Fruiful Armenia

5
Thanks
Fruitfull Armenia would like to thank the persons who have been involved in the preparation of this book: first of all to Mr. Ing. Daniel Alberto Tardito, intellectual and material author of this book. to Mr. Ing. Matas Esteva, who accompanied all the agricultural technical revision. to Mr. Sebastin Fratto - who under the specifics directions of Mr. D. Tardito made the research workand his team: Miss Micaela Garcia Luna, Lic. Ignacio Lpez, Lic. Sabrina Arana, Lic. Carlos Bove, Lic. Luciana Montaperto, Lic. Sergio Spadaro, for the financial issues, Converse Bank through their representatives Mr. Jos Luis Prsico and Mr. Ararat Ghukasyan, for the legal issues the invaluable unconditional help of Mr. Armen Ter-Tachatyan, his very patient lawyer Ms. Liana Yordanyan, as well as Mr. Vahe Yacoubian, for the translations into English to Miss Claudia Calvosa and Silvana Garca Calabria, and for the translations into Armenian to Mrs. Hasmik Mkrtchyan, and Lilit Manoukyan, as well as Anna Mnatsakanyan, for her every day precious work, patience, efficiency to Mrs. Dra Georgina Marioni, for their permanent back-up to Miss Armine Mikayelyan as well as her assistant Miss Astghik Chobanyan, and also to Miss Romina Windholz, to Miss Mariana Rodriguez, to all the IT group supporting us Esteban Arias Duval, Fernando Ketchian, Diego Ovide, Estanislao Aleman, to Ma Eva Pozzi, to Vernica Nuo - creator of 2008 FAF IV image who works at the Image Department leaded by Patricia Eurnekian, to her and all her team, to Claudia Akian from Grfica Akian for accepting to print this book in such rush circumstances, and to Fabio Massolo the editor, an excellent professional but moreover a wonderful pacient person who 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 who gave the first kick-off idea and the chance of being part of his team so as to be able to prepare every year the Fruitfull Armenia gathering
From where I come they say that in your life you have to plant a tree, write a book, and have children . well, Daniel and myself have accomplished the task of writing a book Thank you
Ana Cristina Schirinian

Fruitfull Armenia
Introduction
The present research encompasses an analysis and submits general recommendations for achieving even greater progress in the current boom of agribusiness in the Republic of Armenia. The development of a national agricultural proposal was one of the goals we have set as a contribution to support Armenian growth. Our experience in this field, the setting up of a top-level worldwide interdisciplinary team, powered by the more than four years of working in the country (Tierras de Armenia C.J.S.C., Arevadasht, Armavir), have allowed us to carry out a more accurate diagnosis of the situation. Based on it we have drawn up a broad plan which considers strategic aspects to allow a sustainable agricultural and agribusiness development. Recent years have been of crucial importance in the economic and political life of the Republic of Armenia. [] The centralized economic system has been replaced by one based on the market. [] In the early 1990s the land and the means of production were privatized and a legal framework was created for different forms of possession, the handling of production, freeing of prices and development of the banking system. These reforms created a solid platform for a greater development of agriculture1. Production restructuring usually has two triggers: one, a crisis scenario in which decisions need to be adopted on a day 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 the next five years present very encouraging prospects with regard to the profitability of the sector. Therefore, any proposal to reorganize and transform it will be easier to implement, based on strategic planning. Armenias international dependence when it comes to covering the gap between basic domestic food consumption (e.g. wheat, milk and corn) constitutes a bottleneck for the national economy. The country will see an annual increase in its outlay of hard currency to provide the same volumes, generating inflationary processes and, in extreme cases, shortages. The new international scenario will inevitably lead each region to specialize in whatever is allowed by the comparative advantages of its soil-climate-water-technology conjunction. This premise will undoubtedly redesign the global map of production. The transformation of vegetable protein into animal protein will be uneconomic in those areas where grain production is not efficient, and therefore there will be an increase in the international trade of powdered milk and meat mainly beef as it has the lowest conversion rate. Having determined the current situation and that of the medium and long term, we evaluate production capacity in order to assess the maximum potential (with currently available technologies) existing in the country. Sustainable agricultural production depends mainly on this trilogy: soil, climate and water - natural and therefore unmodifiable resources. The first step in this research was to establish countrys potential productive area. Secondly, the technology currently in use was evaluated, comparing it with that applied in regions with similar agronomic conditions. The adoption of an environmentally friendly policy is key since in the near future it will, undoubtly, condition domestic production, access to foreign markets and international financing. In present proposal it will be possible to have a better understanding of variables that compose the national scenario, economic and productivity indicators, natural resources, strengths and weaknesses of the system as seen today. At the end, FruitfullArmenia will provide its view regarding the main matters for the implementation of a national strategic plan. We do hope this Fruitfull Armenia IV, snapshots: framing the next level up of sustainable agriculture in Armenia will be the kick-off for a national discussion of all players involved in the agricultural sector: farmers, agribusiness sector, farmers organizations, academic institutions, financial institutions, government, religious institutions, diaspora donors, international organizations . Daniel A. Tardito
1 Agriculture of Armenia. Brief Outline. Ministry of Agriculture of the Republic of Armenia, Yerevan, 2006.
World Situation Trends and Challenges
chapter
Chapter 1 - World Situation. Trends and Challenges
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Chapter 1
World Situation. Trends and Challenges

1.1 Introduction
This chapter analyzes the main trends and challenges presented by the world situation as regards the market for agricultural raw materials. High food prices over the last years are not due to an incidental phenomenon but to a trend of a structural character. The boom in demand in the Asian Pacific region is what characterizes this new phase in the world commodities market. The change in its dietary structure accompanied by an increase in purchasing power is translated into a medium term trend which will keep agricultural commodities at their highest values since the nineteenth century. Therefore, what courses of action are available in the face of this world setting? According to World Bank estimates more than thirty (30) countries are negatively affected by high prices of food and around 750,000,000 people find it difficult to nourish themselves. The key to overcoming this crisis is not demand -which will keep growing over the long term- but supply. Countries that produce agricultural commodities face the challenge of increasing their production and trade not only to find potential markets but to supply their own population with food. Satisfaction of domestic demand appears then as a strategic priority to avoid negative repercussions of the world food crisis. Over the long term, once domestic supply is satisfied, developing the agro-export potential is discerned as one of the most urgent courses of action to achieve solvency and competitivity within the world setting. trated in emerging regions (particularly, those of the Asian Pacific area). On the other hand, the greater consumption of food per capita which has been registered in the last decades in central countries and in developing countries. These variables are basic to determining the future and relations of agribusiness to new markets and consumers. 1.2.1 Demographic trends A basic element for estimating possible scenarios in the agri-food industry is the constant increase in world population in the last decades. While this demographic increase is not homogeneous1, since it occurs mainly in emerging regions, a prospective analysis provides a global understanding of the phenomenon. In 2007 the total world population was estimated at 6.7 billion people. After Asia (60% of the total population), Africa is the most populous continent (14%), followed by Europe (11%), Latin America and the Caribbean (9%), North America (5%), and lastly Oceania (1%)2. World population grows at a pace of 200,000 people per day, with approximately 80.000.000 births per year3. According to estimates by the National Intelligence Council of the United States, there was a falling trend in the world growth index from 1.7% in the year 1985 to 1.3% in the year 2000. Likewise, it is foreseen that the world population will grow from 6,100,000,000 in 2001 to approximately 7,200,000,000 in 2015 4. The increase in the world population and future population prospects emphasize the differentiated evolution of the birthrate, associated with the different levels of country development. More than 95% of the increase in world population takes place in developing countries, most of it concentrated in areas of rapid urban expansion5. In any case, according to estimates by the UN (United Nations World Population Prospects), there will be a clear differentiation among developing countries. Eastern Asia will move towards a negative demographic growth (-0.2%
1.2 Medium term trends: population and food

Two trends must be taken into account to analyze the agri-food scenario over the next decades. On the one hand, the constant increase in inhabitants in the world, concen-
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Fruitfull Armenia - The Proposal
per year) toward 2045-2050. Contrariwise, the population of Sub-Saharan Africa will grow 1.2% per year in the same period. Towards 2050, 18,000,000 of the 26,000,000 of people added per year to the world population will live in Sub-Saharan Africa6. The present and potential population growth in emerging regions is a trend that must be taken into account for a careful and close analysis of agri-food industry projections. Figure 1 shows current population distribution per continent while Table 1 shows population trends for developed, under developed and developing countries with regard to the next five decades.
POPULATION (%) YEAR 2015 2030 10.1 21.1 25.2 7.0 6.6 12.1 5.8 6.9 12.4 14.7 5.7 3.9 8.4 3.9
1999/01 Developing Countries Sub-Saharan Africa Excl. Nigeria Near East / North Africa Latin America and the Caribbean Southern Africa East Asia 17.2 33.3 39.0 10.2 10.7 22.3 11.6
2050 3.9 5.8 6.8 3.7 2.6 4.1 2.9
9% 11%
5%
1%
Developing countries Sub-Saharan Africa Excl. Nigeria
POPULATION (in millons) 811 201 191 39 55 299 211 582 179 173 36 41 203 123 458 140 135 36 27 166 88 290 88 84 29 20 90 64
Near East / North Africa
14%
60% Africa Europe Oceania Latin America and the Caribbean
Latin America and the Caribbean Southern Africa
Asia
East Asia
North America
Figure 1. Present population distribution per continents Source: Organization for Economic Cooperation and Development (OECD)
Table 2. Predominance of malnutrition, developing countries Source: FAO
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.
WORLD Total in thousands 1950 1970 1990 2010 2030 2050 2524 3702 5282 6891 8372 9367 Annual increase in millions --75 87 80 66 41 Annual growth % --2.06 1.73 1.20 0.81 0.45 DEVELOPED COUNTRIES Total in millions 813 1008 1148 1206 1212 1162 Annual increase in millions --8 7 2 -2 -3 Annual growth % --0.82 0.60 0.15 -0.13 -0 .23 DEVELOPING COUNTRIES Total in thousands 1711 2694 4134 5684 7159 8205 Annual increase in millions --64 80 78 68 44 Annual growth % --2.55 2.06 1.44 0.98 0.55
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Finally it must be added that according to FAO the rapid increase in population may continue to be an important obstacle to make improvements in food safety in some countries, 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-food demand trends in the future: the considerable growth in the per capita supply of food among developing countries. According to a report by the OECD7, food supply indicators per capita at the international level in the 1992-1994 period were 19% above the indexes registered 30 years earlier. In the last four decades the average of 2,280 calories/person/day (1960) increased to 2,800 calories/person/day (2001/2003)8. Increase in food consumption in the last years is mainly due to emerging countries increase in demand, given that developed countries already, since the mid 1960s, had quite a high level of food consumption per inhabitant. As regards world population distribution, according to nutritional consumption levels, the report
shows that in the 1992-1994 period 10% of this population lived 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 figures show substantial improvement if compared to those recorded during the 1970s, mainly due to economic and nutritional progress in China and India. However, at the same time and according to the same estimates by the OECD, food supply per capita in developing countries will continue growing. According to the forecast by the FAO, food supply per capita in the developing countries will be of 2,860 calories in the year 2015, 2,960 calories in 2030 and, finally, 3,070 calories in the year 2050. Table 3 shows data on food consumption per capita between the years 1969 and 2001 and also includes estimates for the years 2015, 2030 and 2050. 1.2.3 Diversification of food consumption and rising incomes World Bank foresees a 1.9% annual increase in world population income between 2005 and 2015 exceeding 1990s expected growth of 1.2% per year. In developing
Table 3. Food consumption per capita (calories/person/day) Source: FAO

1969/71 World Devoloping countries Sub-Suharan Africa Idem, excl. Nigeria Near East/ North Africa Latin America and the Caribbean Southern Africa East Africa Industrialized countries Countries in transition 2411 2111 2100 2073 2382 2465 2066 2012 3046 3323 1979/81 2549 2308 2078 2084 2834 2698 2084 2317 3133 3389 1989/91 2704 2520 2106 2030 3011 2689 2329 2625 3292 320
YEAR 1999/01 2789 2654 2194 2072 2974 2836 2392 2872 3446 2900 2015 2950 2860 2420 2285 3 080 2990 2660 3110 3480 3030 2030 3040 2960 2600 2490 3130 3120 2790 3190 3520 3150 2050 3130 3070 2830 2740 3190 3200 2980 3230 3540 3270
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countries as a whole the per capita growth is expected to fluctuate from a 3.9% average in the first decade of the 2000s to 4.5% and 3.4% in the second and third decades mainly as a consequence of growth slowing down in the region of West Asia and the Pacific9. It is estimated that the average growth of the Gross Domestic Product (GDP) per capita over the first three decades of the twenty first century (2000/2030) will reach 4.8% in the developing countries. Southeast Asian
Figure 2 (right). GDP growth rates per capita (1980/1990/2001-15) Source: World Bank (2006) Figure 3 (below). Food consumption composition in developing countries. Source: FAO
7 6 5 4 3 2 1 0 -1 -2
A f r ic a
countries will jump to the top in growth rates with estimated averages of 6%. (See Table 4) Figure 2 analyzes GDP growth per capita in all regions since 1980, with estimates for the first decade of the century (2001-2015). Income growth, relative price changes, and urbanization have altered dietary patterns in both developed and developing countries. When people have more money to spend, they normally add more variety and more expensive and
1980
1990
2001/15
b e an A s ia or ld ca ic es P a ci f un tri A f ri C e nt ra an d E u ro p a lA si a
To ta lW
S u b sa ha ra n
N o rth
S o ut h
C a r ib
an d
th
E a st an d
an d
E a st A s ia
er i ca
id dl e
Years 1961/1963
2 13 3 19
La t in
A m
3 4
9 6
7 60 5 6 6 2
H i g
Years 2001/2003
in co m
th
co
52
Cereals
Vegetables
Roots and Tubers
Sugar
Legumes
Meat
Milk
Others
15
high-value foods to their diets, although responses differ between developing and developed countries10. In developed countries, most consumers can afford the foods they prefer, therefore, when their incomes raise, changes in their diets and food purchases are relatively small. In developing countries, on the other hand, rising incomes have an immediate and pronounced impact on diets, as people adjust their budgets to include highervalue food items. Urbanization is another important factor influencing consumers preferences. Urbanization is taking place at a high pace and urban dwellers were expected to outnumber rural populations by around 2007. Large urban markets create opportunities for the establishment of large supermarket chains, and they attract foreign investment and advertising from global corporations.
Figure 3 shows how food consumption in developing countries has varied due to income growth in the last four decades (1961/1963 and 2001/2003). When comparing the ingredients of population food consumption in developing countries at the beginning of the 1960s with current ingredients it should be noticed how cereals and vegetables have decreased and other elements such as meat, pulses, dairy products and others not specified have increased. Table 5 shows changes in food consumption by type of countries since the 1960s with projections to 2030 and 2050. Table 6 shows the same food consumption changes in different developing regions over the same period. The greatest consumption per capita towards 2050 will be led by East Asia, Latin America and the Caribbean, the Middle East and North Africa.
Table 4. Income growth (2000-2050). Source: FAO based on data provided by the Word Bank
GNP per capita in US$ WB Atlas 2002 PPP 11 2002 ANNUAL GROWTH GAP % Total GDP at market price 20002030 7848 3755 1700 5670 6950 2460 4280 28480 6900 3.1 4.8 3.8 4.1 3.4 6.0 6.0 2.5 4.3 20302050 3.2 4.6 4.3 4.1 3.5 5.5 5.0 2.5 3.8 GDP per capita at market price 19801990 1.3 ---1.1 -1.1 -0.9 3.3 5.8 2.5 0.9 19902000 1.2 ---0.5 1.0 1.62 3.2 6.3 1.8 -1.8 20002030 2.1 3.6 1.6 2.4 2.3 4.7 5.3 2.2 4.5 20302050 2.7 4.0 2.8 3.1 3.1 4.9 5.0 2.4 4.5
World Developing countries Sub-Saharan Africa Middle East/ North Africa Latin America and the Caribbean South Africa East Asia and the Pacific High income countries Europe and Central Asia
5021 1077 450 2240 3280 460 960 26490 2160
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YEAR Kg/Person/Year 1969/71 1979/81 1989/91 1999/01 2030 2050
Table 5. Changes in commodities structure Source: FAO
WORLD Cereals, food Cereals, all uses Roots and tubers Sugar Legumes Oilseeds Meat Milk and dairy products excl. butter Other food (Kcal/person/day) Total food (Kcal/person/day) 148.7 302.8 83.7 22.4 7.6 6.8 26.1 75.3 216 2411 160.1 325.0 73.4 23.4 6.5 8.3 29.5 76.5 224 2549 171.0 329.3 64.5 23.3 6.2 10.3 33.0 76.9 241 2704 165.4 308.7 69.4 23.6 5.9 12.0 37.4 78.3 289 2789 165 331 75 26 6 16 47 92 325 3040 162 339 75 27 6 17 52 100 340 3130
DEVELOPING COUNTRIES Cereals, food Cereals, all uses Roots and tubers dem, excl. China Sugar Legumes Oilseeds Meat dem, excl. China y Brasil Milk and dairy products excl. butter Other food (Kcal/person/day) Total food (Kcal/person/day) Cereals, food Cereals, all uses Roots and tubers Sugar Legumes Oilseeds Meat Milk and dairy products excl. butter Other food (Kcal/person/day) Total food (Kcal/person/day) Cereals, food Cereals, all uses Roots and tubers Sugar Legumes Oilseeds Meat Milk and dairy products excl. butter Other food (Kcal/person/day) Total food (Kcal/person/day) 146.3 191.8 78.8 61.8 14.7 9.2 4.9 10.7 10.7 28.6 123 2111 132.3 531.1 74.2 40.5 3.4 13.2 69.7 189.1 486 3046 200.5 653.0 140.2 41.9 4.1 7.4 49.5 185.7 331 3323 161.7 219.1 69.6 59.0 17.5 7.8 6.5 13.7 12.5 34.0 140 2308 159.4 542.0 67.1 36.7 2.8 18.7 12.5 34.0 140 2308 189.2 777.6 118.4 45.9 31.1 9.2 62.9 181.3 372 3389 173.7 238.6 60.1 58.4 19.2 7.3 8.6 18.2 13.6 31.8 171 2520 154.4 543.7 69.4 32.6 3.2 18.5 13.6 38.1 171 2520 179.1 767.8 97.1 43.4 3.2 10.2 70.7 177.2 333 3280 165.7 236.0 67.0 62,8 20.7 6.7 10.4 26.7 15.9 45.9 242 2654 162.4 591.8 66.7 33.1 3.6 21.5 90.2 214.0 525 2654 168.7 499.1 103.3 36.5 1.6 10.1 44.4 160.2 317 2900 166 268 65 76 25 7 14 38 26 67 285 2960 159 641 61 72 4 24 99 223 525 3520 164 618 99 39 2 15 59 179 365 3150 163 279 77 80 26 7 16 44 32 78 300 370 156 665 57 32 4 24 103 227 580 3540 168 685 94 41 2 18 68 193 390 3270
INDUSTRIALIZED COUNTRIES
COUNTRIES IN TRANSITION
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Table 6. Changes in commodities structure, developing regions. Source: FAO
YEAR Kg/Person/Year 1969/71 1979/81 1989/91 1999/01 2030 2050
SUB SAHARAN AFRICA Cereals, food Roots and tubers Excl. Nigeria and Ghana Sugar Legumes Oilseeds Meat Milk and dairy products excl. butter Other food (Kcal/person/day) Total food (Kcal/person/day) Cereals, food Roots and tubers Sugar Legumes Oilseeds Meat Milk and dairy products excl. butter Other food (Kcal/person/day) Total food (Kcal/person/day) Cereals, food Roots and tubers Sugar Legumes Oilseeds Meat Milk and dairy products excl. butter Other food (Kcal/person/day) Total food (Kcal/person/day) Cereals, food Roots and tubers Sugar Legumes Oilseeds Meat Milk and dairy products excl. butter Other food (Kcal/person/day) Total food (Kcal/person/day) Cereals, food Roots and tubers Sugar Legumes Oilseeds Meat Milk and dairy products excl. butter Other food (Kcal/person/day) Total food (Kcal/person/day) 115.3 193.0 184.5 7.8 11.0 8.0 10.2 29.6 139 2100 179.3 16.6 20.4 6.2 7.5 12.6 68.1 22.4 2382 11.8 94.1 40.5 14.2 6.8 33.5 84.0 240 2465 150.4 16.9 20.3 14.5 4.6 39.9 37.0 84 2066 152.2 96.6 5.7 4.8 3.5 9.2 3.7 98 2012 114.3 175.0 182.0 9.8 9.7 8.4 10.5 33.7 141 2078 199.7 26.5 28.0 6.3 10.9 17.3 84.1 277 2834 130.1 74.3 48.1 12.6 10.1 40.5 96.9 246 2698 151.1 19.9 20.6 11.3 5.81 4.1 416 89 2084 181.4 80.8 8.0 4.3 4.7 13.2 5.0 121 2317 142 123.3 118.8 211 191.2 184.3 194 165.9 179.5 12 10.0 8.6 12 9.8 8.9 12 8.9 8.5 14 8.5 9.8 34 28.3 29.8 170 128 130 2000 2194 2106 MIDDLE EAST/NORTH AFRICA 211.8 31.8 28.2 8.0 12.5 19.6 75.0 298 3011 1301 63.9 46.0 10.5 12.1 42.8 94.5 258 2869 203.5 33.7 27.7 6.6 12.1 21.7 73.2 333 2974 132.6 63.3 48.5 11.2 11.8 58.5 108.8 272 3826 199 33 29 7 14 35 90 370 3130 140 62 49 11 15 79 136 310 3120 167 31 30 8 15 12 106 180 2790 176 61 17 2 15 62 21 405 3190 155 205 191 15 14 13 18 38 185 2830 193 33 30 7 15 43 101 385 3190 139 58 47 10 16 90 150 336 3200 169 36 32 7 18 18 129 200 2980 162 53 20 2 17 73 24 440 3280
LATIN AMERICA AND THE CARIBBEAN
SOUTH ASIA 157.1 164.3 23.5 18.7 25.6 23.7 10.1 12.3 9.7 7.2 5.5 5.0 67.6 55.1 141 104 2392 2329 EAST ASIA 199.5 57.1 10.5 2.6 7.8 22.6 7.4 179 2625 186.7 65.8 11.6 2.0 10.6 39.8 11.3 322 2872
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1.3 Implications of current agri-food demand

Considering the main trends previously identified it can be foreseen that meeting an increasing demand for food will require a huge increase in production. An important challenge will be to increase those production levels while preserving soil, water and the environment.
Among the estimates for future demand for specific food products in developing countries including China, the total demand for meat per capita is expected to rise from 17 kg for 1989-1991 period up to 25 kg in 2010, reaching 30 kg in 2025. Likewise, total demand will rise from 69,000,000 tons in 1989-1991 period up to 143,000,000 tons in 2010 and to 204,000,000 tons in 2025.12 The production of meat will rise from 70,000,000 tons in 1989-91 up to
Table 7. Growth in demand (%) Source: FAO
PERIOD 19612001 19712001 19812001 19912001 1999/012030 20302050
TOTAL DEMAND (all commodities and uses) World Developing countries Idem, excl. China Sub-Saharan Africa dem, excl. Nigeria Near East Latin America and the Caribbean Idem, excl. Brasil South Asia East Asia Idem, excl. China Industrialized Countries Countries in transition 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 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 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 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 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 0.9 1.1 1.3 2.0 2.1 1.4 1.0 1.0 1.3 0.6 1.1 0.4 0.1
PER CAPITA DEMAND (all commodities and uses) World Developing countries Idem, excl. China Sub-Saharan Africa dem, excl. Nigeria Near East Latin America and the Caribbean Idem, excl. Brasil South Asia East Asia Idem, excl. China Industrialized Countries Countries in transition 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 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 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 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 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 0.4 0.5 0.6 0.5 0.6 0.4 0.6 0.6 0.7 0.6 0.8 0.4 0.6
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143,000,000 tons in 2010 (leveling meat demand) and to 203,000,000 tons in 2025 (causing a 1,000,000 ton shortfall between demand and actual production). As per cereals, demand in those countries is estimated to rise from 940,000,000 tons recorded in 1989-1991 period up to 1,443,000,000 in 2010 and to 1,874,000,000 in 2025. Meanwhile, production of cereals will rise from 862,000,000 tons in 1989-1991 to 1,296,000,000 in 2010 (the shortfall between demand and what is actually produced will be 147,000,000 tons), and to 1,655,000,000 in 2025 (increasing the shortfall to 219,000,000 tons).13 Based on these trends and considering the increase in world food consumption and population growth in a context of decreasing availability of land suitable for agricultural and livestock production, the capacity of certain countries to provide food will be seriously impaired. On that basis, Table 7 shows the growth in demand since 1961 with trends and projections until 2050, for every region.
1.4 Mid-term trends: production and trade

1.4.1 Agricultural production According to FAO the value of total agricultural production (food and non-food crops and livestock products) has almost trebled in real terms since 1961, representing an average increase of 2,3% per year well ahead of global population growth (1.7% per year)14. Much of this growth has originated in developing countries but it also reflects the rising share of high value commodities such as livestock products and horticulture in the total value of production15. The composition of the agricultural production has changed considerably over the last years. The global output of cereals, oil crops, sugar, vegetables, eggs and meat has increased more than population growth rates, while the production of pulses and roots and tubers has declined relative to total population growth. Table 8 shows the global growth rates for products in the entire world and in developing countries, higher rates in eggs; meat and oil crops stand out. The evolution of per capita cereal production worldwide
over the last 25 years has experienced a slight increase from 303 kg in 1969/1971 rising to a limit of 342 kg in 1984/1986 and declining to 327 kg per capita in 1989/1991 and 307 kg in 1993/199516. According to OECD estimates world agricultural production will increase at a 1.8% average rate per year until 2010 implying a slower pace than a decade earlier but enough to increase world per capita production due to a lower demographic growth rate17. World cereal production projected for 2010 is 2,334,000,000 tons which equals 327 kg per person. Considering production distribution according to country type, the production of cereals per capita in developing countries will continue to grow as part of the trend. In the 1989/1991 period a per capita production of 214 kg was recorded. It will reach 230 kg by 2010. This will represent a 0.8% increase per year. Likewise, it is believed production per inhabitant in developed countries will grow 0.4% per year in the same period; i.e., at a lower rate than in developing countries. These production estimates stand in contrast to the predictions for the evolution in demand in developed 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 the production and consumption of agri-food. In the first place, the increase in world population will raise requirements and some regions will face an increased risk of food shortages. That is particularly the case of developing countries, since the rate of increase in demand will be higher than the production rate due to the demographic explosion in those countries, and to the per capita food consumption increase, which is foreseen as a world trend18. According to FAO estimates, in Asia-Pacific, Near East, Sub-Saharan Africa and Latin America, agricultural demand will be more dynamic than in industrialized countries, where the increase in demand will affect mainly the quality, not the quantity, of production. However, local demand will be higher than production in all regions without exception in the period 1990-2010. In the second place, the increasing pressure on the soil has resulted in the exhaustion of the production capability; and due to the effect of excessive pressure, erosion
20
1961-76 World Cereals Developing Countries World Oil Crops Developing Countries Sugar World Developing Countries World Legumes Developing Countries Roots and tubers Vegetables World Developing Countries World Developing Countries Eggs World Developing Countries Meat World Developing Countries World Milk Developing Countries 2.7 0.5 1.3 3.0 1.8 1.9 3.0 4.6 3.5 4.3 1.6 3.1 3.4 3.1 0.8 3.9 2.9 3.5
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 1970-90 World Developed countries Developing 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 1990-94 1.3 -1.2 3.3 3.0 2.0 4.3 2.7 2.6 1990-2010 1.8 0.7 2.6 3.0 2.7 2.7 2.6 2.3 ACCUMULATED 1970-90 58 32 91 46 84 123 84 77 1990-2010 45 16 71 86 75 75 71 61
Table 8 (above). Global growth rates for different agricultural commodities (1961-2005). Source: FAO, State of Food and Agriculture 2007. Table 9 (left). Total agricultural production growth. In percentages (%) Source: FAO. The Future of Food.
21
and contamination, soils will not be able to produce at the pace set by demand. This situation points to the need to search for effective alternatives to solve the limitations on food supply19. An increase in productivity must be encouraged as an answer to the increasing demand and as an indispensable condition to guarantee market competitiveness. Therefore, intensive investment must be encouraged with the purpose of incorporating new technologies and scientific knowledge in the productive development of the agrifood sector. A second alternative, in addition to the latter, is to focus on the promotion of global economic openness in order to encourage global food trade. Regions and countries enjoying advantageous natural conditions for agri-food production will have an outstanding and differentiated place in the global production structure20. 1.4.2 Agricultural Trade Since the early 1960s, the nominal value of agricultural exports has increased tenfold; while the share of agricultural trade in total merchandise trade has followed a longterm downward trend, falling from almost 25% to less than 10% in recent years21. In this period the net flow of agricultural products between developing and developed countries has reversed direction. In the early 1960s, developing countries had an overall agricultural trade surplus of almost US$ 7 billion per
year, but by the end of 1980s this surplus had disappeared. During most of the following decade and early 2000s developing countries were net importers of agricultural products. Without Brazil the deficit of the rest of the developing world would have been considerable bigger: it would have grown from US$ 20 billion22. The change has been even more pronounced for the least developed countries, which over the same period have changed from being net exporters to net importers of agricultural products. By the end of 1990s imports made by these countries were more than double their exports. 1.4.2.1 International prices of agricultural commodities In 2007 FAO carried out a report analyzing the world market of commodities over the past 40 years. The following are some striking features: Real prices of agricultural products have declined significantly, almost 2% per year. Real prices have fluctuated considerably around the long-term downward trend. Both the fluctuations and the long-term decline have been less pronounced since the mid-1980s. Cereal and oilseed prices have increased recently, driven partly by rising demand for biofuels and by weatherrelated production shortfalls.
700 600 500 400 300 200 100 0 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 Agricultural Exports in realtion to total exports of goods (%) Agricultural Exports, Value
Figure 4. Global agricultural exports (1964-2004) Source: FAO
22
Figure 5 shows the fluctuations between nominal prices, real prices and manufacturers export unit value. A number of factors have contributed to these trends. Trade policy reforms and improvements in transportation and logistics have helped to hold down prices of traded goods, including agricultural products23. Technological advances have reduced costs and made it possible, at given prices, to expand production at a rate that has outstripped demand growth despite rising population and income. These advances have reduced the vulnerability of some crops to climatic influences24. Likewise, trade liberalization has permitted a wider rage of countries to participate in world commodity markets, reducing the relative importance of the supply situation in any one country. Other factors, such as the production and export subsidies in some countries have also contributed to the downward trend in world prices for many agricultural products grown in temperate zones, reducing the export earnings of developing countries that export commodities such as cotton, sugar and rice25. Even though real prices for all agricultural commodities have declined over the past 40 years the rate of decline has varied from one commodity to another. Prices of traditional commodities such as raw material, tropical bever200 180 160 140 120 100 80 60 40 20 0
ages, oil crops and cereals have experienced the largest variation 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. The rising trend in international food prices continued and even accelerated in 2008. USA wheat export prices rose from US$ 375/ton in January to US$ 440/ton in March and Thai rice export prices increased from US$ 365/ton to US$ 562/ton26. This came on top of a 181% increase in global wheat prices over the 36 months leading up to February 2008, and an 83% increase in overall global food prices over the same period27. The observed increase in food prices is not a temporary phenomenon but likely to persist in the medium term. The World Bank expects that food crop prices will remain high in 2008 and 2009 and then begin to decline as supply and demand respond to high prices; however, they are likely to remain well above the 2004 levels through 2015 for most food crops 28. (See Table 10) According to FAO scenarios, historical trends towards increased food consumption per capita globally and particularly in developing countries will continue in the near future. However, they will continue at a slower rate than in
Figure 5. Agricultural commodity prices (1964-2004) Source: FAO
Nominal Values Real prices MUV (Manufacturer export unit value) 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04
23
2007 Maize Wheat Rice Soy Soybean oil Sugar 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 projected real food crop prices in US$/ ton. Source: World Bank. 2004=100
the past as more countries approach medium high levels. The average of the developing countries may rise from the current 2.650 kcal per person per day to 3.070 kcal by 2050. By the middle of the twenty-first century more than 90 percent of the worlds population may be living in countries with per capita food consumption of more than 2,700 kcal per day compared to 51% at present and only 4% three decades ago. As in the past, great improvements in China, India and other populous countries will continue to play a significant role in these developments. However, the present sustained rise in agricultural commodity prices results not only from higher per capita consumption but from factors related to energy (situations generated by the so called "bio-fuels" and by the increase in oil prices), to speculation and to a lack of suitable land for agriculture and livestock. 1.4.3.1 Bio-fuels Increase bio-fuel production has partially contributed to the rise in agricultural commodity prices. Concerns over oil prices, energy security and climate change have prompted governments to take a more proactive stance towards encouraging production and use of bio-fuels29, encouraging speculation conducts by certain investors. Numerous countries have set standards or targets for use of bio-fuels. The European Union has set a goal of 5.75% of motor fuel use from bio-fuels by 2010. The USA has mandated the use of 28.4 billion liters of bio-fuels for transportation by 2012. Brazil will require that all diesel oil contain 2% bio-
diesel by 2008 and 5% by 2013 and Thailand will require 10% ethanol in all gasoline starting in 2007. India mandates a 5% ethanol blend in nine states, and China is requiring a 10% ethanol blend in five provinces 30. Increasing use of bio-fuels by many countries has led to increased demand for bio-fuel raw materials such as wheat, soy, maize and palm oil and increase competition for cropland. Almost all of the increase in global maize production from 2004 to 2007 (the period when grain prices rose sharply) went for bio-fuels production in the USA, while existing stocks were depleted by an increase in global consumption for other uses. Other developments, such as droughts in Australia and poor crop in the European Union and Ukraine in 2006 and 2007, were largely offset by good crops and increased exports in other countries. Only a relatively small share of the increase in food production process (around 15%) is due directly to higher energy and fertilizers costs31. 1.4.3.2 Increase in oil prices The price of oil has broken through the barrier unthinkable until recently of US$ 130 per barrel. The cost of such a fundamental input directly influences the final price of agricultural commodities that require machines for sowing and harvesting, trucks for the transportation of goods and industry to manufacture end products. It is estimated that one-third of the final food price is formed by energy-related costs.
24
1.4.3.3 Speculative factors The most powerful global investment groups have been anticipating the increase in food value and have decided to bet on it. They have made strong investments in food price futures and have driven input suppliers to increase their prices. Many funds for real estate development and high technology companies seek security in agribusiness to diversify their portfolios and obtain better financial results32. 1.4.3.4 Shortage of land suitable for agriculture and livestock The possibility of raising agri-food production in view of the increases in world population and food consumption is limited as a result of the difficulty in increasing cultivated areas. The effects of erosion, floods, salinization and contamination of the land contribute considerably to a progressive reduction of soil productivity33. Regarding land degradation particularly, it is estimated that almost 1,964,000,000 hectares in the world are considered degraded. This represents more than 22% of the total agricultural land, pastures, forests and jungles on the planet in Asia alone there are 450,000,000 hectares affected by this problem. When analyzing the causes of degradation, deforestation and the intensive use of pastures for animal food stand out and are responsible for one third of total degradation34. These estimates are even worse in the specific case of land degradation for agricultural production. In Asia 30% of agricultural land is classified as more or less degraded. In the case of China, 466,000,000 hectares (or 50% of the country's land) suffer from some kind of soil degradation. The data show a truly dramatic situation according to the World Resources Report of the World Resources Institute. The above mentioned report states that soil degradation in China is an extremely serious problem: 73.000.000 hectares of the countrys total land are affected by moderate degradation and 86.000.000 hectares by strong degradation. If only 50% of this total is present in agricultural lands (probably a low estimate) then around 80.000.000 hectares (or more than 60%) of cultivated land is affected by some kind of soil degradation, either moderate or strong35. In the case of the Republic of Armenia the report states that from its total agricultural
land (estimated in 2002 at 560,000 ha), the country obtains one of the highest per capita food production rates in Asia (114.636), exceeding those of the United States (97.8) and China (109.1)37.
1.5 Food crisis: Impact on countries

a) International inflation and domestic inflation Rising 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 translate into an immediate and proportional rise in domestic costs due to various factors that intervene at the time of absorbing that effect. The domestic infrastructure and price stabilization policies are some of the main tools. While the extent of global price transmission varies, over the last year there have been significant surges in domestic food price inflation in countries such as Sri Lanka (34%), Costa Rica (21%) and Egypt (13.5%). In many countries and regions food price inflation is higher than aggregated inflation and contributing to underlying inflationary pressure on the national economy. For example, in Europe and Central Asia total inflation in 2007 averaged 10%, food inflation 15% and cereal inflation 23%. This compares to 6% overall inflation and 6.4% food inflation in 200638. b) Terms of trade and the balance of payment Higher agricultural commodity prices have generally been mitigated by rising non-food commodity prices, although these averages mask significant impacts on the balance of payments for certain countries39. When all primary commodity price changes are considered, the termsof-trade impacts become large and more positive for resource rich countries with exports of oil and other minerals than for countries exporting only agricultural commodities. The trade balances of many countries are adversely affected either because imports increase or because the value of the commodities they sell to other countries is depreciated. The countries with the largest negative terms of trade impact in 2007 include Lesotho, Eritrea and Gambia.
25
c) Distributed impact and poverty Distributional impacts of rising agricultural commodity prices can be serious even in countries where the balance of payments has not been adversely affected40. While some households benefit from higher prices (since they experience increases in purchasing power because they have links to raw material exports), others are hurt by them, depending on whether they are net food producers or net consumers and the extent to which wages adjust to higher food price inflation. In general, poor people, especially in urban areas, suffer due to rising food prices. Using a sample of household data for nine low income countries, a recent paper41 analyzes the impacts of higher prices of key staple foods on poverty taking into account direct impacts from changes in commodity prices and impacts on wage rates for unskilled labor. Results show that in six of the nine countries considered, price increases in staple food commodities were associated with a significant rise in poverty. Averaging across these nine countries, the increase in food prices between 2005 and 2007 is estimated to have increased poverty by 3 percentage points. A recent assessment in Indonesia shows that over three-fourths of the poor are net rice buyers, and an increase in the relative rice price
by 10% will result in an additional two million poor people (1% of the population)42. For many countries and regions where progress in reducing poverty has been slow, the negative poverty impact of rising food prices risks undermining the poverty gains of the last 5 to 10 years, at least in the short term. For example in the case of Yemen, estimates show that the doubling of wheat over the last year could reverse all gains in poverty reduction between 1998 and 2005. Over the long term, the impact on poverty of higher food and other commodity prices will also depend partly on how economic growth responds to increased wealth accumulation and productive investment. Table 11 shows related estimates:
1.6 The Armenian case

In order to understand the food crisis impact on the Armenian economy it is necessary to take three items, mentioned previously, into account in the analysis: inflation, the trade balance, and distributive impact and poverty. a) Inflation The Armenian economys inflation was 6.6% in 2007. Of
IN MILLIONS 1990 Developing countries Idem, excl. China Sub-Saharan Africa Middle East and North Africa Latin America and the Caribbean South Asia East Asia and the Pacific Idem, excl. China 1216 841 227 6 49 462 472 97 2002 1001 821 303 5 42 437 214 34 2015 614 603 336 3 29 232 14 2
POPULATION % 1990 31.0 30.2 44.6 2.3 11.3 41.3 29.6 21.1 2002 24.2 26.9 46.4 2.4 9.5 31.3 14.9 10.8 2015 12.3 14.8 38.4 0.9 6.9 12.8 0.9 0.4
Table 11. Poverty estimates and projections in thousands of persons and percentages (%). Source: FAO on the basis of data by the World Bank
26
that aggregate, 53% was due to food prices increase, 29.9% to services inflation, and the remaining 16% to price increases in other goods. The highest increase was registered in bread, cereals, fruits and vegetables43. However, compared to other countries in the Community of Independent States, Armenia has recorded the lowest inflationary index, due to efficient fiscal and monetary policies.
3,5 3 2,5 2 1,5 1
25 21 20 19 20 20
0,5 0 2003 Exports 2004 Imports 2005 2006 2007
15 11 10 7 5 12
Figure 7. Armenian trade balance (2003-2007). Total exports and imports in billions of US$. Source: Republic of Armenia Ministry of Finance.
Figure 6. CIS inflationary index in 2007. Source: International Monetary Fund (IMF)
b) Trade balance The trade balance has recorded rising deficits in the last 5 years, due to a considerable excess of imports over exports. In 2007, the trade deficit reached US$2,100,000,000. Total value of exported merchandise reached US$1,200,000,000 in 2007, 16.7% more than in 2006. Precious stone exports represented more than 50% of total export income. Likewise, merchandise imports increased by 49.7% in 2007, to US$3,300,000,000. Higher prices for energy and agricultural commodities (particularly grains) had an influence on the increase in imports.
c) Distributive impact and poverty In Armenia, the rate of people living under the poverty line decreased from 55% in 1998 to 34% in 2005. Current estimates are 30%. Only 4.6% of inhabitants in the country were considered extremely poor in 200744. There arent sufficient data to infer that the food crisis is worsening poverty conditions in Armenia. Various programs (among which the ones fostered by the World Bank stand out) have been coordinated by the Department of Labor and Social Action promoting a considerable improvement in the fight against poverty. Even though the world food crisis is negatively affecting many countries with medium and low per capita income, Armenia isnt yet being severely affected in this manner by the food scarcity trend.
1.7 Conclusions
What is expressed in this chapter intends to describe the current international setting in relation to the world market for agricultural commodities. The trends and challenges that this setting presents for emerging countries economies are of a structural character and require state
27
policies that emphasize strategic sectors and mitigate negative outside factors. Armenia has an agribusiness potential suited to the new global requirements. Knowing how to boost and channel it for correct projection is the challenge. Armenia is only affected by one of the three consequences (high inflation, trade balance deficit and negative distributive impact) that the world crisis is causing developing countries. Armenian inflation has been of only 6.6% in 2007 (the country with the lowest index in the CIS). More than half the inflationary pressure was due to food price increases. Efficient stabilization policies have mitigated and counteracted inflationary tensions and have given rise to excellent results last year. The Armenian trade balance has been negative for the last 5 years. The growing deficit is basically due to
the raise in two commodities, energy and grains, and stands as the most negative impact of the international price increases. Lastly, poverty has constantly decreased over the last 10 years, showing that the many social plans applied were efficient. The food price world situation does not seem to have any serious negative effects on Armenian citizens with fewer resources. In short, the continuing trade deficit is the worst negative impact that the Armenian economy presents as a consequence of the current situation. Increasing production and productive investment and meeting domestic demand is the challenge. Therefore, the avoidance of the negative effects of the present food crisis and ensuring the long term solvency of the economy are the main challenges for sustainable development in Armenia.
Notes
1 While trends indicate population will grow in developing countries, growth rate will become negative in developed countries. 2 OECD-ECOWAS (Organization for Economic Co.Operation and Development / 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 with Nongovernment Experts. National Intelligence Council, December 2000. 5 Global Trends 2015: A Dialogue About the Future with Nongovernment Experts. National Intelligence Council, December 2000. 6 FAO, World Agriculture: Towards 2030/205, Rome, 2006. 7 Organization for Economic Cooperation and Development 8 FAO, Food and Agriculture World status, Rome, 2007. 9 World Bank. Global Economic Prospects 2008: Long-term Prospects and Poverty Forecasts. 10 Purchasing Power Parity is an economic indicator introduced at the beginning of the 1990s by the IMF in order to compare different countries standards of living in a realistic manner, taking into consideration the GDP per capita in terms of purchasing power in each country. 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-Land Use Interactions for the Assessment of Environmental Indicators in Developing Countries," FAO, Rome, 1995. 14 FAO, Agricultura and Food World Situation, Rome, 2007, p. 134. 15 Ibid. 16 Haen, Alexandratos and Bruinsma 17 Reza Lahidji, Wolfang Michalski and Barrie Stevens. The Future of Food: An Overview of Trends and Key Issues. OECD. The Future of 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: 2008 27 World Bank, Rising Food Prices: Policy Options and World Bank Response, 2008. 28 Ibid. 29 Ibid. 30 Ibid. 31 Ibid.
28
32 The Economist, Cheap no more, 6/12/07 33 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 the 1999-2001 period. The per capita food production rate covers all edible agricultural products containing nutritional substances; coffee and tea are excluded. During a given year, the rate is calculated considering the available average production of all food raw materials by weight or volume and dividing it by the average production in 19992001, and then multiplying it by 100. In other words, value rates indicate higher levels of per capita food production than 1999-2001 if their 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 Bank Response, 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 for Poverty in Low-Income Countries, 2008. 43 IMF, Nienke Oomes, Inflation in Armenia: What is Happening to Armenian Prices, 2007. 44 World Bank, Armenia: Benefist of undergone reforms, February 2007.
Natural Resources in Armenia
chapter
Chapter 2 - Natural Resources in Armenia
31
Chapter 2
Natural Resources in Armenia

2.1 Introduction
Previous section was intended to demonstrate increase in commodity prices is the result of a series of interrelated variables. Nothing indicates this situation may change in the short term. On the contrary, many analysts state the tendency is irreversible and agricultural commodities costs instead of showing a decreasing trend will continue to increase. In fact, World Bank President Robert B. Zoellick said this orientation will be maintained at least until 2015. Food prices after falling in real terms for more than five decades have been clearly on the rise for some years now. This price climb threatens to reverse the so-called green revolution progress forcing thousands of people to reduce food consumption and making basic basket unaffordable to others. At national level this situation makes low income countries should bear heavy burdens on imported food costs, currency drain, imported inflation1 and growth stoppages, among other negative external influences. Hence countries strategic need to develop agricultural sector and achieve self-supply so as to do not depend on external price fluctuations. However, such a development can only be obtained keeping in mid a clear understanding of related countrys physical and environmental characteristics. This is the reason why this chapter aims to analyze Armenian resources for agricultural production. Turkey, covering a total surface of 29,800 km2 rendering it the smallest country in terms of surface in Caucasus region. Territorys basic feature is its high altitude average particularly in the high plateau but also valid for most countrys lands. This is an ancient characteristic for Armenian lands, having developed present features since Cenozoic period, most particularly after Miocene period, five million years ago, bearing as of today intense tectonic activity. The country may be divided into four large geographical regions: 1) The mountain chain and valleys in countrys northeast area close to Kur River basin. This great erosion regions includes Virahajots, Batumi, Pambak, Gougarats, Aregouni and Sevan mountain ridges. 2) The Asia Minor regions of volcanic origin, including Ashotsk, Aragats, Geghama, Vardenis and Sunik mountain chains. This areas characteristic is surface covered with volcanic material, has little evidence of erosion, long rivers and deep valleys. 3) The series of mountains adjacent to Arax River forming Minor Caucasus mountain system. This region is prone to great erosion. 4) The Ararat valley, in the lowest part of Ararat depression. The lowest altitudes in the country belong to this region.
2.2 Physical geography

