Agricultural Services Project

Transcription

1 Agricultural Services Completion Evaluation Yerevan

2 Preamble Agricultural Services : Beginning from October 1, 2001 the Agricultural Services (hereinafter ) is being implemented under the International Fund for Agricultural Development in the Republic of Armenia. The project implementation period is four year. ASP is made of five components (implementation streams) and of five categories (investment streams). Programme components Programme categories Agricultural Development Irrigation Development Rural Funding Community Infrastructure development Coordination Civil Works Procurement Technical support, study and trainings Loan Periodic costs General Objective: The project aimed to improve the living standards of the rural population. To establish the sustained growth of population investment and food. Poverty reduction. Reduction of migration processes. Component Objectives: Each component or subcomponent has its specific objectives which supported the realization of the general objective. Development of horticulture in Tavush and Syunik marzes through the support of two independent Horticultural Unions. The WU Associations with the support of CAWUO will provide and exploit the thirdly and secondly irrigation schemes, rehabilitated by the. The farmers will develop their households through the rural loans; the financial operations will be available in all marzes. The provision of loans to the small entrepreneurs will bring to the growth of different services, development of marketing relations, and creation of new work places. The rehabilitation of socially important sites will improve the living standards of population, and the quality of social services provided to the population. ASP will lead the financial investments and will coordinate the implementation of works by components. The current report aims to evaluate and review the main achievements and shortcomings of the ASP, funded by the International Fund for Agricultural Development (IFAD) and the project impact on the rural household, increase of their living standards. The investigations were made by two directions: a) the impact of project investments on the agricultural development and sustained growth in living standards of rural population is clarified, b) The impact of project investments on the development of farming households and income growth is found out. The investigation has been implemented through filling in the blanks. The following questions were clarified. 2

3 Names, number of family members, gender, age, education, occupation, and the cash profit from nonagricultural activities, all these information is collected from Marzes, communities and regions, Agricultural importance about the lands with the subdivisions of crops, privacy form, renting source and its cost, irrigable and non irrigable varieties. Information about harvest range, applied fertilizer dosage and varieties, the level application of farming technological activities, investments and incomes. Being a beneficiary of programme component. Number of cattle, increase (decrease), the range of investment, remittances, veterinarian services and other information about the costs. Information about WUA activities, water supply, and harvest balancing after the rehabilitation of irrigation scheme, most useful crop patterns and assessment of beneficiaries on the crop patterns. Evaluation of general living standards by the beneficiaries, comparison with the previous years and expectation for the coming year. Information about the lending purposes of rural population, collate rated objects, proposals for the amendment in the lending bylaws. 20 regions, 20 communities and 200 rural households, of Aragatsotn, Shirak, Lori, Gegharqunik, Sjunik, Tavush and Vayots Dzor marzes were investigated. The coverage of the investigated rural communities is the 3.9% of the total programme area. The composition of the report is based on the methods, collaborated for the Proogramme Monitoring and Evaluating purposes, on the basis of which is implemented data collection by visiting area marzes on January 2006, also many opinions, view points and information is collected from the same communities. In general, 7 marzes, 20 communities and 200 rural households of the area are studied. The collected data is entered in computer on the basis of which the report is composed. The study is mainly concentrated on the components of Development of Irrigation and Rural Financing. The Community Infrastructure component is also mentioned in the report of the IFAD and UNOPS Supervision Mission. A very important and broad study is made by the Programs development international organization and Social Dialogue social organization on the basis of which the Social Capital Impact Assessment Report is made. Under the Agricultural development Component it is important to mention that the orchards planted in the beginning of the will give harvest only in 2006 and it is early to make assessments related to this component. Development of Irrigation The current project component is composed of Rehabilitation of Irrigation Schemes (implemented by Jrshin SCSS) and of Water Management/Water Users (CAWUO SI) Association Foundation subcomponents. In the end of the project the design works of 70 sites are finished, which includes 23 thousand/ha land of 99 project area communities. The component expenditures comprised USD 10.2 million. The supported the CAWUO SI, which instead of anticipated 15 supported 23 water users associations (WUA) foundation. According to the policy and inclusion of irrigation participary management of the Republic of Armenia directed to the irrigation water management decentralization the CAWUO SI finished the formation and 3

