AGBU Magazine Cover for November 2009


The collapse of the Soviet Union led to a serious crisis in economy and in agricultural production in the South Caucasus. The communist idea for centralized plan-based households was ruined, resulting in the collapse of the lifestyle of collective and state farms that had existed for several decades. Nearly 20 years later, former Soviet republics, including Armenia, still struggle in developing a market-based farming industry.

Armenia started agricultural reforms before any of its neighbors. In 1991, a law was passed on privatization of land and the entire agro-industrial sphere. Soon after that, collective farms and state farms were liquidated. Land, livestock and agricultural equipment were distributed to villagers. Within a few months after Armenia gained independence, land was divided among 320,000 households. (It was one of the first post-Soviet reforms and haphazardly administered, leaving little verifiable record today of how the allocations were determined and by what measure land was distributed.)

The reform was crucial to Armenia's survival during the war and economic blockade of the early ‘90s. Thousands of factory workers had lost jobs and turned to farming for survival.

Distribution of resources suits Armenia, a land blessed with the natural means for agriculture. Its hillsides provide grazing in summer and hay in winter for livestock, while its valleys' dark soil provides rich beds for cultivation. Mount Ararat and the lesser snowy peaks of the Armenian Dance Mountain Range and other mountainous ranges are constant irrigation resources, while plant growth enjoys an average of 333 sunny days a year.

Challenges, though, exist in finding or affording the best ways to exploit the gifts of nature.

Most farming in Armenia is done on the family level—as a form of sustenance, rather than simply a source of revenue. About 545,000 families are considered employed through agriculture. (One reason why Armenia's official employment figures are routinely out of line with reality is that anyone who owns a plot of land is considered "employed.")

On record there are about 332,000 farming households in Armenia, a huge shift from the Soviet era, when Armenia provided the USSR with 280 collective farms and 513 state farms. (Collective farms were centered in villages, with production under a joint administration and distribution of products determined by "collective" decision. State farms employed workers in the realms of agriculture and animal husbandry.)

Whether for family use or as a business enterprise, agricultural production remains a manual labor-intensive work in Armenia.

The spring and summer landscape is dotted with men, women and youth engaged in planting by hand or cleaning young crops of weeds, or cutting and collecting large quantities of grass for storage. Autumn brings the back-bending business of harvesting.

It is a seasonal way of life well known to villagers such as Ararat Stepanian, who shepherds three cows and five goats. He also tends a one-hectare [2.47acres] orchard, harvesting apples, pears, apricots, mulberries, peaches and walnuts, in Ushi village of Aragatsotn province in Armenia.

His only machine is a beat-up Zhiguli (a Soviet-era Lada car) into which he and his sons load the product of their labor and their livestock's generosity: yoghurt, cottage cheese, milk, butter, and sometimes meat.

Once filled, the Zhiguli faithfully hums about 45 minutes to Yerevan and the markets. If the trees are fruitful and the cows and sheep productive, the Stepanian family earns $1,000-$1,500 a month from their labor (during warm-weather season).

It's a good sum for a small farmer. But this small farmer husbands a big family—wife, six children, and his elderly parents. It's barely enough, he says, for the 10 of them.

Vardges Poghossian, another farmer from the same village, who has four children and an elderly mother, says that what he earns after selling produce is not enough to provide for his family, so he's trying to earn extra by working at a petrol station on Ashtarak-Gyumri highway.

"My children are finishing school, we have to pay private teachers [to prepare for university entrance exams], my mother is sick, she has undergone several surgeries, so I have to make some money on the side," says Poghossian.

Lending a hand

Over the years, international agencies such as the United States Agency for International Aid (USAID) have focused programs on strengthening Armenia's agricultural production.

The United States Department of Agriculture's Marketing Assistance Program (MAP) supports farmers in creating and operating milk production cooperatives. The first was started in the Lejan village of Lori province in 2003. Within three years it produced 500 tons of milk on an investment of $106,000. (Similar cooperatives have also started in Tolors and Akhlatyan villages of Syunik province, Vahan village of Gegharkunik province, and Pushkino village of Lori province.)

Earnings from the sale of milk allow members of the cooperative to buy seed, fertilizer and other farming necessities.