The Republic of Armenia is located in Caucasus region between 51 and 41 18 latitude north and between 43 29 and 46 37 longitude east. It borders to the north with Georgia, to the east with Azerbaijan, to the south with Islamic Republic of Iran and to the west with
2.3 Climate
The Republic of Armenia territory is landlocked and extremely mountainous. In fact, it is the most precipitous country among the Caucasus republics. The land of Armenia acquired its present characteristics by means of a process initiated 25million years ago, when a geological
32
upheaval pushed up earths crust to form the Armenian Plateau, creating the complex topography of modern Armenia. This circumstance makes temperatures in Armenia depend upon elevation. Mountain formations block moderating climatic influences of the sea. The altitude, with an average height of 1,800 m and a maximum height of 4,095 m above sea level (corresponding to the summit of Mount Aragats) also intervenes in the climate formation process. Mountains prevent humid winds from passing. This is the reason why Armenia has a continental type climate characteristic of regions isolated by mountain chains hindering maritime influence. A high thermal range is verified throughout the territory affecting potential crops. It must be noted such disparity varies according to the observed area; in the plains, winters are long and severe, summers are short and hot, while on the mountains climate is cooler and weather conditions are much more extreme in winter. According to the Republic of Armenia Hydrometeorology Department (Armhydromet) average temperature recorded
20
during 1961-1990 period was 5.5C, while average temperature for year 2002 was 5.9C2. Calculations indicate thermal average in the country will be 1.7% higher than present in year 2100. However, previous data is not homogeneous throughout the country. Moreover, topographical factor brings about a considerable temperature difference among regions. As an example, we list here below climatograms of Yerevan city (1,000 m above sea level) and Gyumri city3 (1,500 m above sea level) separated only by 120 km distance.
F MONTH January February March April May June Min 15 18 30 42 50 57 63 64 55 21 34 26 Max 29 34 50 6 76 87 93 92 83 69 50 38 Min -9 -8 -1 6 10 14 17 18 13 7 1 -3
C Max -2 1 10 19 24 31 34 33 28 21 10 3
10 C 0 1 -10 Month 2002 2 3 4 5 6 7 8 9 10 11 12
July August September October November December
1961-1990
Average temperatures Source: Own chart with data from Armhydromet
Average Temperatures, Yerevan Source: ArmenianPages.com, drawn up with data published by RA Ministry of Agriculture. Average temperatures in Armenia Source: Armhydromet.
Jan. 19611990 2002 -6.8
Feb. -5.8
Mar. -1.4
Apr. 4.9
May 9.6
June 13.4
July 17.1
Aug. 16.7
Sept. Oct. 13.2 7
Nov. 1.5
Dec. Average -3.9 5.9
-7.2
-2.8
1.3
3.4
8.1
13.5
17.3
16.7
15.2
10
3.1
-8.4
5.9
33
Yerevan
60 50 40 30 10 20 10 0 5 0 -5 Precipitation (mm) Temperature (C) Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec 30 25 20 15
Source: Own chart with data from Armhydromet
mm
Monthly average Precipitation (mm) Temperature (C)
Jan. 26 -3,5
Feb. 27 -1
Mar. 34 5,8
Apr. 49 13
May 52 18
C
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
Gyumri
90 80 70 60 50 5 40 30 20 10 0 Jan Feb Mar Apr May Jun Precipitation (mm) Jul Aug Sept Oct Nov Dec Temperature (C) 0 -5 -10 -15 25 20 15 10
mm
Monthly average Precipitation (mm) Temperature (C)
Jan. 25 -8,7
Feb. 27 -7
Mar. 36 -1
Apr. 61 5,8
May 81 12
C
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
34
Annual average precipitations vary according to topography, fluctuate between 250 mm per year recorded in Ararat Valley and Araks River valley area countrys most arid region up to 1,000 mm per year in countrys higher precipitation places4. Furthermore, rain gauge records do not have constant levels. The period with more rains is from April to June (summer) while the period with less rains is from December to February (winter), national average being 526 millimeters per year5. Indeed, highest regions receive more rain compared to valleys. In fact, there are around 100 lakes in considerably high areas, which could be used as watering resources for lowlands by means of hydraulic works. Perennial snows on mountains located 1,300 m above sea level may also be a potential source of fresh water6.
ALTITUDE TYPE
AVERAGE TEMPERATURE IN SUMMER
ANNUAL PRECIPITATIONS IN MILLIMETERS (mm)
is one of the main factors in air flows distribution, a process having in turn an influence on climate structure in various regions of Armenian territory and Caucasus region11. Westerly winds influence is mainly verified from October to March during northern hemisphere winter season while in warmer periods12 winds are considerably less rigorous. In turn, temperature difference recorded during summer season between higher and lower altitudes produces different winds pressure gradient and distribution throughout the country. Solar radiation is very intense in all Armenia. At midday the surface receives an average of 1.46 calories per cm2 in the lands close to Ararat Valley. These values increase as altitude rises, reaching an average of 1.54 calories per cm2 in areas 3,000m above sea level. There is sunlight for an average of almost 3,000 hours in Ararat Valley and Lake Sevan basin while in the mountainous northern territories annual average lowers to 2,000 hours13. 2.3.1 Agro-ecological zones Armenia is located on sub-tropical area northern border, at latitudes characterized by having continental type climate. Due to its specific topographical conditions, there are different climates varying according to the area under analysis. For instance, Ararat valley area has an arid and continental climate but only 10 km up north, at Mount Aragats (Aragatsotn marz), mountain tundra appears with different glacier formations14 and a much more humid climate. This is the reason why six different agro-ecological areas 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 is 236,000 hectares15, formed by Ararat valley, lowlands adjacent to foothills, as well as small tracts in the south-east at altitudes between 600 up to 1,300 m over sea level. Major characteristics are low precipitation (not above 250 mm per year) and high air temperature (hot summers) resulting in rapid evaporation of soil moisture, leading in turn to salt accumulation in soil upper levels. This is the reason why vegetation is scarce, mainly two families may be found: the xero-
Low level Medium level High level
24 -26C 15 -20C 10 -15C
250-300 400-600 700-1.000
Source: Republic of Armenia Ministry of Nature Protection.
During last fifty years rains annual average decreased 5.8%. Should this trend continue rains will be 10% lower in 2100 year7. Yearly average humidity8 is around 60%: 44% in summer 80%9 in winter. Large region water masses effect on climate behavior must be underlined. Lake Sevan and lakes Urmia (North Iran) and Van (Turkey) are climate moderators, together with other smaller lakes and rivers flowing throughout Armenia. Armenia is in a westerly winds zone, flowing at high speed some kilometers above sea level, encircling the earth globe and affecting local winds in the regions through which they pass, particularly North America and Asia10. These winds interaction with countrys topography
35
phytes i.e. Hordeum crinitum, Kochia, Euphorbia marschalliana, Astragalus, Bromus inermis, Androsace, Festuca sulcata, , the ephemerals family i.e.Bromus tectorum, Bromus squarrosum, Androsace, Geranium tuberosum, Hordeum crinitum, Poa bulbosa, Chenopodium humile, Carex stenophilla16. In intense salinization areas vegetation is Salsola. (ii) Steppe zone.- Occupies territories between 1,000 and 2,200m altitude above sea level covering a total area of 242,00017 hectares. Climate is mainly dry and warm. In terms of temperature effects, two sub-zones can be identified: - the upper or moderately warm sub-zone, at above 1,800m altitude, with lower temperatures, and - the lower or warm sub-zone, characterized by a higher temperature in summer and a longer duration of its growing period18. In both sub-zones annual precipitation is 450 mm to 600 mm, distribution being uneven. Maximum precipitation level is in spring and beginning of summer. This zone is typically agricultural19, presenting a highly developed scenario in wheat, barley, and oats grains as well as fruit-growing and livestock-raising . Livestock benefits from fodder production and pastures. (iii) Steppe-meadow zone.- Forms a transition between steppes and meadows, occupying a considerable surface at a range of 1,5001,800 m above sea level, although in some parts this agro-ecological zone reaches 2,000 to 2,300 m. Annual precipitation level exceeds 600 mm, reaching in the upper zone up to 700 mm20. Soil types are varied and good for agriculture, main crops being cereals and potato. Stonier slopes are used only for grazing. It has extremely diverse vegetation such as the Festuca sulcata, Phleum phleoides, Agropyron, Bromus, Phleum pratense Dactylis glomerata and Festuca pratensis, among others. (iv) Forest zone: Occupies 712,000 hectares although actual area covered with trees is only 288,000 hectares. This is so since trees were not adequately protected in the past and exploitation was not regu-
lated. Armenia has the largest forests in Caucasus region although their distribution is not even: there is a large surface in the northeast of the country and then a series of smaller zones throughout the territory, except in its central part . Forests may be found on mountains at 500 m up to 2,300 m altitude above sea level21 as well as the valleys; they do not develop on the plateau or meadows. Climate enabling forests to develop is relatively cold with few fluctuations throughout the year. Precipitations in this ecological zone range from 400 mm up to 800 mm per year22. In this exozone a great variety of species such as Quercus, Fagus, Carpinus (these last three being the most important ones), Tilia, Acer, Ulmus, Fraxinus, Carpinus orientalis, Betula, Pinus and Juniperus exists. (v) Sub-alpine zone: Found at an altitude of 2,300m up to 2,800m above sea level. Summer here is moderately cold and brief while winter is long and harsh; annual precipitation levels typically exceed 700 mm per year. In these ecological zones moderate slopes and meadows are scarce. The Zangezur chain zone is especially famous for its rugged relief and steep slopes. While soil in this region is distinguished by a high level of humus unfortunately agriculture is excluded as a result of severe climate and sparse vegetation. Pastures growing here are typically used for pasture. (vi) Alpine zone. This ecozone may be found at an altitude of 2,700 up to 3,500 m. covering together with sub-alpine zone 629,000 hectares of the country23. Alpine zone environmental conditions are unique due to climate harshness. Abrupt temperature variations between day and night (in summer), considerably high level of precipitations, high humidity levels (particularly in spring and fall), strong winds are alpine climate basic characteristics. Farming here is impossible since no field crop can grow under such severe environmental conditions, either due to scarce height or bad quality of pastures, and sometimes both24.
36
37
2.4 Water resources

Armenia is in a relatively favorable situation in terms of natural reserves of water resources. Taking into account all available water resources in the Republic, annual water resources per capita25 are about 2,500-2,700 m3. The country receives 18.400 million m3 of water per year26 through rainfall from which unfortunately most of the volume is lost due to evaporation27. However, 200 streams lay the territory with different flow volumes. Many of them can be used not only for consumption and irrigation but also as an hydroelectric energy source estimated at 1.7 million kilowatts28. This fact becomes very important in an international setting where oil price reaches new higher levels every day. The majority of those streams are fed by melting snows, springs and underground water. When analyzing national water system, countrys lakes and rivers must be considered as well as underground water sources29. Therefore, it is worth to mention, the enormous aquifer lying underneath Ararat valley, a water source for many area inhabitants, a substitute for the lack of rain in the region, Kasakh River, with a length of 89km, Hrazdan River flowing along 146km, Azat and Vedi Rivers, 56km and 58km long respectively, are some of the water courses flowing along this valley feeding many irrigation channels. Natural water resources of underground water in Armenia30 are estimated 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 main ones). The Arax basin. This basin has major tributary rivers: Akhourian, Kasakh, Metsamor, Hrazdan, Azat, Vedi, Arpa and Vorotan, among others, widely used by local population and for agricultural development on a smaller scale. Watershed volume of sweet water is 21,900 km3. Taking into account these two systems together with remaining water courses (around 200 not exceeding 10 km
in length have been listed), average density tributaries range being of 0,4 km/km2. Armenian rivers have 7 km3 per second flow average volume 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, with an approximate useful volume of 1.16 km3 32. Currently, about 10 new dams are being built, which will add approximately 400,000,000 m3 to the water system. Flooding risks exists in certain countrys low parts due to rapid snow melting in summer together with hard rains that may occur in the same season. May has the highest possibilities according to statistics, lowering to its minimum levels as from September. Lakes are another important water resource. Armenia has a series of lakes that vary in volume, among which Lake Sevan located in the eastern province of Gegharkunik. Lake Sevan occupies 5% of Armenias surface, located almost 2,000 m above sea level, close to Gegham, Areguni, Sevan and Vardenis mountain chains forming one of the largest alpine lakes in the world, covering 940 km2. This system is fed by 28 rivers and streams. Only 10% of the water is drained through Hrazdan River, while the remaining 90% evaporates. This lake is important for the country since almost 80% of total national water resources are there, containing 58.5 km3 of water. Lake Sevan systems importance was noticed long ago. In fact, since late XVIIIth century discussions so as to find out the best way to benefit from it were held, considering its altitude, proximity to the arid but fertile Ararat Valley, need of water, among other issues. In 1910, Armenian engineer Suqias Mannaserian suggested a series of measures but only in 1933 an overall project came into light. Moscow authorities prepared a program of measures seeking to reduce evaporation levels six times by lowering lakes water level 50 meters. Drained water would be used to provide drinking water to the region and produce energy with 6 hydroelectric plants, at 500 megawatts capacity. Systems construction started in 1933, was completed in 1949, but did not produce the expected results. By the 1960s the ecological and economic consequences of its misuse became
38
so evident people understood they should stop using the resource as it was done since 1933. The lake had at that time a volume of 240 km3, almost one fourth of the capacity it had in 1920, and changes in the lake temperature (a 2% decrease on the surface), eutrofization and acidity increase were among other undesired side effects. Therefore, in 1963 construction of a 48 km long tunnel began to connect the lake with Arpa River so the river would supply the lake with water, increasing lakes volume.
Since 1981 this project has allowed 250 million m3 water flow each year from Arpa river to Lake Sevan. In 1975, when Metsamor nuclear plant opened, hydroelectric production was stopped and from that moment lakes ecological situation has been improving. Government has since then been committed to lakes protection, carrying out active policies for Lake Sevan systems defense. In 1978 Lake Sevan National Park was established in order to protect the lake and for countrys and future generations benefit.
LAKE NAME
LOCATION
ALTITUDE (meters above sea level)
SURFACE (km )
VOLUME IN THOUSANDS OF cm
MAXIMUM DEPTH (in meters)
AVERAGE DEPTH (in meters)
Lakes in Armenia Source: Republic of Armenia, Ministry of Nature Protection, 1999 Next page: Irrigation techniques on 285,649 ha. Source: Own chart based on FAO information
KARI
Close to Mount Aragats summit
3.190
0.12
357
AKNA
Close to Mount Agzdahak
3.030
0.8
2.500
15
ARNOT
Mount Geghama eastern side
2.350
0.04
206
12.6
5.2
GAZANA
Geghi River headwaters
3.590
0.06
360
10
KAPUTAN
Kajarants River headwaters
3.300
0.1
1.500
22
AL
Mount Gharabagh
2.990
0.6
180
4.5
SEV
Mount Ishkhanasar
2.666
9.000
7.5
ARPI
Ashotsk River Eastern basin
2.025
22
100.000
4.2
AIGHR
Ararat Valley North
860
0.07
310
9.4
4.3
39
Likewise, some smaller lakes may be found. Since in its territory there are more than a hundred smaller lakes Assyrians called Armenia Nairi, which means land of lakes and rivers. Among those lakes, only Arpi and Sevan have been intensively studied. Hereunder you will find a list of the most significant smaller lakes: 2.4.1 Irrigation Most countrys agriculture depends on irrigation, 70% of cultivated area requiring water systems to be able to develop. National irrigation structure was designed to provide water to 286,000 hectares per year33. Even though the situation varies according to each marz, almost 60% of farmers have access to the water resource at an average of 0.7 hectares to be irrigated per farmer. Currently, almost 190,000 hectares are under this system while 96,000 hectares are not irrigated because various pumping stations and channels have inadequate conditions34 after 1988s huge earthquake. Due to land unevenness, irrigation strongly depends on previously mentioned pumping stations, not very appropriate for present Armenian agricultural situation35 characterized by small farms. Currently, a plan is
under development to render the system more efficient by using gravity as a means of transport and improving the various channels structure. The following table shows present distribution of irrigated area (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 to the loss of a great volume of water. In spite of the success of many projects by international donor organizations 36 there are only few watering networks in good condition. This is due to leaks in the pipes, damaged infrastructure and water escapes among other problems. These losses are included in the rate paid by farmers for water, therefore, they are paying a higher rate for watering than they would with an adequate system. Thus, if users associations are financed and water rates are according to real volumes used, farmers will have greater chances to reduce cultivation costs and increase their income. Together with water loss another rel-
AGRICULTURAL LANDS
Nonrrigated Irrigated
ARABLE LANDS
ORCHARDS
VINEYARDS
HIGH LANDS
PASTURES
Irrigated
Irrigated
Irrigated
Irrigated
MARZ
Ararat Armavir Aragatsotn Kotayk Gegharkunik Tavush Lori Shirak Vayots Dzor Syunik Total
51.3 64.6 80.6
32.8 46.1 17.5
29.8 42.7 16.5 9.1 2.1 4.2 5.5 12.4 4.9 3.0
27.2 40.8 52.9 38.6 76.7 28.8 43.3 75.8 15.4 44.4
22.9 37.3 16.5 13.7 6.9 17.3 9.1 18.6 4.1 7.3
21.2 34.9 10.9 5.6 2.1 2.7 5.1 12.2 3.0 1.8
3.7 3.5 2.8 3.3 0.1 0.5 0.8 0.1 0.9 1.2 16.9
3.6 3.4 2.7 3.1 0.0 0.5 0.5 0.1 0.9 1.1 15.9
3.6 3.3 2.5 2.9 0.0 0.4 0.4 0.1 0.8 1.0 14.9
3.5 3.7 2.3 0.6 0.0 1.2 0.1 0.0 0.7 0.2 12.3
3.5 3.7 2.3 0.6 0.0 1.2 0.1 0.0 0.7 0.1 12.3
3.5 3.7 2.3 0.6 0.0 1.1 0.1 0.0 0.7 0.1 12.0
3.3 1.3 4.8 8.9 21.0 10.6 33.3 11.1 4.8 7.1 106.2
0.7 1.2 1.2 0.0 0.0 0.2 0.1 0.0 0.5 0.1 4.0
0.3 0.8 0.6 0.0 0.0 0.0 0.0 0.0 0.4 0.1 2.1
13.6 15.4 45.8 29.0 55.5 28.2 65.0 43.5 29.7 76.9 402.9
2.0 0.4 1.8 0.1 0.0 0.3 0.0 0.0 0.0 0.0 4.7
1.2 0.1 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.5
108.6 24.5 153.4 6.9 69.4 19.6
142.4 9.8 130.5 18.8 51.5 6.1
129.7 8.7
981.9 190.8 130.2 443.9
153.7 99.6
Irrigated
Nonrrigated
Nonrrigated
Nonrrigated
Nonrrigated
Nonrrigated
Total
Total
Total
Total
Total
Total
40
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 all watering system from a pumping system to one employing gravity is not sustainable. In many cases it is highly appropriate to use alternative and much modern methods more profitable and less expensive. Currently, more than 90% of the area equipped to obtain water do so by gravitational irrigation37. Even though watering by flooding is considered inefficient due to the fact that half the water is not absorbed by the fields, either due to non-desired drainage or to evaporation, and therefore wasted, in Armenia this method continues to be used in 46% of the 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 recent years an increase in the utilization of more efficient methods for water use has been observed.
2.5 Topography
Republic of Armenia territory acquired present characteristics through the process started 25 million years ago, when strong geological upheavals made the earth crust rise, originating the Armenian plateau and creating the complex current topography. As previously stated, Armenia is the most mountainous country among Caucasian republics, with an average altitude of 1,800 m above sea level. Altitude of almost 90% total territory is above 1,000 m sea level, highest recorded point being Mount Aragats (4,095 m), while lowest areas are situated near Margi gorge (with an average height of 380 m above sea level) and Araks and Debet valleys (located north, with an altitude ranging from 380 up to 430 m). The elevations do not allow moist winds from passing; this is the reason why Armenias climate is continental, a mountain chains isolated regions characteristic, preventing maritime influence. Approximately only 3% countrys total surface is below 650m and nearly half the territory is located 2,000m above sea level or higher. However, if we analyze the percentage of territory at 1,000 m above sea level, we can notice 90% has this characteristic The following table shows Armenias territory altitude range:
ALTITUDE ABOVE SEA LEVEL (meters) Up to 500 501 to 1.000 1.001 to 1.500 AREA (km ) %
Irrigation techniques on 285,649 ha.

13% 12%
75%
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
By gravity
By sprinkling
Others (dripping)
1.501 to 2.000 2.001 to 2.500 2.501 to 3.000
Source: Own chart based on FAO information
Irrigation potential is estimated at 653,651 hectares38. Investment in the sector is required in order to reach that figure, as well as a comprehensive plan taking into account farms specifics various needs as well as each marz or rural community different characteristics.
3.001 to 3.500 Above 3.501 TOTAL
Source: Republic of Armenia, Ministry of Nature Protection, 1999
41
Moderating agents coming from Mediterranean Sea and Black Sea are affected by this topography generating a marked seasonal difference in climate as regards to annual temperatures. Due to its mountain chains height, Armenia has a distinct dry continental weather and a wide climatic range between the two main seasons. This situation produces short and hot summers, long, cold and harsh winters.
Furthermore, slopes position and gradient have important implications for countrys biodiversity distribution. The steepest slopes are found on mountainsides, their use is complex, but in contrast, slopes with a 12 gradient (74% of the land, i.e. 21, 000 km2) are easy to cultivate and have great yield potential39. Among the ridged mountains and valleys of Minor
42
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 the highest peaks of this mountain ridge, reaching 3,101m above sea level), Vardenis heights (east Lake Sevan, close to Azerbaijan border) and Zangezur ramifications (south of the country, being the natural border with Azerbaiajn, and in which heights average 2,400m) are natural barriers to climate behavior there are. These elevations separate narrow fertile valleys. One of the most important valleys the wide and fertile Ararat Valley is located south, on Araks River left bank, forming the natural border with Turkey. Mount Aragats northeast land and close to Lake Sevan in the east, land are extremely stony, hindering but not preventing agricultural sector development. Lastly, in southeastern zone some small valleys may be found very appropriate for the development of the sectors surrounding the large mountain ridges. The mountain chain of this country is formed by the Caucasus system starting north of the country, splitting in a southeastern direction, between Lake Sevan and Azerbaijan. It also covers Armenian-Azerbaijani frontier up to Islamic Republic of Iran. Still undergoing tectonic movements, constantly readapting its tectonic plates, this situation generates devastating earthquakes. Last one took place in December 1988 with epicenter in Spitak region, measuring 7.2 magnitude in Richter scale. killing about 50,000 people according to unofficial figures, injuring, destroying, one of the most lethal in history. Armenian plateau corresponds to Anatolian tectonic plate, therefore small mountains and dormant volcanos exist in the zone. As soil formation is volcanic, its edafological classification is very good consequently highly appropriate for agriculture. Due to sloping ground and rains action, the edafological material surplus flows gently to the valleys, consolidating these soils quality.
2.6 Soils
Armenian scenario as far as soils is very varied. Every type of zonal soils may be found formed in Great Caucasus mountain regions 40. Over the territory there are five classes, fifteen genetic types and thirty-three different subtypes of these type of soil ,covering 91% of the territory. Intrazonal and nonzonal types cover a marginal surface, equivalent to 9% of Armenian lands41.
Soils percentage in Armenia

100% 80% 60% 40% 20% 0% Zona Intrazona Nonzonal
Source: Own chart with data by Robert Tumanian in Armenia, Country Pasture Forage Resource Profiles
There are many Chernozem type soils covering 50% of arable land42. In general, they are moderately fertile, have organic substances high content, good water retention capacity43, are in a medium altitude range (from 1,300 m to 2,400 m above sea level). Chestnut soils cover 14% of arable land; are typically found at lower altitudes (from 700 to 1,700 m), are shallow and stony, contain little organic substance and very low production potential44. Mountainous soils are found at heights above 2,000 m; they contain much organic substance but are mainly used for grazing45. Almost 40% of total countrys surface is not appropriate for agriculture46. Of the lands that may be used for this business activity (1,394,400 hectares47), 494,300 hectares are arable (35.5%), 63,800 hectares are covered with evergreen plants (6.4%), 138,900 hectares are meadow (10%) and 694,000 hectares are pastures (49.9%)48.
43
Land use
60 50 40
desertification, 19.8% moderate desertification; and 8.8% slight desertification, only 13.5% (499 km?) of the territory not being exposed to it52.
Land Deterioration Rates

30,0%
(%)
30
25,0%
20
20,0%
10 0 Arable Lands Evergreen plants Meadows Pastures
15,0% 10,0% 5,0%
Source: FAO in A Strategy for Sustainable Agricultural Development
0,0% Extremely severe Severe Moderate Slight No Deterioration
According to different research works about 44% Armenian lands are exposed to erosion49, Located mainly in Aragatsotn, Kotayk, Lori, Syunik and Vayots Dzor marzes. Natural as well as artificial factors leads us to a situation where 94,000 hectares of total 464,300 hectares arable lands are eroded (20,3%). One of the main land deterioration causes is overgrazing. Natural meadowlands occupying 1.4 million hectares in 1940 have decreased currently as a result of said praxis, stretching out today along a 804,500 hectares surface50. 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 and Vorotan rivers basins; - soil salinization, especially in Ararat plain, where 10% of lands are salinized; - deforestation, reaching relevant levels in the country, and - earthquakes, among other factors51. According to the National Action Plan to Fight Desertification, about 24,353 km2 (81.9% of the total), excluding Lake Sevan and water reservoirs surfaces are, to different extents, exposed to desertification: 26.8% of the lands faces extremely severe desertification; 26.4% severe
Source: Own chart with data provided by the National Action Plan to Combat Desertification
Lands with different degrees of degradation can be found in 281 communities of the marzes53. According to the United Nations Economic Commission for Europe (UNECE) data, over 1978-1998 period there were 640 stretches of land degraded, with a total surface of 7,530 hectares, mainly by actions of the mining industry, 3,780 hectares of which were used as agricultural lands before degradation. Over these degraded lands total surface area, mining activities have been halted on 3,037 hectares. These lands could be restored for agricultural use, while the remaining 4,493 hectares are still being used for mining activities. It should be noted mining industry is an important source of wealth for the country, but at the same time one of the most pollutant. Its operation typically produces strong environmental impact, natural soil destruction and creation of new soils, the so called anthrosols, featuring strong physical, chemical and biological limitations making vegetation reinstallation difficult. As an example, land surrounding Alaverdi copper plant in a radius of 3 km is polluted by heavy metals with concentrations 20 to 40 times above tolerable limits; a similar situation exists in the land adjacent to Ararat gold plant. Kadjaran, Kapan and Agarak and their surroundings are also
44
polluted by this kind of enterprises but statistical data is not available to determine toxicity level54. Another harmful source of erosion reducing soil quality are pollutants with agents used for agriculture. Certain chemical fertilizers, herbicides and pesticides used during long time in the country having a residual effect, intensified the problem. A paradigmatic case is Dichloro-DiphenylTrichloroethane (DDT), a toxic chemical product greatly used during the XXth century as a pesticide, but after various investigations claimed a potential risk for consumers; its use was prohibited in many parts of the world55. The Soviet Union did the same in the 1970s; the regulation was adopted by the Republic of Armenia at that time. Even though more than three decades have passed, certain areas of the country still suffer from its effect. The abusive exploitation, using non specific fertilizers for each crop, the inappropriate use of machinery oftentimes obsolete- are other factors that generate edaphic erosion and require many years to recover.
2.7 Human Resources

This section will take into consideration data from 2007 Human Development Index (HDI 2007) by United Nations Development Program (UNDP). HDI is a compound indicator measuring a country average 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 and Purchasing Power Parity in United States of America Dollars (PPP in US$).
2.7.1 General considerations HDI evaluates 177 countries performance related to human development, and ranks them. The countries, according to the results are classified in High Human Development countries (HDI ? 0,8), Medium Human Development countries (0,5 HDI < 0,8) and finally Low Human Development countries (HDI < 0,5). According to HDI 2007 Armenia ranks 83 and has medium human development (HDI 0,775). In general, the country presents life expectance of 71.7 years. Regarding education it has 99.4% adult literacy rate and 70.8% gross enrolment ratio for elementary school, high school and college. Finally the GDP per capita adjusted by PPP is US$ 4,945. Table 1 shows the Armenian position within the former Soviet Socialist Republics. Table 2 analyzes the evolution of the Human Development Index for the same countries since 1980. Data available for Armenia for 1990 show a 0.737 index. Said index drops in 1995 to 0.701; later, years 2000 and 2005 recorded an increase if 0.738 and 0.775 respectively. HDI also evaluates human development by group of countries and sets a world average. Table 3 shows the main indicators. Developing countries have a life expectancy of 66.1 years; a 76,7% literacy rate and 64,1% gross enrolment ratio for elementary school, high school and college. Lastly, GDP per capita adjusted by PPP is US$ 5,282. Table 4 summarizes demographic trends by group of countries and calculates world scenario for 2015. In developing countries population percentage under age 15 will fall from 30.9% to 28%, while population over age 65 will represent 6.4%. In addition, data shows fertility rate has dropped abruptly over last 30 years, a trend that will continue in the near future. Table 5 estimates demographic trends of Community of Independent Sates (CIS) member countries and Baltic States. In the Republic of Armenia demographic growth rate is expected to be 0.1% in the 2005-/ 2015 decade, a figure entailing population stagnation. In the same period population percentage under age 15 might fall from 20.8% to 17.5% and population aged 65 or older will drop from 12%
45
COUNTRY
RANKING
HUMAN DEVELOPMENT INDEX (HDI) 2005
LIFE EXPECTANCY AT BIRTH (years) 2005
ADULT LITERACY RATE (% persons 15 years or older) 1995-2005
GROSS ENROLMENT RATIO FOR ELEMENTARY SCHOOL, HIGH SCHOOL AND COLLAGE EDUCATION (%) 2005
LIFE GDP EDUCATION EXPECTANCY PER INDEX INDEX CAPITA (PPP US$) 2005
GDP INDEX
HUMAN DEVELOPMENT
Lithuania Estonia Latvia Byelorussia Russia
42 43 44 64 67
0,862 0,860 0,855 0,804 0,802
72,5 71,2 72,0 68,7 65,2
99,6 99,8 99,7 99,6 99,4
91,4 92,4 90,2 88,7 88,9
14,494 15.478 13.646 7.918 10.845
0,792 0,770 0,784 0,728 0,702
0,965 0,968 0,961 0,956 0,882
0,831 0,842 0,821 0,730 0,653
MEDIUM HUMAN DEVELOPMENT
Kazakhstan Ukraine Armenia A Georgia Azerbaijan Turkmenistan Moldavia Uzbekistan Kirgizstan Tajikistan
73 76 83 96 98 109 111 113 116 122
0,794 0,788 0,775 0,754 0,746 0,713 0,708 0,702 0,696 0,673
65,9 67,7 71,7 70,7 67,1 62,6 68,4 66,8 65,6 66,3
99.5 99,4 99,4 100,0 98,8 98,8 99,1 98,7 99,5
93,8 88,5 70,8 76,3 67,1 69,7 73,8 77,7 70,8
7.857 6.848 4.945 3.365 5.016 3.838 2.100 2.063 1.927 1.356
0,682 0,711 0,779 0,761 0,702 0,627 0,724 0,696 0,662 0,689
0,973 0,948 0,896 0,914 0,882 0,903 0,892 0,906 0,865 0,896
0,728 0,705 0,651 0,587 0,653 0,609 0,508 0,505 0,557 0,435
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
Table 1 (above). Human Development Index, former Soviet Socialist Republics Source: 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 Index Source: 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: former Soviet Socialist Republic Source: UNDP Human Development Report 2007-2008 , Table 6 (p. 45, below). Gender-related development index Source: UNDP Human Development Report 2007-2008 ,
0,713 0,708 0,700 0,696 0,673
46
HDI RANK
HUMAN DEVELOPMENT INDEX (HDI) 2005
LIFE EXPECTANCY AT BIRTH (years) 2005
ADULT LITERACY RATE (% de persons 15 years or older) 1995 - 2005
GROSS GDP PER ENROLMENT RATIO CAPITA FOR ELEMENTARY (PPP US$) SCHOOL, HIGH 2005 SCHOOL AND COLLAGE EDUCATION (%) 2005
LIFE EXPECTANCY INDEX
EDUCATION INDEX
GDP INDEX
Developing countries Least developed countries Arab States East Asia and the Pacific Latin America and the Caribbean South Asia Sub-saharan Africa Central and Eastern Europe 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
HDI RANK
TOTAL POPULATION (in millons of inhabitants)
ANNUAL POPULATION GROWTH RATE (%) 1975- 20052005 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
URBAN POPULATION (% of total)
POPULATION UNDER AGE OF 15 (% of total) 2005 2015 30,9 28,0 41,5 39,3 35,2 32,1 23,8 20,6 29,8 26,3 33,6 29,5 43,6 41,7 18,1 17,4 28,3 26,0
POPULATION AGED 65 AND OLDER (% of total) 2005 2015 5,3 3,3 3,9 7,1 6,3 4,7 3,1 6,4 3,5 4,4 8,8 7,7 5,4 3,2
TOTAL FERTILITY RATE (Births per women) 1970- 20001975 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
1975 Developing countries Least developed countries Arab States East Asia and the Pacific Latin America and the Caribbean South Asia Sub-saharan Africa Central and Eastern Europ and the CIS World total
2005
2015
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
2,972,0T 5.215,0T 5.966,6T 357,6 T 144,4T 765,7T 313,9T 765,7T 313,9T
1.312,3T 1.960,6T 1.190,6T 323,9T 556,6T 566,6T
835,4T 1.587,4T 1.842,2T 314,1T 366,6T 722,7T 406,2T 913,2T 396,6T
12,8 12,9 7,3 8,3
4.076,1T 6.514,8T 7.295,1T
47
COUNTRY
TOTAL POPULATION (in millons of inhabitants)
ANNUAL POPULATION GROWTH RATE (%) 19752005 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 20052015 -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
URBAN POPULATION (% of total)
POPULATION UNDER AGE 15 (% of total) 2005 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 2015 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
POPULATION AGED 65 AND OLDER (% of total) 2005 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 2015 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
TOTAL FERTILITY RATE (Births per women) 19701975 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 2000 2005 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
1975 Lithuania Estonia Latvia Byelorussia Russia Kazakhstan Ukraine Armenia Georgia Azerbaijan Turkmenistan Moldavia Uzbekistan Kirgizstan Tajikistan 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
2005 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
2015 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
1975 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
2005 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
2015 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
COUNTRY
GENDERRELATED DEVELOPMENT INDEX (IDH)
LIFE EXPECTANCY AT BIRTH (year) 2005
ADULT LITERACY RATE (% aged 15 and older) 1995-2005
COMBINED GROSS ENROLMENT RATIO FOR ELEMENTARY SCHOOL, HIGH SCHOOL AND COLLEGE EDUCATION (%) 2005
ESTIMATED EARNED INCOME (PPA EN US$) 2005
HDI RANK MINUS GDI
CLASIF. Lithuania Estonia Latvia Byelorussia Russia Kazakhstan Ukraine Armenia Georgia Azerbaijan Turkmenistan Moldavia Uzbekistan Kirgizstan Tajikistan 38 41 44 57 59 65 69 75 87 97 98 102 106
VALUE 0,861 0,858 0,853 0,803 0,801 0,792 0,785 0,772 0,743 0,704 0,699 0,692 0,669
WOMEN MEN 78,0 76,8 77,3 74,9 72,1 71,5 73,6 74,9 74,5 70,8 67,0 72,0 70,0 69,6 69,0 66,9 65,5 66,5 62,7 58,6 60,5 62,0 68,2 66,7 63,5 58,5 64,7 63,6 61,7 63,8
WOMEN 99,6 99,8 99,7 99,4 99,2 99,3 99,2 99,2 98,2 98,3 98,6 98,6 98,1 99,2
MEN 99,6 99,8 99,8 99,8 99,7 99,8 99,7 99,7 99,5 99,3 99,6 99,6 99,3 99,7
WOMEN 97 99 97 91 93 99,8 87 74 77 66 73 72 80 64
MEN 87 86 83 84 85 97 86 68 75 68 67 75 76 77
WOMEN 12.00 12.112 10.951 6.236 8.476 91 4.970 3.893 1.731 3.960 6.108 1.634 1.547 1.414 992
MEN 17.349 19.430 16.842 9.835 13.581 6.141 9.067 6.150 5.188 6.137 9.596 2.608 2.585 2.455 1.725 4 2 0 3 3 1 0 0 0 1 1 0 1
48
to 11% . Fertility rate fell from 3 births per women in 1970/75 to 1.3 in 2000/05. Table 6 analyzes gender-related development in the same group of countries. Ranking for Armenia is 75 (of 177 countries). Life expectancy is 74.9 years for women and 68.2 for men; literacy rate in both cases is over 99%, while enrolment in every level is higher for women (74%). Estimated earned income for men is (US$ 6,150) and (US$ 3,893) for women. 2.7.2 Health Indicators Table 7 summarizes main heath indicators: 92% of Armenians have access to drinking water, while this percentage drops to 83% regarding sanitation facilities. Life expectancy is estimated in 72 years and fertility rate is 1.3, far away from the 2.1 considered for population renewal in various generations. Urban population growth rate is negative (1.4), showing migration from urban areas to rural ones. 2.7.3 Education Indicators Table 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 the number of Internet users per 100 inhabitants is 5.
HEALTH INDICATORS Total percentage of population with access to drinking-water Total percentage of population using sanitation facilities Estimated number of people with HIV, in thousands Life expectancy, 2006 Fertility rate, 2006 Urban population annual growth rate (1990/2006) Infant mortality rate (under 1), 2006 Percentage of children under five suffering from underweight (moderate or severe) VALUE 92% 83% 2.9 72 years 1.3 -1.4% 21 5%
Female school enrolment rate is higher than male school enrolment rate and it is also higher in high school than in elementary school. Armenia society is well-known for its education and for the high quality of its scientists and researchers56, it stands out in areas such as physics, electronics, geology, seismography, applied mathematics, astrophysics, biotechnologies, chemistry and pharmacy only to mention a few. Armenia high educational institutions are one of the most outstanding in the region, but transition to a market economy has had negative effects on the activities of many institutions. Some had to cancel research projects. Those organizations that did survive did so as a result of grants from foreign organizations and state subsidies57. The economic situation also had an influence on the total volume of scientific work and on the decision to emigrate to the West taken by many engineers. At present the situation in the area of applied research is stable. Certain positive tendencies can be observed58: Including universities and small-scale laboratories the total number of scientific organizations operating in Armenia is 88. The budget for this activity is 1,519.1 million Armenian Drams . According to the National Statistic Agency Report the number of scientists and researchers in 2000 was 7.309. According to the United Nations Economic Commission for Europe, UNECE, the main obstacle for an efficient development of sciences in the country lies in the absence of lasting links between scientific institutions and the private sector. Tables 9 and 10 summarize the educational system compared to Baltic States and Community Independent States (CIS) and by type of countries.
Table 7. Source: UNICEF
49
EDUCATION INDICATORS Youth (15 - 24 years) literacy rate, 2000/2006, male Youth (15 - 24 years) literacy rate, 2000/2006, female Number of phones per 100 inhabitants 2005 Number Internet users per 100 inhabitants 2005 Elementary school enrolment ratio 2000/2006, gross, male Elementary school enrolment ratio 2000/2006, gross, female Elementary school enrolment ratio 2000/2006, net, male Elementary school enrolment ratio 2000/2006, net, female High school enrolment ratio 2000/2006, net, male High school enrolment ratio 2000/2006, net, female High school attendance ratio 2000/2006, net, male High school attendance ratio (2000-2006), net, female
VALUE (%) 100 100 30 5 77 81 99 98 83 86 93 95
Table 8 (above). Main Education Indicators, Armenia Source: UNICEF Table 9 (below). Literacy and enrolment Source: UNDP Human , Development Report 20072008
RANK HDI
ADULT LITERACY RATE (% aged 15 and older)
YOUTH LITERACY RATE (% aged 15-24)
NET PRIMARY ENROLMENT RATE (%)
NET SECONDARY ENROLMENT RATE (%)
CHILDREN REACHING GRADE 5 (% of grade 1 students)
TERTIARY STUDENTS IN SCIENCE, ENGINEERING AND CONSTRUCTION (% of tertiary students)
1985-1994 1995-2005 Lithuania Estonia Latvia Byelorussia Russia Kazakhstan Ukraine Armenia Georgia Azerbaijan Turkmenistan M oldavia Uzbekistan Kirgizstan Tajikistan 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 99 22 86 92 89 80 97 89 89 78 92 77
2005 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
50
Project Fruitfull Armenia
Rank HDI
ADULT LITERACY RATE (% aged 15 and older)
YOUTH LITERACY RATE (% aged 1524)
NET PRIMARY ENROLMENT RATE (%)
NET CHILDREN SECONDARY REACHING ENROLMENT GRADE 5 RATE (% of grade (%) 1 students)
TERTIARY STUDENTS IN SCIENCE, ENGINEERING, MANUFACTURING AND CONSTRUCTION (% of tertiary students) 1999-2005 -
1985-1994 1995-2005 1985-1994 1995-2005 Developing countries Least developed countries Arab States East Asia and the Pacific Latin America and the Caribbean South Asia Sub-Saharan Africa Central and Eastern Europe and the CIS World total 68,2 47,4 58,2 77,1 53,3 70,3 90,7 80,2 56,3 74,8 85,6 65,5 85,2 97,8
1991 80 47 71 -
2005 85 77 83 93
1991 2005 53 27 59 69
1991 2004
87,6 47,6 54,2 97,5 76,4
89,9 59,7 59,3 99,1 82,4
93,7 60,7 64,4 83,5
96,6 74,7 71,2 99,6 86,5
86 52 90 83
95 87 72 91 87
68 26 24 59
Table 10. Literacy and Enrolment, in general. Source: UNDP Human Development Report 2007-2008 ,
2.7.4 Standard of living indicators Table 11 synthesizes GDP per capita earned by national inhabitants (US$ 1,930 per inhabitant in 2005); growth rate per inhabitant (5.2% in the last 18 years); percentage of population below US$1 per day (less than 2% of the total population). Table 12 measures inequity in income and expenditure in
the Baltic States and in those of the Community Independent States (CIS). The richest 10% in Armenia concentrates 42.8% of total income, while the poorest represents 3.6%. Armenia holds a 33.8 index indicating that the richest 10% exceeds approximately 8 times the poorest 10%. Table 13 shows the main features on human and income poverty in the same group of countries.
Table 11. Standard of living indicators Source: UNICEF
STANDARD OF LINVING INDICATORS
VALUE
GDP per capita (U$S), 2006 GDP per capita average annual growth rate, 1990/2006 Percentage of population below U$S 1 per day, 1990 / 2005
1930 5.2% <2%
51
COUNTRY
SURVEY YEAR
SHARE OF INCOME OR EXPENDITURE (%) POOREST POOREST 10% 20% RICHEST 10% RICHEST 20%
INEQUALITY MEASURES RICHEST 10% TO POOREST 10% 10,4 10,8 11,6 6,9 12,7 8,5 5,9 8,0 15,4 9,7 12,3 8,2 10,6 6,4 7,8 RICHEST 20% TO POOREST 20% 6,3 6,4 6,8 4,5 7,6 5,6 4,1 5,0 8,3 6,0 7,7 5,3 6,2 4,4 5,2 GINI INDEX
Lithuania Estonia Latvia Byelorussia Russia Kazakhstan Ukraine Armenia Georgia Azerbaijan Turkmenistan Moldavia Uzbekistan Kirgizstan Tajikistan
2003 2003 2003 2002 2002 2003 2003 2003 2003 2001 1998 2003 2003 2003 2003
2,7 2,5 2,5 3,4 2,4 3,0 3,9 3,6 2,0 3,1 2,6 3,2 2,8 3,8 3,3
6,8 6,7 6,6 8,5 6,1 7,4 9,2 8,5 5,6 7,4 6,1 7,8 7,2 8,9 7,9
43,2 42,8 44,7 38,3 46,6 41,5 37,5 42,8 46,4 44,5 47,5 41,4 44,7 39,4 40,8
27,7 27,6 29,1 23,5 30,6 25,9 23,0 29,0 30,3 29,5 31,7 26,4 29,6 24,3 25,6
36,0 35,8 37,7 29,7 39,9 33,9 28,1 33,8 40,4 36,5 40,8 33,2 36,8 30,3 32,6
COUNTRY
PROBABILITY AT BIRTH OF NOT SURVIVING TO AGE 60 (% of cohort) 2000-2005
POPULATION BELOW INCOME POVERTY LINE 50% OF MEDIAN INCOME 2000-2005 12,4 18,8 -
Table 12 (above). Inequity in income and expenditure Source: UNDP Human , Development Report 2007-2008 Table 13 (below). Human and income poverty: former Soviet Socialist Republic , Source: UNDP Human Development Report 2007-2008
US$ A DAY 2000-2004 36,6 33,2 26,3 15,8 45,3 56,7 44,7 80,5 61,9 85,9 79,4 64,7 19,6 72,5 84,7
Lithuania Estonia Latvia Byelorussia Russia Kazakhstan Ukraine Armenia Georgia Azerbaijan Turkmenistan Moldavia Uzbekistan Kirgizstan Tajikistan
20,0 21,4 19,8 12,7 15,9 31,1 26,5 17,6 19,1 24,5 31,3 24,2 25,9 26,9 25,9
52
2.7.4.1 Human Resources The households human capital is comprised of those individual characteristics of its members, both qualitative and quantitative, helping them generate income59. The main characteristics of human capital are age, education and gender and household size. According to a study made in 2003 60 household head average age is 54 years old; all household members average age is 35 years old. Household size average is 4.6 persons, of which 2.8 are of working age between 16 and 65; 53% of them are women61. Impoverished households62 are significantly larger (5.0 members) and have more dependants on the household income; their average dependency ratio defined as the share of household members younger or older than working age (16-65) - is 0.41, compared to 0.36 for non-impoverished households63. The highest level of education completed in household normally is secondary; women having slightly more often general education, while men have professional activity-oriented education. Illiteracy is virtually absent. Other human capital aspect is the presence of a household member eligible for receiving a pension. Having a pensioner in the household implies access to an important
source of income and can be consistently viewed as part of a households human capital. Half households in this sample included one or more pensioners. Impoverished households have 48% of pensioners while non- impoverished households have 54%64. There are significant differences in incomes if the household is in an urban or rural area, Table 14 analyzes the structure of average rural household 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 social structures (Portes and Sensenbrenner, 1998). Considered a fundamental tool to promote improvement in the standard of living of a modern society this concept cannot be extrapolated nor implemented by governments since personal interrelation is present in the values of society, in its modus vivendi. Several characteristics can be considered to analyze the Armenian social capital according to a study done in 200366. First, only 7% of households participate in a professional agricultural organization, with no significant differences between the poor and non-poor. Second, nearly half (43%) of households take part in co-operation activities in some farming-related area, most often in irrigation (27% of households),
INCOME
AVERAGE CONTRIBUTION TO TOTAL INCOME %
HOUSEHOLD WITH THIS INCOME BEING THE MAIN FUNDING SOURCE % 96 39 61 18 20 26 15 ---
Table 14. Structure of household incomes per household Source: Rural Livelihoods in Armenia.65
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
53
followed by joint use of machinery and equipment (9%). Virtually no cooperation was reported in production, processing or input purchasing. Non-poor households are 55% more engaged in cooperative activities than poor households. A third way to measure social capital is the incidence of mutual help in hard times, which may reduce households vulnerability in affected households (Dudwick, 2003).
Approximately 45% of respondents reported they had experienced a serious economic crisis that had endangered the well-being of their family over the past 5 years. About a fifth (21%) of these households had received help from relatives during and after the crisis, and 5% had received help from others (a state agency, charitable organization or church)67. However, 73% had received no help at all.
Notes
1 This expression is used to describe a countrys inflation directly influenced by international price increase. 2 These figures were gathered by means of data processing from 46 meteorological stations throughout the country. 3 These cities were chosen since the first meteorological observations 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 Mount Aragats. 5 United Nations Disaster Relief Coordinator- UNDRO-UN, Multisectoral Study on Disaster and Management Planning in Armenia, New York, 1990 6 Bedoukian, P., Geography of Armenia, Geneva, 2005, p. 29 7 Source: United Nations Economic Commission for Europe (UNECE). 8 Relative Humidity. 9 Republic of Armenia, Ministry of Environmental Protection, First National Report to the Convention on Biological Diversity, Yerevan, 1999, p. 9 10 Elliott, D; Schwartz, M; Scott, G; Haymes, S; Heimiller, D; George, R; Wind Energy Resource Atlas of Armenia, 2003, p. 28 11 Op. cit., p. 28 12 From April to September 13 Tumanian, Robert, Armenia, Country Pasture/Forage Resource Profiles, 2006 14 Ibid. 15 National Report on the State of the Environment in Armenia in 2002, Yerevan, 2003, p. 31 16 Tumanian, Robert, Armenia, Country Pasture/Forage Resource Profiles, 2006 17 Republic of Armenia National Report on the State of the Environment in Armenia in 2002, Yerevan, 2003, p. 31 18 Tumanian, Robert, Armenia, Country Pasture/Forage Resource Profiles, 2006 19 Ibid. 20 Ibid. 21 However, in some regions they may be found at 2,600 m or more above sea level. 22 Ibid. 23 Republic of Armenia National Report on the State of the Environment in Armenia in 2002, Yerevan, 2003, p. 31 24 Ibid. 25 National Report on the State of the Environment in Armenia in 2002, Yerevan, 2003, p. 26 26 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, First National Report to the Convention on Biological Diversity, Yerevan, 1999, p. 9 28 Source: Republic of Armenia, Ministry of Environmental Protection 29 Annual underground water refilling is estimated at 3.8 billion m3, 1.3 billion m3 of which reappear as springs in the country. Of the remaining 2.5 billion, 0.7 billion m3 are extracted from wells and used for domestic, industrial and irrigation uses. 30 Source: United Nations Development Program (UNDP). 31 According to data by FAO Information System on Water and Agriculture (AQUASTATS) 32 Source: United Nations Food and Agriculture Organization (FAO). 33 USAID/Armenia, Armenia Agricultural Assessment, 2002 34 Ibid. 35 According to the United Nations Economic Commission for Europe (UNECE). 36 World Bank, International Fund for Agricultural Development36, Armenian Social Investment Fund among others, ASIF 37 Hayjirnackhagits Institute, The Program of Utilization of Water Resources within the Republic of Armenia, 1993 38 According to data by Water and Agriculture Information System of United Nations Food and Agriculture Organization FAO. 39 Republic of Armenia, Ministry of Environmental Protection, First National Report to the Convention on Biological Diversity, Yerevan, 1999, p. 8 40 Tumanian, Robert, Armenia, CountryPasture/Forage Resource Profiles, 2006
54
41 Ibid. 42 Republic of Armenia, Ministry of Agriculture with the support of FAO, A Strategy for Sustainable Agricultural Development, Yerevan, 2002, p. 9 43 Ibid. 44 Ibid. 45 Ibid. 46 Source: United Nations Development Program (UNDP). 47 Republic of Armenia, Ministry of Agriculture with the support of FAO, A Strategy for Sustainable Agricultural Development, Yerevan, 2002, p. 9 48 Ibid. 49 Source: United Nation Economic Commission for Europe (UNECE) 50 National Report on the State of the Environment in Armenia in 2002, Yerevan, 2003, P. 31 51 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, 2002 55 In 1962 writer Rachel Carson published a book Silent Spring where she stated all the ecological danger from the use of DDT. She even expressed all the birds of the world would disappear if the
use of such pesticide continued. As from that moment a world campaign began so as to ban the use of such agent. Nowadays the book is venerated by the environmentalism since it expressed the horrors of progress and dangers of chemical compounds to public opinion. 56 United Nations Economic Commission for Europe (UNECE), Towards a knowledge-based economy. Armenia: country readiness assessment report, New York and Geneva, 2002, p. 13. 57 Ibid. 58 Ibid. 59 Bezemer y Lerman, Rural Livelihoods in Armenia, Discussion Paper No. 4.03, The Hebrew University of Jerusalem, 2003. 60 The studys empirical base is a sample of rural houses in Armenia, made in 1998 by the Sustainable Social and Ecological Development Unit of the World Bank. The sample covered 75 towns and 7000 people in 1500 households. 61 Ibid. 62 Poor and non-poor households are considered according to the Armenian government poverty line. 63 Ibid. 64 Ibid. 65 Bezemer y Lerman, Rural Livelihoods in Armenia, Discussion Paper No. 4.03, The Hebrew University of Jerusalem, 2003. 66 Ibid. 67 Ibid.
Armenian Agricultural Scenario
chapter
Chapter 3 - Armenian Agricultural Scenario
57
Chapter 3
Armenian Agricultural Scenario

3.1 Introduction
nomic activity status representing one fifth of the Armenian Gross Domestic Product. Natural resources minerals, soil, animals and plants- are nature given elements and forces man use as wealth sources. Fuels, wind and water can also be used for energy production. But their best utilization depends on the knowledge man has on laws governing the conservation thereof. Each country relies on certain resources to enable its inhabitants progress. But their exploitation must be made taking into account future needs, should growth be detrimental to the entire society all its legitimacy is lost. That is why development must be sustainable, it being understood as an integral process requiring from different society 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 productive sector must incorporate sustainability in its operations, relations with workers and the community. Furthermore, resources available for a country determine which products can be produced and exploited. In other words, a single country can obtain from its natural environment only what circumstances and technology allow it. That is why in the previous chapter several factors determining Armenian agricultural potential and their general physical characteristics were analyzed. Bearing in mind, elements such as water, topography and climate influence decisively in shaping countrys agricultural profile this sectors production in Armenia can be analyzed consistently only when the foregoing is duly considered. Considering previous statements, we are now ready to present this chapters goal. We will review current Armenia agricultural scenario taking into account previous section assertions. Understanding agricultural sectors hallmarks will enable to make a comprehensive analysis of such eco-
3.2 Soils in Armenia

