale goes from 0 to 5000. The high concentration ofloans in the agricultural sector is remarkable. It is higher

1400

1200

1000

800

600

400

200

02002 2003 2004 2005 2006

Assets

Credits

Deposits

Graph 5. Herfindhal – Hirschman Index (HHI) Assets, Credits &Deposits (2002-2006)Source: Era Dabla Norris and Holger Floerkemeier, op. cit.

Graph 6. Loans by sectorconcentration average(HHI) (2002-2006)Source: Era Dabla Norrisand Holger Floerkemeier,op. cit.



than the loan concentration of other economy sectors. Thisindicates that one or only a few banking entities drawtogether most of the loans of the sector.

In addition, Graph 7 estimates the average of the con-centration Herfindhal – Hirschman Index (HHI) in the sameperiod and in the same scale as Graph 6, but this time inrelation to personal loans and loans to legal entities. Theresult is also clear: there is more concentration on individ-ual deposits than on deposits of legal entities. This meansthat most people - who make deposits - do so in the samelegal entity or to the same legal entities.

Finally, Graph 8 shows the loans to industriesConcentration Index Average (HHI). The period is the same(2002-2006) and the scale goes from 0 to 6000. The con-centration of loans to metallurgical, mining and pharma-ceutical industries is evident.

As a consequence of market segmentation and asshown in the graphs, credit concentration on individualeconomic sectors and on deposits demand is considerablysuperior. Market concentration is high in loans for agricul-tural activities and mortgage loans, and, moderate in thetransport and communication sector as well as in sectors

4000

3500

3000

2500

2000

1500

1000

500

0Individual demand Legal entities

demand

0

1000

2000

3000

4000

5000

6000

related to the construction industry. Most banks are only active in two or four of the nine

main economic sectors typically causing high Herfindhal –Hirschman Index on credit portfolio specialization10. Thedifference between large and small banks has decreased.By the end of year 2006 the ten largest banks in the coun-try concentrated 80% of the banking system total assets,

Graph 8. Loans by IndustriesConcentration Average (HHI)(2002-2006)Source: Era Dabla Norris andHolger Floerkemeier, op. cit.

Graph 7. Deposits Concentration Average (HHI) (2002-2006)Source: Era Dabla Norris and Holger Floerkemeier, op. cit.



a lower percentage than the 81% registered at the begin-ning of the year. Polarization of the four most importantbanks has also diminished, since they had 46% of the totalassets of the financial system and 49% of the total liabili-ties by the end of 2006, compared to 47% and 50%,respectively, at the beginning of the year (see Table 3). Thetotal polarization of capital was the only item that grew,basically due to the capital development of the AgriculturalCredit Bank ACBA11.

INDICATORS 31.12.04 31.12.05 31.12.06

Total Assets

LB 4 (4 largest Banks) 49 47 46


Total Liabilities



Total Capital



Total Loans



Persons and Legal Entities Term Deposits



Persons and Legal EntitiesClaim Debts (includingbanking accounts)



Table 3. Banking system concentration levels (%)Source: author’s elaboration based on Republic of Armenia CentralBank data.

6.2.3 Banking System Financial RisksThe existence of a foreseeable framework for the risks

faced by the Republic of Armenia banking system is anurgent task. Not only legal mechanisms that provide cred-it standing on the long term are needed but also institution-al and political tools so as to provide confidence and trans-parency to all the financial system13. Taking into accountthe rapid growth of loans, credit risk is considered themost important financial risk in the system14. Depositors’confidence in the banking system is still low15. The mainreasons seem to be the experience in bank failures duringrecent years and the lack of transparency and responsibil-ity of the financial entities16.

It is important to note that many sectors of the Armenianeconomy do not trust the banking sector for financial inter-mediation. Firms and individuals of the informal economyprefer to use cash at the time of making transactions, part-ly to evade taxes17. This fact diminishes considerably thebases of potential deposits and products offered by thebanking system and other financial institutions18.

Another factor to be considered is the financial interme-diation margin. The spread between loans and interestrates on deposits (borrower rate) is considered as an indi-cator of the efficacy of financial intermediation. High inter-est rate spreads are an obstacle to financial intermediationas they discourage potential savers with low returns ondeposits and increase financing costs for borrowers, thusreducing investment and growth opportunities19. Highinterest rates spreads in the Armenian banking system aredetermined by three factors: high credit risk perception,high banking income due to market segmentation, and, atlast, the high formation and operative costs of smallbanks20.

The protection of creditor rights is another problemmaking banking loans’ growth more difficult. The foreclo-sure of the surety bond is a hard task on banks and thiscan be seen in high interest rates21.

Foreclosure problems and long judicial procedures gen-erally make it difficult for the banks to enforce the paymentof the surety bond22. Therefore, the information of thefinancial system is crucial. Only with the development of afinancial long term relationship the bank may distinguish



between "good quality debtors" from those who “incur inmoral risk”. The introduction of a credit register in 2003and the creation of a Private Credit Bureau (functioningsince 2007) have been important steps towards theimprovement of data on loan takers23. Today, the Republicof Armenia is moving towards a regulated credit system,encouraged by legal and institutional mechanisms whichprovide efficient, transparent, and, reliable methods ofdebt restructuring, including seizure and sale of movableand fixed assets, sale or collection of intangible assets,and third party debts24.

6.3 Agribusiness Sector

Since the middle of the last decade, the Republic ofArmenia economy has grown at two digit rates, at an annu-al average of approximately 10%. The agricultural sectorcontribution to the GDP fluctuated from 12.9% in 1990 toa peak of 46.3% in 1993 with subsequent fall to 14.5% in2004 (See Table 4 & Graph 9).

GROSSDOMESTICPRODUCT

Industry

Agriculture

Construction

Services

1998

7.2

-2.2

12.9

10.6

7.1

1999

3.3

5.2

1.3

7.7

9.8

2000

5.9

6.4

-2.5

28.4

8.3

2001

9.6

3.8

11.6

14.5

10.6

2002

12.9

14.2

4.4

47.0

12.4

2003

13.2

15.1

4.3

44.4

11.1

2004

10.1

2.1

14.5

13.4

12.3

Table 4. Real GDP growth (1998-2004) in percentages (%)Source: Republic of Armenia National Statistical Service (NSS)Statistical Yearbook, 2007

Gross agricultural production has constantly grown overthe last 4 years (except for a 2% fall in 2005) together withthe growth of the global economy. The cumulative growthof the sector has been 47.5% since 2004 (See Table 5).Agriculture has kept its great significance towards employ-ment and rural income for the last 15 years25. In 2006, the

agribusiness sector drew together 46.5% of the totalemployed population26.

Until now, rural areas benefited only moderately fromeconomic growth. The sector contributes almost with 40%to the industrial sector GDP. However, while the new pro-

20000

500000

1000000

1500000

2000000

2500000

3000000

3500000

2001 2002 2003 2004 2005 2006 2007

Total Agricultural ProductionGDP

Graph 9. GDP & Total Agricultural Production in millions ofArmenian Drams AMD (2000 – 2007).Source: Republic of Armenia National Statistical Service (NSS)Statistical Yearbook, 2007.

YEAR ABSOLUTE VOLUMEin millions AMDArmenian drams

VARIATION PERCENTAGE y/y (year/year) (%)

2000 281173.4 ---

2001 351015.9 24.8%

2002 377654.4 7.6%

2003 410138.4 8.6%

2004 504078.0 22.9%

2005 493017.9 -2.1%

2006 555922.3 12.7%

2007 633877.8 14%

Table 5. Gross Agricultural Production (2000-2007) in millions ofArmenian Drams AMD. Source: Republic of Armenia National Statistical Service (NSS)Statistical Yearbook, 2007.



duction lines have received some investment, agribusinessindustries still need to attract more important levels ofinvestment.

Graph 10 explains the growing trend towards receivingForeign Direct Investment (FDI) in the Republic of Armenia.This is, undoubtedly, the result of better performance ofthe economy together with judicial stability and improve-ment in the quality and development of the public sector.

350

300

02000 2005 2006

Foreign Direct Investement(FDI) in millones of U$S

50

100

150

200

250

Graph 10. Foreign Direct Investment (2000, 2005, 2006) in millionsof US$. Source: World Development Indicators database.

0

1999 2000 2001 2002 2003

2

4

6

8

10

12

14

0

1999 2000 2001 2002 2003

2

4

6

8

10

12

14

However, if we consider foreign direct investment (FDI)as a whole and compare several areas of the economy, wenotice that the agribusiness sector lags behind comparedto other items, due to its importance for the GDP in theperiod 1999-2006 (see Graph 11, 12 and 13).

Lack of investment and long term credit, in addition tohigh interest rates for the available short term credit, setsup another barrier to growth. Agriculture shows encourag-ing signs of growth and improvement in productivity, in pri-mary production as well as in agribusiness sector. Data onthe performance of agribusiness in 2004 suggests a posi-tive trend with a growth rate of approximately 14% com-pared to 2003 and a total contribution of the agriculturalsector to the GDP growth of more than 3 points (i.e., thesector that individually contributed most to the real GDPgrowth in 2004). Adjustments occurred to commoditiesstructure. While grains and other crops of low added value

Graph 11. Development of the Agribusiness Sector Investment(1999-2003) in GDP percentage.Source: World Bank, Armenia’s Rural Economy.

35

30

25

20

Percentage Percentage

15

5

0

A gri cu

l ture

I ndu s

try

T rans

p ort

T rad e

O th er

10

Graph 12. Sector Investment and Participation in GDP (1999-2003)Source: World Bank, Armenia’s Rural Economy.



44%

9% 14%

33%

Telecommunications Mining Industry Air Transportation Others

Graph 13. Foreign Direct Investment (FDI) in 2006, per sector.Source: Republic of Armenia National Statistical Service (NSS)Statistical Yearbook, 2007.

maintained their importance for subsistence, high valueharvest production (fruits, grapes and some vegetables)increased27.

6.3.1 Rural Labor MarketRegarding rural labor market it is important to consider

the difference between commercial rural sector and sub-sistence farms. Accordingly two types of agricultural workcan be recognized: on the one hand, small and mediumfarmers owners of their own land, and, on the other hand,farmers with subsistence farms.

Medium producers -a dynamic and growing sector,although still small, that arose during last 3/4 years- are themost visible ones in the marketing chains. They tend to bemore specialized than subsistence farms and usually enterinto contracts with commercial chain providers and mar-keting agents.

Regarding land ownership, in 2001 there were 460.000ha owned by 350.000 private producers and only 115.000ha government owned land28. Nevertheless, in 2003 only3.8% of the total agricultural production was produced incommercially certified farms, the remaining productioncame from subsistence private sector. This percentagedecreased in 2006 when only 2.4% of the total produc-tion was carried out through commercial organizations(See Graph 14).

100

80

60

40

20

02003 2004 2005 2006

Commercial Organizations Smal producers (subsistence)

Graph 14. Production per type of farm (%) 2003-2006.Source: Republic of Armenia National Statistical Service (NSS),Yearbook 2007.

In addition, the arable land and vegetable gardens -once units dedicated to monoculture- are now diversified.The ownership of land by agricultural Armenian workersranges on surfaces of 1 up to 3 hectares. Therefore, agri-culture production by these small producers is very ineffi-cient. Vineyards and vegetable gardens have been neg-lected due to their fragmented sizes, lack of care by newowners and in general lack of investment and other prac-tices to improve the crop.

With few opportunities of work outside farms, rural pop-ulation depends on their small farms for survival29.Agriculture still functions as a social security network (itemploys almost three times more people than before theindependence), it is subsistence-oriented, and its commer-cial production is at least half the total production. Massiveaccess of labor force to the rural sector (as from the mid90s) is associated mainly to the collapse of non-agricultur-al sources of income, more than to the economical attrac-tion of the sector. Increase in productivity has lead to sus-tainable growth of the sector. This is due mainly to liberal-ization of the market, privatization of the already pos-sessed land, increase in exports and several infrastructureimprovements through investments.



6.3.2 Sector Financing After examining the agricultural sector from an econom-

ic perspective, it is necessary to associate the previousobservations with considerations related to the substanceof this section: financing. In this section several questionsrelated to the referred issue are dealt with, speciallyreferred to current situation and systems potentialities.

6.3.2.1 Current Financing CharacteristicsDuring the first years of the transition period – charac-

terized by macroeconomic instability and high inflationrates30 – the Republic of Armenia Government channeledbank credit to the agricultural sector with the purpose ofsustaining operations from strategic state companies anddeveloping companies recently privatized and farms. Thiscredit programs were actually agricultural subsidies andgrants - more than real loan operations31.

The negative effects of the Republic of ArmeniaGovernment intervention on the redirection of former statebanks show up around 1996 and 1997 when banks had topay off bad loans and registered substantial losses32.Nowadays, the Republic of Armenia Government does notcount any more on those resources which enabled it todevelop the old agricultural credit programs. Currently,credit operations to the sector have been diversified. Thereare new actors now such as international credit organiza-tions and foreign capital commercial banks. Nevertheless,rural financial markets are still limited and loans to the agri-cultural sector are even now reduced. Commercial banksin the Republic of Armenia are of marginal relevance tofarmers needs of agricultural credits. As an example of itwe can mention total loans to agriculture in year 2003 rep-resented only 2.5% of the agricultural GDP33.

In spite of the increasing demand of rural loans this sit-uation was paradoxically accompanied with the unwilling-ness of the banks and financial intermediate entities toenter into this segment of the market. Only few banksgranted loans to agricultural workers in a small scale. TheAgricultural Cooperative Bank of Armenia (ACBA), thatowned branches in 10 marzes, rendered services in fivehundred towns and had approximately 20.000 agriculturalworkers as clients34. This entity granted loans to small

agricultural farmers from its own resources as well as fromdonor credit lines. It was a very promising and lasting solu-tion for the supply of financial services to agricultural farm-ers and rural population. However, its capacity to accesspotential rural clients, particularly in poor and remoteareas, is still limited. Today entities such as the ConverseBank are orienting their development strategy to reach notonly the small and medium producers but also all the econ-omy actors, no matter their size.

Microfinance entities active in rural areas are traditional-ly supported by donor contributions. Most of the invest-ments are financed by small agricultural workers with ownsavings and loans from donors who financed the projects.Financial institutions still lack all the credit structurerequired for the agricultural activity (for example: warrants)

6.3.2.2 New Trend (2004-2008)Notwithstanding the structural characteristics of the

sector’s financing over the last 15 years, the granting ofnew credits as well as new possibilities of investment

10000000

9000000

8000000

7000000

6000000

5000000

4000000

3000000

2000000

1000000

0

2004 2005 2006

Food Industry Loans Agricultural Loans

Graph 15. Loans to the Agribusiness Sector (2004-2006) in millionsof Armenian Drams AMD.Source: Author’s elaboration based on Republic of Armenia CentralBank data.



SECTORS 2004 2006

1. Industry 13.577.135 19.223.900

1.1 Energy 3.495.024 2.526.336

1.2 Food 3.491.600 9.884.946

11.3 Pharmaceutical 23.596 56.082

1.4 Metallurgical 25.168 116.569

1.5 Machinery 132.745 999.928

1.6 Mining 2.320.684 507.802

1.6 Precious Stones 145.536 437.805

2. Agriculture 1.162.018 5.975.940

3. Construction 1.640.397 8.175.740

4. Transportation and Communications 540.506 2.807.452

5. Trade 12.892.609 22.245.271

6. Financial Sector 1.010.520 11.933.577

7. Personal Loans(including mortgages)

7.517.792 40.946.412

TOTAL 45.185.339 121.660.236

Table 6. Investment Loans for Economy Sectors.Source: author’s elaboration based on Republic of Armenia CentralBank data.

seem to have gained stronger fresh energy. Loans forinvestment in all the sectors of the economy but particular-ly in agribusiness have increased over the last 4 years.According to the Central Bank of Armenia loans for foodindustry increased 183% in two years (2004 to 2006). Asfor funds allocated to the agricultural sector they increasedfrom AMD 1.162.018 in 2004 to AMD 3.917.349 in 2005,reaching AMD 5.975.940 in 2006 (meaning 414% in twoyears). (See Table 6 and Graph 15)

This new trend shows the recovery capacity of the finan-cial system and the positive effect of the new reforms ori-ented to strengthening macroeconomic confidence andstability. It should be noted that in order to finance agricul-tural and non-agricultural activities in a feasible way it isnecessary to develop a strong rural financial system. The

development of the system depends on setting up a welldefined political and legal framework and creating ade-quate rural financial institutions. Now, which are theguidelines that will encourage and deepen this trend? Theywill be developed hereinafter.

6.3.2.3 Guidelines for Better Financinga) Participation of the public sector and internationalfunds

Cooperation between public sector and internationalbodies with financing capacity may create an intereststrategic variable to improve investment capacity. Todaythere are loans subsidized jointly by the Republic ofArmenia Ministry of Finance and Economy and qualifiedcommercial banks. Participant banks are selected amongthose applying for international loan funds and complyingwith the regulations set forth by the Central Bank ofArmenia35. Final borrowers are private agribusiness com-panies as well as small agricultural workers granted shortand medium term loans. The main effect of these loanfunds has been reduction of high credit interest of com-mercial banks generating a greater stability in banking sys-tem. Greater competitiveness results in lower spreadswhich brings incentive to take a loan and invest. This proj-ect has been successful in regions where participant bankshave local branches. The location of entities in remoteregions makes the system to be known by small and poorworkers, enabling advice and providing incentive forinvestment and improvement.

However, the use of international loan funds constitutesonly a temporary solution since this mechanism discour-ages commercial banks from compromising theirresources and expanding their credit activities to agricul-tural workers. Therefore, new undertakings should beencouraged but without leaving aside national genuineinvestment tools.

b) Agricultural insurance Agricultural sector’s activities are characterized by their

high risks whether due to adverse weather conditions oreconomic uncertainties giving rise to wide fluctuations inproduction and price levels.



There is no crop insurance system in the Republic ofArmenia at present. Even though nowadays it is commonplace to accept public sector develops multiple risks insur-ance schemes, they are neither economically viable norsustainable36. Present output volumes make strategies tocover large losses difficult to apply. In specific circum-stances private schemes handled by the economic sectorshould be developed, especially for large agribusinesscompanies since they represent substantial investmentcosts. In this way, the major contagion risks from the sys-tem are avoided and fast recovery of the entire sector isenabled.

c) Training of banks and micro-financing organizations Banking or financing organizations granting loans should

evaluate payment and repayment capacity of their new andpotential clients. As stated before, the capacity of theseinstitutions to acquire and provide information not onlydecreases their risks but also has global impact on the sys-tem. Foreclosure of the surety bond should and must be alast instance resource to ensure loan repayment. To achievesuch banking practices, it is necessary to train the person-nel of the financial institutions in the evaluation of the feasi-bility of the required investment, in the preparation of ade-quate business plans and in the study of the payment andrepayment capacity of the new loans37. Following this idea,special attention should be paid to the capacity to mobilizesavings and to the role this capacity has in development, torisk management of agricultural loans, to the use of newtechnologies and financing practices for small agriculturalworkers, to regular evaluations regarding standard loansoperation, to adequate loan recovery policies and to therequirements and repayment of loans.

d) Client TrainingAmong commercial banks only ACBA used to invest

adequate time and money in training representatives andmembers of cooperative associations on organizationissues, basic credit principles and loan procedures,accounting, financial management, etc.38 .On this issue, inthe frame of Converse Bank´s development and expan-sion, its support and training to agricultural sector acquires

strategic importance, due to the contribution of this sectorto the country’s economy and growth.

“Agricultural credit clubs” members training deservesalso high priority to education. In order to increase smallagricultural workers capacity to contact the banks, it isimportant to improve their financial management under-standing and planning as well as to strengthen their abili-ties for the business.

e) Lease Leasing is a method granting financing in order to

acquire and use fix assets based on the concept thatassets value stands in their appliance for business purpos-es rather than in their ownership right39.

Since agricultural machinery and equipment constitutean essential cost element for small agricultural workers,and, considering that often this cannot be self-financed40,in addition to the difficulty to take loans, leasing of machin-ery and equipment may constitute an attractive alternativeto finance development.

Leasing, as a financing alternative, provides severaladvantages. On the one hand, property rights remainunder the control of the lessor and in this way surety bondsare more reliable than those of the credit grantor, i.e., theymay be more easily recoverable. On the other hand, gen-erally the initial purchase installment is low. Finally, in gen-eral, no additional guarantees are required41.

f) Micro-financingA considerable number of microfinance projects have

been put into practice in recent years. Even though micro-finance institutions have the specific objective of givingservices to low income micro-businessmen their volume ofoperations and their extension to small agricultural work-ers is still in an initial stage42.

Micro-finance industry is estimated in US$11 millionwith approximately 30.000 clients43 and it appears to beone of the most feasible alternatives for the rural financialsystem. While loan portfolios of commercial banksincreased 13% between 2001 and 2003, microfinanceinstitutions (MFI) increased 52%, an indication of theirrecent strong growth44. Even though micro-credits are



mainly invested in commerce (50.5% of the total) they arealso significantly present in agriculture (34.3%) comparedto credits from commercial banks. However, their interestrates are very high - on the 36%-76% range- and theyhave limited financing. The amount of loans continues tobe relatively small, near US$2.000 to US$10.000 per year.Average loan has historically been US$300 although thereis higher demand. Data evaluation made by donor agen-cies and microfinance traders suggests that there are atleast around 150.000 to 200.000 clients45.

It is important to know that micro-finance and organiza-tions’ projects do not usually require the conventional loansurety bond since they often follow practices of jointresponsibility groups and the social types of surety bondsas substitutes to ensure loan reimbursement. Therefore, they seem to adjust to the poorest agriculturalworkers in the sector. A legal and foreseeable frameworkis essential for their development and strengthening.

6.4 Conclusions

A detailed and careful analysis of what has been stated inthis chapter draws an obvious conclusion: the developmentof the financial system focused on the deepening and exten-sion of the different lines of credit is basic for the potentialagribusiness growth. The composition and structure of thesector indicates a strong concentration of gross agriculturalproduction in the hands of small agricultural workers andsubsistence farms. The agribusiness sector has increasedin the last years to rates higher than 10%. Loans to that sec-tor have increased since 2004 more than 500%.

It is of great importance to develop long term strategicguidelines in order to grant credit standing to agribusiness.Therefore, the strengthening of five (5) central themes willbe top priority:

1) International Financing. To promote internationalfinancing under the Republic of Armenia Government man-agement, control and cooperation. The large external cred-it capacities plus the Republic of Armenia Governmentstrategic objectives are a solid work base to improve com-petitiveness and financial stability in the sector.

2) Agricultural insurance. Due to producers character-istics and composition it is necessary to develop anagricultural insurance directed to avoid contagion risksand mitigate large losses for exogenous reasons.

3) Information and training of financial entities andclients. Training and information channels for lendinginstitutions and clients that take loans are also neces-sary and productive. A deep knowledge of the activities,legal frameworks and sector forecasts make the finan-cial system more foreseeable and solvent.

4) Leasing. It shows up as a realistic and feasible solu-tion for cost reduction including production results max-imization.

5) Microfinancing. This is also a strategic guideline todevelop since it adjusts to the sociological characteris-tics of the sector.

The development of these central themes is basic for theagribusiness credit stability and development. As the worldeconomic situation indicates commodities values will con-tinue to increase, it is of great priority to strengthen the inter-nal financial sector (which over the last two years turned tobe more foreseeable and controlled) for all the nationaleconomy in general and to lever agribusiness production,which shows great recovery and expansion capacity.



1 Grasso, Federico & Banzas, Alejandro, “El spread bancario en laArgentina”, Working Paper No. 11, Economy and Finance Center.August 2006.2 Dabla Norris, Era & Floerkemeier Holger, Bank Efficiency andMarket Structure: What determines Banking Spreads in Armenia?IMF Working Paper, June 2007, p. 1 & s.3 The World Bank divides economies in accordance with the GDPper capita, calculated by using World Bank Atlas method. Thegroups are: low income, US$ 905 or less; low average income, US$906 - US$ 3,595; high average income, US$ 3,596 - US$ 11,115;and high income, US$ 11,116 or more. Republic of Armenia is with-in the average-low income countries category.4 Available at: http://www.ian.cc/notas/noticias_ian.php?id=4465 Law on the Republic of Armenia Central Bank 6 “The Caucasian Tiger”, World Bank, Washington, 2007 p 737 Available at: http://www.tacentral.com/economy.asp?story_no=8 8 Ibid.9 In this case, the Herfindhal-Hirschman concentration index variesbetween 0 and 1, characterizing the concentration level. Valuesclose to 0 indicate low concentration levels while values close to 1indicate the opposite.10 Dabla Norris, Era & Floerkemeier Holger, op. cit. p. 7.11 Republic of Armenia Central Bank, op. cit. p. 28.12 Ibid. 13 Giragosián, A., “Banks in the New Independent States”,Washington DC, 2006, p.7814 Republic of Armenia Central Bank, op. cit.15 “Governance Indicators 2000-2006”, AFLA, 2007, p.5316 “The Caucasian Tiger”, World Bank, Washington, 2007, p.14217 “Governance Indicators 2000-2006”, AFLA, 2007, p.5318 Floerkemeier H. & other. Republic of Armenia: Selected Issues.Fondo Monetario Internacional, 2006, p. 35.19 Dabla Norris, Era & Floerkemeier Holger, op. cit. p. 3.20 Floerkemeier H. & other, op. cit., p. 35.

21 Mitra, Sauyma & other. The Caucasian Tiger. Sustaining eco-nomic growth in Armenia. World Bank, 2007.22 Republic of Armenia Ministry of Agriculture, “Estrategia para undesarrollo agrícola sustentable”, p. 30.23 Dabla Norris, Era & Floerkemeier Holger, op. cit. p. 18.24 Ibid.25 World Bank, Armenia’s Rural Economy – From Transition toDevelopment, August 200526 Republic of Armenia National Statistical Service (NSS) StatisticalYearbook, 200727 World Bank, op. cit., August 2005, p. 1.28 Economic Commission for Europe, Working Party on LandAdministration, October 2000. In Armenia Agriculture AssessmentTeam Report, p. 8.29 Kuddo, A, “Armenia: Labor Market Dinamics”, World Bank,Washington, 200630 Bournoutián, G, “Historia sucinta del pueblo armenio”, NewRochelle, 200331 Republic of Armenia Ministry of Agriculture. Estrategia para undesarrollo agrícola sustentable. p. 3032 Ibid.33 World Bank, op. cit., August 2005, p. 2.34 Armenia Agriculture Assessment Team Report, p.1135 Republic of Armenia Ministry of Agriculture. op. cit. p. 30.36 Ibid.37 Ibid.38 Ibid.39 USAID. Lease. p. 140 Republic of Armenia Ministry of Agriculture. op. cit.41 USAID. Op.cit.42 Ibid.43 World Bank, op. cit. p. 24.44 World Bank, op. cit. p. 24. 45 World Bank, op. cit. p. 24.

Notes


chapter 7

Legal Regulationsof AgriculturalSector



Chapter 7

Legal Regulations of Agricultural Sector

7.1 Introduction

Legal certainty is one of the most important prerequi-sites that makes a country attractive for investment andfinancial development. Legal certainty involves applicablelaws, as well as their effective and impartial application bythe State.

Armenia used to be a part of Soviet Union. At the timeof being part of Soviet Union the social relations were reg-ulated based on Soviet Union’s Laws and Armenian Lawsadopted on the basis of Soviet Union’s Laws. The mainphilosophy of Soviet time’s legal regulations was that thestate was the exclusive owner of land. The citizens wereconsidered as employees of state and therefore did notown land.

After the collapse of the Soviet Union (USSR), the econ-omy went from a centrally-planed one into market-basedsystem. The Republic of Armenia has adapted its legalsystem to the new social, economic and political condi-tions in the country and the world, by adopting new lawsand decrees, signing international and harmonizing itslegal system with the laws of the European Union.

Currently effective Armenian legal framework supportsdevelopment of agricultural sector, inter alia by availabilityof different types of consultation services, including, legal,financial, agricultural, by availability of financial means informs of credits, etc.

This chapter deals with property rights, with a specificfocus on the regulatory framework for:

- property (land), - use of water resources (water), - genetics, - protection of incorporated technology, - phytosanitary barriers.

7.2 Regulation of Rights Related to Property

In 1992 the Republic of Armenia Law “On Organizationsand Entrepreneurial Activity” was adopted, which estab-lished types of enterprises and among them there was col-lective farm. The Republic of Armenia Law “OnOrganizations and Entrepreneurial Activity” determines theprinciples of entrepreneurial activities.

In 1990 the Republic of Armenia Law “On Ownership inthe Republic of Armenia” was adopted. The Law aimed tocreate and develop legal basis for market relations,strengthening economic system and ownership relationsand development of its different types. The Republic ofArmenia Law “On Ownership in the Republic of Armenia”serves the legal basis for regulation of ownership relationstill January 1, 1999, the effectiveness of the Republic ofArmenia Civil Code.