USDA MAP has also assisted cooperatives in developing methods of artificial insemination of livestock. In 12 villages where consumer cooperatives operate, about 400 cows were inseminated by "pedigreed" semen from a breed (Jersey American) that enabled farmers to increase milking in winter (when production typically fell off due to lack of grazing).

From 2004 to 2009, with financial support from the Armenian government and the International Fund for The Development of Agriculture, a loan program "Economic Development of Rural Settlements" was implemented in Tavush, Gegharkunik, Lori, Shirak, Vayots Dzor, Aragatsotn and Syunik provinces. Within the framework of the program, representatives of small and medium businesses (including farms) were given long-term bank loans ranging from $5,000 to $150,000 in a program that was completed this year.

Additionally, the Farmer's Land Bank gave loans amounting to about $3.7 million to Gegharkunik province. From 2004-2009 loans were issued from $3,000 to $150,000. Most of the loans were taken by small businesses (including farms) with 60 percent at $3,000; 20 percent took up to $30,000. A few larger businesses took up to $150,000. Based on the success of the initial program, the bank plans to issue further loans amounting up to $5 million.

New challenges for oldest occupation

Turning of the soil from season to season provides scenes that are either nostalgic or pitiful (according to perspective), as the work on the Armenian terrain is mostly managed by smoke-heaving dinosaurs of the Soviet age. Tractors with wide steel tracks instead of wheels churn the soil, but are just as likely to break down as not before the job is finished.

Mechanized farming in Armenia enjoyed easier seasons in the days when those Soviet tractors were young and shiny. Experts in agriculture say one of the biggest deterrents to more successful production in Armenia is the deterioration of equipment.

But at least farmers tending animals for milk, butter, cheese, etc., can now turn to Ashtarak-Kat (Ashtarak-Milk)—one of Armenia's leading enterprises in dairy production—for help in access to modern machinery.

Ashtarak-Kat (A-K) started in 1995 as a cheese plant in the village of Agarak. It has since grown to become a leading producer of dairy products, including milk (with two low-fat varieties), at least seven types of cheese, and a series of dairy-based desserts aimed at children, under its own brand "Yo Yo."

The company claims a high level of product purity, attributing its quality to the Armenian alpine's clear air and grazing lands untainted by toxins from which Astarak-Kat collects its raw materials.

In 2006, A-K joined the International Dairy Federation, an organization that promotes standardization of dairy-product quality. A-K was granted membership in the federation, following tests of its product that met international standards. With Ashtarak-Kat, Armenia became only the fourth post-Soviet country to earn membership in the federation.

In 2001 Ashtarak-Kat, after having researched a number of highland regions, chose Lori, Syunik, Gegharkunik, Shirak and Aragatsotn provinces in which to build stations for receiving milk. Here, away from busy roads, industrial and domestic sources of pollution, "milk-receiving units" were founded and furnished with modern equipment.

Ashtarak-Kat's network includes 48 mountainous villages. An agreement is signed with each farmer, stating that approved hygiene will be maintained and that only pedigreed cows will be used and fed ecologically pure feed. Furthermore, the livestock get regular vaccinations, during which time milking must be suspended.

According to spokeswoman Tatevik Gazabian, Ashtarak-Kat is working with more than 5,500 farming households.

(A-K has also collaborated with the Armenian Medical Association since 2006 to provide free health examinations to villagers, conducted by specialists from Yerevan.)

Having solved the main problem connected to the selling of raw milk, farmers took a more professional approach to animal breeding and, by doing so, expanded their potential income.

They are breeding new strains by artificial insemination, increasing the number of livestock, and through Ashtarak-Kat company's recent major project—introduction of milking equipment—farmers are producing and supplying milk of higher quality.

The first successful implementation of milking machines took place in 2008 in Artsvakar, a village in Gegharkunik province. The project is carried out with Civilitas Foundation, which provides milking machines through micro-loans.

Ashtarak-Kat, on the other hand, has established an installment system in which farmers receive milking machines that are paid off over the course of a year. A machine that can milk one cow costs about $730; about $1,000 for one that milks two at a time. Ashtarak-Kat stipulates that farmers purchasing the machines on installment must own at least 10 cows, making it more likely that the payoff can be achieved through milk sales.