The Republic of Armenia has a total surface of 2,974,000 hectares, 311,000 hectares of which are under special protection1. The country has an important range of soils throughout its territorial extension. Their common feature is lack of humidity, due to the mountain shield absorbing on its hillsides the water transported by the winds coming from Black Sea. Total number of soils type is fourteen: clay soils prevail in Ararat valley where land is generally very rocky; mountain grasslands have instead the greatest amount of humus - up to 12% with an overall average of 9%, very favorable given humus content since in other areas such as forests it ranges from 4% to 9%, and in predominantly desert areas up to 2%.
Percentages of humus in main soils. Source: Own chart with data from the Republic of Armenia Ministry of Natural Protection.
14% 12% 10% 8% 6% 4% 2% 0% Deserts Mountain Grasslands Forests
58
Erosion has strongly affected countryssoils. Natural as well as caused by mans action factors led to this situation, the latter being the most harmful, leaving sequels still seen today throughout the country. 3.2.1 Armenian agricultural areas Taking into account environmental and economic conditions together with production specialization, eight agricultural areas can be identified2: (i) Ararat valley (ii) Ararat Valley piedemont, (iii) Sevan basin, (iv) Northeastern area, (v) Lori-Pambak region, (vi) Shirak, (vii) Daralagyaz, (viii) Zangezur territory. In general, an agricultural production area represents a combination of areas specialized in certain agricultural productions types distinguished by a specific combination of agronomic activities and lands` use, made not only of merely natural categories or soil conditions, but of agricultural ancient cultural heritage having left its mark and cultural power over hundreds of years in that particular place. Ararat valley piedmont is an area dedicated to wine and fruits production, having an important development in dairy products manufacture as well as cattle, pig and poultry breeding for industrial purposes3. Population living at the top of the mountains is now involved in sheep breeding, cereal crops and tobacco cultivation. Central area has an important dairy products, meat industry and sheep raising development. According to its climate, the area is divided in dry steppe, 1,400 to 1,800 meters above sea level, and dry mountain-steppe in areas with an altitude higher than 1,800 m above sea level. Sevan basin is an area favorable for livestock and potato farming, in sharp growth these last years, in addition to other tubers. Main occupation among livestock activities includes dairy and beef production. At zones bottom, between 1,400 and 2,100 meters above sea level, there are fruit trees typical of the area with a high percentage of land species including walnuts and almonds varieties. From 1,400 to 2,500 meters above sea level livestock breeding prevails. Over 2,500 meters above seal level there are open lands used for grazing4. In northeastern zones tobacco cultivation, cattle rising and fruits cultivation prevails together with wine industry
and breeding hogs development. The zone includes twosub-zones, the plain located up to 900 meters above sea level and the forest, located above 900 meters height. The plain is mainly an agricultural zone in a drought area: potatoes cultivation is done, being the soughtest area for livestock outdoor feeding. Lori-Pambak area has two sub-zones: the mountain forests up to 100 meters above sea level and the mountain-steppe over 1,500 m above sea level. Shirak is an area engaged in dairy, beef production and sheep wool. This land occupies republics northwestern side, being, in turn, divided into two sub-zones: dry steppe at an altitude up to 1,800 meters above seal level and mountain-steppe, at an altitude above 1,800 meters. Irrigated agriculture prevails in the first sub-zone, second one being dry land. Daralagyaz is a developed area dedicated to wine production industry and fruit growing. In turn, at Zangezur territory, Syunik is known for cattle and sheep breeding being as well a developed pole for tobacco cultivation and wine production5. This territory is located in Armenias southwest border. The area is divided into three sub-zones: lowlands, with a maximum altitude of 1,400 meters above sea level, wooded steppes, located 1,400 up to 2,000 meters above sea level, and mountainsteppe, at over 2,000 meters above sea level. 3.2.2 Geographic Distribution of Agricultural Production 3.2.2.1 Wheat Wheat 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 is similar in all districts. Indeed, while main wheat producing marzes are Shirak, Syunik and Gegharkunik the highest productivity marzes per hectare are those of Ararat and Armavir. Approximately, 70% of wheat is produced in the five marzes mentioned above. As far as national wheat seeds production is concerned, its cultivation is carried out in Syunik (30.5%), Lori (30.3%) and Shirak (18%) marzes.
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Wheat Production Geographic Distribution, 2004.
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3.2.2.2 Corn Corn production is very concentrated. The two most important areas are Tavush in the northeast (producing 30% to 35% of Armenian corn) and Ararat and Armavir marzes (producing 43% to 48 % of domestic corn). The rest 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 produced four marzes: Shirak, Siunik, Vayots Dzor, Aragatsorn.
Corn Production Geographic Distribution, 2004.
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3.2.2.3 Fruits 3.2.2.3.1 Apples Apples grow in almost all Armenian areas being countrys most extended fruit cultivation. However, its cultivation for industrial purposes is concentrated only in some areas producing 65% to 70% of the whole, main regions being Aragatsotn lowlands (1,200-1,800 m) 20% to 25%, Kotayk lowlands (1,000-1,500 m), Nairi and Abovyan regions 18 to 23%, Lori marz 10% and Syunik marz 12% each.
Apple Production Geographic Distribution, 2004.
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3.2.2.3.2 Apricot Apricot requires specific growth conditions, for such reason we found it only in some marzes. This crop has an early stage flowering, is extremely sensitive to low temperature and frosts. Production is concentrated almost entirely in Ararat Valley and Aragatsotn and Kotayk lowlands (600-1,500 meters above sea level), almost 95% of Armenian apricots being produced in these regions. Apricot offer lasts several months, harvest time starting in June in Ararat Valley, in July or early August in Aragatsotn and Kotayk highest elevations.
Apricot Production Geographic Distribution, 2004.
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3.2.2.3.3 Peach As it is the case with apricot, peach cultivation is also focused on Ararat Valley and the two neighboring marzes lowlands. This zone produces 83% up to 88% of Armenian peaches, however, unlike apricot, there are peach orchards in lowlands and in other countrys sunny areas like Tavush, Vayots' Dzor (Arpa Valley) and Syuniks Meghri and Kapan regions. Peach cultivation is especially developed in Tavush where about 150 hectares of orchards were planted in the framework of an International Fund for Agricultural Development (IFAD) project6.
Peach Production Geographic Distribution, 2004.
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3.2.2.3.4 Plum While plum is cultivated on a small scale, orchards for its production spread throughout the country. The three main areas are located at Armavir, Lori, and Shirak, each of these marzes producing 20 to 22% of it. Ararat, Kotayk, Syunik, and Aragatsotn marzes produce 5% to 8%. These orchards fragmented nature is due to the fact there are no big areas cultivated with industrial purposes plums generally growing in family plots and forests.
Plum Production Geographic Distribution, 2004.
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3.2.2.3.5 Cherries and Morello cherries Cherries and Morello cherries require similar conditions to apricot and peach ones being consequently, cultivated in the same regions, 80% to 85% of cherries in Ararat valley and Aragatsotn and Kotayk lowlands. Most important orchards are located in Armavir and Ararat marzes. Unlike cherries, Morello cherries are stronger crops. Orchards distribution is equally divided among Armavir and Ararat marzes occuping 50 to 100 hectares in the country. As for plums, there are no large industrial Morello cherries orchards, growing mainly in family plots.
Cherries and Morello Cherries Geographic Distribution, 2004.
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3.2.2.3.6 Figs There are only two places in Armenia where conditions are available for fig crop, a subtropical one requiring particular climatic conditions: Tavush marz at altitudes of up to 800 meters above sea level producing 25% to 30%; and, Meghri region, Syunik marz, heights of up to 400 meters500 meters above sea level producing 50% to 55% of it. Small quantities of figs are cultivated in Armavir and Ararat marzes representing 7% to 8% of the total production.
Fig Production Geographic Production, 2004.
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3.2.2.3.7 Dried Fruits Among dried fruits nuts are the most widespread ones growing in practically all Armenian marzes. However, there are no walnut plantations for industrial purposes since nut orchard planting is one of the less attractive activities, walnut trees occuping large spaces and taking a long time to reach maturity. Walnut trees generally are planted in small farms or grow 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. Like nuts, hazelnuts are not cultivated in orchards. These are collected mainly in Syunik (60%) and Tavush marzes (30%). Dried Fruit Production Geographic Distribution, 2004.
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3.2.2.3.8 Berries Berries grow in all Armenian marzes, however harvest is minimal at high altitude marzes such as Gegharkunik and Shirak. In examining berries production, it is worth considering cultivation areas and production volumes distribution, since marzes with large cultivated fields not necessarily achieve high productivity7. Strawberries mainly grow in Ararat Valley and Aragatsotn and Kotayk marzes lowlands. About 75% of Armenian strawberry fields are located in these regions, achieving 80% to 85% of the total production.
Raspberry is more widespread than strawberry; 70% to 75% of it is cultivated in Goris and Kapan regions, Syunik marz, Hrazdan region in Kotayk marz, Tumanyan region in Lori marz, Tavush marz and Aragatsotn marz lowlands. Gooseberry is mainly cultivated in Lori, Syunik, Aragatsotn and Tavush marzes. Mulberries occupy berries cultivation fourth place in Armenia, concentrated in Kapans forests and Goris regions in Syunik marz, Tavush marz, and Tumanyan region in Lori marz. More than 80% of the total mulberry production derives from such regions.
Geographic Distribution of Berry Production, 2004.
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3.2.2.3.9 Grapevine Grape cultivation is concentrated in 3 places: - Ararat valley and Aragatsotn and Kotayk marzes lowlands, concentrate 84% of Armenian vineyards and 92% of total grape production. - Tavush marz, where 9% of countrys vineyards produce 5% countrys total vine production. - Vayots' Dzor marz, where 7% of countrys vine-
yards produce 3% of countrys 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 Lori and Syunik marzes lowlands, but their volume is not significant for industrial purposes.
Grapevine Production Geographic Distribution, 2004.
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3.2.3 Micro-organisms present in the soil It is worth highlighting diverse Armenia landscapes and climates support awide micro-organisms diversity. They have been well studied compared to other countries, through field investigations, analysis and surveys carried out by the RA Institute of Microbiology of the RA National Academy of Sciences, the RA Republican Center for Microorganism and the RA Institute of Biotechnology of the Republic of Armenia Ministry of Industry. Following are some of the microorganisms present in countrys soil: - Nitrogen fixing micro-organisms They are the best studied group. Distributions of different species have been described from various soil types in the territory and from plants root systems Even a new species has been described: Azotobacter Nigricans. Tuber bacteria presence has been detected from soil and species recorded
from different plant groups including Rhizobium simplex, Rhizobium leguminosarum, Rhizobium meliloti, Rhizobium phaseoli, Rhizobium lupinus, and Rhizobiu trifoli. - Sulphate removing bacteria Detected and studied in Ararat valley region, where they occur in damp soils with high levels of sulphate and organic matter. Soil treatments (such as sulphur acid washing) have achieved a decrease in the bacteria quantity and affected its sulphate removing role. - Bacteria supporting extreme conditions They are those tolerating heat, cold, salinity and alkalinity. Deeply studied in Armenia, Micro-organisms State Bank keeps hundred of them. Soil use is conditioned by its potential. Data from country lands needing to be improved is listed herebelow:
Lands Needing Improvements. Source: Republic of Armenia National Report on the State of the Environment in Armenia in 2002, Yerevan, 2003, page 32.
LAND, PER DEGRADATION TIPE IN HECTARES TYPE OF LAND ACCORDING TO ITS GOAL 1. Agriculture and Forests (total) 1.1 Arable lands 1.2 Evergreen plants 1.3 Meadows 1.4 Pastures 1.5 Others 2. Irrigated Agr. Lands 3. Protected areas 3.1 Natural 3.2 Entertainment 3.3 Historic-cultural 3.4 Others 4. Forests 4.1 Forested Lands 5. Water courses 6. Reserve Lands TOTAL EXPOSED TO WATER- DESERSALINIFIED SECONDARY DEGRADED EXCESSIVE ROCKY AREA EROSION LOGGED TIFISALINIZATION MOISTURE AND IN EOLIC AQUATIC CATION POLLUTED HECTARES EROSION EROSION 1762438.7 464261.6 42896.0 136892.4 633532.7 484856.0 179209.0 233324.0 226518.0 910.0 1912.0 3984.0 371326.0 222687.0 149114.0 963343.0 4275 1765 2 2412 96 440 82 82 116 15 155 9170 2816 1572 4714 68 186 22 22 68 65 5 12 864 790 74 270 700 700 1941 119 1356 466 331 1163 528 620 15 80 15 15 33742 3477 5540 24660 65 210 210 65 65 1350 8080 8060 20 2 3498 1395 450 153 1500 12
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EXPLOITATIONS
AREA IN HECTARES 332.598 37.139 52.482 50.331 46.133 32.542 37.611 28.151 12.707 11.010 24.492 458.642 51.939 31.893 41.665 68.426 59.492 53.409 66.730 38.679 16.052 30.357
FARMABLE LAND 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
REAPING FIELDS 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.
Total Aragatsotn Ararat Armavir Guegharkunik Lori Kotayk Chirak Siounik Vayots Dzor Tavouch
19%
2% 3% 55% 8%
Land Distribution in Armenia. Source Republic of Armenia National Report on the State of the Environment in Armenia in 2002, Yerevan, 2003, page 30.
12% 1% 55%: Reserved Land 2%: Settlements 8%: Protected Areas 1%: Water mirrors (excluding Sevan Lake) 19%: Land devoted to agriculture 3%: Industry and other uses 12%: Forests
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3.3 Cultivations
Agriculture has a long history in Armenia with records dating from two thousand years ago. In fact, plateaus volcanic soil fertility made this region one of the first sites of the world having had a true agricultural development. Today agriculture represents only one fifth of national income providing employment to nearly 50% of the population. This situation is basically due to the fact that after 1991 a significant number of economy sectors crashed during the complex transition towards a market economy, after 1991, generating the depicted situation. Thus, agricultural sector absorbed a mass of loose workers from other areas. The largest impact was reflected in transition first five years. The sector rose from 389.000 workers in 1991 to 586.000 in 1996, stabilizing on a plateau of around 560.000 towards 1998 followed by a similar trend in the early years of new XXIst century.
600000 500000 400000 389000 300000 200000 100000 0 1991 Rural workers 1996 586000
Development in the number of rural workers 1991-1996. Source Institute of Social Studies, Netherlands.
It is estimated 30% of farmers do not grow all their land; the portion of the ground remaining without farming use is around 15%, although this data varies depending on the region. 88% of the farms covering less than two hectares8 use 77% of lands total area for production purposes; 12% of the farms have more than two hectares and use 23% of the land for production purposes9. This is due to poor soil types but also to the difficulty of addressing costs, lack of water or to distances separating farms from distribution or consumption centers10. In any case, averages vary according to regions ranging from 0.61 hectares in Ararat area up to 3 hectares in Syunik area, having the largest amount of crops and livestock. Small landholdings produce for family feeding and market sale purposes; 40% to 50% is sold and a small portion exchanged for other goods or allocated for barter purposes, which only happens on an informal base between certain regions and neighboring communities. Most farm owners sell their crops to consumers at direct sales markets, although in limited portions some firms channel their sales to other enterprises needing various agricultural products. Due to sectors scarce development and primary production processing absence, small farms still depend on market operations according to the season11. Following the agrarian reform, the collapse of the food industry, the loss of export markets and the abrupt decline of population income, agricultural models have radically changed since the 1991 independence. A major shift occurred towards basic subsistence crops (cereal and potatoes) with a gradual withdrawal from grains for livestock 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 and fruits (8%) and pastures (remaining 20%)12.
As a result of the transition towards private farms there are more than 335.000 family-managed farms, producing 98%of total agricultural incomes. Each farms land surface for agriculture can be calculated in about 1.37 hectare with an average of three plots of land, of which only one is irrigated.
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25,7 13,1 53
27,2
200,8 32,3 Grains Industrial Crops
1,3 Potatoes Vegetables Forage Fruits Grapes
Planted Area, in thousands of hectares. Source Republic of Armenia, Ministry of Agriculture, 2006.
Crops results in figures are reduced due to agricultural inputs small quantities and qualities and inadequate or obsolete sectorswork start-up practices. Irrigation is important 60% of the farmers having access to technology, with an average of 0.7 hectare per irrigated farm13. 3.3.1 Crops Characteristics Wheat cultivation is relatively inefficient in most countrys farms. A great amount of wheat is planted in non irrigated lands, since land with water resources is mainly used for orchards andvineyards. Production levels of the non irrigated lands are therefore comparatively minor. It is worth mentioning harvest rotation lack. If wheat is grown in the same land for several years on an uninterrupted basis, it causes a decline in production, spread of pests and reduction of land nutrients, while harvest rotation allows enriching earth with nutrients and removing the undesirable elements from previous crops. This rotation is only carried out in large farms, growing wheat for commercial purposes and not for individual consumption. Crops rotation can be carried out in lowland areas. In those lands, Winter wheat collection begins in July; conse-
quently it is possible to plant in the same land vegetables maturing by October and November. Furthermore, rotation is possible in the same year, around mid- Autumn Winter wheat can be sowed again. Same year rotation is not possible in higher areas, where wheat is collected in August and September and farmers can hardly have time to prepare the land for sowing Winter wheat. Other subjects to consider regarding wheat cultivation are harvested lands fertilization and chemicals use. These processes have been recently intensified in the Republic because large farms having financial means are undertaking this type of treatments. This crop is planted in the traditional way: lands where wheat is harvested are firstly plowed and then sowed, the process being implemented mostly with machinery. Main sowing way is in rows; however there are exceptions, since in some communities we do not found this type of sowing lands being manually harvested. The referred sowing method also takes place in those places where corn and wheat grow in small and dispersed lands. Sowing these lands with tractors is more expensive therefore not profitable for farmers. Each farmer is responsible for transporting and storing its own harvest. There is no centralized transportation or storage system many farms being small. Some produced wheat is acquired by processors (mills and liqueurs producers) while most of it remains in the farms and is consumed by their dwellers. Larger farms store their crops in barns where ventilation and dryness are assured. Fruit plantations have taken place in Armenia since ancient times; a wide range of fruit -cultivated and exotic- are found throughout the territory. This includes four apples varieties, seventeen pears types, ten common rowan varieties, four plums varieties and four almonds types. More than 70% of countrys plantations are located in lands with an altitude ranging from 400 meters up to 1,000 meters above sea level, 5% in areas from 1,500 meters to 2,000 meters and a 2.5% at more than 2,000 meters above sea level14. Moreover, different species and varieties of peaches, quinces, nuts, pomegranates, figs and melon, as well as Ribes genre varieties and species (including blackcurrant), Dospyros, Cerassus, Pistacia (including pistachio and tur-
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pentine), Elaeagnus (including mulberries), Fragaria, and Rubs are cultivated. Fruits are produced by 482 facilities located among agricultural areas of the Republic15. Fruit demand by local consumers, processors and exporters has increased in recent years. This meant an incentive for farmers outstretching the cultivation in their orchards. Agricultural activities increase requires regular irrigation, increased use of fertilizers and chemicals and an adequate land treatment, elements present in the national production. In this case, moreover, intense cultivation is exclusively developed by well organized and large commercial farms. Their intensive approach negatively impacts on products ecological purity, however, it ensures better production and better appearance, something particularly important for fruits. Land treatment in large farms is made by mechanization, while in small farms cultivation is manual. As for dried fruits, there are no great production orchards since they grow in individual and very small plots. Their marketing is limited due to: - The space required for orchards: dried fruit trees have wider leaves requiring more space to grow than fruit trees. - The period of time until maturity: compared to fruit trees, dried fruit trees require more time to mature. Traditionally, figs also grow in individual plots. As in the case of dried fruits, there are few fig orchards where sophisticated agricultural techniques are not used. However, situation began to change in recent time since Republic of Armenia Ministry of Agriculture and International Fund for Agriculture Development (IFAD), planted some orchards of important features in Meghri region, Syunik marz. A wide variety of edible wild plants have been picked up in the territory for a long time and some of them have been cultivated creating profits and competitive advantages to small and medium-sized farmers. Among red edible fruits possible crops, only strawberries, raspberries and gooseberry are cultivated applying certain agricultural techniques such as plague control, fertilization and irrigation for production. Not more than 20% of individual farms cultivating them for non-commercial purposes treat their crops. Generally, they are planted as hedges between terrains.
A great variety of cereals are found in Armenia. There are as much as thirteen species and around 360 varieties of corn, three of which are globally recognized: Triticum Boeoticum, Tricticum Urartu and Tricticum Araraticum: plus nine Aegilops genus corn species. There are substantial rye species types, such as Secale cereale sub species, Secale vavilovii wild varieties and about 36 Secale species. Barley cultivations such as Hordeum distichon, Hordeum intermedium and Hordeum vulgare are done by planting them while another eight wild species with intra-specific diversities, including Hordeum sponteanum and Hordeum Bulbosum, grow wildly. Regarding forage, Armenia has many cultivations particularly the Fabaceae including among others Medicago with 10 species /different varieties, Trifolium (30 species), Onobrychis (6 species), Vicia (36 species), and Poaceae including species of Agropyron, Arrhanuterum, Dactylis, Festuca, Lolium, Pleum, and Bromas. As for the oilseeds cultivation, it is worthy mentioning certain wild species are grown with good results, including linseed, hemp plant, (called faked flax), several species of mustard, carthamus and poppy, among others. In terms of vine cultivation, around 80% of Armenia's vineyards are located in areas requiring orchards to be buried, such as Ararat Valley, in its central areas, and Vayots Dzor region. During Soviet times grape cultivation focused on large farms thus allowing agricultural equipment centralization. During privatization period, large grape vines were divided into smaller ones. Currently, vineyards average size is 0.4 hectares in Ararat, 0.22 hectares in Vayots Dzor, and 0.16 hectares in Tavush. As a result, it is virtually impossible in such lands to use tractors for cultivation. Manual labor prevails. Pest control and fertilization are not made as required. Vine cultivation is very hard in Armenia due to huge temperatures differences in summer and winter. However, winegrowing is among the most developed areas of Armenian agriculture and among principal sources generating significant trade incomes from exports. But current promising scenario is radically different from the one prevailing just ten years ago, when only 13,000 hectares were allocated to vine cultivation, a surface markedly smaller to the 37,000 hectares cultivated in
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1981. Two factors led to the reduction of cultivated surfaces: Mijail Gorbachovs encouragement to remove vines roots in all Soviet Countries so as to fight alcoholism and the economic difficulties after 1991 independence leading to 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 Minister being a regular consumer of it) marked the beginning of a series of investments (such as Vedi-Alco company purchase) in the sector and an increase in cultivated land which currently covers 21,800 hectares, 85% of them used for high quality cognac production. Currently, there are about seven companies producing brandy and twenty-five companies producing wine, which in 2004 year purchased 79-100 tons of grapes. The table below shows the main companies and grape purchase percentage:
Grape demand per company, 2004. Source Alpha Plus Consulting.
COMPANY
GRAPE DEMAND TONS
PERCENTAGE OF DEMAND
Yeveran Brandy Company Yeveran Ararat Brandy-WineVodka Factory Artashat Wincon AKZ MAP Vedi-Alco Others TOTAL
19,000
24.0%
8,820
11.2%
Brandy production is specially developed. Today, Armenia produces higher volumes than in 1990. YBC and Great Valley had greatly contributed to this development. However, Great Valley imports alcohol while YBC uses local raw material. YBC does business with around 4,000 Armenian farms cultivating grapes. In 2004, it purchased 19,000 tons of grapes and sold 4.000.000 liters of brandy. This represents 56% of the total volume produced in the country during that year. Most of the brandy produced by Armenian manufacturers is exported. As a token of this, it should be stressed 90% of YBC and Great Valley production is traded in the foreign market, 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 is among the few Armenian companies striving for raw material self-supply. The company planted over 100 hectares of vineyards in Vayots Dzor marz mostly using Areni grapes. Other two major wine producers are ljevan Wine Factory and Yerevan Champagne-Wine Factory, holding 13% and 11% of the market share, respectively. Wine producing companies are also focusing on exports, nearly 50% to 70% of their production volume being exported. In contrast to wine production which has grown steadily with certain fluctuations, sparkling wine production is decreasing. In 1999, 938 decaliters of sparkling wine were produced compared to only 569 decaliters in 2004. Consumption of sparkling white wine (champagne) is limited, the product being highly priced since cultivating grapes for this type of beverage is expensive. Finally, it should be noted orchards lands surfaces have significantly grown over recent years. This is basically due to: organization of new processing companies, increase in dried fruit exports increase in processed fruit exports increase in the number of exports destinations need to renew orchards after 2003 frost
8,000 6,500 5,520 2,000 29,260 79,100
10.1% 8.2% 7.0% 2.5% 37.0% 100.0%
Vegetables cultivation has been extended throughout the country, covering 14% of total arable land16. There are several cultivated species such as onion, cucumber, radish, gar-
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lic, cabbage, spinach, tomato, pepper, aubergine, cauliflower, turnip, watercress, parsley, gherkin, basil, zucchini, pumpkin, horseradish and a series of different wild species cultivation, including beet, carrot, coriander, mint, asparagus and leek. New orchards were planted by large commercial farms (owners of hundreds hectares of land) and by individual farms. Large orchards are mechanically operated, mainly by land drillers,, while smaller ones are manually planted. New orchards currently planted are based on intensive cultivation method. By applying high density plantation techniques, a large production may be picked up over a short length of time17. On the other hand, orchards with larger plantations are prone to be infected and need constant fertilization and pest control reducing production ecological purity to a certain extent. As for investments costs, specialists estimate to plant a hectare of vineyard or orchard needs around US$5,000, this amount of money representing a significant one for average farmers, and become more complicated due to: - Difficult access to financing. The financing problem used to be related to small loan amounts, high interest rates, short revolving periods, and in certain instances, to the complex evaluation procedures involved. Today institutions such as ACBA or Converse Bank are dealing with the subject, reaching farmers so as to understand their particular needs and provide a specific product and an easier access to it. - Long waiting terms before picking up: meaning at least three years without generating any profit, frozens farmers wishes to plant new vines. To sum up, there is a great variety of cultivation, basically winter and summer cereals, potatoes, pumpkins, vegetables, horticultural and fruit cultivation, grapes applied to brandy production, in addition to grains for cattle raising industry, and to a lesser extent, grains for industry18. Industrial cultivation production is also developed with different production ranges depending on the region, although this activity only accounts for less than 1.5% of countrys total seeded surface, among which its worthy of mention are geranium, beet sugar and tobacco.
Cultivation indicators, in thousands of tons. Source: International Social Studies, Netherlands.

700 600 500 400 300 200 100 0 1991 Grains Potatoes 1995 1998 1999 2000 2001 2002 2003 Fruit trees Grapes
Vegetables Watermelon
The chart above shows the self-sufficiency strategy applied by most small farmers. Grain production significantly fluctuated over last ten years since crops results depend on rains or in case of lack of it, on irrigation systems operation not always in proper conditions. Most of them rely on Diasporapatrons good will that, in cooperation with marzes administrations, provide assistance to achieve efficiency in specific zones. It should be noted so called "high value, low volume" production follows a complex mechanism related to crafty systems for seeding, irrigation, harvest and production of worldwide renowned products. Under this scheme, even renowned brandy grapes suffered complications. In view of the impossibility to send their products abroad, to obtain credit, in addition to inputs prices, certain wine growing producers in Vayots Dzor marz were forced to root up their vines plantations in order to plant wheat and turn their production to domestic market19. This also occurred in Ararat and Armavir marzes. In this process, old highly valuable vineyards had no seeds nor does vine shoot. They are unlikely to be replaced, although significant sectors representatives remain in winegrowing areas.
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3.3.2 The Concept of Organic Agriculture Organic agriculture is new in Armenia since the first discussions on this method that disregards intensive cultivation and mineral and chemical fertilizers use started to beheld in 2000. Organic agriculture defines strict requirements for each and every stage of agricultural activity, from soil composition to crop transport, storage and processing. First FruitFull Armenia meeting subject was on organic agriculture in Armenia, Organic and Organic Farming in Armenia, 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 the term "ecologically clean" whose definition is wider than the one for organic term. Thus, obtaining ecologically clean agricultural products does not fully discard fertilizers and chemical products use; however, it defines a strict control over standards of use. It prevents accumulation of dangerous substances such as nitrates, heavy metals and other chemical elements in final products. True organic agriculture utterly rejects chemical measures uses for plant protection, mineral fertilizers and intensive cultivation since fertilization and control are made through natural substances20. Organic agriculture strongly applies plant rotation, secures soil high biological activity and takes measures against nitrate high levels in the soil. 3.3.2.1 Opportunities for Organic Cultivation To trace opportunities development for organic food production in the Country, the issue must be viewed from two perspectives: (i) production or supply on the one side and (ii) sale or demand on the other. After 1991, mineral and chemical fertilizers use significantly decreased and in some areas was fully interrupted. This situation continued until 2001-2002. e21. However, organic concept is quite new in Armenia and due to high market price of these foods, demand is limited. Best illustration is Shen products sales example. In 2005, apricot production being highly abundant in the countrys processing companies purchased them all for the same price - AMD 50 per kilogram- whether or not they
were organic. Production losses are another major reason for which many farmers reject this kind of cultivation, since it may be significantly reduced when no mineral fertilizers and contemporary and efficient treatment substances are used, having as a result profits reductions. Therefore, organic products sale might be done focusing on export markets. Organic products prices are 20% to 50% higher than those of common products. Sales in export markets will not only allow for recovery of losses in the yield of organic cultivation but will also secure additional profits. According to estimations made by the Armenian Organic Agriculture Foundation (AOAF), following organic products may be produced and sold in the country: - Fruits: apricot, peach, cherry, plum, nut, pomegranate, 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, saffron and other medicinal plants, herbal teas, diet supplements. - Apiculture Products: nectar, sweet juice, pollen, honey
3.4 Yield
First years after 1991 independence of Armenia were very harsh for farmers, agricultural infrastructure having suffered serious deterioration. Under soviet system, supplies quality required for crops (seeds, young trees, fertilizers and chemical products) was reasonable and provided by the State. Upon deterioration of government control on supplies process and provision, farmers used low quality and obsolete materials, affecting adversely productions. By 2000 situation improved up to a certain point since several private and public entities started to import supplies of a relatively better quality22. Due to these improvements, productivity of almost all crops increased substantially. Currently, 170,000 hectares to 195,000 hectares of cultivable lands are sowed with cereals, 85% of which are
78
wheat and barley. Wheat is used for bread and barley for brewery. Low productivity is the result of lack of an adequate agricultural technology. Production of winter wheat ranges from 18 up to 22 quintals per hectare, but in 2000 due to a serious drought and to lack of an adequate irrigation network dropped to 5.9 quintals per hectare. Winter barley productivity ranges between 11 to 17 quintals per hectare, while spring barley ranges between 6.7 to 13.1 quintals per hectare23. WINTER WHEAT WINTER BARLEY: SPRING BARLEY: 18 to 22 QUINTALS/Ha 11 to 17 QUINTALS/Ha 6.7 to 13.1 QUINTALS/Ha
As regards the foregoing, average production in Amavir and Ararat regions ranges between 3 to 3.8 tons per hectare, being the highest indicator in Armenia. In Shirak region, the largest wheat area cultivated, production is 2.5 tons per hectare. This results from seeds low quality and irrigation problems.
Winter wheat production per region, 2001-2004 in tons/hectare. Source: Alpha Plus Consulting.
REGION 2001 2002 2003 2004
Yeveran Aragatsotn Ararat Armavir Gegharkunik Lori Kotayk Shirak Syunik Vayots Dzor Tavush ARMENIA
3.50 1.53 2.86 3.52 1.34 3.05 1.21 2.14 1.13 1.04 2.06 2.31
2.40 2.14 3.08 3.76 1.99 1.85 1.42 2.38 2.05 1.99 1.61 2.42
3.01 1.57 3.13 3.10 1.72 1.11 0.92 1.15 1.51 1.44 1.04 1.73
3.21 2.21 3.51 3.04 2.25 1.87 1.94 2.32 2.08 1.75 1.30 2.35
Corn production also varies significantly depending on the region. Significant amounts of corn are cultivated in four regions: Lori, Ararat, Armavir and Tavush. Higher levels of complete and ripe corn are observed in Armavir and Ararat (7 to 9 tons/hectare) as a result of lands better quality and irrigation availability in these regions. Most of the lands for corn cultivation are located at Tavush (58% of corn cultivation total lands). Average yield ranges between 4 to 5 tons/hectare as a result of the lack of irrigation. It represents a very low level for corn since currently there are hybrid seeds securing 16 to 18 tons of corn in only one hectare. Over last years, several organizations holding large lands have imported high quality corn seeds from the United States of America. It is expected this grain cultivation will increased in the next years, not only due to the cultivated lands surface but also for production levels improvements. Main cultivated vegetables are, as mentioned above, tomato, 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 cultivations covering each year a surface ranging between 32,000 hectares up to 34,000 hectares with an average production of 515,000 tons almost 54% of which is picked up in Gegharkunik marz. Other marzes play an important role in root crop: Armavir produces around 44,000 tons annually and Lori 38,000 tons a year. In 2006, increase in production accounted for 13% in Gegharkunik, 41% in Kotayk and 10% in Ararat, while in the rest of the marzes figures were lower than in previous years. However, for this tubercle cultivation, representing up to 70% of agricultural producers income in the above mentioned areas, no adequate production techniques to maximize yields for sowing with established international quality standards have been applied yet. Fertilizers, pesticides and herbicides shortage and high prices also affect productions costs. Potato productivity ranges between 87 up to 134 quintals per hectare24.
POTATOES
84 to 134 QUINTALS/Ha
79
It is estimated that by applying another technique, average as per quintal would reach 180 in the foregoing zones. Each year around 3,000 to 4,000 hectares are planted with cabbage. Main cultivation is obtained in Ararat valley and some in the mountainous regions. Mean cabbage yield per hectare ranges from 167 up to 248 quintals/ hectare25.
CABBAGE
167 to 248 QUINTALS / Ha
As for fruit production levels, it should be noted official information collection on harvest productivity started in 2004. However, that year is regarded as a poor reference to analyze fruit production levels since almost half of the production was damaged by late spring frosts. Therefore, production levels for certain fruits varieties suffering greater damage were very low (see next chart). According to the Republic of Armenia Ministry of Agriculture, these frosts damaged national crops in the following percentages: - 20%-25% of low lands planted with apple orchards and 5%-10% of high lands (mountainous) planted with apple 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.
Fruit Yield Indicators, 2004. Source: Alpha Plus Consulting.

FRUITS PRODUCTION TONS/HA
During a favorable year, average apricot production is 7 tons/ha. In 2005, apricot production was 9 tons/ha, establishing a record. Unlike the foregoing, during a favorable year for fig harvest, average production is 2.5 to 2.6 tons/ha, and for dried fruits harvest average may range between 2 to 2.5 tons/ha. When analyzing fruit production level, it must be taken into account production is affected by trees age and size as well as by their number in a specific piece of land. Therefore, yield may significantly vary, even among neighboring orchards. Considering these variations, data about fruits and dried fruits must be read as an average. Armenia is well-known worldwide for the finest varieties of grapes and apricot. Year 2004 was not a regular period for vine production since vineyards were also damaged by frosts. This was preceded by worse frosts in 2002 and 2003 resulting in a significant production reduction. During a favorable year, average grape production ranges between 12 to 15 tons/ha. This may significantly vary depending on grapetype, plantation volume, location, irrigation possibilities and cultivation conditions. Thus, "Banants" (mainly cultivated in Tavush region) is the higher productivity technique variety, might yield up to 20 to 25 tons/hectare. On the other hand, Rkatsiteli and Lalvar varieties (better quality than Banants), may yield between 10 to 12 tons/ha. The area allocated to grapes covers 21,800 hectares, around 13% of the total cultivated surface26. Due to agricultural companies low purchasing power to continue developing this kind of production, several territories suitable for grape cultivation, were destroyed and transformed into arable lands. Currently, there are 15,000 hectares of vineyards in the country. Mean yield per hectare ranges between 61 to 78 quintals27
Apple Apricot Peach Plum Sweet Cherry Cherry Fig Raspberry
7.30 1.00 4.51 3.24 4.01 3.05 1.28 2.33
80
Grape Productivity as per region, 2001-2004 ton/ha. Source: Alpha Plus Consulting.
MARZ
2001
2002
2003
2004
Yeveran Aragatsotn Ararat Armavir Gegharkunik Lori Kotayk Shirak Syunik Vayots Dzor Tavush ARMENIA
4.91 2.12 11.63 10.66 3.81 1.15 7.68 4.67 6.39 8.14
4.35 4.02 11.85 11.07 0.80 0.67 3.91 1.72 1.01 8.28
1.76 0.95 14.68 6.26 5.26 0.36 3.47 1.40 6.87 7.14
4.60 3.83 15.77 14.63 1.00 2.04 1.35 4.61 5.36 10.89
is cultivated in early Spring in Ararat Valley. Forage cultivation is basic perennial: Medicago sativa, Onobrychis viciifolia, Trifolium pratense, Dactylis glomerata, Festuca pratensis and Phleum pratense. Vegetables are planted separately and mixed with herbs while grass cultivation is mixed. In low lands where cultivations get heat and water, basic cultivation is alfalfa, harvested 4 to 5 times during vegetation term, obtaining 150 to 160 quintals/hectare. Sainfoin is cultivated in arid non-irrigated regions; sainfoin and clover are cultivated in high mountainous regions. Hay is used for winter, its mean yield ranging between 32.9 to 52.8 quintals/ha30. During the Soviet period, along with seeds production, forage seeds production was developed. Special attention was given to exploitations involved in seed production as their main activity. Generally, Armenia has been always known for its seeds and plants; however some of them
VINE
61 to 78 QUINTALS / Ha
ALFALFA HAY
150 to 160 QUINTALS/Ha 32.9 to 53 QUINTALS/Ha
One of the main previous conditions for cattle raising development and animal production is forage base extension. For these purposes forage cultivation is essential. Green corn yield ranges between 109.3 to 189.6 quintals/ha, while grain yield ranges between 22.3 to 46.2 quintals/ha28. Cattle in remote zones do not feed from pastures; particularly milk cows eats green forage as well as pasturage in nearby pastures.
GREEN CORN GRAIN
109.3 to 189.6 quintals /ha 23.3 to 46.2 quintals /ha
Some exploitations use oat grass for silage. Mean yield ranges between 27.2 to 97.1 quintals/ha. With agriculture expansion, yield is decreasing year after year. Edible roots are cultivated for milk cows. Mean yield ranges between 141.7 to 264.8 quintals/ha. For milk cows Brassica napus29
(particularly leguminous seeds) were imported from other former Soviet republics. After land privatization, whole agricultural seeds production collapsed. Only a few private estates began to produce alfalfa and sainfoin seeds31. Recently, alfalfa seeds production has increased in the country starting to supply local market. Imported seeds price 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 pasturelands and pastures. Fluctuations in Gross Agriculture Production occurred since transition to an open economy begun: it suffered a significant drop by 16.3% between 1991 and 1993, even though t comparing year 2006 to 1990 -when the country was still a Soviet republic - shows a drop of only 2%. In the preceding decade, 1998 was a good year for agricultural production followed by a new drop in Gross Agriculture Production due to Russian crisis consequences.
81
Gross Agriculture Production, 1998-2003 In billions of Armenian Drams. Source: Republic of Armenia, Ministry of Agriculture.
1998 1999 2000 2001 2002 2003
Total Gross Agriculture Production GAP of Cultivation GAP of Cultivation for Animals
402.1
311.7
281.2
351.0
377.6
410.1
245.6
180.0
136.2
208.0
226.6
228.7
Agricultural production had a fresh impetus after 2003. This situation was particularly reflected in vegetables (27% increase), potatoes (22.5% increase) and fruits (17% increase). Grain harvest had a moderate decrease, while forage and industrial cultivation production continues decreasing. Hereunder main crops with their production percentages, surface area covered and average yield from 2000 to 2004 is presented (according to data provided by Armenia, Country pasture/forage resource profiles by Mr. Robert Tumanian):
156.5
131.7
145.0
143.0
151.0
181.4
Source: Armenia, Country pasture/forage resource profiles.
2000
2001 YIELD (quintal / ha) AREA (ha) YIELD (quintal / ha) AREA (ha)
2002 YIELD (quintal / ha) AREA (ha)
2003 YIELD (quintal / ha) AREA (ha)
2004 YIELD (quintal / ha)
Cultivation
AREA (ha)
Winter wheat Winter Rye
79657
22.6
100434
16.2
112840
20.2
104323
20.0
101369
17,9
14.3
191
9.6
80
7.0
120
8.3
92
8.2
Winter Barley
2485
17.0
2140
14.4
1625
11.5
1356
14.2
1303
15.7
Spring Wheat
13183
12.1
13120
12.3
11467
11.8
8079
11.3
13118
5.9
Spring Rye
30.0
216
9.3
10.0
15
20.0
13
20.0
Spring Barley
74970
13,1
72025
7.8
62403
11.5
50531
12.9
54439
6.7
Oats
1765
9.8
1605
7.5
928
13.8
914
12.4
601
6.4
Winter Barley
82
2485
17.0
2140
14.4
1625
11.5
1356
14.2
1303
15.7
Spring Wheat
13183
12.1
13120
12.3
11467
11.8
8079
11.3
13118
5.9
Spring Rye Cultivation Spring Barley
2000
2001
2002
2003
2004
5
AREA (ha)
30.0
YIELD (quintal / ha)
216
AREA (ha)
9.3
7
AREA (ha)
10.0
15
AREA (ha)
20.0
13
AREA (ha)
20.0
74970
13,1
72025
7.8
62403
11.5
50531
12.9
54439
6.7
Oats
1765
9.8
1605
7.5
928
13.8
914
12.4
601
6.4
Spelt
7513
12.7
5307
9.4
5305
9.8
5435
9.0
5107
7.4
Corn for grain
1967
22.3
2070
46.2
2277
25.3
2856
40.3
2799
23.2
Peas
17
22.3
99
13.5
33
15.4
105
8.5
26
9.9
Kidney bean
1968
23.9
1606
20.8
1569
18.1
1746
20.4
2029
19.3
Chickpea
211
10.7
137
13.3
141
13.1
91
9.8
90
8.9
Lentil
62
6.0
38
9.9
16
9.8
5.9
Tobacco
19
12.3
35
11.9
117
19.0
820
22.6
2538
18.1
Flax
108
36
4.1
38
10.5
33
5.9
35
3.9
Potato
32645
129.6
32875
109.4
32736
134.6
31963
130.6
34202
87.3
Cabbage
4091
194.6
3961
196.0
3364
245.9
3809
247.9
3103
167.2
Cucumber
1984
141.6
1865
112.9
1911
129.0
2125
154.5
1985
148.0
Tobacco
19
12.3
35
11.9
117
19.0
820
22.6
2538
18.1
83
Flax
108
36
4.1
38
10.5
33
5.9
35
3.9
2000
2001
2002
2003
2004
Potato
Cultivation
32645
AREA (ha)
129.6
32875
AREA (ha)
109.4
32736
AREA (ha)
134.6
31963
AREA (ha)
130.6
34202
AREA (ha)
87.3
Cabbage
4091
194.6
3961
196.0
3364
245.9
3809
247.9
3103
167.2
Cucumber
1984
141.6
1865
112.9
1911
129.0
2125
154.5
1985
148.0
Tomato
5995
262.5
5486
241.3
4959
230.2
5788
261.8
5594
257.1
Red Beet
482
173.8
404
142.2
443
157.2
534
130.8
531
131.1
Carrot
704
172.6
770
133.8
757
215.9
813
226.1
833
82.9
Onion
2056
166.1
3805
162.9
2283
167.3
2203
183.8
1950
161.1
Garlic
690
86.4
705
65.8
827
68.7
913
76.7
874
70.1
Green Pea
77
45.2
69
34.5
54
104.7
42
37.6
178
70.2
Other Vegetables
4958
197.4
4637
171.1
4674
216.2
4587
186.5
4864
205.4
Pumpkin
3814
158.9
3593
172.8
3271
185.4
4225
209.4
3386
156.1
Edible Root
310
223.1
259
199.3
188
246.8
281
198.5
337
141.7
Silage Corn
537
121.6
189
189.6
223
181.2
287
153.5
348
109.3
Annual Herb
31646
91.7
18620
59.1
16364
27.2
14098
30.5
11465
40.0
Other 4958 197.4 Vegetables Fruitfull Armenia - The Proposal 84 Pumpkin 3814 158.9
4637
171.1
4674
216.2
4587
186.5
4864
205.4
3593
172.8
3271
185.4
4225
209.4
3386
156.1
Edible Root Cultivation Silage Corn
2000
2001
2002
2003
2004
310
AREA (ha)
223.1
259
AREA (ha)
199.3
188
AREA (ha)
246.8
281
AREA (ha)
198.5
337
AREA (ha)
141.7
537
121.6
189
189.6
223
181.2
287
153.5
348
109.3
Annual Herb
31646
91.7
18620
59.1
16364
27.2
14098
30.5
11465
40.0
Perennial Herb Perennial Herb for Hay For Green Forage
3211
70.0
3532
41.0
2336
43.9
2678
40.4
2960
58.2
67227
52.8
55221
36.8
43390
45.0
60602
40.0
45209
32.9
For Seeds
309
88.2
1226
73.4
436
104.4
15688
87.3
1278
57.9
Sainfoin
144
4.1
41
4.9
223
4.1
126
5.6
60
4.2
Alfalfa
59
0.5
89
7.2
107
4.3
Natural Pastureland
Haying
139384
26.7
134609
21.3
132239
22.7
107728
22.8
108525
19.5
Green Forage
105
75.2
1036
54.4
903
40.3
5872
46.7
1828
42.6
Fruit and Soft Fruit
Main
19544
50.4
15293
37.5
12040
52.7
11968
40.2
12166
39.0
19544
50.4
15293
37.5
12040
52.7
11968
40.2
12166
39.0
Natural Pastureland
Chapter 3 - Armenian Agricultural Scenario 85
Haying
139384
26.7
134609
21.3
132239
22.7
107728
22.8
108525
19.5
Green Forage Cultivation Fruit and Soft Fruit
2000
2001
2002
2003
2004
105
AREA (ha)
75.2
1036
AREA (ha)
54.4
903
AREA (ha)
40.3
5872
AREA (ha)
46.7
1828
AREA (ha)
42.6
Main
19544
50.4
15293
37.5
12040
52.7
11968
40.2
12166
39.0
19544 Hard 14213
50.4 44.4
15293 9117
37.5 58.9
12040 9053
52.7 71.6
11968 9992
40.2 39.9
12166 9764
39.0 87.1
Dry
209
14.0
233
17.0
248
26.8
273
30.1
492
36.2
Sub trop
135
33.5
256
66.6
254
95.3
219
87.5
177
80.2
Red
38
56.6
42
16.1
102.7
22
86.6
197
20.4
Grape
21850
73.1
17758
61.4
15785
69.4
15768
74.7
15027
78.0
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, it should be taken into account major variation occurs in total production area and not in cultivated land size, since some cultivated area may be damaged by natural disasters. These incidents are more frequent with corn than with wheat. Over 2001-2004 period, total wheat production surfaces were barely smaller than total cultivated areas. Losses ranged from 0.8% in 2002 to a maximum of 3.3% in 2004. The following table shows corn and wheat production levels:
Wheat and Corn Production Volume, 2001-2004, in tons. Source: Alpha Plus Consulting.
CULTIVATION
2001
2002
2003
2004
Wheat, including Winter wheat Spring wheat Corn, including for grain for food
241,679 231,114 10,565
284,670 277,695 6,976
216,698 207,984 8,714
291,556 283,877 7,679
13,882 9,865 4,018
15,165 12,156 3,009
18,413 15,241 3,172
27,028 19,321 7,707
86
The analysis of corn and wheat production volume for 20022004 period indicates most important variable consists in exerted on production levels impact. Fluctuations in production levels are high, resulting in 2003corn production volume reduction, despite cultivated areas expansion during same year. As already mentioned, 2004 levels cannot provide a reference for fruit production volumes. This is particularly true for apricot: 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 endanger fruit production, many farmers continue expanding cultivated areas resulting in produced volumes quantitative increase. This is the case with apricots, peaches, sweet cherries and figs, whose demand and sale opportunities grow each year. Production volumes for other types of fruits are comparatively stable. Statistical information about dry fruits and strawberries production volumes must be carefully monitored since there might be an underestimation of produced volumes. These underestimations derive from the fact these trees often grow under wild conditions (mainly in woods) and thereforecannot be counted. Furthermore, there are presumably32 more dry fruit trees and strawberry bushes cultivated in farms than those mentioned in official data and current dry fruit production volume should be 1.5 to 2 times higher than available figures, that is, 4,500 to 6,000 tons per year. As for strawberries, potential production is estimated 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 an unexpected low yield in 2003 (81,600 tons), 150,000 hectares were produced in 2004 - the best harvest in preceding eight years. Most widespread varieties are Kangun and Rkatsiteli, used for cognac production, growing mainly in Tavush region. Areni variety grows in Vayots Dzor region, but is also harvested in Ararat and Armavir regions; however, their quality is not equal to those harvested in Vayots Dzor region. Also worthy of mention is the fact new "Areni" vineyards have been planted in the three regions mentioned above. A greater yield in vineyards is expected for the next years since those damaged by adverse weath-
er conditions during previous years have been restored to good condition and new vineyards have been planted. 3.4.2 Prices and Productivity Farm products retail sales prices have increased faster than producers prices. This is mainly due to international markets grain prices increase but also attributed to processing and production high cost and to the lack of effective 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 in the international and local markets, leading in 2005 to a relevant increase in bread industrially produced for domestic consumption price. Exchange terms for agricultural sector did not improve but production did it significantly. Both the price and the index decreased in 2000 although they started recovering in subsequent years33. Agriculture price index remained unchanged despite marked fluctuations occurred over recent years. Therefore, most of the increase in agriculture production value may be attributed to production increases. The chart below shows the dramatic increase in agricultural volume index over the referred years. Although surface for agriculture has only increased about 2% compared to 1999, there was around an 18% increase in agriculture production.
Index of Agribusiness Prices, Volumes and Commercial Terms. Source: Republic of Armenia Annual Statistics Book, Armenia 2004.
140 120 100 80 60 40 20 0 1999 Quantity index 2000 2001 Real index 2002 2003
Commercial terms
87
3.5 Conclusions
3.5.1 Armenian Agriculture Exporting Potential Armenia has all the necessary strenght to be a competitive producer in several areas34. It has exporting potential in certain agricultural sectors, main products being vegetables and fruits (specifically processed vine). Some of these products have a major demand by Armenian Diaspora, mainly from Russia, where largest Armenian community living abroad in the world is concentrated. Basturma and other air-dried cured beef, brandy and traditional cheese are exported to these markets, although other products such as high value vegetables (for instance asparagus and broccoli) might be exported in great volumes representing new market opportunities. Currently, the Armenian Diaspora represents products greater market issue. In addition to exports to Russia, significant numbers of beef, greens and primary manufactured food such as oils, grapes and nuts are exported to the United States of America and to some places in Western Europe. These clients currently represent a relevant source of revenue for exporters, but they are definitely fragile since their targeted consumer is switching its tastes as generations switch their national origin feeling to a clear social transformation according to their environment. Furthermore, these products are expensive in those markets compared to their equivalents or substituentes when preparing traditional folk meals. Therefore it is recommended those exports do not become the sole corporate income source, companies having to search for a variety of products to be consumed by a greater number of individuals35. For that purpose, on one side, quality standards of potentially exportable products must be increased as well as on another side global proposals allowing the country to be positioned with a brand image through active policies strength in international food, tourism, culture and education fairs should continue to be developed. But these dynamics cannot rely on Government actions only: private companies inter-relation with focused proposals to the administration have been the source opening the way to development and growth of agro exporting companies worldwide.
Not less important is exports diversification so agribusiness does not depend on only one marketable product. It should be reminded alcoholic beverages such as wine, beer and brandy account for over 80% sectors exports having dramatically 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 average turnover of US$ 514,000 and brandy exports increased by 2,059% 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 the brandy sector accounts for 80% of revenue resulting from alcoholic beverages exports.
Increase of Alcoholic Beverages Exports 1995-2005. Source: Annual Statistics Book, Armenia 2004.
35000% 30000% 25000% 20000% 15000% 10000% 5000% 0% Beer Brandy Wine 2059% 138% 31000%
An improvement in processes and an active promotion policy in the sector will allow this country to hold a much more important position than the one held today as far as agribusiness. This dynamic will also allow Armenian population to enjoy national products with higher qualities than todays ones.
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Notes
1 Republic of Armenia National Report on the State of the Environment in Armenia in 2002, Yerevan, 2003, page 30. 2 Tumanian, Robert, Armenia, Country Pasture/Forage Resource Profiles, 2006 3 Ibid. 4 Op. Cit. 5 Op. Cit. 6 Op. Cit 7 An example of this it is worth to mention Aragatsotn marz, having approximately 15% of berries fields, produces 35% up to 40% of countrys total production. Moreover, Lori has also 15% of berries fields, but produces only 5% to 8% of the total. These productivity discrepancies are the result of prolificity differences between different 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 Sustainable Agricultural Development, Yerevan, 2002, page 10. 9 Ibid. 10 Ibid. 11 Ibid. 12 Ibid. 13 Ibid. 14 Republic of Armenia Ministry of Agriculture with FAOs support, A Strategy for sustainable agricultural development, Yerevan, 2002, page 13. 15 Ibid. 16 Republic of Armenia Ministry of Agriculture with FAOs support, A strategy for sustainable agricultural development, Yerevan, 2002, Page 12. 17 Four to five years 18 Source: United Nations Food and Agriculture Organization (FAO) 19 Akopin, Z. Reforms in the New Independent States, Paris, 1996, p.213. 20 Soil is solely fertilized using organic fertilizers (manure and manure fluid, peat, bio-humus, vegetal manure, poultry manure, vegetal ash, etc.) and bacterial. Pest and disease control is made through biological means, such as organic pesticides use, combined cultivation of different plants (herbs and control of diseases through another plant), predator rising (hedgehogs, toads), etc. The following pest control measures are applied: plant insects hand collection, 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 cultivation, among others. 21 Such plants are mainly located near Yerevan and in mining areas (Agarak, Qajaran, Kapan, Alaverdi, Metsamor), which may be excluded from the organic cultivation projects. 22 Such as seeds, young plants, fertilizers and agrochemical products. 23 Tumanian, Robert, Armenia, country pasture/forage resource profiles, 2006. 24 Ibid. 25 Ibid. 26 Source: United Nations Economic Commission for Europe (UNECE). 27 Tumanian, Robert, Armenia, country pasture/forage resource profiles, 2006. 28 Ibid. 29 Ibid. 30 Ibid. 31 Republic of Armenia Ministry of Agriculture with FAOs support, A strategy for sustainable agricultural development, Yerevan, 2002. 32 Alpha Plus Consulting, The State of Armenian Agriculture, a quantitative and qualitative analysis, 2005. 33 According to data issued by the Food and Agriculture Foundation, Netherlands. 34 Republic of Armenia Ministry of Agriculture with the support of the FAO, A strategy for sustainable agricultural development, Yerevan, 2002, page 9. 35 Russell, T., The Armenian Diaspora, Washington, 1994
Logistics
chapter
Chapter 4 - Logistics
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Chapter 4
Logistics
Introduction`
This chapter will treat different independent subjects related to agriculture but where farmers are not directly involved nor their lands nor the cultivations itselves even though their improvements will have impact on the sectors wealth. First one will be countrys infrastructure regarding transportation means: roads, rail and aviation. Followed by the standards quality and their connection to food safety, and by weights and measures situation. Finally we will present post- harvest management and processing status. 4.2.1.1. Network of roads The Republic of Armenia has a relatively well designed network of roads1 made up of 7700 linear kilometers2 with 1400 km of interprovincial roads, 2520 kilometers of regional roads and 3780 km of local roads3, representing an average of 257.6 linear kilometers of road every 1000 square kilometers of territory. Most cargo and passenger transport is by road. Three roads lead to the border with the Republic of Georgia: Bavra/Jdanovi, Gogavan/Guguti and Bagratashen/Sadakhlo4, essential for cargo transport since they connect with Poti port in the Black Sea, main provider of sea transported merchandise to arrive to or to be sent by Armenia. On the other side, Agarak/Tabriz road leads to the border with the Islamic Republic of Iran5. Local routes to access from towns to markets are in bad condition in many areas of the country and they must be repaired to improve the standard of living of the inhabitants and their communities. Travelling is slow on those roads, and is many times interrupted due to seasonal causes or
Condition of Rural Roads in Armenia. Source: FAOSTAT, 2004.
11%
4.2 Infrastructure
The overall elements and services necessary to create and operate any organization constitute its infrastructure. All sectors and particularly the agribusiness sector under analysis in this work need an appropriate infrastructure to flourish, not only because it contributes to efficient product marketing but also because the nature of the products most of them perishable so requires. We are basically referring to means of transportation in good condition, either land (roads, railroads), air, or water transport, as well as to intermediate facilities such as adequate storage for efficient post-harvest management (silos, cold stores, cold storage warehouses) 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 a viable option. The development of appropriate and accessible routes and roads as well as of railroads and air routes becomes crucial.
28%
61% Poor or very poor Normal Good
92
93
to deterioration6 even when according to the RA Ministry of Transport and Communications 89% of the national network of roads is paved. Deterioration of rural roads is a Government concern: land communication is frequently interrupted, generating a barrier that separates rural communities from regional centers. The following index is formed by marzes GDP per capita, their regional economies, and their exports as well as distances that separate them from urban centers and from the capital city. The higher the indicator, the greater is the tendency of the community to poverty.
geted to the improvement of routes with an ambitious plan to up-grade the network and create new roads (with the support of international organizations such as the Lynsi Foundation, the Millennium Challenge Account, and the Asian Development Bank). The start up of the Millennium Challenge Account plan shall assign among other investments, US$ 67,000,000 to repair 321 km of national highways, 622 local roads and 19 bridges. The WTO estimated a total of US$ 90,000,000 necessary to rehabilitate the network of roads in order to allow loaded trucks to transit the roads at an average speed of 60 km/h10. The investment in
Ratio between poverty and distance to urban centers Source: UNDP
DISTANCES (In km)
UNDER 20 KM
20-30 KM
30-40 KM
40-50 KM
50-60 KM
60 KM OR OVER
From regional centers From the capital city
11.9
20.9
33.7
47.2
76.6
85.4
33.8
46.2
109.2
162.9
266.9
237.6
Rural roads connecting rural communities to national or interstate highways constitute in many cases the only possibility of a community to survive and the capacity to trade with the rest of the country. It is the so-called Lifeline7, a play on words that refers to the road as the line that divides communities 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 the region, with the rest of the country, the world, life8. Interstate roads and regional highways are administered and managed by the government entity SSCC Armenia Roads. Owing to the technical support timely received, this entity is now technically competent and capable of carrying out most of its civil works, including design engineering and contract supervision9. State financing for route maintenance and rehabilitation is still limited and as there is no roads fund, State allocation to this item is highly restricted. However, the situation will be reversed, since considerable foreign funds are tar-
infrastructure to rehabilitate rural and connection roads with local or international routes is top priority. Secondary routes, road junctions and inner fields, have received almost no money from these funds for the last decade. Rural infrastructure study estimates that total expenditures on rural roads have increased to approximately US$500,000 with approximately half funded from the community budgets11. The following table summarizes the status of community roads in each marz12 taking into account the interior routes of the country. Road condition was evaluated based on the maximum speed a vehicle may attain and rating as good roads where 60 km/h may be attained, as standard those where vehicles may be driven at 40 to 60 km/h, as poor where scarce 20 to 40 km/h may be attained and, finally as very poor those roads with a maximum speed limit of 20 km/h. Some rural roads are totally untransitable. From the total length of 3692 km of roads connecting rural communities with main roads 2250 km (61%) are classified as
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GOOD
STANDARD
POOR
VERY POOR 4% 0% 0% 6% 0% 5% 9% 0% 9% 0% 3%
MARZES WITH AVAILABLE PUBLIC TRANSPORTATION 57% 99% 85% 60% 100% 64% 90% 75% 44% 24% 73%
Roads situation in each Marz Source: Rural Infrastructure Study, 2004.
Aragatzotn Ararat Armavir Gegharkunik Kotayk Lori Shiraz Syunik Tavush Vayots' Azor Total
2% 69% 8% 1% 18% 2% 1% 0% 2% 9% 11%
29% 27% 41% 43% 62% 24% 21% 17% 43% 85% 34%
65% 3% 51% 50% 20% 68% 69% 83% 45% 6% 51%
poor or very poor, 1033 km (28%) in fair condition and only 406 km (11%) in good condition. Furthermore, only 597 km (16%) of these roads are totally passable during the winter time, while 748 km (20%) are completely impassable. At the same time, the country is undergoing rapid growth in the number of vehicles causing traffic safety and traffic congestion in capital centers - among other problems - with subsequent increase in traffic accidents. Therefore, signaling improvement and driving training emerged as a new need and resulted in the creation in 2005 of the Traffic Safety Department. The increase in the number of vehicles estimated in 30% for the period 2003-2004 resulted in 38% growth in goods carried by road and 61% in passenger transport. 4.2.1.2 The Railway System The railroad structure in the Republic of Armenia is formed by 845 km of railroads with 1520mm electrified gauge, 3Kw DC. Only 736 km are still in operation while the remaining 110 km are not, due to border closing, landslides and other reasons13. The network of railroads managed by state company Armenian Railroads (AR) required major investments to go back to load volumes registered in the last years of the
Soviet era, since most of the rolling stock should be replaced, the main track from Yerevan city to the border with the Republic of Georgia should be restored, the electric systems renewed and damaged bridges refurbished14. The system lags well behind similar European railway systems15 causing many citizens who used this means of transport to travel or to carry goods to use other alternative means of transport or preventing them from travelling. Railroad freight in 1991 was 12,000,000 tons and decreased since then to 2,600,000 tons in 2005. The number of passengers also decreased from 3,500,000 at the beginning of the 1990s to 700,000 in 2005. At the beginning of 2008, the President of Russian Railroads, Vladimir Yakunin, and the Ministry of Transport of Armenia, Andranik Manukyan, entered into a vertical concession according to which the Russian railroad company will manage the Armenian railroad network. According to the agreement, the infrastructure is still owned by the Nation and the licensee operates and manages the structure. The license shall be for thirty years, with a twenty year extension right after the first twenty years of operation. South Caucasus Railroads, an affiliate company of Russian Railroads, especially created for this contract in Armenia, shall take on the management of Armenian Railroads.
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16 14 12 10 8 6 4 2 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Passengers Weight (tn)
Railroad transportarion (millions) Source: The Armenian Economist.
In accordance to the agreement, Russian Railroads shall make a down payment of ?3,500,000 together with an annual 2 percent of the income (excluding income for passenger transportation). Furthermore, the licensee shall purchase all the rolling railroad stock of Armenia. The initial investment plan foresees that Russian Railroads shall be bound to contribute with ?284,000,000 for thirty years for the development of the railroad infrastructure in the republic of Armenia. It is also foreseen it invests approximately ?120,000,000 to update the rolling stock. Russian Railroads shall guarantee the investment. The licensee shall start to manage the Armenian railroads in the second semester of 2008. Furthermore, this company shall be in charge of the construction of a railroad track to Iran. Consequently, Georgia, whose railroad is the only one that links Armenia to the world but which at the same time suffers a transport blockade by the Russian Federation has announced that in March 2008 it will eliminate discounts in Armenian goods freight rates through its territory. 4.2.1.3 Aviation Network. Aviation industry remains Armenia's most reliable transportation link to the outside world. Being one of the former Soviet republics located in the Southern Caucasus, Armenia is landlocked country mainly due to the lack of efficient road and railway communication with other countries and it depends on the effective and well organized aviation indus-
try. Even during the soviet era Armenia aviation sector and Zvartnots airport were among the most sophisticated projects implemented by that time. Currently Aviation is one of the industries where the Armenian Government applies all efforts to develop it and become competitive in the region, giving a special priority to all projects presented in the sector since it may have significant potential and play an important role in maintaining political and economic independence of the country. The aeronautical scenario grew dramatically towards modernization with the kick-off given by the government when privatizing Zvartnots International Airport (EVN). By December 2001 decision was taken, approved early 2002 allowing the took over to happen on June 2002. Armenia International Airports CJSC was founded based on the Concession Agreement signed between the Government of the Republic of Armenia and Corporacin Amrica SA. The company was granted with the right to manage and operate Yerevans Zvartnots International Airport for a period of 30 years, with possible quinquenial renovations and later in 2007 Gyumris Shirak International Airports. The strategic goal of the company is to implement the master plan approved by the government in 2002 according to which Zvartnots International Airport must reach by 2010 standards applied in similar airports around the world, contributing to the plan of transforming the airport into a regional HUB in order to take advantage of Armenias strategic
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location between Europe and Asia, increase passengers traffic as well as airlines frequencies. These goals have been already reached by concessionaire quite in advance of the due date. The first objective was to renovate the existing runway and platforms so as to make it safe and secure for all flights in all weather conditions. Currently Zvartnots International Airport runway has the following parameters 3850-meter long, 60-meter width. The lighting system was fully renovated with IDMAN lighting system, including center line, touch down zone, and its permanent maintenance in due conditions. Therefore the airport was assigned ICAO category II, being able to handle any type of commercial, cargo and military aircrafts. Full reorganization plan implemented on airport safety and security levels upgrade as well as runway full reconstruction allowed market expansion. These goals were directly interlinked with the objectives of developing the existing infrastructure of the airport and constructing a new terminal. Yerevan`s geological situation was a challenge during the initial stage of the design process for the new terminal since 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 the application of rubber lead seismic isolators very new for the region, implemented considering the specifications of the area as well the strategic significance of the building. Completely new prenova slab system, reducing the slabs weight and the building total mass, was applied during the works as a new approach and technology in the construction. Mainly used to keep the building as light as possible, one of the design challenges of this New Terminal Building, a special system of pre cast prefabricated slabs with polyethylene spheres was developed, making the structural system a much lighter overall element in order to achieve better seismic resistance. The structural design was adjusted and reduced to minimum possible sections. The technology allows reducing vulnerability with a 65 % limitation of seismic effects and increase anti-seismic durableness. Double Glassed Faade of the building was installed following energy saving technologies, increasing the efficiency of the building operation by means of providing thermal comfort regulating heat lost / heat gains, reducing weather impacts. Intelligent Building Management System is another innovation applied in the country targeted to increase safety and security of the building, allowing to have smart control over
Zvartnots International Airport, New Terminal Building inaugurated 25 May 2007, Yerevan.
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2001 January February March April May June July August September October November December 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.
the building by means of integration of such systems as CCTV, Firefighting, Security locks, air-conditioning etc. into the one centralized computerized server, which will immediately react on any irregularity observed in the building. On May 25th, 2007 new terminals arrivals and departures sterile area was put into operation, a wonderful modern building, transparent, with full view to Mount Arart. Up to now it has been consumed about 150 million US dollars, from the total of 220 million US dollars planned for the term concession. As a result aircraft movement growth for the period from 2001-2007 was really strong, 40% increase recorded in the number of aircraft movement. Local airline Armenian Airlines bankruptcy influenced and required from Armenian airline industry more modern and more efficient fleet. Routes left void by the referred company were took over by a new formed one Armavia - as a local alternative replacement with Airbuses A320 delivery partially replacing the Russian fleet operated on the mentioned routes, as well as allowing to start operation of new flights to Europe. In 2003 two new airlines started to operate regular scheduled flights to Zvartnots International Airport. The European air carrier Czech Airlines operated with its Prague-Yerevan flight twice a week and Fly Air, a Turkish airline, operated scheduled flights Istanbul-Yerevan twice a week. British
Airways decided to operate to Yerevan on a non-stop direct basis from London. The operation of new routes and airline companies in Armenia resulted in noticeable enlivening in the activity of already operating companies in the market, which contributed to increase flights frequency to Armenia. For instance, Austrian Airlines Yerevan-Vienna flight increased from three (3) weekly scheduled flights in 2003 to five (5) in 2004 and seven (7) in 2007. Years 2004-2006 were development ones of new and already existing directions, due to the fact that the first phase of the master plan presented by AIA and targeted on both safety and security standards and new terminal construction arrival level were completed. As a result in June 2005 Lufthansa Airlines started operation to Yerevan from Munich with two weekly flights. Two new international air companies started their operation to Yerevan in 2006 Air France from Paris and Air Arabia. In 2008s first quarter the tendency to increase flights frequencies has been confirmed when Lufthansa and Czech airlines requested to up-grade their flights to four (4) weekly scheduled ones and Air Baltic started two (2) weekly flights to Riga. The best route with maximum loading passenger factor is still Yerevan-Moscow, with the four daily flights operated by both Armavia and Aeroflot and S7 are also increased during the high season to 5-6. During the years 2006-2007 the airlines were operating about 34 CIS and international routes
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16000 14000 12000 10000 8000 6000 4000 2000 0
2001
2002
2003
2004
2005
2006
2007
Aircraft Movement Annual Accumulated.
EVN Passenger movement .
2001 January February March April May June July August September October November December 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
99
1.400.000 1.200.000 1.0000000 800.000 600.000 400.000 200.000 0
2001
2002
2003
2004
2005
2006
2007
Pax Movements Annual Accumulaited.
Mail Annual Accumulated.
800,0 700,0 600,0 500,0 400,0 300,0 200,0 100,0 0,0
September
February
Oktober
June
July
August
March
May
November
2001
2002
2003
2004
2005
2006
December
2007
January
April
100
and have code-share agreements for two international routes operated by other carriers. The destinations to Russia by cities are Krasnodar, Perm, Orenburg, Min Vody, Saratov, Samara, St. Petresrburg Anapa, Moscow, Vladikovkaz Rastov, 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 countries we should mention France (Paris, Aroport Roissy Charles de Gaule), England (London Heathrow airport) Germany (Munich International Airport - F.J. Strauss), Austria (Vienna International Airport), the Netherlands (Schipol), Greece (Athens), Turkey (Istanbul). Flights also serve Middle Eastern 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 from 2001-2007 has been strong, 92 % increase was recorded in the number of passengers served. Passenger traffic increase
2001 January February March April May June July August September October November December 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 Merchandises in Tons.
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Cargo Movements Annual Accumulated.

