GORIS TEGH GORHAYK MEGHRI VAYK JERMUK ARITAP U … · municipalities include: Goris, Tegh, Gorhayk...

Ministry of Territorial

Administration and

Development of the

Republic of Armenia

Expert Team

Varazdat Karapetyan

Artyom Grigoryan

Artak Dadoyan

Gagik Muradyan

GIZ Coordinator

Armen Keshishyan

September 2016

DEVELOPMENT PROJECT IDEAS GORIS, TEGH, GORHAYK, MEGHRI, VAYK, JERMUK, ZARITAP,

URTSADZOR, NOYEMBERYAN, KOGHB, AYRUM, SARAPAT, AMASIA, ASHOTSK, ARPI

2

List of Acronyms

MTAD Ministry of Territorial Administration and Development

ATDF Armenian Territorial Development Fund

GIZ German Technical Cooperation

LoGoPro GIZ Local Government Programme

LSG Local Self-government (bodies)

(FY)MDP Five-year Municipal Development Plan

PACA Participatory Assessment of Competitive Advantages

RDF «Regional Development Foundation» Company

LED Local economic development

3

Contents

List of Acronyms ........................................................................................................................ 2 Contents ..................................................................................................................................... 3 Structure of the Report .............................................................................................................. 5 Preamble ..................................................................................................................................... 7 Introduction ................................................................................................................................ 9

Approaches to Project Implementation ................................................................................... 9 Mechanism of holding the workshops ................................................................................... 13 GORIS: ANALYSIS OF ECONOMIC SITUATION ..................................................................... 15

Goris municipality ..................................................................................................................16 Competitive advantages of Goris ...........................................................................................16 Goris economy brief ..............................................................................................................17 Development initiatives ..........................................................................................................18 Priority initiatives ...................................................................................................................20

TEGH: ANALYSIS OF ECONOMIC SITUATION ...................................................................... 23 Tegh municipality ..................................................................................................................24 Competitive advantages of Tegh ...........................................................................................24 Tegh economy brief ...............................................................................................................24 Development initiatives ..........................................................................................................25 Priority initiatives ...................................................................................................................26

GORHAYK: ANALYSIS OF ECONOMIC SITUATION .............................................................. 29 Gorhayk municipality .............................................................................................................30 Competitive advantages of Gorhayk ......................................................................................30 Gorhayk economy brief .........................................................................................................31 Development Initiatives .........................................................................................................34 Priority initiatives ...................................................................................................................34

МEGHRI: ANALYSIS OF ECONOMIC SITUATION .................................................................. 37 Meghri municipality ................................................................................................................38 Competitive advantages of Meghri ........................................................................................38 Meghri economy brief ............................................................................................................38 Development initiatives ..........................................................................................................41 Priority initiatives ...................................................................................................................42

NOYEMBERYAN: ANALYSIS OF ECONOMIC SITUATION .................................................... 44 Noyemberyan municipality .....................................................................................................45 Competitive advantages of Noyemberyan .............................................................................45 Noyemberyan economy brief .................................................................................................46 Development initiatives ..........................................................................................................51 Priority initiatives ...................................................................................................................52

AYRUM: ANALYSIS OF ECONOMIC SITUATION ................................................................... 55 Ayrum municipality ................................................................................................................56 Competitive advantages of Ayrum .........................................................................................56 Ayrum economy brief .............................................................................................................56 Development initiatives ..........................................................................................................60 Priority initiatives ...................................................................................................................60

KOGHB: ANALYSIS OF ECONOMIC SITUATION ................................................................... 63 Koghb municipality ................................................................................................................64 Competitive advantages of Koghb .........................................................................................64 Koghb economy brief .............................................................................................................64 Development initiatives ..........................................................................................................67

4

Priority initiatives ...................................................................................................................68 VAYK: ANALYSIS OF ECONOMIC SITUATION ...................................................................... 70

Vayk Municipality ...................................................................................................................71 Vayk economy brief ...............................................................................................................73 Development initiatives ..........................................................................................................74 Priority initiatives ...................................................................................................................75

JERMUK: ANALYSIS OF ECONOMIC SITUATION ................................................................. 79 Jermuk municipality ...............................................................................................................80 Competitive advantages of Jermuk ........................................................................................80 Jermuk economy brief ...........................................................................................................81 Development initiatives ..........................................................................................................82 Priority initiatives ...................................................................................................................83

ZARITAP: ANALYSIS OF ECONOMIC SITUATION ................................................................. 86 Zaritap Municipality................................................................................................................87 Competitive advantages of Zaritap ........................................................................................87 Zaritap economy brief ............................................................................................................88 Development initiatives ..........................................................................................................90 Priority initiatives ...................................................................................................................90

Sers settlement ..................................................................................................................92 Gomk Settlement ...............................................................................................................92 Nor Aznaberd Settlement ...................................................................................................92 Zaritap Settlement ..............................................................................................................92 Martiros Settlement ............................................................................................................93 Khndzorut Settlement ........................................................................................................93

URTSADZOR: ANALYSIS OF ECONOMIC SITUATION .......................................................... 94 Urtsadzor Municipality ...........................................................................................................95 Competitive advantages of Urtsadzor ....................................................................................95 Urtsadzor economy brief .......................................................................................................95 Development initiatives ..........................................................................................................97 Priority initiatives ...................................................................................................................98

SARAPAT: ANALYSIS OF ECONOMIC SITUATION ............................................................. 100 Sarapat municipality ............................................................................................................ 101 Competitive advantages of Sarapat ..................................................................................... 101 Sarapat economy brief ........................................................................................................ 102 Development initiatives ........................................................................................................ 103 Priority initiatives ................................................................................................................. 104

AMASIA: ANALYSIS OF ECONOMIC SITUATION ................................................................ 106 Amasia municipality ............................................................................................................. 107 Competitive advantages of Amasia ..................................................................................... 107 Amasia economy brief ......................................................................................................... 107 Development initiatives ........................................................................................................ 109 Priority initiatives ................................................................................................................. 110

ASHOTSK: ANALYSIS OF ECONOMIC SITUATION ............................................................. 113 Ashotsk municipality ............................................................................................................ 114 Competitive advantages of Ashotsk ..................................................................................... 114 Ashotsk economy brief ........................................................................................................ 114 Development initiatives ........................................................................................................ 116 Priority initiatives ................................................................................................................. 116

ARPI: ANALYSIS OF ECONOMIC SITUATION ...................................................................... 118 Arpi municipality .................................................................................................................. 119 Competitive advantages of Apri ........................................................................................... 119

5

Arpi economy brief............................................................................................................... 119 Development initiatives ........................................................................................................ 122 Priority initiatives ................................................................................................................. 123

Appendix 1. Key Data on 15 consolidated municipalities ................................................... 126 Appendix 2: Number of participants in the participatory diagnosis and planning workshops, by municipalities ............................................................................................... 130

Structure of the Report Below is the structure of this Report for the ease of reference to specific issues contained therein. Preamble: The prerequisites for design and implementation of this Project are set out in this section. Introduction: This section describes the overall framework, in which the Project has operated. Project Implementation Approaches: This section reflects on the roles of the GIZ, MTAD, RDF and ATDF, including the specificities inherent to the organisation of works and activities under the Project.

