2017年-世界发展银行全球_Cheese_Production_and_Export_Supply_Chain___Armenia_76页_1mb

Summary of Cheese Production and Export Supply Chain in Armenia

Core Content

The report provides an in-depth analysis of the cheese production and export supply chain in Armenia, developed in cooperation with the World Bank Group, the Ministry of Economic Development and Investments of the Republic of Armenia, and the Development Foundation of Armenia. It highlights the current state of the sector, identifies key challenges, and proposes recommendations to improve the investment environment and competitiveness of Armenian cheese in international markets.

Main Viewpoints

• Cheese Production and Export Potential: Cheese production is a traditional and potentially attractive sector for investment due to its high export growth potential. It is one of the key priorities for the Armenian government.
• Market Structure and Challenges: The sector is characterized by a large number of small, non-professional farmers and informal producers, which contribute to inefficiencies and challenges in production and export.
• Supply Chain Constraints: Seasonality of milk supply, poor infrastructure, and low milk yield are significant issues affecting the sector's development.
• Quality and Safety Issues: There is a lack of use of internationally accepted food safety systems and practices, which hinders access to competitive markets like the EU and EEU.
• Export and Logistics Problems: Export procedures are complicated, especially at the Georgian-Russian border, and there is a lack of storage and distribution facilities in Russia.
• Financial Constraints: Access to finance is limited, particularly for long-term investments, and financial management skills are generally weak.
• Policy and Regulatory Barriers: The absence of an animal identification system and inefficient data management limit traceability and policy effectiveness.

Key Information

1. Milk Production

• Supply Issues: Milk supply is seasonal, with a peak in June-July. Annual milk supply for processing is about 490,000 metric tons.
• Low Milk Yield: Officially, the annual milk yield per cow is 2,100 liters, but actual yield is around 1,500 liters due to poor animal management, genetics, and feeding practices.
• Fodder and Feed Deficit: Fodder and feed production is underdeveloped, with only 20,000–30,000 metric tons of combined feed produced annually.
• Pasture Management: Despite abundant alpine meadows, pasture management is inefficient, leading to reduced competitiveness in animal husbandry.

2. Cheese Production

• Types of Cheese: Armenia produces over 20 types of cheese, with cow cheese making up 95% of total production. Traditional cheeses include Lori, Chanakh, Bryndza, and Chechil.
• Formal and Informal Sectors: Over 70% of cheese production is from the informal sector. The formal sector is dominated by 10 largest producers accounting for 90% of formal output.
• Technology and Productivity: Many new production facilities are equipped with modern technologies, but the sector still faces challenges in adopting advanced production and hygiene practices.

3. Export and Market Issues

• Export Markets: The main export markets are the Eurasian Economic Union (EEU) and the United States (U.S.). In 2015, there was a sharp increase in cheese exports (from 1,500 to 9,000 metric tons), but it dropped to 5,500 metric tons in 2016.
• Export Challenges: Export logistics are problematic, especially at the Lars border crossing point. There is also a lack of storage and distribution infrastructure in Russia, leading to middlemen capturing a larger share of profits.
• Informal Sector Impact: The informal sector accounts for 72% of total cheese production, affecting price formation and market dynamics.

4. Supporting Institutions and Infrastructure

• Storage and Logistics: There is a lack of adequate storage and distribution facilities, contributing to logistical challenges.
• Extension Services: Farm Service Centers (FSCs) have been introduced to support farmers, but their impact is still limited.

5. Government Policies and Programs

• VAT Exemptions: The government introduced VAT exemptions for equipment used in cheese production to encourage investment.
• Strategic Initiatives: Several donor-funded projects have improved milk collection, pasture management, and advisory services.

Recommendations

• Enhance Milk Supply and Quality: Improve fodder and feed production, implement better pasture management practices, and increase the use of high-quality genetics.
• Promote Formal Sector Growth: Encourage the formalization of the cheese sector and the establishment of cooperatives to improve efficiency and competitiveness.
• Strengthen Food Safety Systems: Adopt HACCP, GMP, and GHP standards to improve product quality and safety for international markets.
• Simplify Export Procedures: Streamline customs and logistics processes, particularly at the Lars border, and improve traceability and data management.
• Improve Access to Finance: Develop long-term financing options and enhance financial management skills among producers and exporters.
• Enhance Business Management Practices: Provide training in production planning, financial management, and marketing to support sustainable growth.
• Strengthen Institutional Capacity: Invest in human resources and institutional development to improve the overall performance of the sector.

Conclusion

The Armenian cheese sector has significant potential for growth and export, but it faces numerous challenges related to supply chain inefficiencies, quality standards, financial constraints, and institutional capacity. Addressing these issues through targeted interventions, improved policies, and enhanced cooperation between public and private stakeholders is essential for the sector's sustainable development and competitiveness in international markets.