4 registration processes of WUA in ASP areas. The irrigable area of the WUA of the ASP areas comprises over 73.8 thousand/ha, and the total number of water users is approximately The above mentioned 23 WUA are allocated in 1. Tavush 5 2. Lori 1 3. Shirak 4 4. Kotayk 1 5. Gegharqunik 3 6. Vayots Dzor 1 7. Syunik 8 The WUA are provided with water user personal contracts, which are already signed. The all WUAs signed contract with water supplying organizations. The all WUAs are provided with computers, office furniture, cars, water measurers and with necessary documents for water management. The all WUAs are provided with financial funds which comprises USD 74 thousand for commencing the activities. 12 dredges have been bought, painted and distributed to the WUAs. However the WUAs still need machinemechanics for operation and maintenance of irrigation scheme. Challenges: The data shows that there is need to improve the water planning and calculation processes. The factual inlet for planning comprises 51%, but for planning of 1 ha area is given 67%. The calculation of factual irrigable area is a serious problem, which practically is not implemented. The difference between the self cost and tariff of irrigation water should be mentioned, which is anticipated to transfer it on state subsidiary account. In the result of which only the costs of electricity and VAT is transferred. Because of such kind of situation many WUAs appears in such a situation when they are not able to pay the salaries and taxes of their employees, the accumulation of which brings to gross consequences. Practically the implementation of preservation of schemes is missing. Proposition: Above mentioned that there is an urgent need for supporting the WUA nearly in all fields of its activities, particularly: The main idea of WUAs is to widen their activities in the frames of water users and to integrate them into the day to day activities of association. To clarify and if necessary amend the tax responsibilities in WUA activities, particularly VAT. To continue the provision of training and technical support to WUA executive bodies in the frames of accountancy, management, water using, water measuring, and in operation and maintenance of schemes. TO support in WUAscheme rehabilitation activities, paying great attention to those WUAs which are in mountainous areas where there is an opportunity to change the mechanic irrigation into gravity. To implement the lending if possible addressed. 4

5 Impact Results: In behalf of the component the widening of irrigable areas gave an opportunity to rural households to expand their productive activities by renting or buying (which is rarer) new plots. In comparison with latest data (Monitoring and Evaluation data 2004) there is a noticeable tendency in rural households by 0.4 ha mainly on the basis of rentable plots. The great deal in rentable plots is natural haymaking, but it is important to mention that it helps to improve the private fodder base for animal husbandry. This fact indicates the growth in household s revolving funds (land fee, harvest, and other expenses). It may be noted that the investments promoted the growth of animal husbandry activities in this component. It means that both the cultivating plots and the growth of cattle create supplementary demand of new label force and working hours. The 65% of surveyed person mentioned the necessity of new label force and working hours. In the studied households where cereals (wheat, barley) are cultivated only in 30% it is possible to apply seeds with comparatively high reproductivity. In general the application of high seeds is possible only in the existence of several factors. The existence of seeds market in that area, price availability (the application of high quality seeds also needs the application of adequate agro rules); existence of necessary revolving funds and other factors can be mentioned in the list of those factors. The rehabilitation of water management and irrigation schemes resulted the noticeable growth in prolificacy of nearly all crops. In the case of cereals it comprises approximately 25%, for potato and vegetable cereals it is 3035%. It is important to mention that the rehabilitation of irrigation scheme endorsed the improvement of land quality as well, which resulted the opportunity of cultivation more intensive crops. The positive tendency in agricultural products does not reflect the increase of cash income. In this case the most important thing is the problems connected with market as very often the farmers face many difficulties while consuming their products, which is closely interrelated with the tendency of cash income. The information has been mentioned both during the group discussions and in questionnaire related the consuming volume of agricultural products states that comparing with last 23 years the 60% of surveyed people mentioned a little improvement and the 30% noticeable improvement in consuming volume of agricultural products. The collected data shows that the 35% of productive volume growth is a result of rehabilitation of irrigation scheme and its effective management. The improved water management, satisfactory supply and in time irrigation water promoted the prolificacy growth and transfer to higher quality crop production. According to the mentioned factors, it can be noted that the income from the consumption of agricultural products increased. Over 30% of beneficiaries that mentioned about the increase of their incomes connected it with the remittances received from their outmigrated relatives. The 20% of surveyed people mentioned the difficulties connected with market availability and consumer attracting processes. It is important to mention that these above mentioned factors have been stated by those farmers, who are somehow connected with retail/wholesale markets (road defects, fuel and transportation prices). However it should be added that the difficulties connected with the consumption of all kinds of crops are not in the same level. Analyzing the data of food security of rural households it should be mentioned that the 70% of surveyed people are able to solve the problem of flour production for their own consumption. If we consider that a household which is consisted of 45 persons needs tones of wheat,which is possible to get from cultivation of / ha of cereals. From this point of view the 20% of surveyed are more vulnerable. 5

