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ARMENIAN VILLAGE
Vestnik Kavkaza, Russia
March 27 2013
David Stepanyan, Yerevan. Exclusively to Vestnik Kavkaza
According to official statistics, the share of agriculture in the
GDP structure is growing in past years. In 2010 agriculture took 17%
of the GDP, in 2011 it grew to 20.2% and in 2012 - to 21%. At the same
time the authorities don't want to stop. The minister of agriculture
Sergo Karapetyan stated that his ministry has big goals this year -
"hard work" on providing necessary development of agriculture. The
Ministry of Agriculture is sure that it is impossible to develop
agriculture without an effective system of crediting. In theory
everything is simple.
But the reality is far from the commercials broadcasted on TV. The
question is on what conditions an Armenian farmer is being credited.
The state takes the sums from international credit organization at
tiny interest of 1-1.5% per year, giving these sums to the Central
Bank at fixed interest of 4% in dollars annually. At the same time,
the interest rate in drams is not fixed. After this, the process of
interest churning on "benefit" credits continues and the interest
grows. Banks and credit organizations fix an interest rate and pay-off
terms by themselves, considering their credit business-program. They
explain it by the fact that the whole risk of the deal is put on them.
Therefore, a farmer cannot pay off a credit, but the financial
organization has to compensate the resources for the office. In most
cases it pumped out last property from the farmer. As the result the
interest rate of "benefit" credits is flowing in limits of 15-24%
per year.
Thus, the nonsense which is voiced by the government and the Ministry
of Agriculture on beneficial financing of agriculture comes down to
pumping out money through smashup of farmers. Considering the fact
that for any Armenian oligarch-bureaucrat it is an affair of honor to
have a bank or a huge share in a bank, the government's desire to give
"benefit" credits to the citizens is understandable, considering the
general logic of "development" of the Armenian economy.
The Ministry of Agriculture is working in the same way. For funding
the program of purchasing diesel fuel and fertilizers the government
of Armenia decided to allocate 3.16 billion drams to the Ministry of
Agriculture. About 27 thousand tons of fertilizers will be imported
on these resources in 2013; each bag of them will be sold to farmers
for 6 000 drams. As for diesel fuel which will cost 350 drams, 17
million liters will be imported in the country. The marketable value
of a bag of the fertilizers is about 8-8.5 thousand drams; and the
wholesale price of diesel fuel liter is 410 drams in Armenia. Thus,
the difference between "benefit" and marketable fertilizers is not
significant, so it cannot influence the development of the sphere.
Only price equity which appears as the result of buying fertilizers
and diesel in Russia for really beneficial prices by the Ministry of
Agriculture and selling them for "myth" benefit prices to farmers is
significant. Of course the society is not aware of these prices.
Farmers have to feed down results of their year work to pigs and cows.
For example, potato is the only source of revenues for farmers of the
Gegerkunik Region. All other revenues are coming from their relatives
who have to work in Ukraine and Russia. That is why the residents
of the mountain areas demand that Sergo Karapetyan should be the
minister of agriculture of not only valley regions, for example,
prospering Ararat or Armavir regions, but also mountain regions,
including Gegarkunik. In case if Karapetyan is unable to work for the
whole country, farmers ask the government to appoint one more minister
who would agree to pay attention to mountain regions. According to
farmers, President Serge Sargsyan ordered Karapetyan to keep prices
of potatoes down in the pre-election and postelection period for
prevention of a riot in Yerevan.
http://vestnikkavkaza.net/articles/economy/38544.html .
Vestnik Kavkaza, Russia
March 27 2013
David Stepanyan, Yerevan. Exclusively to Vestnik Kavkaza
According to official statistics, the share of agriculture in the
GDP structure is growing in past years. In 2010 agriculture took 17%
of the GDP, in 2011 it grew to 20.2% and in 2012 - to 21%. At the same
time the authorities don't want to stop. The minister of agriculture
Sergo Karapetyan stated that his ministry has big goals this year -
"hard work" on providing necessary development of agriculture. The
Ministry of Agriculture is sure that it is impossible to develop
agriculture without an effective system of crediting. In theory
everything is simple.
But the reality is far from the commercials broadcasted on TV. The
question is on what conditions an Armenian farmer is being credited.
The state takes the sums from international credit organization at
tiny interest of 1-1.5% per year, giving these sums to the Central
Bank at fixed interest of 4% in dollars annually. At the same time,
the interest rate in drams is not fixed. After this, the process of
interest churning on "benefit" credits continues and the interest
grows. Banks and credit organizations fix an interest rate and pay-off
terms by themselves, considering their credit business-program. They
explain it by the fact that the whole risk of the deal is put on them.
Therefore, a farmer cannot pay off a credit, but the financial
organization has to compensate the resources for the office. In most
cases it pumped out last property from the farmer. As the result the
interest rate of "benefit" credits is flowing in limits of 15-24%
per year.
Thus, the nonsense which is voiced by the government and the Ministry
of Agriculture on beneficial financing of agriculture comes down to
pumping out money through smashup of farmers. Considering the fact
that for any Armenian oligarch-bureaucrat it is an affair of honor to
have a bank or a huge share in a bank, the government's desire to give
"benefit" credits to the citizens is understandable, considering the
general logic of "development" of the Armenian economy.
The Ministry of Agriculture is working in the same way. For funding
the program of purchasing diesel fuel and fertilizers the government
of Armenia decided to allocate 3.16 billion drams to the Ministry of
Agriculture. About 27 thousand tons of fertilizers will be imported
on these resources in 2013; each bag of them will be sold to farmers
for 6 000 drams. As for diesel fuel which will cost 350 drams, 17
million liters will be imported in the country. The marketable value
of a bag of the fertilizers is about 8-8.5 thousand drams; and the
wholesale price of diesel fuel liter is 410 drams in Armenia. Thus,
the difference between "benefit" and marketable fertilizers is not
significant, so it cannot influence the development of the sphere.
Only price equity which appears as the result of buying fertilizers
and diesel in Russia for really beneficial prices by the Ministry of
Agriculture and selling them for "myth" benefit prices to farmers is
significant. Of course the society is not aware of these prices.
Farmers have to feed down results of their year work to pigs and cows.
For example, potato is the only source of revenues for farmers of the
Gegerkunik Region. All other revenues are coming from their relatives
who have to work in Ukraine and Russia. That is why the residents
of the mountain areas demand that Sergo Karapetyan should be the
minister of agriculture of not only valley regions, for example,
prospering Ararat or Armavir regions, but also mountain regions,
including Gegarkunik. In case if Karapetyan is unable to work for the
whole country, farmers ask the government to appoint one more minister
who would agree to pay attention to mountain regions. According to
farmers, President Serge Sargsyan ordered Karapetyan to keep prices
of potatoes down in the pre-election and postelection period for
prevention of a riot in Yerevan.
http://vestnikkavkaza.net/articles/economy/38544.html .