Armenia - Country Commercial Guide
Agriculture
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Overview

Agriculture is one of the most important sectors of the Armenian economy.  Armenia was one of the first former Soviet Republics to privatize land after the collapse of the Soviet Union.  Investments by both private sector and international organizations have improved the agro-processing industry.  The industry is still adapting to a market economy, and the government’s efforts are focused on improving efficiency, competitiveness of products, and diversification of production.  Some local companies are competing both in domestic and international food markets and are making investments to scale up production.  Increased demand from abroad for Armenian agricultural products provides local farmers with an incentive to improve the efficiency of their operations and increase production and quality to satisfy other markets.  Approximately 30 percent of workers in Armenia are employed in the agriculture sector.  
Despite nominal growth potential in the agriculture sector, there are several limiting factors.  More than 335,000 farms are in operation, with an average landholding of 1.4 hectares per household.  Relatively small landholdings do not foster an efficient and diversified production system involving both crops and livestock.  The extent of soil degradation is also a notable problem.  Although approximately 70 percent of Armenia’s territory is classified as agricultural land, arable land comprises only 15 percent of the total territory.  The livestock sector is facing serious challenges, such as unsustainable pasture management and underutilization, persistent livestock diseases, processing and marketing constraints, and reduced productivity.  Imported meat now accounts for half of national meat consumption, due to low productivity in the livestock sector and the unreliable supply of meat and milk.  There are also notable fluctuations in the supply of dairy products, with most milk produced in the summer months and almost none produced during the winter and spring.  These challenges limit Armenia’s capacity to exploit opportunities arising from increasing domestic and foreign demand.

The government has introduced a 10-year strategy to drive the development of Armenia’s agriculture sector focused on making agriculture more sustainable, introducing innovative solutions and new technologies, and moving Armenian agricultural products up the value chain for export abroad.  More specific measures include increasing the availability of cultivable farmland, improving irrigation systems, enhancing access to finance, improving the quality of seeds and planting materials, promoting modern livestock management techniques and facilities, consolidating farms, and developing wholesale markets. 
Since 2021, agriculture output has declined by about one percent yearly in output  primarily due to unfavorable weather conditions and water shortages.  Continued government support to promote access to subsidized credit, the ongoing development of value chains, and the enhancement of farming productivity and efficiency are expected to reverse declines.  Greater interest from the private sector in agriculture investments and introducing new technologies could further contribute to growth.

Livestock breeding is a central component of the Armenian agricultural sector.  In recent years, almost 40 percent of the country’s gross agricultural product has come from livestock breeding.  Nearly all of the cattle raised in Armenia are milk and beef category Brown Caucasians, which are well adapted to local climate conditions. Holstein, Brown Swiss, Simmental, and Black species are also bred in Armenia.  About 18 tons of mutton is produced in Armenia annually.  Armenia has the capacity to export 180 to 200 thousand head of sheep annually.  Commercial pig breeding farms produce up to 18 tons of live weight pork annually.  Poultry production has reached nearly 700 million eggs and eight tons of poultry meat annually. 

Armenia has favorable climatic conditions for year-round commercial fish farming.  Approximately 14 tons of commercial fish, most of which are trout, are raised each year in more than 200 fish farms around the country. Commercial fish farms are significant water users, and there may be opportunities for the sector to adopt more water and energy-efficient technologies.

Many vegetable, nut, fruit, and berry varieties are found in Armenia, including: green peas, black and red peppers, radishes, carrots, pumpkins, pomegranates, quince, plums, various cherry varieties, mulberries, apricots, peaches, apples, pears, walnuts, pistachios, hazelnuts, currants, raspberries, blackberries, and strawberries.