6 Table1. The productive depiction of studied households. Agricultural net income rate 31% Private plot Total cult. Land 2.0/ ha. 2.5/ha The average rate of household members involved in the agricultural processes 1.1 Main Cultivation cereal (1.2 ha.) During the survey on the evaluation of general living standards the 15% of surveyed people mentioned that comparing with the past years they notice a positive tendency in their living standards. The data shows that the half of the rural households still on the poverty level though the 60% of which mentioned a little improvement and the 30% noticeable improvement in their living standards. It is difficult to make right decisions about the impact assessment of AS on rural poverty reduction processes. During the discussion with a group of farmers, the 50% mentioned that there are several factors that caused widening of rural procedures, increase in prolificacy, cultivation of new varieties of cereals, in the opinion of 30% of farmers it is directly interrelated with the improvement of irrigation water supply. Table 2 Prolificacy data Before the 2002 After the Growth Gegarqunik t/ha Wheat % t/ha Barley % t/ha Potato % Shirak t/ha Wheat % t/ha Barley % t/ha Potato % t/ha Vegetable % Lori t/ha Wheat % t/ha Barley % t/ha Potato % Aragatsotn t/ha Wheat % t/ha Barley % t/ha Potato % Syunik t/ha Wheat % t/ha Barley % t/ha Potato % Vayots Dzor t/ha Wheat % t/ha plot % t/ha Potato 21.3 Tavush t/ha Wheat % t/ha Plot % t/ha Wheat n.a

7 While speaking about Irrigation Development component, should be mentioned about the role of Water management, and Water Users Association. It found its vivid reflection in increase of farmers skills, particularly in the skills connected with the WUA members water using (planning, time table composing, fees viewing the irrigation water as goods). According to the data analysis, the 40% of surveyed people took an active part in water management procedures, the 55% of which considered themselves poor households. It may be concluded that the great part of rural poor is integrated in water management procedures. Though there are also several contradictory data, if we ignore the poor not poor subdivisions by selfestimation it is becoming obvious that in WUA administrations the participants are people with high incomes. 7