6

The above introductory and generally information sections are followed by cluster specific reviews along the breakdown, such as: cluster briefs, description of the works implemented in the framework of this Project and applied methodologies, identified needs and priorities, available resources, project ideas, of which those with highest scores are further detailed to form basis for project proposals a cluster in question may want to develop in due time and occasion. It is important to mention that despite the social initiatives have not been within the scope of this Project nevertheless their list is provided with light-touch reflection on them in some cases. The cluster related sections are winded up with noticed specificities and relevant recommendations as considered important from the perspective of further use of this Report by the relevant agencies. The Report contains Appendices as its closing sections which reflect on this or that section of the Report by providing more details, which have not been considered primary for inclusion in the body text thereof.

7

Preamble This Report has been developed in the framework of Support to Generation of Economic Development Project Ideas in the New 15 Clusters Established under the Amendments in the Law on Administrative and Territorial Division of Armenia. The Project has been agreed for implementation between the GIZ and the Ministry of Territorial Administration and Development of Armenia, and is hereinafter referred to as Project. The collaboration between GIZ and MTAD has been shaped into the Project by virtue of protracted and intensive discussions among the GIZ, MTAD and ATDF, including as a result of presentations and discussions held in the framework of January and June 2016 sessions of the Coordination Committee in the effort to identify how GIZ may support the MTAD and ATDF in their endeavours to identify investment projects in the consolidated municipalities. Thus, GIZ has developed the Terms of Reference for the Project and agreed them with the MTAD, the ATDF involved in the inherent discussions. Further, GIZ has contracted implementation of the Project to «Regional Development Foundation», an institution with considerable local and international experience of performance in territorial and regional development socio-economic planning, in devising and application of participatory programming methodologies, and finally experience in cooperating with GIZ. One of the most recent instances of GIZ-RDF cooperation was the three-days training workshops in LED Planning Methodologies and Application successfully held in the first three clusters established under the administrative and territorial reform, i.e. Dilijan, Tatev and Tumanyan1. According to the Terms of Reference, the objectives of the Project include, but are not limited to: - Design of a training programme targeting prioritisation of local economic development; - Compilation of brief socio-economic development picture of the Project municipalities; - Methodologically justified identification of needs and priorities and shaping development

vision; - Formulation of the list of needs and capacities through application of participatory tools; - Separation of a couple of priorities from the above list for presentation to be developed into

shape of project proposals to potential donors (e.g.: ATDF) in prospect in the post-election periods and use in designing the five-year socio-economic development plans of the municipalities;

- Preliminary brief general description of each of the Project municipalities (about 7-9 pages); - Final draft report indicating next steps (should the need be and in agreement with GIZ,

including recommendations on improvement of the 4-Y MDP Methodology and the Guidelines);

- Public awareness on local economic development in the framework of consolidation of municipalities.

The experience gained in the first three clusters of Dilijan, Tatev and Tumanyan has made it evident that one of the major obstacles to implementation of investment projects in the consolidated projects is the lack of capacities and methodologically structured skills to identify needs and priorities of the communities in a participatory and consultative manner, generate

1 See: http://www.mtad.am/files/docs/1513.pdf

http://www.mtad.am/files/docs/1513.pdf

8

methodologically justified project ideas in the environment of collaboration among various constituents of the municipalities and shape them into project proposals. As a result, a decision has been taken to search and develop adequate capacities in the new clusters before the elections are taken place. This approach has enabled representatives of administrative, civil and private segment of the clusters be prepared for the visits of the ATDF staff, other potential donors and partners, as well as investors, providers of technical assistance, charity and other institutions towards implementation of effective and efficient cooperation therewith and demonstrate consolidated, coordinated and programmed approach to such collaboration. Moreover, in some municipalities powerful players operate, their presence and activities being potentially involved in addressing municipal and community needs (e.g.: Wings of Tatev, “Geoteam”, etc.). Taking into consideration that certain capacities and skills are delivered to the communities of target municipalities through the Project, as well as its nature and methodologies, the specific composition (person-wise) of the municipalities is not crucial for the purposes of the Project, because the current mayors, members of community councils, members of administration and staff of municipal organisations will continue to reside in the municipalities, now consolidated, and confront its needs perhaps in different or similar positions. On the other hand, the techniques and processes of implementing Project activities, holding workshops, prioritisation and identification of project ideas to be shaped into project proposals at later stage may be instrumental in designing MDPs, because they come to replenish the MDP Design and Management Methodology2 and the Guidelines for Application of MDP Methodology in Multi-settlement Municipalities3, in particular, by strengthening their economic development planning and participation/engagement components given the evident need for such replenishment crucial in the current stage of reforms in municipal administration and management. The materials elaborated in the framework of the Project, in particular, this Report (covering discreet reports on specific clusters) will be submitted to the GIZ and later to the MTAD and having gone through discussions already in the intermediate stages of Project implementation will be used as final product by the Ministry as an important orientation for ATDF in identifying and deciding on their investment activities in consolidated municipalities. This Report has been produced and developed by experts of the «Regional Development Foundation», including Messrs Varazdat Karapetyan (team leader), Artak Dadoyan, Artyom Grigoryan and Gagik Muradyan. The Project has been financed by the GIZ South Caucasus Local Government Programme in the framework of its Support to Generation of Economic Development Project Ideas in the New 15 Clusters Established under the Amendments in the Law on Administrative and Territorial Division of Armenia Project. The Project Coordinator is Mr Armen Keshishyan, GIZ Adviser.

2 http://mta.gov.am/files/docs/886.pdf

3 http://cfoa.am/wp-content/uploads.2016/06/GUIDE-for-FYDP.pdf

http://mta.gov.am/files/docs/886.pdf

http://cfoa.am/wp-content/uploads.2016/06/GUIDE-for-FYDP.pdf

9

Introduction In pursuit of implementation of its administrative and territorial reform agenda, the Government of Armenia submitted the draft Law on Introduction of Amendments in the Law on Administrative and Territorial Division of Armenia (LA-100-N) to the National Assembly, which was adopted on June 174 and ratified on June 27 by the President. The Law entered into legal effect on July 11 2016. According to the above legal initiative, 15 new clusters are to be established in Armenia covering 118 former municipalities (embracing135 settlements). The newly established municipalities include: Goris, Tegh, Gorhayk and Meghri in Syunik marz, Vayk, Jermuk and Zaritap in Vayots Dzor marz, Amasia, Ashotsk, Sarapat and Arpi in Shirak marz, Urtsadzor in Ararat marz, Noyemberyan, Ayrum and Koghb in Tavush marz. In some of these municipalities local elections are set for September 18 and for October 2 in others (see details in the Appendix 1). The lessons learned from experiences in the first three clusters, namely, Dilijan, Tatev and Tumanyan, show, inter alia, that the local capacities to generate project proposals are in need of strengthening in view of the fact that it took almost eight months after their de jure consolidation (elections were held on February 14, 2016) to devise project proposals for submission to the ATDF, which should form the basis for support to consolidated municipalities within the logic of TARA reforms. Background analyses, preliminary assessments and the extensive experience of working at grassroots level infer that scrupulous and serious work is needed to embed local capacities to generate project ideas. This objective is served, among others, by this Project developed by the GIZ and agreed with the MTAD and ATDF.