10.000,0 8.000,0 6.000,0 4.000,0 2.000,0 0,0
July
September
March
May
2001
2002
2003
2004
2005
2006
November
January
2007
both on account of improved services for existing carriers as well as on the account of competitive edge development and attraction of new carriers and geographic connections, including evaluating transit zone were within the primary target of the company in its first three years. The airport has an important cargo building where mail and other cargo are dealt with. Cargo handled merchandise has had an erratic behavior during the years of the concession. No reliable data was found for previous years. This is due mainly on international foreign aid which happened to very important in the starting years of the independency so as to mitigate consequences of lack of electricity or earthquakes. The volume not being sufficient for regular cargo aircrafts to install scheduled frequencies, alternatives are looked for. Nevertheless the airplane cargo is served by Armenian cargo line from Germany airport, on a weekly basis, helping a lot In 2007 the concession agreement was amended and Armenia International Airports was granted with the rights to operate SHIRAK international airport located in the countrys second city Gyumri, it will be mainly used as alternative airport for Zvartnots International Airport. It started operating in 1961, annually serving about 46.000 passengers. After full reconstruction 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 opportunity to international air companies to make use of the airports services. Currently, there are two regular flights operated on weekly basis to SHIRAK from Moscow by S7 airline, and one flight per week from Sochi operated by Aeroflot-Don air company, negotiations are in the process to have regular flights 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 of the world-wide industrial and post-industrial infrastructure supporting economic activities, societal needs and more equitable opportunities in other words, sustainable development. The key role of standards has been implicitly recognized, since a long time, in the education programmes covering a broad variety of technical fields. However, it is a more recent trend the increased awareness of educational institutions all over the world of the importance of standardization activities in a more general sense: for the contribution that they can give to trade of products and services, to promoting good
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business practices and to fostering technological innovation. One of the most relevant worldwide institutions in the standardization field is the International Organization for Standardization. Because "International Organization for Standardization" would have different acronyms in different languages ("IOS" in English, "OIN" in French for Organisation internationale de normalisation), its founders decided 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 form of the organization's name is always ISO. ISO considers the above referred trend of utmost importance and believes in the fundamental contribution that educational institutions can give on teaching what international standardization is and what can be achieved through it. ISO is keen to support these institutions in their efforts and to encourage them to share their knowledge, experience and expertise. Also, considering that education and research are often linked, ISO wishes to promote studies and surveys relating to the macro- and micro-economic benefits of standardization. Other organizations such as USDA have their own quality standards based on measurable attributes that describe the value and utility of the product. For example, Beef quality standards are based on attributes such as marbling (the amount of fat interspersed with lean meat), color, firmness, texture, and age of the animal, for each grade. Standards for each product describe the entire range of quality for a product, and the number of grades varies by commodity. There are eight grades for beef, and three each for chickens, eggs, and turkeys. On the other hand, there are 38 grades for cotton, and more than 312 fruit, vegetable, and specialty product standards. GOSSTANDARD, a standard rule issued by the government of the Soviet Union, followed by the Russian Federation, serves as protection for the user and the adherence of existing standards. In this framework the quality and standards of goods and services are certified, not only for imported goods, but products manufactured in Russian Federation. Certificates for products are issued for either one or three years. The existence of an ISO document facilitates the certification by the Russian Authorities.
Why standards matter? Standards make an enormous and positive contribution to most aspects of our lives. Standards ensure desirable characteristics of products and services such as quality, environmental friendliness, safety, reliability, efficiency and interchangeability - and at an economical cost. When products and services meet our expectations, we tend to take this for granted and be unaware of the role of standards. However, when standards are absent, we soon notice. We soon care when products turn out to be of poor quality, do not fit, are incompatible with equipment that we already have, are unreliable or dangerous. When products, systems, machinery and devices work well 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 of products 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 conformity assessment share technological advances and good management practice disseminate innovation safeguard consumers, and users in general, of products and services make life simpler by providing solutions to common problems Who standards benefit? Standards provide technological, economic and societal benefits. For businesses, the widespread adoption of International Standards means that suppliers can develop and offer products and services meeting specifications that have wide international acceptance in their sectors. Therefore, businesses using International Standards can compete on many more markets around the world. For innovators of new technologies, International Standards on aspects like terminology, compatibility and
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safety speed up the dissemination of innovations and their development into manufacturable and marketable products. For customers, the worldwide compatibility of technology which is achieved when products and services are based on International Standards gives them a broad choice of offers. They also benefit from the effects of competition among suppliers. For governments, International Standards provide the technological and scientific bases underpinning health, safety and environmental legislation. For trade officials, International Standards create "a level playing field" for all competitors on those markets. The existence of divergent national or regional standards can create technical barriers to trade. International Standards are the technical means by which political trade agreements can be put into practice. For developing countries, International Standards that represent an international consensus on the state of the art are an important source of technological know-how. By defining the characteristics that products and services will be expected to meet on export markets, International Standards give developing countries a basis for making the right decisions when investing their scarce resources and thus avoid squandering them. For consumers, conformity of products and services to International Standards provides assurance about their quality, safety and reliability. For everyone, International Standards contribute to the quality 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 radiation and environmental aspects of products can contribute to efforts to preserve the environment. The importance of standards for international trade lies on seven basic issues: They enable to efficiently organize international trade by offering a homogeneous language to producers, packagers, buyers and consumers. They are essential to solve any possible controversy between buyers and sellers.
Standardized quality levels are the bases of information managed and published by marketing services, enabling to win or loose potential markets for products from various nations. They are necessary to truly compare prices. Allows for a more transparent market; an advantage for all the marketing chain. They aim at keeping those products whose quality is not identified out of the market. Quality improvement is their objective since by increasing product quality an increase in value is usually verified. Therefore, producers tend to improve their products in order to increase their income. 4.3.1 National Situation The first Standards Bureau in Armenia was established in 1931, while inside of the Soviet Union, as a branch of the former Gosstandard system. It carried out activities in the fields of standardization, calibration of measuring devices, and, applied metrology. In 1998 the Institute "Armstandard" was established, but in 2004 by Decision of the Government of the Republic of Armenia the Institute was reorganized into the National Institute of Standards (SARM). The Institute is a closed joint-stock company operating under the Ministry of Trade and Economic Development of the Republic of Armenia, sitting on Komitas Avenue 49/2, AM-0051 Yerevan, tel: +374 10 23 70 20, Fax: +374 10 28 56 20, e-mail: sarm@sarm.am, 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 of standardization are carried out by the Institute. The Institute has been accredited as a product, services, quality and environmental management systems certification body and carries out conformity assessment activities in the mentioned fields. Activities on standardization and conformity assessment are performed according to the Laws "On Standardization" adopted by the Parliament of Armenia in 1999, amended in 2004 and "On Conformity Assessment" adopted by the Parliament of Armenia in 2004. In accordance with the Law "On Standardization", the nation-
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al standards are voluntary, but a part of them contains mandatory requirements. SARM is a member body of ISO since 1996. Armenia agribusiness processes are at very different points on the path to ISO and HACCP (Hazard Analysis and Critical Control Point) accreditations16. No company has the volume of fresh produce exports to the EU to warrant investment in the comprehensive and stringent private sector EUREP-GAP accreditation or British Retailers Code of practice. Many fresh and processed food companies in Armenia lack the infrastructure and organization that is needed to meet the basic requirements for Good Manufacturing Practices (GMP) as recognized in the EU or the USA (the reference standard chosen by the Armenian government for harmonization purposes). The majority uses an incremental approach, improving their facilities, equipment, and practices as their business volumes grow. However, many agribusiness processes operate in buildings that were bought during the privatizations of the 1990s. Most of these buildings were not designed as facilities able to process food in compliance with international quality standards. Most of these facilities have insufficient water supply and are inadequate for workers, they even lack solid and liquid waste management in compliance with the international standards of the twenty-first century. 4.3.2 Connections with food safety Meeting food safety standards is another way to strengthen the competitiveness of Armenias agribusiness. To strengthen its competitiveness, the agricultural sector and the agribusiness will need to equip themselves to cost effectively respond to domestic consumers preferences for food safety and match food quality standards being at the same time competitive in the international market17. These standards will become increasingly relevant to agriculture and agribusiness. Domestic demand remains the primary driver for food safety and quality improvements for most producers and processors. Higher quality imports penetrating the market already point to the need to raise local standards simply to maintain the domestic market share, and achieve import substitution or establish export markets. International experience suggests that implementation of quality standards needs to be driven by the private sector
rather than imposed by the government. However, the government has an important public role to play in providing support to skills development of veterinary staff and advisory services that assist producers and processors to meet food safety standards. The Government also needs to take a lead to develop the legislative and regulatory framework that allows the development of adequate standards while not impeding on Armenias small and medium enterprise sector. When introducing safety standards, the challenge is how to face interventions as the formal food sector grows, without driving out informal activities that serve an important economic function. The formal market should be precisely oriented while by providing incentives and better public information on safety standards, the informal market is expected to improve by itself. The costs of introducing or carrying out food safety systems can be large and prohibitive, therefore excluding many producers. A phased and differentiated implementation strategy would give time to producers to adjust practices and enable public institutions to develop and refine their control and enforcement capacity. Safety and quality insufficiencies in the agri-food sector together with inconsistent supply continue to remain the main barriers for increasing the exports of agro-processed products from Armenia to European and U.S. markets. To reverse this situation the focus should be set on developing sustainable agricultural practices, and on producing safe and high quality export products of sufficient quantity which would be competitive in the respective markets. Armenias small quantity of exported agro-processed products, low-valued product, and negative safety and quality reputation make it a likely price-taker instead of being a price setter18 . It has limited access to higher end markets. One option for Armenia to improve its export position is to differentiate its products in specialty markets, such as ethnic markets, produce organic agro-processed products. Alternatively, Armenia can get access to demanding markets by improving the safety and quality of its agriculture. Importing countries frequently require guarantees that exports are derived from areas that are free from certain pests and diseases, that minimum standards of hygiene have been applied in the manufacture, packaging and distri-
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bution of food products or that residue of pesticides, veterinary medicine, environmental contaminants or naturally occurring contaminants not exceed the standards set by the competent body. The exporting country and the export industry must have capacity to comply with these requirements and in many cases also to prove that compliance has been achieved19. Food safety and agricultural health management capacity is important not only to meet requirements for export markets, but also to facilitate effective controls on imported agricultural and food products and on domestic production. Indeed, in certain contexts (e.g. tourism sector) these controls may be of great importance20. A number of international and local organizations are active to enhance Armenias opportunities to benefit from international trade. Within agriculture these efforts are largely focused on supporting Armenian agro-processors to produce better quality and safer products, and to enable Government to comply with WTO rules on Sanitary and Phytosanitary Standards (SPS). There has been considerable support by some donor organizations, such as USDA or USAID, to improve the quality and safety of products of individual agro-processors (dairies, slaughterhouses, food processors etc.). Donor activities are mainly targeted towards assisting companies to receive ISO certifications and implement HACCP standards. In addition, FAO just recently launched a project for strengthening and updating the performance of the food control systems in Armenia and Georgia. In response to recent queries from the WTOs secretariat, the Armenian government has formed a working group to recommend changes in the current food safety and phytosanitary laws and regulations, needed to bring these into conformance with the Codex Alimentarius. Even if there has been improvement in many aspects there is still a lot to be done. Armenia lacks an independent reference laboratory certified by the WTO that will monitor adherence to international testing and little has been done to establish a food safety system compliant with WTO principles. Within the framework of the requirements to finally join the WTO, on June 2006 the commission appointed by Armenia together with delegates from the Republic of Kyrgyzstan and Moldavia submitted a petition to the
Agricultural Committee of the WTO requiring the flexibility of certain measures so as to be included in a shorter period, based on the fact that they are low income transition economies, and for a matter of survival, especially for the purpose of helping their respective towns to adapt and adjust their businesses to a fast pace of free trade, considering that this would enable them access to new markets. The concerns stated in the above mentioned proposal are considered vital and real, and are based on an objective analysis of the national economic and social situations and of the position in the multilateral trade system in terms of the commitment regarding access to market and preparation of standards and obligations assumed by those countries after joining WTO. With no intention to generate a new subcategory of countries within members of the WTO, flexibility is required in order to allow the economy of these countries to achieve better quality and extend diversification and production to comply with the standards required and take part in the multilateral trade system in the medium term. 4.3.3 Armenia and the WTO The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the worlds trading nations and ratified in their parliaments. The goal is to help producers of goods and services, exporters, and importers conduct their business. The republic of Armenia requested becoming a member of the WTO and became member no. 145 on February 5, 2003 and therefore, since that date it had to harmonize the national legislation with the principles of this international entity, the implementation of which, as well as the infrastructure for their application, required more attention since that time. It also had to create within the Government the capacity to participate as full member of the WTO. Armenia was allowed an application term after joining date due to two requirements: The constant technical regulations for product standard certifications (December 31, 2004) and the conversion of the present VAT exemption to farmers for the sale of agricultural products within the subsidy program (December 31, 2008)
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Compliance with international product certifications hasnt yet been fully achieved21. The Armenian standard system has not been harmonized with international standards and the Government has to take the necessary measures to enforce the WTO Codex Alimentarius. As Armenias main commercial partners (such as Russia) start to adopt the aforementioned Codex it will be more necessary for the Armenian Government to implement its plans to harmonize with international standards22. After the master agreement, preexisting valid GOST standards were eliminated without establishing an alternative standard system. Subject to the agreement between Armenia and the World Trade Organization concerning the elimination of VAT exemptions for agricultural producers, Parliament has enacted a law that would eliminate the current tax exemption on aggregate value for national agricultural production sold by producers and for the sale of veterinary products23 as from December 31, 2008. Present VAT exemption reaches only up to the point of sale. Once the agricultural products leave the farm they are subject to this tax. The debates that arose after joining the WTO emphasized the importance to support the agricultural sector in its current level of development and emphasized the need of promoting a support system based on subsidies instead of VAT exemptions. This implies the development of a flexible tax and subsidies system to avoid adversely affecting the sector. However, so far very little has been done to achieve agricultural support. WTO after the adhesion evaluation points out that Armenia will require an accounting system that would enable to fix the agricultural production levels of individual farmers and an agricultural tax system that will not turn into an additional administrative burden to farmers and local governments. Even though it is easier to deal with agri-businessmen, production nature, lack of frequency and door to door sale make added value estimation difficult and tedious, especially for small farmers. Often countries exempt small businesses from VAT or if companies are below a certain size, they are treated differently with a fixed tax fee. Although the system has some difficulties, it exempts farmers (and local governments) from excessive compulsory costs. As VAT paid on
inputs cannot be credited it produces a cascade in lower production phases and erodes the systems intentions for no distortion. For example, for small farmers, prevailing in Armenia, purchased inputs may be so little that added value in the agricultural level is a large part of gross value. As a result, the anticipated farmers tax amount for value added outweighs VAT credit that will be credited to the farmer for VAT payment on inputs used in agricultural production. Therefore, at present, farmers are net beneficiaries of the subsidies. However, since farmers are increasingly using agricultural inputs, incidence on net subsidy decreases. The Government needs to evaluate options within the obligations undertaken with the WTO24. Within the current administrative structures and schemes it seems very difficult to introduce VAT control for farmers without substantial increase in administrative burden to producers as well as to local governments. Therefore, the Government should make it clear the extent and limits within which agricultural producers may continue to be VAT exempted and how a fixed tax fee system on agricultural gross sales can be used.25. Within the framework of the requirements to finally join the WTO, on June 2006 the commission appointed by Armenia together with delegates from the Republic of Kyrgyzstan and Moldavia submitted a petition to the Agricultural Committee of the WTO requiring the flexibility of certain measures so as to be included in a shorter period, based on the fact that they are low income transition economies, and for a matter of survival, especially for the purpose of helping their respective towns to adapt and adjust their businesses to a fast pace of free trade, considering that this would enable them access to new markets. The concerns stated in the above mentioned proposal are considered vital and real, and are based on an objective analysis of the national economic and social situations and of the position in the multilateral trade system in terms of the commitment regarding access to market and preparation of standards and obligations assumed by those countries after joining WTO. With no intention to generate a new subcategory of countries within members of the WTO, flexibility is required in order to allow the economy of these countries to achieve better quality and extend diversification and production to comply with the standards required and take part in
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the multilateral trade system in the medium term.
4.4 Weights and measures

The International Metrology System is formed mainly by the Metric Convention of 1875. This Convention created three main bodies to act in issues related to conversion of the 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 27 Associate States, including developed and developing nations. Armenia is not a separate State in this Agreement. Armenia is not a member or an associated state in the International Organization of Legal Metrology29 (IOLM). However, the Republic of Armenia since February 5, 2003, the day it became a member state of the World Trade Organization, had to standardize weights and measures for the agricultural production pursuant to the international standards required by said organization; On several occasions Armenia required flexibility for this and other requirements based on the lack of adequate equipment to comply with such standardization. Among other drawbacks, Armenia doesn't have enough scales whether public or private, and the existing ones don't comply with the general standards required by the BIPM. Therefore, sales are mainly volumetric, causing significant inconveniences 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 weight is unknown. Existence of an informal economy based on barter due
to the lack of reference prices in many areas of the country, especially those further away from large consumer centers. Difficulties in obtaining bank loans, making the development of the sector impossible. Factual impossibility by the Government to prepare a trade record. Since weights and measures are not standardized, the agribusiness activity suffers from the lack of standards: markets require safe and convertible exchanges. The result is the lack of guidelines, long term plans, process optimization, method and criteria to be followed, as well as the impossibility to access credit and finally the lack of price, quality, volume, confidentiality and availability standards.
4.5 Logistic implementation in Armenia

Field studies made by the UN, FAO, World Food Program, Forum for International Agricultural Research and other international organizations30 show that Armenia doesn't have a logistic development according to the countrys needs. Likewise, from different non-government areas, local representations are encouraged to spread the need of making structural improvements as a mean of maximizing producers efforts, increase their profitability, contribute to satisfy local population food needs and in a subsequent process, sell certain agricultural products abroad. 4.5.1 Status of agriculture, post-harvest management and processing The agricultural sector is the main supplier of food and raw materials for international markets, and provides a significant source of export earnings, thereby contributing substantially to economic growth in the region31. Despite its significant economic contribution, the sector is plagued with a number of problems32. Most agricultural products reach the consumers table in an unprocessed state. During the privatization process, many large-scale processing plants - fruit and vegetable plants, mills, wineries, fat and oil processing plants and other
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factories- were either destroyed or restructured. The small workshops which replaced them were unable to guarantee the necessary volume and quality of production, resulting in decreased output of processed products, decreased employment, and a reduction of added value. Most agricultural products consequently reach the consumers table in an unprocessed state33. Lack of infrastructural development and coordination among countries of the region, has made the shift to interregional and world markets difficult. Consequently, small producers can't have direct access to local markets; the agricultural sector is therefore dominated by many intermediate traders who prevent products from reaching consumers directly and increase their original price causing - according to their economic value - the local consumers demand to be satisfied with imported products which are often lower in price. 34. Crisis within the agricultural sector and processing industry is the consequence of a steep reduction of the resource base. The provision of techniques, technologies and equipment has been reduced and these facilities have begun to deteriorate35: Equipment is old and worn, with low productivity. At least 40% of all the equipment in the processing industry is over 10 years old. Machinery used by farmers during the Soviet regime was thought and designed for large stretches of land. Once private capital owned the land, this machinery became inadequate due to their size and input costs didnt answer the needs of small estates; their old technology even became obsolete. Moreover, spare parts were not produced any more due to the shut down of Soviet plants. Due to wear and the removal of the main production parts, serviceability of the machinery has been surpassed: one-third of the equipment has been in use for more than two amortization periods; enterprise labor productivity for processing agricultural raw materials has diminished 2-3 times as compared to similar enterprises in developed countries, and more than 50% of food processing operations are carried out manually; drying of fruit and berries is carried out with the use of traditional labor methods Lack of refrigeration equipment remains one of the main problems for the fruit and vegetable industry.
With the appearance of so-called small enterprises in the oil-fat industry more than 20 % of oil seeds are processed only by pressing without extraction, with consequent losses of oil. Due to the absence of a packaging industry and the unavailability of packaging materials, over 40% of local food products and agricultural raw materials enter the retail market in an unpackaged form. Perhaps the most glaring example is that of the fruit and vegetable canning industry which today is still equipped with antiquated canning facilities for packing fruit and vegetable into 2-3 liters cans. The lack of capacity to produce fruit and vegetable juices and pack them in small containers, convenient for the consumer, has led to post-harvest losses in fruits and vegetables. With the land privatization process, farmers started to cultivate small plots of land. The lack of tools and machinery, fertilizers, seeds, chemical products, wood and fuel had a negative effect on the land and in many cases it became eroded in different areas of the country. Insufficient financing for scientific research has led to a reduction in the scientific potential of agro-industrial complexes. This has had a negative impact on both basic and applied science, as well as on the implementation of scientific and technological advances and particularly in the postharvest sector36. Specialized scientific institutions engaged in the development of technologies for the processing of local raw materials are however operational in countries of the Commonwealth of States such as Kyrgyzstan and Tajikistan with optimum results in the creation of new products and local demand satisfaction, with a few exports to the European 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 focused on generating income, profitability for small enterprises and small actors, and food safety.
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STRENGTHS - Favorable climatic conditions - Skilled and inexpensive labor - Scientific potential - Beneficial tax and customs legislation
WEAKNESSES - Lack of funding for post-harvest activities - Small land holdings and lack of co-operation - Weak marketing - High cost of transportation tariffs and high energy costs
OPPORTUNITIES - Use of scientific potential for the development of joint interregional projects - Settings up of information networks to satisfy the postharvest needs of the region - Production of high valueadded products - high quality wines, cognacs, brandies, natural aromatics, spices, and cigarettes to satisfy the demand in the region - Use of improved germplasm in order to ensure high quality raw materials - Application of scientific and engineering potential to serve the needs of the postharvest sector
THREATS - Unsettled ethnic conflicts - Protectionism - Environmental concerns - Potential threat of global energy crisis - Cross-border ecological disasters (locusts migration, penetration of plant diseases, etc)
Strength, weaknesses, opportunities and threats (SWOT) are analyzed as follows. Source: GFAR, Regional Workshop on Post-Harvest in Central Asia and the Cau casus, Almaty.
Large investments should be focused on spreading existent knowledge for the adequate use of current technologies instead of on applying significant resources to develop new technologies. Research results should be more widely shared than they are now. Private active participation should be emphasized. Tools are needed to help less scale agents select the adequate technology for their situation. Study trips and visits to similar or larger companies in other areas are recommended. Improvement of technology for a reliable and uniform product is the key factor for producers to be competitive. Production capacity should be encouraged. Technology related to small enterprises capabilities should be strengthened.
4.6 Processing
4.6.1 Harvest pressure Without an adequate grain and fruit storage structure, agricultural producers must sell their production before it rots. Moreover, when all the producers of the same sector harvest at the same time, crop prices drop due to the large offer. An adequate storage structure releases producers from harvest pressure, helps plan their production, maximizes and increases their profitability levels. Presently Armenia lacks intermediate structures appropriate for its production levels that would prevent these situations in order to avoid economic damage to producers. 4.6.2 Importance of storage in place of origin Certain Republics of the Commonwealth of Independent States38 are encouraging the Origin storage 39 practice since storage at the producer level enables:
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To manage different nature batches in a differential manner. More and more specific demands are only satisfied if batches are managed without losing their identity by mixing different quality grains. To reduce post-harvest costs not only by performing conditioning and conservation work on the same field but also because a more rational use of transportation can be made to access lower price freights away from the peak harvest period. To have the goods on farmers own fields to sell them at the appropriate time, that is to say, when prices are higher than during harvest time. At present Armenia lacks a precise policy regarding this issue. 4.6.3 Processing levels in Armenia In clear correlation with all technical implementations in the sector, processing levels are close to the countrys average. The percentage of silos and storage structures isnt relevant in the republics agriculture40. According to the above mentioned the construction of intermediate structures is essential in order to allow agribusiness 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 bodies are carried to ports (false freights) and cargos may be postponed and get better distribution. - Commercial results: When there is a storage facility the different marketing channels and sale forms can be planned during the campaign, purchasers and destinations may be evaluated and farmers may become independent of board rates. Benefits for quality products, and storage and mainly freight differential tariffs can be obtained due to their drop away 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 be achieved 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 more balanced prices and improving grain quality in place of origin. Current food consumers seek product quality as a deciding factor when purchasing. Therefore, storage will play an essential role at the time of winning new markets, either international or domestic.
4.7 Conclusions
Armenias logistic sector faces multiple challenges in order to reach the levels of development enjoyed by other countries in the region. Taking into consideration the recommendations of international organizations present in the country, considerable funds and an integral plan are needed to answer requirements from different areas of the country. Therefore, at present different valuable initiatives are in the implementation stage from various institutions which main objective is to accompany the government in striving to improve the existing infrastructure. To that respect the following institutions should be mentioned, among others: the Lynsi Foundation which invested US$138,000,000 over period 2002-2007 for Road Rehabilitation and Construction, the Asian Development Bank with a projected investment of US$ 30,600,000 for the period 2008-2011, the World Bank which program Armenian Roads reports to have invested US$ 39,000,000 between 1995-2000 while the Transportation Project informed an approximated investment of US$ 49,200,000 from 2000 to 2004 and finally the Millennium Challenge Account, which in one of the plans for road improvement foresees an investment of US$ 67 million until 2011.
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In turn, it is necessary to improve the food quality standards in order to comply with the obligations assumed at the moment of joining the WTO. This not only implies improve-
ment in industrial manufacturing processes but also promotion efficiency in the post-harvest management, and investments in the metrology area.
Notes
1 Samuelin, 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 Economic Committee for Europe. 5 According to data provided by the United Nations Economic Committee for Europe. 6 Jones, D., Infrastructure and Transport Costs, London, 2006, p. 87. 7 Those secondary roads and community connections critical for rural commerce and community development. 8 UNDP, Situation Report, 2005. 9 The World Bank, Road Management and Safety Project in Armenia, 2006. 10 WTO, Towards an Economy for Development in the Caucasus, 2006. 11 The World Bank, Armenian Agriculture, from Transition to Development, 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 to Development, 2005. 17 World Bank is carrying out an assessment of Armenias food quality and SPS management. This chapter contains some of the findings, conclusions and recommendations by international entities. 18 Davrizhetsi, P; Food Quality and Development: WTO and its rules, 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 present Armenian practices and recommendations for food security improvement. 23 Amendment of VAT law, Law No 420-N enacted October 21, 2002. 24 World Bank, Situacin del Cucaso 2007. 25 World Bank, op, cit. p. 125. 26 World metrology coordinator. 27 Administrative Committee meets annually at the BIPM and submits reports that are the basis of the Conferences decisions. 28 It is the decision making body of the Metrology Convention. It is in charge of issues related to metrology, and issues especially related to the International System of Units (SI). The CGPM is made up of representatives of member states and associates from the Metrology Convention and meets every four years. 29 This treaty was signed in 1955 to harmonize metrology legal proceedings. 30 Cahen, T, Euro-Asian logistics, Geneva, 2003 p.19. 31 FAO/GFAR, Regional Workshop on Post-Harvest in Central Asia and the Caucasus, Almaty, 2002 p.4. 32 Ibid. 33 Ibid. 34 Ibid. 35 FAO/GFAR, Regional Workshop on Post-Harvest in Central Asia and the Caucasus, Almaty, 2002 p.5. 36 FAO/GFAR, Regional Workshop on Post-Harvest in Central Asia and the Caucasus, Almaty, 2002 and FAO/GFAR, Global PostHarvest Systems Initiative for the 21st Century: linking farmers to markets, Rome, 2003. 37 FAO/GFAR, Regional Workshop on Post-Harvest in Central Asia and the Caucasus, Almaty, 2002 and FAO/GFAR, Global PostHarvest Systems Initiative for the 21st Century: linking farmers to markets, 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 economic growth in Armenia, Washington, 2007, p. 306. 41 Pursuant to data provided by International Organizations mentioned before.
Agribusiness and Marketing
chapter
Chapter 5 - Agribusiness and Marketing
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Chapter 5
Agribusiness and Marketing

5.1 Introduction
Industry currently represents 16.6% of the Armenian national Domestic Gross Product being the fourth most important sector after services (31.1%, including transport and communications), construction (24%) and agriculture (19.6%)1. The industrial sector reached its peak in the 1970s and 1980s specializing in the manufacture of trucks, tires, electronic devices, manufactured goods, chemical products, petrochemicals, fertilizers and construction materials2. Many scientists were formed due to the need of experienced technicians for the sector; therefore, today the Republic of Armenia has the largest number of professional specialists with a university degree and is the second country with more scientists in all the Community of Independent States (CIS)3. Agribusiness current circumstances are not ideal. Two main factors become responsible for this situation: 1988 earthquake (30% of industrial infrastructure was destroyed or damaged, further on not enough resources were invested to achieve reconstruction4, food processing being one of the most harmed sectors) and the collapse of Soviet block. Food imports increased dramatically since 1991 so as to compensate shortage in national food processing companies production (only in one year, from 1991 to 1992 agribusiness productivity decreased by 58%5). Privatization of state owned companies related to the agricultural sector allowed sector competitiveness considerable improvements. Yet much still has to be done so as national industry recovers former years productivity levels. complement scarce income from other sources7, from which approximately 581.000 are women and 573,000 men8. Aragast region has the largest rural population in the country with 195,200 inhabitants, followed by Armavir region where 181.400 people live in non-urban areas. Vaiots Dzor has the smallest rural population with 36,500 inhabitants9. Over 934 communities 871 are located in rural areas10. Agriculture sector is the main income source for rural areas inhabitants, representing about 51% of home income in spite means of subsistence fragility for many of them11. Activities related to agribusiness represented 26% of total national Domestic Gross Income12. Together with sectors related to agriculture processing activities, this as a whole represents the greatest employer (34.7% in 200113) and the most important export income tax-payer (12% en 200314). Population involved in agriculture proportion increased up to 35.7% in 200615 after being almost constant in the 1990s (around 30%) and in the 1980s (20.9%)16. However, this increase is not due to domestic nor to foreign incentives, nor to comprehensive promotional policies of the sector nor to new investments in the farming area. This phenomenon happened due to the lack of alternatives in urban centers, driving many people to marginal regions enabling some kind of production so as to achieve a better quality of life. Currently 335,000 homes depend on the agricultural production, with a land average of 1.4 hectares17. Farms small sizes mean few producers are able to take advantage of potential scale economies in agriculture. Although agriculture activities provide rural homes main incomes, its insufficient to allow consumption needs satisfaction for most of them unless they get involved in other economic activities. With few labor opportunities outside the farm rural homes fragility becomes huger Rural population is countrys most vulnerable population; 48.7% of non-urban areas inhabitants being below poverty line concentrated along bordering territories in mountain-
5.2 Rural Economy Characteristics

Total population is about 3,500,000 inhabitants. Thirty-six percent (36%) of it, about 1.200.000, are rural areas inhabitants6 in many cases dependent on subsistence agriculture to
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ous areas prone to earthquakes18. Shirak, Lori and Kotayk marzes hold largest rural population living in poverty. According to International Fund for Agricultural Development (IFAD) current scenario is the result of policies applied at the time of Soviet Union collapse, 600 collective farms having been transformed in 330,000 plots reduced to ensure a minimum supply of food to thousands of families related to agricultural sector so as to take up workers of closed down or privatized industries. Many new farmers were awarded lands where natural conditions limited productivity, and many of them lacked technical knowledge and/or necessary skills so as to cultivate efficiently the lands. Technology and infrastructure inherited from the previous period being useless for reduced scale agriculture, helped to worsen the situation. Table 1 shows real GDP growth for economy as a whole and by sectors during 1998-2003 periods. There are three main items: (i) national economy great development during all the period driven by construction, industry and trade growth none of which are direct contributors to the mitigation of poverty in rural communities; (ii) growth marked volatility in agricultural sector reflecting sector vulnerability to exogenous events such as the 1999/2000 fall and 2003/2004 frosts; in the former, about 15% farms lost their total production and a larger percentage suffered considerable losses19 (iii) slow sector growth considering national GDP.
Due to problems inherited from previous system and in order to get producers used to market economy requirements rural sector had to face considerable reforms over lasts 17 years. These reforms tried to make emerging farms strive to supply raw material to the country in order to satisfy national need for food. The present global economic situation with higher raw material demand (particularly food) and increasing prices shall be an incentive to produce a second generation reforms that may enhance efficiency and achieve producers competitiveness in national and international markets. 5.2.1 Marketing Characteristics It is estimated that farmers sell 40% to 50% of their production in the market, the remaining being for family consumption. However such percentages have its overtones since smallest farms are used by their owners mainly for subsistence while large farms are trade-oriented. Farmers only rely on two different channels for marketing their products: direct sale to consumers and private traders and business firms sales20. State purchases and consumption cooperatives are not important any more for agricultural products marketing. Producers associations or marketing cooperatives role is virtually zero in present circumstances. One of the factors explaining farm prices unfavorable development compared to industrial and consumption prices is probably
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)
1998 PBI Agriculture Industry Construction Transport & Communication Trade Other services 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
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farmers wrong organization to sell their agricultural production. During 1996-1999 annual average growth of consumer price index was 10.3%; Industry Price index increased 14% per year while agriculture price index only increased at a 1.8% annual average21. This shows producers are not in a good position to trade their products, and have moderate influence to negotiate prices with traders, intermediaries or transformation companies. Lack of cold storage capacity is also a negative factor since most farmers sell their products at the same time:, consequently at low prices. Farmers could get better prices if they were able to store their production until a more convenient time. In order to reach a more balanced situation it is necessary to increase competence -whenever possible- compared to traders and intermediaries and reduce fragmentation at the last supply stage so as to increase farmers marketing influence and commercialization possibilities forming producers marketing groups. Recent efforts have been devoted to create marketing cooperatives supported by donors community in dairy, fruits and vegetables sectors22. Land privatization by means of small farms entailed agricultural production trade great fragmentation with high adverse effects for food processing industry, loosing very quickly its former raw material suppliers as well as its markets for their products. Processing companies are supplied with raw material by their own buyers-suppliers, intermediaries as well as by producers. Long term contractual relations between producers and processors have not been established yet. These conditions seldom exist since the parties are not aware of these contractual relations advantages. As for processors, farming contracts would allow for their activities better planning and producers raw material supply quality improvement. As for producers they would face less risk in price fluctuations and enjoy better conditions for inputs purchase. The raw material supply for products manufacture organization may also be optimized by establishing marketing cooperatives. There are no real wholesale markets in the Republic of Armenia. In general, wholesale activities are carried out at night in various permanent markets. There are three markets, one in Yerevan and other two in Gyumri and Armavir. The creation of a great wholesale market in the national capital with
many linked markets in the main farming regions supported by private capitals is frequently suggested. It is argued that creation of a formal wholesale space would contribute to improve purchases, packaging, quality control, storage and marketing of farming products in the national and foreign markets. However, in order to reach the expected benefits for the new wholesale markets, it is necessary to achieve a strong consensus and commitment by all pertinent agents - not only by local and national authorities- but also by enforcement of applicable law. Otherwise a new infrastructure will be created which will only be used by market user as it was demonstrated by the interrupted project for Yerevan wholesale market creation in mid 1990. The most favorable proposal is to carry out small scale projects with the participation of all interested agents, oriented to improve markets operation with adequate investment. If creation of a wholesale space is foreseen in the future, evaluation of needs and size of investment should be analyzed in-depth, and the lesson learnt the interruption of the previous project should be considered. Domestic market intelligence is carried out by ASCs23 coordinated by Agribusiness Development Center processing and diffusing all information gathered by ASCs. In spite of these efforts it cannot be stated that a real market information service has been created in the country enabling all agents involved -including farmers- adequate access to data on prices becoming an incentive to encourage the market to operate in an efficient and transparent way. An integral system should be established with a clear strategy on objectives, users and coverage as well as a frequent publicity in the media. Creation of a Market Information Service in the Republic of Armenia should bring positive results, among others, small traders lacking resources to watch markets on a regular basis entrance in the market
5.3 Food Processing Industry