8 Table 3 The range and dynamics of current crop patterns ò³íñ³ñå»ù Ù߳ϳµáõÛë»ñ Wheat Barley Multip. grass Natural grass Gegharqunik Shirak Lori Aragatsotn Syunik Vayots Dzor Tavush Before the After the Before the After the Before the After the Before the After the Before the After the Before the After the Before the After the 57% 61% 41% 43% 45% 42% 47% 49% 54% 58% 44% 43% 51% 49% 16% 10% 21% 18% 17% 18% 20% 12% 21% 14% 19% 11% 12% 11% 4% 6% 3% 5% 1% 4% 2% 5% 2% 3% 8% 5% 7% 11% 6% 21% 17% 19% 17% 15% 13% 11% 10% 21% 18% 13% 10% Corn 2% 3% TOTAL 85% 83% 86% 83% 82% 81% 84% 81% 86% 84% 87% 80% 81% 80% High valued crops potato 8% 11% 5% 9% 6% 10% 4% 7% 5% 8% 3% 5% 4% 5% Vegetable 2% 3% 2% 4% 1% 2% 3% 4% 1% 1% 2% 2% 3% Plot+Garpe 2% 4% 1% 2% 4% 9% 6% 8% TOTAL 10% 14% 7% 13% 7% 12% 9% 15% 7% 11% 7% 16% 12% 16% Other/unused 5% 3% 7% 4% 11% 7% 7% 4% 7% 5% 6% 4% 7% 4% 8

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10 Rural Finances The number of financial services under the provided to the farmers and enterprises have been widened by the. The supported the ACBA Bank, which according to the loan by law of the Bank provided season loans to the rural households of Shirak, Lori, Aragatsotn, Tavush, Sjunik, Kotayq, Vayots Dzor and Gegharquniq marzes in the frames of project. The foundation works of Bank branches in Gegharqunik and Kotayk marzes finished by making available for rural population. Allocation due to Marzes: Under the ASP the 55% of loans have been allocated in Aragatsotn and Syunik marzes, the 14% in Kotayk and the rest 5% in other marzes (Shirak, Tavush, Syunik, Gegharqunik and d Vayots Dzor). This correspondents to the expectations, as in Aragatsotn and Lori marzes were included in the, and had a great deal of incorporation of clients. In the same in Shirak marz, there was a problem connected with repayments. The loan disbursement was stopped in several villages of Shirak Marz and the Bank can not rich the previous inclusion indexes. Allocation due to sex: Loan allocation due to sex was lower than expected. In 2002 the loans provided to women comprised 5.4% of total portfolio. In 2003 that index was decreased to 4.0% and in 2004 it increased up to 5.5%. In general for ASP it comprises 4.9 %. ACBA bank explains the low percentage of loans provided to women with the fact that the main collaterals are usually registered under the men's names. Loan Repayment: The repayment of growing loans reported as 99%. However the ACBA bank took several measures for the loan repayment: deep analyses of individual loans, monitoring of rural unit activities, responsibility enhancement of loan agents, rotation of heads of field offices, active internal audit and serious supervision by central office. Impact Results: After the group discussions it became obvious that the loans provided by ACBA to the rural households had a great positive impact, particularly during the agricultural period (in spring and autumn) it helps to the reduction of vulnerability connected with revolving funds and promotes the sustainability of households related to incomes. In spring and fall planting and also in harvesting period it becomes possible to get high quality seeds, fertilizers, fuel and to pay for machinery services with the help of additional revolving funds. As it has been mentioned the ACBA loans are more seasonal and the majority of loans are provided in spring and autumn. At the same time the loans are used by households for different agricultural activities. Taking into consideration the lack of financial products in the communities and no opportunity for getting all the above mentioned products, it can be said that ACBA loans are becoming indispensable. It should be mentioned that without ACBA loans the farmers would not be able to do that expenses or as an alternative choice for covering those expenses they should sell cattle (the majority of households does). The regular ACBA clients state that they became more skilled in planning their household works, expenses, payment of taxes. Some part (over 30%) of the surveyed states that the majority of incomes received from agriculture is in autumn which makes them vulnerable. Seasonally and unstable incomes increase the risk for resistance against difficulties. ASP Rural loan component impact on the increase of household incomes is analyzed on the basis of collected data. The data shows that comparing with non beneficiary households the beneficiary ones have income growth. For comparing the incomes derived from agricultural products should be taken 5 groups of similar households with the same social characteristic, due to height of sea altitude, plot subdivisions, cattle adequacy. For each group the income from agricultural product and also the net profit per person is calculated. It becomes obvious that in non beneficiary household it comprises 1.7$ and for beneficiary households it is 2.2$. The index of revenue comprises The current component of ASP factually promoted the economic sustainability of households 10