Thus, till the adoption of the Republic of ArmeniaConstitution in 1995 Armenia had legal framework for regula-tion of entrepreneurial activities, including entrepreneurial activ-ities in agricultural field. The Republic of Armenia Constitutionenvisaged the protection of ownership right, guarantees ofstate for free development of all forms of ownership, freedomof economic activity and free economic competition,

In 2005 the Republic of Armenia Constitution is amend-ed and added.

During time new legal regulations were adopted andexisting legal regulations were improved, which promoteagricultural development.

The Constitution of the Republic of Armenia states in itsArticle three the Republic of Armenia shall ensure protec-tion of fundamental human and civil rights and freedoms,in conformity with principles and norms of InternationalLaw. It also states that the Republic shall be limited bythose rights and freedoms stipulated in the Constitutionand applicable laws.



The Constitution recognizes and protects propertyrights and freedom of economic activity (Constitution,Article 8). The Republic of Armenia guarantees free eco-nomic competition (Constitution, Article 8). Everyone isentitled to engage in any entrepreneurial activity, not pro-hibited by Law (Constitution, Article 33.1)

Besides, Republic of Armenia Constitution stipulates allcitizens shall have the right to freely own, use and disposeof the property belonging to them. However, the right toown property may not be exercised in a way that causesdamage to the environment or infringe on the rights andlawful interests of other persons, the society and the Stateitself (Constitution, Article 31).

Furthermore, the Republic of Armenia Civil Codedefines the right of property ownership as the right toposess, use, and dispose of property belonging to it a sub-ject at his discretion, pursuant to applicable statutes andother legal acts (Civil Code, Article 163) while according toits Article 166 property may be owned by citizens, legalpersons, the Republic of Armenia or communes.

- The right of possession is the legally suppported abil-ity to exercise actual control on the property.

- The right of use is the legally supported ability toextract from the property its natural usable contents andbenefit from it. The benefit may be manifested in the formof income, cultivation, vegetation, among others.

- The right of disposition is the legally supported abilityto determine the legal fate of the property

7.2.1. On bases for Acquiring Ownership Right There are several ways of acquiring ownership right to

property:(i) A person, who makes or creates new property in

accordance with the law or other legal acts, acquires theownership right to the new property. When a person wish-es acquire a property right on a new immovable property,such property must be previously registered with the rele-vant official registery. It is from this registration that theright arises,

(ii) Should the property have an owner, it is the latter whoshall transfer the title to property to a third party by a legal

instrument, which may be a contract, a title deed, etc.,(iii) In case of the death of a citizen the right of ownership

to property belonging to him passes by inheritance to otherpersons in accordance with a will or as prescribed by Law,

(iv) Through privatization (if the State or a marz(province) is the owner),

(v) In the event a natural person (Armenian citizen) or alegal person (registered in the Republic of Armenia) is notthe owner of immovable property but has in good faith,openly and without interruption possessed a property ashis/its own for ten years, he/it may acquire ownership ofthis property (acquisitive prescription),

(vi) Unless otherwise provided by contract, the right ofownership to new movable property created by a personby processing materials not belonging to it is acquired bythe owner of the materials. If the value of the processingsubstantially exceeds the value of the materials the right ofownership to the new property the ownership right isacquired by the person, who, acting in good faith, con-ducted the processing,

(vii) When, in accordance with a law, a general permis-sion given by the owner, or in accordance with local cus-tom in forests, bodies of water, or on other territory thegathering of fruit, the catching of fish, the capture of ani-mals or the gathering of other generally accessible proper-ty is allowed, the right of ownership to the respective prop-erty is acquired by the person who conducted the gather-ing or capture,

(viii) A person, in whose ownership, possession, or usethere is a land parcel, body of water, or other object, wherethere is an abandoned property whose value is clearly lessthan a sum corresponding to fifty times the minimummonthly wage or discarded scrap metal, defective prod-ucts, waste formed in the acquiring of useful minerals,production scrap and other scrap shall have the right tobring this property into its ownership by having started touse it or having taken other actions evidencing the bring-ing of the property into ownership,

(ix) If in the course of six months from the time of report-ing a found property to the police or to a body of local self-government, the person empowered to receive the foundproperty is not established or does not himself report its



right to the found property to the person who found it norto the police nor to the body of local self-government, thefinder of the property acquires the right of ownership to it,

(x) If in the course of six months from the day of reportof catching an unsupervised domestic animal their ownerhas not been found or has not itself declared its right tothem, the person who has the animals for maintenanceand for use shall acquire the right of ownership to them,

(xi) Treasure trove, i.e. money or valuable objects buriedin the ground or in other property or hidden in anothermanner whose owner cannot be established or by virtue ofa law has lost the right of ownership to them, shall go intothe ownership of the person to whom the property (landparcel, structure, etc.) belongs, where the treasure trovewas hidden and the person who found the treasure trove inequal ownership shares unless an agreement betweenthem provides otherwise. (Civil Code, Chapter 11),

The size and value of the property owned by a naturalperson (Armenian citizen) or by a legal person (registeredin the Republic of Armenia) is not limited a priori. However,it may be restricted only by Law if necessary in a demo-cratic society in the interests of national security, publicorder, crime prevention, protection of public health andmorality, constitutional rights and freedoms, as well ashonor and reputation (Constitution, Article 43).

7.2.2 On Immovable Property RightsBeing a Post Soviet country Armenia was the first, which

privatized the land in 1991. The land privatization wasdesigned and cunducted effectivly. The land privatizationwas the mainstream for agricultral development.

In 1991 the Republic of Armenia adopted Land Code,which was the basis for land to be object of civil circula-tion. The Land Code of 1991 created legal envirnment forcitizens and collectives to own land. Thus, the citiznes areentited to own and manage its property at his/her discre-tion following the legal regulations.

The Land Code of 1991 as well as the Property Law of theRepublic of Armenia (resolution 384) were revoked by theRepublic of Armenia New Land Code of June 15, 2001 (RA LC).

This new regulation focuses on a regulatory framework

to protect and promote the improvement of the environ-ment, guaranteeing the effective use and care for the earth,creating the conditions needed for the proper developmentof business. Furthermore, this regulation seeks to protectthe rights of citizens and legal persons – including organ-ized bodies and the State itself – regarding property byconsolidating the existing legal system.

This new code is part of the legal system to be appliedto property rights together with the Constitution of theRepublic of Armenia – the supreme law of the Nation - theCivil Code and applicable domestic legislation.

Laws and other normative legal acts regulating landrelations and determined by the Land Code must be incompliance with the provisions set forth by the Republic ofArmenia Labor Code. If International Agreements (Treaties)duely ratified by the Republic of Armenia determined otherprovisons than the Labor Code, International Treaties areapplied (RA LC, Article 1).

Natural persons who are not citizens of the Republic ofArmenia as well as foreign residents, have restricted rightsto enjoy the right to own real property (Constitution, Article31, RA LC, Article 4, item 2).

7.2.3 Limitations on foreign citizens’ and non-resi-dents’ real property rights.

The Republic of Armenia New Land Code sets clear lim-its regarding the use of land, among which the followingshould be mentioned:

1. Land parcels may be divided, provided it is in compli-ance with legal regulations and .in case if such landparcels are under joint ownership, the land parcels may notbe divided lesser than the determined sizes.

2. The use of the property and its operation must be inaccordance with its zoning classification.

It should be noted the State is responsible for classify-ing the Republic of Armenia land according to a previousstudy of it in different categories. Land may be classifiedinto: (i) agricultural lands; (ii) residential lands; (iii) land forindustrial use: (iv) lands for energy, communication, trans-port entities and public infra-structural facilities; (v) lands inspecially protected areas; (vii) lands of special significance;(vii) forests, water masses and natural reserves.



3. There are special regulatory provisions on land-useand measures for their implementation:

(i) prohibition of tools which cause a decrease in landquality and fertility or environment contamination:

(ii) density of construction on land. Total OccupationFactor shall be determined in each case in accordancewith civil and environmental engineering projects submit-ted by the owner.

7.2.4 Regulation on Agricultural Lands Republic of Armenia New Land Code Chapter 3

describes Agricultural Lands as those lands allocated foruse for agricultural purposes, processing of plants, cre-ation of long term plantations, harvesting, cattle livestockprovision and other agricultural activities.

According to soil types, the State divides agriculturallands into (i) cultivated lands, (ii) long-term plantations, (iii)hayfields, (iv) pastures, and (v) other soil types.

Once classified, agricultural soil types are subject tospecial protection. Transfer of those lands to non-agricul-tural uses is permitted in exceptional cases1 and only byGovernment decision.

The Official Land Register (cadastre) gathers the classifi-cation corresponding to each land parcel and registers it ineach land allocation, because such classification deter-mines its use, cadastre value, property taxes, among others.

The owner of a land parcel has the right to use every-thing above and below its surface, unless it violates therights of other persons (Civil Code, Article 202, Clause 3).The use of what is located below the surface (i.e. water orminerals) is restricted by applicable regulations.

All lands in the Republic of Armenia are subject to Statesupervision, either to control their use in accordance withthe classification, to prevent a decrease in quality, or toprevent and eliminate negative activities consequences.

The State has the right to lands compulsory purchasefor public state need in case of eminant domain. This iscommon in most countries. In such cases, the State shallcompensate the owner, taking into account several vari-ables, such as landmarket value, improvements on theland and loss suffered by the owner due to such alien-ation, early termination of third party contracts, loss of

profits from interruption of business, among others. In case the landowner does not accept the State valua-

tion, he may go to Court for a review of the State action,pursuant to the provisions in the Civil Code and theRepublic of Armenia Law On Aliniation of Property ForPublic and State Need.

The owner must be notified on the Republic of ArmeniaGovernment Decree on recognizing as eminent domain bysending such Decree to the owner within seven days fromthe day when such Decree becomes effective.

Also, the real property of convicted criminals may beforfieted as part of a criminal sentence or restitutuion.

In cases of natural disasters, epidemics, emergencies,wars, land may be taken by requisition from the owner bythe State. Upon termination of the special circumstanceswhich led to this situation, the natural or legal personwhose property has been taken shall have the right todemand return of the land or its part.

Should a landowner not comply with the applicable reg-ulations, in cases such as land contamination, non imple-mentation of measures aimed at land improvement, viola-tion of legal regimes defined for the environment protec-tion, and, the non-use of agricultural lands for a period ofthree years or more (RA LC, Article 105) it may bring aboutcompulsory taking of the land through the court.

- Registration of Rights on Land. The right of citizensand legal entities on land is created through privatization,heredity, trade, donation and other legal instruments2 (RALC, Article 44). Such rights must be registered with theOfficial Land Register.

Other rights on land established through legislation,such as mortgages, all types of servitude and easement(for access, exploitation, etc are also subject to registra-tion. The State does not guarantee the protection of prop-erty rights that are not duly registered.

- Land lease. Agricultural lands, owned by the State or bythe commune may not be rented for more than 25 years.However, other types of land, owned by the State or by com-mune may be rented for up to 99 years (RA LC, Article 48).

- Tenancy. The lands owned by the State or commune



may be given by lease to citizens of the Republic of Armeniaas well as to companies registered in the Republic of Armenia.

The applicable regulations on property are based on theprinciple of equality, ownership inviolability, contract free-dom , impermissibility of arbitrary interference by anyone inprivate affairs, civil law rights unhindered exercise, violatedrights restoration guaranty and their judicial protection3.

- Taxation. Taxes on agricultural lands are imposed atthe rate of 15% of net annual income, as assessed by the

Official Land Register (RA Law on Land Tax, Article 4). However, natural or legal persons involved in agricultural

activities (generating agricultural production) are exemptedfrom income tax. Land parcels covering 0,1 hectares or more,dedicated to vineyards and orchard recently planted and witha short life span, are exempted from land tax until production.

- Foreign Investment. Foreign investment regulationsare stated below:

Law of the Republic of Armenia on the Privatisation

of State Property (1998)

This Law regulates legal relationships concerning privatization of State property, including unfinished construction sites.

Natural and legal persons, including foreign natural and legal persons, have the same rights of participation in privatiza-tion of State property.

Law on Foreign Investment (1994)

It defines foreign investor as follows: “Foreign investor” shall mean any foreign state, foreign legal entity, foreign citizen, stateless person, citizen of the Republicof Armenia permanently residing out of the territory of the Republic of Armenia, as well as any international organizationwhich engages, in accordance with the legislation of the country of its location, in investment in the Republic of Armenia”.

Legal regime governing foreign investments and legal regime related thereto cannot be less favorable than the regimegoverning the investments, property and property rights of Armenian citizens and legal persons.

Additional privileges may be established to encourage foreign investments.

In the event of amendments to the Armenian legislation ruling the foreign investment, the foreign investor shall have aguaranty: upon the which of foreign investor the legislation which was effective at the moment of investments implemen-tation shall be applied during a five year period as from that moment.

Foreign investments in the Republic of Armenia shall not be subject to nationalisation nor to confiscation (seizure may beallowed only as an extreme means in case of emergency, and may be applied only upon a court of law judgment withfull compensation).

Foreign investors shall be entitled to freely export their profits and other means legally gained.Foreign investor’s intellectual property rights shall be guaranteed in accordance with the corresponding legislation.



Foreign persons may organize and become parties to Joint Ventures with the same rights as natural and legal persons ofthe Republic of Armenia.

Law on Securities Market (2008)

Since February 29, 2008 the new Law on Securities Market is on force. The Law on Securities Market govern relationsarising in relation to implemenmtation of activity in the Republic of Armenia securities market.

The Government of the Republic of Armenia subscribedand ratified the International Centre for Settlement ofInvestment Disputes Convention (ICSID) on September 16,1992. It became effective on October 16, 1992.

The ICSID convention establishes an Arbitration Courtunder the auspices of the World Bank, to settle internation-al disputes on investments. Any dipute between theRepublic of Armenia and another country or national ofanother country which has also ratified the ICSIDConvention may be referred to ICSID for resolution.

7.4 Rights and Obligations on WaterManagement

According to an OECD4 report, subsurface waterresources represent 95% of drinkable water in theRepublic of Armenia. Such water is high quality, accordingto microbiological and chemical standards.

The efficient use of natural resources, specifically thewater resource, is crucial for agricultural development.However, the country has an obsolete water distributionsystem, which generates considerable loss (approx. 35% -40%) along its path, as well as inappropriate supply of thisvital resource. As a result, the Government has leased thewater distribution network of Yerevan to an internationallyrecognized French company and granted a managementcontract to another internationally recognized French com-pany for the network outside Armenia, with strict guidelines

to improve the performance and effeciency of the systems.In the year 2002 a new Water Code was adopted to satis-

fy the general needs of all the population through efficient andresponsible water management and protection of existingwater natural resources in the country. The Code acknowl-edges that as water is a non-renewable resource and as thereis no alternative to water (Water Code, Article 5), its environ-mental and economic protection is extremely important.

The Code establishes water resources5 existing in theterritory of the Republic of Armenia are State property.

Water systems of national significance (defined by theNational Water Program) and inalienable zones of main andinter-community water supply6 and wastewater disposal sys-tems shall not be subject to privatization (Water Code, Article 4).Therefore, water usage is regulated through water use permits.

The Law on Water User Association and Water UserAssociation Unions of the Republic of Armenia has beenenacted in July, 2002. Persons, having irrigated lands in theservice area of the Water User Association, are entitled touse irrigation water, based on water supply contracts withthe Water User Association not less than for three yearstime period. Water User Associations and Water UserAssociation Unions are non-profit legal persons operatingin the public interest. Water Users Associations are madeup of natural and/or legal persons owning lands or having aright to use lands with a specific irrigation system. WaterUser Union is made up of Water Users Associations. Theycarry out the operation and maintenance of irrigation sys-tems and supply water among members in the territory in



accordance with the annual supply schedule. They alsohave the contractual obligation to supply water to users –members and non-members of the Association and theUnion7 located within the service area, obtain water fromwater resources for irrigation, collect member and non-member fees for the services rendered, promote new irriga-tion techniques and financing for these new methods andtechnologies, secure hydrotechnical equipment, managewater supply preventing contamination and promote itsproper and efficient use (providing ecological safety meas-ures) among other (Law “on Water Users Associations andWater Users Associations Unions, Article 4).

The main difference between members and non-mem-bers of these associations is based on the rights and dutiesof the former, since they have the opportunity to take part indecision making, organize discussions, use the servicesoffered and be compensated for damages caused by theassociation, among other things. For the timely water sup-ply, they must comply with irrigation schedule and allow theassociation to use channels or other hydrotechnical equip-ment within their land area in order to guarantee irrigationsystem balance maintenance. Now, water resource userswhose lands are irrigated – either members or non-members– may enter into agreements for the supply of water, whilethey are within the association’s service area and not for lessthan three years. However, non-members must pay a higherrate than members, which shall not exceed 150% in sur-charge (Law “On Water Users Assossiations and WaterUsers Assossiations Unions” Article20).

In general, water use permits are given by the WaterResources Management and Protection Body(Republic of Armenia Nature protection Ministry). These

permits fund costs for recreation purposes. Land ownerhas priority to obtain a permit for underground water use inhis own land. (Water Code, Article 25).

Furthermore, a permit may be granted for the use of under-ground water at a third party’s property with the latter’s writtenconsent. If Water Resources Management and ProtectionBody determines the extraction of groundwater is necessaryon any person’s property and landowner refuses to provideauthorization, the land may be condemned from the landown-er, providing fair compensation is paid or by appliation ofmandatory servitude (according to provisions in the New LandCode). Sustainable maximum extraction rates for groundwaterresources shall be established by the Water ResoursesManagement and Protection Body (Water Code, Article 25).

A water use permit must be signed by the permit holderand the Head of the Water Resources Management andProtection Body, sealed by the stamp of the Water ResourcesManagement and Protection Body and, duly recorded in theState Water Cadastre in order for it to be valid. The Water Usepermit period of validity depends on the following8:

1. Prior to the final approval of the “National WaterProgram,” a water use permit may be valid for nomore than three (3) years.

2. In locations where a “Water Basin Management Plan”exists, a water use permit may be valid for a maxi-mum of twenty-five (25) years.

3. In locations where a “Water Basin Management Plan”does not exist, a water use permit may be valid for amaximum of five (5) years.

The Water Code establishes water users’ rights andduties as follows:

- Comply with qualitative and quantitative standards and requirements needed for water resources protection and improvementof its quality. This means the allowed marginal polluters concentrationmust be complied with. (Article 66, 67).

- Pay rates corresponding to water use and services derived (Article 76).

- Take the necessary measures to prevent disasters resulting from hydrotechnical structures destruction9. It is forbiddento operate water systems without carrying out measures for land inundation and land erosion prevention (Article 88).

Duties



Use and Protection of International WatersInternational treaties and agreements between the

Republic of Armenia and neighbouring countries shall beapplied for the use and protection of water resources atinternational boundaries (RA Water Code, Article 63).

Treaties of the former USSR define the use of Araksand Akhurian rivers at the Armenian border and allocatethe resources equally. These treaties also govern thereserve and reservoir of Akhurian river. Similar agree-ments have been signed for Arkas river for equal exploita-tion with the Islam Republic of Iran10; with Georgia in rela-tion to the Debed river and with Azerbaijan for the use of

the waters of Arpa, Vorotan, Aghstev and Tavush Rivers.The Republic of Armenia considers water and water

resources a very important issue. There is a program onstructural and legislative reforms related to resource sus-tainable use, which focuses on improving related legislation.

The RA Law on Basic Provisions of National WaterPolicies was adopted, developing concepts related to theuse and protection of water resources and systems.Following the principles established in the RA Water Code,this law emphasizes the principles of “paying user” and “hewho contaminates pays”, to collect rates that enable invest-ment in maintainance and improvement of water resources.

- During water scarcity and draught, activities connected with water resources may be limited (Article 92).

- In case of war and ecological emergencies, hydrotechnical systems manager must implement activities according to theinstructions established by the Government (Article 94).

- In the event new technologies are implemented, the environmental impact must be taken into account (Article103).

- Operation of lands irrigated with wastewater is prohibited without a system for observation of ground water regimes(Article 103).

- People failing to follow the terms of a valid water use permit, polluting water above quotas established by the legisla-tion, causing harm to the water systems and violating their operational rules, among other, shall bear criminal or admin-istrative responsibility (Article 114).

- Persons violating requirements of Water Code are obliged to compensate the losses caused. (Article 116).

Rights

- Possibility of becoming members of Water Users’ Associations (Article 72).

- Users as well as water suppliers may be provided subsidies or tax privileges (Article 81).

- Users may be compensated for damages caused by hydrotechnical structures breakdown (Article 89)

- Irrigation of agricultural lands with wastewater in a manner determined by the Government (Article 101).

- Disputes evolved in water relations may be resolved by a Dispute Resolution Commission, except the cases when theRepublic of Armenia is a disputing party. In case no consent is attained by the parties the disputes shall be resolved in ajudicial way (Article110).

- Obtain a water use permit (Article 21) in accordance with Codes´ provisions.



In order to carry out an efficient policy, water demand mustbe assessed, taking into account its quality, quantity andlocation. The law on the National Water Program for theRepublic of Armenia has been effective since March 25, 2007.This is the main document ruling present and future trends onwater management as well as protection of water resourcesand systems. The process suggested by this project providesfor a more integral and efficient management of this resource.

Besides, the Code itself establishes after its approval notonly the previous Code ruling on the same subject shall berepealed (1992) but also the following laws must be adopted:

• On Water User Associations and Water UserAssociation Unions (effective).

• On Basic provisions of National Water Policies (effective), • On National Water Program (effective),• On drinking water,• On melioration of agricultoral lands (effective).Therefore, the efficient use of water and water resources

must be protected, improved and fostered even more, anda clear policy of rules known and respected by everyonemust be followed, since activities like agriculture may benegatively affected by necessary water resources lack.

7.5 Intellectual Property and laws on pro-tection of incorporated technology

Civil Code of the Republic of Armenia Section 10 isexclusively dedicated to intellectual property; a right rec-ognized by the Constitution in Article 31 stating this type ofproperty should be protected by law.

Likewise, issues related to intellectual property are ruledand protected in the Criminal Code (Chapter 19), the CustomsCode (Section 14, Chapter 39), and, the Republic of Armenialaw on protection of economic competition, the Republic ofArmenia law on copyright and related rights, the Republic ofArmenia law on patents, the Republic of Armenia law on legalprotection of topographies in integrated circuits, the Republicof Armenia law on trade names, the Republic of Armenia lawon trademarks and service marks and designation of origin,as well as by different international treaties: 11

•Paris Convention for the Protection of the Industrial

Property, (March 29, 1994) •Berne Convention for the Protection of the Literary and

Artistic Works (June 10, 2000) •Madrid Agreement concerning the International

Registration of Marks (March 29, 1994) •Patent Cooperation Treaty (PCT) (March 29, 1994) •Intergovernmental Council on Industrial Property

Protection Issues (March 12,1992) •Agreement with the World Intellectual Property

Organization (WIPO)(November 6, 2004) •European Patent Organization (February,27,1996)•Brussels Convention Relating to the Distribution of

Programmed-. Carrying Signals Transmitted bySatellite (June 22, 1993).

•Euroasian Patent Organization (February, 27, 1996)•Protocol relating to the Madrid Agreement concerning

the International Registration of Marks (May 8, 2000)•Convention for the Protection of Producers of

Phonograms against Duplication of theirPhonograms, adopted at Geneva (January, 31, 2003)

•The International Convention for the Protection ofPerformers, Producers of Phonograms andBroadcasting Organizations (April 11, 2002)

•Budapest Treaty on the International Recognition of theDeposit of Microorganisms for the Purposes of PatentProcedure (November 6, 2004)

•Nice Agreement Concerning International Classificationof Goods and Services Registration of Marks Purposes(November 6, 2004)

•Strasbourg Agreement Concerning International PatentClassification (November 6, 2004)

•Vienna Agreement Establishing an InternationalClassification of the Figurative Elements of Marks(November 6, 2004).

•Copyright Treaty WIPO (March, 6, 2005) •WIPO Performance and Phonograms Treaty (March, 6,

2005) All Treaties are effective as of said date. They are harmo-

nized by the Agreement on Trade-Related Aspects ofIntellectual Property Rights (Annex 1C of the MarrakechAgreement from which the WORLD TRADE ORGANIZA-TION, WTO, was created in 1994. The Republic of Armenia



OBJECTS

Patent

Trademarks andservice marks

Designationof origin

Copyright

Protection ofLayout-designof IntegratedCircuits

LAW

Law on Patent

Law on trademarksand service marks anddesignation of placesof origin

Law on trademarksor service marks ordesignation of placesof origin

Law on copyrightand related Rights

Law on the legalprotection of topographies ofintegrated circuits

DATE OF ENTRYINTO FORCE

January 9, 2005

April 15, 2000

April 15, 2000

July 22, 2006

March 24, 1998

VALIDITY PERIOD

Invention Patent: up to 20years, granted on the basisof a substantive examination(Basic patent), or for up to10 years, if granted without asubstantive examination(provisional patent).Industrial design patents:up to 15 years.Patents on a utility model:up to 10 years.

10 years, term that could befurther extended for multipleperiods of ten years.


The author´s economic rightsshall run for the whole life ofthe author and for 50 yearsafter his death, calculated fromJanuary 1 of the year followingthe year of the author´s death.

The exclusive right to use topography shall be validfor 10 years.

COMMENT

The Patent owner may assignits patent to a natural or legalperson.This assignment shall beregistered with thecorresponding office,otherwise the assignmentshall be null.

Based on a licensingagreement, the owner of atrademark may grant another person a permissionto use the trademark.

If an International Treaty ofwhich the Republic ofArmenia is party definesrules other than those setforth by this law, then thenorms of the InternationalTreaties shall apply.

The economic rights of theauthor holding copyrightcould be transferred byinheritance.

Where an identical originaltopography, independentlycreated by a different inventor, exists, the generalperiod of validity of the exclusive right to use the topography may not exceed10 years.

was admitted to WTO on February 5, 2003, thereby estab-lishing its supremacy over the laws of the Republic ofArmenia and other national regulations12.

The Republic of Armenia protects intellectual propertyand their use in commerce. Among intellectual propertiesare: works of scholarship, literature and artistic works, per-formances, phonograms and transmissions of broadcastingorganizations, inventions, utility models, industrial design,achievements related to new varieties of plants and newforms of animal breeding, topology of integrated circuits(layout-design) and undisclosed information, includingsecrets of production (“know how”). The second regulatedobjects include firm names, trademarks and services marks,and names of places and designation of origin.

The right to intellectual property arises from the fact ofcreation or as a result of granting legal protection accord-ing to the procedure set forth in the Civil Code or any otherlegal act relating to the subject. Furthermore, the right tobe recognized as creator of intellectual property, belongingonly to the person, whose creative work resulted the cre-ation of intellectual activity, is considered personal, non-property, inalienable, non-transferable, and effective with-out the limit of time13. Therefore, the author has the legal-ly recognized and protected intellectual property objects´right of use at his own discretion. The use of the objects byother persons is allowed only with the consent of the hold-er of the right, unless otherwise provided by the law.

Intellectual property rights may be protected as follows:recognition of this exclusive right (Civil Code, Article 14), rein-

statement of the situation existing before right violation ,stopping the activities that violated the right or created athreat of its violation, applying consequences of invalidity ofa void transaction, recognition of avoidable transaction asinvalid and application of consequences of its invalidity,recognition of the invalidity of an act of state or local self-gov-ernmental authority, non-application by the court the act ofstate or local self-governmental authority, which contradictsthe law, self-protection of a right, enforcement performanceof obligation by in kind, compensation for losses, award ofpenalty and termination or alteration of a legal relation andother means provided by the law. Article 1110 further extendsthose means of protection of property rights, by allowing theseizure of all material objects which helped the violation ofsuch exclusive rights or created as a result of such violation.It also requires the compulsory publication about the breach,including the identity of the owner of the right.

The Intellectual Property Agency was established in March,2002 under the direction of the Ministry of Trade andEconomic Development, in order to centralize the tasks andcontrol over intellectual property. This Agency receives andexamines applications related to industrial property andmicrocircuit topologies, grants patents and certificates, keepsstate records, examines claims and oppositions againstgranting of patents or certificates, publication of works andthe registration of the agreement on use of license, etc.

There are different rules in relation to protection granted tovarious types of intellectual property and their exploitation. Thefollowing are in force regarding patents and trademarks:



Current valid texts on patents and trademarks.Source: The Federation of International Trade Associations14

OBJECTS

Patent



Copyright


LAW

Law on Patent






January 9, 2005

April 15, 2000

April 15, 2000

July 22, 2006

March 24, 1998

VALIDITY PERIOD






COMMENT






OBJECTS

Patent



Copyright


LAW

Law on Patent






January 9, 2005

April 15, 2000

April 15, 2000

July 22, 2006

March 24, 1998

VALIDITY PERIOD






COMMENT






Patent related laws (Article 41), Copyright and relatedRights (Article 71), Integrated Circuit Topographies (Article13) and Trademarks or Service marks or Designation ofOrigin (Article 48) state that foreign citizens or residents shallenjoy the same rights and bear the same responsibilities asthe citizens and residents of the Republic of Armenia, underthe international treaties to which the Republic of Armenia isa party or on the basis of the principle of reciprocity.

