Ameria Management Advisory Services successfully completed the “Economic Modelling and Feasibility” project aimed at reduction of rural poverty by promoting small-scale horticulture.

Economic Modelling and Feasibility” project was conducted as part of the “Rural Assets Creation Program” implemented by the “Rural Areas Economic Development Programmes Implementation Unit” SA under RA Government Staff PIU.

During the project approximately seven fruit and nut crops (particularly grapes, apple, apricot, peach, plum, nut and pear) best suiting to climate and soil conditions of Armenia and having the biggest commercial potential were identified, and appropriate lending products were developed. Relevant financial models were elaborated for each of the specified crops for the financial institutions to be able to assess the feasibility of lending.

According to Vahe Harutyunyan, acting director of Rural Finance Facility PIU under “Rural Areas Economic Development Programmes Implementation Unit”, the new lending program is aimed at developing skills and increasing the income of smallholders by means of supporting horticulture (fruits and nuts) value chain. “While developing the lending product the actual needs of farmers, specifics of biological phases of crops and the respective financial requirements were considered. We considered also the terms of demand study, production, storage, on-farm recycling and large-scale sales value chain in horticulture. We expect the long term lending program to trigger an increase of financial capacities of the farmers and production of crops thus reducing rural poverty. The experience gained and the positive results will be used in future horticulture-related projects”.

According to the research, agriculture has been a leading sector in the Armenian economy since 2010 in terms of its share in the GDP and its contribution to GDP growth rates. Agriculture employs almost 45 percent of the labor force in Armenia. Small-scale horticulture is mostly popular in Aragatsotn, Ararat, Kotayk, Lori, Tavush and Vayots Dzor regions of Armenia. Around 70 percent of farms, however, are small, with 1.3 ha of land on the average.The target of “Economic Modelling and Feasibility” project is small farms, in particular, farms with up to 3 ha area in high altitude regions.