2017年-世界发展银行全球_Sustainable_Inclusive_Agriculture_Sector_Growth_in_Armenia___Lessons_from_Recent_Experience_of_Growth_and_Contraction_46页_1mb

Summary of Sustainable, Inclusive Agriculture Sector Growth in Armenia

Core Content

This report analyzes the growth and contraction trends in Armenia's agriculture sector from 2004 to 2015, with a focus on its contribution to sustainable and inclusive growth. It is part of the World Bank's Systematic Country Diagnostic (SCD) for Armenia, aiming to identify key challenges and opportunities in advancing shared prosperity and reducing poverty.

Main Points

• Agriculture's Role in the Economy:
  Agriculture contributes about 20% to Armenia's GDP, 35% to employment, and approximately a third of total exports in 2015. It has been a major driver of economic growth, with a 83% increase in output from 2004 to 2015, accounting for 24% of total economic growth during the period.

• Sector Characteristics:

  • The majority of farms in Armenia are small-scale and semi-subsistence, with 80% of farms having less than 2 ha of land.
  • Only 1% of farms have more than 10 ha, but these account for 15% of agricultural land use.
  • Irrigated land accounts for 30% of total agricultural land and 45% of the value of crop production.
  • The sector is characterized by low productivity and limited use of modern technology.

• Productivity Growth:

  • Productivity increased significantly, with land productivity rising by 64% and labor productivity by 122%.
  • Productivity gains were driven by increased use of fertilizers and improved seeds, rather than technological innovation or diversification into high-value crops.
  • The shift from semi-subsistence to commercial agriculture is minimal, and the sector remains largely traditional.

• Export Trends:

  • Agricultural exports more than quadrupled from $81.6 million in 2004 to $389 million in 2015.
  • However, most of this growth is attributed to the export of beverages (especially alcoholic) and tobacco products, which do not heavily rely on local agricultural resources.
  • Exports of fresh fruit, vegetables, dairy, and processed products have grown but remain less significant in terms of value.

• Access to Capital:

  • Access to credit and foreign direct investment (FDI) improved significantly, with commercial bank lending to agriculture increasing tenfold in real terms.
  • FDI was mainly driven by Armenian diaspora investors in Russia, particularly in beverage processing and crop/livestock production.
  • Subsidy programs, while targeting small farms, have not led to meaningful shifts towards commercial agriculture due to limited eligibility and lack of equity requirements.

• Budget Support:

  • Budget support for agriculture is modest, with agriculture accounting for 2.2%-2.6% of total budget expenditure and 3.1%-3.6% of agricultural GDP.
  • Subsidies for inputs (fertilizers, seeds, etc.) account for one-third of the budget, while essential services like agricultural extension receive only 2%.
  • The focus of subsidies on small farms may discourage investment and expansion.

• Employment Trends:

  • Agricultural employment decreased by 18% from 461,500 in 2004 to 379,000 in 2015, while non-farm employment in rural areas increased.
  • Women's employment in agriculture increased by 1%, and their share of total agricultural employment rose from 44% to 54%.
  • Agricultural wages increased by 126%, but still remained at 65-70% of non-agricultural wages.

• Inclusiveness of Growth:

  • Growth in the agriculture sector has been inclusive, particularly benefiting small-scale farmers due to their dominance in the sector.
  • Public investments and productivity increases are scale-neutral, making them accessible to small farms.
  • Subsidy programs explicitly target small farms, though they may not be effective in encouraging commercialization.

• Resilience of the Sector:

  • The agriculture sector has shown resilience against exogenous shocks, such as the Global Financial Crisis (GFC) and the Russian recession.
  • It recovered rapidly from the 2010 drought, with a 14% real growth in 2011.
  • Rural household income has remained relatively stable, supported by diversified income sources, including public and private transfers.

• Challenges and Opportunities:

  • The sector's reliance on Russian markets makes it vulnerable to economic fluctuations.
  • Climate change poses a growing threat due to limited irrigation infrastructure and low rainfall.
  • A new growth model is needed, focusing on medium-scale farms and agri-business, along with investment in knowledge transfer and education for rural populations.

Key Hypotheses for Future Policy

1. New Growth Model: Transition from semi-subsistence to commercial agriculture through medium-scale farms and agri-business.
2. Vibrant Private Sector: Encourage private sector development through improved access to capital and technology.
3. Knowledge Transfer and Education: Invest in farmer training and extension services to support modernization.
4. Resilience in Modernized Agriculture: Strengthen the sector's resilience through better water management and diversified production systems.

Conclusion

The agriculture sector in Armenia has grown significantly, driven by productivity increases and small-scale farming. However, the growth is not sustainable and lacks diversification. The sector remains vulnerable to external shocks and relies heavily on Russian markets. Future policies should focus on supporting medium-scale farms, improving access to capital, and enhancing institutional capacity for knowledge transfer and resilience building.