The Law on Patents sets forth that the inventions, utili-ty models or industrial designs created in the Republic ofArmenia may be patented in foreign countries. Before filingthe corresponding application, inter alias within the frame-

work of the International treaties, before an InternationalAuthority, said application must be filed with the author-ized State body and must also state the applicant’s inten-tion to patent it in a foreign country. If within three monthsafter filing the decision of patenting the object abroad, theauthorized State body does not prohibit said patenting (onthe grounds provided by sub-clause 6 of Article 4 of theLaw on Patents), the person then may act at his discretion.Any infringement regarding the procedures, established bysub-clause 2, Article 40 of the Republic of Armenia Law onPatents shall result in liability according to the Republic ofArmenia effective legislation (Law on Patents, Article 40).



Finally, the inventor or owner of the topography rights cre-ated in the Republic of Armenia may require legal protec-tion in another country (Law on Legal Protection of

Topographies of Integrated Circuits, Article 12).In case there is an infringement of a right previously

mentioned, Criminal Code provides as follows:

CRIMINAL CODE: CHAPTER 19 - CRIMES AGAINST CONSTITUTIONAL HUMAN RIGHTS AND FREEDOM OF CITIZENS

OBJECT

Patent(Article 159)

Infringement ofCopyright andrelated rights(Article 158)

Rights related totrademarks(Article 197)

INFRINGEMENT

Illegal use of patent right or dissemination of information concerningits nature without the applicants consent, misappropriation of authorshipor compulsion to coauthorship.

Illegal use of copyright and related Rights or misappropriation ofauthorship, given that this action has caused great damage.

Illegal use of trademarks, service mark or firm name, giventhat the action has caused great damage.

PENALTY

Fine at a rate of 200 to 400 timesminimum salary or imprisonment fora maximum term of two years.

Fine at a rate of 200 to 400 timesminimum salary or imprisonment fora maximum term of two years.

Fine at a rate of 300 to 500 timesminimum salary or arrest fora maximum term of two months.

The core elements of patents granted to new varieties ofplants and new breeds of animals are the following: CivilCode establishes rights to new varieties of plants and newbreeds of animals must be protected when a patent hasbeen issued (Civil Code, Article 1157) through a processregulated by the Law on Patents. Notwithstanding article 5of the said law, the law states the following shall not consti-tute patentable inventions: plant and animal varieties,essentially biological processes for the production of plantsand animals, processes that modify the genetic identity ofanimals and animals resulting from such processes,processes for cloning of human beings, uses of humanembryos for industrial or commercial purposes, processesfor modifying the genetic identity of human beings, topogra-phies of integrated circuits. However, Law on Protection ofSelection Achievements establishes a mechanism by whicha patent is granted with the purpose of protecting new vari-eties of plants and animals (see Article 4).

In order to create a favorable environment for the normaldevelopment of the economy based on a free market econ-omy, encourage foreign investment and improve economic

competition, two essential laws were passed: the Law onProtection of Economic Competition (November 6, 2000)and the Law on Protection of Domestic Market (April 18,2001). The former defines the relations within market play-ers related to unfair competition15. This law applies to theactivities and conducts of private economic entities, andGovernment bodies and local self-government bodies, aswell as their officials which do or might give rise to econom-ic competence restrictions, preventions or prohibitions, aswell as to acts of unfair competition, except for cases pro-vided by law and prejudice caused to consumer rights.However, this law does not apply to relations associated tointellectual property rights, except when these rights areused for the purpose of restricting, preventing or prohibitingeconomic competition (Law on Protection of EconomicCompetition (November 6, 2002, Article. 2, paragraph 1 and2). The latter law promotes anti-dumpling measures on prod-ucts imported to the territory of the Republic of Armenia.

Since July 22, 2006 a new law on copyright and relatedright has been effective and Civil Code of the Republic ofArmenia was respectively amended.



Nowadays, the Republic lacks the necessary structures,mechanisms and policies to ensure a correct developmentregarding innovation. For this reason, the Government,through the Ministry of Trade and Economic Developmenthas taken certain steps to create the legal basis and favor-able conditions to promote the innovation process16.

At this time, clear steps are taken for the purpose of adapt-ing the Armenian legislation to the current situation in theworld. Intellectual property rights are recognized by the con-stitution and are of great importance. The rules tend to coverall possible issues regarding this subject, and State bodiesguarantee the protection of the legally recognized rights.

One very important issue is the granting of patents tonew varieties of plants and breeds of animals due to theirimmediate agricultural consequences.

7.5 Technology, Seeds and Genetics

There are several laws regarding genetic regulation andbiotechnical security. The purpose of said laws is to pro-tect the environment and to guarantee citizens the possi-bility to live in a healthy environment. Constitution Articles8 and 10 are the basis of said rules.

It should be noted a "Law on Flora" has been approvedwhere the concept of a “genetically modified organism” isestablished understood as any living organism having a newcombination of genetic material obtained using modern bio-logical technology (according to Cartagena Protocol on Bio-safety definition, Convention on Biological Diversity17). Inorder to protect country’s flora and fauna, the following isprohibited: illegal import of plant and animals for selectiveuse and acclimatization, non-regulated use of fertilizers andtoxic substances, unjustified use of modified living organ-isms created through biotechnology18.

However, the legislation does not govern the access togenetic resources nor the distribution of the benefitsderived thereof.

Law on Protection of Selection Achievements definesselection achievement as a plant variety acquired by anartificial way, having one or several economic characteris-tics distinguishing it from existing plant varieties and the

breed of animals raised by a man, which possessesenough inborn quantity of characteristics in order to bedistinct from other breeds of animals and to be bred asseparate breed, that is to say multinomial group of animalswith the same origin. The right regarding selection achieve-ment shall be protected by law on Protection of Selectionachievements and other related legal acts and shall haveto be certified by a patent issued by an authorized Statebody. Once the patent is obtained, the object shall be reg-istered with the State Register of Protected SelectionAchievements. Patent term shall be 20 years as from thedate of registration. Moreover, for grapevines and orna-mental plants varieties, fruits and forest trees (includingrootstocks) said period shall be 25 years.

In addition, patent for the object governed by law onProtection of Selection achievements shall be issued follow-ing four criteria: the variety should be new, distinct, homo-geneous and stable. Selection achievement shall be desig-nated by a name so that it can be clearly identified. Beforegranting a patent to a new variety of plant, said plant shallbe subject to a preliminary evaluation in which the four cri-teria before mentioned will be considered. If the Republic ofArmenia Agricultural Ministry (authorized state body) grantsthe patent, the new variety shall be registered. Should thefile be rejected, the applicant can appeal to the authorizedbody requiring repeated preliminary examination.

Patent owner rights are clearly protected under the lawgoverning selection achievements protection. Patentowner has the exclusive right to prohibit third persons fromusing patented selection achievement without his/her per-mission, as well as use it at his discretion provided suchuse does not infringe other patent owners’ rights.Nevertheless, under a license contract patent owner maygrant a permit for patented object use, inter alias produc-tion, reproduction, conditioning of the seed material for thepurpose of further propagation, offering for sale, sale orother way of realization, export from the Republic ofArmenia, import in the Republic of Armenia and storage forthe mentioned purposes (these contracts shall be regis-tered with the authorized State body).Nevertheless, it shallnot be considered as an infringement of patent ownerexclusive rights above mentioned should the selection



process be used for private and non-commercial purpos-es, experimental purposes or as an initial material forbreeding new plant and animal varieties purpose(Law onProtection of Selection Achievements. Article15). However,in cases of public interest and national security, in situa-tions of emergency, and in cases of public non-commercialuse, the Government of the Republic of Armenia isempowered to use or authorize third parties to use a selec-tion achievement without patent owner consent, providedpatent owner is notified within 10 days and paid adequateremuneration taking into account each case and the eco-nomic value of such authorization (Law on Protection ofSelection Achievements, Article 17, paragraph 6). Authorof objects, who is not the patent owner, governed by theabove mentioned law has the right to receive a certificateof authorship, and if he/she is not the patent owner, toreceive remuneration to be paid by the patent owner forthe use of this new variety. The amount shall be deter-mined by contract (Law on Protection of SelectionAchievements, Article 14).

Foreign natural persons and legal entities shall be cov-ered by Armenian law, on the basis of international treatiesto which the Republic of Armenia is a party, or on the basisof reciprocity, and shall bear the same liability as naturalpersons and legal entities of the Republic of Armenia (Lawon Protection of Selection Achievements, Article 21).

Specifically, Law on Seeds establishes seeds import /export shall only be carried out upon registration in the listof usual varieties and shall bear a certification.Certification shall match variety and quality standards aswell as sanitary standards for the Republic of Armenia,whether for import or export. In addition, these seedsshould be adequately packed and sealed, and shall speci-fy their seed variety, class, quantity, packing date and typeof chemical process undergone.

Seeds imported to Republic of Armenia customs territo-ry shall be examined by the authorized entity, which willcontrol data on seeds labels packages match certificationthereof. Seeds packages without labels will be dischargedand denied the possibility to be used in the national terri-tory. Imported seeds will undergo a sample test andresearch will be carried out in authorized laboratories; later

seeds will be cultivated in experimental fields. The personwilling to do the importation has the right to require the useof an efficient field to test the seeds. Once the test ismade, the Ministry of Agriculture is empowered to author-ize the use of the seeds in the country, provided such testsdo not violate the above mentioned law and seeds matchthe required technical standards.

The Republic of Armenia has signed the InternationalPlant Protection Convention (IPPC) and the Convention onCreation of the European and Mediterranean PlantProtection Organization. For this reason, the Governmentof the Republic has sought for many years to adapt theinternal legislation to the required international standards,in order to promote and guarantee the creation of highquality seeds, encourage agriculture and placing Armenianproducts on international markets.

7.6 Phyto-sanitary barriers

There are several State bodies in charge of sanitary andphyto-sanitary controls. They are under the Ministry ofAgriculture, the Ministry of Trade and EconomicalDevelopment and the Ministry of Health.

The Republic of Armenia has a quarantine list with morethan 90 insects, diseases and weeds varieties19. SeedsImport and export certificates are issued in accordancewith this list, so that they match the standards required bythe importing countries. One of the bodies in charge is thePlant Quarantine Inspectorate. For imported products onlya provisional phyto-sanitary certification is issued, havingto be confirmed by Internal Customs before the product isfree to be used. Material bought abroad shall be deliveredto an authorized custom center near Yerevan before finalinspection, testing and authorization. If the imported mate-rial is seeds for cultivation, an inspection and an authoriza-tion are required by the Ministry of Agriculture. It is esti-mated phyto-sanitary approval shall be issued within 24hours20. Procedure assures double responsibility isinvolved. In the event of export sales, each region agentswill be in charge of the corresponding inspection.

One of the problems arising from this mechanism is that



according to the product to be imported, plants andprocessed materials of plants may be subject to furtherinspection by Quality Inspectors Group, under Ministry ofTrade and Economical Development. This means func-tions and responsibilities of different governmental bodiesare divided. In turn, laboratories used for testing importedpesticides do not have the necessary resources asrequired by the Armenian law21.

Law on Plant Protection and Plant Quarantine includes anespecially important chapter. In order to eliminate quaran-tine pests introduction and dissemination risks, as well asthe ones related to infested plants and plants products,these materials can be confiscated and destroyed by aState inspector decision. The cost arising from such prod-ucts confiscation and extermination shall be compensatedprovided it does not occur as a result of owners´ non-fulfill-ment with legal phyto-sanitary measures and it has notcaused any damage to environment or national interests(Law on Plant Protection and Plant Quarantine Article 23).Legal and natural persons shall have the right to appealauthorized state bodies actions regarding plant protection,and may demand compensation for damages, including lossprofit caused by illegal acts or inactivity of the state (Law onPlant Protection and Plant Quarantine, Article 12).

7.7 Animals

Animal world is natural wealth and is under exclusiveownership of the Republic of Armenia.

In 2000 the Republic of Armenia Law “On Animal world”was adopted, which determines the state policy on protec-tion, maintenance, use and regeneration of wild animals.

7.8 Agricultural Workers Labor LegalScenario

Everyone has freedom to choose his own work(Constitution, Article 22). Since June 21, 2006 the newLabor Code of the Republic of Armenia is effective It regu-lates the collective and individual labor relations, deter-

mines the basis and order of exercising such rights, chang-ing and termination of such relations, rights and duties,liabilities of parties to a labor relation, as well as conditionsof ensuring the safety and health of employees.Furthermore, it states that any type of mandatory work andviolence to the employees is forbidden.

The employment relations arise based on a writtenemployment agreement. The employment agreement maybe concluded for a certain term or for an indefinite term.The employment agreement may be concluded with citi-zens, from 16 years old on, or with citizens from 14 to 16years old upon written consent of one of his/her naturalparents, adoptive parents or curator. Agreements ofemployment with citizens up to 14 years old or involvingthem into work is absolutely forbidden. Foreigners are enti-tled to work in Armenia based on work permit (Law onForeigners, Article 22). The law on foreigners also deter-mines the cases when the foreigners are entitled to workwithout work permit.

The parties in employment relations are equal regard-less of sex, race, nationality, language, origin, citizenship,social state, religion, martial and family status, age, beliefs,view points, memberships in political parties, trade unionsor public organizations, other circumstances not connect-ed with employment qualifications.

An employment agreement may be concluded for sea-sonal work. On August 25, 2005 the Republic of ArmeniaGovernment adopted a decree confirming the types ofjobs, which are considered to be seasonal. The list of sea-sonal jobs includes agricultural work, including:

a) presowing works,b) spring agricultural works,c) cropping works,d) post cropping works,e) organization of birth of agricultural animals,f) feeding and care of newborn, up to 4 months, inclusive,g) cattle pasturing,h) organization of shear.

In order to conclude an employment agreement, theemployer is obliged to request the following documents:

• Identification Document,



• Employment record book (except for the employers,who are employed for the first time and joint work)andsocial security card and in case of absence of socialsecurity card, reference thereon,

• certificate on education or necessary qualification, incase if in accordance to Labor Code, the job is con-nected with specific professional and educationalqualification,

• reference on good state of health (sanitary book),in caseof the employment for which the employment agree-ment is concluded, needs preliminary and periodicalmedical examination, as well as in case of conclusionof an employment agreement with the citizens youngereighteen years old.

• written consent of one of the parents or adoptive parentsor curator, if the employed is a citizen of 14-16 years old.

• other documents prescribed by the law or other nor-mative legal acts.

Since January 1, 2008 the minimal monthly wage isAMD 25,000 (Law on Minimal Monthly Wage, Article 1). Foreach hour of night work and overtime work, performedupon the request of the employer the employee shallreceive additional payment in the amount of not less than1.5 times of hourly rate. For each hour of overtime work,performed upon the consent of employer and employees,the employee shall receive additional payment in theamount of not less than hourly rate.

Normal work time may not exceed 40 hours per week.The employees are entitled to have breaks lasting not morethat 2 hours and not less than 30 minutes for rest andlunch. Uninterrupted rest per week may not be less than35 hours. The employees are entitled to an annual leave for28 calendar days.

The employees are free to assemble in trade unions.An employee is entitled to terminate an employment

agreement concluded for an indefinite term, as well as anemployment agreement concluded for a definite term beforeexpiration of the term thereof by notifying the employerthereon in writing at least fourteen days prior to termination.

An employee is entitled to terminate an employmentagreement concluded for an indefinite term, as well as anemployment agreement concluded for a definite term, before

expiration of the term thereof by notifying the employerthereon in writing at least five days prior to termination, if ter-mination of the employment agreement is related to illness orwork injury which hinders his work, or due to other soundreasons determined by the labor agreement, or when theemployer does not perform the duties set by the employmentagreement, violates the law or the collective agreement.

An employer is entitled to terminate an employmentagreement concluded for an indefinite term, as well as anemployment agreement for a definite term before expira-tion of the term thereof in the following cases:

1. liquidation of the company (termination of the activityof individual entrepreneur),

2. bankruptcy of employer,3. reduction of employees’ numbers, conditioned by

changing production volume, economic, technologi-cal conditions work organization parameters, as wellas production necessity,

4. if the employee does not comply with the positionoccupied or performed work,

5. unsatisfactory results of probation period,6. nonperformance or improper performance of

employee’s duties,7. losing trust toward the employee, 8. long-lasting disablement of the employee (if the

employee did not report for work during more than 120continuous days, temporary disablement or within lasttwelve-month period the employee did not report forwork more than 140 days, in case if the law or otherlegal acts do not state that for certain types of dis-eases the position should be kept for a longer period),

9. retirement of the employee,10. other cases determined by the Republic of Armenia

Labor Code.

The employment agreement may be also terminated:• based on an effective verdict of the Court, in accordance

with which the employee has been exposed to suchpunishment, which does not allow to continue the work,

• when the employee is deprived from special rights ofperforming certain works in a manner prescribed bythe Law,


157

• when the employee is from fourteen to sixteen yearsold, and one of the parents, the adoptive parent orthe curator, the doctor taking care of employee'shealth or the Employment State Inspector requirestermination of employment contract,

• upon entering temporary military service, not later thatthree days prior to the term mentioned in the relevantnotice,

• upon death of the employee - the employer unilateral-ly terminates the employment agreement from theday of employee's death.

While terminating the employment agreement prior toexpiation of the term thereof, the employer is obliged tonotify the employee in writing in the following terms:

• liquidation of the company (termination of the activityof individual entrepreneur), as well as in case ofreduction the number of employees conditioned bychanging the volume of production, economic, tech-nological conditions and conditions of work organiza-tion, as well as production necessity - not later thanbefore two months,

• if the employee does not comply with the occupied posi-tion or performed work, as well as in case of retirementof the employee - not later than before two weeks,

• in case of unsatisfactory results of probation period -before three days.

Should the employment agreement be terminated dueto company’s liquidation, bankruptcy of an employer,reduction the number of employees, when the employee isnot offered another job, the employer will pay the employ-ee dismal allowance in the amount of employee's one-month salary. And when the employment agreement is ter-minated because of non-compliance of the employee withoccupied position or performed work, retirement of theemployee, as well as reduction the number of employees,when the employee refuses to perform the offered job,which corresponds to the profession, qualification andhealth of the employee, as well as entrance of temporarymilitary service, the employer will pay the employee dismalallowance in the amount of employee's two-week salary.

For disciplinary violation, the following sanctions maybe applied to the employee:

1. warning,2. strict warning,3. Termination of employment agreement (in case of non-

performance or improper performance of the duties ofthe employee or in case of losing trust toward theemployee),

In case of change of employment conditions or termina-tion of employment agreement by the initiative of employ-er the employee may seek the remedy in the court.

7.7 Conclusions

As from 1991, many legislative reforms were made bythe Government of Armenia in order to harmonize the inter-nal laws and regulations to the political, economic andsocial contemporary conditions. Regarding the subjectsanalyzed in this chapter, legal regulatory framework of landand water are the more developed ones.

Certain challenges remain: • regarding laws on protection of incorporated technol-

ogy and genetic creations, even though current legis-lation covers necessary conditions to rule and protectnew varieties genetically modified insertion, provi-sions to govern access to genetic resources and dis-tribution of its benefits is still missing. Consideringcurrent up-grades in these issues, the preliminarydraft of the bill on modified living organism oncepassed shall complement the existing laws.

• Regarding the protection of biodiversity as well as thephyto-sanitary barriers, it should be noted a greatvariety of regulations govern the topic.

• Nevertheless, responsibilities and functions of differ-ent empowered entities for the phyto-sanitary inspec-tion are super-imposed, duplicating the work. Thepurpose of the law is protection of the flora and faunaas well as human health.

• It should be noted private interests are protected bynorms provided they are not contrary to existing laws.



1 See item 2 on limitations on the use of land.2 Civil Code, New Land Code, “Law of the Republic of Armenia onstate registration of property rights”, April 1999. It establishes thatrights on immovable property such as use, committments, mort-gages and servitudes must be registered with the State.3 RA Ministry of State Property Management (2003). “WhatInvestors need to know about Armenian Legislation”. Available at<http://www.privatization.am/old/>4 Organization for Economic Cooperation Development OECD(2001). Water Management and Investment in the New IndependentStates. page 43.5 Defined as: all surface and underground waters, includingstreams, rivers, springs, swamps, lakes, ponds, cumulated snow,glaciars, aquifers and any other water bodies, including seasonalwater resources. 6 As defined by the article itself. 7 A Union is understood as a non-profit voluntary group of associ-ations operating the irrigation system, acting within the authoriza-tion delegated by those associations that compose it (Article23They must be registered with the State (Article8).8 They may be renewed at least 6 months prior to expiration of thepermit term.9 Structures used to modify water course. Some of them may bedams, reservoirs, channels, distribution tubings, purifying plants,aqueducts, etc.10 These agreements were signed by the USSR but the Republic ofArmenia is acknowledged as the successor state, and consequent-

ly, bound by such agreements (Available at: <http://www.waterwi-ki.net/index.php/Armenia#Legislation_and_Agreements>11 Republic of Armenia Intellectual Property Agency (2008).Available at <http://www.armpatent.org/english/> (on: 05/27/2008)12 World Trade Organization, WTO. Working Team Report onArmenia accession to the WTO, Paragraph 36. Available at:<http://www.wto.org/spanish/thewto_s/acc_s/completeacc_s.htm#arm> 13 In case the creators of the results of the intellectual activity aretwo or more persons, they shall be recognized as cocreators (CivilCode Art. 1103).14 Available at:< http://fita.org/countries/marche_86.html> (on:May 28, 2008).15 Ministry of Economy of the Republic of Armenia. Market andCompetition. Available at: <http://www.mineconomy.am/en/21/>(on: May 28, 2008)16 Arzumanyan, Tigran (2006). Current issues on research, devel-opment and innovation in Armenia. At: INt. J. Forsight andInnovation Policy, Vol. 2 (2), p. 141.17 Ratified March 16, 2004 by the Government of the Republic ofArmenia.18 Republic of Armenia - Ministry of Natural Protection (2004). Op.Cit. P. 10. 19 World Bank, Armenia’s rural economy. From transition to devel-opment, Washington, 2005 P. 57.20 Ibid. P. 73.21 Ibid, P. 61.

Notes


chapter 8

InternationalOrganizations’StrategicRecommendations for AgriculturalDevelopment inArmenia


Chapter 8 - International Organizations’ Strategic Recommendations for Agricultural Development in Armenia 161

8.1 Short and medium term

Taking into account the current agricultural setting inArmenia, various actions recommended by some internation-al organizations1 to maximize crop yields are mentioned here:

1. To design a development strategy for crops and for fruitand vegetable production a short term action plan (STAP)is required. This plan is based on an identification draftfocusing on areas of comparative advantage within theframework of resources, their potential, profitability, andmarket sale feasibility;

2. Increase the seed variety range accessible to farmers;

3. Encourage the private sector to import, multiply anddistribute technical improvements; increase the efficiencyof the administrative procedures relevant to seed certifi-cations;

4. Develop recommendations to make sowing more prof-itable as a means to reduce production costs andincrease yields;

5. On the basis of the present trends regarding basicproducts and input prices and of the knowledge of soilsand fertilizers, it is necessary to determine and announcethe benefits obtained by maximizing fertilizer use for themain crops in the principal production areas.

6. Considering the present trends regarding basic prod-ucts and input prices and of the knowledge of crop pro-tection, it is also necessary to identify low cost tech-

Chapter 8

International Organizations’ Strategic Recommendationsfor Agricultural Development in Armenia

niques to face weed systems and pest control, appropri-ate for small producers of grain, vegetables, fruit andindustrial crops;

7. Taking into account a realistic evaluation, it is neces-sary — employing suitable mechanisms — to determinethe profitability of adopting such technologies for eachcrop. Data gathering precision and questionnaire uni-formity are the basis of the success of reliable meas-urements. Once the cultivation areas where yield has increased areidentified, the practices must be made known to all levelsof production in each sector, through all the stages ofgeneration of the product.

8. Extension services to encourage farmers to diversifytheir profitable crops by developing packages enablingthem to continue with their crops but, at the same time,to develop others that are of interest to the various sec-tors of the production chain. The objective is to lower theimport of crops that may be produced in the arable terri-tory. This can be carried out through demonstrations atagricultural establishments and visits to farms, amongother activities, as well as by informing farmers on therange of available markets for new cultivation productsand on the type of products these markets seek. Diversification should be mainly based on:

a) Cultivation of oilseed plants and of grain for cattlefeeding;b) Crops that have a short ripening cycle. In thesecases double crops may be planned in irrigated areas,thus increasing farmers’ incomes as well as agricultur-al and non-agricultural employment;



c) Fodder crops. These offer the improvements need-ed to feed cattle and for nutritional improvement: alfal-fa and pasture, leguminous plants and mixtures;

9. The government and the donor community must pro-mote the creation of producer associations as a means tospread and support the adoption of better managementtechniques, loss reduction at small agricultural establish-ments and diversification towards more profitable cropsand better markets for their products, with an internation-al focus, in the context of a favorable price growth in agri-culture;

10. To address the issue of the fragmentation of the land,it is necessary to develop the markets for its output andto consolidate pilot projects, based on land use and onthe micro-regional development concept consideringgeographic and natural differences and coincidences andthe country’s cultural heterogeneity;

11. Intensification and heightening of current require-ments for land preparation with systems that may reducecosts particularly regarding grains, with good auxiliaryequipment currently not available in Armenia.

12. Crop practices and drought mitigation measures. Themain problems arise from drought in unirrigated areas;support areas for the most vulnerable groups of the agri-cultural community are suggested. The minimum farmingprinciple should be introduced as a pilot test. This princi-ple brings in cultivation practices to increase water infil-tration and storage in the soil profile. This, together withstubble for soil protection and structure improvement,has categorically demonstrated that drought effects canbe efficiently mitigated in a relatively short time.

8.2 Agricultural production for cattleraising: short term strategies

1. The production and use of fodder resources require acomprehensive plan in which pasture management is animportant component;

2. Detect and develop fodder crop production as part ofthe STAP;

3. Increase extension services in order to promote thedevelopment of seeds and grains high in proteins and ofother fodder crops; diversify crops to compensate forpasture deterioration and to improve animal feeding;

4. Develop extension and research services at low cost,to identify silage systems and develop related require-ments for agricultural machinery as an alternative meansto improve the quantity and quality of the crops at theirvarious implementation stages;

5. Promote research and extension services to developlow cost food adjusted to recommendations on a smallscale for commercial farms as a basis for improvingyoung population growth rates, reducing the age of firstdelivery and shortening breeding intervals;

6. The government and donor community should pro-mote the generalized creation of producers’ associationsas a means of spreading and supporting better manage-ment practices for cattle raising;

7. Continue to subsidize artificial insemination in order tokeep up the genetic stock;

8. Launch an animal identification program all over thecountry with the help of donors, as a preliminary condi-tion for breeding;

9. Regarding milk production, increased training on thestandards of hygiene needed for the production of good-quality milk should be considered a high priority;


Chapter 8 - International Organizations’ Strategic Recommendations for Agricultural Development in Armenia 163

10. Promote the diversification of extension services ordonor support:

a) Sheep business reorientation to the production ofcheese and meat. Genetic resource imports will berequired;b) Development of goat breeding for milk productionand goat cheese manufacture. Adequate managementof pastures and development of advisory services willbe necessary;c) Improvement of small-scale pork productionthrough improvement in food, reproduction and healthmanagement practices.

In short, the government, companies and civil societyshould undertake a series of actions in order to achieve theeagerly awaited development of sustainable agriculture.Although there is a long way to go, everything indicates thatjoint action by the different sectors of society will enableArmenia to reach the rank it deserves within the competitiveinternational situation as regards commodities production.

1 Considering recommendations by United Nations DevelopmentProgramme (UNDP), United Nations Food and AgricultureOrganization (FAO), United Nations Economic Commission forEurope (UNECE) and World Bank.

Notes


chapter 9

FruitfullArmeniaProposal


Chapter 9 - Frutifull Armenia Proposal 167

Chapter 9

Frutifull Armenia Proposal

Our proposal for the enhancement of agro productiv-ity in the Republic of Armenia is based on four mainaspect, which represent the foundations to build a rea-sonable medium-term agriculture Master Plan:

1- Agro productive zoning2- Adoption of new technologies3- Improvement of legal framework4- Financial strategy

Agro productive zoning

WHY does Armenia need to develop agro- productivezoning:

The worldwide increase in commodities value, due tohigher demand, highlights even more the competitiveadvantages in different regions of the earth at the time ofyielding. The main food producing countries concentratetheir efforts and specially their resources - soil, water, cli-mate - on those outputs where they have more advantagesso as to reduce their efforts on those where they cannotcompete against more efficient producers.

