ARMENIA’S FARMERS: GOT MILK?

by Olivia Katrandjian
The Civilitas Foundation

Milk production is one of the main sources of income for rural communities
in Armenia. Although production has increased by more than 50 percent over
the last 15 years, the country remains a net importer of milk and relies
heavily on imported dairy products. There is a serious demand for milk and
milk by-products in Armenia – major dairy producers say they would buy
three times the amount of milk available today.

Due to a lack of capacity, however, the industry functions at less than 30%
of its potential.

Sargis Manukian, an Armenian farmer, learned from a friend about the
Civilitas Foundation’s Dairy Production Assistance Program, which sells
milking machines to farmers on a microfinance basis.

`He has been calling me three times a day asking what he needs to sign up,’
said Sona Nazaryan, a staff member at Civilitas in Yerevan. `One day he came
from Stepanavan, which is almost 100 miles away.

He didn’t have an appointment – he just phoned and said `I’m downstairs.’ I
told him that without the papers, I couldn’t write up a contract.’

`Don’t you worry, I have all the papers with me!’ he said.

`What about the letter from the person who guarantees there is a market for
your milk?’ Sona asked. How could he have the letter? She hadn’t given it to
him.

`Of course!’ he said. He pulled a folded piece of paper out of his pocket.
It was blank except for the village mayor’s stamp and signature. `Here is
the paper! Whatever you write, he guarantees it.’

After filling out the paperwork and getting an actual guarantee, Sargis got
his milking unit. He has been using it for over a month now and has already
made his first payment.

He is one of many farmers to benefit from the program, which provides
milking machines to Armenian farmers through a loan guarantee system. The
farmers agree to pay back the purchase price of the unit in installments
with no interest. The payback rate is 100 percent. The repaid funds are used
to purchase additional units, thereby increasing the number of
beneficiaries.

The Civilitas staff have become dairy `experts’. `The current average milk
yield estimation shows that at least 35 cows are required for one farming
household of six to sustain itself,’ says Hayk Petrosyan, Programs
Coordinator at Civilitas. `Yet, the average milk-producing household has
only three to 10 cows. Farmers rely on manual labor to milk their cows,
which has prevented them from increasing the size of their herd. A milking
unit allows a farmer to improve efficiency and increase quantity of produced
milk, thereby increasing yearly net income by approximately 30 percent.’

With support from the Polish Government, Civilitas is also building milk
cooling and collection centers in two villages. A cooling center will enable
these communities to store enough milk to make it economically beneficial
for the dairy producer to come pick it up. Each center involves 75 percent
of each village’s population. The centers will be completed in May and
used on a loan basis with no interest.

Civilitas not only supplies the equipment but also provides training for
the farmers on the use and maintenance of the milking machines and cooling
centers. This helps the farmers become self-reliant. A self-reliant farmer
is an economically self-sufficient one. Self-sufficiency, in turn, allows
the farmer to participate in and build a civil society. Armen and Nadya
Ekserciyan of Argentina also believe in this notion, which is why they were
the project’s first sponsors.