11 which let to direct the economy to business sector, widening the production sector and range. It should be mentioned that it is one of the main objectives of the. The project made noticeable advance in provision of loan resources to the rural population. Attempts were carried out to find out whether the ACBA procedures were available to poor population. The analyses showed that the ACBA loans were available to different levels of population. In the 89 households out of 200 used rural loan component, the 68 or 76.4% of them mentioned that the loan satisfy the realization of their objectives, which is 18.2% higher than the monitoring data of previous project. The 60 or 67.4% mentioned that the loan money satisfy the realization of their objectives. Seven (7.8%) beneficiaries mentioned that will have difficulties with repaying the loan in time and the nine mentioned that (10.1%) will have to sell something for repaying the loan. Five beneficiaries (5.6%) are also beneficiaries of other bank, and also 3 beneficiaries mentioned that had to borrow money (from private sources) in order to pay the loan. 17 people or 19.1% refused to take loans by the same terms. The people who refused taking loans mentioned several reasons: The period for repayment the loan is very short and does not coincide with the harvesting and product consumption period. Absence of collaterals. None of the farmers (beneficiary) utilizes the insurance services. There is not an executing system for insuring the agricultural products in the Republic. The already formed insuring companies only insure real estates, agricultural technique and nothing that has close relation with agricultural products. Still there is not any organization which will insure investments, expecting harvest, insurance of cattle. It makes a negative impact on the development of current system and particularly on lending. It means that even after facing decrease of incomes, the beneficiary has to pay the loan with its interests. As it has been mentioned from 200 farming households only 89 used the rural loan component with USD The average of loan comprises USD 1206, which comparing with the previous project increased by USD 243. Marz NWASP The avaerage of the loan ASP + Vayots Dzor Tavush Syunik Gegharqunik Aragatsotn Shirak Lori Total and the average In the studied farming households the average of the loan increased by 12.1%. Greater increase is noticed in Lori marz, it is 89.5%. It can be explained by the fact that in Lori marz the volume of potato planting is great, which is more profitable than the planting of other cereals. 11

12 Challenges: In spite of the satisfactory implementation of the project still there exist several factors that can disturb the lending processes. a) In spite of the satisfactory loan repayments still this procedure is not studied well, it is not still clarified whether the current satisfactory picture of repayments is vital, or much efforts are made by the beneficiaries to pay the loans for avoiding punishments or deprivation of loans envisaged by the loan agreements. If there are such kinds of cases which part of portfolio they comprise? b) After facing some difficulties or failures in some area the bank hardly ever continues its activities in that area. c) It is mentioned above that the number of women beneficiaries are very low. Propositions: a) to propose the bank to find out the way the farmers repay the loans. b) To study the current situation and further activities of the bank in Shirak marz. c) to propose the bank to suggest several privileges for women beneficiaries. Development of small enterprise: The project continued its support to ANIV foundation which provided loans to the small enterprises of Shirak, Lori, Aragatsotn, Syunik, Tavush, and Vayots Dzor marzes, according to the Foundation Loan Agreement. The foundation provided over 1.5 thousand vacancies by loans. For the implementation of the component the Ministry of Agriculture of the Republic of Armenia chose and the IFAD approved the ANIV foundation established by SHEN social, charity organization. For the implementation of Development of Small Enterprises component on January 11, the Ministry of Agriculture, Ministry of Finance and Economy, AAU SI and Aniv Foundation signed Subsidiary Loan Agreement according to the Loan Agreement. The Aniv foundation established in August 2000, and reestablished in According to the Foundation legislation it has by law assured by the Ministry of Justice of the Republic of Armenia, and acts as a non trade organization. The only founder of Aniv is Shen OSO. At present the requirements of normative field of the Central Bank and law about the loan organizations has no influence on the Aniv activities. Though during 2005 the Central Bank of Armenia submits a requirement to the organization for registering as a Loan Organization, this fact may cause serious problems for Aniv. The head body of Aniv is Trustee s Committee, which appoints executive body employees providing the daily operations of Aniv. The Aniv staff has been reduced for the purposes of cost optimality, though it has no negative impact on the quality of loan services. At present Aniv staff consists of 15 employees, 7 of employees work in 7 offices allocated in 5 marzes. In 2003 the Aniv loan agents participated in trainings organized in banking college. The 3 employees of Aniv have experience in banking and other financial systems. Repayments: The amount of repayments of beneficiaries currently comprises over 78%. The dynamics of repayments due to years has the following picture, (See the diagram). The repayment problems are connected with the low quality of businessprojects, loan provision and amendments made in service mechanisms and clients unawareness of current business requirements in Besides it the Aniv staff integrated employees from Shen OSO, who got lending experiences in the activities of Aniv. 12