The increasing demand of these products, the subse-quent raise in prices and the inability to control domesticinflation have an impact – to a greater or lesser extent – onthe entire globe. Policies such as consumption subsidies orexport restrictions are applied obtaining different levels ofefficacity, but at the end they are only corrective measuresof market distortion not a real solution to the problem.

Directing the course of production to its maximum pos-sibilities is not only a good strategy but now an urgent need.

Each country must address its strategy towards region-alization, define the best areas for each different possibleproduction, choose applicable technologies and finally,define the necessary infrastructures (roads, railways,

energy, water, storage points, etc.) to reach this target.Agricultural traditions must give way to new technologies

and organized production plans reinforcing productivity.Probably in fifteen or twenty years as from today techno-

logical development now in force will be commercially avail-able all over the world and productivity increase may com-pensate human demand once again. Until that time it will beimportant to consider the position held by each country toface the present situation.

THEREFORE the new scenario should have some ofthese features

Farm surface:These processes will undoubtedly generate – especiallyin the most extensive productions – a necessary increasein the productive unit per producer; small surfaces willonly withstand intensive productions with state of the arttechnology and high yield mainly assigned to supplydomestic market (vegetables, fruits, etc.)In some places the land redistribution process was inthe hands of the market, in other places the State tookpart regulating transactions. Such redistribution doesnot necessarily imply the transfer of property from oneproducer to another; long term rental systems arebeing very successful in different parts of the world.

Internal MigrationProductive unit increase shall generate country´s inter-nal migrations from rural to urban areas Particularly inArmenia, a considerable number of the rural popula-tion comes from urban areas, without agricultural tra-dition and probably, they do not feel comfortable withthis situation.These internal migrations will be sustained by the exist-ing high education level skills. Unlike the rest of theworld, one of the factors which made the deepestimpression on us during these years working in Armeniais the education level of the population. We put special



emphasis on the high level of literacy (considering it asan advantage) there being no appreciable differencesbetween the urban population and the rural one, a factconsiderably noticeable in other regions of the world. Inour opinion this is a great element we can count with forthe fast transformation of national agricultural sector.

As it was stated at the beginning of this book, there arethree elements which define the agricultural potentials of aregion. They were given to us by Mother Nature. Our chal-lenge is to take care of using them in the best possible ways,not forgetting to preserve it. The land is something our grand-fathers gave us to use it but to be returned to our children

The key resources: water

The deep concern of the world about the unavoidable oilshortage is a minor issue compared to the potable water cri-sis humanity is facing. While the first one will certainly besolved with alternative energy sources, the water stock isnot renewable nor even replaceable.

The challenge is not only to take care of the water avail-ability but also of its quality. For this reason, all measuresfocused on the protection of natural and artificial watercourses and reserves must be maximized.

A very important comparative advantage for agriculturaldevelopment in Armenia is the possibility to count on withenough water resources for the development of agricultureas well as for the supply of drinking water for the population.

Different water courses in arheic and endorheic basins,the provision of water coming from international courses,the underground aquifers like the one at the Ararat valley,grants the country sufficient total volume of water, a priori,to cover the needs mentioned before. Nevertheless, arational water manage strategy must be planned so as tocapture seasonal excess water and administer its use on thefield, based on a new productive setting related to a mastergeneral plan independently from the existing structures.

Furthermore, taking into account agriculture locationaccording to country’s natural topography, is performedmanly in the flat areas and water resources locations are in

the higher areas- there are not greater energy requirementsfor pressurization of modern irrigation systems, naturalmanometric heights may be used. In some cases the samewater used for irrigation may generate electricity, increasingthe rural sector supply.

The construction of several dams strategically located, thereconstruction and construction of adequate main conductionsystems that would reduce transport losses, the constructionof intermediate reservoirs that would balance water offer andfinally the use of pressurized watering equipment, sprinkling,micro-sprinkling and drip irrigation shall enable the use of thewater resource in a more rational and efficient manner.

With the traditional gravity irrigation methods it is impos-sible to reach efficiency levels over 35%, while not less than80% efficiency can be expected with mechanized sprinklingand 90% with drip irrigation, i.e. the double or more can bewatered with the same amount of water without taking intoaccount the considerable improvement in quality and homo-geneity that can be reached.

Another issue of vital importance is the preservation ofthe water available, protecting water courses and reservoirsfrom any type of contamination.

Water ManagementWater Associations, which deal with the management of

their supply, are an important tool to reach this goal, buttheir ruling policies must be standardized and final usersmust be made conscious of the importance of paying for theirrigation royalties in due time and form, so as to keep thesystem running adequately.

The development of conduction and irrigation infrastructuresand their preservation should be rewarded with the correspon-ding payment of royalties by the users without exception.

Armenia currently irrigates approximately 286,000 ha,and has sufficient resources to reach more than 650,000 ha.



AraratVayots Dzor

Gegharkunik

Tavush

LoriShirak

Syunik

Armavir

Aragatsotn Kotayk

Yerevan

Lori Cereals (wheat, barley)PotatoFruit (apples, pear, plums)Vegetables (tomato, beans,cucumber)

ShirakCereals (wheat, barley)PotatoVegetables (cabbage, beans)Fodder

AragatsotnSub-mountainousGrapes Fruit (apricot, peach, apple)Vegetables (tomato, cucumber,onion)Cereals (wheat, barley)MountainousCereals (barley)Fodder

ArmavirTruck crops (watermelon,pumpkin)Grapes Vegetables (tomato, cucumber,onion)Fruit (apricot, peach, mulberry)

AraratTruck crops (watermelon,pumpkin)Grapes Vegetables (tomato, cucumber,onion)Fruit (apricot, peach, mulberry)

TavushGrapes TobaccoCornVegetables (tomato, cucumber,onion)Fruit (peach, apple, pomegra-nate)

GegharkunikCereals (wheat, barley) PotatoVegetables (cabbage, beans)

Armenia: Main Crops by Marz

Syunik(Sub-mountainous)FruitGrapes Vegetables (tomato, cucumber)(Mountainous)Cereals (wheat, barley)PotatoFruit (apple, plum)Vegetables (cabbage, beans)

Graphic by United Nations World Food Programme Armenia. Vulnarability Analysis and Mapping (VAM) Unit: February 2003. Data Source: WFP Armenia. The bounda-ries and names shown on the map do not imply official endorsement or acceptance by the United Nations

Vayots DzorGrapes Fruit (peach, apple)Vegetables (tomato, cucumber)



Adoption of new technologies

Which ones?Germoplasms:Vegetal Genetic are suitable for the new world productionreality especially in relation to grains, particularly corn,wheat and barley.

Cycles (maturity) should be adjusted to each zonalrequirement considering the specifics phenologies ofeach germoplasms. Early maturity corn and late matu-rity apricots are two elements that can improve pro-ductivity and harvest safety. Improve drastically seed quality. Variety purity andappropriate growing features favor timely crops andenable management homogeneity, resulting in lowercosts and higher yields.A national law on seeds should be modified to rule theactivity and control seed producers’ activity.

Animal Genetic: for cattle rasing, it is also necessary todevelop a new milk and beef genetic incorporating spe-cific performance breeds and avoiding the double pur-pose scheme. The introduction of semen and mainly highquality embryos will produce in situ generations of greaterquality and productivity animals.

Sanitary Policy: the design of an internal and internation-al sanitary policy strict scheme is top priority so as to pro-tect crops and cattle.

Irrigation:To add pressurized irrigation that would provide a sig-nificant increase in the efficiency of water use, whichwould increase the total irrigation area and improvecrop performance by increasing homogeneity and theopportunity of irrigation. In addition, gravity irrigationprocesses accelerate salinization processes, evident inareas like the Ararat valley, which endanger future soilproduction.

Soil Conservation:To adopt conservationist practices in the agricultural

labor scheme, considering minimum farming as a pre-vious step to direct farming. It is essential to limitweather and water erosion which compromise the soilresource in the near future. To maintain land covered permanently, to avoid baresoils, to rotate different crops regarding a rationalsequence should be clear guidelines to transmit to theproductive sector. Direct farming technology will in addition save irriga-tion water due to reduction in evaporation processesof bare soils.

Pest Controls: To set insect controls with new generation products,banning from the market particularly those organo-chlorinated and organo-phosphorated products, high-ly aggressive to the environment, soil and water pollu-tants as well as dangerous for population’s health. Pest integrated management and biological control aretwo tools requiring to apply only training and discipline.

Machinery:To adjust the number of machines, aiming at new tech-nology equipments, much more versatile, precise andless fossil fuel consuming.The existing current equipment in the country is obso-lete, being highly less efficient (five to ten times) than amodern one. To renew them is a high priority for a sus-tainable production

Improvement of the legal framework

Protecting LegislationLegislation should be established to protect the tech-nologies to be incorporated. Leading countries will notsell their technologies to Armenia if a clear legislationprotecting their rights as creators/owners of such tech-nologies is not in force. The lack of up-graded technologies generates a pro-ductive gap between the various countries and threat-ens future competitiveness.



Market Standarization It is important to set marketing standards for all pro-ductions clearly setting the issues to discount orpenalize in each case. This gives an incentive to pro-ducers to improve their production practices in searchof better prices and higher quality.

Referencial MarketsThe publication of a daily referent market will help pro-ducers, consumers as well as the financial system tohave a real knowledge of the local production valueand to make decisions with a broader knowledge oftheir production marketing.

Financial strategy

The Driver:Financial resources are the true driver for technologyinvestment. They should be directed mainly to financethe master plan and its atomization must be avoided.

all the financial effort should be directed to areas will-ing to invest in technology so as to increase produc-tion, making it safer and foreseeable, generating finan-cial services repayment capacity. Only those farmers adopting the national strate-gic agricultural master plan should receive thebenefits coming from the financial system and thetax incentives.In addition adequate tax incentives for production will be atool to stimulate change and lead the agricultural produc-ers towards banks becoming part of the financial circuit.

Vehicles:Tools such as future markets or warrants will help theagriculture community to obtain better profits organiz-ing crops sales.

Fruitfull Armenia is absolutely convinced Armenia caneasily double its production (reaching even to two and a halftimes) should an integral production plan be applied gener-ating a highly significant impact on national economy.

Water and soil are available to achieve that goal … but Armenia has a much valuable tool,

its human resource,

people needing only to be persuaded this is possible.


the marzes

Marz 1

Aragasotn Marz


Marz 1 - Aragatsotn Marz 175

First records of the territory of Aragatsotn Marz reachback to the ancient and Middle Ages. The area was part ofAragatsotn District, Ayraratyan Province, Mets Hayk.Under the Arshakunis the area was the property of theroyal court, later on it passed to the Smbatuni Ministers.

During the Arab Rule this marz area passed to theBagratunis and was annexed with the Ani-Shirak Realm,owned by the Pahlavuni Earls then.

In this marz we can find the memorial dedicated to thevictorious battle of Bash-Aparan, fought against Turks in1918. We do also find at Oshakan Village the place wherelies the tomb of Mesrop Mashtots the inventor and firstteacher of Armenian Alphabet.

Aragatsotn Marz is located in the foothills and uplands(Aparan and Aragats Districts) of Ararat Plain, on theSouthern and South-Eastern slopes of Aragats Mountainmassive (1.100-3.800m above the sea level). In the EastAragatsotn Marz borders with Kotayk Marz, in theNorth-West with Shirak Marz, in the South-West with

Marz 1

Aragatsotn Marz

Armavir Marz and partly, Yerevan area, and in the Northwith Lori Marz.

From lowlands to the summit of Mount Aragats, thegamut of climatic conditions embraces different zones fromarid continental to mountain-tundra. In lowlands averageannual temperature is +140C, with –20C on the peak ofMount Aragats; in July it varies from +250C to +80C, and inJanuary from -60C to -350C. Average annual precipitationsare 300-800mm. The period of snow cover lasts for 60 days(Ashtarak, Aragats and Aparan Districts). The great river isthe Kasakh with its tributary, the Amberd, whose flow isregulated by the Aparan Water Reservoir.

In Aragatsotn Marz semi-desert, Brown Mountain,mountain carbonate soils and mountain black earth prevail.

The branches of agriculture in Aragatsotn Marz includeanimal husbandry – milk and meat cattle-breeding - sheep-breeding; among the plant-growing branches the followingare practiced: fruit-growing, cultivation of field crops –wheat, barley, cabbage, potato.



MARZINFORMATION

Population

Number of farms

Cattle

Including Cows

Small Livestock

Goats

Swine

Hives

Orchards

Vineyards

Young Orchards

Field Crops

Pastures

Man

MEASUREMENTUNIT

Item

Head

Head

Head

Head

Head

Item

Ha

Ha

Ha

Ha

Ha

165.343

ARAGATSOTNMARZTOTAL

49.647

60.176

33.263

90.424

4.307

7.047

7.453

3.340

1.909

694

4.798

45.806

79.882

ASHTARAKDISTRICT

23.366

16.846

9.726

16.370

1.025

2.045

3.649

2.312

1.585

205

1.362

7.526

42.165

TALINDISTRICT

12.008

19.755

10.610

43.432

2.158

3.450

2.629

949

324

487

1.352

23.184

27.625

APARANDISTRICT

6.424

12.224

6.740

15.858

567

1.218

1.003

79

0

2

1.413

7.002

15.671

7.849

11.351

6.187

14.764

557

334

172

0

0

0

671

8.094

ARAGATSDISTRICT

Table 1.1. Key indicators of agriculture in Aragatsotn Marz (2007)

VARIETY

Voskehat

Tchilar

Rkatsiteli

Pinot Noir

Hadis

Spitak Muscat(White Muscat)

250-300

YIELDQUINTAL/HECTARE

120-150

220-250

60-100

260-280

80-100

October 10-15

PERIOD OFHARVEST

October 20-30

October 10-15

September 5-10

September 25-30

October 15-25

In fresh conditionlight and sweet wines,raw stuff for cognac

and champagne

USAGE

Sweet wines

Strong andSherry wines

Strong and lighttable wines

Red sweetwines

Strong and lighttable wines

25-26

SUGARCONTENT

%

22-24

24-25

22-24

23-26

25-28

Ashtarak andTalin Districts

NOTES






Table 1.2. Grape varieties in Aragatsotn Marz



Table 1.3. Table grape varieties in Aragatsotn Marz

VARIETY

Shahumyan

Van

Black Sateni

Yerevani Deghin(Yerevan Yellow)

Tavrizeni

Vardaguyn Yerevani (Yerevan Pink)

250-300


250-300

130-150

200-250

190-220

200-250

September 20-25

PERIOD OFHARVEST

September 25-October 10

August 20-25

September 25-30

September 25-30


In fresh condition

USAGE

In fresh condition

For juices, in freshcondition

For juices, in freshcondition, raisins



20-23

SUGARCONTENT

%

20-21

19-20

22-26

23-24

22-24


NOTES








Table 1.4. Expenses on cultivation of vegetable crops in Aragatsotn Marz

Tomato, pepper, eggplant, cucumber, onion

NOTES

In autumm

In spring

Handwork

14-16 times

Pre-plant

tillage

True and false oidium,gray rot, blackleg, stolbur

Roundup, Zenkor

Actara, Bazudin, Karate

Handwork

Handwork

Handwork

PRICEPER UNIT

AMD

20.000

15.000

40.000

7

120

30.000

28.000

3.000

7

80

180

24.000

-

16.000

3.000

3.000

3.000

10.000

16.000

MEASUREMENTUNIT

Ha

Ha

Ha

Item

Kg

Ha

Ha

Man / day

M 3

Kg

Kg

L

L

L

Man / day

Man / day

Man / day

Man / day

AMD

AMD

PLANNEDQUANTITY

1

1

1

16.000

120

1

1

40

15.000

100

90

2

-

2

25

20

30

6

1

-

WORK

Disking

Smoothing

Laying beds

Plants

Fertilizing N

Winter tillage

Plowing

Transplanting

Irrigation

P

K

Diseases control

Chemical weeds Control

Pests control

Weeding, loosening

Hilling

Harvest and sorting

Transport

Land Tax

Contingencies

Total

TOTALAMD

20.000

15.000

40.000

112.000

14.400

30.000

28.000

120.000

105.000

8.000

16.200

48.000

-

32.000

75.000

60.000

90.000

60.000

16.000

10.000

899.600



Table 1.5. Cultivation of vegetable crops in Aragatsotn Marz

USAGE

In fresh andcanned condition



















SPECIES

Tomato

Tomato

Tomato

Tomato

Tomato

Tomato

Tomato

Pepper

Pepper

Pepper

Pepper

Eggplant

Eggplant

Eggplant

Eggplant

Eggplant

Cucumber

Cucumber

Onion

VARIETY

Nver

Lia

Gyumri

Anahit-351

Yeraz

Syunik

Zurab

Hayk

Nush-55

78/1

Zmrukht

Armavir

Yerevani Manushakaguyn(Yerevan Violet)

Haykakan Vaghahas(Armenian Early)

Karine

Sev Margarit(Black Pearl)

Gayane

Mane

Khatunarkh


750-800

750-800

650-700

700-750

780-800

800-820

850-900

350-400

400-450

370-410

360-400

600-650

640-660

510-550

650-700

600-610

220-250

230-240

280-300

PERIOD OFRIPENING AFTER

TRANSPLANTING DAYS

65-70

70-75

60-65

55-60

65-70

60-65

75-80

65-70

65-70

70-75

65-70

65-70

55-60

55-60

50-55

65-70

50-55

45-50

145-150

Midseason

NOTES

Midseason

Early

Early

Midseason

Midseason-early

Late-ripening

Early

Early

Midseason

Early

Midseason

Early

Early

Superearly

Midseason

Midseason

Midseason-early

Midseason



Table 1.6. Expenses on field crops in Aragatsotn Marz (less expenses on seeds)

Wheat, barley, spelt, corn, potato, cabbage, cauliflower

WORK

Plowing

Backset

Raking

Seeding

Rolling

Irrigation

Fertilizing N

P

K

Weeds control

Harvest

Transport

Land tax

Contingencies

Total

MEASUREMENT UNIT

Ha

Ha

Ha

Ha

M3

Kg

Kg

Kg

L

Ha

Man/day

AMD

AMD

PLANNED QUANTITY

1

1

1

1

-

3.000

250

300

90

-

1

1

1

-

PRICE PER UNIT AMD

30.000

18.000

12.000

10.000

-

7

120

100

150

-

35.000

10.000

16.000

-

TOTAL AMD

30.000

18.000

12.000

10.000

-

21.000

30.000

30.000

13.500

-

35.000

10.000

16.000

10.000

235.500

NOTES

4-5 times

Pre-plant

tillage



Table 1.7. Field crops in Aragatsont Marz

Wheat, barley, spelt, corn, potato, cabbage, cauliflower

SPECIES

Wheat

Wheat

Wheat

Wheat

Wheat

Barley

Barley

Spelt

Corn (grain)

Corn (silo)

Potato

Potato

Potato

Potato

Potato

Cabbage

Cabbage

Cabbage

Cauliflower

Hybrid

VARIETY

Armyanka-60

Nairi-68

Vagharshapat

Weston

Stephens

Nutans

Shirak

Sisian Local

Abovyan-60

Abovyan-60

Impala

Ausonia

Cosmos

Arinda

Sandra

Stakhanovskaya

Slava-1305

Leninakani Ushahas (Leninakan Late-Ripening)

Garantia

108-F

YIELD QUINTAL/HECTARE

40-42

40-45

40-42

45-48

48-50

35-38

38-40

20-22

38-40

750-800

380-400

400-420

350-380

300-320

300-380

200-220

180-200

230-240

150-180

150-180

PERIOD OF HARVEST

September 1-5

September 5-10

September 5-10

September 10-15

September 10-15

September 10-15

September 15-25

September 20-25

October 15-20

September 15-20

September 20-25

September 20-25

September 20-25

October 10-15

September 15-20

September 1-10

September 10-15

September 20-25

September 20-25

September 25-30

USAGE

Baking

Baking

Baking

Baking

Baking

Forage

Raw stuff for Beer

Confectionery

Confectionery Baking

Forage

In fresh condition

In fresh condition

In fresh condition

In fresh condition

In fresh condition

In fresh and tinned condition





NOTES

Spring

Spring

Spring

Silo stuff in the milk-and-wax ripening phase



Table 1.8. Expenses on vineyard cultivation in Aragatsotn Marz

WORK

Unearthing of vines in spring

Pruning and trimming of vines

Collection and removal of brushwood

Tying vines to supports (when vines are dry)

Plowing

Fertilizing (mineral fertilizers) N

P

K

Digging

Repair of supports

Pruning (on green vines)

Tying vines to supports (when vines are green)

Diseases control

Pests control

Irrigation

Harvest

Transport

Burying of vines

Land tax

Contingencies

Total

MEASUREMENT UNIT

Man/day

Man/day

Man/day

Man/day

Ha

Kg

Kg

Kg

Man/day

Man/day

Man/day

Man/day

L

L

m3

Man/day

Man/day

Man/day

AMD

AMD

-

PLANNED QUANTITY

18

22

8

11

1

250

500

200

33

3

13

13

4

4

9.600

15

3

44

1

-

PRICE PER UNIT AMD

3.000

5.000

3.000

3.000

15.000

100

80

120

4

3.000

2.000

4.000

16.000

18.000

7

3.000

3.500

5.000

18.000

-

TOTAL AMD

54.000

110.000

24.000

33.000

15.000

25.000

40.000

24.000

132.000

9.000

26.000

52.000

64.000

72.000

67.200

45.000

10.500

220.000

18.000

35.000

1.075.700

NOTES

2 times

5 times

3 times

8 times



Table 1.9. Fruit crops in Aragatsotn Marz

SPECIES

Apricot

Peach

Prune

Plum

Sweet cherry

Cherry

Apple

Pear

Nut

VARIETY

Yerevan

Sateni

Khosroveni

Narinj Early

Narinj Mid-Season

Narinj Late-Ripening

Limonniy

Lodz

Oshakan

Anna Shpet

Hungarian

Italian

Sev Shlor (Black Plum)

Deghin Shlor (Yellow Plum)

Sev Shlor 1 (Black Plum 1)

Napoleon Black

Victory

Ashtarak

Sisian

Zhukovskaya

Bellefleur Kitayka

Golden Delicious

Red Delicious

Aldaret

Williams Forest

Antarayin Geghetskuhi (Forest

Beauty)

Dzmernuk

Bere Bosque

Teghakan (Local)


180-200

190-210

180-200

220-260

200-220

200-210

180-200

180-190

170-180

180-200

180-190

170-180

160-170

150-160

160-170

160-180

140-160

150-160

160-180

160-190

220-260

260-280

260-280

270-290

180-200

160-170

180-190

170-180

80-90

PERIOD OF RIPENING

July 10-15

July 15-25

July 25-30

August 1-5

August 10-15

August 1-10

August 1-10

July 25-30

August 15-20

August 25-30

August 20-25

August 20-25

August 10-15

August 10-15

August 15-20

July 10-15

July 10-15

July 1-10

June 15-20

June 15-20

September 10-15

September 20-25

September 10-15

September 10-15

August 1-10

September 1-10

September 10-15

September 10-15

September 20-25

USAGE

Universal In fresh and dried

condition

Universal

Universal

Universal

Universal

Universal

Universal

Universal

Universal

Universal

Universal

Universal

Universal

Universal

Universal

In fresh condition

In fresh and processed condition



In fresh condition

In fresh condition

In fresh condition

In fresh condition

In fresh condition

In fresh condition

In fresh condition

In fresh condition


NOTES

Ashtarak and Talin Districts




















Aparan District








Ashtarak District



Table 1.10. Characteristics and productivity of livestock in Aragatsotn Marz

NAME

Milk cow

Milk cow

Milk cow

Cattle meat

Cattle meat

Cattle meat

Dam (sheep)

Small livestock meat

Sow

Sow

Pork

Pork

Dam (goat)

Dam (goat)

Hive

Layer (hen) Layer (hen)

BREED

Caucasian Brown

Shwitz

Sevabghet

Caucasian

Brown

Shwitz

Sevabghet

Balbas

Balbas

Ukrainian White

Landras

Ukrainian

White

Landras

Local

Cross-breed

Caucasian Brown

Yerevan

Silver

PRODUCTIVITY

Milk l

1.800-2.000

2.000-2.200

2.800-3.200

-

-

-

90

-

-

-

-

-

120

350

-

-

-

YIELD AFTER SLAUGHTERING,

%

42

41

42

42

41

42

40

40

65

66

66

67

41

42

-

-

-

WEIGHT INCREMENT,

g

-

-

-

700

800

900

-

180

-

-

500

550

150

200

-

-

-

PRODUCTIVITY(EGGS),

%

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

75

78

WOOL,KG

-

-

-

-

-

-

3

-

-

-

-

-

-

-

-

-

-

HONEY,Kg

-

-

-

-

-

-

-

-

-

-

-

-

-

-

9

-

-

PRODUCTIVITY, %

95

97

97

-

-

-

120

-

12

10

-

-

125

140

-

-

-

EXPENSESPER

UNIT OFPRODUCTION,

(AMD)

65

60

55

600

650

600

35/320

600

-

-

850

720

85

67

1.300

28

24

ADEQUACY PERIOD (YEARS)

5

7

7

1.5

1.5

1.3

6

0.8

4

4.5

0.7

0.6

5

4

-

1.5

1.5


the marzes

Marz 2

Ararat Marz


Marz 2 - Aratat Marz 187

The Ararat Marz comprises 3 regions: Artashat, Masis,Ararat.

Artashat, the capital of Ancient Armenia in the 2nd cen-tury B. C., was at that time located in Mets Hayk, at wherethe old courses of the Yeraskh and the Metsamor riversmeet, on Khor Virap hills. Movses Khorenatsi wrote: “KingArtashes went to the place where the two rivers join; he took afancy of the locality and caused a town to be built there, which henamed after himself – Artashat.”

Ararat Marz is situated in the South-West of Ararat Plainand includes part of South-Western slopes of the GeghamaMountains. Several short offshoots stretch in the middlebasins of the Vedi and the Azat joined with the GeghamaRange, such as the Yeraskh Range which stretches along theleft bank of the Azat to reach Ararat Plain.

Soils of agricultural significance are situated 900-1.500mabove the sea level.

Highlands are mountain-steppe and sub-alpine zoneswhile in lowlands semi-desert zone prevails with arid con-tinental climate. Prevalence of irrigated lands and ground

Marz 2

Ararat Marz

waters to a certain degree mitigate arid climate, though.In the mountain-steppe zone the climate is arid, conti-

nental, with cold winters. Average annual temperature is+6 -100C, minimum temperature being -320C, maximum+410C; in January -60C in lowlands and -80C in uplandswhile in July +260C and +200C, respectively. The annualprecipitations are 250-500mm.

Prevailing soils are brown semi-desert, BrownMountain, brown meadow, irrigated and alkali semi-desert, here and there salt soils. Forests are scarce(Khosrov Reserve).

In Ararat Marz agriculture plant-growing prevails,namely viticulture, vegetable and forage crop cultivation,fruit-growing, growing of melons and gourds. Milk cattle-breeding, sheep-breeding, poultry-breeding and swine-breeding are also developed.

The water of the Araks and the Azat is used for irriga-tion. Currently all lands of agricultural significance areirrigated through artificial reservoirs (Azat Reservoir) andcanals – Garni, Artashat Canals, and the Araks.