The food processing industry was developed mainly during socialist period as a means to make best use of national potential and generate agricultural production surpluses in order to transform them into exportable goods. Under this policy many state-owned food processing industries were
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established for transformation of local production. There were more than 630 agricultural companies in the country engaged in processing a wide range of products, mostly under Ministry of Food and Acquisitions (now nonexistent) control24. It is not clear if any of those plants actually operate to their full capacity, however they had the possibility to process large quantities of food each year (around 90,000 metric tons of meat and more than 320,000 metric tons of milk). Almost all these facilities have been privatized and/or closed. Companies continuing to run nowadays do so well below their designed capacity25. This policy legacy was creation of great processing capacity in main agricultural production areas, but lack of investment during 1980s and part of 1990s left these processing plants with obsolete technology, equipment in poor condition of preservation and lack of adequate equipment to face market economy challenges. This process became more complicated due to most managers marketing experience and knowledge lack in existing companies26. In many cases products quality and range offered are neither suitable for western demanding markets nor to comply with other market economies requirements, not even competing efficiently within the national territory with imported goods27. Over last years a large number of machinery was purchased abroad in order to establish new processing plants with state of the art technology. Other renewed facilities were updated using parts of equipment saved or relocated from older plants28. However, in any case they are seldom used in full. Some managers state main obstacle is raw material supply. For example, a meat processing plant selling both in Armenia and in foreign markets, currently imports all the meat although they plan to start a local meat production farm29. Recent reports by different international organizations on economic trends show a positive aspect: food industry has been constantly increasing over last years (in value as well as in volume) and currently represents a third of manufacturing production. In turn it should be noticed that even though processing facilities number has decreased in approximately two thirds, there is still spare processing capacity with greater use depending on available markets and/or inputs supply to be processed30.
5.4 Agricultural Trade

For more than a decade trade balance produced a negative result regarding agricultural sector. Exports of fresh and processed products such as fruits, vegetables, wines and cognac have not compensated expenditures due to import of forage and food grains, meat, sugar, milk and dairy products. Over last years countrys self-sufficient food production improved as a result of considerable decrease in imports of certain products due to consumers income fall and substitution of local manufactured products for more expensive imported products31. 5.4.1 Development of exports Following privatizations, most processing plants directors lacked experience in corporate management and product marketing32. Most of them were food engineers that never had to look for markets for their products since the others Republics in the Soviet Union USSR absorbed the production surplus without considering price or quality. Following transition traditional export markets collapsed. Getting new buyers or recovering previous markets requires an adequate knowledge of their needs and demands, products diversification and adaptation as well as strong efforts in marketing. Active sale strategies should substitute passive approaches often full of inflexible pricing policies33. Among main constraints on exports food industry level should be mentioned34: Small export surplus for bulk products not always allows to respond to large buyers needs. This also concerns several niche market products whose export surplus needs to be developed so as to make available a sizeable quantity supply; Reliability of deliveries (in quantities, quality and timely delivery); Lack of acceptable quality assurance and standards of hygiene; Price policies and competitiveness: for bulk products, Armenia is a price taker and therefore needs to adjust to international price levels. Fresh products, in particular fruits, are in high demand in several markets, particularly in the European Union.
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Perishable products may not survive long transit times or fragile conditions. In addition, for fresh products there is an increasing tendency in Western European Markets exporter does some functions (e.g. ripening, quality control, packaging and re-packaging, prepackaging and labeling) in the country of origin. Development of exports, not only of food products, is conditional on an array of factors that can facilitate or impede it. This includes exchange rates and other macro-economic policies, transport infrastructure and diplomatic efforts aimed at the conclusion of trade agreements to facilitate access to foreign markets. Trade diplomacy should also focus on addressing trade facilitation with countries in the region (combating corruption, diminishing non-tariff barriers, harmonizing standards, abandoning transit taxes, etc.) Donors community in food sector has made great efforts to improve products quality, brand and packaging to supply assessment of foreign markets, to increase sanitation and set forth guarantee quality systems, mainly by the USDA Marketing Assistance Project, USAID - Armenia Agribusiness Small and Medium Enterprise Market Development Project (ASME) and the World Bank Agricultural Reform Support Project (ARSP)35. In order to develop exports it is necessary to provide a coherent group of incentives that may include tax refund for export related activities (market research, quality control, etc.) and to set an allowance system according to which part of incurred expenses in exports development may be paid by the system36. Government may also be a means to promote high quality food national marketing strategy development, based on production quality and official certification in compliance with the accepted international standards. 5.4.1.2 International Trade Customs authorities must approve food exports and imports based on required certificates. Two listings cover certain food products that must be approved by Government when exporting or importing a product. One list includes products that must be accompanied by a Compliance Certificate issued by the Department of Regulations, Metrology and Certification (SARM) of the R.A.
Ministry of Industry and Economic Development. Second list includes products that must be accompanied by a phyto-sanitary certificate issued by Ministry of Agriculture. Some products appear in both lists and require two inspections and two certificates37. Inspection fees paid by both certificates differ significantly as well as other considerations. There is an additional list developed by the Chamber of Commerce related to Certificate of Origin requirements for certain products. This complicated situation implies shipping documents must be issued by two or three different bodies using different criteria and fees, confusing traders, causing additional costs and shipping time for transportation inside and outside the country. In the absence of a modern and international accepted legislation on certificate control, food products capability for foreign markets is limited. With the purpose of protecting consumers health, enable trade and access of Armenian products to foreign markets, standards, rules and control procedures should be brought into harmony with international standards. The continuous use of outdated norms and control systems hinders progress in this important stage of the economic development. 5.4.2 Value and Analysis of the Supply Chain Value 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 obstacles and inefficiency in agricultural economy, particularly in a transition economy, as structures and links in supply chain continue to develop to replace definitively soviet production and distribution system. Like in many other countries, trade between producers and processors or distributors is controlled by the Government39. Transition to a demand economy has been production system serious fragmentation cause. When production base changed from being owned by the state to being owned by agriculture workers, market infrastructure and system demand collapsed over night. Impact on agricultural transformation industry shows consequences of this disorder40. As agricultural processing facilities shifted to private hands they were devastated with debts, obsolete equipment, lack of capital and market collapse. Many of recently privatized
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plants were still immerse in a Soviet style management system and continued to produce according to previous demand levels. They bought raw materials without analyzing how they would repay them; they werent able to sell their production, meaning the impossibility to comply with payment obligations aroused from inputs bought to producers. Industries failure to pay in addition to a growing inflation and loss of non rural agricultural activity income, led the producers to change their production towards first need food in an effort to guarantee food security. Marketing problems continued and increased due to import of meat and dairy products at lower costs. More than a decade after the end of the soviet system, agricultural supply chain is being developed ad hoc mainly by businessmen owning enough capital to finance the purchase, process and shipping of basic agricultural products.41 A detailed analysis of value chain basic agricultural products shows intermediaries currently capture a great part of transactions value.
5.5 Conclusions
Agribusiness should be updated in a profitable way in order to strengthen its competitiveness and fulfill food quality and security demands by local consumers. In turn, said requirements are the two most important sector barriers preventing products marketing in most demanding foreign markets. That is why modernization not only implies upgrading facilities with suitable machinery but also to develop a sustainable and integral agricultural plan allowing better qualities (and quantities) of processed agricultural products so they will be competitive in the internal market and, in a future stage, in the international market. It should be noted that Armenian products could cover part of national demand of agri-food products. Imports of this kind of products have constantly decreased over the last years together with Armenian agri-food exports increase. National demand and increasing production capacity are the main drivers of this trend.
Notes
1 According to data by Republic of Armenia Ministry of Economy and Finance and RA National Statistics Service; data as of October 2007. 2 Source: Foreign and Commonwealth Office, UK. 3 Source: Country Studies/Armenia. United States Army Department, 1998. 4 Idem 5 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 in Service Delivery, September 2004. 11 FAO- Ministry of Agriculture of the Republic of Armenia, A Strategy for Sustainable Agricultural Development, Yerevan, 2002. 12 Source: World Bank, 2004. 13 According to data of the Census performed in 2001, RA National Statistical 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: Addressing Gaps in Service Delivery, September 2004. 17 According to World Bank estimates. 18 Source: Rural Poverty Portal, based on data from the International Fund for Agricultural Development (IFAD). 19 WTO, Caucasus, Challenges and Obstacles for emerging economies, 2007. 20 Tenenbaum, Y, Rural Population Worldwide, New York, 2007, P. 372. 21 Ministry of Agriculture of the Republic of Armenia, A Strategy for Sustainable Development, Yerevan, 2002. 22 United States Agency for International Development (USAID), Armenia Competitiveness Assessment, Arlington, 2004. 23 Agricultural Support Centres 24 World Bank (2001), , Prices and Poors Need Technical Paper N.497, Washington DC 25 World Bank, (2004), , Armenia at first sight, statistical summary compiled by the Permanent Office in the Country. 26 Mitra, S and others, The Caucasian tiger: Sustaining economic growth in Armenia, Washington, P. 349. 27 FAO, Bio-technology and Bio-saftety in Balkans and Caucasus countries 2005
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28 Ibid. 29 FAO-GFAR, workshop on Post-Harvest in Central Asia and Caucasus, 2005 30 WTO, Caucasus, Challenges and Obstacles for emerging economies, 2007. 31 UNDP (2002) Poor communities at armenian marzes, Social Trends, Analytic Newsletter , Yerevan. 32 World Bank, idem, 2005 33 UNDP (2006), Most Vulnerable Population in Armenia, Armenian Social Tendencies, Analytic Newsletter, Yerevan. 34 World Bank: Armenia Rural Economy From Transition to Development. Central Europe and Asiatic Region Social Development and Substantial Environment Department. August 2005.
35 World Bank, Armenia Public Expenses Audita, Washington DC, 2006 36 World Bank, Armenia: Poverty Evaluation (two volumes) Volume II: Conclusions Summary s", Unit of the Human Development Sector, Europe and the Central Asia Region, Washington, 2005 37 GFAR-FAO Global propositions and initiatives for XXI century: connecting farmers to the markets s, 2006 38 Recursos de la tierra y suelos en Armenia: Estado del Arte y Poltica de Medidas, Armenia, 2008. 39 UNDP (2002), Poor communities at armenian marzes, Social Trends, Analytic Newsletter, Yerevan. 40 World Bank: Armenia Rural Economy From Transition to Development. Central Europe and Asiatic Region Social Development and Substantial Environment Department. 41 Idem
Agribusiness Sector Financing
chapter
Chapter 6 - Agribusiness Sector Financing
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Chapter 6
Agribusiness Sector Financing

6.1 Introduction
The development of the financial system is an indicator of the efficiency and openness of a market economy as banking and financial intermediation is essential to reach high standards of living in a nation. Investment foreign as well as domestic is also a means to ensure global development to economic sectors above all those sectors with potential which has not been completely developed to the full. The Republic of Armenia agribusiness sector has shown remarkable signs of recovery over the last 15 years. All the indications are that, by means of proper and effective investment policies, the sector will show even greater signs of growth. This chapter describes the countrys present financial and banking system and then it focuses on the systems main risks. Finally, it develops the features of agribusiness growth, aiming at potential investment, credit, and, potential capabilities.
50 40 30 20 10 0 1995 2000 2003 2008 Armenia Mediumlow income countries
Graph 1. Bank spreads (%) in the Republic of Armenia and Medium-Low Income Countries.3 Source: authors elaboration based on World Bank and Republic of Armenia Central Bank data.
6.2 Financial System: general considerations

The main function of banking entities is financial resources intermediation, sustained by raising deposits and granting credits. The result of this activity is the financial intermediation cost or spread, usually defined as the difference between the cost debtors pay for receiving funds (known as the lending rate) and the compensation deposit owners receive (borrowing rate)1. In the Republic of Armenia financial system banks appear as the leading actors. In spite of the major reform introduced in the banking sector and the extended period of macroeconomic stability and strong economic growth, financial intermediation in the Republic of Armenia has fallen behind compared to other countries going through a
period of transition in Central and Eastern Europe (See Graph 1). It should be noted that interest rates have remained high in relation to most of these countries, at 12%2 average approximately. The scarce development of the financial system represents a considerable obstacle for the economy sustainable growth. While within the entire financial system the banking sector is the one with the highest development, nonbanking credit entities and capital market entities financing is still underdeveloped. As in other countries undergoing transitions, the banking system structure has suffered severe changes during the last decade. The system restructuring and privatization have been accompanied by the introduction of new foreign banks into the market, by revision and re-adaptation of the legal and regulatory framework providing ground for advancement. However, financial intermediation continues to stay low compared with regional standards. Graph 2 compares the financial development of various countries undergoing transition, most of them from former Soviet Union. The two variables taken into account to determine this development are the total amount of money in the
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Financial Deepening 70 60
Private Sector Credit/GDP
Financial Deepening and Interest Spread 70
LAT HUN
EST
CRO
60
Private Sector Credit/GDP
EST
LAT HUN
CRO
SLV BUL
50 40 30 20 10 0 0 MKD
50 40 30 20 10
LIT UKR SLK KAZ TJK RUS ROM POL
CZE
CZE LIT SLK POL MOL BER AZE ARM`06 ARM`05 ARM`04 14 16 UKR ROM TJK GEO
GEO MOL BER AZE ARM`06 KYG ARM`04 ARM`05 10 20 30 40 50 60 70 80
RUS
0 0 2 4 6 8 10 12 Interest Spread
Broad Money/GDP
Graph 2. Comparison of regional financial growth, 2005 Source: Era Dabla Norris and Holger Floerkemeier, op. cit.
Domestic Currency Lending-Deposit Spreads (in percent) 30
Graph 4. Financial Development & Banking Spreads. Regional Comparison Source: Era Dabla Norris and Holger Floerkemeier, op. cit.
25
20
15
10
Armenia Georgia Azerbaijan Russia West. CIS 1/ Baltics
Source: IFS 0 Dec-02 Jun-03 Dec-03 Jun-04 Dec-04 Jun-05 Dec-05 Jun-06 Dec-06 Jun-07 1/ Western CIS includes Belarus, Moldova, Ukraine.
Graph 3. Personal loans Deposit Spreads (%). Regional Comparison Source: Era Dabla Norris and Holger Floerkemeier, op. cit.
economy as a GDP percentage (x) and the percentage of private sector credit in relation to the GDP (y). As the graph indicated, Republic of Armenias position is low for both variables even though it shows an evident increase from 2004 to 2006. Graph 3 shows the difference between personal loan interests and rates on deposits. The higher that percentage, the higher the spread banks charge for lending money and what they pay for deposits. The higher the percentage, the higher the system risks. Towards 2006, that percentage was stable and decreasing. Graph 4 also analysis banking spread (x) and the credit percentage to the private sector in relation to GDP (y). The higher the banking spread, the lower the credit percentage of GDP the , less the financial system development will be. Changes from 2004 to 2006 indicate a remarkable development towards . lower spreads and higher private credit percentages / GDP Courses of action tending to improve transparency rankings, bureaucracy and quality of financial services are real challenges for the financial sector. These elements are essential to generate more efficiency and confidence in the system. It should be noted that, according to a research project by the World Bank4, 52% of Armenian companies considers limited access to financial products one of the
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main obstacles to the operational capacity and growth of their business activities. Therefore, all public policies that seek to improve aspects of the system based on confidence values and decisional transparency are necessary and decisive to improve results and thus bring national performances to more advanced international standards.
2005 2006
especially on the deposits demand concentration, from personal customers and legal entities. The Herfindhal-Hirschman Concentration Index is relatively low for all the banking system, which indicates its reduced concentration8 (See Table 2).
2005 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 VTB Bank Armenia Ardshininvestbank Armeconombank Artsakhbank Converse Bank ACBA Credit Agricole Bank Unibank Anelik Bank Areximbank Inecobank HSBC Bank Armenia Prometey Bank Armimpexbank Armenian Development Bank Armbusinessbank Mellat Bank Cascade Bank International Trade Bank Investbank BTA Ararat Bank Armswissbank TOTAL 101 51 39 12 16 12 17 6 4 4 1 3 2 1 269 2006 98 51 43 14 16 16 27 8 8 4 2 2 1 4 2 3 299
nia VTB
6.2.2 The Banking System 101 98 bank The Republic of Armenia banking system is made up of a 51 51 ank Central Bank of Armenia which is a centralized, unified and 5 legal entity, and commercial banks. After the 39 43 independent 90s banking crisis, the Government engaged in a privatiza12 14 nk tion process and a reform of regulations, adapting financial 16 16 co de Crdito Agrcola rules to international standards. At the beginning of 1990 many banks were created. However, gradual regulations 12 16 made for the sector and several bank failures occurred 17 27 between years 2000 and 2002, reduced their number from 8 74 in 1994 to 216banks at present (See Table 1). The Government of Armenia does not hold any interests 4 8 in banks any more. All banking entities belong to the private 4 4 Armenia sector, showing the success of privatization process and 1 2 market openness. Majority of banks currently functioning in etey the Republic of Armenia are2controlled by foreign investors. 3 nk Nowadays, there are two problems which must be faced: nio del Desarrollo on the one hand, the small size of the banking system, and on the other hand, the slowness of reforms in the economys bank real sector6. Therefore, the banking system, although small, 1 is more developed than other sectors in Armenia, which de brings about some problems for its development7. In spite acional de Comercio of its size, the Armenian banking system has demonstrated ITB an outstanding 2improvement regarding competitiveness. 4 TA The larger number of banks and the lower concentration of 1 2 capital ownership and the shortness of loans extensions are indicator factors - it. One of the parameters to measure the of 3 k level of concentration and competition of the system is the TOTAL Herfindhal-Hirschman Index (HHI). This is a generally accepted measure to assess market concentrations and it is 269 299 calculated by adjusting the market share of each competing company (in this case, a banking entity). The HHI number may vary from almost zero to 10.000. Regarding the Republic of Armenia banking system concentration, during year 2006 a decrease has been observed
Table 1. Banks in the Republic of Armenia and number of branches (2005-2006). Source: Republic of Armenia National Statistical Service (NSS) Statistical Yearbook, 2007. Table 2. Concentration Index9 Source: Herfindhal Hirschman Index (HHI) Republic of Armenia Central Bank
INDICATORS Total Assets Total Liabilities Total Capital Total Loans Persons and Legal Entities Term Deposit account 31.12.04 0.09 0.10 0.06 0.09 0.11 0.18 31.12.05 31.12.06 0.08 0.09 0.06 0.08 0.10 0.17 0.08 0.09 0.07 0.08 0.10 0.15
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In order to go in depth into the analysis, we must consider the graphs following hereunder carefully, explain their scales, and weigh up their results. Graph 5 shows the development of concentration index (HHI) among assets, credits and deposits of the banking system during 2002 and 2006. In this case the measuring scale goes from 0 to 1,500. The highest values show greater concentration levels, while the lower values present lower concentration levels. The whole system change to lower concentration levels is clearly seen. Graph 6 represents the average of concentration index by sectors during a 4-year period (2002-2006). In this case, the scale goes from 0 to 5000. The high concentration of loans in the agricultural sector is remarkable. It is higher
5000
1400 1200 1000 800 600 400 200 0 2002 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.
4500
4000
Graph 6. Loans by sector concentration average (HHI) (2002-2006) Source: Era Dabla Norris and Holger Floerkemeier, op. cit.
3500
3000
2500
2000
1500
1000
500
0
n r A g ri c ul tu re n . ag es ry Tr ad e r se ct o ia l se ct o In d u st ct io C o m p t io To ta l
C o ns t ru
Fi na nc
C o ns um
.&
P u b l ic
ns p
Tr a
or tg
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than the loan concentration of other economy sectors. This indicates that one or only a few banking entities draw together most of the loans of the sector. In addition, Graph 7 estimates the average of the concentration Herfindhal Hirschman Index (HHI) in the same period and in the same scale as Graph 6, but this time in relation to personal loans and loans to legal entities. The result is also clear: there is more concentration on individual deposits than on deposits of legal entities. This means that most people - who make deposits - do so in the same legal entity or to the same legal entities. Finally, Graph 8 shows the loans to industries Concentration Index Average (HHI). The period is the same (2002-2006) and the scale goes from 0 to 6000. The concentration of loans to metallurgical, mining and pharmaceutical industries is evident. As a consequence of market segmentation and as shown in the graphs, credit concentration on individual economic sectors and on deposits demand is considerably superior. Market concentration is high in loans for agricultural activities and mortgage loans, and, moderate in the transport and communication sector as well as in sectors
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. The difference between large and small banks has decreased. By the end of year 2006 the ten largest banks in the country concentrated 80% of the banking system total assets,
4000 3500 3000 2500 2000 1500 1000 500 0
Individual demand Legal entities demand
Graph 7. Deposits Concentration Average (HHI) (2002-2006) Source: Era Dabla Norris and Holger Floerkemeier, op. cit. Graph 8. Loans by Industries Concentration Average (HHI) (2002-2006) Source: Era Dabla Norris and Holger Floerkemeier, op. cit.
5000
4000
3000
2000
1000
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a lower percentage than the 81% registered at the beginning of the year. Polarization of the four most important banks has also diminished, since they had 46% of the total assets of the financial system and 49% of the total liabilities by the end of 2006, compared to 47% and 50%, respectively, at the beginning of the year (see Table 3). The total polarization of capital was the only item that grew, basically due to the capital development of the Agricultural Credit Bank ACBA11.
INDICATORS Total Assets LB 4 (4 largest Banks) LB 10 (10 largest Banks) Total Liabilities LB 4 (4 largest Banks) LB 10 (10 largest Banks) Total Capital LB 4 (4 largest Banks) LB 10 (10 largest Banks) Total Loans LB 4 (4 largest Banks) LB 10 (10 largest Banks) Persons and Legal Entities Term Deposits LB 4 (4 largest Banks) LB 10 (10 largest Banks) Persons and Legal Entities Claim Debts (including banking accounts)
31.12.04
31.12.05
31.12.06
49 81
47 81
46 80
52 84
50 85
49 84
32 65
35 64
38 67
45 85
43 85
47 83
51 80
51 88
49 87
LB 4 (4 largest Banks) LB 10 (10 largest Banks)
60 86
64 86
57 85
Table 3. Banking system concentration levels (%) Source: authors elaboration based on Republic of Armenia Central Bank data.
6.2.3 Banking System Financial Risks The existence of a foreseeable framework for the risks faced by the Republic of Armenia banking system is an urgent task. Not only legal mechanisms that provide credit standing on the long term are needed but also institutional and political tools so as to provide confidence and transparency to all the financial system13. Taking into account the rapid growth of loans, credit risk is considered the most important financial risk in the system14. Depositors confidence in the banking system is still low15. The main reasons seem to be the experience in bank failures during recent years and the lack of transparency and responsibility of the financial entities16. It is important to note that many sectors of the Armenian economy do not trust the banking sector for financial intermediation. Firms and individuals of the informal economy prefer to use cash at the time of making transactions, partly to evade taxes17. This fact diminishes considerably the bases of potential deposits and products offered by the banking system and other financial institutions18. Another factor to be considered is the financial intermediation margin. The spread between loans and interest rates on deposits (borrower rate) is considered as an indicator of the efficacy of financial intermediation. High interest rate spreads are an obstacle to financial intermediation as they discourage potential savers with low returns on deposits and increase financing costs for borrowers, thus reducing investment and growth opportunities19. High interest rates spreads in the Armenian banking system are determined by three factors: high credit risk perception, high banking income due to market segmentation, and, at last, the high formation and operative costs of small banks20. The protection of creditor rights is another problem making banking loans growth more difficult. The foreclosure of the surety bond is a hard task on banks and this can be seen in high interest rates21. Foreclosure problems and long judicial procedures generally make it difficult for the banks to enforce the payment of the surety bond22. Therefore, the information of the financial system is crucial. Only with the development of a financial long term relationship the bank may distinguish
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between "good quality debtors" from those who incur in moral risk. The introduction of a credit register in 2003 and the creation of a Private Credit Bureau (functioning since 2007) have been important steps towards the improvement of data on loan takers23. Today, the Republic of Armenia is moving towards a regulated credit system, encouraged by legal and institutional mechanisms which provide efficient, transparent, and, reliable methods of debt restructuring, including seizure and sale of movable and fixed assets, sale or collection of intangible assets, and third party debts24.
3500000 3000000 2500000 2000000 1500000 1000000 500000 0 2000 2001 2002 2003 GDP 2004 2005 2006 2007
6.3 Agribusiness Sector

Since the middle of the last decade, the Republic of Armenia economy has grown at two digit rates, at an annual average of approximately 10%. The agricultural sector contribution to the GDP fluctuated from 12.9% in 1990 to a peak of 46.3% in 1993 with subsequent fall to 14.5% in 2004 (See Table 4 & Graph 9).
Total Agricultural Production
Graph 9. GDP & Total Agricultural Production in millions of Armenian Drams AMD (2000 2007). Source: Republic of Armenia National Statistical Service (NSS) Statistical Yearbook, 2007.
ABSOLUTE VOLUME in millions AMD Armenian drams 281173.4 351015.9 377654.4 410138.4 504078.0 493017.9 555922.3 633877.8
YEAR
VARIATION PERCENTAGE y/y (year/year) (%)
GROSS DOMESTIC PRODUCT 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
2000 2001 2002 2003 2004 2005 2006 2007
--24.8% 7.6% 8.6% 22.9% -2.1% 12.7% 14%
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 over the last 4 years (except for a 2% fall in 2005) together with the growth of the global economy. The cumulative growth of the sector has been 47.5% since 2004 (See Table 5). Agriculture has kept its great significance towards employment and rural income for the last 15 years25. In 2006, the
Table 5. Gross Agricultural Production (2000-2007) in millions of Armenian Drams AMD. Source: Republic of Armenia National Statistical Service (NSS) Statistical Yearbook, 2007.
agribusiness sector drew together 46.5% of the total employed population26. Until now, rural areas benefited only moderately from economic growth. The sector contributes almost with 40% to the industrial sector GDP. However, while the new pro-
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duction lines have received some investment, agribusiness industries still need to attract more important levels of investment. Graph 10 explains the growing trend towards receiving Foreign Direct Investment (FDI) in the Republic of Armenia. This is, undoubtedly, the result of better performance of the economy together with judicial stability and improvement in the quality and development of the public sector.
350 300
14 12 10 8 6 4 2
250 200 150 100 50 0 2000 2005 Foreign Direct Investement (FDI) in millones of U$S 2006
35
0 1999 2000 2001 2002 2003
Graph 11. Development of the Agribusiness Sector Investment (1999-2003) in GDP percentage. Source: World Bank, Armenias Rural Economy.
Graph 10. Foreign Direct Investment (2000, 2005, 2006) in millions of US$. Source: World Development Indicators database.
30
25
However, if we consider foreign direct investment (FDI) as a whole and compare several areas of the economy, we notice that the agribusiness sector lags behind compared to other items, due to its importance for the GDP in the period 1999-2006 (see Graph 11, 12 and 13). Lack of investment and long term credit, in addition to high interest rates for the available short term credit, sets up another barrier to growth. Agriculture shows encouraging signs of growth and improvement in productivity, in primary production as well as in agribusiness sector. Data on the performance of agribusiness in 2004 suggests a positive trend with a growth rate of approximately 14% compared to 2003 and a total contribution of the agricultural sector to the GDP growth of more than 3 points (i.e., the sector that individually contributed most to the real GDP growth in 2004). Adjustments occurred to commodities structure. While grains and other crops of low added value
20
15
10
Tr an sp or t
Tr ad e
A g ri c ul tu
In d u st ry
Percentage
Percentage
Graph 12. Sector Investment and Participation in GDP (1999-2003) Source: World Bank, Armenias Rural Economy.
th er
re
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44%
33%
100 80 60 40
9% Telecommunications Mining Industry
14% Air Transportation Others
20 0 2003 2004 2005 2006 Commercial Organizations Smal producers (subsistence)
Graph 13. Foreign Direct Investment (FDI) in 2006, per sector. Source: Republic of Armenia National Statistical Service (NSS) Statistical Yearbook, 2007.
Graph 14. Production per type of farm (%) 2003-2006. Source: Republic of Armenia National Statistical Service (NSS), Yearbook 2007.
maintained their importance for subsistence, high value harvest production (fruits, grapes and some vegetables) increased27. 6.3.1 Rural Labor Market Regarding rural labor market it is important to consider the difference between commercial rural sector and subsistence farms. Accordingly two types of agricultural work can be recognized: on the one hand, small and medium farmers 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 the most visible ones in the marketing chains. They tend to be more specialized than subsistence farms and usually enter into contracts with commercial chain providers and marketing agents. Regarding land ownership, in 2001 there were 460.000 ha owned by 350.000 private producers and only 115.000 ha government owned land28. Nevertheless, in 2003 only 3.8% of the total agricultural production was produced in commercially certified farms, the remaining production came from subsistence private sector. This percentage decreased in 2006 when only 2.4% of the total production was carried out through commercial organizations (See Graph 14).
In addition, the arable land and vegetable gardens once units dedicated to monoculture- are now diversified. The ownership of land by agricultural Armenian workers ranges on surfaces of 1 up to 3 hectares. Therefore, agriculture production by these small producers is very inefficient. Vineyards and vegetable gardens have been neglected due to their fragmented sizes, lack of care by new owners and in general lack of investment and other practices to improve the crop. With few opportunities of work outside farms, rural population depends on their small farms for survival 29. Agriculture still functions as a social security network (it employs almost three times more people than before the independence), it is subsistence-oriented, and its commercial production is at least half the total production. Massive access of labor force to the rural sector (as from the mid 90s) is associated mainly to the collapse of non-agricultural sources of income, more than to the economical attraction of the sector. Increase in productivity has lead to sustainable growth of the sector. This is due mainly to liberalization of the market, privatization of the already possessed land, increase in exports and several infrastructure improvements through investments.
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6.3.2 Sector Financing After examining the agricultural sector from an economic perspective, it is necessary to associate the previous observations with considerations related to the substance of this section: financing. In this section several questions related to the referred issue are dealt with, specially referred to current situation and systems potentialities. 6.3.2.1 Current Financing Characteristics During the first years of the transition period characterized by macroeconomic instability and high inflation rates30 the Republic of Armenia Government channeled bank credit to the agricultural sector with the purpose of sustaining operations from strategic state companies and developing companies recently privatized and farms. This credit programs were actually agricultural subsidies and grants - more than real loan operations31. The negative effects of the Republic of Armenia Government intervention on the redirection of former state banks show up around 1996 and 1997 when banks had to pay off bad loans and registered substantial losses32. Nowadays, the Republic of Armenia Government does not count any more on those resources which enabled it to develop the old agricultural credit programs. Currently, credit operations to the sector have been diversified. There are new actors now such as international credit organizations and foreign capital commercial banks. Nevertheless, rural financial markets are still limited and loans to the agricultural sector are even now reduced. Commercial banks in the Republic of Armenia are of marginal relevance to farmers needs of agricultural credits. As an example of it we can mention total loans to agriculture in year 2003 represented only 2.5% of the agricultural GDP33. In spite of the increasing demand of rural loans this situation was paradoxically accompanied with the unwillingness of the banks and financial intermediate entities to enter into this segment of the market. Only few banks granted loans to agricultural workers in a small scale. The Agricultural Cooperative Bank of Armenia (ACBA), that owned branches in 10 marzes, rendered services in five hundred towns and had approximately 20.000 agricultural workers as clients34. This entity granted loans to small
agricultural farmers from its own resources as well as from donor credit lines. It was a very promising and lasting solution for the supply of financial services to agricultural farmers and rural population. However, its capacity to access potential rural clients, particularly in poor and remote areas, is still limited. Today entities such as the Converse Bank are orienting their development strategy to reach not only the small and medium producers but also all the economy actors, no matter their size. Microfinance entities active in rural areas are traditionally supported by donor contributions. Most of the investments are financed by small agricultural workers with own savings and loans from donors who financed the projects. Financial institutions still lack all the credit structure required for the agricultural activity (for example: warrants) 6.3.2.2 New Trend (2004-2008) Notwithstanding the structural characteristics of the sectors financing over the last 15 years, the granting of new credits as well as new possibilities of investment
10000000 9000000 8000000 7000000 6000000 5000000 4000000 3000000 2000000 1000000 0 2004 Food Industry Loans 2005 Agricultural Loans 2006
Graph 15. Loans to the Agribusiness Sector (2004-2006) in millions of Armenian Drams AMD. Source: Authors elaboration based on Republic of Armenia Central Bank data.
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SECTORS 1. Industry 1.1 Energy 1.2 Food 11.3 Pharmaceutical 1.4 Metallurgical 1.5 Machinery 1.6 Mining 1.6 Precious Stones 2. Agriculture 3. Construction 4. Transportation and Communications 5. Trade 6. Financial Sector 7. Personal Loans (including mortgages) TOTAL
2004 13.577.135 3.495.024 3.491.600 23.596 25.168 132.745 2.320.684 145.536 1.162.018 1.640.397 540.506 12.892.609 1.010.520 7.517.792
2006 19.223.900 2.526.336 9.884.946 56.082 116.569 999.928 507.802 437.805 5.975.940 8.175.740 2.807.452 22.245.271 11.933.577 40.946.412
development of the system depends on setting up a well defined political and legal framework and creating adequate rural financial institutions. Now, which are the guidelines that will encourage and deepen this trend? They will be developed hereinafter. 6.3.2.3 Guidelines for Better Financing a) Participation of the public sector and international funds Cooperation between public sector and international bodies with financing capacity may create an interest strategic variable to improve investment capacity. Today there are loans subsidized jointly by the Republic of Armenia Ministry of Finance and Economy and qualified commercial banks. Participant banks are selected among those applying for international loan funds and complying with the regulations set forth by the Central Bank of Armenia35. Final borrowers are private agribusiness companies as well as small agricultural workers granted short and medium term loans. The main effect of these loan funds has been reduction of high credit interest of commercial banks generating a greater stability in banking system. Greater competitiveness results in lower spreads which brings incentive to take a loan and invest. This project has been successful in regions where participant banks have local branches. The location of entities in remote regions makes the system to be known by small and poor workers, enabling advice and providing incentive for investment and improvement. However, the use of international loan funds constitutes only a temporary solution since this mechanism discourages commercial banks from compromising their resources and expanding their credit activities to agricultural workers. Therefore, new undertakings should be encouraged but without leaving aside national genuine investment tools. b) Agricultural insurance Agricultural sectors activities are characterized by their high risks whether due to adverse weather conditions or economic uncertainties giving rise to wide fluctuations in production and price levels.
45.185.339
121.660.236
Table 6. Investment Loans for Economy Sectors. Source: authors elaboration based on Republic of Armenia Central Bank data.
seem to have gained stronger fresh energy. Loans for investment in all the sectors of the economy but particularly in agribusiness have increased over the last 4 years. According to the Central Bank of Armenia loans for food industry increased 183% in two years (2004 to 2006). As for funds allocated to the agricultural sector they increased from AMD 1.162.018 in 2004 to AMD 3.917.349 in 2005, reaching AMD 5.975.940 in 2006 (meaning 414% in two years). (See Table 6 and Graph 15) This new trend shows the recovery capacity of the financial system and the positive effect of the new reforms oriented to strengthening macroeconomic confidence and stability. It should be noted that in order to finance agricultural and non-agricultural activities in a feasible way it is necessary to develop a strong rural financial system. The
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There is no crop insurance system in the Republic of Armenia at present. Even though nowadays it is common place to accept public sector develops multiple risks insurance schemes, they are neither economically viable nor sustainable36. Present output volumes make strategies to cover large losses difficult to apply. In specific circumstances private schemes handled by the economic sector should be developed, especially for large agribusiness companies since they represent substantial investment costs. In this way, the major contagion risks from the system are avoided and fast recovery of the entire sector is enabled. c) Training of banks and micro-financing organizations Banking or financing organizations granting loans should evaluate payment and repayment capacity of their new and potential clients. As stated before, the capacity of these institutions to acquire and provide information not only decreases their risks but also has global impact on the system. Foreclosure of the surety bond should and must be a last instance resource to ensure loan repayment. To achieve such banking practices, it is necessary to train the personnel of the financial institutions in the evaluation of the feasibility of the required investment, in the preparation of adequate business plans and in the study of the payment and repayment capacity of the new loans37. Following this idea, special attention should be paid to the capacity to mobilize savings and to the role this capacity has in development, to risk management of agricultural loans, to the use of new technologies and financing practices for small agricultural workers, to regular evaluations regarding standard loans operation, to adequate loan recovery policies and to the requirements and repayment of loans. d) Client Training Among commercial banks only ACBA used to invest adequate time and money in training representatives and members of cooperative associations on organization issues, basic credit principles and loan procedures, accounting, financial management, etc.38 .On this issue, in the frame of Converse Banks development and expansion, its support and training to agricultural sector acquires
strategic importance, due to the contribution of this sector to the countrys economy and growth. Agricultural credit clubs members training deserves also high priority to education. In order to increase small agricultural workers capacity to contact the banks, it is important to improve their financial management understanding and planning as well as to strengthen their abilities for the business. e) Lease Leasing is a method granting financing in order to acquire and use fix assets based on the concept that assets value stands in their appliance for business purposes rather than in their ownership right39. Since agricultural machinery and equipment constitute an 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 machinery and equipment may constitute an attractive alternative to finance development. Leasing, as a financing alternative, provides several advantages. On the one hand, property rights remain under the control of the lessor and in this way surety bonds are more reliable than those of the credit grantor, i.e., they may be more easily recoverable. On the other hand, generally the initial purchase installment is low. Finally, in general, no additional guarantees are required41. f) Micro-financing A considerable number of microfinance projects have been put into practice in recent years. Even though microfinance institutions have the specific objective of giving services to low income micro-businessmen their volume of operations and their extension to small agricultural workers is still in an initial stage42. Micro-finance industry is estimated in US$11 million with approximately 30.000 clients43 and it appears to be one of the most feasible alternatives for the rural financial system. While loan portfolios of commercial banks increased 13% between 2001 and 2003, microfinance institutions (MFI) increased 52%, an indication of their recent strong growth44. Even though micro-credits are
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mainly invested in commerce (50.5% of the total) they are also significantly present in agriculture (34.3%) compared to credits from commercial banks. However, their interest rates are very high - on the 36%-76% range- and they have limited financing. The amount of loans continues to be relatively small, near US$2.000 to US$10.000 per year. Average loan has historically been US$300 although there is higher demand. Data evaluation made by donor agencies and microfinance traders suggests that there are at least around 150.000 to 200.000 clients45. It is important to know that micro-finance and organizations projects do not usually require the conventional loan surety bond since they often follow practices of joint responsibility groups and the social types of surety bonds as substitutes to ensure loan reimbursement. Therefore, they seem to adjust to the poorest agricultural workers in the sector. A legal and foreseeable framework is essential for their development and strengthening.
1) International Financing. To promote international financing under the Republic of Armenia Government management, control and cooperation. The large external credit capacities plus the Republic of Armenia Government strategic objectives are a solid work base to improve competitiveness and financial stability in the sector. 2) Agricultural insurance. Due to producers characteristics and composition it is necessary to develop an agricultural insurance directed to avoid contagion risks and mitigate large losses for exogenous reasons. 3) Information and training of financial entities and clients. Training and information channels for lending institutions and clients that take loans are also necessary and productive. A deep knowledge of the activities, legal frameworks and sector forecasts make the financial system more foreseeable and solvent. 4) Leasing. It shows up as a realistic and feasible solution for cost reduction including production results maximization. 5) Microfinancing. This is also a strategic guideline to develop since it adjusts to the sociological characteristics of the sector. The development of these central themes is basic for the agribusiness credit stability and development. As the world economic situation indicates commodities values will continue to increase, it is of great priority to strengthen the internal financial sector (which over the last two years turned to be more foreseeable and controlled) for all the national economy in general and to lever agribusiness production, which shows great recovery and expansion capacity.
6.4 Conclusions
A detailed and careful analysis of what has been stated in this chapter draws an obvious conclusion: the development of the financial system focused on the deepening and extension of the different lines of credit is basic for the potential agribusiness growth. The composition and structure of the sector indicates a strong concentration of gross agricultural production in the hands of small agricultural workers and subsistence farms. The agribusiness sector has increased in the last years to rates higher than 10%. Loans to that sector have increased since 2004 more than 500%. It is of great importance to develop long term strategic guidelines in order to grant credit standing to agribusiness. Therefore, the strengthening of five (5) central themes will be top priority:
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Notes
1 Grasso, Federico & Banzas, Alejandro, El spread bancario en la Argentina, Working Paper No. 11, Economy and Finance Center. August 2006. 2 Dabla Norris, Era & Floerkemeier Holger, Bank Efficiency and Market 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 GDP per capita, calculated by using World Bank Atlas method. The groups 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 within the average-low income countries category. 4 Available at: http://www.ian.cc/notas/noticias_ian.php?id=446 5 Law on the Republic of Armenia Central Bank 6 The Caucasian Tiger, World Bank, Washington, 2007 p 73 7 Available at: http://www.tacentral.com/economy.asp?story_no=8 8 Ibid. 9 In this case, the Herfindhal-Hirschman concentration index varies between 0 and 1, characterizing the concentration level. Values close to 0 indicate low concentration levels while values close to 1 indicate 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 Giragosin, A., Banks in the New Independent States, Washington DC, 2006, p.78 14 Republic of Armenia Central Bank, op. cit. 15 Governance Indicators 2000-2006, AFLA, 2007, p.53 16 The Caucasian Tiger, World Bank, Washington, 2007, p.142 17 Governance Indicators 2000-2006, AFLA, 2007, p.53 18 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 economic growth in Armenia. World Bank, 2007. 22 Republic of Armenia Ministry of Agriculture, Estrategia para un desarrollo agrcola sustentable, p. 30. 23 Dabla Norris, Era & Floerkemeier Holger, op. cit. p. 18. 24 Ibid. 25 World Bank, Armenias Rural Economy From Transition to Development, August 2005 26 Republic of Armenia National Statistical Service (NSS) Statistical Yearbook, 2007 27 World Bank, op. cit., August 2005, p. 1. 28 Economic Commission for Europe, Working Party on Land Administration, October 2000. In Armenia Agriculture Assessment Team Report, p. 8. 29 Kuddo, A, Armenia: Labor Market Dinamics, World Bank, Washington, 2006 30 Bournoutin, G, Historia sucinta del pueblo armenio, New Rochelle, 2003 31 Republic of Armenia Ministry of Agriculture. Estrategia para un desarrollo agrcola sustentable. p. 30 32 Ibid. 33 World Bank, op. cit., August 2005, p. 2. 34 Armenia Agriculture Assessment Team Report, p.11 35 Republic of Armenia Ministry of Agriculture. op. cit. p. 30. 36 Ibid. 37 Ibid. 38 Ibid. 39 USAID. Lease. p. 1 40 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.
Legal Regulations of Agricultural Sector
chapter
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Chapter 7
Legal Regulations of Agricultural Sector