Approaches to Project Implementation In methodological terms, the approaches to implementation of this Project are based on two major components:

- Organisational and

- Methodological The organisational component incorporates negotiations and consultations among GIZ, MTAD and ATDF towards streamlining and timing the programmatic objectives and goals. According to the TOR, the following are among the objectives of the Project: - Design of training module for defining LED priorities - Compile socio-economic development brief of partner municipalities - Define needs and development vision in a methodologically justified and backed manner - Make an inventory and list existing potential and needs through participatory techniques

4 http://parliament.am/drafts.php?sel=showdraft&DraftID=40879

http://parliament.am/drafts.php?sel=showdraft&DraftID=40879

10

- Select 2-3 items from the identified priorities for submission to potential donors for shaping project proposals in the future, after elections (e.g.: ATDF) and use in designing 5-year MDPs

- Produce preliminary 7-9 page overview on each of partner municipality - Produce final report indicating next steps (and recommendations on improvement of MDP

Methodology and Guidelines if needed and duly agreed with the GIZ) - Support public awareness on LED in the framework of consolidation reform.

The consultations and discussions entailed contract signing with «RDF», which is in full command of international and local experiences in participatory territorial and municipal socio-economic planning and maintains high-class specialists competent to implement the contractual works and assignments required by the Project.

GIZ adviser and First Deputy Minister, the Head of LSG Department of the MTAD and the Head of Coordination Department of ATDF and Programme Coordinator agreed on the schedule of visits to the Project municipalities, the final version of which is set out in the Table below. Table 1: Schedule of visits to the Project municipalities Marz/municipality Date Marz/Municipality Date Marz/Municipality Date

Syunik Vayots Dzor Tavush Goris 27.07 Jermuk 03.08 Noyemberyan 10.08 Tegh 27.07 Vayk 04.08 Koghb 11.08 Gorhayk 28.07 Zaritap 04.08 Ayrum 11.08 Meghri 17:08

Shirak Ararat Amasia 23.08 Urtsadzor 16.08 Ashotsk 23.08 Sarapat 24.08 Arpi 24.08

The Head of LSG Department of MTAD has hugely supported the expert team in organising the meetings and notifying the partner LSGs, participating civil society, private businesses and mass media on the objectives, goals and expected results of the Project, as well as the representatives of the institutions operating therein who may have significant roles in municipal development (such as Wings of Tatev, Geoteam, etc.). Total of 480 people participated in the activities and workshops envisaged by the Project.

11

Mr. A. Giloyan, Head of LSG Department of MTAD, has participated in all workshops in all partner municipalities, as well as in the subsequent team discussions and analyses, providing clarifications, assessment and recommendations on the process, progress and perspectives of the Project works. Heads of structural units of ATDF (Messrs. A. Grigoryan and D. Aslanyan) participated in a number of Project activities and workshops and their participation is acknowledged and appreciated from the perspective of presenting the ATDF procedures, precluding unjustified expectations, and notifying the schedule of works planned by ATDF in the consolidated municipalities in the post-election period. The project has proved to be a genuinely participatory and team work for all the involved parties, beneficial both to implementation of the defined objectives and the capacities of partner municipalities to perform the works anticipated therefrom, as well as their roles in such works, perception of programmatic approaches and participatory generation of project ideas. The visits and their intermediate results were discussed with Mr V. Terteryan, First Deputy Minister MTAD, in order to review the scope for improvement as informed by the visits already taken place and secure the comprehensive and result-oriented nature of the final report. As for the methodological component of Project implementation and holding the workshops, the team of experts (Messrs. V. Karapetyan, A. Dadoyan, A. Grigoryan and G. Muradyan) has applied a large spectrum of internationally accepted participatory economic development planning methodologies, selection of which (including a combination of several) was preconditions by the specificities of the participants, their number and the attitudes of audience. The methodologies include Participatory Assessment of Competitive Advantages, HEXAGON, COMPASS, Gender-sensitive Value Chains and LED Café. Their brief description is set out in the Box 1 below. Box 1: Brief on methodologies applied at the workshops

PACA (Participatory Appraisal of Competitive Advantage)5

Participatory Appraisal of Competitive Advantage is a method that allows conducting an action-oriented

appraisal of a local economy in just two weeks. PACA combines concepts such as competitive

advantage, systemic competitiveness, rapid appraisal, and visualisation-based facilitation techniques into

an innovative approach. PACA allows community stakeholders to build a shared perspective and mobilize

resources for the participatory planning, participatory implementation and participatory monitoring and

evaluating of LED measures contributing to enhanced competitiveness with first tangible results visible in

the short run.

PACA can be used

to kick-start or energise LED in a given location

as a toolkit to make ongoing LED activities more effective and efficient

5 Visit http://www.mesopartner.com/knowledge-services/tools/paca/ for more information

http://www.mesopartner.com/knowledge-services/tools/paca/

12

PACA has been introduced into more than 40 countries in Asia, Africa, Latin America and Europe.

Hexagon

The Hexagon is a framework to organise LED training events. It organises the key issues in territorial

development around six triangles. Moreover, it is the basis of a number of formats for quick workshops to

clarify local stakeholders' perspective at LED.

The Hexagon is the sum of six triangles:

1. The target group of LED: Local firms, start-ups, and external investors

2. Locational factors: Tangible factors, intangible factors relevant for firms and for individuals

3. Synergy: The relationship between economic development, urban / spatial planning and social

development

4. Sustainability: Combining economic, ecological and social development

5. Governance: The relationship between the public sector, the private sector, and local

communities

6. Process: LED as an iterative process of analysis, action and adjustment

Compass

The Compass is a method that takes the Balanced Scorecard as a starting point and turns it into a

participatory, practical tool.

The core of the Compass is a one day facilitated workshop with local stakeholders. During this workshop,

they

share the successes they have achieved so far,

define an overarching goal of their development effort,

elaborate the critical success factors for their sector, cluster or location’s further upgrading,

define activities that address all the critical success factors.