Table 2.1. Key indicators of agriculture in Ararat Marz (2007)

MARZINFORMATION

Population

Number of farms

Cattle Including cows

Small livestock

Goats

Swine

Hives

Orchards

Vineyards

Young orchards

Field crops

Pastures

MEASUREMENTUNIT

Man

Item

Head

Head

Head

Head

Head

Item

Ha

Ha

Ha

Ha

Ha

ARARAT MARZTOTAL

305.765

77.648

38.819

20.841

62.414

4.248

8.078

3.894

3.104

3.301

640

3.307

13.579

ARTASHATDISTRICT

116.697

28.634

10.919

5.819

23.450

557

2.718

886

1.853

1.695

330

498

1.350

ARARATDISTRICT

106.653

27.227

17.542

9.643

30.955

3.354

3.193

2.824

1.049

1.416

239

2.150

11.226

MASISDISTRICT

82.415

21.787

10.358

5.379

8.009

337

2.167

184

202

190

17

659

1.003



Table 2.2. Expenses on vineyard cultivation in Ararat Marz

WORK

Unearthing of vinesin spring Pruning and trimmingof vines

Collection and removalof brushwood Tying vines to supports (when vines are dry) Plowing Fertilizing (mineral fertilizers) N P K

Digging Repair of supports Pruning (on green vines) Tying vines to supports (when vines are green) Diseases control

Pests control

Irrigation Harvest Transport

Burying of vines

Land tax Contingencies Total

MEASUREMENT UNIT

Man/day

Man/day

Man/day

Man/day

Ha

Kg KgKg

Man/day

Man/day

Man/day

Man/day

L

L

m3

Man/day

Man/day

Man/day

AMD

AMD

-

PLANNED QUANTITY

18

22

8

11

1

250500200

33

3

13

13

4

4

9.600

15

3

44

1

-

PRICE PER UNIT AMD

3.000

5.000

3.000

3.000

15.000

10080

120

4.000

3.000

2.000

3.000

16.000

18.000

7

3.000

3.500

5.000

18.000

-

TOTAL AMD

54.000

110.000

24.000

33.000

15.000

25.00040.00024.000

132.000

9.000

26.000

39.000

64.000

72.000

67.200

45.000

10.500

220.000

18.000

20.000

1.047.700

NOTES

2 times

5 times

3 times

8 times



Table 2.3. Grape varieties in Ararat Marz

VARIETY YIELDQUINTAL/HECTARE

PERIOD OFHARVEST

USAGE SUGARCONTENT

%

NOTES

All Districts of the Marz

All Districtsof the Marz


All Distrits of the Marz






20-22

22-24

23-25

24-26

24-26

22-23

24-25

22-23

22-26

23-25

25-27

22-25

23-26

24-26

Quality wines and grape juice


Strong and sweet wines

Red sweet wines

Sweet wines

Table and sweet wines, raw stuff

for cognac

Sweet wines

Table and sweet wines


Table, strong, liquor and sweet

wines


Light and strong wines

Table and sweet wines, in fresh

condition


October 25-30

October 15-26

October 1-5

September 25-30

September 20-25

September 10-30

September 20-30


October 10-20

September 25-30

October 20-25

October 10-15

October 5-10

September 25-30

200-250

200-220

200-220

150-160

150-160

150-300

170-220

200-250

250-350

80-100

250-300

160-200

300-350

180-200

Kakheti

Mskhali

Sev Areni (Black Areni)

Hadis

Tokun

Kangun

Karmrahyut

Victory

Nrneni

Saperavi

Voskehat

Garan Dmak

Meghrabuyr

Nerkarat



Table 2.4 . Table grape varieties in Ararat Marz


PERIOD OFHARVEST

USAGE SUGARCONTENT

%

NOTES

In the whole Marz



In the whole

Marz


Masis and Artashat Districts

In the whole

Marz




Masis and Artashat Districts



In the whole Marz


21-23

23-25

22-23

22-25

21`-23

20-21

25-27

20-21

19-20

19-20

20-21

23-25

21-23

20-23

19-20

In fresh condition, grape juice

In fresh condition, raisins

In fresh condition

In fresh condition

In fresh condition

In fresh condition


In fresh condition

In fresh condition

In fresh condition

In fresh condition


In fresh condition

In fresh condition

In fresh condition

October 20-25


August 25-30

September 20-25

September 20-25


September 25-30

September 20-25

September 25-30

September 25-30

August 25-30


September 25-30

September 25-30

September 25-30

250-280

220-250

180-230

250-300

170-200

250-300

250-280

300-350

300-350

300-350

250-280

200-250

200-250

200-250

250-300

Spitak Arakseni (White Arakseni)

Yerevani Deghin (Yerevan Yellow)

Yerevan Muscat

Shahumyan

Arevshat

Van

Tokun

Ayvazyani Berkatu

Ayvazyani Khoshoraptugh

Ayvazyani Pahuni

Erebuni

Vardaguyn Yerevani

Karmir Itsaptuk

Masis

Hayrenik



Table 2.5. Cultivation of field crops in Ararat Marz

Wheat, barley, corn, potato, cauliflower

SPECIES

Wheat

Wheat

Wheat

Wheat

Wheat

Barley

Barley

Barley

Corn

Corn

Potato

Potato

Potato

Potato

Potato

Cauliflower

Hybrid

VARIETY

Armyanka-60

Nairi-68

Vagharshapat

Weston

Stephens

Nutans

Shirak

Zangezur

Abovyan-60

Abovyan-60

Impala

Ausonia

Cosmos

Arinda

Sandra

Garantia

108-F


40-45

40-46

45-48

48-52

50-55

38-40

35-40

38-43

35-40

750-800

350-380

300-320

300-350

280-300

300-350

150-180

130-150

PERIOD OF HARVEST

July 1-5

July 5-10

July 5-10

July 10-15

July 10-15

June 10-15

June 15-25

June 20-25

August 15-20

August 15-20

June 1-10

June 1-5

June 1-10

June 10-15

June 15-20

June 20-25

June 10-15

USAGE

Baking

Baking

Baking

Baking

Baking

Forage

Raw stuff for beer

Raw stuff for beer

Confectionery, baking

Forage

In fresh condition

In fresh condition

In fresh condition

In fresh condition

In fresh condition

In fresh condition

In fresh condition

NOTES


Early

Mid-season-early

Early

Mid-season

Mid-season

Early

Early



Table 2.6. Expenses on field crops in Ararat Marz (less expenses on seeds)

Wheat, barley, corn, potato, cauliflower

WORK

Plowing Backset Raking Seeding Rolling Irrigation Fertilizing N P K

Weeds control

Harvest Transport

Land tax Contingencies

Total

MEASUREMENTUNIT

Ha

Ha

Ha

Ha

M3

KgKgKg

L

Ha

Man/day

AMD

AMD

PLANNED QUANTITY

1

1

1

1

1

4.000

20020090

1.5

1

1

1

-

PRICE PER UNIT AMD

25.000

12.000

10.000

10.000

7.000

7

120100100

22.000

35.000

10.000

18.000

-

TOTAL AMD

25.000

12.000

10.000

10.000

7.000

28.000

24.00020.0009.000

33.000

35.000

10.000

18.000

10.000

251.000

NOTES

Mechanical works

4-5 times

Preplanttillage



Table 2.7. Expenses on cultivation of melons and gourds in Ararat Marz

Water-melon, melon

WORK

Winter tillage Plowing Disking Smoothing Laying beds Sowing Seeds

Irrigation Fertilizing N P K

Diseases control

Pests control

Weeds control Hilling

Harvest and sorting Transport Land tax Contingencies Total

MEASUREMENT UNIT

Ha

Ha

Ha

Ha

Ha

Man/day

Kg

M3

KgKgKg

L

L

Man/day

Man/day

Man/day

Man/day

AMD

AMD

PLANNED QUANTITY1

1

1

1

1

1

30

0.5

15.000

12018090

2

2

20

5

20

8

1

-

PRICE PER UNIT AMD

25.000

18.000

15.000

10.000

35.000

3.000

150.000

7

12090180

18.000

17.000

4.500

3.500

3.000

10.000

18.000

-

TOTAL AMD

25.000

18.000

15.000

10.000

35.000

90.000

75.000

105.000

14.40016.20016.200

36.000

34.000

90.000

17.500

60.000

80.000

18.000

30.000

785.300

NOTES

In autumn

In spring

Handwork

10-12 times

Preplanttillage

True and false oidium


Handwork

Handwork

Handwork



Table 2.8. Cultivation of melons and gourds in Ararat Marz

USAGE

In fresh condition

In fresh condition

In fresh condition

In fresh condition

In fresh condition

In fresh condition

In fresh anddried condition


SPECIES

Water-melon

Water-melon

Water-melon

Water-melon

Melon

Melon

Melon

Melon

VARIETY

Arevik

Jubilee/Yubileyniy

Sweet Princess

Dixie Queen

Anush

Arpi

French Charantais

American Crenshaw


400-420

390-400

420-480

480-500

250-270

260-270

220-250

230-250

PERIOD OF RIPENINGAFTER SOWING

DAYS

70-80

75-85

70-75

65-70

80-85

75-80

110-115

100-110

Mid-season

Mid-season

Mid-season -early

Mid-season -early

Early

Early

Mid-season

Late-ripening

NOTES



Table 2.9. Expenses on cultivation of vegetable crops in Ararat Marz


WORK

Winter tillage Plowing Disking Smoothing Laying beds Transplanting Price of Plants


Diseases control

Chemical weeds control

Pests control

Weeds control

Hilling


MEASUREMENT UNIT

Ha

Ha

Ha

Ha

Ha

Man/day

Item

M3

KgKgKg

L

L L

Man/day

Man/day

Man/day

Man/day

AMD

AMD

PLANNED QUANTITY1

1

1

1

1

1

50

5.500

22.800

12018090

4

2

3

40

45

40

6

1

-

PRICE PER UNIT AMD

40.000

35.000

25.000

15.000

60.000

4.000

5

7

12090

180

18.000

24.000

16.000

4.000

4.000

3.500

15.000

16.000

TOTAL AMD

40.000

35.000

25.000

15.000

60.000

200.000

27.500

159.600

14.40016.20016.200

72.000

48.000

48.000

160.000

180.000

140.000

90.000

16.000

50.000

1.412.900

NOTES

In autumn

In spring

Handwork

18-20 times

Preplanttillage

True and false oidium, gray rot, blackleg, stolbur

Roundup, Zenkor


Handwork

Handwork

Handwork



Table 2.10. Cultivation of vegetable crops in Ararat Marz

USAGE

5

In fresh andtinned condition

















SPECIES

1

Tomato

Tomato

Tomato

Tomato

Tomato

Tomato

Tomato

Tomato

Pepper

Pepper

Pepper

EggPlant

EggPlant

EggPlant

Cucumber

Cucumber

Onion

VARIETY

2

Nver

Lia

Ranni-Nush

Gyumri

Anahit-351

Yeraz

Syunik

Zurab

Hayk

Nush-55

Nush-78

Armavir

YerevaniManushakaguyn(Yerevan Violet)

Haykakan Vaghahas

(Armenian Early)

Gayane

Mane

Khatunarkh


3

750-800

750-800

650-700

620-650

780-890

780-800

750-760

850-900

450-500

450-500

300-350

650-700

650-680

550-560

270-280

240-250

280-300


TRANSPLANTING DAYS

4

60-65

65-70

55-60

57-60

55-60

60-65

58-62

70-75

65-70

65-70

70-75

65-70

50-60

50-60

50-55

45-50

140-150

6

Mid-season

Mid-season

Early

Early

Early

Mid-season

Mid-season-early

Late-ripening

Early

Early

Mid-season

Mid-season

Early

Early

Mid-season

Mid-season-early

Mid-season

NOTES



Table 2.11. Cultivation of fruit varieties in Ararat Marz

SPECIES

Apricot

Apricot

Apricot

Peach

Peach

Peach

Prune

Prune

Prune

Plum

Plum

Sweet cherry

Sweet cherry

Sweet cherry

Cherry

Cherry

Apple

Pear

Pear

Quince

Nut

VARIETY

Yerevan

Sateni

Khosroveni

Narinj

Zafran

Lodz Shertavor /layered

Albukhar

Renklot Alton’s

Italian

Sev Shlor-1 (Black Plum-1)

Gyogja

Dragan’s Yellow

Napoleon Black

Victory

Ashtarak

Zhukovskaya

Golden Delicious

Malacha

Antarayin Geghetskuhi(Forest Beauty)

Ani

Teghakan (Local)


250-280

250-280

240-260

250-280

250-280

200-220

200-250

200-220

230-240

180-200

200-210

150-180

150-160

150-160

150-160

160-170

220-240

230-250

150-180

180-200

180-200

PERIOD OF HARVEST

June 10-20

June 20-25

June 25-July 1

June 15-25

June 20-30

June 25-July 1

July 20-August 10

June 15-20

August 15-25

July 15-20

June 20-25

June 15-20

May 10-15

June 5-10

July 10-15

June 15-20

September 25-30

August

August 25-September 1

September 20-25


NUMBER OF TREES

PER HECTARE

280-290

250-260

280-300

550-580

580-600

580-600

350-380

330-350

340-360

300-310

300-330

450-470

470-480

480-500

400-420

400-420

380-400

300-310

300-320

400-420

15-17

PRICE PERSAPLING AMD

900

900

1.000

900

1.000

850

900

1.000

1.000

600

600

1.000

1.000

1.100

1.100

1.300

1.100

900

1.100

700

1.100



Table 2.12. Characteristics and productivity of livestock in Ararat Marz

NAME

Milk cow Milk cow

Cattle meat

Cattle meat

Dam (sheep)


Sow

Sow

Sow

Pork

Pork

Pork

Dam (goat)

Hive

Layer (hen)

Layer (hen)

BREED

Shwitz

Sevabghet

Shwitz

Sevabghet

Mazekh

Mazekh

Ukrainian White

Landras

Armenian

Ukrainian White

Landras

Armenian

Local

Caucasian Brown

Yerevan

Silver

PRODUCTIVITY

Milk l

2.300-2.500

2.800-3.200

-

-

100

-

-

-

-

-

-

-

120

-

-

-


%

41

42

41

42

41

42

65

66

68

66

67

69

41

-

--

-

WEIGHT INCREMENT,

g

-

-

800

900

-

210

-

-

-

500

550

650

150

-

-

-

PRODUCTIVITY(EGGS),

%

-

-

-

-

-

-

-

-

-

-

-

-

-

-

75

78

WOOL,KG

-

-

-

-

1.8

-

-

-

-

-

-

-

-

-

-

-

HONEY,Kg

-

-

-

-

-

-

-

-

-

-

-

-

-

9

-

-

PRODUCTIVITY, %

92

95

-

-

120

-

12

10

10

-

-

-

125

-

-

-

EXPENSESPER

UNIT OFPRODUCTION,

(AMD)

65

60

650

670

40/300

650

-

-

-

650

780

650

85

1.600

24

20


7

7

1.5

1.3

6

0.6

4

4.5

4

0.7

0.6

0.5

5

-

1.5

1.5


the marzes

Marz 3

Armavir Marz


Marz 3 - Armavir Marz 203

Armavir Marz comprises Armavir, Baghramyan andVagharshapat Districts.

The two capitals of one of the oldest Armenian state for-mations – the Yervanduni Realm - Armavir andYervandashat are situated in Armavir Marz. Before the V-VI centuries Armavir Marz was included in AyraratyanDistrict ruled by the Arshakunis, later on it passed underthe rule of the Amatuni Ministers.

Armavir Marz is situated in the central part of Ararat Plain;it includes the lower stretches of the Kasakh and the Hrazdanand the basin of the Metsamor. Overall, the relief of the Marzis smooth. Average altitude is 870m above the sea level.Climate is arid continental, with cold and short winters, and

Marz 3

Armavir Marz

hot summers. Average annual temperature is +120C, minimum-300C, maximum +400C; annual precipitations are 200-300mm.

Through Armavir Marz flows the Kasakh, the Metsamorand the Araks, the latter being the state frontier withTurkey. In the East is situated Akna Lake.

Brown meadow soils, alkali, brown salt, and water-logged soils are common as well as semi-desert soils.

Armavir Marz is developed in terms of almost allbranches of agriculture. Main branches of plant-growing:viticulture, fruit-growing, melons and gourds.

Animal husbandry is developed as well, namely cattle-breeding, sheep-breeding, swine-breeding, poultry-breed-ing, bee-keeping.

MARZINFORMATION

Population

Number of farms

Cattle

Including cows

Small livestock

Goats

Swine

Hives

Orchards

Vineyards

Young orchards

Field crops

Pastures

Man

Item

Head

Head

Head

Head

Head

Item

Ha

Ha

Ha

Ha

Ha

MEASUREMENTUNIT

307.388

65.343

38.405

19.456

48.794

598

11.287

3.890

3.825

4.060

1.371

1.256

15.379

ARMAVIR MARZTOTAL

126.537

36.283

18.447

8.203

23.689

120

5.676

2.558

2.359

2.004

789

10

599

ARMAVIRDISTRICT

158.382

23.075

13.472

7.771

12.194

126

3.932

1.305

792

1.715

161

369

766

VAGHARSHAPATDISTRICT

22.469

5.985

6.486

3.482

12.911

352

1.679

27

674

341

421

877

14.014

BAGHRAMYANDISTRICT

Table 3.1. Key indicators of agriculture in Armavir Marz (2007)



Table 3.2. Grape varieties in Armavir Marz


PERIOD OFHARVEST

USAGE SUGARCONTENT

%

NOTES


All Districtsof the Marz


All Distrits of the Marz






20-22

22-24

23-25

24-26

24-26

22-23

24-25

22-23

22-26

23-25

25-27

22-25

23-26

24-26




Red sweet wines

Sweet wines

Table and sweet wines, raw stuff

for cognac

Sweet wines



Table, strong, liquor and sweet

wines


Light and strong wines

Table and sweet wines, in fresh

condition


October 25-30

October 15-26

October 1-5

September 25-30

September 20-25

September 10-30

September 20-30


October 10-20

September 25-30

October 20-25

October 10-15

October 5-10

September 25-30

200-250

200-220

200-220

150-160

150-160

150-300

170-220

200-250

250-350

80-100

250-300

160-200

300-350

180-200

Kakheti

Mskhali

Sev Areni (Black Areni)

Hadis

Tokun

Kangun

Karmrahyut

Victory

Nrneni

Saperavi

Voskehat

Garan Dmak

Meghrabuyr

Nerkarat



Table 3.3. Table grape varieties in Armavir Marz


PERIOD OFHARVEST

USAGE SUGARCONTENT

%

NOTES

In the whole Marz



In the whole Marz



In the whole Marz







In the whole Marz


21-23

23-25

22-23

22-25

21-23

20-21

25-27

20-21

19-20

19-20

20-21

23-25

21-23

20-23

19-20

In fresh condition, grape juice


In fresh condition

In fresh condition

In fresh condition

In fresh condition

In fresh condition,

raisins

In fresh condition

In fresh condition

In fresh condition

In fresh condition


In fresh condition

In fresh condition

In fresh condition

October 20-25


August 25-30

September 20-25

September 20-25


September 25-30

September 20-25

September 25-30

September 25-30

August 25-30


September 25-30

September 25-30

September 25-30

250-280

220-250

180-230

250-300

170-200

250-300

250-280

300-350

300-350

300-350

250-280

200-250

200-250

200-250

250-300

Spitak Arakseni (White Arakseni) Yerevani Deghin (Yerevan Yellow) Yerevan Muscat Shahumyan Arevshat Van

Tokun

Ayvazyani Berkatu Ayvazyani Khoshoraptugh Ayvazyani Pahuni

Erebuni Vardaguyn Yerevani

Karmir Itsaptuk Masis

Hayrenik



Table 3.4. Cultivation of vegetable crops in Armavir Marz

USAGE

5


















SPECIES

1

Tomato

Tomato

Tomato

Tomato

Tomato

Tomato

Tomato

Tomato

Pepper

Pepper

Pepper

EggPlant

EggPlant

EggPlant

Cucumber

Cucumber

Onion

VARIETY

2

Nver

Lia

Ranni-Nush

Gyumri

Anahit-351

Yeraz

Syunik

Zurab

Hayk

Nush-55

Nush-78

Armavir

Yerevani Manushakaguyn(Yerevan Violet)

Haykakan Vaghahas

(Armenian Early)

Gayane

Mane

Khatunarkh


3

750-800

750-800

650-670

620-650

780-890

780-800

750-760

850-900

450-500

450-500

300-350

650-700

650-680

550-560

270-280

240-250

280-300


TRANSPLANTING DAYS

4

60-65

65-70

55-60

57-60

55-60

60-65

58-62

70-750

65-70

65-70

70-75

65-70

50-60

50-60

50-55

45-50

140-150

6

Mid-season

Mid-season

Early

Early

Early

Mid-season

Mid-season-early

Late-ripening

Early

Early

Mid-season

Mid-season

Early

Early

Mid-season

Mid-season-early

Mid-season

NOTES



Table 3.5. Cultivation of melons and gourds in Armavir Marz

USAGE

In freshcondition

In freshcondition

In freshcondition

In freshcondition

In freshcondition

In freshcondition

In fresh and dried condition


SPECIES

Water-melon

Water-melon

Water-melon

Water-melon

Melon

Melon

Melon

Melon

VARIETY

Arevik

Jubilee/Yubileyniy

Sweet Princess

Dixie Queen

Anush

Arpi

French Charantais

American Crenshaw


400-420

390-400

420-480

480-500

250-270

260-270

220-250

230-250

PERIOD OF RIPENINGAFTER SOWING

DAYS

70-80

75-85

70-75

65-70

80-85

75-80

110-115

100-110

Mid-season

Mid-season

Mid-season-early

Mid-season-early

Early

Early

Mid-season

Late-ripening

NOTES



WORK

Winter tillage Plowing Disking Smoothing Laying beds Transplanting Plants


Diseases control

Chemical weeds control

Pests control

Weeds control

Hilling


MEASUREMENT UNIT

Ha

Ha

Ha

Ha

Ha

Man/day

Item

M3

KgKgKg

L

L L

Man/day

Man/day

Man/day

Man/day

AMD

AMD

PLANNED QUANTITY1

1

1

1

1

1

30

5.500

22.800

12018090

4

2

3

40

45

40

6

1

PRICE PER UNIT AMD

30.000

25.000

20.000

10.000

60.000

4.000

5

7

12090

180

18.000

24.000

16.000

4.000

4.000

3.500

15.000

16.000

TOTAL AMD

30.000

25.000

20.000

10.000

60.000

120.000

27.500

159.600

14.40016.20016.200

72.000

48.000

48.000

160.000

180.000

140.000

90.000

16.000

50.000

1.275.400

NOTES

In autumn

In spring

Handwork

18-20 times

Preplanttillage


Roundup, Zenkor


Handwork

Handwork

Handwork

Table 3.6. Expenses on cultivation of vegetable crops in Armavir Marz

Tomato, pepper, EggPlant, cucumber, onion



Table 3.7. Field crops in Armavir Marz

Wheat, barley, corn, potato, cabbage, cauliflower

SPECIES

Wheat

Wheat

Wheat

Wheat

Wheat

Barley

Barley

Barley

Corn

Corn

Potato

Potato

Potato

Potato

Potato

Cauliflower

Hybrid

VARIETY

Armyanka-60

Nairi-68

Vagharshapat

Weston

Stephens

Nutans

Shirak

Zangezur

Abovyan-60

Abovyan-60

Impala

Ausonia

Cosmos

Arinda

Sandra

Garantia

108-F


40-45

40-46

45-48

48-52

50-55

38-40

35-40

38-43

35-40

750-800

350-380

300-320

300-350

280-300

300-350

150-180

130-150

PERIOD OF HARVEST

July 1-5

July 5-10

July 5-10

July 10-15

July 10-15

June 10-15

June 15-25

June 20-25

August 15-20

August 15-20

June 1-10

June 1-5

June 1-10

June 10-15

June 15-20

June 20-25

June 10-15

USAGE

Baking

Baking

Baking

Baking

Baking

Forage

Raw stuff for beer

Raw stuff for beer


Forage

In fresh condition

In fresh condition

In fresh condition

In fresh condition

In fresh condition

In fresh condition

In fresh condition

NOTES


Early

Mid-season-early

Early

Mid-season

Mid-season

Early

Early



Table 3.8. Expenses on vineyard cultivation in Armavir Marz

WORK




Pests control


Burying of vines


MEASUREMENT UNIT

Man/day

Man/day

Man/day

Man/day

Ha

Kg KgKg

Man/day

Man/day

Man/day

Man/day

L

L

M3

Man/day

Man/day

Man/day

AMD

AMD

-

PLANNED QUANTITY

18

22

8

11

1

250500200

33

3

13

13

4

4

9.600

15

3

40

1

-

PRICE PER UNIT AMD

3.000

5.000

3.000

3.000

15.000

10080

120

4.000

3.000

2.000

3.000

16.000

18.000

7

3.000

3.500

5.000

18.000

-

TOTAL AMD

54.000

110.000

24.000

33.000

15.000

25.00040.00024.000

132.000

9.000

26.000

39.000

64.000

72.000

67.200

45.000

10.500

200.000

18.000

20.000

1.080.200

NOTES

2 times

5 times

3 times

8 times



Table 3.9. Expenses on field crops in Armavir Marz (less expenses on seeds)


WORK


Weeds control

Harvest Transport


Total

MEASUREMENTUNIT

Ha

Ha

Ha

Ha

M3

KgKgKg

L

Ha

Man/day

AMD

AMD

PLANNED QUANTITY

1

1

1

1

1

5.000

25030090

1.5

1

1

1

-

PRICE PER UNIT AMD

35.000

20.000

15.000

18.000

15.000

7

120100150

22.000

40.000

10.000

18.000

-

TOTAL AMD

35.000

20.000

15.000

18.000

15.000

35.000

30.00030.00013.500

33.000

40.000

10.000

18.000

312.500

NOTES

Mechanical works

4-5 times

Preplanttillage



Table 3.10. Cultivation of fruit varieties in Armavir Marz

SPECIES

Apricot Apricot

Apricot

Peach Peach

Peach

Prune Prune

Prune

Plum Plum

Sweet cherry Sweet cherry

Sweet cherry

Cherry Cherry

Apple

Pear Pear

Quince

Nut

VARIETY

Yerevan

Sateni

Khosroveni

Narinj

Zafran

Lodz Shertavor / layered

Albukhar

Renklot Alton’s

Italian


Gyogja

Dragan’s Yellow

Napoleon Black

Victory

Ashtarak

Zhukovskaya

Golden Delicious

Malacha


Ani

Teghakan (Local)


200-220

240-250

220-240

200-220

220-250

200-220

200-250

200-220

230-240

180-200

200-210

150

130-140

150-160

150-160

160-170

220-240

230-250

150-180

180-200

180-200

PERIOD OF HARVEST

June 10-20

June 20-25

June 25-July 1

June 15-25

June 20-30

June 25-July 1

July 20-August 10

June 15-20

August 15-25

July 15-20

June 20-25

June 15-20

May 10-15

June 5-10

July 10-15

June 15-20

September 25-30

August


September 20-25


NUMBER OF TREES

PER HECTARE

280-290

250-260

280-300

550-580

580-600

580-600

350-380

330-350

340-360

300-310

300-330

450-470

470-480

480-500

400-420

400-420

380-400

300-310

300-320

400-420

15-17


900

900

1.000

900

1.000

850

900

1.000

1.000

600

600

1.000

1.000

1.100

1.100

1.300

1.100

900

1.100

700

1.100



Table 3.11. Expenses per 1 hectare of orchard in Armavir Marz

WORK

Pruning of trees

Fertilizing (mineral fertilizers) N P K

Digging of cupsaround trees

Diseases control

Pests control

Irrigation

Harvest

Transport Land tax

Contingencies

Total

MEASUREMENTUNIT

Man/day

KgKgKg

Man/day

L

L

M3

Man/day

Man/day

AMD

AMD

-

PLANNED QUANTITY

10

280450180

14

10

13

11.700

25

6

1

-

PRICE PER UNIT AMD

3.500

120100150

4000

12.000

15.000

7

4.000

15.000

22.000

-

TOTAL AMD

35.000

33.60045.00027.000

56.000

120.000

195.000

81.900

100.000

90.000

22.000

12.000

859.500

NOTES

3 times

4 times

8 times

Selective harvest



NAME

Milk cow Milk cow

Cattle meat

Cattle meat

Dam (sheep)

Dam (sheep)


Sow

Sow

Sow

Pork

Pork

Pork

Dam (goat)

Hive

Layer (hen)

Layer (hen)

Layer (hen)

BREED

Shwitz

Sevabghet

Shwitz

Sevabghet

Bozakh

Mazekh

Mazekh

Ukrainian White

Landras

Armenian

Ukrainian White

Landras

Armenian

Local

Caucasian Brown

Yerevan

Silver

Lowman Brown

PRODUCTIVITY

Milk l

2.000-2.200

2.800-3.200

-

-

45

100

-

-

-

-

-

-

-

120

-

-

-

-


%

41

42

41

42

41

41

42

65

66

68

66

67

69

41

-

-

-

-

WEIGHT INCREMENT,

g

-

-

800

900

-

-

210

-

-

-

500

550

650

150

-

-

-

-

PRODUCTIVITY(EGGS),

%

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

75

78

92

WOOL,KG

-

-

-

-

1.8

1.8

-

-

-

-

-

-

-

-

-

-

-

HONEY,Kg

-

-

-

-

-

-

-

-

-

-

-

-

-

9

-

-

-

PRODUCTIVITY, %

90

92

-

-

130

120

-

12

10

10

-

-

-

125

-

-

-

-

EXPENSESPER

UNIT OFPRODUCTION,

(AMD)

70

65

600

650

60/380

40/300

650

-

-

-

850

720

650

85

1.200

29

22

20


7

7

1.5

1.3

6

6

0.6

4

4.5

4

0.7

0.6

0.5

5

-

1.5

1.5

1.2

Table 3.12. Characteristics and productivity of livestock in Armavir Marz


the marzes

Marz 4

Gegharkunik Marz


Marz 4 - Gegharkunik Marz 217

Gegharkunik Marz comprises 5 districts: Vardenis,Tchambarak, Sevan, Martuni, Gavar.

Gegharkunik Marz is encompassed with high mountainranges of Areguni, Sevan, Vardenis, Geghama and Pambak.The lowest part is occupied by the basin of Lake Sevan.