7.1 Introduction 7.2 Regulation of Rights Related to Property
In 1992 the Republic of Armenia Law On Organizations and Entrepreneurial Activity was adopted, which established types of enterprises and among them there was collective farm. The Republic of Armenia Law On Organizations and Entrepreneurial Activity determines the principles of entrepreneurial activities. In 1990 the Republic of Armenia Law On Ownership in the Republic of Armenia was adopted. The Law aimed to create and develop legal basis for market relations, strengthening economic system and ownership relations and development of its different types. The Republic of Armenia Law On Ownership in the Republic of Armenia serves the legal basis for regulation of ownership relations till January 1, 1999, the effectiveness of the Republic of Armenia Civil Code. Thus, till the adoption of the Republic of Armenia Constitution in 1995 Armenia had legal framework for regulation of entrepreneurial activities, including entrepreneurial activities in agricultural field. The Republic of Armenia Constitution envisaged the protection of ownership right, guarantees of state for free development of all forms of ownership, freedom of economic activity and free economic competition, In 2005 the Republic of Armenia Constitution is amended and added. During time new legal regulations were adopted and existing legal regulations were improved, which promote agricultural development. The Constitution of the Republic of Armenia states in its Article three the Republic of Armenia shall ensure protection of fundamental human and civil rights and freedoms, in conformity with principles and norms of International Law. It also states that the Republic shall be limited by those rights and freedoms stipulated in the Constitution and applicable laws. Legal certainty is one of the most important prerequisites that makes a country attractive for investment and financial development. Legal certainty involves applicable laws, as well as their effective and impartial application by the State. Armenia used to be a part of Soviet Union. At the time of being part of Soviet Union the social relations were regulated based on Soviet Unions Laws and Armenian Laws adopted on the basis of Soviet Unions Laws. The main philosophy of Soviet times legal regulations was that the state was the exclusive owner of land. The citizens were considered as employees of state and therefore did not own land. After the collapse of the Soviet Union (USSR), the economy went from a centrally-planed one into market-based system. The Republic of Armenia has adapted its legal system to the new social, economic and political conditions in the country and the world, by adopting new laws and decrees, signing international and harmonizing its legal system with the laws of the European Union. Currently effective Armenian legal framework supports development of agricultural sector, inter alia by availability of different types of consultation services, including, legal, financial, agricultural, by availability of financial means in forms of credits, etc. This chapter deals with property rights, with a specific focus on the regulatory framework for: - property (land), - use of water resources (water), - genetics, - protection of incorporated technology, - phytosanitary barriers.
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The Constitution recognizes and protects property rights and freedom of economic activity (Constitution, Article 8). The Republic of Armenia guarantees free economic competition (Constitution, Article 8). Everyone is entitled to engage in any entrepreneurial activity, not prohibited by Law (Constitution, Article 33.1) Besides, Republic of Armenia Constitution stipulates all citizens shall have the right to freely own, use and dispose of the property belonging to them. However, the right to own property may not be exercised in a way that causes damage to the environment or infringe on the rights and lawful interests of other persons, the society and the State itself (Constitution, Article 31). Furthermore, the Republic of Armenia Civil Code defines the right of property ownership as the right to posess, use, and dispose of property belonging to it a subject at his discretion, pursuant to applicable statutes and other legal acts (Civil Code, Article 163) while according to its Article 166 property may be owned by citizens, legal persons, the Republic of Armenia or communes. - The right of possession is the legally suppported ability to exercise actual control on the property. - The right of use is the legally supported ability to extract from the property its natural usable contents and benefit from it. The benefit may be manifested in the form of income, cultivation, vegetation, among others. - The right of disposition is the legally supported ability to 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 the ownership right to the new property. When a person wishes acquire a property right on a new immovable property, such property must be previously registered with the relevant official registery. It is from this registration that the right arises, (ii) Should the property have an owner, it is the latter who shall 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 other persons 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 a legal person (registered in the Republic of Armenia) is not the owner of immovable property but has in good faith, openly and without interruption possessed a property as his/its own for ten years, he/it may acquire ownership of this property (acquisitive prescription), (vi) Unless otherwise provided by contract, the right of ownership to new movable property created by a person by processing materials not belonging to it is acquired by the owner of the materials. If the value of the processing substantially exceeds the value of the materials the right of ownership to the new property the ownership right is acquired by the person, who, acting in good faith, conducted the processing, (vii) When, in accordance with a law, a general permission given by the owner, or in accordance with local custom in forests, bodies of water, or on other territory the gathering of fruit, the catching of fish, the capture of animals or the gathering of other generally accessible property is allowed, the right of ownership to the respective property is acquired by the person who conducted the gathering or capture, (viii) A person, in whose ownership, possession, or use there is a land parcel, body of water, or other object, where there is an abandoned property whose value is clearly less than a sum corresponding to fifty times the minimum monthly wage or discarded scrap metal, defective products, waste formed in the acquiring of useful minerals, production scrap and other scrap shall have the right to bring this property into its ownership by having started to use it or having taken other actions evidencing the bringing of the property into ownership, (ix) If in the course of six months from the time of reporting a found property to the police or to a body of local selfgovernment, the person empowered to receive the found property is not established or does not himself report its
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right to the found property to the person who found it nor to the police nor to the body of local self-government, the finder of the property acquires the right of ownership to it, (x) If in the course of six months from the day of report of catching an unsupervised domestic animal their owner has not been found or has not itself declared its right to them, the person who has the animals for maintenance and for use shall acquire the right of ownership to them, (xi) Treasure trove, i.e. money or valuable objects buried in the ground or in other property or hidden in another manner whose owner cannot be established or by virtue of a law has lost the right of ownership to them, shall go into the ownership of the person to whom the property (land parcel, structure, etc.) belongs, where the treasure trove was hidden and the person who found the treasure trove in equal ownership shares unless an agreement between them provides otherwise. (Civil Code, Chapter 11), The size and value of the property owned by a natural person (Armenian citizen) or by a legal person (registered in the Republic of Armenia) is not limited a priori. However, it may be restricted only by Law if necessary in a democratic society in the interests of national security, public order, crime prevention, protection of public health and morality, constitutional rights and freedoms, as well as honor and reputation (Constitution, Article 43). 7.2.2 On Immovable Property Rights Being a Post Soviet country Armenia was the first, which privatized the land in 1991. The land privatization was designed and cunducted effectivly. The land privatization was 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 circulation. The Land Code of 1991 created legal envirnment for citizens and collectives to own land. Thus, the citiznes are entited to own and manage its property at his/her discretion following the legal regulations. The Land Code of 1991 as well as the Property Law of the Republic of Armenia (resolution 384) were revoked by the Republic 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 environment, guaranteeing the effective use and care for the earth, creating the conditions needed for the proper development of business. Furthermore, this regulation seeks to protect the rights of citizens and legal persons including organized bodies and the State itself regarding property by consolidating the existing legal system. This new code is part of the legal system to be applied to property rights together with the Constitution of the Republic of Armenia the supreme law of the Nation - the Civil Code and applicable domestic legislation. Laws and other normative legal acts regulating land relations and determined by the Land Code must be in compliance with the provisions set forth by the Republic of Armenia Labor Code. If International Agreements (Treaties) duely ratified by the Republic of Armenia determined other provisons than the Labor Code, International Treaties are applied (RA LC, Article 1). Natural persons who are not citizens of the Republic of Armenia as well as foreign residents, have restricted rights to enjoy the right to own real property (Constitution, Article 31, RA LC, Article 4, item 2). 7.2.3 Limitations on foreign citizens and non-residents real property rights. The Republic of Armenia New Land Code sets clear limits regarding the use of land, among which the following should be mentioned: 1. Land parcels may be divided, provided it is in compliance with legal regulations and .in case if such land parcels are under joint ownership, the land parcels may not be divided lesser than the determined sizes. 2. The use of the property and its operation must be in accordance with its zoning classification. It should be noted the State is responsible for classifying the Republic of Armenia land according to a previous study of it in different categories. Land may be classified into: (i) agricultural lands; (ii) residential lands; (iii) land for industrial use: (iv) lands for energy, communication, transport entities and public infra-structural facilities; (v) lands in specially protected areas; (vii) lands of special significance; (vii) forests, water masses and natural reserves.
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3. There are special regulatory provisions on land-use and measures for their implementation: (i) prohibition of tools which cause a decrease in land quality and fertility or environment contamination: (ii) density of construction on land. Total Occupation Factor shall be determined in each case in accordance with civil and environmental engineering projects submitted 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 for use for agricultural purposes, processing of plants, creation of long term plantations, harvesting, cattle livestock provision and other agricultural activities. According to soil types, the State divides agricultural lands into (i) cultivated lands, (ii) long-term plantations, (iii) hayfields, (iv) pastures, and (v) other soil types. Once classified, agricultural soil types are subject to special protection. Transfer of those lands to non-agricultural uses is permitted in exceptional cases1 and only by Government decision. The Official Land Register (cadastre) gathers the classification corresponding to each land parcel and registers it in each land allocation, because such classification determines its use, cadastre value, property taxes, among others. The owner of a land parcel has the right to use everything above and below its surface, unless it violates the rights of other persons (Civil Code, Article 202, Clause 3). The use of what is located below the surface (i.e. water or minerals) is restricted by applicable regulations. All lands in the Republic of Armenia are subject to State supervision, either to control their use in accordance with the classification, to prevent a decrease in quality, or to prevent and eliminate negative activities consequences. The State has the right to lands compulsory purchase for public state need in case of eminant domain. This is common in most countries. In such cases, the State shall compensate the owner, taking into account several variables, such as landmarket value, improvements on the land and loss suffered by the owner due to such alienation, early termination of third party contracts, loss of
profits from interruption of business, among others. In case the landowner does not accept the State valuation, he may go to Court for a review of the State action, pursuant to the provisions in the Civil Code and the Republic of Armenia Law On Aliniation of Property For Public and State Need. The owner must be notified on the Republic of Armenia Government Decree on recognizing as eminent domain by sending such Decree to the owner within seven days from the day when such Decree becomes effective. Also, the real property of convicted criminals may be forfieted 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 by the State. Upon termination of the special circumstances which led to this situation, the natural or legal person whose property has been taken shall have the right to demand return of the land or its part. Should a landowner not comply with the applicable regulations, in cases such as land contamination, non implementation of measures aimed at land improvement, violation of legal regimes defined for the environment protection, and, the non-use of agricultural lands for a period of three years or more (RA LC, Article 105) it may bring about compulsory taking of the land through the court. - Registration of Rights on Land. The right of citizens and legal entities on land is created through privatization, heredity, trade, donation and other legal instruments2 (RA LC, Article 44). Such rights must be registered with the Official 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 registration. The State does not guarantee the protection of property rights that are not duly registered. - Land lease. Agricultural lands, owned by the State or by the commune may not be rented for more than 25 years. However, other types of land, owned by the State or by commune may be rented for up to 99 years (RA LC, Article 48). - Tenancy. The lands owned by the State or commune
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may be given by lease to citizens of the Republic of Armenia as well as to companies registered in the Republic of Armenia. The applicable regulations on property are based on the principle of equality, ownership inviolability, contract freedom , impermissibility of arbitrary interference by anyone in private affairs, civil law rights unhindered exercise, violated rights restoration guaranty and their judicial protection3. - Taxation. Taxes on agricultural lands are imposed at the 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 exempted from income tax. Land parcels covering 0,1 hectares or more, dedicated to vineyards and orchard recently planted and with a short life span, are exempted from land tax until production. - Foreign Investment. Foreign investment regulations are 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 privatization 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 Republic of Armenia permanently residing out of the territory of the Republic of Armenia, as well as any international organization which 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 regime governing 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 a guaranty: upon the which of foreign investor the legislation which was effective at the moment of investments implementation 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 be allowed only as an extreme means in case of emergency, and may be applied only upon a court of law judgment with full compensation). Foreign investors shall be entitled to freely export their profits and other means legally gained. Foreign investors intellectual property rights shall be guaranteed in accordance with the corresponding legislation.
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Foreign persons may organize and become parties to Joint Ventures with the same rights as natural and legal persons of the 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 relations arising in relation to implemenmtation of activity in the Republic of Armenia securities market.
The Government of the Republic of Armenia subscribed and ratified the International Centre for Settlement of Investment Disputes Convention (ICSID) on September 16, 1992. It became effective on October 16, 1992. The ICSID convention establishes an Arbitration Court under the auspices of the World Bank, to settle international disputes on investments. Any dipute between the Republic of Armenia and another country or national of another country which has also ratified the ICSID Convention may be referred to ICSID for resolution.
7.4 Rights and Obligations on Water Management

According to an OECD4 report, subsurface water resources represent 95% of drinkable water in the Republic of Armenia. Such water is high quality, according to microbiological and chemical standards. The efficient use of natural resources, specifically the water resource, is crucial for agricultural development. However, the country has an obsolete water distribution system, which generates considerable loss (approx. 35% 40%) along its path, as well as inappropriate supply of this vital resource. As a result, the Government has leased the water distribution network of Yerevan to an internationally recognized French company and granted a management contract to another internationally recognized French company 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 satisfy the general needs of all the population through efficient and responsible water management and protection of existing water natural resources in the country. The Code acknowledges that as water is a non-renewable resource and as there is no alternative to water (Water Code, Article 5), its environmental and economic protection is extremely important. The Code establishes water resources5 existing in the territory of the Republic of Armenia are State property. Water systems of national significance (defined by the National Water Program) and inalienable zones of main and inter-community water supply6 and wastewater disposal systems 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 User Association Unions of the Republic of Armenia has been enacted in July, 2002. Persons, having irrigated lands in the service area of the Water User Association, are entitled to use irrigation water, based on water supply contracts with the Water User Association not less than for three years time period. Water User Associations and Water User Association Unions are non-profit legal persons operating in the public interest. Water Users Associations are made up of natural and/or legal persons owning lands or having a right to use lands with a specific irrigation system. Water User Union is made up of Water Users Associations. They carry out the operation and maintenance of irrigation systems and supply water among members in the territory in
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accordance with the annual supply schedule. They also have the contractual obligation to supply water to users members and non-members of the Association and the Union7 located within the service area, obtain water from water resources for irrigation, collect member and nonmember fees for the services rendered, promote new irrigation techniques and financing for these new methods and technologies, secure hydrotechnical equipment, manage water supply preventing contamination and promote its proper and efficient use (providing ecological safety measures) among other (Law on Water Users Associations and Water Users Associations Unions, Article 4). The main difference between members and non-members of these associations is based on the rights and duties of the former, since they have the opportunity to take part in decision making, organize discussions, use the services offered and be compensated for damages caused by the association, among other things. For the timely water supply, they must comply with irrigation schedule and allow the association to use channels or other hydrotechnical equipment within their land area in order to guarantee irrigation system balance maintenance. Now, water resource users whose lands are irrigated either members or non-members may enter into agreements for the supply of water, while they are within the associations service area and not for less than three years. However, non-members must pay a higher rate than members, which shall not exceed 150% in surcharge (Law On Water Users Assossiations and Water Users Assossiations Unions Article20). In general, water use permits are given by the Water Resources Management and Protection Body (Republic of Armenia Nature protection Ministry). These
permits fund costs for recreation purposes. Land owner has priority to obtain a permit for underground water use in his own land. (Water Code, Article 25). Furthermore, a permit may be granted for the use of underground water at a third partys property with the latters written consent. If Water Resources Management and Protection Body determines the extraction of groundwater is necessary on any persons property and landowner refuses to provide authorization, the land may be condemned from the landowner, providing fair compensation is paid or by appliation of mandatory servitude (according to provisions in the New Land Code). Sustainable maximum extraction rates for groundwater resources shall be established by the Water Resourses Management and Protection Body (Water Code, Article 25). A water use permit must be signed by the permit holder and the Head of the Water Resources Management and Protection Body, sealed by the stamp of the Water Resources Management and Protection Body and, duly recorded in the State Water Cadastre in order for it to be valid. The Water Use permit period of validity depends on the following8: 1. Prior to the final approval of the National Water Program, a water use permit may be valid for no more than three (3) years. 2. In locations where a Water Basin Management Plan exists, a water use permit may be valid for a maximum 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 a maximum of five (5) years. The Water Code establishes water users rights and duties as follows:
Duties - Comply with qualitative and quantitative standards and requirements needed for water resources protection and improvement of 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 forbidden to operate water systems without carrying out measures for land inundation and land erosion prevention (Article 88).
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- 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 the instructions 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 legislation, causing harm to the water systems and violating their operational rules, among other, shall bear criminal or administrative 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 the Republic of Armenia is a disputing party. In case no consent is attained by the parties the disputes shall be resolved in a judicial way (Article110). - Obtain a water use permit (Article 21) in accordance with Codes provisions.
Use and Protection of International Waters International treaties and agreements between the Republic of Armenia and neighbouring countries shall be applied for the use and protection of water resources at international boundaries (RA Water Code, Article 63). Treaties of the former USSR define the use of Araks and Akhurian rivers at the Armenian border and allocate the resources equally. These treaties also govern the reserve and reservoir of Akhurian river. Similar agreements have been signed for Arkas river for equal exploitation with the Islam Republic of Iran 10; with Georgia in relation 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 on structural and legislative reforms related to resource sustainable use, which focuses on improving related legislation. The RA Law on Basic Provisions of National Water Policies was adopted, developing concepts related to the use 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 he who contaminates pays, to collect rates that enable investment in maintainance and improvement of water resources.
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In order to carry out an efficient policy, water demand must be assessed, taking into account its quality, quantity and location. The law on the National Water Program for the Republic of Armenia has been effective since March 25, 2007. This is the main document ruling present and future trends on water management as well as protection of water resources and systems. The process suggested by this project provides for a more integral and efficient management of this resource. Besides, the Code itself establishes after its approval not only the previous Code ruling on the same subject shall be repealed (1992) but also the following laws must be adopted: On Water User Associations and Water User Association 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, and a clear policy of rules known and respected by everyone must be followed, since activities like agriculture may be negatively affected by necessary water resources lack.
7.5 Intellectual Property and laws on protection of incorporated technology

Civil Code of the Republic of Armenia Section 10 is exclusively dedicated to intellectual property; a right recognized by the Constitution in Article 31 stating this type of property should be protected by law. Likewise, issues related to intellectual property are ruled and protected in the Criminal Code (Chapter 19), the Customs Code (Section 14, Chapter 39), and, the Republic of Armenia law on protection of economic competition, the Republic of Armenia law on copyright and related rights, the Republic of Armenia law on patents, the Republic of Armenia law on legal protection of topographies in integrated circuits, the Republic of Armenia law on trade names, the Republic of Armenia law on 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 by Satellite (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 their Phonograms, adopted at Geneva (January, 31, 2003) The International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations (April 11, 2002) Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure (November 6, 2004) Nice Agreement Concerning International Classification of Goods and Services Registration of Marks Purposes (November 6, 2004) Strasbourg Agreement Concerning International Patent Classification (November 6, 2004) Vienna Agreement Establishing an International Classification 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 harmonized by the Agreement on Trade-Related Aspects of Intellectual Property Rights (Annex 1C of the Marrakech Agreement from which the WORLD TRADE ORGANIZATION, WTO, was created in 1994. The Republic of Armenia
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was admitted to WTO on February 5, 2003, thereby establishing its supremacy over the laws of the Republic of Armenia and other national regulations12. The Republic of Armenia protects intellectual property and their use in commerce. Among intellectual properties are: works of scholarship, literature and artistic works, performances, phonograms and transmissions of broadcasting organizations, inventions, utility models, industrial design, achievements related to new varieties of plants and new forms of animal breeding, topology of integrated circuits (layout-design) and undisclosed information, including secrets of production (know how). The second regulated objects include firm names, trademarks and services marks, and names of places and designation of origin. The right to intellectual property arises from the fact of creation or as a result of granting legal protection according to the procedure set forth in the Civil Code or any other legal act relating to the subject. Furthermore, the right to be recognized as creator of intellectual property, belonging only to the person, whose creative work resulted the creation of intellectual activity, is considered personal, nonproperty, inalienable, non-transferable, and effective without the limit of time13. Therefore, the author has the legally recognized and protected intellectual property objects right of use at his own discretion. The use of the objects by other persons is allowed only with the consent of the holder 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 a threat of its violation, applying consequences of invalidity of a void transaction, recognition of avoidable transaction as invalid and application of consequences of its invalidity, recognition of the invalidity of an act of state or local self-governmental authority, non-application by the court the act of state or local self-governmental authority, which contradicts the law, self-protection of a right, enforcement performance of obligation by in kind, compensation for losses, award of penalty and termination or alteration of a legal relation and other means provided by the law. Article 1110 further extends those means of protection of property rights, by allowing the seizure of all material objects which helped the violation of such 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 and Economic Development, in order to centralize the tasks and control over intellectual property. This Agency receives and examines applications related to industrial property and microcircuit topologies, grants patents and certificates, keeps state records, examines claims and oppositions against granting of patents or certificates, publication of works and the registration of the agreement on use of license, etc. There are different rules in relation to protection granted to various types of intellectual property and their exploitation. The following are in force regarding patents and trademarks:
OBJECTS
LAW
DATE OF ENTRY INTO FORCE January 9, 2005
VALIDITY PERIOD
COMMENT
Patent
Law on Patent
Invention Patent: up to 20 years, granted on the basis of a substantive examination (Basic patent), or for up to 10 years, if granted without a substantive examination (provisional patent). Industrial design patents: up to 15 years. Patents on a utility model: up to 10 years. 10 years, term that could be further extended for multiple periods of ten years.
The Patent owner may assign its patent to a natural or legal person. This assignment shall be registered with the corresponding office, otherwise the assignment shall be null.
Trademarks and service marks
Law on trademarks and service marks and designation of places
April 15, 2000
Based on a licensing agreement, the owner of a trademark may grant
OBJECTS
LAW
DATE OF ENTRY INTO FORCE January 9, 2005 April 15, 2000
its patent to a natural or legal years, granted on the basis person. of a substantive examination This assignment shall be (Basic patent), or for up to registered with the 10 years, if granted without7a- Agribusiness Sector Financing 151 Chapter corresponding office, substantive examination otherwise the assignment (provisional patent). shall be null. Industrial design patents: up to 15 years. Patents onPERIOD COMMENT VALIDITY a utility model: up to 10 years.
Invention term that to 20 10 years, Patent: upcould be years, granted onfor multiple further extended the basis of a substantive examination periods of ten years. (Basic patent), or for up to 10 years, if granted without a substantive examination (provisional patent). 10 years, design patents: be Industrial term that could further extended for multiple up to 15 years. periods of ten years. Patents on a utility model: up to 10 years. 10 years, term that could be further extended for multiple periods of ten years. The authors economic rights shall run for the whole life of the author and for 50 years after his death, calculated from January 1 of the year following 10 years, term that could be the year of the authors death. further extended for multiple periods of ten years. The Patent licensing Based on a owner may assign its patent to a natural of a agreement, the owneror legal person. trademark may grant This assignment permission another person ashall be registered trademark. to use the with the corresponding office, otherwise the assignment If an be null. shall International Treaty of which the Republic of Armenia is party defines rules other than those set forth by this law, then the norms of the International Based on a licensing Treaties shall apply. agreement, the owner of a trademark may grant The economic rights of the another person a permission author holding copyright to use the trademark. could be transferred by inheritance. If an International Treaty of which the Republic of Armenia is party defines rules other than those set Where an identical original forth by this law, then the topography, independently norms of the International created by a different Treaties exists, the inventor,shall apply. general
Patent Trademarks and service marks
Patent Law on trademarks and service marks and designation of places of origin
Designation of origin
Law on trademarks or service marks or designation of places of origin
April 15, 2000
Trademarks and service marks
Copyright
Law on trademarks and service marks and designation of places Law on copyright of origin and related Rights
April 15, 2000
July 22, 2006
Designation of origin
Protection of Layout-design of Integrated Circuits

Copyright
Law on trademarks or service marks or designation of places of origin Law on the legal
April 15, 2000
March 24, 1998
protection of topographies of integrated circuits

Law on copyright and related Rights July 22, 2006
The exclusive right to use topography shall be valid for 10 years.
Current valid texts on patents and trademarks. Source: The Federation of International Trade Associations14
Protection of Law on the legal March 24, 1998 Layout-design protection of of Patent related laws (Article of Integrated topographies 41), Copyright and related Circuits integrated circuits Rights (Article 71), Integrated Circuit Topographies (Article
The authors economic rights shall run for the whole life of the author and for 50 years after his death, calculated from January 1 of the year following the year of the authors death.
period of validity of the exclusive right to use of the The economic rights the topography may not exceed author holding copyright 10 years. transferred by could be inheritance.
13) and Trademarks or Service marks or Designation of Origin (Article 48) state that foreign citizens or residents shall enjoy the same rights and bear the same responsibilities as the citizens and residents of the Republic of Armenia, under the international treaties to which the Republic of Armenia is a party or on the basis of the principle of reciprocity. The Law on Patents sets forth that the inventions, utility models or industrial designs created in the Republic of Armenia may be patented in foreign countries. Before filing the corresponding application, inter alias within the frame-
Where an identical original The exclusive right to use topography, independently topography shall be valid before an International work of years. for 10 the International treaties, created by a different inventor, with the authorAuthority, said application must be filed exists, the general period ized State body and must also state theof validity of theintenapplicants exclusive right to use the tion to patent it in a foreign country. If withinmay not months topography three exceed 10 years. after filing the decision of patenting the object abroad, the
authorized State body does not prohibit said patenting (on the grounds provided by sub-clause 6 of Article 4 of the Law on Patents), the person then may act at his discretion. Any infringement regarding the procedures, established by sub-clause 2, Article 40 of the Republic of Armenia Law on Patents shall result in liability according to the Republic of Armenia effective legislation (Law on Patents, Article 40).
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Finally, the inventor or owner of the topography rights created in the Republic of Armenia may require legal protection 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 Illegal use of patent right or dissemination of information concerning its nature without the applicants consent, misappropriation of authorship or compulsion to coauthorship. PENALTY Fine at a rate of 200 to 400 times minimum salary or imprisonment for a maximum term of two years.
Infringement of Copyright and related rights (Article 158) Rights related to trademarks (Article 197)
Illegal use of copyright and related Rights or misappropriation of authorship, given that this action has caused great damage.
Fine at a rate of 200 to 400 times minimum salary or imprisonment for a maximum term of two years.
Illegal use of trademarks, service mark or firm name, given that the action has caused great damage.
Fine at a rate of 300 to 500 times minimum salary or arrest for a maximum term of two months.
The core elements of patents granted to new varieties of plants and new breeds of animals are the following: Civil Code establishes rights to new varieties of plants and new breeds of animals must be protected when a patent has been issued (Civil Code, Article 1157) through a process regulated by the Law on Patents. Notwithstanding article 5 of the said law, the law states the following shall not constitute patentable inventions: plant and animal varieties, essentially biological processes for the production of plants and animals, processes that modify the genetic identity of animals and animals resulting from such processes, processes for cloning of human beings, uses of human embryos for industrial or commercial purposes, processes for modifying the genetic identity of human beings, topographies of integrated circuits. However, Law on Protection of Selection Achievements establishes a mechanism by which a patent is granted with the purpose of protecting new varieties of plants and animals (see Article 4). In order to create a favorable environment for the normal development of the economy based on a free market economy, encourage foreign investment and improve economic
competition, two essential laws were passed: the Law on Protection of Economic Competition (November 6, 2000) and the Law on Protection of Domestic Market (April 18, 2001). The former defines the relations within market players related to unfair competition15. This law applies to the activities and conducts of private economic entities, and Government bodies and local self-government bodies, as well as their officials which do or might give rise to economic competence restrictions, preventions or prohibitions, as well as to acts of unfair competition, except for cases provided by law and prejudice caused to consumer rights. However, this law does not apply to relations associated to intellectual property rights, except when these rights are used for the purpose of restricting, preventing or prohibiting economic competition (Law on Protection of Economic Competition (November 6, 2002, Article. 2, paragraph 1 and 2). The latter law promotes anti-dumpling measures on products imported to the territory of the Republic of Armenia. Since July 22, 2006 a new law on copyright and related right has been effective and Civil Code of the Republic of Armenia was respectively amended.
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Nowadays, the Republic lacks the necessary structures, mechanisms and policies to ensure a correct development regarding innovation. For this reason, the Government, through the Ministry of Trade and Economic Development has taken certain steps to create the legal basis and favorable conditions to promote the innovation process16. At this time, clear steps are taken for the purpose of adapting the Armenian legislation to the current situation in the world. Intellectual property rights are recognized by the constitution and are of great importance. The rules tend to cover all possible issues regarding this subject, and State bodies guarantee the protection of the legally recognized rights. One very important issue is the granting of patents to new varieties of plants and breeds of animals due to their immediate agricultural consequences.
7.5 Technology, Seeds and Genetics

There are several laws regarding genetic regulation and biotechnical security. The purpose of said laws is to protect the environment and to guarantee citizens the possibility to live in a healthy environment. Constitution Articles 8 and 10 are the basis of said rules. It should be noted a "Law on Flora" has been approved where the concept of a genetically modified organism is established understood as any living organism having a new combination of genetic material obtained using modern biological technology (according to Cartagena Protocol on Biosafety definition, Convention on Biological Diversity17). In order to protect countrys flora and fauna, the following is prohibited: illegal import of plant and animals for selective use and acclimatization, non-regulated use of fertilizers and toxic substances, unjustified use of modified living organisms created through biotechnology18. However, the legislation does not govern the access to genetic resources nor the distribution of the benefits derived thereof. Law on Protection of Selection Achievements defines selection achievement as a plant variety acquired by an artificial way, having one or several economic characteristics distinguishing it from existing plant varieties and the
breed of animals raised by a man, which possesses enough inborn quantity of characteristics in order to be distinct from other breeds of animals and to be bred as separate breed, that is to say multinomial group of animals with the same origin. The right regarding selection achievement shall be protected by law on Protection of Selection achievements and other related legal acts and shall have to be certified by a patent issued by an authorized State body. Once the patent is obtained, the object shall be registered with the State Register of Protected Selection Achievements. Patent term shall be 20 years as from the date of registration. Moreover, for grapevines and ornamental plants varieties, fruits and forest trees (including rootstocks) said period shall be 25 years. In addition, patent for the object governed by law on Protection of Selection achievements shall be issued following four criteria: the variety should be new, distinct, homogeneous and stable. Selection achievement shall be designated by a name so that it can be clearly identified. Before granting a patent to a new variety of plant, said plant shall be subject to a preliminary evaluation in which the four criteria before mentioned will be considered. If the Republic of Armenia Agricultural Ministry (authorized state body) grants the patent, the new variety shall be registered. Should the file be rejected, the applicant can appeal to the authorized body requiring repeated preliminary examination. Patent owner rights are clearly protected under the law governing selection achievements protection. Patent owner has the exclusive right to prohibit third persons from using patented selection achievement without his/her permission, as well as use it at his discretion provided such use does not infringe other patent owners rights. Nevertheless, under a license contract patent owner may grant a permit for patented object use, inter alias production, reproduction, conditioning of the seed material for the purpose of further propagation, offering for sale, sale or other way of realization, export from the Republic of Armenia, import in the Republic of Armenia and storage for the mentioned purposes (these contracts shall be registered with the authorized State body).Nevertheless, it shall not be considered as an infringement of patent owner exclusive rights above mentioned should the selection
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process be used for private and non-commercial purposes, experimental purposes or as an initial material for breeding new plant and animal varieties purpose(Law on Protection of Selection Achievements. Article15). However, in cases of public interest and national security, in situations of emergency, and in cases of public non-commercial use, the Government of the Republic of Armenia is empowered to use or authorize third parties to use a selection achievement without patent owner consent, provided patent owner is notified within 10 days and paid adequate remuneration taking into account each case and the economic value of such authorization (Law on Protection of Selection Achievements, Article 17, paragraph 6). Author of objects, who is not the patent owner, governed by the above mentioned law has the right to receive a certificate of authorship, and if he/she is not the patent owner, to receive remuneration to be paid by the patent owner for the use of this new variety. The amount shall be determined by contract (Law on Protection of Selection Achievements, Article 14). Foreign natural persons and legal entities shall be covered by Armenian law, on the basis of international treaties to which the Republic of Armenia is a party, or on the basis of reciprocity, and shall bear the same liability as natural persons and legal entities of the Republic of Armenia (Law on Protection of Selection Achievements, Article 21). Specifically, Law on Seeds establishes seeds import / export shall only be carried out upon registration in the list of usual varieties and shall bear a certification. Certification shall match variety and quality standards as well as sanitary standards for the Republic of Armenia, whether for import or export. In addition, these seeds should be adequately packed and sealed, and shall specify their seed variety, class, quantity, packing date and type of chemical process undergone. Seeds imported to Republic of Armenia customs territory shall be examined by the authorized entity, which will control data on seeds labels packages match certification thereof. Seeds packages without labels will be discharged and denied the possibility to be used in the national territory. Imported seeds will undergo a sample test and research will be carried out in authorized laboratories; later
seeds will be cultivated in experimental fields. The person willing to do the importation has the right to require the use of an efficient field to test the seeds. Once the test is made, the Ministry of Agriculture is empowered to authorize the use of the seeds in the country, provided such tests do not violate the above mentioned law and seeds match the required technical standards. The Republic of Armenia has signed the International Plant Protection Convention (IPPC) and the Convention on Creation of the European and Mediterranean Plant Protection Organization. For this reason, the Government of the Republic has sought for many years to adapt the internal legislation to the required international standards, in order to promote and guarantee the creation of high quality seeds, encourage agriculture and placing Armenian products on international markets.
7.6 Phyto-sanitary barriers

There are several State bodies in charge of sanitary and phyto-sanitary controls. They are under the Ministry of Agriculture, the Ministry of Trade and Economical Development and the Ministry of Health. The Republic of Armenia has a quarantine list with more than 90 insects, diseases and weeds varieties19. Seeds Import and export certificates are issued in accordance with this list, so that they match the standards required by the importing countries. One of the bodies in charge is the Plant Quarantine Inspectorate. For imported products only a provisional phyto-sanitary certification is issued, having to be confirmed by Internal Customs before the product is free to be used. Material bought abroad shall be delivered to an authorized custom center near Yerevan before final inspection, testing and authorization. If the imported material is seeds for cultivation, an inspection and an authorization are required by the Ministry of Agriculture. It is estimated phyto-sanitary approval shall be issued within 24 hours 20. Procedure assures double responsibility is involved. In the event of export sales, each region agents will be in charge of the corresponding inspection. One of the problems arising from this mechanism is that
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according to the product to be imported, plants and processed materials of plants may be subject to further inspection by Quality Inspectors Group, under Ministry of Trade and Economical Development. This means functions and responsibilities of different governmental bodies are divided. In turn, laboratories used for testing imported pesticides do not have the necessary resources as required by the Armenian law21. Law on Plant Protection and Plant Quarantine includes an especially important chapter. In order to eliminate quarantine pests introduction and dissemination risks, as well as the ones related to infested plants and plants products, these materials can be confiscated and destroyed by a State inspector decision. The cost arising from such products confiscation and extermination shall be compensated provided it does not occur as a result of owners non-fulfillment with legal phyto-sanitary measures and it has not caused 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 appeal authorized state bodies actions regarding plant protection, and may demand compensation for damages, including loss profit caused by illegal acts or inactivity of the state (Law on Plant Protection and Plant Quarantine, Article 12).
7.7 Animals
Animal world is natural wealth and is under exclusive ownership of the Republic of Armenia. In 2000 the Republic of Armenia Law On Animal world was adopted, which determines the state policy on protection, maintenance, use and regeneration of wild animals.
7.8 Agricultural Workers Labor Legal Scenario

Everyone has freedom to choose his own work (Constitution, Article 22). Since June 21, 2006 the new Labor Code of the Republic of Armenia is effective It regulates the collective and individual labor relations, deter-
mines the basis and order of exercising such rights, changing and termination of such relations, rights and duties, liabilities of parties to a labor relation, as well as conditions of ensuring the safety and health of employees. Furthermore, it states that any type of mandatory work and violence to the employees is forbidden. The employment relations arise based on a written employment agreement. The employment agreement may be concluded for a certain term or for an indefinite term. The employment agreement may be concluded with citizens, from 16 years old on, or with citizens from 14 to 16 years old upon written consent of one of his/her natural parents, adoptive parents or curator. Agreements of employment with citizens up to 14 years old or involving them into work is absolutely forbidden. Foreigners are entitled to work in Armenia based on work permit (Law on Foreigners, Article 22). The law on foreigners also determines the cases when the foreigners are entitled to work without work permit. The parties in employment relations are equal regardless of sex, race, nationality, language, origin, citizenship, social state, religion, martial and family status, age, beliefs, view points, memberships in political parties, trade unions or public organizations, other circumstances not connected with employment qualifications. An employment agreement may be concluded for seasonal work. On August 25, 2005 the Republic of Armenia Government adopted a decree confirming the types of jobs, which are considered to be seasonal. The list of seasonal 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, the employer is obliged to request the following documents: Identification Document,
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Employment record book (except for the employers, who are employed for the first time and joint work)and social security card and in case of absence of social security card, reference thereon, certificate on education or necessary qualification, in case if in accordance to Labor Code, the job is connected with specific professional and educational qualification, reference on good state of health (sanitary book),in case of the employment for which the employment agreement is concluded, needs preliminary and periodical medical examination, as well as in case of conclusion of an employment agreement with the citizens younger eighteen years old. written consent of one of the parents or adoptive parents or curator, if the employed is a citizen of 14-16 years old. other documents prescribed by the law or other normative legal acts. Since January 1, 2008 the minimal monthly wage is AMD 25,000 (Law on Minimal Monthly Wage, Article 1). For each hour of night work and overtime work, performed upon the request of the employer the employee shall receive additional payment in the amount of not less than 1.5 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 the amount 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 more that 2 hours and not less than 30 minutes for rest and lunch. Uninterrupted rest per week may not be less than 35 hours. The employees are entitled to an annual leave for 28 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 an employment agreement concluded for a definite term before expiration of the term thereof by notifying the employer thereon in writing at least fourteen days prior to termination. An employee is entitled to terminate an employment agreement concluded for an indefinite term, as well as an employment agreement concluded for a definite term, before
expiration of the term thereof by notifying the employer thereon in writing at least five days prior to termination, if termination of the employment agreement is related to illness or work injury which hinders his work, or due to other sound reasons determined by the labor agreement, or when the employer does not perform the duties set by the employment agreement, violates the law or the collective agreement. An employer is entitled to terminate an employment agreement concluded for an indefinite term, as well as an employment agreement for a definite term before expiration of the term thereof in the following cases: 1. liquidation of the company (termination of the activity of individual entrepreneur), 2. bankruptcy of employer, 3. reduction of employees numbers, conditioned by changing production volume, economic, technological conditions work organization parameters, as well as production necessity, 4. if the employee does not comply with the position occupied or performed work, 5. unsatisfactory results of probation period, 6. nonperformance or improper performance of employees 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 120 continuous days, temporary disablement or within last twelve-month period the employee did not report for work more than 140 days, in case if the law or other legal acts do not state that for certain types of diseases 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 such punishment, which does not allow to continue the work, when the employee is deprived from special rights of performing certain works in a manner prescribed by the Law,
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when the employee is from fourteen to sixteen years old, and one of the parents, the adoptive parent or the curator, the doctor taking care of employee's health or the Employment State Inspector requires termination of employment contract, upon entering temporary military service, not later that three days prior to the term mentioned in the relevant notice, upon death of the employee - the employer unilaterally terminates the employment agreement from the day of employee's death. While terminating the employment agreement prior to expiation of the term thereof, the employer is obliged to notify the employee in writing in the following terms: liquidation of the company (termination of the activity of individual entrepreneur), as well as in case of reduction the number of employees conditioned by changing the volume of production, economic, technological conditions and conditions of work organization, as well as production necessity - not later than before two months, if the employee does not comply with the occupied position or performed work, as well as in case of retirement of 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 due to companys liquidation, bankruptcy of an employer, reduction the number of employees, when the employee is not offered another job, the employer will pay the employee dismal allowance in the amount of employee's onemonth salary. And when the employment agreement is terminated because of non-compliance of the employee with occupied position or performed work, retirement of the employee, as well as reduction the number of employees, when the employee refuses to perform the offered job, which corresponds to the profession, qualification and health of the employee, as well as entrance of temporary military service, the employer will pay the employee dismal allowance in the amount of employee's two-week salary.
For disciplinary violation, the following sanctions may be applied to the employee: 1. warning, 2. strict warning, 3. Termination of employment agreement (in case of nonperformance or improper performance of the duties of the employee or in case of losing trust toward the employee), In case of change of employment conditions or termination of employment agreement by the initiative of employer the employee may seek the remedy in the court.
7.7 Conclusions
As from 1991, many legislative reforms were made by the Government of Armenia in order to harmonize the internal laws and regulations to the political, economic and social contemporary conditions. Regarding the subjects analyzed in this chapter, legal regulatory framework of land and water are the more developed ones. Certain challenges remain: regarding laws on protection of incorporated technology and genetic creations, even though current legislation covers necessary conditions to rule and protect new varieties genetically modified insertion, provisions to govern access to genetic resources and distribution of its benefits is still missing. Considering current up-grades in these issues, the preliminary draft of the bill on modified living organism once passed shall complement the existing laws. Regarding the protection of biodiversity as well as the phyto-sanitary barriers, it should be noted a great variety of regulations govern the topic. Nevertheless, responsibilities and functions of different empowered entities for the phyto-sanitary inspection are super-imposed, duplicating the work. The purpose of the law is protection of the flora and fauna as well as human health. It should be noted private interests are protected by norms provided they are not contrary to existing laws.
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Notes
1 See item 2 on limitations on the use of land. 2 Civil Code, New Land Code, Law of the Republic of Armenia on state registration of property rights, April 1999. It establishes that rights on immovable property such as use, committments, mortgages and servitudes must be registered with the State. 3 RA Ministry of State Property Management (2003). What Investors 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 Independent States. page 43. 5 Defined as: all surface and underground waters, including streams, rivers, springs, swamps, lakes, ponds, cumulated snow, glaciars, aquifers and any other water bodies, including seasonal water resources. 6 As defined by the article itself. 7 A Union is understood as a non-profit voluntary group of associations operating the irrigation system, acting within the authorization delegated by those associations that compose it (Article23 They must be registered with the State (Article8). 8 They may be renewed at least 6 months prior to expiration of the permit term. 9 Structures used to modify water course. Some of them may be dams, reservoirs, channels, distribution tubings, purifying plants, aqueducts, etc. 10 These agreements were signed by the USSR but the Republic of Armenia is acknowledged as the successor state, and consequently, bound by such agreements (Available at: <http://www.waterwiki.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 on Armenia 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 are two or more persons, they shall be recognized as cocreators (Civil Code 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 and Competition. Available at: <http://www.mineconomy.am/en/21/> (on: May 28, 2008) 16 Arzumanyan, Tigran (2006). Current issues on research, development and innovation in Armenia. At: INt. J. Forsight and Innovation Policy, Vol. 2 (2), p. 141. 17 Ratified March 16, 2004 by the Government of the Republic of Armenia. 18 Republic of Armenia - Ministry of Natural Protection (2004). Op. Cit. P. 10. 19 World Bank, Armenias rural economy. From transition to development, Washington, 2005 P. 57. 20 Ibid. P. 73. 21 Ibid, P. 61.
International Organizations Strategic Recommendations for Agricultural Development in Armenia
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Chapter 8 - International Organizations Strategic Recommendations for Agricultural Development in Armenia
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Chapter 8
International Organizations Strategic Recommendations for Agricultural Development in Armenia

8.1 Short and medium term
Taking into account the current agricultural setting in Armenia, various actions recommended by some international organizations1 to maximize crop yields are mentioned here: 1. To design a development strategy for crops and for fruit and vegetable production a short term action plan (STAP) is required. This plan is based on an identification draft focusing on areas of comparative advantage within the framework of resources, their potential, profitability, and market sale feasibility; 2. Increase the seed variety range accessible to farmers; 3. Encourage the private sector to import, multiply and distribute technical improvements; increase the efficiency of the administrative procedures relevant to seed certifications; 4. Develop recommendations to make sowing more profitable as a means to reduce production costs and increase yields; 5. On the basis of the present trends regarding basic products and input prices and of the knowledge of soils and fertilizers, it is necessary to determine and announce the benefits obtained by maximizing fertilizer use for the main crops in the principal production areas. 6. Considering the present trends regarding basic products and input prices and of the knowledge of crop protection, it is also necessary to identify low cost techniques to face weed systems and pest control, appropriate for small producers of grain, vegetables, fruit and industrial crops; 7. Taking into account a realistic evaluation, it is necessary employing suitable mechanisms to determine the profitability of adopting such technologies for each crop. Data gathering precision and questionnaire uniformity are the basis of the success of reliable measurements. Once the cultivation areas where yield has increased are identified, the practices must be made known to all levels of production in each sector, through all the stages of generation of the product. 8. Extension services to encourage farmers to diversify their profitable crops by developing packages enabling them to continue with their crops but, at the same time, to develop others that are of interest to the various sectors of the production chain. The objective is to lower the import of crops that may be produced in the arable territory. This can be carried out through demonstrations at agricultural establishments and visits to farms, among other activities, as well as by informing farmers on the range of available markets for new cultivation products and on the type of products these markets seek. Diversification should be mainly based on: a) Cultivation of oilseed plants and of grain for cattle feeding; b) Crops that have a short ripening cycle. In these cases double crops may be planned in irrigated areas, thus increasing farmers incomes as well as agricultural and non-agricultural employment;
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c) Fodder crops. These offer the improvements needed to feed cattle and for nutritional improvement: alfalfa and pasture, leguminous plants and mixtures; 9. The government and the donor community must promote the creation of producer associations as a means to spread and support the adoption of better management techniques, loss reduction at small agricultural establishments and diversification towards more profitable crops and better markets for their products, with an international focus, in the context of a favorable price growth in agriculture; 10. To address the issue of the fragmentation of the land, it is necessary to develop the markets for its output and to consolidate pilot projects, based on land use and on the micro-regional development concept considering geographic and natural differences and coincidences and the countrys cultural heterogeneity; 11. Intensification and heightening of current requirements for land preparation with systems that may reduce costs particularly regarding grains, with good auxiliary equipment currently not available in Armenia. 12. Crop practices and drought mitigation measures. The main problems arise from drought in unirrigated areas; support areas for the most vulnerable groups of the agricultural community are suggested. The minimum farming principle should be introduced as a pilot test. This principle brings in cultivation practices to increase water infiltration and storage in the soil profile. This, together with stubble for soil protection and structure improvement, has categorically demonstrated that drought effects can be efficiently mitigated in a relatively short time.
8.2 Agricultural production for cattle raising: short term strategies

1. The production and use of fodder resources require a comprehensive plan in which pasture management is an important component; 2. Detect and develop fodder crop production as part of the STAP; 3. Increase extension services in order to promote the development of seeds and grains high in proteins and of other fodder crops; diversify crops to compensate for pasture deterioration and to improve animal feeding; 4. Develop extension and research services at low cost, to identify silage systems and develop related requirements for agricultural machinery as an alternative means to improve the quantity and quality of the crops at their various implementation stages; 5. Promote research and extension services to develop low cost food adjusted to recommendations on a small scale for commercial farms as a basis for improving young population growth rates, reducing the age of first delivery and shortening breeding intervals; 6. The government and donor community should promote the generalized creation of producers associations as a means of spreading and supporting better management practices for cattle raising; 7. Continue to subsidize artificial insemination in order to keep up the genetic stock; 8. Launch an animal identification program all over the country with the help of donors, as a preliminary condition for breeding; 9. Regarding milk production, increased training on the standards of hygiene needed for the production of goodquality milk should be considered a high priority;
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10. Promote the diversification of extension services or donor support: a) Sheep business reorientation to the production of cheese and meat. Genetic resource imports will be required; b) Development of goat breeding for milk production and goat cheese manufacture. Adequate management of pastures and development of advisory services will be necessary; c) Improvement of small-scale pork production through improvement in food, reproduction and health management practices.
In short, the government, companies and civil society should undertake a series of actions in order to achieve the eagerly awaited development of sustainable agriculture. Although there is a long way to go, everything indicates that joint action by the different sectors of society will enable Armenia to reach the rank it deserves within the competitive international situation as regards commodities production.
Notes
1 Considering recommendations by United Nations Development Programme (UNDP), United Nations Food and Agriculture Organization (FAO), United Nations Economic Commission for Europe (UNECE) and World Bank.
Fruitfull Armenia Proposal
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Chapter 9 - Frutifull Armenia Proposal
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Chapter 9
Frutifull Armenia Proposal

Our proposal for the enhancement of agro productivity in the Republic of Armenia is based on four main aspect, which represent the foundations to build a reasonable medium-term agriculture Master Plan: 1234Agro productive zoning Adoption of new technologies Improvement of legal framework Financial strategy 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 technological development now in force will be commercially available all over the world and productivity increase may compensate human demand once again. Until that time it will be important to consider the position held by each country to face the present situation. THEREFORE the new scenario should have some of these features Farm surface: These processes will undoubtedly generate especially in the most extensive productions a necessary increase in the productive unit per producer; small surfaces will only withstand intensive productions with state of the art technology and high yield mainly assigned to supply domestic market (vegetables, fruits, etc.) In some places the land redistribution process was in the hands of the market, in other places the State took part regulating transactions. Such redistribution does not necessarily imply the transfer of property from one producer to another; long term rental systems are being very successful in different parts of the world. Internal Migration Productive unit increase shall generate countrys internal migrations from rural to urban areas Particularly in Armenia, a considerable number of the rural population comes from urban areas, without agricultural tradition and probably, they do not feel comfortable with this situation. These internal migrations will be sustained by the existing high education level skills. Unlike the rest of the world, one of the factors which made the deepest impression on us during these years working in Armenia is the education level of the population. We put special
Agro productive zoning

WHY does Armenia need to develop agro- productive zoning: The worldwide increase in commodities value, due to higher demand, highlights even more the competitive advantages in different regions of the earth at the time of yielding. The main food producing countries concentrate their efforts and specially their resources - soil, water, climate - on those outputs where they have more advantages so as to reduce their efforts on those where they cannot compete against more efficient producers. The increasing demand of these products, the subsequent raise in prices and the inability to control domestic inflation have an impact to a greater or lesser extent on the entire globe. Policies such as consumption subsidies or export restrictions are applied obtaining different levels of efficacity, but at the end they are only corrective measures of market distortion not a real solution to the problem. Directing the course of production to its maximum possibilities is not only a good strategy but now an urgent need. Each country must address its strategy towards regionalization, define the best areas for each different possible production, choose applicable technologies and finally, define the necessary infrastructures (roads, railways,
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emphasis on the high level of literacy (considering it as an advantage) there being no appreciable differences between the urban population and the rural one, a fact considerably noticeable in other regions of the world. In our opinion this is a great element we can count with for the fast transformation of national agricultural sector. As it was stated at the beginning of this book, there are three elements which define the agricultural potentials of a region. They were given to us by Mother Nature. Our challenge is to take care of using them in the best possible ways, not forgetting to preserve it. The land is something our grandfathers 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 oil shortage is a minor issue compared to the potable water crisis humanity is facing. While the first one will certainly be solved with alternative energy sources, the water stock is not renewable nor even replaceable. The challenge is not only to take care of the water availability but also of its quality. For this reason, all measures focused on the protection of natural and artificial water courses and reserves must be maximized. A very important comparative advantage for agricultural development in Armenia is the possibility to count on with enough water resources for the development of agriculture as 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, a rational water manage strategy must be planned so as to capture seasonal excess water and administer its use on the field, based on a new productive setting related to a master general plan independently from the existing structures. Furthermore, taking into account agriculture location according to countrys natural topography, is performed manly in the flat areas and water resources locations are in
the higher areas- there are not greater energy requirements for pressurization of modern irrigation systems, natural manometric heights may be used. In some cases the same water used for irrigation may generate electricity, increasing the rural sector supply. The construction of several dams strategically located, the reconstruction and construction of adequate main conduction systems that would reduce transport losses, the construction of intermediate reservoirs that would balance water offer and finally the use of pressurized watering equipment, sprinkling, micro-sprinkling and drip irrigation shall enable the use of the water resource in a more rational and efficient manner. With the traditional gravity irrigation methods it is impossible to reach efficiency levels over 35%, while not less than 80% efficiency can be expected with mechanized sprinkling and 90% with drip irrigation, i.e. the double or more can be watered with the same amount of water without taking into account the considerable improvement in quality and homogeneity that can be reached. Another issue of vital importance is the preservation of the water available, protecting water courses and reservoirs from any type of contamination. Water Management Water Associations, which deal with the management of their supply, are an important tool to reach this goal, but their ruling policies must be standardized and final users must be made conscious of the importance of paying for the irrigation royalties in due time and form, so as to keep the system running adequately. The development of conduction and irrigation infrastructures and their preservation should be rewarded with the corresponding 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.
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Armenia: Main Crops by Marz
Shirak
Lori
Tavush
Lori Cereals (wheat, barley) Potato Fruit (apples, pear, plums) Vegetables (tomato, beans, cucumber)
Aragatsotn
Kotayk Yerevan
Shirak Cereals (wheat, barley) Potato Vegetables (cabbage, beans) Fodder
Armavir Ararat
Gegharkunik
Vayots Dzor
Syunik
Tavush Grapes Tobacco Corn Vegetables (tomato, cucumber, onion) Fruit (peach, apple, pomegranate) Gegharkunik Cereals (wheat, barley) Potato Vegetables (cabbage, beans)
Aragatsotn Sub-mountainous Grapes Fruit (apricot, peach, apple) Vegetables (tomato, cucumber, onion) Cereals (wheat, barley) Mountainous Cereals (barley) Fodder
Syunik (Sub-mountainous) Fruit Grapes Vegetables (tomato, cucumber) (Mountainous) Cereals (wheat, barley) Potato Fruit (apple, plum) Vegetables (cabbage, beans)
Armavir Truck crops (watermelon, pumpkin) Grapes Vegetables (tomato, cucumber, onion) Fruit (apricot, peach, mulberry) Ararat Truck crops (watermelon, pumpkin) Grapes Vegetables (tomato, cucumber, onion) Fruit (apricot, peach, mulberry)
Vayots Dzor Grapes Fruit (peach, apple) Vegetables (tomato, cucumber)
Graphic by United Nations World Food Programme Armenia. Vulnarability Analysis and Mapping (VAM) Unit: February 2003. Data Source: WFP Armenia. The boundaries and names shown on the map do not imply official endorsement or acceptance by the United Nations
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Adoption of new technologies

Which ones? Germoplasms: Vegetal Genetic are suitable for the new world production reality especially in relation to grains, particularly corn, wheat and barley. Cycles (maturity) should be adjusted to each zonal requirement considering the specifics phenologies of each germoplasms. Early maturity corn and late maturity apricots are two elements that can improve productivity and harvest safety. Improve drastically seed quality. Variety purity and appropriate growing features favor timely crops and enable management homogeneity, resulting in lower costs and higher yields. A national law on seeds should be modified to rule the activity and control seed producers activity. Animal Genetic: for cattle rasing, it is also necessary to develop a new milk and beef genetic incorporating specific performance breeds and avoiding the double purpose scheme. The introduction of semen and mainly high quality embryos will produce in situ generations of greater quality and productivity animals. Sanitary Policy: the design of an internal and international sanitary policy strict scheme is top priority so as to protect crops and cattle. Irrigation: To add pressurized irrigation that would provide a significant increase in the efficiency of water use, which would increase the total irrigation area and improve crop performance by increasing homogeneity and the opportunity of irrigation. In addition, gravity irrigation processes accelerate salinization processes, evident in areas like the Ararat valley, which endanger future soil production. Soil Conservation: To adopt conservationist practices in the agricultural
labor scheme, considering minimum farming as a previous step to direct farming. It is essential to limit weather and water erosion which compromise the soil resource in the near future. To maintain land covered permanently, to avoid bare soils, to rotate different crops regarding a rational sequence should be clear guidelines to transmit to the productive sector. Direct farming technology will in addition save irrigation water due to reduction in evaporation processes of bare soils. Pest Controls: To set insect controls with new generation products, banning from the market particularly those organochlorinated and organo-phosphorated products, highly aggressive to the environment, soil and water pollutants as well as dangerous for populations health. Pest integrated management and biological control are two tools requiring to apply only training and discipline. Machinery: To adjust the number of machines, aiming at new technology equipments, much more versatile, precise and less fossil fuel consuming. The existing current equipment in the country is obsolete, being highly less efficient (five to ten times) than a modern one. To renew them is a high priority for a sustainable production
Improvement of the legal framework