The Compass gives you

a quick overview of ongoing processes in your territorial development initiative (i.e. local

economic development, cluster promotion, regional economic development, value chain

promotion),

alignment of perspectives among relevant stakeholders,

strong buy-in from the relevant stakeholders,

definition of practical activities that is informed by a strategic perspective.

13

The LED Café

6

The LED Café is an innovative facilitation tool to engage a large group of local stakeholders, for instance

for awareness-raising by realizing a single workshop on Local Economic Development (LED). It can easily

be used with more than 200 participants. It has been successfully applied in numerous countries. It is an

extremely robust and effective format that stimulates the creativity and encourages the buy-in of a wide

variety of local stakeholders.

Mechanism of holding the workshops In winding up this section it is necessary to indicate that the workshops were structured along the following major milestones:

- The opening address was delivered by Mr A. Giloyan to make a presentation on progress in administrative and territorial reforms in the country, communicate news on the involved processes and programmes and notify the audience on the planned activities and approaches of the Ministry. Mr Giloyan underscored the importance of the knowledge and skills transferred to the participants during the Project as a means of deploying well-structured and methodologically backed collaboration with potential donors and an efficient tool to regulate the processes aimed at addressing the needs encountered by the municipality.

- In his introductory address, Mr A. Keshishyan, GIZ Adviser, set out the objectives and goals of the Project, specifics of cooperation among GIZ, MTAD and ATDF in the framework of this Project, called participants to take active stance in the workshops and secure truly participatory and shared module of identifying needs and priorities and presented the team of experts. Mr Keshishyan also emphasised the importance of economic development planning for designing five-year municipal development plans indicating that the participatory methods and techniques taught to the audience well may be used for strategic planning, enhancing the quality of cooperation with donor community, as well as strengthening participatory governance at municipal level, and endorsing the stance of municipality through exploiting “one community one voice” stance and consolidating indigenous resources.

- Messrs A. Grigoryan and D. Aslanyan, ATDF representatives, presented the statutory goals and objectives of ATDF, informed the audience on the procedures and processes, pledged that the Fund would visit the clusters after the elections and establishment of LSGs and underscored the significance of this Project for getting prepared for the works and consultations with ATDF. Messrs Grigoryan and Aslanyan also briefed the municipalities about the projects designed for the already consolidated clusters of Dilijan, Tumanyan and Tatev, as well as the expert group established in the MTAD and chaired by First Deputy Minister Terteryan to assess the project proposals coming from the municipalities7.

- RDF launched their work with presenting the agenda of the workshops, distributing the roles, and describing the methods to be applied. The team of RDF experts has carried out the workshops and concomitant trainings, inventoried, discussed and analysed all

6 Visit http://www.mesopartner.com/knowledge-services/tools/led-cafe/ for more information

7 The expert group was created pursuant to the MTAD Minister Order N 80-A, dated 20 July 2016

http://www.mesopartner.com/knowledge-services/tools/led-cafe/

14

the opinions voiced by the audience, and guiding the workshops as a whole. One of the specifics of the applied methodologies is that the participants do present, describe, characterise and formulate their needs, priorities and design their project ideas, while the team of experts guide them towards quality analyses and formulations by virtue of hints and explanatory insertions to keep them within the methodologies and objectives of the Project.

All four parties, i.e. MTAD, GIZ, ATDF and RDF, pledged their preparedness to respond to questions arising among the audience, which was observed to a varying extent and activity from municipality to municipality. Sometimes, in realising the presence of ATDF staff as the institution in command of investment funds, participants – quite understandably – tried to address multiple questions of interest to them and relating purely to the Fund and its procedures. Ably briefing the audience on their questions, the parties skilfully managed to retrieve the participants into the Project logic and processes setting their questions into the objectives and goals of the Project to embark on the training workshops per se. The Project enjoyed extensive media coverage by involving local administrative and press staff (e.g.: staff secretary as in Ashotsk, Goris Press Club as in Goris, marzpetaran web-sites as in Shirak, etc.) and extensive use of MTAD web-site by either providing information to be shaped into ministerial and local electronic or printed news feed or sharing information notes produced through MTAD and GIZ collaboration.

Goris, Syunik marz

15

GORIS: ANALYSIS OF ECONOMIC SITUATION SYUNIK MARZ

Table 2: Syunik marz: Memorandum Items8 Area 4 506 sq. km

Area vs. Republic 15.1%

Urban municipalities 7

Rural municipalities 102

Number of population as at end 2014 140.2 thousand people

Share of marz population in total, 2014 4.7 %

Share of urban population 67.3 %

Agricultural lands 306 914.4 hectares

8 Source: National Statistical Service of Armenia: Marzes of Armenia and Yerevan in Figures, 2015

Goris, Syunik marz

16

Goris municipality The consolidated Goris municipality is situated in the northern part of Syunik marz and incorporates Akner, Aghbulagh, Bardzravan, Khndzoresk, Hartashen, Nerkin Khndzoresk, Shurnukh, Vorotan, Vanand, Verishen, and Karahunj villages, i.e. 13 populated settlements and 10 municipalities. Total population of the consolidated municipality of Goris is 29,423 people9. Participatory diagnosis and evaluation process was launched in Goris municipality on July 27 2016.

Competitive advantages of Goris The workshops and other works defined by the Project were implemented in Goris cluster on 27 July, in the municipal administration office premises. The comparatives advantages of Goris municipality have been identified through LED café methodology, with around 30 participants from all constituent settlement. The list of participants is annexed to this Report in the Appendix 2.

Below is the list of competitive advantages as identified at the workshop:

1. High touristic attractiveness, including historical, natural and new monuments, picturesque and unique nature

2. Crossroad on the North-South main road, and roads to Mountainous Karabagh and Iran 3. Availability of infrastructures (roads, drinking and irrigation water, etc.) 4. Already traditional annual festivals and sports events 5. Availability of educational infrastructures, namely a college and a university 6. High-quality craftsmanship 7. Active civil society (some 30 non-government organisations operate in the municipality) 8. Recognised fruit vodkas, beans and other eco-food 9. Favourable conditions for agricultural development, including fertile lands, accessible

vast land resources, pastures and meadows.

9 Source: MTAD estimates

Goris, Syunik marz

17

Goris economy brief With the objective to generate the overview of the economic landscape of the municipality, COMPASS participatory diagnostic and assessment toolkit was applied at the workshop.