Marz 4

Gegharkunik Marz

The climate is mountain-continental. Annual precipita-tions are 400-500mm, in highlands – 800-850mm.

There are over 80 rivers in Gegharkunik Marz which areslow and flow into Lake Sevan.

Table 4.1. Key indicators of agriculture in Gegharkunik Marz (2007)

MARZINFORMATION

Population

Number of farms


Small livestock

Goats

Swine

Hives

Orchards

Vineyards

Young orchards

Field crops

Pastures

MEASUREMENTUNIT

Man

Item

Head

Head

Head

Head

Head

Item

Ha

Ha

Ha

Ha

Ha

GEGHARKUNIKMARZ - TOTAL

264.611

78.704

92.441

49.824

99.607

3.645

8.989

18.131

30

0

0

21.039

55.518

VARDENIS DISTRICT

50.254

14.907

21.156

11.776

32.975

1.293

1.164

5.844

0

0

0

1.818

10.606

TCHAMBARAK DISTRICT

17.277

4.995

8.996

4.918

10.044

1.030

1.110

1.220

16

0

0

5.399

12.859

SEVAN DISTRICT

50.438

13.695

14.383

8.744

11.391

358

2.641

1.897

14

0

0

4.639

8.353

MARTUNI DISTRICT

82.671

25.904

32.095

15.992

22.747

761

819

7.163

0

0

0

3.457

11.557

GAVAR DISTRICT

63.971

19.203

15.811

8.394

22.450

203

3.255

2.007

0

0

0

5.726

12.143



Table 4.2. Expenses on field crops in Gegharkunik Marz (less expenses on seeds)

Wheat, barley, corn, potato, cabbage

WORK


Weeds control

Harvest Transport


Total

MEASUREMENTUNIT

Ha

Ha

Ha

Ha

M3

KgKgKg

L

Ha

Man/day

AMD

AMD

PLANNED QUANTITY

1

1

1

1

1

2.000

25030090

-

1

1

1

-

PRICE PER UNIT AMD

20.000

8.000

7.000

8.000

-

7

100100120

-

25.000

8.000

10.000

TOTAL AMD

20.000

8.000

7.000

8.000

-

14.000

25.00030.00010.800

-

25.000

8.000

10.000

10.000

175.800

NOTES

3-4 times

Preplanttillage


Marz 4 - Gegharkunik Marz 219

Table 4.3. Cultivation of field crops in Gegharkunik Marz


SPECIES

Wheat

Wheat

Wheat

Barley

Barley

Barley

Corn

Potato

Potato

Potato

Potato

Potato

Cabbage

Cabbage

Cabbage

VARIETY

Bezostaya-1

Weston

Stephens

Nutans

Shirak

Zangezur

Abovyan-60

Impala

Ausonia

Cosmos

Arinda

Sandra

Stakhanovskaya

Slava-1305



40-42

45-48

48-50

35-38

38-40

35-38

750-800

380-400

400-420

350-380

300-320

300-380

200-220

180-200

230-240

PERIOD OF HARVEST

September 1-5

September 10-15

September 10-15

September 10-15

September 15-25

September 20-25

September 15-20

September 20-25

September 20-25

September 20-25

October 10-15

September 15-20

September 1-10

September 10-15

September 20-25

USAGE

Baking

Baking

Baking

Forage

Raw stuff for beer

Raw stuff for beer

Forage

In fresh condition

In fresh condition

In fresh condition

In fresh condition

In fresh condition




NOTES

Spring

Spring

Spring


Table 4.4. Fruit varieties in Gegharkunik Marz

SPECIES

Apple

Apple

Apple

Pear

VARIETY

Bellefleur Kitayka

Virgin Pink

Winter Banana

Heghine


250-270

220-240

250-260

150-180

PERIOD OF HARVEST

September 20-25

September 25-30

September 25-30

October 20-25

NUMBER OF TREES

PER HECTARE

350-380

380-400

300-360

300-320


600

800

400

900



Table 4.5. Characteristics and productivity of livestock breed in Gegharkunik Marz

NAME

Milk cow

Milk cow

Milk cow Milk cow

Cattle meat

Cattle meat

Cattle meat

Cattle meat

Dam (sheep)

Dam (sheep)



Sow

Sow

Pork

Pork

Dam (goat)

Dam (goat)

Hive

Layer (hen)

Layer (hen)

BREED

Caucasian Brown

Shwitz

Sevabghet

Holstein

Caucasian Brown

Shwitz

Sevabghet

Holstein

Balbas

Armenian (Semi-Rough-

Fleeced)

Balbas


Fleeced)

Ukrainian White

Landras

Ukrainian White

Landras

Local

Cross-breed

Caucasian Brown

Yerevan

Silver

PRODUCTIVITY

Milk l

1.800-2.000

2.000-2.200

2.800-3.200

5.000-5.500

-

-

-

-

90

60

-

-

-

-

-

-

120

350

-

-

-


%

42

41

42

42

42

41

42

42

40

42

40

41

65

66

66

67

41

42

-

-

-

WEIGHT INCREMENT,

g

-

-

-

-

700

800

900

950

-

-

180

200

-

-

500

550

150

200

-

-

-

PRODUCTIVITY(EGGS),

%

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

75

78

WOOL,KG

-

-

-

-

-

-

-

-

3

3.5

-

-

-

-

-

-

-

-

-

-

-

HONEY,Kg

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

9

-

-

PRODUCTIVITY, %

93

95

92

93

-

-

-

-

120

120

-

-

12

10

-

-

125

140

-

-

-

EXPENSESPER

UNIT OFPRODUCTION,

(AMD)

65

60

55

48

600

630

600

600

35/320

40/300

600

720

-

-

850

720

85

67

1.400

29

26


5

7

7

6

1.5

1.5

1.3

1.3

6

6

0.8

0.7

4

4.5

0.7

0.6

5

4

-

1.5

1.5


the marzes

Marz 5

Kotayk Marz


Marz 5 - Kotayk Marz 223

Kotayk Marz comprises Abovyan, Hrazdan and NairiDistricts.

The rivers of Kotayk Marz are the Kasakh and theHrazdan.

Altitude is 1.200-1.800m above the sea level, the maxi-mum point is 3.101m (Mount Tezh ).

Climate is temperate continental, in highlands cold moun-tainous (Hrazdan District). Average annual temperature inhighlands is -80C, in lowlands +60C, with a minimum tem-perature of -400C and a maximum of +380C; in January -120C, in July +200C. Winter is long and summer mild.

Marz 5

Kotayk Marz

Average annual precipitations are 500-700mm. Prevailing winds are North-Eastern. Among soils brown

carbonate soils, brown soils as well as black earth (in high-lands – 1.800-2.000m and more) prevails.

Among developed branches of agriculture animal hus-bandry is the most important; plant-growing is well expand-ed, too. Milk cattle breeding, swine-breeding, poultry-breed-ing, fish-breeding, and bee-keeping are spread out with ashare of other types of animal husbandry. As for plant-grow-ing diversities we do find vegetable and field crop cultiva-tion, as well as fruit-growing.

Table 5.1. Key indicators of agriculture in Kotayk Marz (2007)

MARZINFORMATION

Population

Number of farms


Small livestock

Goats

Swine

Hives

Orchards

Vineyards

Young orchards

Field crops

Pastures

MEASUREMENTUNIT

Man

Item

Head

Head

Head

Head

Head

Item

Ha

Ha

Ha

Ha

Ha

KOTAYK MARZTOTAL

339.432

86.389

51.128

27.286

57.652

7.627

10.747

7.639

3.512

391

339

8.920

29.034

HRAZDANDISTRICT

117.077

29.182

13.528

8.204

16.627

3.538

2.224

2.867

793

0

15

5.201

9.872

NAIRI DISTRICT

89.004

22.399

15.687

7.582

18.134

610

2.437

1.611

1.479

371

147

319

4.288

ABOVYANDISTRICT

133.351

34.808

21.913

11.500

22.891

3.479

6.086

3.161

1.240

20

177

3.400

14.874



Table 5.2. Expenses on vineyard cultivation in Kotayk Marz

WORK




Pests control


Burying of vines


MEASUREMENT UNIT

Man/day

Man/day

Man/day

Man/day

Ha

Kg KgKg

Man/day

Man/day

Man/day

Man/day

L

L

m3

Man/day

Man/day

Man/day

AMD

AMD

-

PLANNED QUANTITY

18

22

8

11

1

250500200

33

3

13

13

4

4

9.600

15

3

44

1

-

PRICE PER UNIT AMD

3.000

5.000

3.000

3.000

15.000

10080

120

4

3.000

2.000

3.000

16.000

18.000

7

3.000

3.500

5.000

18.000

-

TOTAL AMD

54.000

110.000

24.000

33.000

15.000

25.00040.00024.000

132.000

9.000

26.000

39.000

64.000

72.000

67.200

45.000

10.500

220.000

18.000

20.000

1.047.700

NOTES

2 times

5 times

3 times

8 times



Table 5.3. Grape varieties in Kotayk Marz


PERIOD OFHARVEST

USAGE SUGARCONTENT

%

NOTES

25-26

22-24

24-25

22-24

23-26

25-28

In fresh condition, light

and sweet wines, raw stuff for cognac and

champagne

Sweet wines

Strong wines and Sherry

Strong and light

table wines

Red sweet wines

Light and strong table wines

October 10-15

October 20-30

October 10-15

September 5-10

September 25-30

October 15-25

250-300

120-150

220-250

60-100

260-280

80-100

Voskehat

Tchilar

Rkatsiteli

Pinot Noir

Hadis

Spitak Muscat (White Muscat)


PERIOD OFHARVEST

USAGE SUGARCONTENT

%

NOTES

Nairi District

Nairi District

Nairi District

20-23

20-21

19-20

22-26

23-24

22-24

In fresh condition

In fresh condition

In fresh condition, for

juices

In fresh condition, for juices, raisins


juices


juices

September 20-25


August 20-25

September 25-30

September 25-30


250-300

250-300

130-150

200-250

190-220

200-250

Shahumyan

Van

Sateni Sev (Sateni Black)

Yerevani Deghin (Yerevan Yellow)

Tavrizeni


Table 5.4. Cultivation of table varieties of grape in Kotayk Marz



Table 5.5. Expenses on field crops in Kotayk Marz (less expenses on seeds)


WORK


Weeds control

Harvest Transport


Total

MEASUREMENTUNIT

Ha

Ha

Ha

Ha

M3

KgKgKg

L

Ha

Man/day

AMD

AMD

PLANNED QUANTITY

1

1

1

1

1

2.000

20020090

-

1

1

1

-

PRICE PER UNIT AMD

30.000

20.000

8.000

10.000

7.000

7

100100100

-

30.000

8.000

14.000

TOTAL AMD

30.000

20.000

8.000

10.000

7.000

14.000

20.00020.0009.000

-

30.000

8.000

14.000

10.000

200.000

NOTES

Mechanical works

3-4 times

Preplanttillage



Table 5.6. Field crops in Kotayk Marz


SPECIES

Wheat

Wheat

Wheat

Wheat

Wheat

Barley

Barley

Barley

Corn

Corn

Potato

Potato

Potato

Potato

Potato

Cabbage

Cabbage

Cabbage

VARIETY

Armyanka-60

Nairi-68

Vagharshapat

Weston

Stephens

Nutans

Shirak

Zangezur

Abovyan-60

Abovyan-60

Impala

Ausonia

Cosmos

Arinda

Sandra

Stakhanovskaya

Slava-1305



40-42

40-45

40-42

45-48

48-50

35-38

38-40

35-38

38-40

750-800

350-380

300-320

300-350

280-300

300-350

200-220

180-200

190-210

PERIOD OF HARVEST

August 1-5

August 5-10

August 5-10

August 10-15

August 10-15

August 10-15

August 15-25

August 20-25

September 15-20

August 15-20

September 1-10

September 1-5

September 1-10

September 10-15

September 15-20

September 1-10

September 10-15

September 20-25

USAGE

Baking

Baking

Baking

Baking

Baking

Forage

Raw stuff for beer

Raw stuff for beer


Forage

In fresh condition

In fresh condition

In fresh condition

In fresh condition

In fresh condition




NOTES

Spring

Spring

Spring




Table 5.7. Expenses on cultivation of vegetable crops in Kotayk Marz


WORK

Winter tillage Plowing Disking Smoothing Laying beds Transplanting Price of Plants


Diseases control

Pests control

Weeds control

Hilling


MEASUREMENT UNIT

Ha

Ha

Ha

Ha

Ha

Man/day

Item

M3

KgKgKg

L

L

Man/day

Man/day

Man/day

Man/day

AMD

AMD

PLANNED QUANTITY1

1

1

1

1

1

50

16.000

120

180902

1

40

45

30

4

7

1

-

PRICE PER UNIT AMD

25.000

18.000

15.000

10.000

35.000

3.000

7

120

90180

18.000

24.000

3.000

3.000

3.000

10.000

10.000

15.000

TOTAL AMD

25.000

18.000

15.000

10.000

35.000

150.000

112.000

14.400

16.20016.20036.000

24.000

120.000

135.000

90.000

40.000

70.000

15.000

30.000

971.800

NOTES

In autumn

In spring

Handwork

18-20 times

Preplanttillage



Handwork

Handwork

Handwork



Table 5.8. Cultivation of vegetable crops in Kotayk Marz

USAGE

5





















SPECIES

1

Tomato

Tomato

Tomato

Tomato

Tomato

Tomato

Tomato

Tomato

Pepper

Pepper

Pepper

Pepper

Eggplant

Eggplant

Eggplant

Eggplant

Eggplant

Cucumber

Cucumber

Onion

VARIETY

2

Nver

Lia

Ranni-Nush

Gyumri

Anahit-351

Yeraz

Syunik

Zurab

Hayk

Nush-55

Nush-78

Zmrukht

Armavir

Yerevani Manushakaguyn Yerevan Violet)

Haykakan Vaghahas Armenian Early)

Karine

Sev Margarit(Black Pearl)

Gayane

Mane

Khatunarkh


3

750-800

750-800

650-700

650-680

760-790

780-800

800-820

850-900

350-400

400-450

300-380

360-400

650-700

650-680

550-560

700-750

650-700

270-280

240-250

280-290


TRANSPLANTING DAYS

4

70-75

75-80

60-65

60-65

60-65

65-70

60-65

75-80

65-70

65-70

80-85

65-70

65-70

55-60

50-60

50-55

65-70

50-55

45-50

140-150

6

Mid-season

Mid-season

Early

Early

Early

Mid-season

Mid-season-Early

Late-ripening

Early

Early

Mid-season

Early

Mid-season

Early

Early

Super-early

Mid-season

Mid-season

Mid-season-Early

Mid-season

NOTES



SPECIES

Apricot

Apricot

Peach

Peach

Prune

Prune

Prune

Plum

Plum

Sweet cherry

Cherry

Cherry

Apple

Pear

Pear

Pear

Quince

Nut

VARIETY

Yerevan

Sateni

Narinj

Zafran

Albukhar

Renklot Alton’s

Italian


Gyogja

Victory

Ashtarak

Zhukovskaya

Golden Delicious

Malacha


Dzmernuk

Ani

Teghakan (Local)


200-220

240-250

200-220

220-250

200-250

200-220

230-240

180-200

200-210

150-160

150-160

160-170

220-240

230-250

150-180

200-220

180-200

180-200

PERIOD OF HARVEST

July 10-20

July 20-25

July 15-25

July 20-30


July 15-20

September 15-25

August 15-20

July 20-25

June 5-10

July 10-15

June 15-20

September 25-30

August


September 20-25

September 20-25


NUMBER OF TREES

PER HECTARE

280-290

250-260

550-580

580-600

350-380

330-350

340-360

300-310

300-330

480-500

400-420

400-420

380-400

300-310

300-320

250-280

400-420

15-17


500

500

650

700

700

800

650

400

350

900

900

1.000

800

800

900

400

600

1.000

Table 5.9. Fruit varieties in Kotayk Marz



NAME

Milk cow

Milk cow

Milk cow Milk cow

Cattle meat

Cattle meat

Cattle meat

Cattle meat

Dam (sheep)

Dam (sheep)



Sow

Sow

Pork

Pork

Hive

Layer (hen)

Layer (hen)

Layer (hen)

BREED

Caucasian Brown

Shwitz

Sevabghet

Holstein

Caucasian Brown

Shwitz

Sevabghet

Holstein

Armenian Semi-Rough-

Fleeced

Mazekh

Armenian Semi-Rough-

Fleeced

Mazekh

Ukrainian White

Landras

Ukrainian White

Landras

Caucasian Brown

Yerevan

Silver

Lowman Brown

PRODUCTIVITY

Milk l

1.800-2.000

2.000-2.200

2.500-2.800

5.500-6.000

-

-

-

-

60

100

-

-

-

-

-

-

-

-

-

-


%

42

41

42

42

42

41

42

42

42

41

41

42

65

66

66

67

-

-

-

-

WEIGHT INCREMENT,

g

-

-

-

-

700

800

900

950

-

200

210

-

-

500

550

-

-

-

-

PRODUCTIVITY(EGGS),

%

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

75

78

92

WOOL,KG

-

-

-

-

-

-

-

-

3.5

1.8

-

-

-

-

-

-

-

-

-

-

HONEY,Kg

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

9

-

-

-

PRODUCTIVITY, %

92

91

95

90

-

-

-

-

120

120

-

-

12

10

-

-

-

-

-

-

EXPENSESPER

UNIT OFPRODUCTION,

(AMD)

65

60

60

52

600

680

650

620

40/300

40/300

720

650

-

-

700

720

1300

28

25

21


5

7

7

6

1.5

1.5

1.3

1.3

6

6

0.7

0.6

4

4.5

0.7

0.6

-

1.5

1.5

1.2

Table 5.10. Characteristics and productivity of livestock in Kotayk Marz


the marzes

Marz 6

Lori Marz


Marz 6 - Lori Marz 235

Lori Marz includes Stepanavan, Tashir, Spitak, Tumanyanand Gugark Districts.

Climate is temperate, mild, with snowy winters and mod-erately warm summers. Average temperature in January is -40C, in July +180C.

Annual precipitations are 600-700mm. The main rivers of Lori Marz are the Dzoraget, the

Pambak, the Debed. The Northern border is demarcated by

Marz 6

Lori Marz

the Virahayots Range, the Southern by the Halab Range. Inthe West Bazum Range is the border with Shirak Marz,while to the East the marz stretches to Gugarats Range.There are a number of lakes the largest among which isSargis Lake.

Forests occupy 43% of this marz territory. Prevailing soilsare brown mountain forest, mountain-steppe, mountain car-bonate soils and black earth.

MARZINFORMATION

Population

Number of farms


Small livestock

Goats

Swine

Hives

Orchards

Vineyards

Young orchards

Field crops

Pastures

MEASUREMENTUNIT

Man

Item

Head

Head

Head

Head

Head

Item

Ha

Ha

Ha

Ha

Ha

LORI MARZTOTAL

202.978

58.044

61.755

32.473

37.941

5.210

18.962

11.171

1.129

42

19

33.304

64.978

STEPANAVAN DISTRICT

33.964

12.136

10.629

6.001

6.727

402

4.153

2.440

177

0

0

6.243

9.509

TASHIRDISTRICT

35.282

9.063

16.291

8.760

6.452

400

1.999

1.410

28

0

0

12.810

12.620

SPITAK DISTRICT

49.282

17.779

8.919

4.948

5.950

331

1.241

2.556

196

0

4

1.453

16.299

TUMANYAN DISTRICT

55.810

15.716

13.542

7.247

10.267

3.060

7.338

2.120

330

42

12

5.868

12.822

GUGARK DISTRICT

28.640

9.350

12.374

5.517

8.545

1.017

4.231

2.645

398

0

3

6.930

13.728

Table 6.1. Key indicators of agriculture in Lori Marz (2007)



Table 6.2. Expenses on vineyard cultivation in Lori Marz

WORK

Pruning and trimmingof vines



Pests control



MEASUREMENT UNIT

Man/day

Man/day

Man/day

Ha

Kg KgKg

Man/day

Man/day

Man/day

Man/day

L

L

m3

Man/day

Man/day

AMD

AMD

-

PLANNED QUANTITY

15

8

11

1

250500200

33

3

5

5

4

4

9.600

15

3

1

-

PRICE PER UNIT AMD

5.000

3.000

3.000

15.000

10080

120

4.000

3.000

2.000

4.000

16.000

18.000

7

3.000

3.500

18.000

-

TOTAL AMD

75.000

24.000

33.000

15.000

25.00040.00024.000

132.000

9.000

10.000

20.000

64.000

72.000

67.200

45.000

10.500

18.000

-

683.700

NOTES

2 times

5 times

3 times

8 times



Table 6.3. Grape varieties in Lori Marz


PERIOD OFHARVEST

USAGE SUGARCONTENT

%

NOTES

18-21

17-20

17-19

17-23

Tumanyan District

Tumanyan District

Tumanyan District

Tumanyan District

Table wines, raw stuff for cognac and champagne



Strong and sweet table

wines, raw stuff for champagne

September 20-30



September 1-10

80-150

200-250

150-200

50-90

Aligoté

Lalvar

Rkatsiteli

Pinot Noir

Table 6.4. Table grape varieties in Lori Marz


PERIOD OFHARVEST

USAGE SUGARCONTENT

%

NOTES

24-25

22-24

22-24

Tumanyan District

Tumanyan District

Tumanyan District


In fresh condition,

raisins, sweet wines

Sweet wines, in fresh condition

September 10-15

September 5-10

September 10-15

220-250

250-280

280-300

Muscat

Kirovabadi Seghani (Kirovabad Table)

Shahumyan



Table 6.5. Cultivation of fruit in Lori Marz

SPECIES

Peach

Plum

Sweet cherry

Cherry

Apple

Pear

VARIETY

Laureate

Uspekh

Narinj Early

Lodz

Limonniy




Napoleon Black

Ashtarak

Sisian

Zhukovskaya

Winter Banana

Pippin Saffron


Heghine

Bere Bosque


240-260

260-280

220-240

220-240

240-260

160-180

150-170

170-180

150-160

150-170

150-170

180-190

220-240

200-220

180-220

180-220

180-200

PERIOD OFRIPPENING

August 10-15

August 20-25

August 1-5

September 20-25

September 10-15

August 1-5

July 10-15

August 10-15

July 10-15

July 20-25

July 10-15

July 15-20

September 1-10

September 1-10

September 10-15

September 25-30

September 1-15

USAGE



In fresh condition



Universal

Universal

Universal

Universal




In fresh condition

In fresh condition

In fresh condition

In fresh condition

In fresh condition

NOTES

In the whole Marz

In the whole Marz

In the whole Marz

In the whole Marz

In the whole Marz

In the whole Marz

In the whole Marz

In the whole Marz

In the whole Marz

In the whole Marz

In the whole Marz

In the whole Marz

In the whole Marz

In the whole Marz

In the whole Marz

In the whole Marz

In the whole Marz



Table 6.6. Cultivation of field crops in Lori Marz

Wheat, barley, spelt, corn, potato

SPECIES

Wheat

Wheat

Wheat

Wheat

Wheat

Barley

Barley

Spelt

Maize (grain)

Maize (silo)

Potato

Potato

Potato

VARIETY

Armyanka-60

Nairi-68

Vagharshapat

Weston

Stephens

Nutans

Shirak

Sisian Local

Abovyan-60

Abovyan-60

Impala

Ausonia

Cosmos


30-35

35-40

35-40

45-48

48-50

35-38

30-35

15-20

38-40

750-800

380-400

400-420

350-380

PERIOD OF HARVEST

July 15-20

July 15-20

July 15-20

July 10-15

July 10-15

July 10-15

July 15-25

July 20-25

August 15-20

July 15-20

August 20-25

August 20-25

August 20-25

USAGE

Baking

Baking

Baking

Baking

Baking

Forage

Raw stuff for beer

Confectionery


Forage

In fresh condition

In fresh condition

In fresh condition

NOTES

Spring

Spring

Spring




Table 6.7. Characteristics and productivity of livestock bred in Lori Marz

NAME

Milk cow

Milk cow Milk cow

Cattle meat

Cattle meat

Cattle meat

Dam (sheep)


Sow

Sow

Pork

Pork

Dam (goat)

Hive

Layer (hen)

Layer (hen)

BREED

Caucasian Brown

Shwitz

Sevabghet

Caucasian Brown

Shwitz

Sevabghet

Bozakh

Bozakh

Ukrainian White

Landras

Ukrainian White

Landras

Local

Caucasian Brown

Yerevan

Silver

PRODUCTIVITY

Milk l

1.800-2.000

2.000-2.200

2.800-3.200

-

-

-

45

-

-

-

-

-

120

-

-

-


%

42

41

42

42

41

42

41

41

65

66

66

67

41

-

-

-

WEIGHT INCREMENT,

g

-

-

-

700

800

900

-

190

-

-

500

550

150

-

-

-

PRODUCTIVITY(EGGS),

%

-

-

-

-

-

-

-

-

-

-

-

-

-

-

75

78

WOOL,KG

-

-

-

-

-

-

1.8

-

-

-

-

-

-

-

-

-

HONEY,Kg

-

-

-

-

-

-

-

-

-

-

-

-

-

9

-

-

PRODUCTIVITY, %

95

97

97

-

-

-

130

-

12

10

-

-

125

-

-

-

EXPENSESPER

UNIT OFPRODUCTION,

(AMD)

65

60

60

700

750

600

60/380

680

-

-

700

720

85

1.300

28

25


5

7

7

1.5

1.5

1.3

6

0.7

4

4.5

0.7

0.6

5

-

1.5

1.5


the marzes

Marz 7

Shirak Marz


Marz 7 - Shirak Marz 243

Shirak Marz comprises Akhuryan, Ashotsk, Ani, Amasia,Artik Districts.

The territory of the Marz used to be the royal seat of theBagratuni Realm, a dynasty founded by King Ashot. He wasfollowed by his son. The latter having acceded to the thronetransferred the capital to Shirakavan. In 961 Ani was pro-claimed the capital of the Armenian Realm.

Climate is continental. Average temperature of January–ranges from -180C down to -380C, and during July from+180C to +210C.

Average annual precipitations are 400-500mm. Black earth and dark brown soils are common. Shirak Plain has long been praised as a depository of

Marz 7

Shirak Marzgrain. Reviewing the agricultural potential of Shirak Marz,namely lands of agricultural significance, crop plantations,cornfields, pastures, livestock, it becomes clear that the marzcan be divided into two regions. Analysis of Amasia andAshotsk Districts shows a considerable potential for devel-opment of animal husbandry. Lands of agricultural signifi-cance are 59.326 hectares of which 23.359 hectares (39.4%) arepastures, and 9.853 hectares are occupied by cornfields. Thenumber of cattle is 23.282 heads, that of small livestock –about 35.000 heads. It should be noted that out of about26.000 hectares of arable lands a considerable portion is usedunder cultivation of forage crops. These data shows theexisting number of livestock in this region may be enlarged.