13 Loan Dates: The loans were provided by 36 month. The dating period of loans, number of included employees and repayment indexes are brought up below in diagram. It can be concluded that the indexes of 2534 month loans Number of Loans and Sum due to Years Number of Loans Sum have worse indicators both in repayment and in distribution of job places. The loan money for one job place is 36 month and comprises USD 1.47 thousand, for 2534 months it is USD 1.6 thousand, up to 25 months it comprises USD 1.38 thousand. Lending Amount: The greater amount of loans is USD The repayment is strongly connected with the right predicts of financial flows, which is very decisive in stating the lending amounts and provision dates. The repayment of loans is connected with its immensity, it is shown in the below diagram. In general the big level of repayments is derived in the case of small and large loans. It can be considered that the risk of small lending decreased in case of precise money investments. In a case of big lending, the law risk rate is stabilized by diversification of investments. Repayment of Loans due to Loan amount Repayment of Loans due to Period up to 8000 $ $ $ $ 17500$ more up to 25 months 2536 Month 36 months 0 Number Repayment % Repayment percentage % number the repayment of principal sum Repayment of Interes% Activities made by lending: The 36% of lending is directed to cattle breeding, 7% to different services, 6.5% to cheese making, 6.5% is directed to mutton breeding, 6% to production of construction material, 4.5% to pig breeding, 3.5% to the confectionery production, 3% to bee breeding, 3 % to flour production, 2.5% to bread production, 2% to goat husbandry, 2% to wood processing, and 19% is directed to other variety of activities. Consequently the average rate of investments in the area has not noticeable impact on the repayment rate. The more important are the preliminary and current studies of lending. Aniv Loans due to activities and repayments. 13

14 "Aniv" Loans due to Activities and Repayments cattle breeding Services Chesse making Mutton breeding Production Pig breeding Ðñáõß³ Ï»Õ»Ý Bee breeding Flour, bread Other Number of Loans Repayment percentage % Current Lending: By the 31 loans (15.4%) USD thousand, out of 201 provided by ANIV are finished, 22 loans (11%) USD thousand, (9.9%) is ceased. The current loan package comprises over USD 1milion 162 thousand, and the possible entry from interests is over USD 11.6 thousand. The picture of operating loans and repayments is as follows: NWASP ASP Marz Number Money from operating loans / thousand USD/ Loan Repayments Repayment of interest money Number Money from operating loans / thousand USD/ Loan Repayments Repayment of interest money Aragatsotn % 76.5% % 86.7% Lori % 79.8% % 99.0% Shirak % 95.2% % 95.4% Tavush % 96.0% Syunik % 96.4% V. Dzor % 94.4% Total % 82.3% % 95.2% The rate of repayments is gradually getting improved. Get rid of risky loans will improve the repayment percentage, though the standin package will decrease consequently the entry of interest money. Each of seven agents serves at average 21 operating loans in USD 166 thousand. Conclusions and Suggestions: Conclusions: The analyses of provided loans show that: The more succeed loans are small rated, usually serving for family business and cooperatively larger loans for the development of already operating businesses. 14