Protecting Legislation Legislation should be established to protect the technologies to be incorporated. Leading countries will not sell their technologies to Armenia if a clear legislation protecting their rights as creators/owners of such technologies is not in force. The lack of up-graded technologies generates a productive gap between the various countries and threatens future competitiveness.
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Market Standarization It is important to set marketing standards for all productions clearly setting the issues to discount or penalize in each case. This gives an incentive to producers to improve their production practices in search of better prices and higher quality. Referencial Markets The publication of a daily referent market will help producers, consumers as well as the financial system to have a real knowledge of the local production value and to make decisions with a broader knowledge of their production marketing.
all the financial effort should be directed to areas willing to invest in technology so as to increase production, making it safer and foreseeable, generating financial services repayment capacity. Only those farmers adopting the national strategic agricultural master plan should receive the benefits coming from the financial system and the tax incentives. In addition adequate tax incentives for production will be a tool to stimulate change and lead the agricultural producers towards banks becoming part of the financial circuit. Vehicles: Tools such as future markets or warrants will help the agriculture community to obtain better profits organizing crops sales. Fruitfull Armenia is absolutely convinced Armenia can easily double its production (reaching even to two and a half times) should an integral production plan be applied generating a highly significant impact on national economy.
Financial strategy
The Driver: Financial resources are the true driver for technology investment. They should be directed mainly to finance the master plan and its atomization must be avoided.
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.
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Marz 1
Aragasotn Marz
the marzes
Marz 1 - Aragatsotn Marz
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Marz 1
Aragatsotn Marz
First records of the territory of Aragatsotn Marz reach back to the ancient and Middle Ages. The area was part of Aragatsotn District, Ayraratyan Province, Mets Hayk. Under the Arshakunis the area was the property of the royal court, later on it passed to the Smbatuni Ministers. During the Arab Rule this marz area passed to the Bagratunis and was annexed with the Ani-Shirak Realm, owned by the Pahlavuni Earls then. In this marz we can find the memorial dedicated to the victorious battle of Bash-Aparan, fought against Turks in 1918. We do also find at Oshakan Village the place where lies the tomb of Mesrop Mashtots the inventor and first teacher of Armenian Alphabet. Aragatsotn Marz is located in the foothills and uplands (Aparan and Aragats Districts) of Ararat Plain, on the Southern and South-Eastern slopes of Aragats Mountain massive (1.100-3.800m above the sea level). In the East Aragatsotn Marz borders with Kotayk Marz, in the North-West with Shirak Marz, in the South-West with Armavir Marz and partly, Yerevan area, and in the North with Lori Marz. From lowlands to the summit of Mount Aragats, the gamut of climatic conditions embraces different zones from arid continental to mountain-tundra. In lowlands average annual temperature is +140C, with 20C on the peak of Mount Aragats; in July it varies from +250C to +80C, and in January from -60C to -350C. Average annual precipitations are 300-800mm. The period of snow cover lasts for 60 days (Ashtarak, Aragats and Aparan Districts). The great river is the Kasakh with its tributary, the Amberd, whose flow is regulated 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 include animal husbandry milk and meat cattle-breeding - sheepbreeding; among the plant-growing branches the following are practiced: fruit-growing, cultivation of field crops wheat, barley, cabbage, potato.
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Table 1.1. Key indicators of agriculture in Aragatsotn Marz (2007)

MARZ INFORMATION MEASUREMENT UNIT ARAGATSOTN MARZ TOTAL 165.343 49.647 60.176 33.263 90.424 4.307 7.047 7.453 3.340 1.909 694 4.798 45.806 ASHTARAK DISTRICT TALIN DISTRICT APARAN DISTRICT ARAGATS DISTRICT
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
79.882 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 12.008 19.755 10.610 43.432 2.158 3.450 2.629 949 324 487 1.352 23.184
27.625 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
Table 1.2. Grape varieties in Aragatsotn Marz

VARIETY YIELD QUINTAL/ HECTARE 250-300 PERIOD OF HARVEST USAGE SUGAR CONTENT % 25-26 NOTES
Voskehat
October 10-15
In fresh condition light and sweet wines, raw stuff for cognac and champagne Sweet wines
Ashtarak and Talin Districts
Tchilar
120-150
October 20-30
22-24
Ashtarak and Talin Districts Ashtarak and Talin Districts Ashtarak and Talin Districts Ashtarak and Talin Districts Ashtarak and Talin Districts
Rkatsiteli
220-250
October 10-15
Strong and Sherry wines Strong and light table wines Red sweet wines Strong and light table wines
24-25
Pinot Noir
60-100
September 5-10
22-24
Hadis Spitak Muscat (White Muscat)
260-280 80-100
September 25-30 October 15-25
23-26 25-28
177
Table 1.3. Table grape varieties in Aragatsotn Marz

Shahumyan
September 20-25
In fresh condition
Ashtarak and Talin Districts Ashtarak and Talin Districts Ashtarak and Talin Districts Ashtarak and Talin Districts Ashtarak and Talin Districts Ashtarak and Talin Districts
Van
250-300
September 25October 10 August 20-25
In fresh condition
20-21
Black Sateni
130-150
For juices, in fresh condition For juices, in fresh condition, raisins For juices, in fresh condition For juices, in fresh condition
19-20
Yerevani Deghin (Yerevan Yellow) Tavrizeni Vardaguyn Yerevani (Yerevan Pink)
200-250
September 25-30
22-26
190-220 200-250
September 25-30 September 30October 10
23-24 22-24
178
Table 1.4. Expenses on cultivation of vegetable crops in Aragatsotn Marz Tomato, pepper, eggplant, cucumber, onion
WORK
MEASUREMENT UNIT Ha Ha Ha Ha Ha Man / day Item M N P K

3
PLANNED QUANTITY 1 1 1 1 1 40 16.000 15.000 120 100 90 2 2 25 20 30 6 1 -
PRICE PER UNIT AMD 30.000 28.000 20.000 15.000 40.000 3.000 7 7 120 80 180 24.000 16.000 3.000 3.000 3.000 10.000 16.000
TOTAL AMD 30.000 28.000 20.000 15.000 40.000 120.000 112.000 105.000 14.400 8.000 16.200 48.000 32.000 75.000 60.000 90.000 60.000 16.000 10.000 899.600
NOTES
Winter tillage Plowing Disking Smoothing Laying beds Transplanting Plants Irrigation Fertilizing
In autumm In spring
Handwork
14-16 times
Kg Kg Kg L L L Man / day Man / day Man / day Man / day AMD AMD
Pre-plant tillage True and false oidium, gray rot, blackleg, stolbur Roundup, Zenkor Actara, Bazudin, Karate Handwork Handwork Handwork
Diseases control Chemical weeds Control Pests control Weeding, loosening Hilling Harvest and sorting Transport Land Tax Contingencies Total
179
Table 1.5. Cultivation of vegetable crops in Aragatsotn Marz

SPECIES VARIETY YIELD QUINTAL/ HECTARE 750-800 750-800 PERIOD OF RIPENING AFTER TRANSPLANTING DAYS 65-70 70-75 USAGE NOTES
Tomato Tomato
Nver Lia
In fresh and canned condition In fresh and canned condition In fresh and canned condition In fresh and canned condition In fresh and canned condition In fresh and canned condition In fresh and canned condition In fresh and canned condition In fresh and canned condition In fresh and canned condition In fresh and canned condition In fresh and canned condition In fresh and canned condition In fresh and canned condition In fresh and canned condition In fresh and canned condition In fresh and canned condition In fresh and canned condition In fresh and canned condition
Midseason Midseason
Tomato Tomato Tomato Tomato
Gyumri Anahit-351 Yeraz Syunik
650-700 700-750 780-800 800-820
60-65 55-60 65-70 60-65
Early Early Midseason Midseasonearly Lateripening Early Early Midseason Early
Tomato Pepper Pepper Pepper Pepper
Zurab Hayk Nush-55 78/1 Zmrukht
850-900 350-400 400-450 370-410 360-400
75-80 65-70 65-70 70-75 65-70
Eggplant Eggplant Eggplant Eggplant Eggplant Cucumber Cucumber Onion
Armavir Yerevani Manushakaguyn (Yerevan Violet) Haykakan Vaghahas (Armenian Early) Karine Sev Margarit (Black Pearl) Gayane Mane Khatunarkh
600-650 640-660 510-550 650-700 600-610 220-250 230-240 280-300
65-70 55-60 55-60 50-55 65-70 50-55 45-50 145-150
Midseason Early Early Superearly Midseason Midseason Midseasonearly Midseason
180
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
PLANNED QUANTITY 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
Ha Ha Ha Ha M
3
1 1 1 3.000 250 300 90 1 1 1 -
4-5 times
Kg Kg Kg L Ha Man/day AMD AMD
Pre-plant tillage
181
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) VARIETY Armyanka-60 Nairi-68 Vagharshapat Weston Stephens Nutans Shirak Sisian Local Abovyan-60 Abovyan-60 YIELD QUINTAL/HECTARE 40-42 40-45 40-42 45-48 48-50 35-38 38-40 20-22 38-40 750-800 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 USAGE Baking Baking Baking Baking Baking Forage Raw stuff for Beer Confectionery Confectionery Baking Forage Silo stuff in the milk-and-wax ripening phase Spring Spring Spring NOTES
Potato Potato Potato Potato Potato Cabbage Cabbage Cabbage
Impala Ausonia Cosmos Arinda Sandra Stakhanovskaya Slava-1305 Leninakani Ushahas (Leninakan Late-Ripening) Garantia 108-F
380-400 400-420 350-380 300-320 300-380 200-220 180-200 230-240
September 20-25 September 20-25 September 20-25 October 10-15 September 15-20 September 1-10 September 10-15 September 20-25
In fresh condition In fresh condition In fresh condition In fresh condition In fresh condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition
Cauliflower Hybrid
150-180 150-180
September 20-25 September 25-30
182
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 m
3
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
Man/day Man/day Man/day AMD AMD -
183
Table 1.9. Fruit crops in Aragatsotn Marz

SPECIES VARIETY YIELD QUINTAL/ HECTARE 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 USAGE NOTES
Apricot
Yerevan Sateni Khosroveni
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
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 and processed 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 In fresh and processed condition
Ashtarak and Talin Districts Ashtarak and Talin Districts Ashtarak and Talin Districts Ashtarak and Talin Districts Ashtarak and Talin Districts Ashtarak and Talin Districts Ashtarak and Talin Districts Ashtarak and Talin Districts Ashtarak and Talin Districts Ashtarak and Talin Districts Ashtarak and Talin Districts Ashtarak and Talin Districts Ashtarak and Talin Districts Ashtarak and Talin Districts Ashtarak and Talin Districts Ashtarak and Talin Districts Ashtarak and Talin Districts Ashtarak and Talin Districts Ashtarak and Talin Districts Ashtarak and Talin Districts Aparan District Ashtarak and Talin Districts Ashtarak and Talin Districts Ashtarak and Talin Districts Ashtarak and Talin Districts Ashtarak and Talin Districts Ashtarak and Talin Districts Ashtarak and Talin Districts Ashtarak District
Peach
Narinj Early Narinj Mid-Season Narinj Late-Ripening Limonniy Lodz Oshakan
Prune
Anna Shpet Hungarian Italian
Plum
Sev Shlor (Black Plum) Deghin Shlor (Yellow Plum) Sev Shlor 1 (Black Plum 1)
Sweet cherry
Napoleon Black Victory
Cherry
Ashtarak Sisian Zhukovskaya
Apple
Bellefleur Kitayka Golden Delicious Red Delicious Aldaret
Pear
Williams Forest Antarayin Geghetskuhi (Forest Beauty) Dzmernuk Bere Bosque
Nut
Teghakan (Local)
184
Table 1.10. Characteristics and productivity of livestock in Aragatsotn Marz

NAME BREED
Milk l
PRODUCTIVITY
YIELD AFTER WEIGHT PRODUCTIVITY SLAUGHTERING, INCREMENT, (EGGS), % g % WOOL, KG HONEY, PRODUCTIVITY, Kg %
EXPENSES ADEQUACY PERIOD PER (YEARS) UNIT OF PRODUCTION, (AMD) 65 60 55 600 650 600 35/320 600 5 7 7 1.5 1.5 1.3 6 0.8
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)
Caucasian Brown Shwitz Sevabghet Caucasian Brown Shwitz Sevabghet Balbas Balbas
1.800-2.000
42 41 42 42 41 42 40 40
700 800 900 180
3 -
95 97 97 120 -
2.000-2.200 2.800-3.200 90 -
Ukrainian White Landras Ukrainian White Landras Local Cross-breed Caucasian Brown Yerevan Silver
120 350 -
65 66 66 67 41 42 -
500 550 150 200 -
75 78
9 -
12 10 125 140 -
850 720 85 67 1.300 28 24
4 4.5 0.7 0.6 5 4 1.5 1.5
Marz 2
Ararat Marz
the marzes
Marz 2 - Aratat Marz
187
Marz 2
Ararat Marz
The Ararat Marz comprises 3 regions: Artashat, Masis, Ararat. Artashat, the capital of Ancient Armenia in the 2nd century B. C., was at that time located in Mets Hayk, at where the old courses of the Yeraskh and the Metsamor rivers meet, on Khor Virap hills. Movses Khorenatsi wrote: King Artashes went to the place where the two rivers join; he took a fancy of the locality and caused a town to be built there, which he named after himself Artashat. Ararat Marz is situated in the South-West of Ararat Plain and includes part of South-Western slopes of the Geghama Mountains. Several short offshoots stretch in the middle basins of the Vedi and the Azat joined with the Geghama Range, such as the Yeraskh Range which stretches along the left bank of the Azat to reach Ararat Plain. Soils of agricultural significance are situated 900-1.500m above the sea level. Highlands are mountain-steppe and sub-alpine zones while in lowlands semi-desert zone prevails with arid continental climate. Prevalence of irrigated lands and ground waters to a certain degree mitigate arid climate, though. In the mountain-steppe zone the climate is arid, continental, with cold winters. Average annual temperature is +6 -100C, minimum temperature being -320C, maximum +410C; in January -60C in lowlands and -80C in uplands while in July +260C and +200C, respectively. The annual precipitations are 250-500mm. Prevailing soils are brown semi-desert, Brown Mountain, brown meadow, irrigated and alkali semidesert, 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 cattlebreeding, sheep-breeding, poultry-breeding and swinebreeding are also developed. The water of the Araks and the Azat is used for irrigation. Currently all lands of agricultural significance are irrigated through artificial reservoirs (Azat Reservoir) and canals Garni, Artashat Canals, and the Araks.
188
Table 2.1. Key indicators of agriculture in Ararat Marz (2007)
MARZ INFORMATION Population Number of farms Cattle Including cows Small livestock Goats Swine Hives Orchards Vineyards Young orchards Field crops Pastures
MEASUREMENT UNIT Man Item Head Head Head Head Head Item Ha Ha Ha Ha Ha
ARARAT MARZ TOTAL 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
ARTASHAT DISTRICT 116.697 28.634 10.919 5.819 23.450 557 2.718 886 1.853 1.695 330 498 1.350
ARARAT DISTRICT 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
MASIS DISTRICT 82.415 21.787 10.358 5.379 8.009 337 2.167 184 202 190 17 659 1.003
189
Table 2.2. Expenses on vineyard cultivation in Ararat 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 -
PRICE PER UNIT AMD 3.000 5.000 3.000 3.000 15.000 100 80 120 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 25.000 40.000 24.000 132.000 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
190
Table 2.3. Grape varieties in Ararat Marz
VARIETY
YIELD QUINTAL/ HECTARE 200-250
PERIOD OF HARVEST
USAGE
SUGAR CONTENT % 20-22
NOTES
Kakheti
October 25-30
Quality wines and grape juice 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 and sweet wines Table, strong, liquor and sweet wines Table and sweet wines Light and strong wines Table and sweet wines, in fresh condition Table and sweet wines
Mskhali
200-220
October 15-26
22-24
Sev Areni (Black Areni) Hadis Tokun Kangun
200-220
October 1-5
23-25
150-160 150-160 150-300
September 25-30 September 20-25 September 10-30
24-26 24-26 22-23 All Districts of the Marz All Districts of the Marz All Districts of the Marz All Distrits of the Marz All Districts of the Marz
Karmrahyut Victory
170-220 200-250
September 20-30 September 20-October 10 October 10-20
24-25 22-23
Nrneni
250-350
22-26
Saperavi
80-100
September 25-30
23-25
Voskehat
250-300
October 20-25
25-27
All Districts of the Marz All Districts of the Marz All Districts of the Marz
Garan Dmak
160-200
October 10-15
22-25
Meghrabuyr
300-350
October 5-10
23-26
Nerkarat
180-200
September 25-30
24-26
All Districts of the Marz
191
Table 2.4 . Table grape varieties in Ararat Marz
VARIETY
PERIOD OF HARVEST
USAGE
NOTES
Spitak Arakseni (White Arakseni) Yerevani Deghin (Yerevan Yellow) Yerevan Muscat
October 20-25
In fresh condition, grape juice In fresh condition, raisins In fresh condition
In the whole Marz All Districts of the Marz All Districts of the Marz In the whole Marz All Districts of the Marz Masis and Artashat Districts In the whole Marz All Districts of the Marz All Districts of the Marz All Districts of the Marz Masis and Artashat Districts All Districts of the Marz All Districts of the Marz In the whole Marz All Districts of the Marz
220-250
September 25-October 10 August 25-30
23-25
180-230
22-23
Shahumyan
250-300
September 20-25
In fresh condition
22-25
Arevshat
170-200
September 20-25
In fresh condition
21`-23
Van
250-300
September 30-October 10
In fresh condition
20-21
Tokun
250-280
September 25-30
In fresh condition, raisins In fresh condition
25-27
Ayvazyani Berkatu Ayvazyani Khoshoraptugh Ayvazyani Pahuni Erebuni
300-350
September 20-25
20-21
300-350
September 25-30
In fresh condition
19-20
300-350
September 25-30
In fresh condition
19-20
250-280
August 25-30
In fresh condition
20-21
Vardaguyn Yerevani Karmir Itsaptuk
200-250
September 25-October 10 September 25-30
In fresh condition, raisins In fresh condition
23-25
200-250
21-23
Masis
200-250
September 25-30
In fresh condition
20-23
Hayrenik
250-300
September 25-30
In fresh condition
19-20
192
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
VARIETY Armyanka-60 Nairi-68 Vagharshapat Weston Stephens Nutans Shirak Zangezur Abovyan-60 Abovyan-60
YIELD QUINTAL/HECTARE 40-45 40-46 45-48 48-52 50-55 38-40 35-40 38-43 35-40 750-800
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
USAGE Baking Baking Baking Baking Baking Forage Raw stuff for beer Raw stuff for beer Confectionery, baking Forage
NOTES
Silo stuff in the milk-and-wax ripening phase Early Mid-season-early Early Mid-season Mid-season Early Early
Potato Potato Potato Potato Potato Cauliflower Hybrid
Impala Ausonia Cosmos Arinda Sandra Garantia 108-F
350-380 300-320 300-350 280-300 300-350 150-180 130-150
June 1-10 June 1-5 June 1-10 June 10-15 June 15-20 June 20-25 June 10-15
In fresh condition In fresh condition In fresh condition In fresh condition In fresh condition In fresh condition In fresh condition
193
Table 2.6. Expenses on field crops in Ararat Marz (less expenses on seeds) Wheat, barley, corn, potato, cauliflower
MEASUREMENT UNIT
PLANNED QUANTITY 1
PRICE PER UNIT AMD 25.000 12.000 10.000 10.000 7.000 7 120 100 100 22.000 35.000 10.000 18.000 -
TOTAL AMD 25.000 12.000 10.000 10.000 7.000 28.000 24.000 20.000 9.000 33.000 35.000 10.000 18.000 10.000 251.000
NOTES
Ha Ha Ha Ha M3 Kg Kg Kg L Ha Man/day AMD AMD
1 1 1 1 4.000 200 200 90 1.5 1 1 1 -
Mechanical works 4-5 times Preplant tillage
194
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 Kg Kg Kg L L Man/day Man/day Man/day Man/day AMD AMD
PLANNED QUANTITY1 1 1 1 1 1 30 0.5 15.000 120 180 90 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 7 120 90 180 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 14.400 16.200 16.200 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 Preplant tillage True and false oidium Actara, Bazudin, Karate Handwork Handwork Handwork
195
Table 2.8. Cultivation of melons and gourds in Ararat Marz
SPECIES
VARIETY
YIELD QUINTAL/ HECTARE 400-420 390-400 420-480 480-500 250-270 260-270 220-250
PERIOD OF RIPENING AFTER SOWING DAYS 70-80 75-85 70-75 65-70 80-85 75-80 110-115
USAGE
NOTES
Water-melon Water-melon Water-melon Water-melon Melon Melon Melon
Arevik Jubilee/Yubileyniy Sweet Princess Dixie Queen Anush Arpi French Charantais
In fresh condition In fresh condition In fresh condition In fresh condition In fresh condition In fresh condition In fresh and dried condition In fresh and dried condition
Mid-season Mid-season Mid-season -early Mid-season -early Early Early Mid-season
Melon
American Crenshaw
230-250
100-110
Late-ripening
196
Table 2.9. Expenses on cultivation of vegetable crops in Ararat Marz Tomato, pepper, eggplant, cucumber, onion
WORK Winter tillage Plowing Disking Smoothing Laying beds Transplanting Price of Plants Irrigation Fertilizing N P K Diseases control MEASUREMENT UNIT Ha Ha Ha Ha Ha Man/day Item M3 Kg Kg Kg L PLANNED QUANTITY1 1 1 1 1 1 50 5.500 22.800 120 180 90 4 PRICE PER UNIT AMD 40.000 35.000 25.000 15.000 60.000 4.000 5 7 120 90 180 18.000 TOTAL AMD 40.000 35.000 25.000 15.000 60.000 200.000 27.500 159.600 14.400 16.200 16.200 72.000 18-20 times Preplant tillage True and false oidium, gray rot, blackleg, stolbur Roundup, Zenkor Actara, Bazudin, Karate Handwork Handwork Handwork Handwork NOTES In autumn In spring
Chemical weeds control Pests control Weeds control Hilling Harvest and sorting Transport Land tax Contingencies Total
L L Man/day Man/day Man/day Man/day AMD AMD
2 3 40 45 40 6 1 -
24.000 16.000 4.000 4.000 3.500 15.000 16.000
48.000 48.000 160.000 180.000 140.000 90.000 16.000 50.000 1.412.900
197
Table 2.10. Cultivation of vegetable crops in Ararat Marz
SPECIES
VARIETY
YIELD QUINTAL/ HECTARE 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
PERIOD OF RIPENING AFTER 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
USAGE
NOTES
1 Tomato Tomato Tomato Tomato Tomato Tomato Tomato Tomato Pepper Pepper Pepper EggPlant EggPlant
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
5 In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition
6 Mid-season Mid-season Early Early Early Mid-season Mid-season-early Late-ripening Early Early Mid-season Mid-season Early
EggPlant Cucumber Cucumber Onion
550-560 270-280 240-250 280-300
50-60 50-55 45-50 140-150
Early Mid-season Mid-season-early Mid-season
198
Table 2.11. Cultivation of fruit varieties in Ararat Marz
SPECIES
VARIETY
PERIOD OF HARVEST
YIELD QUINTAL/ HECTARE 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
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 PER SAPLING 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
Apricot Apricot Apricot Peach Peach Peach Prune Prune Prune Plum Plum Sweet cherry Sweet cherry Sweet cherry Cherry Cherry Apple Pear Pear Quince Nut
Yerevan Sateni Khosroveni Narinj Zafran Lodz Shertavor /layered Albukhar Renklot Altons Italian Sev Shlor-1 (Black Plum-1) Gyogja Dragans Yellow Napoleon Black Victory Ashtarak Zhukovskaya Golden Delicious Malacha Antarayin Geghetskuhi (Forest Beauty) Ani Teghakan (Local)
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 September 25-October 1
199
Table 2.12. Characteristics and productivity of livestock in Ararat Marz
NAME
BREED
Milk l
PRODUCTIVITY
EXPENSES ADEQUACY PER PERIOD UNIT OF (YEARS) PRODUCTION, (AMD) 65 60 650 670 40/300 650 7 7 1.5 1.3 6 0.6
Milk cow Milk cow Cattle meat Cattle meat Dam (sheep) Small livestock meat Sow Sow Sow Pork Pork Pork Dam (goat) Hive Layer (hen) Layer (hen)
Shwitz Sevabghet Shwitz Sevabghet Mazekh Mazekh
2.300-2.500 2.800-3.200 100 -
41 42 41 42 41 42
800 900 210
1.8 -
92 95 120 -
Ukrainian White Landras Armenian Ukrainian White Landras Armenian Local Caucasian Brown Yerevan Silver
120 -
65 66 68 66 67 69 41 -
500 550 650 150 -
12 10 10 125 -
650 780 650 85 1.600 24 20
4 4.5 4 0.7 0.6 0.5 5 1.5 1.5
75 78
Marz 3
Armavir Marz
the marzes
Marz 3 - Armavir Marz
203
Marz 3
Armavir Marz
Armavir Marz comprises Armavir, Baghramyan and Vagharshapat Districts. The two capitals of one of the oldest Armenian state formations the Yervanduni Realm - Armavir and Yervandashat are situated in Armavir Marz. Before the VVI centuries Armavir Marz was included in Ayraratyan District ruled by the Arshakunis, later on it passed under the 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 Hrazdan and the basin of the Metsamor. Overall, the relief of the Marz is smooth. Average altitude is 870m above the sea level. Climate is arid continental, with cold and short winters, and
Table 3.1. Key indicators of agriculture in Armavir Marz (2007)
MARZ INFORMATION MEASUREMENT UNIT ARMAVIR MARZ TOTAL 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 DISTRICT VAGHARSHAPAT DISTRICT BAGHRAMYAN DISTRICT
hot summers. Average annual temperature is +120C, minimum -300C, maximum +400C; annual precipitations are 200-300mm. Through Armavir Marz flows the Kasakh, the Metsamor and the Araks, the latter being the state frontier with Turkey. In the East is situated Akna Lake. Brown meadow soils, alkali, brown salt, and waterlogged soils are common as well as semi-desert soils. Armavir Marz is developed in terms of almost all branches of agriculture. Main branches of plant-growing: viticulture, fruit-growing, melons and gourds. Animal husbandry is developed as well, namely cattlebreeding, sheep-breeding, swine-breeding, poultry-breeding, bee-keeping.
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
126.537 36.283 18.447 8.203 23.689 120 5.676 2.558 2.359 2.004 789 10 599
158.382 23.075 13.472 7.771 12.194 126 3.932 1.305 792 1.715 161 369 766
22.469 5.985 6.486 3.482 12.911 352 1.679 27 674 341 421 877 14.014
204
Table 3.2. Grape varieties in Armavir Marz
VARIETY
PERIOD OF HARVEST
USAGE
NOTES
Kakheti
October 25-30
Quality wines and grape juice 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 and sweet wines Table, strong, liquor and sweet wines Table and sweet wines Light and strong wines Table and sweet wines, in fresh condition Table and sweet wines
Mskhali
200-220
October 15-26
22-24
Sev Areni (Black Areni) Hadis Tokun Kangun
200-220
October 1-5
23-25
150-160 150-160 150-300
24-26 24-26 22-23 All Districts of the Marz All Districts of the Marz All Districts of the Marz All Distrits of the Marz All Districts of the Marz
Karmrahyut Victory
170-220 200-250
September 20-30 September 20-October 10 October 10-20
24-25 22-23
Nrneni
250-350
22-26
Saperavi
80-100
September 25-30
23-25
Voskehat
250-300
October 20-25
25-27
Garan Dmak
160-200
October 10-15
22-25
Meghrabuyr
300-350
October 5-10
23-26
Nerkarat
180-200
September 25-30
24-26
205
Table 3.3. Table grape varieties in Armavir Marz
VARIETY
PERIOD OF HARVEST
USAGE
NOTES
Spitak Arakseni (White Arakseni) Yerevani Deghin (Yerevan Yellow) Yerevan Muscat Shahumyan Arevshat Van
October 20-25
In fresh condition, grape juice In fresh condition, raisins In fresh condition In fresh condition In fresh condition In fresh condition
In the whole Marz
220-250
September 25-October 10 August 25-30 September 20-25 September 20-25 September 30-October 10 September 25-30
23-25
180-230 250-300 170-200 250-300
22-23 22-25 21-23 20-21
All Districts of the Marz In the whole Marz All Districts of the Marz All Districts of the Marz
Tokun
250-280
In fresh condition, raisins In fresh condition In fresh condition
25-27
In the whole Marz
Ayvazyani Berkatu Ayvazyani Khoshoraptugh Ayvazyani Pahuni Erebuni Vardaguyn Yerevani Karmir Itsaptuk Masis Hayrenik
300-350 300-350
20-21 19-20
All Districts of the Marz All Districts of the Marz
300-350 250-280 200-250
September 25-30 August 25-30 September 25-October 10 September 25-30 September 25-30 September 25-30
In fresh condition In fresh condition In fresh condition, raisins In fresh condition In fresh condition In fresh condition
19-20 20-21 23-25
200-250 200-250 250-300
21-23 20-23 19-20
All Districts of the Marz In the whole Marz All Districts of the Marz
206
Table 3.4. Cultivation of vegetable crops in Armavir Marz
SPECIES
VARIETY
YIELD QUINTAL/ HECTARE 3 750-800
PERIOD OF RIPENING AFTER TRANSPLANTING DAYS 4 60-65
USAGE
NOTES
1 Tomato
2 Nver
5 In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition
6 Mid-season
Tomato
Lia
750-800
65-70
Mid-season
Tomato
Ranni-Nush
650-670
55-60
Early
Tomato
Gyumri
620-650
57-60
Early
Tomato
Anahit-351
780-890
55-60
Early
Tomato
Yeraz
780-800
60-65
Mid-season
Tomato
Syunik
750-760
58-62
Mid-season-early
Tomato
Zurab
850-900
70-750
Late-ripening
Pepper
Hayk
450-500
65-70
Early
Pepper
Nush-55
450-500
65-70
Early
Pepper
Nush-78
300-350
70-75
Mid-season
EggPlant
Armavir
650-700
65-70
Mid-season
EggPlant
Yerevani Manushakaguyn (Yerevan Violet) Haykakan Vaghahas (Armenian Early) Gayane
650-680
50-60
Early
EggPlant
550-560
50-60
Early
Cucumber
270-280
50-55
Mid-season
Cucumber
Mane
240-250
45-50
Mid-season-early
Onion
Khatunarkh
280-300
140-150
Mid-season
207
Table 3.5. Cultivation of melons and gourds in Armavir Marz
SPECIES
VARIETY
PERIOD OF RIPENING AFTER SOWING DAYS 70-80
USAGE
NOTES
Water-melon
Arevik
In fresh condition In fresh condition In fresh condition In fresh condition In fresh condition In fresh condition In fresh and dried condition In fresh and dried condition
Mid-season
Water-melon
Jubilee/Yubileyniy
390-400
75-85
Mid-season
Water-melon
Sweet Princess
420-480
70-75
Mid-seasonearly Mid-seasonearly Early
Water-melon
Dixie Queen
480-500
65-70
Melon
Anush
250-270
80-85
Melon
Arpi
260-270
75-80
Early
Melon
French Charantais
220-250
110-115
Mid-season
Melon
American Crenshaw
230-250
100-110
Late-ripening
208
Table 3.6. Expenses on cultivation of vegetable crops in Armavir Marz Tomato, pepper, EggPlant, cucumber, onion
WORK Winter tillage Plowing Disking Smoothing Laying beds Transplanting Plants Irrigation Fertilizing N P K Diseases control
MEASUREMENT UNIT Ha Ha Ha Ha Ha Man/day Item M3 Kg Kg Kg L
PLANNED QUANTITY1 1 1 1 1 1 30 5.500 22.800 120 180 90 4
PRICE PER UNIT AMD 30.000 25.000 20.000 10.000 60.000 4.000 5 7 120 90 180 18.000
TOTAL AMD 30.000 25.000 20.000 10.000 60.000 120.000 27.500 159.600 14.400 16.200 16.200 72.000
Handwork
18-20 times Preplant tillage True and false oidium, gray rot, blackleg, stolbur Roundup, Zenkor Actara, Bazudin, Karate Handwork Handwork Handwork
Chemical weeds control Pests control Weeds control Hilling Harvest and sorting Transport Land tax Contingencies Total
L L Man/day Man/day Man/day Man/day AMD AMD
2 3 40 45 40 6 1
24.000 16.000 4.000 4.000 3.500 15.000 16.000
48.000 48.000 160.000 180.000 140.000 90.000 16.000 50.000 1.275.400
209
Table 3.7. Field crops in Armavir Marz Wheat, barley, corn, potato, cabbage, cauliflower
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
NOTES
Silo stuff in the milk-and-wax ripening phase Early Mid-season-early Early Mid-season Mid-season Early Early
Potato Potato Potato Potato Potato Cauliflower Hybrid
Impala Ausonia Cosmos Arinda Sandra Garantia 108-F
350-380 300-320 300-350 280-300 300-350 150-180 130-150
June 1-10 June 1-5 June 1-10 June 10-15 June 15-20 June 20-25 June 10-15
In fresh condition In fresh condition In fresh condition In fresh condition In fresh condition In fresh condition In fresh condition
210
Table 3.8. Expenses on vineyard cultivation in Armavir Marz
MEASUREMENT UNIT Man/day Man/day Man/day Man/day Ha Kg Kg Kg Man/day Man/day Man/day Man/day L L M
3
PRICE PER UNIT AMD 3.000 5.000 3.000 3.000 15.000 100 80 120 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 25.000 40.000 24.000 132.000 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
Man/day Man/day Man/day AMD AMD -
211
Table 3.9. Expenses on field crops in Armavir Marz (less expenses on seeds) Wheat, barley, corn, potato, cabbage, cauliflower
MEASUREMENT UNIT
PLANNED QUANTITY 1
PRICE PER UNIT AMD 35.000 20.000 15.000 18.000 15.000 7 120 100 150 22.000 40.000 10.000 18.000 -
TOTAL AMD 35.000 20.000 15.000 18.000 15.000 35.000 30.000 30.000 13.500 33.000 40.000 10.000 18.000
NOTES
Ha Ha Ha Ha M
3
1 1 1 1 5.000 250 300 90 1.5 1 1 1 -
312.500
212
Table 3.10. Cultivation of fruit varieties in Armavir Marz
SPECIES
VARIETY
PERIOD OF HARVEST
YIELD QUINTAL/ HECTARE 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
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 PER SAPLING 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
Apricot Apricot Apricot Peach Peach Peach Prune Prune Prune Plum Plum Sweet cherry Sweet cherry Sweet cherry Cherry Cherry Apple Pear Pear Quince Nut
Yerevan Sateni Khosroveni Narinj Zafran Lodz Shertavor / layered Albukhar Renklot Altons Italian Sev Shlor-1 (Black Plum-1) Gyogja Dragans Yellow Napoleon Black Victory Ashtarak Zhukovskaya Golden Delicious Malacha Antarayin Geghetskuhi (Forest Beauty) Ani Teghakan (Local)
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 September 25-October 1
213
Table 3.11. Expenses per 1 hectare of orchard in Armavir Marz
WORK Pruning of trees Fertilizing (mineral fertilizers) N P K Digging of cups around trees Diseases control Pests control Irrigation Harvest Transport Land tax Contingencies Total
MEASUREMENT UNIT Man/day Kg Kg Kg Man/day L L M

3
PLANNED QUANTITY 10 280 450 180 14 10 13 11.700 25 6 1 -
PRICE PER UNIT AMD 3.500 120 100 150 4000 12.000 15.000 7 4.000 15.000 22.000 -
TOTAL AMD 35.000 33.600 45.000 27.000 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
Man/day Man/day AMD AMD -
214
Table 3.12. Characteristics and productivity of livestock in Armavir Marz
NAME
BREED
Milk l
PRODUCTIVITY
EXPENSES ADEQUACY PERIOD PER (YEARS) UNIT OF PRODUCTION, (AMD) 70 65 600 650 60/380 40/300 650 7 7 1.5 1.3 6 6 0.6
Milk cow Milk cow Cattle meat Cattle meat Dam (sheep) Dam (sheep) Small livestock meat Sow Sow Sow Pork Pork Pork Dam (goat) Hive Layer (hen) Layer (hen) Layer (hen)
Shwitz Sevabghet Shwitz Sevabghet Bozakh Mazekh Mazekh
2.000-2.200 2.800-3.200 45 100 -
41 42 41 42 41 41 42
800 900 210
1.8 1.8 -
90 92 130 120 -
Ukrainian White Landras Armenian Ukrainian White Landras Armenian Local Caucasian Brown Yerevan Silver Lowman Brown
120 -
65 66 68 66 67 69 41 -
500 550 650 150 -
75 78 92
12 10
850 720 650 85 1.200 29 22 20
4 4.5 4 0.7 0.6 0.5 5 1.5 1.5 1.2
9 -
10 125 -
Marz 4
Gegharkunik Marz
the marzes
Marz 4 - Gegharkunik Marz
217
Marz 4
Gegharkunik Marz
Gegharkunik Marz comprises 5 districts: Vardenis, Tchambarak, Sevan, Martuni, Gavar. Gegharkunik Marz is encompassed with high mountain ranges of Areguni, Sevan, Vardenis, Geghama and Pambak. The lowest part is occupied by the basin of Lake Sevan. The climate is mountain-continental. Annual precipitations are 400-500mm, in highlands 800-850mm. There are over 80 rivers in Gegharkunik Marz which are slow and flow into Lake Sevan.
Table 4.1. Key indicators of agriculture in Gegharkunik Marz (2007)
GEGHARKUNIK MARZ - 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
218
Table 4.2. Expenses on field crops in Gegharkunik Marz (less expenses on seeds) Wheat, barley, corn, potato, cabbage
MEASUREMENT UNIT
PLANNED QUANTITY 1
PRICE PER UNIT AMD 20.000 8.000 7.000 8.000 7 100 100 120 25.000 8.000 10.000
TOTAL AMD 20.000 8.000 7.000 8.000 14.000 25.000 30.000 10.800 25.000 8.000 10.000 10.000 175.800
NOTES
Ha Ha Ha Ha M
3
1 1 1 1 2.000 250 300 90 1 1 1 -
3-4 times
Preplant tillage
Marz 4 - Gegharkunik Marz
219
Table 4.3. Cultivation of field crops in Gegharkunik Marz Wheat, barley, corn, potato, cabbage
SPECIES Wheat Wheat Wheat Barley Barley Barley Corn VARIETY Bezostaya-1 Weston Stephens Nutans Shirak Zangezur Abovyan-60 YIELD QUINTAL/HECTARE 40-42 45-48 48-50 35-38 38-40 35-38 750-800 PERIOD OF HARVEST September 1-5 September 10-15 September 10-15 September 10-15 September 15-25 September 20-25 September 15-20 USAGE Baking Baking Baking Forage Raw stuff for beer Raw stuff for beer Forage Spring Spring Spring Silo stuff in the milk-and-wax ripening phase NOTES
Impala Ausonia Cosmos Arinda Sandra Stakhanovskaya Slava-1305 Leninakani Ushahas (Leninakan Late-Ripening)
380-400 400-420 350-380 300-320 300-380 200-220 180-200 230-240
In fresh condition In fresh condition In fresh condition In fresh condition In fresh condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition
Table 4.4. Fruit varieties in Gegharkunik Marz

SPECIES VARIETY PERIOD OF HARVEST YIELD QUINTAL/ HECTARE 250-270 220-240 250-260 150-180 NUMBER OF TREES PER HECTARE 350-380 380-400 300-360 300-320 PRICE PER SAPLING AMD 600 800 400 900
Apple Apple Apple Pear
Bellefleur Kitayka Virgin Pink Winter Banana Heghine
September 20-25 September 25-30 September 25-30 October 20-25
220
Table 4.5. Characteristics and productivity of livestock breed in Gegharkunik Marz
NAME
BREED
Milk l
PRODUCTIVITY
EXPENSES ADEQUACY PERIOD PER (YEARS) UNIT OF PRODUCTION, (AMD) 65 60 55 48 600 630 600 600 35/320 40/300 5 7 7 6 1.5 1.5 1.3 1.3 6 6
Milk cow Milk cow Milk cow Milk cow Cattle meat Cattle meat Cattle meat Cattle meat Dam (sheep) Dam (sheep)
Caucasian Brown Shwitz Sevabghet Holstein Caucasian Brown Shwitz Sevabghet Holstein Balbas Armenian (Semi-RoughFleeced) Balbas
1.800-2.000 2.000-2.200 2.800-3.200 5.000-5.500 90 60
42 41 42 42 42 41 42 42 40 42
700 800 900 950 -
3 3.5
93 95 92 93 120 120
Small livestock meat Small livestock meat Sow Sow Pork Pork Dam (goat) Dam (goat) Hive Layer (hen) Layer (hen)
40
180
600
0.8
Armenian (Semi-RoughFleeced) Ukrainian White Landras Ukrainian White Landras Local Cross-breed Caucasian Brown Yerevan Silver
41
200
720
0.7
120 350 -
65 66 66 67 41 42 -
500 550 150 200 -
75 78
9 -
12 10 125 140 -
850 720 85 67 1.400 29 26
4 4.5 0.7 0.6 5 4 1.5 1.5
Marz 5
Kotayk Marz
the marzes
Marz 5 - Kotayk Marz
223
Marz 5
Kotayk Marz
Kotayk Marz comprises Abovyan, Hrazdan and Nairi Districts. The rivers of Kotayk Marz are the Kasakh and the Hrazdan. Altitude is 1.200-1.800m above the sea level, the maximum point is 3.101m (Mount Tezh ). Climate is temperate continental, in highlands cold mountainous (Hrazdan District). Average annual temperature in highlands is -80C, in lowlands +60C, with a minimum temperature of -400C and a maximum of +380C; in January 120C, in July +200C. Winter is long and summer mild. Average annual precipitations are 500-700mm. Prevailing winds are North-Eastern. Among soils brown carbonate soils, brown soils as well as black earth (in highlands 1.800-2.000m and more) prevails. Among developed branches of agriculture animal husbandry is the most important; plant-growing is well expanded, too. Milk cattle breeding, swine-breeding, poultry-breeding, fish-breeding, and bee-keeping are spread out with a share of other types of animal husbandry. As for plant-growing diversities we do find vegetable and field crop cultivation, as well as fruit-growing.
Table 5.1. Key indicators of agriculture in Kotayk Marz (2007)

MARZ INFORMATION Population Number of farms Cattle Including cows Small livestock Goats Swine Hives Orchards Vineyards Young orchards Field crops Pastures MEASUREMENT UNIT Man Item Head Head Head Head Head Item Ha Ha Ha Ha Ha KOTAYK MARZ TOTAL 339.432 86.389 51.128 27.286 57.652 7.627 10.747 7.639 3.512 391 339 8.920 29.034 HRAZDAN DISTRICT 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 ABOVYAN DISTRICT 133.351 34.808 21.913 11.500 22.891 3.479 6.086 3.161 1.240 20 177 3.400 14.874
224
Table 5.2. Expenses on vineyard cultivation in Kotayk Marz
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 -
PRICE PER UNIT AMD 3.000 5.000 3.000 3.000 15.000 100 80 120 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 25.000 40.000 24.000 132.000 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
225
Table 5.3. Grape varieties in Kotayk Marz
VARIETY
PERIOD OF HARVEST
USAGE
NOTES
Voskehat
October 10-15
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
Tchilar Rkatsiteli
120-150 220-250
October 20-30 October 10-15
22-24 24-25
Pinot Noir
60-100
September 5-10
22-24
Hadis Spitak Muscat (White Muscat)
260-280 80-100
September 25-30 October 15-25
23-26 25-28
Table 5.4. Cultivation of table varieties of grape in Kotayk Marz

VARIETY YIELD QUINTAL/ HECTARE 250-300 250-300 PERIOD OF HARVEST USAGE SUGAR CONTENT % 20-23 20-21 NOTES
Shahumyan Van
September 20-25 September 25-October 10 August 20-25
In fresh condition In fresh condition
Nairi District Nairi District
Sateni Sev (Sateni Black)
130-150
In fresh condition, for juices In fresh condition, for juices, raisins In fresh condition, for juices In fresh condition, for juices
19-20
Nairi District
Yerevani Deghin (Yerevan Yellow)
200-250
September 25-30
22-26
Tavrizeni
190-220
September 25-30
23-24
Vardaguyn Yerevani (Yerevan Pink)
200-250
22-24
226
Table 5.5. Expenses on field crops in Kotayk Marz (less expenses on seeds) Wheat, barley, corn, potato, cabbage, cauliflower
MEASUREMENT UNIT
PLANNED QUANTITY 1
PRICE PER UNIT AMD 30.000 20.000 8.000 10.000 7.000 7 100 100 100 30.000 8.000 14.000
TOTAL AMD 30.000 20.000 8.000 10.000 7.000 14.000 20.000 20.000 9.000 30.000 8.000 14.000 10.000 200.000
NOTES
Ha Ha Ha Ha M3 Kg Kg Kg L Ha Man/day AMD AMD
1 1 1 1 2.000 200 200 90 1 1 1 -
227
Table 5.6. Field crops in Kotayk Marz Wheat, barley, corn, potato, cabbage
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
NOTES
Spring Spring Spring
Silo stuff in the milk-and-wax ripening phase
350-380 300-320 300-350 280-300 300-350 200-220 180-200 190-210
September 1-10 September 1-5 September 1-10 September 10-15 September 15-20 September 1-10 September 10-15 September 20-25
228
Table 5.7. Expenses on cultivation of vegetable crops in Kotayk Marz Tomato, pepper, eggplant, cucumber, onion
WORK Winter tillage Plowing Disking Smoothing Laying beds Transplanting Price of Plants Irrigation Fertilizing N P K Diseases control
MEASUREMENT UNIT Ha Ha Ha Ha Ha Man/day Item M3 Kg Kg Kg L
PLANNED QUANTITY1 1 1 1 1 1 50 16.000 120 180 90 2 1
PRICE PER UNIT AMD 25.000 18.000 15.000 10.000 35.000 3.000 7 120 90 180 18.000 24.000
TOTAL AMD 25.000 18.000 15.000 10.000 35.000 150.000 112.000 14.400 16.200 16.200 36.000 24.000
Handwork
18-20 times Preplant tillage True and false oidium, gray rot, blackleg, stolbur Actara, Bazudin, Karate Handwork Handwork Handwork
Pests control Weeds control Hilling Harvest and sorting Transport Land tax Contingencies Total
L Man/day Man/day Man/day Man/day AMD AMD
40 45 30 4 7 1 -
3.000 3.000 3.000 10.000 10.000 15.000
120.000 135.000 90.000 40.000 70.000 15.000 30.000 971.800
229
Table 5.8. Cultivation of vegetable crops in Kotayk Marz