MARZINFORMATION

Population

Number of farms


Small livestock

Goats

Swine

Hives

Orchards

Vineyards

Young orchards

Field crops

Pastures

MEASUREMENTUNIT

Man

Item

Head

Head

Head

Head

Head

Item

Ha

Ha

Ha

Ha

Ha

SHIRAK MARZ TOTAL

150.736

38.695

75.985

39.804

71.629

2.131

12.001

10.728

63.5

0

0

11.139

43.522

AKHURYANDISTRICT

49.255

11.605

22.780

11.754

12.725

307

3.912

3.183

37.5

0

0

905

7.585

ASHOTSKDISTRICT

10.925

2.841

14.105

7.236

22.346

782

864

664

3

0

0

4.943

8.552

ANI DISTRICT

23.959

5.971

11.714

5.539

11.235

298

3.748

2.936

0

0

0

4

6.927

AMASIA DISTRICT

8.182

2.252

9.177

4.827

15.408

607

897

1.122

3

0

0

4.910

14.809

ARTIKDISTRICT

58.415

16.026

18.209

10.448

9.915

137

2.580

2.868

20

0

0

376

5.649

Table 7.1. Key indicators of agriculture in Shirak Marz (2007)



WORK


Weeds control

Harvest Transport


Total

MEASUREMENTUNIT

Ha

Ha

Ha

Ha

M3

KgKgKg

L

Ha

Man/day

AMD

AMD

PLANNED QUANTITY

1

1

1

1

-

2.000

25030090

-

1

1

1

-

PRICE PER UNIT AMD

30.000

10.000

8.000

8.000

-

7

100100120

-

30.000

8.000

14.000

TOTAL AMD

30.000

10.000

8.000

8.000

-

14.000

25.00030.00010.800

-

30.000

8.000

14.000

10.000

197.800

NOTES

2 times

Preplanttillage

Table 7.2. Expenses on field crops in Shirak Marz (less expenses on seeds)




SPECIES

Wheat

Wheat

Wheat

Wheat

Barley

Barley

Corn

Potato

Potato

Potato

Potato

Potato

Cabbage

Cabbage

Cabbage

Cauliflower

Hybrid

VARIETY

Armyanka-60

Nairi-68

Weston

Stephens

Nutans

Shirak

Abovyan-60

Impala

Ausonia

Cosmos

Arinda

Sandra

Stakhanovskaya

Slava-1305


Garantia

108-F


40-42

40-45

45-48

48-50

35-38

38-40

750-800

380-400

400-420

350-380

300-320

300-380

200-220

180-200

230-240

150-180

150-180

PERIOD OF HARVEST

September 1-5

September 5-10

September 10-15

September 10-15

September 10-15

September 15-25

September 15-20

September 20-25

September 20-25

September 20-25

October 10-15

September 15-20

September 1-10

September 10-15

September 20-25

September 20-25

September 25-30

USAGE

Baking

Baking

Baking

Baking

Forage

Raw stuff for beer

Forage

In fresh condition

In fresh condition

In fresh condition

In fresh condition

In fresh condition






NOTES

Spring

Spring


Table 7.3. Cultivation of field crops - Shirak Marz




Table 7.4. Fruit varieties in Shirak Marz

SPECIES

Apple

Apple

Apple

Pear

VARIETY

Bellefleur Kitayka

Virgin Pink

Winter Banana

Heghine


250-270

220-240

250-260

150-180

PERIOD OF HARVEST

September 20-25

September 25-30

September 25-30

October 20-25

NUMBER OF TREES

PER HECTARE

350-380

380-400

300-360

300-320


600

800

400

900



NAME

Milk cow

Milk cow

Milk cow Cattle meat

Cattle meat

Cattle meat

Dam (sheep)


Sow

Sow

Pork

Pork

Dam (goat)

Hive

Layer (hen)

Layer (hen)

Layer (hen)

BREED

Caucasian Brown

Shwitz

Sevabghet

Caucasian

Brown

Shwitz

Sevabghet

Bozakh

Bozakh

Ukrainian White

Landras

Ukrainian White

Landras

Local

Caucasian Brown

Yerevan

Silver

Lowman Brown

PRODUCTIVITY

Milk l

1.800-2.000

2.000-2.200

2.800-3.200

-

-

-

45

-

-

-

-

-

120

-

-

-

-


%

42

41

42

42

41

42

41

41

65

66

66

67

41

-

-

-

-

WEIGHT INCREMENT,

g

-

--

700

800

900-

190

-

-

-

500

550

150

-

-

-

-

PRODUCTIVITY(EGGS),

%

-

-

-

-

-

-

-

-

-

-

-

-

-

-

75

78

92

WOOL,KG

-

-

-

-

-

-

1,8

-

-

-

-

-

-

-

-

-

-

HONEY,Kg

-

-

-

-

-

-

-

-

-

-

-

-

9

-

-

-

PRODUCTIVITY, %

90

91

90

-

-

-

130

-

12

10

-

-

125

-

-

-

-

EXPENSESPER

UNIT OFPRODUCTION,

(AMD)

65

60

60

600

600

600

60/380

680

-

-

700

720

85

1.600

28

26

24


5

7

7

1.5

1.5

1.3

6

0.7

4

4.5

0.7

0.6

5

-

1.5

1.5

1.2

Table 7.5. Characteristics and productivity of livestock bred in Shirak Marz


the marzes

Marz 8

Syurik Marz


Marz 8 - Syunik Marz 251

The Syunyats Country is Sisakan, the ninth province of MetsHayk. The relief of the country is extremely mountainous,with zonal top-soils as per different altitudes varyingbetween 390 to 2.200m above the sea level in Meghri andSisian Districts.

Syunik Marz embraces the North-Western mountain-chains in the East of the Northern part of the ZangezurRange, and part of the Western Plateau of SouthernKharabakh Eminence.

The climate is temperate continental with warm summersand cold winters. Average annual temperature is +6.60C, inJanuary we do find -40C in lowlands and -120 C in highlands.

Marz 8

Syunik MarzAnnual norm of precipitations is approximately 400mm. Rivers are typical of mountainous regions. Shaké

Waterfall is famous. The main water courses are the Vorotan,the Meghri, the Goris, the Shaghat, the Ayri.

Below 1.600m dark brown soils prevail, while 1.600-2.200m is the zone of mountain black earth.

Cultivated crops include cereals, legumes. Over 60% ofagricultural production falls to the share of animal hus-bandry.

Main branches of crop cultivation are forage and veg-etable crops, and fruit-growing. Meghri District is affected totropical species: pomegranate, almond, fig, date

MARZINFORMATION

Population

Number of farms


Small livestock

Goats

Swine

Hives

Orchards

Vineyards

Young orchards

Field crops

Pastures

MEASUREMENTUNIT

Man

Item

Head

Head

Head

Head

Head

Item

Ha

Ha

Ha

Ha

Ha

SYUNIK MARZTOTAL

164.747

46.535

50.179

25.787

61.224

7.603

5.926

13.152

1.317

140

29

7.060

76.866

SISIAN DISTRICT

37.404

10.025

19.218

9.588

25.809

1.780

872

5.369

189

0

18

3.228

38.321

GORISDISTRICT

50.946

15.783

22.228

11.143

27.522

866

3.112

4.039

342

45

0

2.162

15.147

KAPANDISTRICT

64.319

17.439

7.373

4.248

6.817

3.074

1.604

2.707

542

3

7

1.517

17.428

MEGHRI DISTRICT

12.078

3.288

1.360

808

1.076

1.883

338

1.037

245

92

4

153

5.969

Table 8.1. Key indicators of agriculture in Syunik Marz (2007)



Table 8.2. Expenses on vineyard cultivation - Syunik Marz

WORK




Pests control



MEASUREMENT UNIT

Man/day

Man/day

Man/day

Ha

Kg KgKg

Man/day

Man/day

Man/day

Man/day

L

L

m3

Man/day

Man/day

AMD

AMD

-

PLANNED QUANTITY

15

8

11

1

250500200

33

3

5

5

4

4

9.600

15

3

1

-

PRICE PER UNIT AMD

5.000

3.000

3.000

15.000

10080

120

4.000

3.000

2.000

4.000

16.000

18.000

7

3.000

3.500

18.000

-

TOTAL AMD

75.000

24.000

33.000

15.000

25.00040.00024.000

132.000

9.000

10.000

20.000

64.000

72.000

67.200

45.000

10.500

18.000

-

683.700

NOTES

2 times

5 times

3 times

8 times



Table 8.3. Grape varieties in Syunik Marz


PERIOD OFHARVEST

USAGE SUGARCONTENT

%

NOTES

21-23

19-23

Meghri and Kapan Districts

In small areas throughout the

Marz





September 10-30

September 1-10

200-300

50-90

Arevik

Pinot Noir

Table 8.4. Table grape varieties in Syunik Marz


PERIOD OFHARVEST

USAGE SUGARCONTENT

%

NOTES

23-25

22-24

20-23

Meghri District

Kapan District

In small areas throughout the

marz

In fresh condition

In fresh condition, sweet

wine

In fresh condition

August 15-20

August 20-25

September 20-25

90-100

120-130

250-300

Meghru Vaghahas (Meghri Early)

Kirovabadi Seghani (Kirovabad Table) Shahumyan



Table 8.5. Expenses on field crops - Syunik Marz (less expenses on seeds)

Wheat, barley, spelt, potato, cabbage

WORK


Weeds control

Harvest Transport


Total

MEASUREMENTUNIT

Ha

Ha

Ha

Ha

M3

KgKgKg

L

Ha

Man/day

AMD

AMD

PLANNED QUANTITY

1

1

1

1

1

2.000

25030090

-

1

1

1

-

PRICE PER UNIT AMD

20.000

8.000

7.000

8.000

-

7

100100120

-

30.000

8.000

14.000

TOTAL AMD

20.000

8.000

7.000

8.000

-

14.000

25.00030.00010.800

-

30.000

8.000

14.000

10.000

184.800

NOTES

3-4 times

Preplanttillage



Table 8.6. Cultivation of field crops in Syunik Marz

Wheat, barley, spelt, potato, cabbage

SPECIES

Wheat

Wheat

Wheat

Wheat

Wheat

Barley

Barley

Barley

Spelt

Corn (silo)

Potato

Potato

Potato

Potato

Potato

Cabbage

Cabbage

Cabbage

VARIETY

Armyanka-60

Nairi-68

Vagharshapat

Weston

Stephens

Nutans

Shirak

Zangezur

Sisian Local

Abovyan-60

Impala

Ausonia

Cosmos

Arinda

Sandra

Stakhanovskaya

Slava-1305



40-42

40-45

40-42

45-48

48-50

35-38

38-40

35-38

15-20

750-800

380-400

400-420

350-380

300-320

300-380

200-220

180-200

230-240

PERIOD OF HARVEST

September 1-5

September 5-10

September 5-10

September 10-15

September 10-15

September 10-15

September 15-25

September 20-25

September 20-25

September 15-20

September 20-25

September 20-25

September 20-25

October 10-15

September 15-20

September 1-10

September 10-15

September 20-25

USAGE

Baking and forage

Baking and forage

Baking and forage

Baking

Baking

Forage

Raw stuff for beer

Raw stuff for beer

Confectionary

Forage

In fresh condition

In fresh condition

In fresh condition

In fresh condition

In fresh condition




NOTES

Spring

Spring

Spring

Spring




Table 8.7. Fruit cultivation in Syunik Marz

SPECIES

Apricot

Apricot

Apricot

Peach

Prune

Prune

Prune

Plum

Plum

Sweet cherry

Cherry

Cherry

Apple

Apple

Pear

Pear

Pomegranate

Fig

Oriental date

Nut

VARIETY

Yerevan

Sateni

Khosroveni

Zafran

Albukhar

Renklot Alton’s

Italian


Gyogja

Napoleon Black

Ashtarak

Zhukovskaya

Golden Delicious

Bellefleur Kitayka

Malacha


Gyulosha

White

JenjiMaru

Teghakan (Local)


250-280

250-280

240-260

250-280

200-250

200-220

230-240

180-200

200-210

150-160

150-160

160-170

220-240

200-220

230-250

150-180

180-200

150-160

160-180

180-200

PERIOD OF HARVEST

June 10-20

June 20-25

June 25-July 1

June 20-30

July 20-August 10

June 15-20

August 15-25

July 15-20

June 20-25

May 10-15

July 10-15

June 15-20

September 25-30

September 25-30

August


September 20-25

August 25-30

September 25-30


NUMBER OF TREES

PER HECTARE

280-290

250-260

280-300

580-600

350-380

330-350

340-360

300-310

300-330

470-480

400-420

400-420

380-400

300-320

300-310

300-320

500

800

600

15-17


900

900

1.000

1.000

900

1.000

1.000

600

600

1.000

1.100

1.300

1.100

800

900

1.100

800

600

1.500

1.100



Table 8.8. Characteristics and productivity of livestock bred in Syunik Marz

NAME

Milk cow

Milk cow Milk cow

Cattle meat

Cattle meat

Cattle meat

Dam (sheep)


Sow

Sow

Sow

Pork

Pork

Pork

Dam (goat)

Dam (goat)

Hive

Layer (hen)

Layer (hen)

BREED

Caucasian Brown

Shwitz

Sevabghet

Caucasian Brown

Shwitz

Sevabghet


Fleeced)


Fleeced)

Ukrainian White

Landras

Armenian

Ukrainian White

Landras

Armenian

Local

Cross-breed

Caucasian Brown

Yerevan

Silver

PRODUCTIVITY

Milk l

1.800-2.000

2.000-2.200

2.500-2.800

-

-

-

60

-

-

-

-

-

-

-

120

350

-

-

-


%

42

41

42

42

41

42

42

41

65

66

68

66

67

69

41

42

-

-

-

WEIGHT INCREMENT,

g

-

-

-

800

900

900

-

200

-

-

-

500

550

650

150

200

-

-

-

PRODUCTIVITY(EGGS),

%

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

75

78

WOOL,KG

-

-

-

-

-

-

3.5

-

-

-

-

-

-

-

-

-

-

-

-

HONEY,Kg

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

9

-

-

PRODUCTIVITY, %

93

92

95

-

-

-

120

-

12

10

10

-

-

-

125

140

-

-

-

EXPENSESPER

UNIT OFPRODUCTION,

(AMD)

68

63

55

600

630

600

40/300

720

-

-

-

800

700

600

85

67

1.300

29

26


5

7

7

1.5

1.5

1.3

6

0.7

4

4.5

4

0.7

0.6

0.5

5

4

-

1.5

1.5


the marzes

Marz 9

Tavush Marz


Marz 9 - Tavush Marz 261

Tavush Marz includes Ijevan, Noyemberyan and BerdDistricts. In the North-West it borders with Lori Marz, in theSouth with Gegharkunik, in the South-East with Kotayk;Northern and South-Eastern frontiers of the marz borderwith Azerbaijan.

Currently Tavush Marz comprises Tavush District of UtikProvince of Mets Hayk. As evidenced by archeological exca-vations, Tavush Marz (Ijevan District) has been inhabitedsince the Stone Age. After the downfall of the ArmenianArshakuni Realm this area was included in the BagratuniRealm, thereafter, in the VII-VIII centuries, it passed underthe rule of the Sevordyats Princedom.

Tavush Marz is encompassed by the Miapor (in BerdDistrict), the Gugarats, in the South the Pambak, theAreguni (Ijevan District), and in the South-West the HalabRanges.

The main rivers are the Tavush, the Kndzorut, theHakhum, the Akhinja, the Aghstev and the Haghartsin. Onthe Hakhum and the Tavush reservoirs have been built forirrigation of 700 hectare and 1.200 hectare plots, respectively.

Marz 9

Tavush MarzClimate is temperate, with moderately warm summers

and mild winters; certain North-Eastern regions have aridsub-tropical climate. Average annual temperature in low-lands is +100C, in uplands –00C; in January it lowers downto -200C, in July it rises up to +38-400C. Annual precipita-tions are 450-750mm.

This marz has 60% of its territory situated at 1.000m abovethe sea level.

Prevailing soils are: dark and light brown soils (800-1.300m above the sea level), mountain-forest, mountain-steppe (1.300-2.100m above the sea level), and brown sub-alpine mountain-meadow soils (above 2.100m) are also com-mon. Forests occupy 52% of the territory.

Plant-growing is oriented to orchard cultivation, fruit-growing, tobacco-growing, while among animal-breedingbranches milk and meat cattle-breeding, sheep-breeding,swine-breeding and poultry-breeding are practiced.

In Noyemberyan District fruit-growing is gatheringswing; numerous orchards, particularly, peach, have beenestablished recently (about 1.000 ha).



MARZINFORMATION

Population

Number of farms


Small livestock

Goats

Swine

Hives

Orchards

Vineyards

Young orchards

Field crops

Pastures

MEASUREMENTUNIT

Man

Item

Head

Head

Head

Head

Head

Item

Ha

Ha

Ha

Ha

Ha

TAVUSH MARZTOTAL

126.421

31.055

35.986

19.403

25.943

5.470

22.944

8.909

260

714

159

10.561

28.216

IJEVAN AND DILIJANDISTRICT

59.486

12.341

17.598

9.436

13.731

2.563

10.600

4.289

5

63

0

6.758

13.099

NOYEMBERYANDISTRICT

29.396

7.936

10.138

5.886

5.662

1.430

8.448

3.278

202

173

159

1.277

9.203

BERD DISTRICT

37.539

10.778

8.250

4.081

6.550

1.477

3.896

1.342

53

478

0

2.526

5.914

Table 9.1. Key indicators if agriculture in Tavush Marz (2007)



Table 9.2. Districted cultivation of fruit in Tavush Marz

SPECIES

Peach

Plum

Sweet cherry

Cherry

Apple

Pear

Nut

VARIETY

Narinj Early

Narinj Mid-Season

Narinj Late-Ripening

Limonniy

Lodz

Salami




Napoleon Black

Dragan’s Yellow

Ashtarak

Sisian

Zhukovskaya

Bellefleur Kitayka

Golden Delicious

Golden Parmen

Malacha

Clap’s Lover

Nut


240-260

280-300

280-300

250-280

240-260

240-250

180-200

180-190

180-190

150-160

150-160

140-150

160-180

160-170

180-200

200-220

180-190

200-220

180-190

80-90

PERIOD OFRIPPENING

September 1-5

September 10-15

September 10-15

September 20-25

September 20-25

September 10-15

August 10-15

July 10-15

August 1-5

July 20-25

July 20-25

July 10-15

July 20-25

July 10-15

September 10-15

September 20-25

September 10-15

August 1-5

July 5-10

September 15-20

USAGE

Universal

Universal

Universal

Universal

Universal

Universal

Universal

Universal

Universal

Universal

Universal




In fresh condition

In fresh condition

In fresh condition

In fresh condition

In fresh condition


NOTES

In the whole marz

In the whole marz

In the whole marz

In the whole marz

In the whole marz

In the whole marz

In the whole marz

In the whole marz

In the whole marz

In the whole marz

In the whole marz

In the whole marz

In the whole marz

In the whole marz

In the whole marz

In the whole marz

In the whole marz

In the whole marz

In the whole marz

In the whole marz



Table 9.3. Expenses on vineyard cultivation in Tavush Marz

WORK




Pests control



MEASUREMENT UNIT

Man/day

Man/day

Man/day

Ha

Kg KgKg

Man/day

Man/day

Man/day

Man/day

L

L

m3

Man/day

Man/day

AMD

AMD

-

PLANNED QUANTITY

15

8

11

1

250500200

33

3

5

5

4

4

9.600

15

3

1

-

PRICE PER UNIT AMD

5.000

3.000

3.000

15.000

10080

120

4.000

3.000

2.000

4.000

16.000

18.000

7

3.000

3.500

18.000

-

TOTAL AMD

75.000

24.000

33.000

15.000

25.00040.00024.000

132.000

9.000

10.000

20.000

64.000

72.000

67.200

45.000

10.500

18.000

-

683.700

NOTES

2 times

5 times

3 times

8 times



Table 9.4. Grape varieties in Tavush Marz


PERIOD OFHARVEST

USAGE SUGARCONTENT

%

NOTES

18-21

17-23

17-20

19-22

24-25

20-21






All Districts of the Marz, mainly in Berd District



and cognac

Strong and light table wines, raw

stuff for champagne



and cognac

Light table wines

Strong and Sherry wines


wines

September 10-30

September 15-20


October 1-20

September 10-15


80-150

50-90

200-250

100-120

280-300

200-250

Aliogoté

Pinot Noir

Lalvar

Saperavi

Rkatsiteli

Karmrahyut


PERIOD OFHARVEST

USAGE SUGARCONTENT

%

NOTES

17-18

18-19

17-18

18-20

In the form of single vines

Not districted, in small areas throughout the

marz



In fresh condition

In fresh condition

In fresh condition

In fresh condition



October 1-20


200-250

130-180

250-300

250-300

Arevshat

Kirovabadi Seghani (Kirovabad Table)

Armenia

Tokun

Table 9.5. Table grape varieties in Tavush Marz



SPECIES

Wheat

Wheat

Wheat

Wheat

Wheat

Barley

Barley

Spelt

Maize (silo)

Potato

Potato

Potato

VARIETY

Armyanka-60

Nairi-68

Vagharshapat

Weston

Stephens

Nutans

Shirak

Sisiani Teghakan(Sisian Local)

Abovyan-60

Impala

Ausonia

Cosmos


30-35

35-40

35-40

45-48

48-50

35-38

30-35

15-20

750-800

380-400

400-420

350-380

PERIOD OF HARVEST

July 15-20

July 15-20

July 15-20

July 10-15

July 10-15

July 10-15

July 15-25

July 20-25

July 15-20

August 20-25

August 20-25

August 20-25

USAGE

Baking

Baking

Baking

Baking

Baking

Forage

Raw stuff for beer

Confectionery

Forage

In fresh condition

In fresh condition

In fresh condition

NOTES

Spring

Spring

Spring


Table 9.6. Cultivation of field crops - Tavush Marz

Wheat, barley, spelt, corn, potato



NAME

Milk cow

Milk cow

Milk cow Milk cow

Cattle meat

Cattle meat

Cattle meat

Cattle meat

Dam (sheep)


Sow

Sow

Pork

Pork

Dam (goat)

Hive

Layer (hen)

Layer (hen)

BREED

Caucasian Brown

Shwitz

Sevabghet

Holstein

Caucasian Brown

Shwitz

Sevabghet

Holstein

Bozakh

Bozakh

Ukrainian White

Landras

Ukrainian White

Landras

Local

Caucasian Brown

Yerevan

Silver

PRODUCTIVITY

Milk l

1.500-1.800

1.600-1.800

1.800-2.000

4.000-4.500

-

-

-

-

45

-

-

-

-

-

120

-

-

-


%

42

41

42

42

42

41

42

42

41

41

65

66

66

67

41

-

-

-

WEIGHT INCREMENT,

g

-

-

-

-

700

800

900

950

-

190

-

-

500

550

150

-

-

-

PRODUCTIVITY(EGGS),

%

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

75

78

WOOL,KG

-

-

-

-

-

-

-

-

1,8

-

-

-

-

-

-

-

-

-

HONEY,Kg

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

9

-

-

PRODUCTIVITY, %

95

97

97

93

-

-

-

-

130

-

12

10

-

-

125

-

-

-

EXPENSESPER

UNIT OFPRODUCTION,

(AMD)

75

65

60

55

600

600

650

550

60/380

680

-

-

600

600

85

1.500

27

24


5

7

7

6

1.5

1.5

1.3

1.3

6

0.7

4

4.5

0.7

0.6

5

-

1.5

1.5

Table 9.7. Characteristics and productivity of livestock - Tavush Marz


the marzes

Marz 10

Vayot Dzor Marz


Marz 10 - Vayots Dzor Marz 271

Vayots Dzor is a district in Syunik Province of Mets Hayk, inthe Arpa Basin.

In 990-991 Gagik I Bagratuni King of Armenia annexedVayots Dzor to the Realm of Ani. Gladzor University gainedwide recognition at the end of the XIII centuryh and in thefirst decades of the XIVcentury. In the middle of the XVIIIcentury Vayots Dzor became part of the newly formedNakhijevan Khanate. In 1828 by the Treaty of Turkmencha itwas annexed to the Russian Empire.

Vayots Dzor is unique in terms of physical and geograph-ical conditions, circumscribed by the Vardenis, Syunyats,and Vayots Dzor Ranges in the North, East, and South. One

Marz 10

Vayotz Dzor Marzof the natural monuments of Vayots Dzor is the very wellknown Jermuk Waterfall (70m).

As for the climate, maximum temperature reaches +400Cin valleys, while absolute minimum temperature is -350C.

Precipitations are 300-700mm. The marz has rich flora and fauna. Forests occupy 4.6% of

the territory. Among the developed branches of agriculture are gar-

dening, animal husbandry and bee-keeping. The keybranch of agriculture in the uplands of Vayots Dzor is ani-mal breeding, mostly sheep-breeding, goat-breeding andbee-keeping.

MARZINFORMATION

Population

Number of farms


Small livestock

Goats

Swine

Hives

Orchards

Vineyards

Young orchards

Field crops

Pastures

MEASUREMENTUNIT

Man

Item

Head

Head

Head

Head

Head

Item

Ha

Ha

Ha

Ha

Ha

VAYOTS DZOR MARZTOTAL

67.009

18.285

22.090

12.095

21.603

10.560

1.218

9.800

1.262

759

203

4.809

29.732

YEGHEGNADZOR DISTRICT

43.657

12.038

13.667

7.646

11.003

5.959

708

5.464

892

758

94

2.713

16.125

VAYK DISTRICT

23.352

6.247

8.423

4.449

10.600

4.601

510

4.336

370

0.5

109

2.096

13.607

Table 10.1. Key indicators of agriculture in Vayots Dzor Marz (2007)



Table 10.2. Expenses on vineyard cultivation in Vayots Dzor Marz

WORK




Pests control



MEASUREMENT UNIT

Man/day

Man/day

Man/day

Ha

Kg KgKg

Man/day

Man/day

Man/day

Man/day

L

L

m3

Man/day

Man/day

AMD

AMD

-

PLANNED QUANTITY

22

8

11

1

250400200

33

3

13

13

3

2

7.500

10

3

1

-

PRICE PER UNIT AMD

3.000

3.000

3.000

12.000

10080

150

3.000

3.000

2.000

3.000

18.000

20.000

7

3.000

3.000

16.000

-

TOTAL AMD

66.000

24.000

33.000

12.000

25.00032.00030.000

99.000

9.000

26.000

39.000

54.000

40.000

52.500

30.000

9.000

16.000

10.000

606.500

NOTES

1 time

3 times

2 times

4 times



Table 10.3. Grape varieties in Vayots Dzor


PERIOD OFHARVEST

USAGE SUGARCONTENT

%

NOTES

22-24 Yeghegnadzor District


September 5-10200-250Areni Sev (Areni Black)

Table 10.4. Table varieties of grape in Vayots Dzor Marz


PERIOD OFHARVEST

USAGE SUGARCONTENT

%

NOTES

22-26

22-26

21-23

22-24

Yeghegnadzor District





In fresh

condition, raisins

In fresh condition


September 20-25

September 20-25

September 15-20

September 15-20

200-250

250-250

200-250

200-250


Deghin Yerevani (Yerevan Yellow) Shahumyan

Sev Kishmish



Table 10.5. Vegetable crops in Vayotz Dzor Marz

CROP

Tomato

Tomato

Tomato

Tomato

Pepper

Pepper

Cucumber

Cucumber

Onion

VARIETY

Anahit -351

Lia

Gandzak

Syunik

Hayk

Nush-55

Kotayk Local

Concurrent

Khatunarkh

HARVEST/RIPENING PERIOD

July 20-25

August 10-15

August 1-15

July 15-20

July 25-August 5

July 25-August 5

July 1-10

June 25-July 5



850-900

750-800

780-800

720-800

370-420

400-450

220-250

180-200

250-280

PRICE PER SEEDLING, AMD

5

4-5

5

4-5

4

4

8-10

8-10

3-4

COMMENTS

Early

Late-ripening

Mid-season

Early

Early

Early

Mid-season-late-ripening

Mid-season

Mid-season



Table 10. 6. Expenses on field crops - Vayotz Dzor Marz (less expenses on seeds)

Wheat, barley, spelt, corn, potato, cabbage

WORK


Weeds control

Harvest Transport


Total

MEASUREMENTUNIT

Ha

Ha

Ha

Ha

M3

KgKgKg

L

Ha

Man/day

AMD

AMD

PLANNED QUANTITY

1

1

1

1

1

2.000

25030090

-

1

1

1

-

PRICE PER UNIT AMD

20.000

8.000

7.000

8.000

-

7

100100120

-

30.000

8.000

14.000

TOTAL AMD

20.000

8.000

7.000

8.000

-

14.000

25.00030.00010.800

-

30.000

8.000

14.000

10.000

184.800

NOTES

3-4 times

Preplanttillage



Table 10.7. Cultivation of field crops in Vayotz Dzor Marz

Wheat, barley, spelt, corn, potato, cabbage

SPECIES

Wheat

Wheat

Wheat

Wheat

Wheat

Barley

Barley

Barley

Spelt

Maize (silo)

Potato

Potato

Potato

Potato

Potato

Cabbage

Cabbage

Cabbage

VARIETY

Armyanka-60

Nairi-68

Vagharshapat

Weston

Stephens

Nutans

Shirak

Zangezur

Sisian Local

Abovyan-60

Impala

Ausonia

Cosmos

Arinda

Sandra

Stakhanovskaya

Slava-1305



40-42

40-45

40-42

45-48

48-50

35-38

38-40

35-38

15-20

750-800

380-400

400-420

350-380

300-320

300-380

200-220

180-200

230-240

PERIOD OF HARVEST

September 1-5

September 5-10

September 5-10

September 10-15

September 10-15

September 10-15

September 15-25

September 20-25

September 20-25

September 15-20

September 20-25

September 20-25

September 20-25

October 10-15

September 15-20

September 1-10

September 10-15

September 20-25

USAGE

Baking and forage

Baking and forage

Baking and forage

Baking

Baking

Forage

Raw stuff for beer

Raw stuff for beer

Confectionary

Forage

In fresh condition

In fresh condition

In fresh condition

In fresh condition

In fresh condition




NOTES

Spring

Spring

Spring

Spring




Table 10.8. Fruit varieties in Vayots Dzor

SPECIES

Apricot

Apricot

Apricot

Peach

Peach

Peach

Prune

Prune

Prune

Plum

Plum

Sweet cherry

Sweet cherry

Sweet cherry

Cherry

Cherry

Apple

Apple

Apple

Pear

Pear

Pear

Quince

Nut

VARIETY

Yerevan

Sateni

Khosroveni

Narinj

Zafran

Lodz Shertavor /layered

Albukhar

Renklot Alton

Italian


Gyogja

Dragan’s Yellow

Napoleon Black

Victory

Ashtarak

Zhukovskaya

Bellefleur Kitayka

Golden Delicious

Winter Banana

Malacha

Antarayin Geghetskuhi (Forest Beauty)

Dzmernuk

Ani

Teghakan (Local)


200-220

240-250

220-240

200-220

220-250

200-220

200-250

200-220

230-240

180-200

200-210

150

130-140

150-160

150-160

160-170

250-270

220-240

250-260

230-250

150-180

200-220

180-200

180-200

PERIOD OF HARVEST

July 10-20

July 20-25

July 25-Aug 1

July 15-25

July 20-30

July 25-Aug 1


July 15-20

September 15-25

August 15-20

July 20-25

June 15-20

June 10-15

June 5-10

July 10-15

June 15-20

September 20-25

September 25-30

September 10-15

August


September 20-25

September 20-25


NUMBER OF TREES

PER HECTARE

280-290

250-260

280-300

550-580

580-600

580-600

350-380

330-350

340-360

300-310

300-330

450-470

470-480

480-500

400-420

400-420

350-380

380-400

300-360

300-310

300-320

250-280

400-420

15-17


500

500

500

650

700

650

700

800

650

400

350

900

800

900

900

1.000

600

800

400

800

900

400

600

1.000



Table 10.9. Characteristics and productivity of livestock in Vayots Dzor Marz

NAME

Milk cow

Milk cow

Milk cow

Milk cow

Cattle meat

Cattle meat

Cattle meat

Cattle meat

Dam (sheep)


Sow

Sow

Pork

Pork

Dam (goat)

Dam (goat)

Hive

Layer (hen)

Layer (hen)

BREED

Caucasian Brown

Shwitz

Sevabghet

Holstein

Caucasian Brown

Shwitz

Sevabghet

Holstein

Balbas

Balbas

Ukrainian White

Landras

Ukrainian White

Landras

Local

Cross-breed

Caucasian Brown

Yerevan

Silver

PRODUCTIVITY

Milk l

1.500-1.800

1.800-2.000

2.000-2.200

4.500-5.000

-

-

-

-

90

-

-

-

-

-

120

350

-

-

-


%

42

41

42

42

42

41

42

42

40

40

65

66

66

67

41

42

-

-

-

WEIGHT INCREMENT,

g

-

-

-

-

700

800

900

950

-

180

-

-

500

550

150

200

-

-

-

PRODUCTIVITY(EGGS),

%

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

75

78

WOOL,KG

-

-

-

-

-

-

-

-

3

-

-

-

-

-

-

-

-

-

-

HONEY,Kg

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

9

-

-

PRODUCTIVITY, %

92

91

90

93

-

-

-

-

120

-

12

10

-

-

125

140

-

-

-

EXPENSESPER

UNIT OFPRODUCTION,

(AMD)

80

75

65

50

700

750

700

680

35/320

600

-

-

900

800

85

67

1.600

29

26


5

7

7

6

1.5

1.5

1.3

1.3

6

0.8

4

4.5

0.7

0.6

5

4

-

1.5

1.5


appendix

Geographyand Historyof Armenia


Geography and History 281

Geography and History

Geographyi

The Republic of Armenia lies in a triangular section ofthe Transcaucasus, bordered by Azerbaijan, Iran, Turkeyand the Republic of Georgia. With an area of 29,800 squarekilometers (11,490 square miles), the landlocked country isjust about the size of Vancouver Island.

