Two new factors are putting farmers under pressure in Armenia: climate change and a fall in the competitiveness of the country’s agricultural exports due to the appreciation of the dram. The response to both of these has been a sharp increase in investments into new agricultural technologies, as outlined by Deputy Economy Minister Arman Khojoyan.
While both of these factors have negative effects on farmers, they have stimulated investment into robotics and smart agriculture technologies by farmers looking to increase productivity and make their products more competitive across a wider range of international markets.
“Integration of robotics and technology in the agriculture sector, often referred to as precision agriculture and smart farming, has great potential to revolutionise the industry by increasing productivity, efficiency and sustainability. Armenia, with its very significant share of agriculture in GDP, can benefit from this investment,” Khojoyan told the EBRD annual meeting and business forum in Samarkand in May.
"By leveraging robotics and automation, the tasks that were traditionally labour-intensive can easily become streamlined. Meanwhile the use of drones, sensors and data analytics can provide valuable insights on soil quality, crop health and yield predictably to enable farmers make data-driven decisions and optimise their production processes.”
Elaborating in an interview with bne IntelliNews on the sidelines of the event, Khojoyan said the government is supporting the process: “Armenian farmers are quite small, the lands are quite fragmented, so that is why efficiency is not that high in Armenia, and we are trying to increase that efficiency,”
According to the deputy minister, growth in agricultural output accelerated in 2022, though he warned that there are “different kinds of shocks which are negatively affecting the agricultural sector, and climate change is one of them. Our activity is to stabilise the sector, not to allow the sector to decline.”
On top of that, the agriculture sector in Armenia, like those around the world, is under pressure from climate change.
“One of the visible issues is the scarcity of water resources, and also the climate is changing and the vegetation is changing, so the traditional way of farming needs to be updated. This is also a new challenge for farmers [and they need] to have new information about all these changes and to apply it,” said Khojoyan.
Price pressure
At the same time, the Armenian dram has appreciated, driven up partly by the arrival of thousands of Russians fleeing mass mobilisation in their home country. This has eroded the competitiveness of Armenian exports, including food and agricultural products.
“In the recent period, the Armenian national currency is experiencing rapid appreciation. In my opinion this can be the exact moment when the producers can benefit from investing in acquiring new technologies. We all understand that appreciation of the national currency in the short term also poses some negative effects but investing in technology has many advantages,” said Khojoyan.
The Armenian government is intensively supporting farmers and producers to update their production capacities and apply frontier technologies. Khojoyan named some of the areas the government is supporting, such as setting up intensive orchards to diversify the fresh produce market, and introducing smart farming and innovative greenhouses. In the last two years the active portfolio of these government projects exceeds $600mn, the deputy minister said.
“This technological advancement will enhance efficiency leading to increased productivity … Companies can increase efficiency, optimise their costs, have quality products, diversify their markets and be competitive in local and international markets,” he told bne IntelliNews.
New tech sectors
According to Khojoyan, currently many of the new technologies being adopted by Armenian farmers are from international companies, but some are emerging within Armenia too, adding a new dimension to the country’s already thriving tech industry.
Asked about agritech companies within Armenia, Khojoyan said: “Yes, of course there are companies but these companies are quite small. We are currently creating an environment for these kind of companies to grow, joining efforts with the Ministry of High-Tech Industry, and also with the Agrarian University,” Khojoyan told bne IntelliNews.
“Arm being very prominent in the IT industry, it’s strange that it still doesn’t provide sufficient input in the agriculture sector. However there are companies founded by Armenians which are providing agricultural services in the US market, such as IntelinAir, which analyses data on crop growth and diseases.”
Khojoyan believes it is particularly important to involve young people in the agriculture sector in light of the challenges posed by climate change.
“This is a global problem: youth are not very interested in the agriculture sector, but it will be an important sector for the future because the population is growing and because of climate change natural resources are decreasing.
“In order to tackle these kinds of challenges, it’s important to combine technology and agriculture and make it attractive for the youth to come and innovate in the sector.”