The leading branches of municipal economy are 4

and include:

1. tourism

2. food production and other industries

3. crop farming

4. cattle breeding

Tourism in the settlements

Elevated mountainous relief, pyramidal peaks, deep canyons caves attach uniqueness to the overall landscape of Goris, which is extremely crossed with 200-800m deep bank meadows along the Vorotan, Goris, Dzorashen, Khndzoresk, Aghsu, Khoznavar and Tatev rivers. The nature is gorgeous and air extremely clean. There is an abundance of historic, cultural, natural and newly erected monuments (castle and tomb of Mkhitar the Commander, Girl’s Castle, St Thaddeus church, St Hripsimeh church, swinging bridge in Khndzoresk, etc.), which lay solid basis for tourism development prospects especially taking into account their harmonious combination with natural gorgeous landscape. According to estimates and available data, some 35000-40000 tourists, both national and international, visits these areas. In contrast to Goris town, where tourist infrastructures and facilities branches are relatively well developed (hotels, B&Bs, catering, entertainment, stores and transport, etc.), the rural areas do not suggest any or additional services to tourists, which leaves occasional tourists using a couple of small commercial kiosks selling bottled water, refreshment drinks, et cetera.

Food production and other Industries

Industrial enterprises, such as “Gamma”, “Zangezur” and “Goris Micro-engine” operate in the municipality, in addition to food producing, craftsmanship, stone processing and cutting workshops. Particularly developed in Goris is electricity production, namely, The System of Vorotan Hydro-Power Plants ltd. Small enterprises based on information technologies gain pace in the municipality; in particular, a robot producing centre operates.

Goris, Syunik marz

18

Cattle breeding

Cattle breeding are the prevailing branch of economy in all rural settlements. Majority of rural population is involved in this sub-sector. The most widespread breed is the Caucasian Grey, and average milking is 2100 litres per annum. Use of remote pastures is proliferate, but in some cases water and electricity supply in those areas remains a challenge, creating complications for automation of milking and securing potable water for the cows. The entire volume of produced milk is procured within the communities and by small cheese producing farms in the neighbouring municipalities. Farmers who own and nurse more than 15 cows usually sell the produced milk in entirely. Too few of these produce dairy products from their own milk to meet the in-household needs. Households who have fewer cows sell 70% of the milk they produce, the remaining kept for production of cheese and butter for household use and sale to a few permanent clients. The average price of milk on the market is in the range of 125-150 drams. Farmers get incremental on high ratio of cream fat, and all farmers are equipped with meters for fat, acidity and water. Meat is sold through intermediaries procuring meat from the villages. Calf and young cow meat is sold at 1800-2200 per kilogram, other meat at 1200-1500 drams per kilo. In contrast to milk, sales of meat are quite complicated giving rise to justified discontent among farmers. Sheep are usually not milked, which is associated with difficulties characteristic to the process. Lambs are sold at the price of 35 000-40 000 drams.

Crop farming

Crop farming, or land cultivation, is also a widespread agricultural activity in the settlements of this cluster. The most frequently cultivated are vegetables, cereals and perennial plants. Melioration primarily consists of nitrogen fertilisers and manure. Majority of cultivated plants is attributed to cereals, mainly wheat and barley. Seeds are purchased in the framework of state support programme implemented by the Ministry of Agriculture. Crop farmers complain about the quality of seeds, since the highest yield rates is below 30 (hundredweight) per hectare. Cultivation of perennial plants is also quite widespread. High yield rates of seeded plants enable harvesting larger volumes of fodder versus unit of area. At the same time, rotation of types of plants seeded in the arable lands does not degrade the soil providing thus for fertility rates.

Development initiatives The following economic development initiatives have been identified in the municipality of Goris through application of participatory and planning tools and techniques.

Goris, Syunik marz

19

Agriculture

spotting new markets, promotion of local agricultural produce

upgrading agricultural machinery and establishment of agricultural machinery fleet

importation of new seeds, sorts and seedlings, and development of seed facilities

establishment of agricultural education centres

irrigation water, including networks, water reservoir, etc.

construction of a slaughter house

construction of milk procurement facility

establishment of anti-hail stations Tourism

advertising touristic attractions of the region

designing and production of touristic maps and guides

designing tourism strategy and PR

establishment of a faculty of tourism in the university

clean environment and garbage removal

signs, posters and banners

development of eco-tourism

cleaning of the river bed

Business

creation of small production facilities

support in maintaining and securing quality standards and introduction of new technologies

creation of entertainment areas companies General and miscellaneous

engaging new donors and partners

street illumination in small villages

improvement of inter- and in-settlement road networks

Goris, Syunik marz

20

Priority initiatives

Cleaning the river-bed of the Vararakn River and mud/water removal facilities

The Vararakn River having a total length of 27.5km springs in Ishkhanasar Mountain and stretches through four settlements of the Goris cluster (namely, Akner, Verishen, Goris and Karahunj) and disgorges into the Vorotan River. The length of the river in the Goris community is 9.6km, which is the major mud and rain water removing facility for the mentioned settlement. The mud and rain water removal facilities of Goris municipality include Goris, Verishen and Karahunj, carrying their waste water into the Vararakn River. There are 10 mud and rain water facilities operating in these sections of the municipality at total length of 8670m. Currently, both the river and the entire mud and rain water removal system are in desperate need of cleaning and renovation. Depending on the relief and taking into consideration weather conditions of the region, cleaning, maintenance and operation of the facilities in question would enable minimisation of the hazard of flooding the community area, which has significant impact on use and operation of agricultural lands, and give rise to harm and ruin of other areas as well, which are repeatedly emerging and in Goris causing substantial destruction. The total area of the Vararakn River subject to cleaning is approximately 8 km, including 3km in the sections of the river where its width is 18 meters, and 6.5 metres in the remaining 5km. The total area subject to cleaning is 3000m * 18m + 5000m * 7m = 89 000 m2. In average, the volume of garbage to be removed from 1 square metre of cleaned area is estimated at 0,25 cubic meters. The estimated total volume of garbage to be removed from the cleaned area is expected to be 22250 cubic meters, i.e. 89 000 square meters of area * 0,25 = 22 250 cubic meters. Taking into consideration that the width of the river exceeds two metres and cleaning is possible by involving relevant machinery, the value of the cleaning works is estimated as follows: 22 250 cubic metres of garbage * 1500 drams per cubic metre * 1,35 ratio = circa 45 mln drams. 3000 metres of the mud and rain water removal facilities holds a width of 3 metres, and 5670 metres approximately 1.25 metres of width. Cleaning of 3 metres wide facilities can be carried out with involvement of machinery at a value of estimated as follows: 3000m * 3m * 0,35 cubic metres of garbage * 1500 drams * 1,35 ratio = approximately 6,4 mln drams.

Goris, Syunik marz

21

The remaining section of the facilities will be cleaned manually, the value of which is estimated as 5670m * 1.25m * 0,35 cubic metres of garbage * 6000 drams * 1,35 ratio = circa 20 mln drams. Total value of this project is estimated as 45 mln drams + 20 mln drams + 6,4 mln drams = 71 mln drams. Project impact estimate

Direct beneficiaries of this project embrace residents of Goris, Verishen and Karahunj settlements, about 25000 people in gross, or, about 85% of total population of the cluster. Indirect beneficiaries include the entire population of the cluster, as well as the visitors and tourists.

