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Economist Says, Situation in Armenian Agriculture Typical of Weak, Underdeveloped Country

It was evident back in spring that this year there would be serious problems with the procurement of agricultural products in Armenia, economist Ashot Yeghiazaryan said in an interview with Epress.am. 

“It was obvious that agricultural produce processing enterprises had consumption problems in the Russian market, which is the primary export market for [the Armenian] food processing industry. [The problems] mainly concerned the field of viticulture which provides raw materials for the production of the exported wine and brandy.”

When the country's agricultural sector faces such issues, the economist stressed, the state has to intervene, play a regulatory role, which does not happen in Armenia. “Farmers by themselves cannot determine what to produce in a given year, what plans to make for the coming years, which is why the state intervenes, gives directions. Authorities, to some extent, also regulate agricultural prices, and take on greater responsibility. A weak country does not have many opportunities. In developed countries agricultural planning is science-based: they use advanced equipment and protective systems, pesticides, and they have the capacity to reduce the impact of natural factors. In other words, they have  functioning mechanisms. [In Armenia], agriculture is not productive; the current situation is a characteristic of a weak, underdeveloped country.”

According to Yeghiazaryan, the state should also regulate the relationship between farmers and large processing enterprises. “They should reach a parity of incomes between farmers and processors. Naturally, since processing companies are much stronger and have more financial resources and market power, income is often distributed in their favor. These companies dictate the rules of the game. There is no optimum parity, and that is why farmers need the help of the state.”

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