Armenia’s struggling agriculture is unlikely to develop and thrive as long as it is dominated by hundreds of thousands of mostly small farms, the new Agriculture Minister Sergo Karapetian said on Wednesday.
“The future of our agriculture lies in the enlargement of land plots and farms,” Karapetian told his first news conference in the current capacity. He said he will seek to “explain” this to farmers across the country.
Privatization of agricultural land was one of the first key measures taken by Armenia’s first post-Communist government in 1990-1991. The bulk of the land, which was previously owned by state collective farms, was evenly distributed, free of charge, among the country’s rural population.
Most of the land owners have since struggled to make their ends meet, hamstrung by a lack of state assistance, irrigation, cheap credit as well as broader economic problems facing Armenia. A growing number of them has reportedly been selling their plots to a new class of wealthy landowners.
Karapetian said that small farms are inherently inefficient because few of their owners can buy tractors and other agricultural machinery. “They also have trouble getting credit resources because they lack property that could be used as a collateral,” he said.
The minister would not say whether that means he supports a further concentration of land holdings in the hands of big landowners. “The enlargement of land plots and farm consolidation must be done voluntarily,” he said. “Nobody will be forcing anyone to sell their land.”
Karapetian was appointed minister late last month amid a more than 14 percent fall in agricultural output blamed by the Armenian government on highly unfavorable weather conditions. The agriculture sector generates roughly one-fifth of the country’s Gross Domestic Product.
The minister previously managed one of the country’s largest food-processing companies, Artfood. He co-owns it with several other individuals, a fact that has raised questions about a possible conflict of interests.
“He is a food buyer, he is a natural rival of farmers,” Hrant Bagratian, a former prime minister critical of the current government, said last week. “He will mess up things. You can’t be an agribusiness chief and a good agriculture minister.”
“A good agriculture minister should unite farmers into cooperatives, strengthen farmers so that they sell their produce at higher prices and more revenue goes from the food-processing industry to agriculture. This guy won’t do that. Will he work to the detriment of his own company?” claimed Bagratian, who himself has managed Armenia’s largest brandy company in the past.
Karapetian dismissed such suggestions, saying that he is not involved in Artfood’s business operations anymore. He also claimed not to remember the names of other company shareholders. Parliament speaker Hovik Abrahamian is believed to be one of them.