Establishment of machinery and tractor fleet

Now when 13 neighbouring municipalities have consolidated to establish a new, Goris municipality, making sure that smooth and functional transport communication exists among the settlements is very much urgent, coupled with contemporary agricultural machinery and equipment is made available to the consolidated municipality, since the existence and operation of these two economic services would enable agricultural works, cooperation and implementation of joint activities and works. Residents identify solution of the above challenges in establishment of the machinery and tractor fleet, which would well serve the two goals at the same time:

1. uninterrupted and accessible communication among settlements of the municipality; and 2. existence of agricultural machinery and equipment to enable efficient agricultural

activities. Securing smooth and accessible transport communication among the settlement Addressing this issue requires availability of five passenger vehicles of “Gazel-Next” brand, which would carry out transportation of citizens along five routes or directions:

Route 1: Goris-Verishen-Akner

Route 2: Goris-Khndzoresk-Nerkin Khndzoresk

Route 3: Goris-Hartashen

Route 4: Goris-Karahunj-Vorotan

Route 5: Goris-Bardzravan-Shurnukh. Average tariff per one-way route would be in the range of 100-400 drams reflecting distance from the town of Goris. The indicated brand of vehicle, i.e. “Gazel-Next”, will technically be capable of meeting the goals of the project, particularly versus of the coefficient of price for quality. The price of one such vehicle is about 12 mln drams, subsequently, 5 vehicles would cost about 60 mln drams. The service will be delivered by the municipality. The generated income will be

Goris, Syunik marz

22

channelled to maintenance and operation of the transportation facility and vehicles and implementation of other municipal projects. According to the estimates, the average use of the transportation service will be provided to 500-800 people per day. Supply of agricultural machinery for agricultural activities Cultivation of winter and summer cereals holds prevailing share of crop farming in the reviewed municipality. Overall, the total areas under winter crops are 2875 hectares and 949 hectares is allocated for summer crops. In addition to the municipally owned lands, approximately identical areas of lands are cultivated by the residents of Goris municipality in the land plots of neighbouring communities. Harvesting in these lands is performed with 7 existing combine-harvesters, majority of which is morally and physically worn-and-torn and their further use or operation is very questionable. Depreciation of the combine-harvesters and high costs on servicing the machinery is aggravated by double values paid for diesel fuel. Losses in harvest reflect as high as 30-35%. Efficient harvesting can be enabled by virtue of 10 new combine-harvesters, acquisition costs of which are estimated at approximately 480 mln drams. In addition to combine-harvesters, efficient organisation of agricultural works would require 8 new tractors with relevant trailers, which would cost about 150 mln drams. Total project costs would make about 690 mln drams. Beneficiaries of this project will include:

Project impact estimate

All those residents of the municipality who would take the advantage of using inter-settlement transportation

The segment of tourists who travel at their own initiative and means without vehicles or accompanying transport services

Facilities and farms involved in agricultural activities in Goris reflecting 60% of its total households.

Tegh, Syunik marz

23

TEGH: ANALYSIS OF ECONOMIC SITUATION SYUNIK MARZ

Table 3: Syunik marz: Memorandum Items10 Area 4 506 sq. km





Share of marz population in total, 2014 4.7 %

Share of urban population 67.3 %


10

Source: National Statistical Service of Armenia: Marzes of Armenia and Yerevan in Figures, 2015

Tegh, Syunik marz

24

Tegh municipality Tegh municipality is located 20km to the east of Goris, and it is bordering municipality. The major branches of agriculture in the municipality are the land cultivation and cattle breeding. The consolidation reform in Tegh resulted in merger of Kornidzor, Karashen, Khnatsakh, Aravus, Vaghatur and Khoznavar settlements into a single municipality of Tegh. Total population of this new jurisdiction is 5696 people11. The diagnostics works and the workshop in Tegh was held on July 27 2016 in the premises of the village administration.

Competitive advantages of Tegh

Vast areas of arable lands Long-standing experience in crop farming Goris-Artsakh highway passes through the municipality, which enables delivery of

multifarious services along the road and establish commercial trade posts (kiosks, stores, etc.)

Favourable conditions for development of agriculture, such as fertile lands, arable land and meadows.

Tegh economy brief The main sources of income of local population include cattle breeding and crop farming (land cultivation). Favourable conditions for crop farming are safeguarded by geographical position and climatic realities of the locality. Soil is fertile, and people are mainly involved in cultivation of cereals. The fertility rate is 2-2.5 tons per hectare. Lands under wheat and barley account for 5600 hectares.

11

Source: MTAD estimates

Tegh, Syunik marz

25

Tegh municipality is also favourable for horticultural activities and orchards. In the Soviet era the municipality cultivated vast volumes of beet, tobacco, potato, fodder plants, and fruits and vegetables were grown here. However, current lack of irrigation water has forced population to cultivate only cereals. Even perennial plants (fodder) are not profitable as far as the respective plots are not irrigated. Cattle breeding are the second largest branch of local economy. The municipality maintains about 10000 cattle, including 4100 cows and 40 000 smaller animals. Households and farms deliver part of produced milk to small cheese producing facilities, which operate in the bordering municipalities, while the rest is used for production of cheese for their own consumption. Overall, marketing of milk is considered satisfactory in contrast to the significant complications farmers encounter in selling meat and wool. There is no demand for wool, and farmers accumulate it months over months ending up in throwing it away. The intermediaries (re-sellers) dictate the prices for meat. Farmers complain that the price intermediaries impose is very low leaving no gains to the producers.

Development initiatives

Participatory diagnoses and planning toolkit

was deployed to formulate the following

economic development initiatives through

direct involvement of the participants in the

workshop.

1. Securing markets for milk, meat and wool

On top of the volume used for local consumption, 70 tons of wool has been produced in the municipality in addition to 250 tons of mutton and 200 tons of beef. Absence of permanent and stabile market, the meat produced here is difficult to sell and - if ever sold - the prices are too low, while that wool is just thrown away.

2. Supply of quality seeds and fertilisers The state implements projects and programmes to supply seeds to the farmers. Nevertheless, the quality of seed remains a major problem, which oftentimes goes astray from the announced standards. Timing of supply of fertilisers is frequently infringed, which necessitates purchase from market hence at higher prices.

Tegh, Syunik marz

26

3. Renovation of inter-settlement roads and field tracks Roads are in dilapidated condition. It is necessary to either capitally renovate the road network or an excavator and a grader are needed that should be owned by the municipality in order to implement patching and maintenance works on an annual basis.

4. Internal potable water network It is only Khnatsakh settlement, which has internal potable water network in the entire municipality of Tegh.