15 Due to date the more succeed loans are shorttime loans, when prices in markets, proposal and demand is anticipating while providing loans, and longterm loans when the creditor has time to reflect the market changes. The field of activity and loan amount has no impact on loan success. The Aniv staff needs development of professional skills, which is impossible implement by means of Aniv. Suggestions: Taking into consideration the above mentioned the following is suggested to Aniv. Give privileges to local small rated/even though beginner or family/ businesses and also to development of operating businesses. Make differentiation and selection among short and long term loan applicants. To create training opportunities and technical support for the Aniv staff in the frames of IFAD next. Women in the Meat Processing Section, Ashtarak Meat LLC The agricultural product enterprises create new job opportunities for women integrating them in production activities such as product preservation, packaging, processing and in other field of activities. Eight women are integrated in current enterprise. Information about the studied farming households Beginning from December 2005 up to January 2006, 200farming households of 20 rural communities of 20 regions in 7 project marzes have been studied. Marz Region Village Farming community Aragatsotn Shirak Tavush Gegharqunik Syunik Vayots Dzor Lori Total

16 The studied farming households which made use of 1 or several components will be considered as direct beneficiary. There are also people who made use indirectly. Those are members of community who participated in the civil works, also people who made profit indirectly from the projects engaged in improving social field (Community Infrastructure development Component). According to marzes, the beneficiaries make use of the following components: In general the 23.3% of adults are occupied with off farm activities, the 26.2 % is a number of employees of village administration, 25.4% is a number of pedagogues, 20.9% is a number of workers, 5.5% is a number of entrepreneurs and 5 % is a number of engineers, mechanics and drivers. The monthly income from nonagricultural activities per family is AMD including the pensions. Planting Areas According to the data collection held in 2005 the studied 200 farming households headed ha planting area. At an average rate each household has 2.5 ha area, which is more by 0.6 than in According to data the private land increased by 0.6 ha. It is important to mention that compared with past years the number of irrigable lands has increased and this fact envisages the existence of an opportunity for renting effective and high quality lands. The 98 (40%) households out of 200 studied ones make use of rentable plots and 21from private lands. The average price for 1/ha rentable area is AMD Prolificacy According to the survey the average rate of prolificacy in studied farming households in 2005 is as follows: wheat 2.1t/ha, barley 1.8 t/ha, perennial plants 6.7 t/ha, natural haying 2.5t/ha, plots 18.8 t/ha, grape 12.1 t/ha, vegetable 27.5 t/ha, potato 25.2t/ha. Compared with 2002 data the prolificacy of crops increased by 50%, grape by 90%, potato by 34%. It is important to mention that the production rate derived from field husbandry is noticeably increased which can be related both with economic growth of country, market vitalization and with the increase of revolving funds in beneficiary households. Fertilizers and toxins The studied farming households mostly use ammonia fertilizers. The super phosphate and potash fertilizer are rarely used. The usage of super phosphate from previous preserves which in some aspect lost its efficiency. The usage of organic manure is particularly preserved. The fertilizer use per ha per household comprises 402kg. of ammonia nitrate and 781 kg, of organic manure (dung). Amonia fertilizer Organic fertilizer Growth NWASP ASP The usage of toxins is gradually increases. Particularly in potato growing and in horticulture. The most usable toxins are fenagon, zenkor, bazudin, arivo, karate, dialen and other various toxins which are not corresponded with the required quality. At present the majority of toxins is outdated and lost their impact, the intensity of composition of ammonia nitrate is lower than the required one. Animal Husbandry 16