According to government reporting, there are approximately 1,600 food-production companies in Armenia, including:  fruit and vegetable processing, dried fruit and spice processing, grape processing, milk processing, meat processing and slaughtering, fish processing, bread baking, confectionary production, mineral and drinking water production, nonalcoholic beverage production, and alcoholic beverage production.
Several key pieces of agricultural and food legislation include: the Law on Food Safety, Law on Veterinary Medicine, Law on Animal Feeding, Law on Phytosanitary Measures, Law on Trade and Services, Law on Ensuring Sanitary and Epidemiological Safety of the Population, Law on Ensuring Uniformity of Measurements, Law on the Protection of Consumer Rights, Law on Standardization, and the Law on Conformity Assessment.  A Law on Organic Agriculture, based on Codex Alimentarius guidelines and EU regulations, stipulates requirements for labeling organic products.
Several government bodies have responsibility for agricultural and related issues.  The Ministry of Economy has primary responsibility for policy issues with respect to agriculture.  Other key bodies include the State Service for Food Safety and its subsidiary veterinary, phytosanitary, and food safety inspectorates; the National Body for Standards and Metrology under the Ministry of Economy; and the State Health Inspectorate under the Ministry of Health.
The Law on Organic Agriculture, adopted in 2008, is based on the Codex Alimentarius organic guidelines and EU organic regulations.  The law dictates the process of organic production and the main provisions on labelling requirements for organic products.  The certification body ECOGLOBE, an Accredited Certifying Agent of the U.S. National Organic Program, operates in Armenia.  There are several non-governmental organizations in Armenia that promote and support organic agriculture.

Leading Sub-Sectors

Processed food products are Armenia’s leading agricultural exports, making up more than a fifth of Armenia’s total goods exports annually.  Important segments include processed food and alcoholic beverage production, especially wine and brandy made from locally grown grapes.  Armenia’s principal food processing exports are alcoholic beverages, fish, cheese, canned fruits, jams, coffee, and mineral water.  Some exporters also ship frozen fruits and vegetables.  Armenia’s soil and climate conditions, high altitude, and limited use of chemical fertilizers account for flavorful produce.  Food products can be successfully delivered to international markets with modern processing and packaging technologies that are currently used to export such Armenian products as soft drinks, mineral water, alcohol, canned fruits and vegetables, milk and dairy products, meat, and meat products. 
Significant recent investment has been focused on the construction of modern greenhouses, together with more advanced drip irrigation systems.  Such investment has grown rapidly and yielded marked productivity gains In July 2023, the government approved a plan to support the construction of modern greenhouse farms with a total area of about 35 hectares between 2023-2026
Armenia has traditionally had a good reputation for high-quality alcoholic beverages, especially brandy.  The Yerevan Brandy Company has been producing internationally renowned brandies since 1887.  Approximately 90 percent of Armenia’s brandy production is exported abroad, overwhelmingly to Russia.  Armenia is seeking out new export markets for brandy.
Armenian wine has developed remarkably in recent years, spurred by an increasing recognition of Armenia as a birthplace of winemaking and several recent large investments aimed at producing high-quality wines.  Armenia now has several dozen wineries, and the number has roughly doubled since 2013.  The area of working vineyards has expanded dramatically in recent years, reversing declines seen after Armenia achieved independence.  More than 10 million liters of wine are produced each year, roughly half of which is exported abroad.  The value of wine exports has doubled in the last five years.  Several wines are noted of being of particularly high quality, and the Areni noir grape has begun to attract broader international recognition.

Opportunities

There are a number of interesting opportunities in Armenia’s agricultural sector.  The government has focused on developing the sector, devising policy reforms and extending benefits such as subsidized lending facilities and tax and customs exemptions.  Armenia is eager to introduce more modern technology to move agricultural products up the value chain, increase exports (especially to Europe), and expand economic opportunities for rural populations.  Armenia’s inability to satisfy local demand for some foodstuffs, notably wheat, through domestic production alone means securing investment is also important for food security.  Wine stands out as an exciting opportunity given the combination of Armenia’s indigenous varieties, moderate land and labor costs, favorable climatic conditions, and excellent terroir.  There are opportunities for U.S. firms to sell agriculture and food products, machinery, and technology to Armenian entities.  

Resources

Ministry of Economy 
State Service for Food Safety
Armenian National Interests Fund (ANIF)
Enterprise Armenia 
Statistical Committee of the Republic of Armenia 
National Body of Standards and Metrology
Center for Agribusiness and Rural Development Foundation 
ECOGLOBE
American Chamber of Commerce in Armenia 
Spyur Information System

U.S. Department of Agriculture