5. External lighting There is no external lighting in any of the seven settlements of the municipality.

6. Garbage removal Regular or scheduled garbage removal service does not exist in Tegh. Supply of two garbage vehicles and bins of adequate quantity would enable arrangement of garbage removal services in the reviewed municipality.

7. Construction of sewage There is no sewage infrastructure in the municipality. Residents underscore construction of the respective infrastructures among their priorities.

8. Construction of irrigation network Renovation of internal irrigation network is a problem in virtually all the municipalities reviewed. Majority of these networks is technically worn-and-torn giving rise to tangible losses of irrigation water.

9. Establishment of a machinery and tractor facility Voting was deployed to identify two priorities in Tegh, namely, construction of irrigation network and establishment of machinery and tractor facility.


Construction of irrigation network

Approximately 5600 hectares of lands are cultivate in Tegh municipality; of these 90% is not irrigated.

Tegh, Syunik marz

27

Table 4: Main indicators of crop farming, by settlements12

Settlements Crop farming households

Arable lands (hectares)

Of which irrigated (hectares)

Idle (hectares)

Tegh 600 2200 - -

Kornidzor 298 1250 500 -

Karashen 130 450 - -

Khnatsakh 240 730 - 150

Aravus 45 630 - -

Vaghatur 100 200 - 100

Khoznavar 90 200 - 100

Total 1503 5660 500 350

75% of cultivated lands are under wheat, 20% under barley and 5% under emmer (hulled) wheat. Approximately 40 hectares of house-adjacent land plots in Kornidzor are cultivated to produce vegetables because these plots are irrigated. In case of vegetable cultivation the profitability rate of the branch is higher than that in cultivating cereals. Nevertheless, lack of irrigation water precludes expansion and development of horticulture in the municipality as a whole. Decades ago, this region saw potato, cabbage, tobacco, tomato, cucumber, beans, onion, and fodder-beats and alfalfa cultivated. All the above plants recorded high yield rates when irrigation systems were available. Now there is no irrigation water supply or networks operating and all these are merely not cultivated. Beneficiaries There are 1503 household farms involved in crop farming in Tegh, which is essentially the entire municipality. Each household cultivate 3-4 hectares in average (between 0.5 and 10 hectares). Cultivation of one hectare of land generates an income of 150-200 thousand drams per farm, while the cultivation of horticultural plants incepts some 1-3 mln drams, depending on the type of cultivated plant. Should there be irrigation water supply available, the residents utterly expressed preparedness to implement activities targeting cultivation of horticultural plants and establish orchards. Overall setup of the project Securing supply of irrigation water would take construction of pump-station at the main canal, from where installation of semi-tubes of total 5km length would secure delivery of water to Tegh municipality; installation of additional 3km of tubes and semi-tubes would deliver water to Khoznavar, Vaghatur, and Khnatsakh settlements, and, finally, another 500 metres of the same infrastructures will give irrigation water to Karashen and Aravus.

12

Source: Data obtained during the community meetings and discussions

Tegh, Syunik marz

28

Making sure irrigation water is accessible in Tegh settlement requires installation of 2.5km of internal network, and another 700 metres in case of Karashen. Project impact

Implementation of this project will make 80-90% of the arable lands of the municipality irrigated. Some 40-60% of farm households will see their incomes increased stemming from cultivation of cereals and fodder, while in case of high-value crops the increase in household incomes would be as high as 200-300%.

Project value According to the preliminary estimates, the project will cost around 500 mln drams. Establishment of machinery and tractor station

Like construction of irrigation network, this initiative targets crop farming development increase in household incomes of local population in Tegh. The combine-harvesters currently operated for harvesting cereals is 30 years old hence physically and morally worn-and-torn. Approximately 30-50% of yields remain abandoned in the fields, as loss. Harvest period is moved in schedule to later times because of frequent occurring need of repairing the existing machinery. In view of the need to frequently purchase spare parts and off-norm fuel consumption, the costs of harvesting significantly jump up. The same picture is observed in case of machinery carrying out sowing and tillage in the arable lands. Efficient harvesting of cereals requires establishment of machinery and tractor fleet to contain three combine-harvesters, two seeding machines, while the improvement and maintenance of field tracks and municipal roads require one small excavator and one grader. Project value The estimated value of this project is in the range of 150-250 mln drams (depending on the type and price of the combine-harvester selected, i.e. between 30 and 50 mln drams per unit). Virtually all farming households of the municipality involved in crop farming can be rightfully considered beneficiaries of this project, total number being 950.

Gorhayk, Syunik marz

29

GORHAYK: ANALYSIS OF ECONOMIC SITUATION

SYNIK MARZ

Table 4: Syunik marz: Memorandum Items13 Area 4 506 sq. m.





Share of marz population in total, 2014 4.7%

Share of urban population in total 67.3%


13



30

Gorhayk municipality

Participatory diagnosis and evaluation process was launched in Gorhayk municipality on July 27 2016.

Municipality of Gorhayk consists of four settlements, namely Gorhayk, Spandaryan, Tsghuk and Sarnakunk. Total population of the municipality is 1872 people, including 517 in Gorhayk, 386 in Tsghuk, 517 in Sarnakunk and 452 in Spandaryan.

Gorhayk is a cattle breeding municipality. The

major source of the vast majority of farmer

households is the cattle breeding. The second

largest branch of economy is crop farming,

where people are involved in cultivation of

cereals, barley and potato.

Competitive advantages of Gorhayk There are some prerequisites and competitive

advantages for development of Gorhayk

economy.

- The municipality and its constituent

settlements are mountainous, rich in cattle

breeding resources, such as arable lands,

pastures and meadows

- People are traditionally involved in

cattle breeding and maintain adequate

experience, knowledge and skills

- It is several years now that a cattle breeding resource centre has been operating in Sarnakunk settlement, and the centre provides quality services to the relevant clientele by employing best professionals in the region

- A milk processing facility furnished with modern equipment operates in Tsghuk, which, at the same time, is one of the major procurers in the region

- Arable lands are fertile and in case quality seeds are used it may secure yields of wheat and barley at higher than average republican values


31

- “North-South” motor-way passes through the municipality, which provides for additional potential of marketing local agricultural produce, including honey, medicinal and other plants, etc.

Gorhayk economy brief M. Porter’s Diamond techniques were applied with the objective to generate the understanding of overall economic situation in the municipality and devise the potential economic development initiatives.14 The leading branches of municipal economy are cattle breeding and crop farming. Statistical data on the economy of Gorhayk is presented in the Table below. Table 1: Main indicators of Gorhayk economy

Agriculture Quantities

Bee-families 1019

Smaller cattle 4981

Larger cattle 4285

of which: cows 1944

Pigs 210

Agricultural lands, hectares 45080

of which: arable lands 4682

Meadows 1822

Pastures 28215

Other lands 10360

Cattle breeding The major sub-branches of cattle breeding are sheep and larger cattle breeding. The main produce generated in the municipality is meat and milk. The major purchasers of meat are those procurers who market the meat in Yerevan. The difference between the procurement price in the locality and markets in Yerevan is about 50%:

14

Porter’s Diamond participatory diagnosis and evaluation techniques enables evaluation of the inner qualities of leading economic branches in a jurisdiction, as well as the substantial economic development factors and auxiliary branches of local economy.

