The bank said the Armenian government will contribute another $5.33 million to the project that aims to boost meat and milk production and improve pasture management in those rural communities.
“Agriculture continues to be a key sector for the Armenian economy, and … it has to revitalize its role and contributions to the country’s economic growth and employment,” Asad Alam, the bank’s regional director, said in a statement.
Prime Minister Tigran Sarkisian promoted the project, called the Community Agricultural Resource Management and Competitiveness (CARMAC), during a visit to the central Aragatsotn province on Tuesday. Officials said six villages in the mountainous region have been included in the scheme.
“As a result of that, you will get serious assistance that will raise your productivity and thus contribute to a rise in your revenues,” Sarkisian told farmers in one of those villages, Avan.
The prime minister’s office said the project will finance the construction of roads and production storage facilities and other infrastructure upgrades in the villages that are home to roughly 78,000 people.
A separate statement by the World Bank confirmed planned investments in the local infrastructure. It said the project will also introduce “innovative livestock production practices.”
“Productivity increases will be the result of a more rational use of pastures and better feeding, and will boost overall efficiency, so that Armenian products will be in a better position to supply the domestic market and to compete regionally,” Doina Petrescu, head of a World Bank team that designed the CARMAC, was quoted as saying.
The assistance is to be mainly channeled into the selected communities through agricultural cooperatives which the bank and the Armenian government hope will be formed by farmers. Sarkisian urged Avan villagers to start jointly raising cattle and using their privately owned pastures.
The launch of the CARMAC is part of the government’s broader efforts to reverse a slump in agriculture that was registered last year due to highly unfavorable weather conditions. The sector generating approximately one-fifth of Armenia’s Gross Domestic Product contracted by over 14 percent.
President Serzh Sarkisian said earlier this month that the government should be “very active” in fostering the sector’s recovery. “I myself will go to villages, deal with agricultural problems and keep some projects under my control,” Sarkisian told the prime minister and other top state officials. He also called for greater commercial bank lending to farmers.
Like many other farmers across the country, Avan residents complained about what they see as a disproportionately high cost of agricultural loans offered by Armenian banks. Prime Minister Sarkisian assured them that the banks have promised to substantially cut the interest rates this year. He did not elaborate.
Last year’s bad weather mainly affected production of cereals, fruit and vegetables, which accounted for over 60 percent of the country’s overall agricultural output. In contrast, official statistics show that the production of meat and dairy products was essentially flat in 2010.
Nevertheless, livestock farming is a key focus of the government drive to boost the Armenian agriculture. Last month, Sarkisian’s cabinet approved funding for the purchase of 2,000 metric tons of high-quality barley seeds from Ukraine and Russia that are to be distributed among thousands of farmers.
The government hopes to thereby revive farming in thousands of hectares of land in mostly mountainous villages, which is presently not cultivated. Barley is mainly used as animal fodder in Armenia.
Tigran Sarkisian discussed the planned seed distribution on Wednesday at a meeting with government ministers and regional governors. He said the assistance should primarily target the poorest communities.
“Clearly, we can not satisfy everyone, but only 20 percent of the [barley seed] demand,” he said. “But I think that as a result, we will have growth in the agriculture sector and an expansion of cultivated lands.”