World Bank provides US$ 32.67 million to boost the competitiveness of Armenian agriculture

The World Bank Board of Executive Directors approved a US$ 32.67 million financing for the Second Community Agricultural Resource Management and Competitiveness (CARMAC) Project for Armenia. This Project is designed to improve productivity and sustainability of pasture and livestock systems in up to 100  communities in the eight regions with significant pasture areas and increase the marketed production from selected livestock and high value agri-food value chains.

For the women and men living in Armenia’s rural communities, agriculture remains the main source of employment and livelihoods.Thus, developing farmers’ productivity, including through cooperatives and associations, and strengthening the links between agricultural producers and the food processing industry are critical. The project will help address key constraints by improving market access, supporting the commercialization process, and enhancing employment opportunities while protecting the natural environment.The second CARMAC expands the scope of the first project, notably its successful pasture-based livestock activities, to include a new value chain component linking livestock and other agriculture production with markets.

“Enhancing productivity and strengtheningmarket access of farmers are key to reducing poverty and boosting shared prosperity in rural areas”says Jean-Michel Happi, the World Bank Country Manager for Armenia. “Project activities are devised in such a way as to mainly benefit pasture users, farmer cooperatives, as well as food business operators. At least 50,000 farmers are expected to participate in this project through their membership in Pasture Users’ Cooperatives (PUC).”

The proposed project will further implement an efficient and sustainable community managed pasture based livestock production and include new ones exhibiting a strong interest, adding to the already existing 86 communities covered by the on-going CARMAC project. Pasture users cooperatives will be established in about 100 communities, which will be the key players in developing sustainable pasture/livestock management plans and receiving grant resources about US$ 200,000 per PUC fortheir implementation. Funding may include financing of infrastructure to access and use remote pastures, milk collection points with cooling equipment, machinery to produce and harvest fodder, and other activities of community importance.

“I would highlight the long-term benefits of value chain development for the efficiency of agricultural output,” says Nicolas Ahouissoussi, World Bank Task Team Leader of the   project. “The project will support agricultural producers and processors to improve the ability to meet domestic demand and access international markets, building on the competitive advantages of the Armenian market.”

Support programs for women and youth are planned to enhance their participation in the PUCs along with their communal decision-making process around pasture management. Along with other activities, the project pays special attention and will contribute to increasing the capacity of public sector institutions, such as regional-level Veterinary Service Centers and State Service for Food Safety, to facilitate business development and enable market access in the selected value chains.

Total financing of the project is US$42.67 million, of which US$10 million will be the Government’s and beneficiaries’ contribution. The World Bank will provide a US$9.67 million equivalent credit, of which US$3.8 million on standard blend IDA terms at a fixed interest rate of 1.25% per annum with a maturity of 25 years and a 5 year grace period;US$5.87 million on hard IDA terms at a fixed interest rate of 1.40% per annum with a maturity of 25 years and a 5 year grace period; and US$23 million IBRD loan of variable spread with a 10 year grace period and the total repayment term of 25 years.

Since joining the World Bank in 1992 and IDA in 1993, the commitments to Armenia total approximately US$ 1,871.73 million.

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