17 According to the survey the number of livestock per household has the following structure: Aragatsotn Shirak Lori Syunik Gegharquniq Tavush Vayots Dzor Total Cattle Including cows Pigs Sheeps Birds Bee The dynamics of current livestock in the studied households compared with 2002 and the monitoring data of previous NWAS has the following picture: ASP NWASP + / ASP NWASP + / Cattle Including cows Pigs Sheeps Birds Bee It can be mentioned that in the animal husbandry exists a noticeable progress both in modified data and contrasting with the households studied by the NWASP. Development of Community Infrastructures. According to the principle of equity the cofinanced several small infrastructural subprojects which have been implemented by the Fund of Social Investments of the Republic of Armenia. 25 subprojects have been implemented in USD 1.55 million amount, from which the USD 0.70 million is provided by ASP. The Asp implemented rehabilitation works of socially important objects in Shirak, Lori, Aragatsotn, Tavush, Vayots Dzor and Gegharqunik marzes. It should be mentioned that social infrastructures are mainly concentrated in three marzes: Shirak, Lori and Tavush, there are 21 projects which comprises the 84% of IFAD cofinancing projects, (See the below diagram) The great part of subprojects are mainly connected with the rehabilitation of drinking water supply systems and schools, (23 projects), it comprises the 92% of all projects (See the diagram). Programmes due to Marzes Programmes due to sphere Other Tavush Lori Shirak Other School Drinking water Development of Agriculture: The project supported the Horticultural Union Social organizations, which established peach orchards in the areas of farmers included in their organizations. 214 ha peach orchards have been established in Tavush marz integrating 403 farmers and 47 ha orchards in Syunik marz integrating 26 farmers. In the first quarter of 2004, 24 ha more orchards were established in Tavush and 2 ha cherry orchards, 27 ha apple orchards, 1 17

18 ha quince orchards, 1 ha nut orchard, 4 ha apricot, 8.8 ha peach orchards, 3.3 eastern persimmon orchards and 9.4 ha fig orchards are established in Syunik marz. In 2005 the harvest from the established orchards will be 104 ha, and the harvest range will comprise over 1000 tones of fruits, in 2006 also 60 ha, the range of expected harvest will comprise 2200 tones of fruits, in 2007 also 40 ha, the range of expected harvest will comprise 2900 tones of fruits and in 2008 the all orchards established by the Programme will be prolific and 4100 tones of fruits are expected. The expenses implemented by the component comprised over USD thousand (1.8% of Programme costs). The information about nature and sizes of plots intended for establishing orchards is collected and reviewed. The ASP signed an Aide Memoire with each Union where the corresponding obligations are mentioned. Implemented tree planting works, organized pruning and nutrition works. The supporting works for irrigation and preservation activities are organized. The horticultural Unions are provided with agricultural equipments for implementing services on contractual basis. Nurseries are created in each Marz, implemented professional consultation procedures and trainings. Organized abroad trainings in the Agricultural Institute of Rome, Italy, for ASP 2 specialists. Component Sustainability: For supporting the sustainability of investments made under the Component, the agreed with the proposition made by Horticultural Unions of Tavush and Syunik Marzes, for supporting to establish a joint Fund, which will act as a profit organization and will indicate more trade approaches to the forming of procedures, will offer charging services to members of cooperatives and other farmers, it will supply with high quality fertilizers and toxins, will implement market investigation and will designate technical support. The Aygegorts Foundation is officially registered. By the support of ASP the Work and Plan Budget of Foundation for 2005 is organized. Propositions: It is suggested that next projects funded by ASP and IFAD continue to execute technical and other supports to the Component. The Foundation under the new RAEDP project and the Programme can sign cooperation aide memoire, where further forms and directions of cooperation will be mentioned. Particularly the Foundation can make use of the RAEDP Rural Financing and Rural business intermediate services component activities. Besides it the Foundation can submit propositions for the investments of Economically Derived Infrastructures. The establishment of orchards should have commercial basis and should be based on precise estimates and business projects. The new created Foundation should concentrate on modern technologies and applications of production systems for the perfection of economic efficiency. The foundation or any other unit and project should not wholly subsidize the establishment of orchards as in that case the farmer will lose the idea of ownership and economic interest. 18

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