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  • Head of Agrarian-Peasant Union of Armenia blames banking system for

    Head of Agrarian-Peasant Union of Armenia blames banking system for
    ruining villagers

    by Gayane Isahakyan

    Friday, May 30, 17:30

    The banking system of Armenia has led the Armenian villagers to ruin,
    Head of the Agrarian-Peasant Union of Armenia Hrachya Berberyan said
    at a press conference in Yerevan.

    "By my calculations, over the period of independence, Armenia has
    received from international structures almost 50 mln USD loans for
    various agrarian purposes", said Berberyan. He has no idea of how and
    how effectively those funds have been used. "The loans were provided
    to the banks at a low interest rate. For instance, the World Bank
    provided the Government of Armenia with loans at LIBOR 0.5-0.75%, and
    the latter provided the loans to the banks at 7% p.a. The banks, in
    turn, lent the money to the villagers at 24%- 30% p.a.", he said.

    "As a result, the villagers owe big funds to the banks now. I think a
    special commission must immediately be set up to find out whether the
    banks properly used the credit facilities meant for agriculture or
    not", said Berberyan. He recalled that the Credit Yerevan Bank, for
    instance, borrowed money from the World Bank for development of the
    agrarian sector and God knows how it spent the money. Another example
    of Berberyan concerned the state program subsidizing the agriculture
    loan rates. "The Government provides preferential loans to the farm
    entities, but in Shirak region only 40 farmers have received loans.
    Today farmers badly need loans, but the banks fail to satisfy the
    villagers' needs and agree to lend them at high rates - no lower than
    18-20%. Cheap loans are extremely limited today", he said.

    He also added that besides suffering of the credits, rural people have
    also suffered of frost and hail. "Incidentally, the losses of the
    agriculture facilities because of hail grow parallel to the growth of
    the anti-hail stations at the territory of the country. The
    agriculture sector needs immediate radical reforms. First, not
    functionaries should create agriculture cooperatives but the farmers
    themselves. Secondly, state functionaries have to draw out the law "On
    producers of agriculture production". The next, it is necessary to
    fully upgrade the irrigation system. Moreover, the anti-hail services
    should become more responsible for the losses of the agriculture
    facilities because of hail. We also need the net anti-hail system
    similar to the one functioning in the European countries. And finally,
    the rates of the banking agro credits should be decreased and the
    terms of their repayment increased up to 15 years", - Berberyan said.

    http://www.arminfo.am/index.cfm?objectid=53EDFFB0-E7FF-11E3-88B60EB7C0D21663

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