ON ARMENIAN GOVERNMENT’S GENEROSITY

news.am
April 13 2010
Armenia

This year the RA Government has allocated 550m AMD (less than
U.S. $1.4m) for agricultural development. Thus, this year the
Government’s assistance is only 1% (!) of last year’s gross
agricultural output.

The Government-allocated funds per capita equal 1,600 AMD (about $4).

With this deplorable fact considered, the "beneficiaries" are limited
to the highland households. Moreover, how much of the symbolic amount
will finally reach the addressees after going though different levels
of local government – one has only to guess at that!

We would exaggerate of we said that Armenian farmers do not need
government aid. The annual gross agricultural output per farm averages
U.S. $4,000 in Armenia. So the labor productivity in Armenia’s
agricultural sector is extremely low, with farmers’ incomes being in
"complete conformity" with the output.

Although the standard of well-being in Armenian cities leaves much to
be desired, the situation in the country’s rural areas is even worse.

In 2008, per capita monthly income averaged 20,800 AMD (about U.S.

$68) in Armenia’s rural areas – 1.5 times as low as in the cities.

Armenia’s rural population totals 1.2m people.

In the United States the rural population constitutes 1% of the total
population – one farmer produces food for 100 citizens, with a large
amount of products exported. There the problem is overproduction, which
influences the average selling price and makes small and middle-sized
households unprofitable. The Government finds the ways of compensating
the farms for their production costs thereby enabling them to survive.

The situation is quite the opposite in Armenia. Rural population
constitutes a third of the Armenian population, and many urban
residents have land plots and are engaged in plant growing and
livestock production. However, in many cases local agricultural
production proves insufficient, and products have to be imported.

Last year, imports constituted 21% of beef available on the market,
45% of pork and as much as 80% of poultry! The last figure is really
surprising – rather efficient poultry farms are operating in Armenia.

Specifically, egg production almost satisfies the local demand. As
regard local wheat production, it meets only a third of the local
demand.

With a serious geopolitical situation in the region considered, the
dependence of the national market on import poses a potential threat
to Armenia. Under the circumstances, one can only be surprised at
"cost saving" at the agricultural sector’s expense – even with the
budgetary funds being limited.