Utilization of such machines enables farmers to save time and increase work efficiency, as well as improve the control over sanitary-hygienic conditions in the milking process. Mostly, though, it cuts down on the need for a significant number of workers—in the case of most farms, dairymaids, i.e., the work of wives and daughters.

Milking equipment is being installed in Goraik and Sarnakunk villages of Syunik province; 200 more are planned to be installed by the end of this year throughout Armenia.

Lending a hand in lending

Farming in Armenia is also getting a boost from a state-initiated system of selective subsidizing.

Deputy Minister of Agriculture Samvel Avetisian says the program is initially aimed at assisting farmers in regions where agriculture is most challenged.

"In other words, subsidizing is envisaged for areas where natural climactic conditions are not favorable for agriculture. In particular, experimental projects are being carried out in Tchambarak (Gegharkunik province), Ashotsk or Amasia (Shirak province)."

When issuing agricultural loans, banks have established 12-16 percent annual interest rates. Beginning last year, the government of Armenia has been offering assistance to pay up to 10 percent of such loans.

AKBA-Credit Agricol Bank is an active participant in the subsidization program. According to bank CEO Stepan Gishian, agricultural loans are the bank's priority line of credit.

"With the beginning of the farming season, our bank is actively financing agriculture in all its 36 branches," he says. According to Gishian, the loan granting process in many villages of Ararat valley is complete now, and the bank is currently working with the highland regions of Armenia.

Both short-term (three years) and long-term (seven years) loans are given up to $80,000.

In 2009 the bank gave loans totaling about $30 million, most at less than $10,000.

Nature and needs

If agriculture is a science, it is first of all a gamble, especially in Armenia where conditions reach the extremes of drought, flood, cold, heat, desert and mountain. Chairman of the Farmers' Union of Armenia Hrachya Berberian says each year has its own surprises.

In 2008, spring cold snaps and early-summer hail storms nearly extinguished the apricot harvest. In 2009, however, apricots were so plentiful they were selling—even in the capital streets—for pennies a pound. (11,000 tons of apricots were exported this past season, while 80 percent of the harvest was consumed in Armenia.)

A few years ago, hail stations began being installed in some farming regions, shooting cloud-bursting pellets toward threatening weather fronts, in a effort to protect fruit trees.

Training in better production methods is routinely being offered by international agencies. New crops are being tried: For example, this year home-grown broccoli and asparagus were seen at produce markets, making their first appearance in Armenia.

As mentioned, banks, the government, and foreign foundations are cooperating to encourage farmers to invest in means for improving their production.

Still: "What do farmers need? Farmers need everything," says Berberian. "First of all, mechanization. Japanese and Chinese technical assistance is given to the country in the form of grants. With the support of Dutch farmers we have brought in potato harvesters. But that's just a drop in the ocean.

"Today we need tractors, combines, proper tools for agriculture. Farmers work small areas manually because what equipment they have is worn-out. We have combines that waste 30-35 percent of the harvest. And, there is a problem with pesticides and fertilizers."

Berberian says work is needed on developing a better competitive market, and complains that in the sale of farm products—as in other goods—monopolies control certain areas. The union chief says many village farmers have stopped taking their produce to Yerevan because they have been shut out of trade by clan-owned markets. The result is that while some benefit due to association with the "right people," others must settle for selling their products at prices lower than they might expect under free competition.

While experts such as Berberian look for ways to improve revenue in agriculture, and wish for better equipment, technology, etc., village farmers such as Poghossian and Stepanian water the soil with their sweat and pray for Mother Nature's kindness and for the vagaries of man—i.e. swine flu, bird flu—to bypass their modest plots.

Like so many facets of society, agriculture in Armenia remains "in transition. " At least, though, the transition continues.

Originally published in the November 2009 ​issue of AGBU Magazine. Archived content may appear distorted on your screen. end character

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AGBU Magazine is one of the most widely circulated English language Armenian magazines in the world, available in print and digital format. Each issue delivers insights and perspective on subjects and themes relating to the Armenian world, accompanied by original photography, exclusive high-profile interviews, fun facts and more.