SPECIES VARIETY YIELD QUINTAL/ HECTARE 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 PERIOD OF RIPENING AFTER 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 USAGE NOTES
1 Tomato Tomato Tomato Tomato Tomato Tomato Tomato Tomato Pepper Pepper Pepper Pepper Eggplant Eggplant Eggplant Eggplant Eggplant Cucumber Cucumber Onion
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
5 In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition
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
230
Table 5.9. Fruit varieties in Kotayk Marz
SPECIES
VARIETY
PERIOD OF HARVEST
YIELD QUINTAL/ HECTARE 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
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
PRICE PER SAPLING AMD 500 500 650 700 700 800 650 400 350 900 900 1.000 800 800 900 400 600 1.000
Apricot Apricot Peach Peach Prune Prune Prune Plum Plum Sweet cherry Cherry Cherry Apple Pear Pear Pear
Yerevan Sateni Narinj Zafran Albukhar Renklot Altons Italian Sev Shlor-1 (Black Plum-1) Gyogja Victory Ashtarak Zhukovskaya Golden Delicious Malacha Antarayin Geghetskuhi (Forest Beauty) Dzmernuk
July 10-20 July 20-25 July 15-25 July 20-30 August 20-September 10 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 August 25-September 1 September 20-25 September 20-25 September 25-October 1
Quince Nut
Ani Teghakan (Local)
231
Table 5.10. Characteristics and productivity of livestock in Kotayk Marz
NAME
BREED
Milk l
PRODUCTIVITY
EXPENSES ADEQUACY PERIOD PER (YEARS) UNIT OF PRODUCTION, (AMD) 65 60 60 52 600 680 650 620 40/300 5 7 7 6 1.5 1.5 1.3 1.3 6
Milk cow Milk cow Milk cow Milk cow Cattle meat Cattle meat Cattle meat Cattle meat Dam (sheep)
Caucasian Brown Shwitz Sevabghet Holstein Caucasian Brown Shwitz Sevabghet Holstein Armenian Semi-RoughFleeced Mazekh Armenian Semi-RoughFleeced Mazekh
1.800-2.000 2.000-2.200 2.500-2.800 5.500-6.000 60
42 41 42 42 42 41 42 42 42
700 800
3.5
92 91 95 90 120
900 950
Dam (sheep) Small livestock meat Small livestock meat Sow Sow Pork Pork Hive Layer (hen) Layer (hen) Layer (hen)
100 -
41 41
200
1.8 -
120 -
40/300 720
6 0.7
42
210
650
0.6
Ukrainian White Landras Ukrainian White Landras Caucasian Brown Yerevan Silver Lowman Brown
65 66 66 67
500
9 -
12 10 -
700 720 1300 28 25 21
4 4.5 0.7 0.6 1.5 1.5 1.2
550 75 78 92
Marz 6
Lori Marz
the marzes
Marz 6 - Lori Marz
235
Marz 6
Lori Marz
Lori Marz includes Stepanavan, Tashir, Spitak, Tumanyan and Gugark Districts. Climate is temperate, mild, with snowy winters and moderately 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 the Virahayots Range, the Southern by the Halab Range. In the 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 is Sargis Lake. Forests occupy 43% of this marz territory. Prevailing soils are brown mountain forest, mountain-steppe, mountain carbonate soils and black earth.
Table 6.1. Key indicators of agriculture in Lori Marz (2007)
LORI MARZ TOTAL 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
TASHIR DISTRICT 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
236
Table 6.2. Expenses on vineyard cultivation in Lori Marz
WORK 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 Land tax Contingencies Total
MEASUREMENT UNIT 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 AMD AMD -
PLANNED QUANTITY 15 8 11 1 250 500 200 33 3 5 5 4 4 9.600 15 3 1 -
PRICE PER UNIT AMD 5.000 3.000 3.000 15.000 100 80 120 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 25.000 40.000 24.000 132.000 9.000 10.000 20.000 64.000
NOTES
2 times 5 times
72.000 67.200 45.000 10.500 18.000 683.700
3 times 8 times
Marz 6 - Lori Marz
237
Table 6.3. Grape varieties in Lori Marz
VARIETY
PERIOD OF HARVEST
USAGE
NOTES
Aligot
September 20-30
Table wines, raw stuff for cognac and champagne Table wines, raw stuff for cognac and champagne Table wines, raw stuff for cognac and champagne Strong and sweet table wines, raw stuff for champagne
Tumanyan District
Lalvar
200-250
17-20
Tumanyan District
Rkatsiteli
150-200
17-19
Tumanyan District
Pinot Noir
50-90
September 1-10
17-23
Tumanyan District
Table 6.4. Table grape varieties in Lori Marz
VARIETY
PERIOD OF HARVEST
USAGE
NOTES
Muscat
September 10-15
Strong and sweet wines In fresh condition, raisins, sweet wines Sweet wines, in fresh condition
Tumanyan District
Kirovabadi Seghani (Kirovabad Table) Shahumyan
250-280
September 5-10
22-24 Tumanyan District
280-300
September 10-15
22-24
Tumanyan District
238
Table 6.5. Cultivation of fruit in Lori Marz
SPECIES
VARIETY
YIELD QUINTAL/ HECTARE 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 OF RIPPENING 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
USAGE
NOTES
Peach
Laureate Uspekh Narinj Early Lodz Limonniy
In fresh and processed condition In fresh and processed condition In fresh condition In fresh and processed condition In fresh and processed condition Universal Universal Universal Universal In fresh and processed condition In fresh and processed condition In fresh and processed condition In fresh condition In fresh condition
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
Plum
Sweet cherry Cherry
Napoleon Black Ashtarak Sisian Zhukovskaya
Apple
Winter Banana Pippin Saffron
Pear
Antarayin Geghetskuhi (Forest Beauty) Heghine Bere Bosque
In fresh condition In fresh condition In fresh condition
Marz 6 - Lori Marz
239
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)
VARIETY Armyanka-60 Nairi-68 Vagharshapat Weston Stephens Nutans Shirak Sisian Local Abovyan-60 Abovyan-60
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
USAGE Baking Baking Baking Baking Baking Forage Raw stuff for beer Confectionery Confectionery, baking Forage
NOTES
Spring Spring Spring
Silo stuff in the milk-and-wax ripening phase
Potato Potato Potato
Impala Ausonia Cosmos
380-400 400-420 350-380
August 20-25 August 20-25 August 20-25
240
Table 6.7. Characteristics and productivity of livestock bred in Lori Marz
NAME
BREED
Milk l
PRODUCTIVITY
Milk cow Milk cow Milk cow Cattle meat Cattle meat Cattle meat Dam (sheep) Small livestock meat Sow Sow Pork Pork Dam (goat) Hive Layer (hen) Layer (hen)
Caucasian Brown Shwitz Sevabghet Caucasian Brown Shwitz Sevabghet Bozakh Bozakh
1.800-2.000 2.000-2.200 2.800-3.200 45 -
42 41 42 42 41 42 41 41
700 800 900 190
1.8 -
95 97 97 130 -
Ukrainian White Landras Ukrainian White Landras Local Caucasian Brown Yerevan Silver
120 -
65 66 66 67 41 -
500 550 150 -
12 10 125 -
700 720 85 1.300 28 25
4 4.5 0.7 0.6 5 1.5 1.5
75 78
Marz 7
Shirak Marz
the marzes
Marz 7 - Shirak Marz
243
Marz 7
Shirak Marz
Shirak Marz comprises Akhuryan, Ashotsk, Ani, Amasia, Artik Districts. The territory of the Marz used to be the royal seat of the Bagratuni Realm, a dynasty founded by King Ashot. He was followed by his son. The latter having acceded to the throne transferred the capital to Shirakavan. In 961 Ani was proclaimed 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
Table 7.1. Key indicators of agriculture in Shirak Marz (2007)
MARZ INFORMATION Population Number of farms Cattle Including cows Small livestock Goats Swine Hives Orchards Vineyards Young orchards Field crops Pastures MEASUREMENT UNIT 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 AKHURYAN DISTRICT 49.255 11.605 22.780 11.754 12.725 307 3.912 3.183 37.5 0 0 905 7.585 ASHOTSK DISTRICT 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 ARTIK DISTRICT 58.415 16.026 18.209 10.448 9.915 137 2.580 2.868 20 0 0 376 5.649
grain. Reviewing the agricultural potential of Shirak Marz, namely lands of agricultural significance, crop plantations, cornfields, pastures, livestock, it becomes clear that the marz can be divided into two regions. Analysis of Amasia and Ashotsk Districts shows a considerable potential for development of animal husbandry. Lands of agricultural significance are 59.326 hectares of which 23.359 hectares (39.4%) are pastures, and 9.853 hectares are occupied by cornfields. The number of cattle is 23.282 heads, that of small livestock about 35.000 heads. It should be noted that out of about 26.000 hectares of arable lands a considerable portion is used under cultivation of forage crops. These data shows the existing number of livestock in this region may be enlarged.
244
Table 7.2. Expenses on field crops in Shirak Marz (less expenses on seeds) Wheat, barley, corn, potato, cabbage, cauliflower
WORK Plowing Backset Raking Seeding Rolling Irrigation Fertilizing N P K Weeds control Harvest Transport Land tax Contingencies Total Ha Ha Ha Ha M3 Kg Kg Kg L Ha Man/day AMD AMD MEASUREMENT UNIT PLANNED QUANTITY 1 1 1 1 2.000 250 300 90 1 1 1 PRICE PER UNIT AMD 30.000 10.000 8.000 8.000 7 100 100 120 30.000 8.000 14.000 TOTAL AMD 30.000 10.000 8.000 8.000 14.000 25.000 30.000 10.800 30.000 8.000 14.000 10.000 197.800 Preplant tillage 2 times NOTES
245
Table 7.3. Cultivation of field crops - Shirak Marz Wheat, barley, corn, potato, cabbage, cauliflower
SPECIES Wheat Wheat Wheat Wheat Barley Barley Corn VARIETY Armyanka-60 Nairi-68 Weston Stephens Nutans Shirak Abovyan-60 YIELD QUINTAL/HECTARE 40-42 40-45 45-48 48-50 35-38 38-40 750-800 PERIOD OF HARVEST September 1-5 September 5-10 September 10-15 September 10-15 September 10-15 September 15-25 September 15-20 USAGE Baking Baking Baking Baking Forage Raw stuff for beer Forage Spring Spring Silo stuff in the milk-and-wax ripening phase NOTES
Potato Potato
Impala Ausonia
380-400 400-420
In fresh condition In fresh condition
Potato Potato Potato Cabbage Cabbage Cabbage Cauliflower Hybrid
Cosmos Arinda Sandra Stakhanovskaya Slava-1305 Leninakani Ushahas (Leninakan Late-Ripening) Garantia 108-F
350-380 300-320 300-380 200-220 180-200 230-240 150-180 150-180
September 20-25 October 10-15 September 15-20 September 1-10 September 10-15 September 20-25 September 20-25 September 25-30
In fresh condition In fresh condition In fresh condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition In fresh and tinned condition
246
Table 7.4. Fruit varieties in Shirak Marz
SPECIES
VARIETY
PERIOD OF HARVEST
YIELD QUINTAL/ HECTARE 250-270 220-240 250-260 150-180
NUMBER OF TREES PER HECTARE 350-380 380-400 300-360 300-320
PRICE PER SAPLING AMD 600 800 400 900
Apple Apple Apple Pear
Bellefleur Kitayka Virgin Pink Winter Banana Heghine
September 20-25 September 25-30 September 25-30 October 20-25
247
Table 7.5. Characteristics and productivity of livestock bred in Shirak Marz

NAME BREED
Milk l
PRODUCTIVITY
Milk cow Milk cow Milk cow Cattle meat Cattle meat Cattle meat Dam (sheep) Small livestock meat Sow Sow Pork Pork Dam (goat) Hive Layer (hen) Layer (hen) Layer (hen)
Caucasian Brown Shwitz Sevabghet Caucasian Brown Shwitz Sevabghet Bozakh Bozakh
1.800-2.000 2.000-2.200 2.800-3.200 45 -
42 41 42 42 41 42 41 41
700 800 900 190 -
1,8 -
90 91 90 -
130 -
Ukrainian White Landras Ukrainian White Landras Local Caucasian Brown Yerevan Silver Lowman Brown
120 -
65 66 66 67 41 -
500 550 150 -
75 78 92
12 10
700 720 85 1.600 28 26 24
4 4.5 0.7 0.6 5 1.5 1.5 1.2
9 125 -
Marz 8
Syurik Marz
the marzes
Marz 8 - Syunik Marz
251
Marz 8
Syunik Marz
The Syunyats Country is Sisakan, the ninth province of Mets Hayk. The relief of the country is extremely mountainous, with zonal top-soils as per different altitudes varying between 390 to 2.200m above the sea level in Meghri and Sisian Districts. Syunik Marz embraces the North-Western mountainchains in the East of the Northern part of the Zangezur Range, and part of the Western Plateau of Southern Kharabakh Eminence. The climate is temperate continental with warm summers and cold winters. Average annual temperature is +6.60C, in January we do find -40C in lowlands and -120 C in highlands.
Table 8.1. Key indicators of agriculture in Syunik Marz (2007)
MARZ INFORMATION Population Number of farms Cattle Including cows Small livestock Goats Swine Hives Orchards Vineyards Young orchards Field crops Pastures MEASUREMENT UNIT Man Item Head Head Head Head Head Item Ha Ha Ha Ha Ha SYUNIK MARZ TOTAL 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 GORIS DISTRICT 50.946 15.783 22.228 11.143 27.522 866 3.112 4.039 342 45 0 2.162 15.147 KAPAN DISTRICT 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
Annual norm of precipitations is approximately 400mm. Rivers are typical of mountainous regions. Shak 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 1.6002.200m is the zone of mountain black earth. Cultivated crops include cereals, legumes. Over 60% of agricultural production falls to the share of animal husbandry. Main branches of crop cultivation are forage and vegetable crops, and fruit-growing. Meghri District is affected to tropical species: pomegranate, almond, fig, date
252
Table 8.2. Expenses on vineyard cultivation - Syunik Marz
WORK 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 Land tax Contingencies Total
MEASUREMENT UNIT 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 AMD AMD -
PLANNED QUANTITY 15 8 11 1 250 500 200 33 3 5 5 4 4 9.600 15 3 1 -
PRICE PER UNIT AMD 5.000 3.000 3.000 15.000 100 80 120 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 25.000 40.000 24.000 132.000 9.000 10.000 20.000 64.000 72.000 67.200 45.000 10.500 18.000 683.700
NOTES
253
Table 8.3. Grape varieties in Syunik Marz

Arevik
September 10-30
Strong and sweet table wines, raw stuff for champagne Strong and sweet table wines, raw stuff for champagne
Meghri and Kapan Districts
Pinot Noir
50-90
September 1-10
19-23
In small areas throughout the Marz
Table 8.4. Table grape varieties in Syunik Marz

Meghru Vaghahas (Meghri Early) Kirovabadi Seghani (Kirovabad Table) Shahumyan
August 15-20
In fresh condition
Meghri District
120-130
August 20-25
In fresh condition, sweet wine
22-24
Kapan District
250-300
September 20-25
In fresh condition
20-23
In small areas throughout the marz
254
Table 8.5. Expenses on field crops - Syunik Marz (less expenses on seeds) Wheat, barley, spelt, potato, cabbage
WORK Plowing Backset Raking Seeding Rolling Irrigation Fertilizing N P K Weeds control Harvest Transport Land tax Contingencies Total Ha Ha Ha Ha M3 Kg Kg Kg L Ha Man/day AMD AMD MEASUREMENT UNIT PLANNED QUANTITY 1 1 1 1 1 2.000 250 300 90 1 1 1 PRICE PER UNIT AMD 20.000 8.000 7.000 8.000 7 100 100 120 30.000 8.000 14.000 TOTAL AMD 20.000 8.000 7.000 8.000 14.000 25.000 30.000 10.800 30.000 8.000 14.000 10.000 184.800 3-4 times Preplant tillage NOTES
255
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) VARIETY Armyanka-60 Nairi-68 Vagharshapat Weston Stephens Nutans Shirak Zangezur Sisian Local Abovyan-60 YIELD QUINTAL/HECTARE 40-42 40-45 40-42 45-48 48-50 35-38 38-40 35-38 15-20 750-800 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 USAGE Baking and forage Baking and forage Baking and forage Baking Baking Forage Raw stuff for beer Raw stuff for beer Confectionary Forage Spring Spring Spring Spring Silo stuff in the milk-and-wax ripening phase NOTES
380-400 400-420 350-380 300-320 300-380 200-220 180-200 230-240
256
Table 8.7. Fruit cultivation in Syunik Marz

SPECIES VARIETY PERIOD OF HARVEST YIELD QUINTAL/ HECTARE 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 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 PRICE PER SAPLING AMD 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
Apricot Apricot Apricot Peach Prune Prune Prune Plum Plum Sweet cherry Cherry Cherry Apple Apple Pear Pear Pomegranate Fig Oriental date Nut
Yerevan Sateni Khosroveni Zafran Albukhar Renklot Altons Italian Sev Shlor-1 (Black Plum-1) Gyogja Napoleon Black Ashtarak Zhukovskaya Golden Delicious Bellefleur Kitayka Malacha Antarayin Geghetskuhi (Forest Beauty) Gyulosha White JenjiMaru Teghakan (Local)
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 August 25-September 1 September 20-25 August 25-30 September 25-30 September 25-October 1
257
Table 8.8. Characteristics and productivity of livestock bred in Syunik Marz

NAME BREED
Milk l
PRODUCTIVITY
EXPENSES ADEQUACY PERIOD PER (YEARS) UNIT OF PRODUCTION, (AMD) 68 63 55 600 630 600 40/300 5 7 7 1.5 1.5 1.3 6
Milk cow Milk cow Milk cow Cattle meat Cattle meat Cattle meat Dam (sheep)
Caucasian Brown Shwitz Sevabghet Caucasian Brown Shwitz Sevabghet Armenian (Semi-RoughFleeced) Armenian (Semi-RoughFleeced) Ukrainian White Landras Armenian Ukrainian White Landras Armenian Local Cross-breed Caucasian Brown Yerevan Silver
1.800-2.000 2.000-2.200 2.500-2.800 60
42 41 42 42 41 42 42
800 900 900 -
3.5
93 92 95 120
Small livestock meat Sow Sow Sow Pork Pork Pork Dam (goat) Dam (goat) Hive Layer (hen) Layer (hen)
41
200
720
0.7
120 350 -
65 66 68 66 67 69 41 42 -
500 550 650 150 200 -
75 78
9 -
12 10 10 125 140 -
800 700 600 85 67 1.300 29 26
4 4.5 4 0.7 0.6 0.5 5 4 1.5 1.5
Marz 9
Tavush Marz
the marzes
Marz 9 - Tavush Marz
261
Marz 9
Tavush Marz
Tavush Marz includes Ijevan, Noyemberyan and Berd Districts. In the North-West it borders with Lori Marz, in the South with Gegharkunik, in the South-East with Kotayk; Northern and South-Eastern frontiers of the marz border with Azerbaijan. Currently Tavush Marz comprises Tavush District of Utik Province of Mets Hayk. As evidenced by archeological excavations, Tavush Marz (Ijevan District) has been inhabited since the Stone Age. After the downfall of the Armenian Arshakuni Realm this area was included in the Bagratuni Realm, thereafter, in the VII-VIII centuries, it passed under the rule of the Sevordyats Princedom. Tavush Marz is encompassed by the Miapor (in Berd District), the Gugarats, in the South the Pambak, the Areguni (Ijevan District), and in the South-West the Halab Ranges. The main rivers are the Tavush, the Kndzorut, the Hakhum, the Akhinja, the Aghstev and the Haghartsin. On the Hakhum and the Tavush reservoirs have been built for irrigation of 700 hectare and 1.200 hectare plots, respectively. Climate is temperate, with moderately warm summers and mild winters; certain North-Eastern regions have arid sub-tropical climate. Average annual temperature in lowlands is +100C, in uplands 00C; in January it lowers down to -200C, in July it rises up to +38-400C. Annual precipitations are 450-750mm. This marz has 60% of its territory situated at 1.000m above the sea level. Prevailing soils are: dark and light brown soils (8001.300m above the sea level), mountain-forest, mountainsteppe (1.300-2.100m above the sea level), and brown subalpine mountain-meadow soils (above 2.100m) are also common. Forests occupy 52% of the territory. Plant-growing is oriented to orchard cultivation, fruitgrowing, tobacco-growing, while among animal-breeding branches milk and meat cattle-breeding, sheep-breeding, swine-breeding and poultry-breeding are practiced. In Noyemberyan District fruit-growing is gathering swing; numerous orchards, particularly, peach, have been established recently (about 1.000 ha).
262
Table 9.1. Key indicators if agriculture in Tavush Marz (2007)

MARZ INFORMATION Population Number of farms Cattle Including cows Small livestock Goats Swine Hives Orchards Vineyards Young orchards Field crops Pastures MEASUREMENT UNIT Man Item Head Head Head Head Head Item Ha Ha Ha Ha Ha TAVUSH MARZ TOTAL 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 DILIJAN DISTRICT 59.486 12.341 17.598 9.436 13.731 2.563 10.600 4.289 5 63 0 6.758 13.099 NOYEMBERYAN DISTRICT 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
263
Table 9.2. Districted cultivation of fruit in Tavush Marz

SPECIES VARIETY YIELD QUINTAL/ HECTARE 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 OF RIPPENING 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 NOTES
Peach
Narinj Early Narinj Mid-Season Narinj Late-Ripening Limonniy Lodz Salami
Universal Universal Universal Universal Universal Universal Universal Universal Universal Universal Universal In fresh and processed condition In fresh and processed condition In fresh and processed condition In fresh condition In fresh condition In fresh condition In fresh condition In fresh condition In fresh and processed condition
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
Plum
Sweet cherry
Napoleon Black Dragans Yellow
Cherry
Ashtarak Sisian Zhukovskaya
Apple
Bellefleur Kitayka Golden Delicious Golden Parmen
Pear
Malacha Claps Lover
Nut
Nut
264
Table 9.3. Expenses on vineyard cultivation in Tavush Marz

WORK 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 Land tax Contingencies Total MEASUREMENT UNIT 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 AMD AMD PLANNED QUANTITY 15 8 11 1 250 500 200 33 3 5 5 4 4 9.600 15 3 1 PRICE PER UNIT AMD 5.000 3.000 3.000 15.000 100 80 120 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 25.000 40.000 24.000 132.000 9.000 10.000 20.000 64.000 72.000 67.200 45.000 10.500 18.000 683.700 2 times 5 times 3 times 8 times NOTES
265
Table 9.4. Grape varieties in Tavush Marz

Aliogot
September 10-30
Strong and sweet table wines, raw stuff for champagne and cognac Strong and light table wines, raw stuff for champagne Strong and sweet table wines, raw stuff for champagne and cognac Light table wines Strong and Sherry wines Strong and sweet table wines
Pinot Noir
50-90
September 15-20
17-23
Lalvar
200-250
17-20
Saperavi Rkatsiteli
100-120 280-300
October 1-20 September 10-15
19-22 24-25
All Districts of the Marz All Districts of the Marz
Karmrahyut
200-250
20-21
All Districts of the Marz, mainly in Berd District
Table 9.5. Table grape varieties in Tavush Marz

Arevshat
September 25-October 10 September 20-October 10
In fresh condition
In the form of single vines Not districted, in small areas throughout the marz In the form of single vines In the form of single vines
Kirovabadi Seghani (Kirovabad Table) Armenia
130-180
In fresh condition
18-19
250-300
October 1-20
In fresh condition
17-18
Tokun
250-300
In fresh condition
18-20
266
Table 9.6. Cultivation of field crops - Tavush Marz Wheat, barley, spelt, corn, potato
SPECIES Wheat Wheat Wheat Wheat Wheat Barley Barley Spelt Maize (silo) VARIETY Armyanka-60 Nairi-68 Vagharshapat Weston Stephens Nutans Shirak Sisiani Teghakan (Sisian Local) Abovyan-60 YIELD QUINTAL/HECTARE 30-35 35-40 35-40 45-48 48-50 35-38 30-35 15-20 750-800 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 USAGE Baking Baking Baking Baking Baking Forage Raw stuff for beer Confectionery Forage Spring Spring Spring Silo stuff in the milk-and-wax ripening phase NOTES
Potato Potato Potato
Impala Ausonia Cosmos
380-400 400-420 350-380
August 20-25 August 20-25 August 20-25
267
Table 9.7. Characteristics and productivity of livestock - Tavush Marz

NAME BREED
Milk l
PRODUCTIVITY
EXPENSES ADEQUACY PER PERIOD UNIT OF (YEARS) PRODUCTION, (AMD) 75 65 60 55 600 600 650 550 60/380 680 5 7 7 6 1.5 1.5 1.3 1.3 6 0.7
Milk cow Milk cow Milk cow Milk cow Cattle meat Cattle meat Cattle meat Cattle meat Dam (sheep) Small livestock meat Sow Sow Pork Pork Dam (goat) Hive Layer (hen) Layer (hen)
Caucasian Brown Shwitz Sevabghet Holstein Caucasian Brown Shwitz Sevabghet Holstein Bozakh Bozakh
1.500-1.800 1.600-1.800 1.800-2.000 4.000-4.500 45 -
42 41 42 42 42 41 42 42 41 41
700 800 900 950 190
1,8 -
95 97 97 93 130 -
Ukrainian White Landras Ukrainian White Landras Local Caucasian Brown Yerevan Silver
120 -
65 66 66 67 41 -
500 550 150 -
75 78 -
9 -
12 10 125 -
600 600 85 1.500 27 24
4 4.5 0.7 0.6 5 1.5 1.5
Marz 10
Vayot Dzor Marz
the marzes
Marz 10 - Vayots Dzor Marz
271
Marz 10
Vayotz Dzor Marz

Vayots Dzor is a district in Syunik Province of Mets Hayk, in the Arpa Basin. In 990-991 Gagik I Bagratuni King of Armenia annexed Vayots Dzor to the Realm of Ani. Gladzor University gained wide recognition at the end of the XIII centuryh and in the first decades of the XIVcentury. In the middle of the XVIII century Vayots Dzor became part of the newly formed Nakhijevan Khanate. In 1828 by the Treaty of Turkmencha it was annexed to the Russian Empire. Vayots Dzor is unique in terms of physical and geographical conditions, circumscribed by the Vardenis, Syunyats, and Vayots Dzor Ranges in the North, East, and South. One
Table 10.1. Key indicators of agriculture in Vayots Dzor Marz (2007)
MARZ INFORMATION Population Number of farms Cattle Including cows Small livestock Goats Swine Hives Orchards Vineyards Young orchards Field crops Pastures MEASUREMENT UNIT Man Item Head Head Head Head Head Item Ha Ha Ha Ha Ha VAYOTS DZOR MARZ TOTAL 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
of the natural monuments of Vayots Dzor is the very well known Jermuk Waterfall (70m). As for the climate, maximum temperature reaches +400C in 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 gardening, animal husbandry and bee-keeping. The key branch of agriculture in the uplands of Vayots Dzor is animal breeding, mostly sheep-breeding, goat-breeding and bee-keeping.
272
Table 10.2. Expenses on vineyard cultivation in Vayots Dzor Marz

WORK 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 Land tax Contingencies Total MEASUREMENT UNIT 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 AMD AMD PLANNED QUANTITY 22 8 11 1 250 400 200 33 3 13 13 3 2 7.500 10 3 1 PRICE PER UNIT AMD 3.000 3.000 3.000 12.000 100 80 150 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 25.000 32.000 30.000 99.000 9.000 26.000 39.000 54.000 40.000 52.500 30.000 9.000 16.000 10.000 606.500 1 time 3 times 2 times 4 times NOTES
273
Table 10.3. Grape varieties in Vayots Dzor

Areni Sev (Areni Black)
September 5-10
Strong and sweet wines
Yeghegnadzor District
Table 10.4. Table varieties of grape in Vayots Dzor Marz

Vardaguyn Yerevani (Yerevan Pink) Deghin Yerevani (Yerevan Yellow) Shahumyan
September 20-25
In fresh condition, raisins
250-250
September 20-25
22-26
200-250
September 15-20
In fresh condition
21-23
Yeghegnadzor District Yeghegnadzor District
Sev Kishmish
200-250
September 15-20
22-24
274
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 August 25September 10
YIELD QUINTAL/HECTARE 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-seasonlate-ripening Mid-season Mid-season
275
Table 10. 6. Expenses on field crops - Vayotz Dzor Marz (less expenses on seeds) Wheat, barley, spelt, corn, potato, cabbage
WORK Plowing Backset Raking Seeding Rolling Irrigation Fertilizing N P K Weeds control Harvest Transport Land tax Contingencies Total Ha Ha Ha Ha M3 Kg Kg Kg L Ha Man/day AMD AMD MEASUREMENT UNIT PLANNED QUANTITY 1 1 1 1 1 2.000 250 300 90 1 1 1 PRICE PER UNIT AMD 20.000 8.000 7.000 8.000 7 100 100 120 30.000 8.000 14.000 TOTAL AMD 20.000 8.000 7.000 8.000 14.000 25.000 30.000 10.800 30.000 8.000 14.000 10.000 184.800 3-4 times Preplant tillage NOTES
276
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) VARIETY Armyanka-60 Nairi-68 Vagharshapat Weston Stephens Nutans Shirak Zangezur Sisian Local Abovyan-60 YIELD QUINTAL/HECTARE 40-42 40-45 40-42 45-48 48-50 35-38 38-40 35-38 15-20 750-800 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 USAGE Baking and forage Baking and forage Baking and forage Baking Baking Forage Raw stuff for beer Raw stuff for beer Confectionary Forage Spring Spring Spring Spring Silo stuff in the milk-and-wax ripening phase NOTES
380-400 400-420 350-380 300-320 300-380 200-220 180-200 230-240
277
Table 10.8. Fruit varieties in Vayots Dzor
SPECIES
VARIETY
PERIOD OF HARVEST
YIELD QUINTAL/ HECTARE 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
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
PRICE PER SAPLING AMD 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
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
Yerevan Sateni Khosroveni Narinj Zafran Lodz Shertavor /layered Albukhar Renklot Alton Italian Sev Shlor-1 (Black Plum-1) Gyogja Dragans Yellow Napoleon Black Victory Ashtarak Zhukovskaya Bellefleur Kitayka Golden Delicious Winter Banana Malacha Antarayin Geghetskuhi (Forest Beauty) Dzmernuk Ani Teghakan (Local)
July 10-20 July 20-25 July 25-Aug 1 July 15-25 July 20-30 July 25-Aug 1 August 20-September 10 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 August 25-September 1 September 20-25 September 20-25 September 25-October 1
278
Table 10.9. Characteristics and productivity of livestock in Vayots Dzor Marz

NAME BREED
Milk l
PRODUCTIVITY
EXPENSES ADEQUACY PERIOD PER (YEARS) UNIT OF PRODUCTION, (AMD) 80 75 65 50 700 750 700 680 35/320 600 5 7 7 6 1.5 1.5 1.3 1.3 6 0.8
Milk cow Milk cow Milk cow Milk cow Cattle meat Cattle meat Cattle meat Cattle meat Dam (sheep) Small livestock meat Sow Sow Pork Pork Dam (goat) Dam (goat) Hive Layer (hen) Layer (hen)
Caucasian Brown Shwitz Sevabghet Holstein Caucasian Brown Shwitz Sevabghet Holstein Balbas Balbas
1.500-1.800 1.800-2.000 2.000-2.200 4.500-5.000 90 -
42 41 42 42 42 41 42 42 40 40
700 800 900 950 180
3 -
92 91 90 93 120 -
Ukrainian White Landras Ukrainian White Landras Local Cross-breed Caucasian Brown Yerevan Silver
120 350 -
65 66 66 67 41 42 -
500 550 150 200 -
75 78
9 -
12 10 125 140 -
900 800 85 67 1.600 29 26
4 4.5 0.7 0.6 5 4 1.5 1.5
Geography and History of Armenia
appendix
Geography and History
281

Geographyi
The Republic of Armenia lies in a triangular section of the Transcaucasus, bordered by Azerbaijan, Iran, Turkey and the Republic of Georgia. With an area of 29,800 square kilometers (11,490 square miles), the landlocked country is just about the size of Vancouver Island. The capital city, Yerevan, lies on the Hrazdan River, and is home to some 1.2 million people. The next three largest cities are Gyumri (pop. 121,000), Vanadzor (pop. 74,000) and Abovian (pop. 54,000). Another important city is Echmiadzin, located some 20 miles west of Yerevan, which is the seat of the patriarchate of the Armenian Apostolic Church. The greatest part of Armenia is mountainous (about 300 feet above sea level), while one-third is pastureland. Forest and woodland cover 12 percent of the country, arid land some 18 percent, and permanent crops cover 3 percent. The highest elevation is 4,095 meters (Mt. Aragats) and the lowest point is 400 meters above the sea level (Debed river). There are more than 200 streams and rivers in Armenia, none navigable, however, because of their steep descents and rapid currents. The Armenian countryside also boasts some 100 small, but picturesque lakes. One of the largest mountain lakes in the world, Lake Sevan, covers an area of 1,400 square kilometers and is about 650 feet above sea level. Climate in Armenia is continental, with lower temperatures and more precipitation in higher elevations. In central plateau temperature varies widely with cold winters and hot summers. The geography of Armenia and its location have determined 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 Armenian plateau to the Taurus Mountains. Frequent earthquakes still remind us that the land lies near the great geological fault between the Asian and African subcontinent plates. The Armenian plateau is a highland which rises directly above its surrounding regions. Geography undoubtedly played a key role in the history and culture of Armenia. Forming an important coin of vantage and a highway of great value for trade and commerce between Asia and Europe, Armenia it seems was destined to be at grips with adversity. The land with its untold riches and its
282
Historical map of Armenia.
nations called the people Armens or Armenians. Archeology has extended the prehistory of Armenia to the Acheulian age (500,000 years ago), when hunting and gathering peoples crossed the lands in pursuit of migrating herds. The first period of prosperity was enjoyed by inhabitants of the Armenian upland in the third millennium B.C. These people were among the first to forge bronze, invent the wheel, and cultivate grapes. The first written records to mention the inhabitants of Armenia come from hieroglyphs of the Hittite Kingdom, inscribed from 1388 to 1347 B.C., in Asia Minor. The earliest inscription to be found directly upon Armenian lands, carved in 1114 B.C. by the Assyrians, describes a coalition of kings of the central Armenian region referring to them as "the people of Nairi." URARTU, THE FIRST KINGDOM IN ARMENIA By the 9th century B.C., a confederation of local tribes flourished as the unified state of Urartu. It grew to become one of the strongest kingdoms in the Near East and constituted a formidable rival to Assyria for supremacy in the region. The Urartians produced and exported wares of ceramic, stone and metal, building fortresses, temples, palaces and other large public works. One of their irrigation canals is still used today in Yerevan, Armenia's capital - a city which stands upon the ancient Urartian fortress of Erebuni.
strategic position of primary import, stirred the ambitions of many "superpowers" of the region. For a succession of centuries, the Armenians were in constant warfare with invaders and conquerors - Assyrians, Romans, Byzantines, Parthians, Arabs and Turks - who rolled over their homeland, although certainly not without meeting the most stubborn resistance. Throughout these turbulent centuries, the Armenians successfully asserted their historical identity and upheld their national heritage against great odds. Although on occasions overpowered by superior forces and reduced to the status of vassals, they nevertheless enjoyed a semblance of national autonomy. Yet, the very vicissitudes that troubled its existence contributed to the creation of a varied and original culture, held together by the constants of social, intellectual and religious institutions. ORIGINS OF THE ARMENIAN NATION Armenian tradition has preserved several legends concerning the origin of the Armenian nation. The most important of these tells of Hayk, the eponymous hero of the Armenians who called themselves Hay and their country Hayk' or Hayastan. The historian of the 5th century, Movses Khorenatsi, also relates at some length the valiant deeds of Aram whose fame extended far beyond the limits of his country. Consequently, the neighboring
Urartu (c. 750 B.C.)
283
PERSIAN RULE In 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 century until the 4th century B.C. Its culture and Zoroastrian religion greatly influenced the spiritual life of the Armenian people who absorbed features of Zoroastrianism into their polytheistic and animistic indigenous beliefs. As part of the Persian Empire, Armenia was divided into provinces called satrapies, each with a local governing satrap (viceroy) supervised by a Persian. The Armenians paid heavy tribute to the Persians, who continually requisitioned silver, rugs, horses and military supplies. The governing satraps of Armenia's royal Orontid family governed the country for some 200 years, while Asia became acquainted with invading Greeks from the west. ARMENIA PARTITIONED With the fall of the Persian Empire to Alexander the Great of Macedonia in 331 B.C., the Greeks appointed a new satrap, an Orontid named Mithranes, to govern Armenia. The Greek Empire, which stretched across Asia and Europe, was one in which cities rapidly grew, spreading Hellenistic architecture, religion and philosophies. Armenian culture absorbed Greek influences as well. As centers at the crossroads of trade routes connecting China, India and Central Asia with the Mediterranean, Armenian cities thrived on economic exchange. The Greeks also infused Armenia's version
of Zoroastrianism with facets of their religious beliefs. After Alexander's sudden death in 323 B.C., the partitioning of his empire and warring among his generals led to the emergence of three Greek kingdoms. Despite pressure from the Seleucid monarchy, one of the Greek kingdoms, the Orontids, continued to retain control over the largest of three kingdoms into which Armenia itself had been divided: Greater Armenia, Lesser Armenia and Sophene. THE RENAISSANCE OF ARMENIA, TIGRAN THE GREAT Seleucid'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 and founded a new dynasty in 189 B.C. Artaxias expanded his territory by defining the borders of his land and unifying the Armenian people. The "renaissance of Armenia" was accomplished during the reign of Tigran the Great (95-99 B.C.), who proclaimed himself "King of Kings." Under Tigran II, Armenia grew to a great degree of military strength and political influence. According to the Greek biographer Plutarch, the Roman general Lucullos said of this king, "In Armenia, Tigran is seated surrounded with that power which has wrested Asia from the Parthians, which carries Greek colonies into Media, subdues Syria and Palestine and cuts off the Seleucids." And Cicero, the Roman orator and politician, adds, "He made the Republic of Rome tremble before the powers of his arms." Armenia's borders extended from the Caspian Sea to the Mediterranean.
Armenia circa 250 B.C.
Armenian Empire (c. 80 B.C.)
284
Arsacid Armenia (c. 150 A.D.)
elected supreme head of the Armenian Church. The creation of the Armenian alphabet in 405 A.D. solidified the unifying factor of the Armenian language for the divided nation. Mesrop Mashtots, a scholar and clergyman, shaped the thirty six (three characters were added later) letters that distinguished Armenia, linguistically and liturgically, from the powers surrounding it. The alphabet representing the many distinct consonants of Armenian has remained unchanged for 1500 years. BATTLE FOR FAITH The conversion to Christianity was inevitably to bring in its wake complications of a political nature and to arouse grave anxieties in neighboring Persia. The Sassanian Persians took advantage of Armenia's inner weakness and launched a campaign to stamp out Christianity there and replace it with Mazdaism. Under this common threat, the princes, nobility and the people of Armenia rallied, and in 451 under the leadership of the Commander-in-Chief (sparapet) Vardan Mamikonian the Armenians heroically faced the Persians at Avarayr in defense of their faith and national heritage. Heavily outnumbered, they were defeated; Vardan Mamikonian and many valiant men fell fighting. But guerrilla warfare continued in the mountainous regions. Vahan Mamikonian, a nephew of Vardan, continued the struggle. This time the Persians, realizing the futility of their policy, were obliged to come to terms with the Armenians. Freedom of religious worship was restored with the Treaty of Nvarsag.
THE ARSACID DYNASTY Tigran's victories were however, destined to hasten his downfall, which occurred in 66 B.C. His son, King Artavazd II, governed Greater Armenia for 20 years until Anthony and Cleopatra had him brought to Egypt in chains. Artavazd refused to name Cleopatra as his queen and was executed. By 64 A.D. the new Arsacid dynasty, a branch of the Parthian Arsacids, came to power, and the country as a whole soon became a buffer zone over which the Romans and Parthians fought for domination. In order that we may realize the real implications of the history of Armenia and grasp the soul of this people, we must turn our gaze upon the beginning of the 4th century, which was momentous in its consequences for the growth of the nation. THE FIRST CHRISTIAN STATE IN THE WORLD One 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 own and, at times, became identified with the Western world. King Tiridates III (Trdat), having been converted by Gregory the Illuminator, proclaimed Christianity as the religion of the state in 301 A.D. Thus, Armenia became the first nation to embrace Christianity officially. This was 12 years before the Emperor Constantine's Edict of Milan which declared tolerance of Christians in the Roman Empire. Gregory the Illuminator, later canonized, was elected Catholicos of the new Armenian national Church, the first in a long line of such clergy to he
Medieval Armenian Kingdoms
285
THE BAGRATID DYNASTY In the 7th century, the mighty Arabs stormed into Armenia and conquered the country. Beginning from the 9th century, Armenia enjoyed a brilliant period of independence when the powerful Bagratid Dynasty asserted political authority. Resumption of international trade brought prosperity and the revival of artistic and literary pursuits. The capital of Ani grew to a population of about 100,000, more than any urban center in Europe. Religious life flourished and Ani became known as the "city of one thousand and one churches." In the middle of the 11th century, most of Armenia had been annexed by Byzantium. THE CILICIAN KINGDOM OF ARMENIA The destruction of the Bagratid Kingdom was completed by raids of new invaders, Seljuk Turks from Central Asia. With little resistance from weakened Byzantium, the Seljuk Turks spread into Asia Minor as well as the Armenian highlands. This invasion compelled a large number of Armenians to move south, toward the Taurus Mountains close to the Mediterranean Sea, where in 1080 they founded, under the leadership of Ruben (Rubenid dynasty), the Kingdom of Cilicia or Lesser Armenia. Close contacts with the Crusaders and with Europe led to absorbing Western European ideas, including its feudal class structure. Cilician Armenia became a country of barons, knights and serfs. The court at Sis adopted
European clothes. Latin and French were used alongside Armenian. The Cilician period is regarded as the Golden Age of Armenian Illumination, noted for the lavishness of its decoration and the frequent influence of contemporary western manuscript painting. Their location on the Mediterranean coast soon involved Cilician Armenians in international trade between the interior of Western Asia and Europe. For nearly 300 years, the Cilician Kingdom of Armenia prospered, but in 1375 it fell to the Mamelukes of Egypt. 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 ARMENIA While in the 13th century Armenians prospered in the Cilician Kingdom, those living in Greater Armenia witnessed the invasion of the Mongols. Later, in the 16th and 17th centuries, Armenia was divided between the Ottoman Empire and Safavid Iran. With the annexation of the Armenian plateau, the Armenians lost all vestiges of an independent political life. The Persian leader Shah Abbas I inaugurated a policy of moving populations of entire Armenian regions to his country to create a no-man's land in the path of the Ottoman advance, and to bring a skilled merchant and artisan class to his new capital, Isfahan. The Armenian community of New Julfa, a suburb of Isfahan, was held by Shah Abbas I in great esteem and
Cilician Kingdom of Armenia
Armenia in 1200
286
became one of the economic bases of the Safavid state. Persians ruled Eastern Armenia until 1828, when it was annexed by Russia. However, it was the Ottoman Turks who governed most of the Armenian land and population (Western Armenia). OTTOMAN EMPIRE AND THE GENOCIDE During the 19th century, the Armenians living under Turkish rule suffered from discrimination, heavy taxation and armed attacks. As Christians, Armenians lacked legal recourse for injustices. They were taxed beyond their means, forbidden to bear arms in a country where murdering a non-Muslim often went unpunished, and were without the right to testify in court on their own behalf. During the late l9th century, the increasingly reactionary politics of the declining Ottoman Empire and the awakening of the Armenians culminated in a series of Turkish massacres throughout the Armenian provinces in 1894-96. Any illusion the Armenians had cherished to the effect that the acquisition of power in 1908 by the Young Turks might bring better days was soon dispelled. For in the spring of 1909, yet another orgy of bloodshed took place in Adana, where 30,000 Armenians lost their lives after a desperate resistance. World War I offered a good opportunity for Turks to "solve the issue." In 1915, a secret military directive ordered the arrest and prompt execution of Armenian community leaders. Armenian males serving in the
Ottoman army were separated from the rest and slaughtered. The Istanbul government decided to deport the entire Armenian population. Armenians in towns and villages were marched into deserts of Syria, Mesopotamia and Arabia. During the "relocation" many were flogged to death, bayoneted, buried alive in pits, drowned in rivers, beheaded, raped or abducted into harems. Many simply expired from heat exhaustion and starvation. 1.5 million people 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 REGIME The defeat of the Ottoman Turks in World War I and the disintegration of the Russian Empire gave the Armenians a chance to declare their independence. On May 28, 1918, the inde-pendent Republic of Armenia was established, after the Armenians forced the Turkish troops to withdraw in the battles of Sardarapat, Gharakilisse and Bashabaran. Overwhelming difficulties confronted the infant republic, but amid these conditions the Armenians devoted all their energies to the pressing task of reconstructing their country. But due to pressure exerted simultaneously by the Turks and Communists, the republic collapsed in 1920. Finally, the Soviet Red Army moved into the territory (Eastern Armenia) and on November 29, 1920, declared it a Soviet republic. Armenia was made part of the Trans-Caucasian Soviet Federal Socialist Republic in 1922, and in 1936, it became one of the Soviet Union's constituent republics. The tumultuous changes occurring throughout the Soviet Union beginning in the 1980's inevitably had repercussions in Armenia. INDEPENDENCE In 1988, a movement of support began in Armenia for the constitutional struggle of the Armenians of Nagorno Karabagh, to exercise their right to self-determination. (This predominantly Armenian populated autonomous region had been placed under the jurisdiction of Azerbaijan by an arbitrary decision of Stalin in 1923.) That same year, in 1988, Armenia was rocked by severe earth-
Armenia in Ottoman Empire
287
quakes that killed thousands, and supplies from both the Soviet Union and the West were blocked by the Azerbaijani Government fighting the Armenians in Nagorno Karabakh. Both of these issues have dominated Armenia's political arena since the first democratic election held in Armenia during the Soviet era. In 1990, the Armenian National Movement won a majority of seats in the parliament and formed a government. On September 21, 1991, the Armenian people overwhelmingly voted in favor of independence in a national referendum, and an independent Armenia came into being.
Armenia today
Notes
i Source: the official web-site of Republic of Armenia Ministry of Foreign Affairs www.armeniaforeignministry.am
Abreviations References
appendix
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: FAOs 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 Childrens Emergency Fund WB: World Bank
Others
C: degrees Celsius F: degrees Farenheit Cal: calories AMD: Armenian Drams ha: hectare ibid: source previously quoted IDH: Human development rate Per capita kcal: kilocalorie kg: kilogram km: kilometer km2: square kilometers km3: cubic kilometer m: meter m2: square meters m3: cubic meter mm: millimeter msnm: meters above sea level op. cit: from the previously quoted source p.a: per annum p.a.b: gross agricultural production GDP: Gross Domestic Product ppp: purchasing power parity tn: metric ton US$: United States of America Dollars vum: exports products unit value
291
References
Alpha Plus Consulting, The State of Armenian Agriculture, a Wan cAklti ams Tseu eoilR hBirr Hpe n.oU 2i0h m,s pr,iv u,i.g sL.o itNU Jrm 4an 0faa ed d1 hyW avw y# 9e oz rN l3L 7C a, eo ns PUnited Nations Economic Commission for Europe (UNECE), tn, ,e 4r b R D 2 c u re rm s n l t quantitative and qualitative analysis, Yerevan, 2005. Towards a knowledge-based economy. Armenia: country readiness assessment report, New York and Geneva, 2002. Arzumanya T, Current issues on research, development and innovation in Armenia en Int. J. Forsight and Innovation United Nations Economic Commission for Europe (UNECE) Policy, Vol 2 (2), 2006 and Ministry of Nature Protection of the Republic of Armenia, National Report on the State of the Environment in Asad, Murthi M., Yemtsov R., Murrugarra E., Dudwick N., Armenia in 2002, Yerevan, 2003. Hamilton E. and Tiongson E., Growth, Poverty and Inequality: Eastern Europe and the Former Soviet Union, CIA World Fact book, Armenia (Available in Washington DC, 2005, World Bank. https://www.cia.gov/library/publications/the-world-factbook/geos/am.html) (Access: April, 2008). Bedoukian, P., Geography of Armenia, Geneva, 2005 Davrizhetsi, P, Food quality and development: WTO and its Broadman H., Anderson J., Claessens S., Ryterman R., rules, Roma, 2005. Slavova S., Vaglasindi M. and Vincelette G, Institutional Elliott, D; Schwartz, M; Scott, G; Haymes, S; Heimiller, D; Reform for Investment and Growth in South Eastern Europe, George, R; Wind energy resource, Atlas of Armenia, 2003 Washington DC, 2004, World Bank. World Bank, Armenia at first sight, statistical material compiled by the Permanent Office in the Country, 2004 World Bank, Armenias Rural Economy, From Transition to Development, Washington DC, 2005. World Bank, Armenia: Reaping the benefits of Steady Reforms, 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, Europe and Central Asia Region, Washington, 2005. World Bank. Global Economic Prospects 2008: Long-term prospects and poverty forecasts, Washington DC, 2008. Wa mo Au 2World Bank, Rising food prices: Policy options and World Ea Di, a,h ,pk rC cn xb ue ov B nW P rflr e d w td g o is R n Bank response, Washington DC, 2008. FAO, Agricultural statistics and environmental issues. Based on Long-term scenarios of livestock-crop-land study results, use interactions for the assessment of environmental indicators in developing countries, Roma, 1995. FAO, Status of Agricultural Biotechnology and Biosafety in Selected 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 Central Asia and the Caucasus, Almaty, 2002 Fisher, Stanley, Sahay R., y Vegh C., How far is Eastern Europe from Brussels?, Washington DC, 1998, FMI. FMI, Oomes N, Inflation in Armenia: What is happening to Armenian prices, Washington DC, 2007.
292
T 9ccttf 1truim Apg a,oa wwi onro rnh Rbg rea hhi rm eau np ue ftit iau ejI ,H zs nr Heilig, G.K., China Food. Can China Feed Itself?, s y o l k s Luxemburg, 1999, IIASA. Ivanic M y Martin W, Implications of Higher Global Food Prices for Poverty in Low-Income Countries, Washington DC, 2008, World Bank. Limao N. y Venables A.J., Infrastructure, Geographical Disadvantage, Transport Cost and Trade, 2001, World Bank Economic Review. Loukoianova E. y Unigovskaia A., Analysis of Recent Growth In 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 of Development Since Independence en Trade in the New Independent 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 Market Structure: What determines Banking Spreads in Armenia? FMI Working Paper, 2007. OCDE, Water Management and Investment in the New Independent States, 2001. OCDE-ECOWAS. Atlas on regional integration in West Africa, 2007. World Trade Organization, Report of the Working Party on the Accession of the Republic of Armenia, Geneva, 2002. Republic of Armenia, Ministry of Nature Protection, First National Report to the Convention on Biological Diversity, Yerevan, 1999.
Republic of Armenia, Ministry of Agriculture and FAO support, A strategy for sustainable agricultural development, Yerevan, 2002 Republic of Armenia, National Statistical Service, Yearbook 2007, Yerevan, 2008. Reza L, Michalski W y Stevens B., The future of food. Long term prospects for the agro-food sector, 1998. Roberts B.W. y Banaian K, Remittances in Armenia: Size, Impacts and Measures to Enhance Their Contribution to Development, Washington DC, 2004, USAID. Russell, T., The Armenian Diaspora, Washington, 1994 Schneider F., The size and Development of the Shadow Economies of 22 Transition and 21 OECD Countries, Document N# 514, University of Linz (Austria) and Institute for the Study of Labor (IZA) in Bonn, Germany, 2002. Tenenbaum Y, Rural Population Worldwide, New York, 2007 R nt,(ife e0n sarn uua rm ryi ce rnu i26 re am o/, lpe ga eT u, b ria sc l0 fo v A p s http://www.fao.org/ag/AGP/AGPC/doc/Counprof/Armenia/ Armenia.htm)p 28ir As 0): 0 (c ,A .c le United Nations Development Program (UNDP), The most vulnerable population in Armenia, Armenia Social trends, Bulletin, Yerevan, 2006 United Nations Development Program (UNDP), The Poorest Communities in Armenias Marzes, Armenia Social trends, Bulletin , Yerevan, 2002. UNDRO-ONU, Multisectoral Study on Disaster and Management Planning in Armenia, New York, 1990 USA, National Intelligence Council, Global Trends 2015: A Dialogue About the Future with Non-government Experts, 2000. USAID, Armenia Competitiveness Assessment, Arlington, 2004. USAID, Armenia agricultural assessment, 2002
293
Index
Thanks 5 7 The Marzes
Introduction Chapters
Marz 1. Aragasotn Marz Marz 2. Ararat Marz
173 185 201 215 221 233 241 249 259 269 279 289
1.World Situation Trends and Challenges 2.Natural Resources in Armenia
3. Armenian Agricultural Scenario 4. Logistics
29 55 89
Marz 3. Armavir Marz
Marz 4. Gegharkunik Marz Marz 5. Kotayk Marz Marz 6. Lori Marz
5. Agribusiness and Marketing
6. Agribusiness Sector Financing
7. Legal Regulations of Agricultural Sector 8. International Organizations Strategic Recommendations for Agricultural Development in Armenia 9. Fruitfull Armenia Proposal
123 139 159 165
113
Marz 7. Shirak Marz Marz 8. Syurik Marz
Marz 9. Tavush Marz
Marz 10. Vayot Dzor Marz
Geography and History of Armenia Abreviations, References

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5

Ana Cristina Schirinian

World Situation Trends and Challenges

Chapter 1 - World Situation. Trends and Challenges

World Situation. Trends and Challenges

1.2 Medium term trends: population and food

Fruitfull Armenia - The Proposal

2050 3.9 5.8 6.8 3.7 2.6 4.1 2.9

Near East / North Africa

60% Africa Europe Oceania Latin America and the Caribbean

Latin America and the Caribbean Southern Africa

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

Chapter 1 - World Situation. Trends and Challenges

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

Fruitfull Armenia - The Proposal

Roots and Tubers

Chapter 1 - World Situation. Trends and Challenges

5021 1077 450 2240 3280 460 960 26490 2160

Fruitfull Armenia - The Proposal

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

Table 5. Changes in commodities structure Source: FAO

Chapter 1 - World Situation. Trends and Challenges

Table 6. Changes in commodities structure, developing regions. Source: FAO

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

LATIN AMERICA AND THE CARIBBEAN

Fruitfull Armenia - The Proposal

1.3 Implications of current agri-food demand

PERIOD 19612001 19712001 19812001 19912001 1999/012030 20302050

Chapter 1 - World Situation. Trends and Challenges

1.4 Mid-term trends: production and trade

Fruitfull Armenia - The Proposal

Chapter 1 - World Situation. Trends and Challenges

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

Fruitfull Armenia - The Proposal

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

Nominal Values Real prices MUV (Manufacturer export unit value) 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04

Chapter 1 - World Situation. Trends and Challenges

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

Fruitfull Armenia - The Proposal

1.5 Food crisis: Impact on countries

Chapter 1 - World Situation. Trends and Challenges

1.6 The Armenian case

Fruitfull Armenia - The Proposal

3,5 3 2,5 2 1,5 1

0,5 0 2003 Exports 2004 Imports 2005 2006 2007

Chapter 1 - World Situation. Trends and Challenges

Fruitfull Armenia - The Proposal

Natural Resources in Armenia

Chapter 2 - Natural Resources in Armenia

Natural Resources in Armenia

2.2 Physical geography

Fruitfull Armenia - The Proposal

10 C 0 1 -10 Month 2002 2 3 4 5 6 7 8 9 10 11 12

July August September October November December

Average temperatures Source: Own chart with data from Armhydromet

Jan. 19611990 2002 -6.8

Sept. Oct. 13.2 7

Dec. Average -3.9 5.9

Chapter 2 - Natural Resources in Armenia

Source: Own chart with data from Armhydromet