Armenia recently experienced its “Hello Revolution.” Now, after a hailstorm earlier this month wiped out a vast array of crops, the country could be in store for a “Hail Revolution” from the country’s farmers, analysts say.
The 43-minute, hailstorm in the Ararat Valley on May 12 destroyed up to 100 percent of the summer crop of apricots, peaches, grapes, watermelons, tomatoes, potatoes, peppers and eggplants in the western regions of Armavir and Aragatsotn, two key agricultural regions. The total damage bill was estimated at 25-billion-drams, or $60 million. Burdened by bank loans that they now cannot repay, hard-pressed farmers began blocking highways in protests that were designed to expedite state relief efforts.
The government, already very familiar with how economic discontent can drive political protests in Armenia, has outlined steps to address farmers’ needs. But many are still grumbling, and several signs suggest that the complaints coming out of the countryside may linger for a while.
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Agriculture is the chief source of livelihood for 40 percent of Armenia’s working-age population of 2.9 million. Unlike the usual economic-development pattern in modernizing states, the agricultural sector in Armenia is expanding in terms of its share of Gross Domestic Product, rising from 16 percent in 2008 to 21 percent last year, according to official data.
That growth has not paid off in greater financial security for farmers. Crop insurance does not exist since private insurance companies reportedly consider the risk too great. At the same time, high-interest bank loans are widely used to purchase seeds and water, rent farm equipment and build hothouses for seedlings.
Now, with crops wiped out, lots of farmers have their backs against a financial wall. “Are people supposed to starve to death?” asked Tatul Soghomonian, head of the village of Mrgashat in Armavir. “In my community, 99 percent of the people have taken loans and owe 6-7 million drams ($14,400-$16,800) to the bank, with an 18-percent interest rate. How are they supposed to pay the interest and survive?”
On May 23, the government promised that “the repayment of loans and interest shall be suspended for a certain period of time,” but did not provide specifics. In addition, Prime Minister Tigran Sarkisian told the cabinet that private banks would help affected farmers “through individual negotiations.”
Such vague and open-ended comments have done little to reassure farmers, who have dropped their highway blockades, but have demanded that Armenian banks freeze their interest payments for at least two years.
“The bank assistance issue is so obscure that it seems to have been included in the state assistance plan to pacify us,” said Armavir-village farmer Yeghiazar Asmarian, who lost five hectares of produce and vineyards to the storm. “Time will show whether they will really suspend the payments of interest or not.”
Bank representatives were not available for comment because of a national holiday. Villagers claim that banks had given them “no information” about whether or not they would qualify for interest-payment relief.
The government also has offered a complete exemption from land taxes and water bills for residents in 22 of the hardest-hit communities. Another 24 settlements, less seriously damaged, will receive a 50-percent discount.
Farmers interviewed by EurasiaNet.org, were generally unimpressed with the government tax relief offer. “If I have spent three million drams ($7,300) on working my orchards, sowing, fertilizing the soil, and the land tax only amounted to 20,000 drams ($48) of that amount, how can it be called compensation?” asked a frustrated Hakob Shahnazarian, whose village, Arevik, lost 700 hectares of vineyards. “This is just a way to silence and fool people.”
Prime Minister Sarkisian has underlined that “only assistance,” rather than financial compensation for lost crops, is an option. “Even the world’s developed countries cannot afford compensating damage” caused by bad weather, he asserted in parliament on May 20.
In addition to tax relief, the government is making available emergency stocks of 24 tons of seeds and 200,000 seedlings to farmers, along with diesel fuel and fertilizers. Some see this as an empty gesture. “What’s the use of seeds or seedlings to us right now, when the weather is getting warmer and the seedlings would simply dry out under the summer sun? Is this some kind of a joke?” said an exasperated Yeghiazar Asmarian, a 45-year-old farmer who lost five hectares of crops.
Another form of relief could come in the form of hail cannons, structures that emit shock waves to prevent hail from forming. Farmers claim that 65 regional cannons did not work in time to prevent crop damage – a charge the government disputes. State Hydro-Meteorological Monitoring Service Director Robert Hovsepian estimates that “it would take 170 more stations to ensure at least 70 percent protection” from hail, but, so far, the government has pledged to pay for just an additional 50.
Private insurance companies operating in Armenia are not willing to bet against Mother Nature, Agriculture Minister Garnik Petrosian told EurasiaNet.org. Experts and farmers alike identify the issue as the largest problem for Armenian agriculture. “We have drafted a concept paper, according to which the state would subsidize 50 percent of the insurance payments, but it’s a matter for the future,” Petrosian said. “For now, the state budget has no such capability.”
While Armenia has prioritized agricultural development, the Ministry of Agriculture’s total available cash kitty of 10 billion drams, or about $24.3 million, amounts to less than 1 percent of the 2013 state budget of 1 trillion drams, or $3 billion. The relatively small budget alone, however, cannot be blamed, experts say.
No detailed, long-term strategy for the agricultural sector exists, they complain. “They commonly try to solve agricultural issues by temporary measures, which cannot be effective and yield long-term results,” commented Hrach Berberian, president of the Agrarian-Rural Union of Armenia, a non-governmental organization that works in rural economic development. “It’s like trying to cure a cancer patient with aspirin.”
Originally published by EurasiaNet.org