The capital city, Yerevan, lies on the Hrazdan River, and ishome to some 1.2 million people. The next three largest citiesare Gyumri (pop. 121,000), Vanadzor (pop. 74,000) andAbovian (pop. 54,000). Another important city is Echmiadzin,located some 20 miles west of Yerevan, which is the seat ofthe patriarchate of the Armenian Apostolic Church.

The greatest part of Armenia is mountainous (about 300feet above sea level), while one-third is pastureland. Forestand woodland cover 12 percent of the country, arid landsome 18 percent, and permanent crops cover 3 percent.The highest elevation is 4,095 meters (Mt. Aragats) and thelowest point is 400 meters above the sea level (Debed river).

There are more than 200 streams and rivers inArmenia, none navigable, however, because of theirsteep descents and rapid currents. The Armenian coun-tryside also boasts some 100 small, but picturesquelakes. One of the largest mountain lakes in the world,Lake Sevan, covers an area of 1,400 square kilometersand is about 650 feet above sea level.

Climate in Armenia is continental, with lower tempera-tures and more precipitation in higher elevations. In centralplateau temperature varies widely with cold winters andhot summers.

The geography of Armenia and its location have deter-mined the destiny of its people and the history of the country.

ANCIENT LAND AT GRIPS WITH ADVERSITY The present-day Republic of Armenia occupies but a

fraction of the ancient Armenia, which extended from the

lesser Caucasus Mountains south across the Armenianplateau to the Taurus Mountains. Frequent earthquakesstill remind us that the land lies near the great geologicalfault between the Asian and African subcontinent plates.The Armenian plateau is a highland which rises directlyabove its surrounding regions. Geography undoubtedlyplayed a key role in the history and culture of Armenia.Forming an important coin of vantage and a highway ofgreat value for trade and commerce between Asia andEurope, Armenia it seems was destined to be at gripswith adversity. The land with its untold riches and its



Historical map of Armenia.

strategic position of primary import, stirred the ambitionsof many "superpowers" of the region. For a succession ofcenturies, the Armenians were in constant warfare withinvaders and conquerors - Assyrians, Romans,Byzantines, Parthians, Arabs and Turks - who rolled overtheir homeland, although certainly not without meetingthe most stubborn resistance. Throughout these turbu-lent centuries, the Armenians successfully asserted theirhistorical identity and upheld their national heritageagainst great odds. Although on occasions overpoweredby superior forces and reduced to the status of vassals,they nevertheless enjoyed a semblance of national auton-omy. Yet, the very vicissitudes that troubled its existencecontributed to the creation of a varied and original cul-ture, held together by the constants of social, intellectualand religious institutions.

ORIGINS OF THE ARMENIAN NATIONArmenian tradition has preserved several legends con-

cerning the origin of the Armenian nation. The mostimportant of these tells of Hayk, the eponymous hero ofthe Armenians who called themselves Hay and theircountry Hayk' or Hayastan. The historian of the 5th cen-tury, Movses Khorenatsi, also relates at some length thevaliant deeds of Aram whose fame extended far beyondthe limits of his country. Consequently, the neighboring

Urartu (c. 750 B.C.)

nations called the people Armens or Armenians.Archeology has extended the prehistory of Armenia tothe Acheulian age (500,000 years ago), when hunting andgathering peoples crossed the lands in pursuit of migrat-ing herds. The first period of prosperity was enjoyed byinhabitants of the Armenian upland in the third millenni-um B.C. These people were among the first to forgebronze, invent the wheel, and cultivate grapes. The firstwritten records to mention the inhabitants of Armeniacome from hieroglyphs of the Hittite Kingdom, inscribedfrom 1388 to 1347 B.C., in Asia Minor. The earliestinscription to be found directly upon Armenian lands,carved in 1114 B.C. by the Assyrians, describes a coali-tion of kings of the central Armenian region referring tothem as "the people of Nairi."

URARTU, THE FIRST KINGDOM IN ARMENIABy the 9th century B.C., a confederation of local tribes

flourished as the unified state of Urartu. It grew tobecome one of the strongest kingdoms in the Near Eastand constituted a formidable rival to Assyria for suprema-cy in the region. The Urartians produced and exportedwares of ceramic, stone and metal, building fortresses,temples, palaces and other large public works. One oftheir irrigation canals is still used today in Yerevan,Armenia's capital - a city which stands upon the ancientUrartian fortress of Erebuni.



PERSIAN RULEIn the 6th century Urartu fell to the Medes, but not long after,

the Persian conquest of the Medes, led by Cyrus the Great,displaced them. Persia ruled over Armenia from the 6th centu-ry until the 4th century B.C. Its culture and Zoroastrian religiongreatly influenced the spiritual life of the Armenian people whoabsorbed features of Zoroastrianism into their polytheistic andanimistic indigenous beliefs. As part of the Persian Empire,Armenia was divided into provinces called satrapies, each witha local governing satrap (viceroy) supervised by a Persian. TheArmenians paid heavy tribute to the Persians, who continuallyrequisitioned silver, rugs, horses and military supplies. Thegoverning satraps of Armenia's royal Orontid family governedthe country for some 200 years, while Asia became acquaint-ed with invading Greeks from the west.

ARMENIA PARTITIONEDWith the fall of the Persian Empire to Alexander the Great

of Macedonia in 331 B.C., the Greeks appointed a newsatrap, an Orontid named Mithranes, to govern Armenia.The Greek Empire, which stretched across Asia and Europe,was one in which cities rapidly grew, spreading Hellenisticarchitecture, religion and philosophies. Armenian cultureabsorbed Greek influences as well. As centers at the cross-roads of trade routes connecting China, India and CentralAsia with the Mediterranean, Armenian cities thrived on eco-nomic exchange. The Greeks also infused Armenia's version

Armenia circa 250 B.C.

of Zoroastrianism with facets of their religious beliefs. AfterAlexander's sudden death in 323 B.C., the partitioning of hisempire and warring among his generals led to the emer-gence of three Greek kingdoms. Despite pressure from theSeleucid monarchy, one of the Greek kingdoms, theOrontids, continued to retain control over the largest of threekingdoms into which Armenia itself had been divided:Greater Armenia, Lesser Armenia and Sophene.

THE RENAISSANCE OF ARMENIA, TIGRAN THE GREATSeleucid's influence over Armenia finally dissolved when, in

the second century B.C., a local general named Artaxias(Artashes) declared himself King of Greater Armenia andfounded a new dynasty in 189 B.C. Artaxias expanded his ter-ritory by defining the borders of his land and unifying theArmenian people. The "renaissance of Armenia" was accom-plished during the reign of Tigran the Great (95-99 B.C.), whoproclaimed himself "King of Kings." Under Tigran II, Armeniagrew to a great degree of military strength and political influ-ence. According to the Greek biographer Plutarch, the Romangeneral Lucullos said of this king, "In Armenia, Tigran is seatedsurrounded with that power which has wrested Asia from theParthians, which carries Greek colonies into Media, subduesSyria and Palestine and cuts off the Seleucids." And Cicero,the Roman orator and politician, adds, "He made the Republicof Rome tremble before the powers of his arms." Armenia'sborders extended from the Caspian Sea to the Mediterranean.

Armenian Empire (c. 80 B.C.)



Arsacid Armenia (c. 150 A.D.)

THE ARSACID DYNASTYTigran's victories were however, destined to hasten his down-

fall, which occurred in 66 B.C. His son, King Artavazd II, gov-erned Greater Armenia for 20 years until Anthony and Cleopatrahad him brought to Egypt in chains. Artavazd refused to nameCleopatra as his queen and was executed. By 64 A.D. the newArsacid dynasty, a branch of the Parthian Arsacids, came topower, and the country as a whole soon became a buffer zoneover which the Romans and Parthians fought for domination. Inorder that we may realize the real implications of the history ofArmenia and grasp the soul of this people, we must turn ourgaze upon the beginning of the 4th century, which was momen-tous in its consequences for the growth of the nation.

THE FIRST CHRISTIAN STATE IN THE WORLDOne of the most crucial events in Armenian history was the

conversion to Christianity. By adopting the new religion,Armenia established a distinct Christian character of its ownand, at times, became identified with the Western world. KingTiridates III (Trdat), having been converted by Gregory theIlluminator, proclaimed Christianity as the religion of the statein 301 A.D. Thus, Armenia became the first nation to embraceChristianity officially. This was 12 years before the EmperorConstantine's Edict of Milan which declared tolerance ofChristians in the Roman Empire. Gregory the Illuminator, latercanonized, was elected Catholicos of the new Armeniannational Church, the first in a long line of such clergy to he

elected supreme head of the Armenian Church. The creationof the Armenian alphabet in 405 A.D. solidified the unifying fac-tor of the Armenian language for the divided nation. MesropMashtots, a scholar and clergyman, shaped the thirty six (threecharacters were added later) letters that distinguishedArmenia, linguistically and liturgically, from the powers sur-rounding it. The alphabet representing the many distinct con-sonants of Armenian has remained unchanged for 1500 years.

BATTLE FOR FAITHThe conversion to Christianity was inevitably to bring in its

wake complications of a political nature and to arouse graveanxieties in neighboring Persia. The Sassanian Persians tookadvantage of Armenia's inner weakness and launched acampaign to stamp out Christianity there and replace it withMazdaism. Under this common threat, the princes, nobilityand the people of Armenia rallied, and in 451 under the lead-ership of the Commander-in-Chief (sparapet) VardanMamikonian the Armenians heroically faced the Persians atAvarayr in defense of their faith and national heritage. Heavilyoutnumbered, they were defeated; Vardan Mamikonian andmany valiant men fell fighting. But guerrilla warfare continuedin the mountainous regions. Vahan Mamikonian, a nephew ofVardan, continued the struggle. This time the Persians, real-izing the futility of their policy, were obliged to come to termswith the Armenians. Freedom of religious worship wasrestored with the Treaty of Nvarsag.

Medieval Armenian Kingdoms



THE BAGRATID DYNASTYIn the 7th century, the mighty Arabs stormed into

Armenia and conquered the country. Beginning from the9th century, Armenia enjoyed a brilliant period of inde-pendence when the powerful Bagratid Dynasty assertedpolitical authority. Resumption of international tradebrought prosperity and the revival of artistic and literarypursuits. The capital of Ani grew to a population of about100,000, more than any urban center in Europe. Religiouslife flourished and Ani became known as the "city of onethousand and one churches." In the middle of the 11thcentury, most of Armenia had been annexed by Byzantium.

THE CILICIAN KINGDOM OF ARMENIAThe destruction of the Bagratid Kingdom was complet-

ed by raids of new invaders, Seljuk Turks from CentralAsia. With little resistance from weakened Byzantium, theSeljuk Turks spread into Asia Minor as well as theArmenian highlands. This invasion compelled a large num-ber of Armenians to move south, toward the TaurusMountains close to the Mediterranean Sea, where in 1080they founded, under the leadership of Ruben (Rubeniddynasty), the Kingdom of Cilicia or Lesser Armenia. Closecontacts with the Crusaders and with Europe led toabsorbing Western European ideas, including its feudalclass structure. Cilician Armenia became a country ofbarons, knights and serfs. The court at Sis adopted

European clothes. Latin and French were used alongsideArmenian. The Cilician period is regarded as the GoldenAge of Armenian Illumination, noted for the lavishness ofits decoration and the frequent influence of contemporarywestern manuscript painting. Their location on theMediterranean coast soon involved Cilician Armenians ininternational trade between the interior of Western Asiaand Europe. For nearly 300 years, the Cilician Kingdom ofArmenia prospered, but in 1375 it fell to the Mamelukes ofEgypt. The last monarch, King Levon VI, died at Calais,France in 1393, and his remains were laid to rest at St.Denis (near Paris) among the kings of France.

PERSIAN RULE IN EASTERN ARMENIAWhile in the 13th century Armenians prospered in the

Cilician Kingdom, those living in Greater Armenia wit-nessed the invasion of the Mongols. Later, in the 16th and17th centuries, Armenia was divided between theOttoman Empire and Safavid Iran. With the annexation ofthe Armenian plateau, the Armenians lost all vestiges of anindependent political life. The Persian leader Shah AbbasI inaugurated a policy of moving populations of entireArmenian regions to his country to create a no-man's landin the path of the Ottoman advance, and to bring a skilledmerchant and artisan class to his new capital, Isfahan.The Armenian community of New Julfa, a suburb ofIsfahan, was held by Shah Abbas I in great esteem and

Cilician Kingdom of Armenia Armenia in 1200



Armenia in Ottoman Empire

became one of the economic bases of the Safavid state.Persians ruled Eastern Armenia until 1828, when it wasannexed by Russia. However, it was the Ottoman Turkswho governed most of the Armenian land and population(Western Armenia).

OTTOMAN EMPIRE AND THE GENOCIDEDuring the 19th century, the Armenians living under

Turkish rule suffered from discrimination, heavy taxationand armed attacks. As Christians, Armenians lacked legalrecourse for injustices. They were taxed beyond theirmeans, forbidden to bear arms in a country where murder-ing a non-Muslim often went unpunished, and were with-out the right to testify in court on their own behalf. Duringthe late l9th century, the increasingly reactionary politicsof the declining Ottoman Empire and the awakening of theArmenians culminated in a series of Turkish massacresthroughout the Armenian provinces in 1894-96. Any illu-sion the Armenians had cherished to the effect that theacquisition of power in 1908 by the Young Turks mightbring better days was soon dispelled. For in the spring of1909, yet another orgy of bloodshed took place in Adana,where 30,000 Armenians lost their lives after a desperateresistance. World War I offered a good opportunity forTurks to "solve the issue." In 1915, a secret military direc-tive ordered the arrest and prompt execution of Armeniancommunity leaders. Armenian males serving in the

Ottoman army were separated from the rest and slaugh-tered. The Istanbul government decided to deport theentire Armenian population. Armenians in towns and vil-lages were marched into deserts of Syria, Mesopotamiaand Arabia. During the "relocation" many were flogged todeath, bayoneted, buried alive in pits, drowned in rivers,beheaded, raped or abducted into harems. Many simplyexpired from heat exhaustion and starvation. 1.5 millionpeople perished in this first genocide of the 20th century.Another wave of massacres occurred in Baku (1918),Shushi (1920) and elsewhere.

THE FIRST REPUBLIC AND THE SOVIET REGIMEThe defeat of the Ottoman Turks in World War I and

the disintegration of the Russian Empire gave theArmenians a chance to declare their independence. OnMay 28, 1918, the inde-pendent Republic of Armeniawas established, after the Armenians forced the Turkishtroops to withdraw in the battles of Sardarapat,Gharakilisse and Bashabaran. Overwhelming difficultiesconfronted the infant republic, but amid these conditionsthe Armenians devoted all their energies to the pressingtask of reconstructing their country. But due to pressureexerted simultaneously by the Turks and Communists,the republic collapsed in 1920. Finally, the Soviet RedArmy moved into the territory (Eastern Armenia) and onNovember 29, 1920, declared it a Soviet republic.Armenia was made part of the Trans-Caucasian SovietFederal Socialist Republic in 1922, and in 1936, itbecame one of the Soviet Union's constituent republics.The tumultuous changes occurring throughout the SovietUnion beginning in the 1980's inevitably had repercus-sions in Armenia.

INDEPENDENCEIn 1988, a movement of support began in Armenia for

the constitutional struggle of the Armenians of NagornoKarabagh, to exercise their right to self-determination.(This predominantly Armenian populated autonomousregion had been placed under the jurisdiction ofAzerbaijan by an arbitrary decision of Stalin in 1923.) Thatsame year, in 1988, Armenia was rocked by severe earth-



quakes that killed thousands, and supplies from both theSoviet Union and the West were blocked by theAzerbaijani Government fighting the Armenians inNagorno Karabakh. Both of these issues have dominatedArmenia's political arena since the first democratic elec-tion held in Armenia during the Soviet era. In 1990, theArmenian National Movement won a majority of seats inthe parliament and formed a government. On September21, 1991, the Armenian people overwhelmingly voted infavor of independence in a national referendum, and anindependent Armenia came into being.

Notes

i Source: the official web-site of Republic of Armenia Ministry ofForeign Affairs www.armeniaforeignministry.am

Armenia today


appendix

AbreviationsReferences


Abreviations

National and International Organisms

AAA: Armenian Academy of Agriculture

AFSA: Armenian Food Safety Agency

AIA: “Armenia” International Airports” C.J.S.C.

AOAF: Armenian Organic Agriculture Foundation

AQUASTAT: FAO’s Information System on Water Use in

Agriculture and Rural Milieu

ASC: Agricultural Support Centre

ASIF: Armenian Social Investment Fund

AWA: Armenian Wine Association

ECOWAS: Economic Community of West Africans States

FAO: Food and Agriculture Organization

FAF: FruitFull Armenia

IMF: International Monetary Fund

FSP: Food Security Program of the European Union

GFAR: Global Forum on Agricultural Research

IFAD: International Fund for Agricultural Development

IICA: Inter-American Institute for Cooperation on

Agriculture

ISO: International Standard Organization

OECD: Organization for Economic Co-operation and

Development

TDA: “Tierras de Armenia” C.J.S.C.

UN: United Nations

UNDP: United Nations Development Program

UNDRO: United Nations Disaster Relief Coordinator

UNECE: United Nations Economic Commission for Europe

UNICEF: United Nations International Children’s

Emergency Fund

WB: World Bank

Others

°C: degrees Celsius°F: degrees FarenheitCal: caloriesAMD: Armenian Dramsha: hectareibid: source previously quotedIDH: Human development ratePer capitakcal: kilocaloriekg: kilogram km: kilometerkm2: square kilometerskm3: cubic kilometerm: meterm2: square metersm3: cubic metermm: millimetermsnm: meters above sea levelop. cit: “from the previously quoted source” p.a: per annump.a.b: gross agricultural productionGDP: Gross Domestic Product ppp: purchasing power paritytn: metric ton US$: United States of America Dollarsvum: exports products unit value


291

References

Alpha Plus Consulting, The State of Armenian Agriculture, aquantitative and qualitative analysis, Yerevan, 2005.

Arzumanya T, Current issues on research, development andinnovation in Armenia en Int. J. Forsight and InnovationPolicy, Vol 2 (2), 2006

Asad, Murthi M., Yemtsov R., Murrugarra E., Dudwick N.,Hamilton E. and Tiongson E., Growth, Poverty andInequality: Eastern Europe and the Former Soviet Union,Washington DC, 2005, World Bank.

Bedoukian, P., Geography of Armenia, Geneva, 2005

Broadman H., Anderson J., Claessens S., Ryterman R.,Slavova S., Vaglasindi M. and Vincelette G, InstitutionalReform for Investment and Growth in South Eastern Europe,Washington DC, 2004, World Bank.

World Bank, Armenia at first sight, statistical material com-piled by the Permanent Office in the Country, 2004

World Bank, Armenia’s Rural Economy, From Transition toDevelopment, Washington DC, 2005.

World Bank, Armenia: Reaping the benefits of SteadyReforms, 2007 (Available in http://siteresources.worldbank.org/EXTIDASPANISH/Resources/IDA-Armenia-ES.pdf)(Access: May, 2008)

World Bank, Armenia: Poverty Assessment (Vol 2) Volume II:Poverty Update, Human Development Department, Europeand Central Asia Region, Washington, 2005.

World Bank. Global Economic Prospects 2008: Long-termprospects and poverty forecasts, Washington DC, 2008.

World Bank, Public Expenditure Review of Armenia, Washington DC, 2World Bank, Rising food prices: Policy options and WorldBank response, Washington DC, 2008.

World Bank, Utility prices and the poor, Report N#. 497, Washington DC, 2001.Bezemer y Lerman, Rural Livelihoods in Armenia, Discussion Paper No. 4.03, The Hebrew University of Jerusalem, 200United Nations Economic Commission for Europe (UNECE),Towards a knowledge-based economy. Armenia: countryreadiness assessment report, New York and Geneva, 2002.

United Nations Economic Commission for Europe (UNECE)and Ministry of Nature Protection of the Republic ofArmenia, National Report on the State of the Environment inArmenia in 2002, Yerevan, 2003.

CIA World Fact book, Armenia (Available inhttps://www.cia.gov/library/publications/the-world-fact-book/geos/am.html) (Access: April, 2008).

Davrizhetsi, P, Food quality and development: WTO and itsrules, Roma, 2005.

Elliott, D; Schwartz, M; Scott, G; Haymes, S; Heimiller, D;George, R; Wind energy resource, Atlas of Armenia, 2003

FAO, Agricultural statistics and environmental issues. Basedon Long-term scenarios of livestock-crop-land study results,use interactions for the assessment of environmental indica-tors in developing countries, Roma, 1995.

FAO, Status of Agricultural Biotechnology and Biosafety inSelected Countries of the Balkans, the Caucasus, Rome, 2005.

FAO. The Sate of Food and Agriculture. Rome, 2007.

FAO, World Agriculture: towards 2030/205, Rome, 2006.

FAO/GFAR, Regional Workshop on Post-Harvest in CentralAsia and the Caucasus, Almaty, 2002

Fisher, Stanley, Sahay R., y Vegh C., How far is EasternEurope from Brussels?, Washington DC, 1998, FMI.

FMI, Oomes N, Inflation in Armenia: What is happening toArmenian prices, Washington DC, 2007.



Hayjirnackhagits Institute, The program of utilization of water resources within the Republic of Armenia, 199Heilig, G.K., China Food. Can China Feed Itself?,Luxemburg, 1999, IIASA.

Ivanic M y Martin W, Implications of Higher Global FoodPrices for Poverty in Low-Income Countries, WashingtonDC, 2008, World Bank.

Limao N. y Venables A.J., Infrastructure, GeographicalDisadvantage, Transport Cost and Trade, 2001, World BankEconomic Review.

Loukoianova E. y Unigovskaia A., Analysis of Recent GrowthIn Low-Income CIS Countries, Washington DC, 2004, FMI.

Matoo A., Shaping Future GATS Rules for Trade in Services,Paper submitted on NBER Conference, Seul, 2000.

Michalopoulos C. y Tarr D., Summary and Overview ofDevelopment Since Independence en Trade in the NewIndependent States, Washington DC, 1994, World Bank/UNDP.

Mitra S., Andrew D., Gyulumyan G., Holden P, Kaminski B,Kuznetsov Y and Vashakmadze E, The Caucasian Tiger,Sustaining Economic Growth in Armenia, Washington DC,2007, World Bank.

Norris D, Era y Holger E y F, Bank Efficiency and MarketStructure: What determines Banking Spreads in Armenia?FMI Working Paper, 2007.

OCDE, Water Management and Investment in the NewIndependent States, 2001.

OCDE-ECOWAS. Atlas on regional integration in WestAfrica, 2007.

World Trade Organization, Report of the Working Party onthe Accession of the Republic of Armenia, Geneva, 2002.

Republic of Armenia, Ministry of Nature Protection, FirstNational Report to the Convention on Biological Diversity,Yerevan, 1999.

Republic of Armenia, Ministry of Agriculture and FAO support, Astrategy for sustainable agricultural development, Yerevan, 2002

Republic of Armenia, National Statistical Service, Yearbook2007, Yerevan, 2008.

Reza L, Michalski W y Stevens B., The future of food. Longterm prospects for the agro-food sector, 1998.

Roberts B.W. y Banaian K, Remittances in Armenia: Size,Impacts and Measures to Enhance Their Contribution toDevelopment, Washington DC, 2004, USAID.

Russell, T., The Armenian Diaspora, Washington, 1994

Schneider F., The size and Development of the ShadowEconomies of 22 Transition and 21 OECD Countries,Document N# 514, University of Linz (Austria) and Institutefor the Study of Labor (IZA) in Bonn, Germany, 2002.

Tenenbaum Y, Rural Population Worldwide, New York, 2007Tumanian, R, Armenia, country pasture/forage resource profiles, 2006 (available inhttp://www.fao.org/ag/AGP/AGPC/doc/Counprof/Armenia/Armenia.htm) (Access: April, 2008).

United Nations Development Program (UNDP), The mostvulnerable population in Armenia, Armenia Social trends,Bulletin, Yerevan, 2006

United Nations Development Program (UNDP), “The PoorestCommunities in Armenia’s Marzes”, Armenia Social trends,Bulletin , Yerevan, 2002.

UNDRO-ONU, Multisectoral Study on Disaster andManagement Planning in Armenia, New York, 1990

USA, National Intelligence Council, Global Trends 2015: ADialogue About the Future with Non-government Experts, 2000.

USAID, Armenia Competitiveness Assessment, Arlington, 2004.

USAID, Armenia agricultural assessment, 2002


293

Index

Thanks

Introduction

Chapters

1.World Situation Trends and Challenges

2.Natural Resources in Armenia

3. Armenian Agricultural Scenario

4. Logistics

5. Agribusiness and Marketing

6. Agribusiness Sector Financing

7. Legal Regulations of Agricultural Sector

8. International Organizations’ StrategicRecommendations for AgriculturalDevelopment in Armenia

9. Fruitfull Armenia Proposal

The Marzes

Marz 1. Aragasotn Marz

Marz 2. Ararat Marz

Marz 3. Armavir Marz

Marz 4. Gegharkunik Marz

Marz 5. Kotayk Marz

Marz 6. Lori Marz

Marz 7. Shirak Marz

Marz 8. Syurik Marz

Marz 9. Tavush Marz

Marz 10. Vayot Dzor Marz

Geography and History of Armenia

Abreviations, References

5

7

9

29

55

89

113

123

139

159

165

173

185

201

215

221

233

241

249

259

269

279

289


Fruiful Armenia

Documents

Transcript of Fruiful Armenia