Cost of beef

1000 drams

Sales price in the

municipality - 1800

drams

Sales price in

Yerevan - 2800

drams


32

Such cost of beef is materialised in cases when a farmer household maintains more than 20 calves and keeps cows in the remote pastures for a part of the year. In cases when the number of animals is less and when they are kept only in the village, the cost of the meat increases by 20%. Depending on a given year and taking into account seasonality variables, approximately the same picture materialises in the market for mutton. There are large exporters operating in mutton market, but even their activities are fairly volatile as they are directly dependent on the procurement orders they receive. The situation in prices for milk is described below: In the meantime, if the farmer households directly sell their milk, the profitability rate is about 30%, which – the size of farms taken into consideration – does not even meet the needs of the family, or it is not even subsistence farming. This branch displays shrinking trends being very sensitive to volatility of milk prices, and, in general, it continues to diminish. The cheese producing facility operating in the municipality and the home production of cheese introduce changes in the overall picture, to some extent. More specifically, if a farm household produces a home-made cheese and does not sell milk, profitability of the farm almost doubles. Cattle breeding resource centre in Sarnakunk has tangible impact on development of this sub-sector. It promotes artificial insemination, veterinary and animal health services, as well as overall increase in efficiency of general agricultural and extension services. Schematic presentation of cattle breeding sub-branch in the Gorhayk municipal economy is set out below:

Cost of milk -

80-90 drams

Sales price in the

municipality - 110-

130 drams

Sales price of

cheese in Yerevan

- 2000 - 2500

drams


33

Crop farming The major produce in the branch of crop farming is wheat. Almost two tons of wheat is harvested from a hectare of lands, a value very close to the average republican indicator. Each farm producing cereals owns approximately five hectares of land in average, thus it gets around 300 thousand drams of profit per annum. This amount does not match even with the recurrent expenses of a family. The municipality or farmer households do not have adequate resources to make investments in agricultural machinery, quality seeds, fertilisers or irrigation networks. The main challenges faced by the municipality in the branch of crop farming include:

Description of agricultural facilities

+ Vast land plots, including pastures and meadows

+ Traditional experience and knowledge

- Unfavourable and low-quality stalls

- Failure to apply modern technologies

- Lack of organisational and marketing skills

- Low qualification of personnel

- Limited indigenous opportunities for expansion of farms

Factors of production

+ Sector knowledge centre existing (CARD)

+ Accessible finance, loans possible

+ Vicinity of interstate motor-way

+ State support to agriculture, subsidising

fuel etc.

- High interest rates

- Low efficiency of anti-epizootic measures

- New technologies inaccessible

- Contemporary information or data on the

sector is limited or inaccessible

- Exploitation of Amulsar mines

- Field tracks

Market dynamics

Meat prices are stable over the

recent three years

Milk prices volatile or display

decreasing trends

Population is inclined towards

ecologically clean food, produced in

villages

Adjacent branches

+ Animal health and artificial insemination services

+ Production of fodder grass

- Production of fodder

- Inefficient machinery services because they are worn-and-torn

Cost of wheat - 80-90 drams

Sales price – 150 drams


34

- A new combine-harvester and other agricultural machinery; the existing obsolete harvesters abandon some 30% of yields in the fields, significantly deceasing the profitability of the farms

- Significant are the complications associated with making arrangements to carry out tillage; namely, the obsolete machinery, in the municipality since Soviet era, is of poor performance hence diminishes the yields

- Soils is stony in many places, while the municipality does not have machinery for amelioration

- Seeds, despite having been provided in the framework of state programme of support to agriculture, is not always of adequate quality giving rise to discontent among the farmers

- State support programmes subsidise fertilisers and fuel prices, and these are accessible to the farmers.

Development Initiatives Participatory diagnosis and planning toolkits were deployed during the workshop to help the participants generate economic development initiatives, or project ideas, which are set out below:

- Establishment of agricultural machinery fleet, in particular, acquisition of new combine-harvesters for the municipality

- Acquisition of equipment for amelioration of soil, which would help cleaning stony segments of the plots and increase of the total space of arable lands

- Construction of irrigation water pipe-lines and internal networks to turn the existing arable land stock into irrigated areas

- Establishment of seed development facility, which would secure supply of quality seeds (wheat) to the farmers

- Acquisition of a grader vehicle, which would enable regular improvement of inter-settlement roads and field tracks, as well as provide for winter maintenance (snow cleaning) of the road network

- Support to establishment of milk and meat processing production facilities

- Design and instruction of support mechanisms for milk and meat marketing.

Priority initiatives Participatory exercise entailed prioritisation of the development project ideas, which, according to the participants, would have the most significant impact on economic development of their municipality.


35

The two of those are:

- Establishment of an agricultural

machinery fleet

- Improvement of field tracks and

acquisition of a grader machine.

The above initiatives are detailed below:

Agricultural machinery fleet and tractor station

Cultivation of wheat in the municipality is the leading branch. There are several major impediments to increasing the yield rate, of which the residents prioritise the inefficiency of tillage and harvesting. More specifically:

- The existing combine-harvesters are obsolete hence they preclude gathering of as much as 30% of the harvest

- The harvest abandoned in the fields hampers seed circulation next year

- The tillage machinery is also obsolete with excessive fuel over-consumption and low quality of tillage

- As a result, the yield rate of wheat diminishes by almost 30%, or, in other words, each farm household suffers approximately 100000 drams of normative income.

Approximately 60% of farm households grow wheat and make use of services delivered by rented agricultural machinery. Annual sowing in the municipality is over and above 3000 hectares of wheat. Due to low quality of agricultural machinery only, losses of the farmers account for as much as 1000 tons of harvest, or, in monetary terms, about 150 mln drams. Agricultural machinery fleet should include sowing machine, combine-harvester and tillage tractor. The value of this investment is estimated at 70-80 mln drams.

Project impact estimate As a result of this investment project the major impact indicators are:

- Number of beneficiary farming households: more than 300

- Profitability of each farming household will increase by approximately 30%

- Areas cultivated per annum will expand by 15-20 percent. As assessed by the municipality, it would be possible to secure payback of this investment within a period of five years. In addition, if the yield losses caused by obsolete agricultural machinery are taken into consideration, the above term will be even shorter.


36

The machinery and tractor fleet may be owned by the municipality, while the services can be delivered at about 20% less fees or tariffs charged in the market. Incomes generated on operation of the agricultural machinery may be used by the municipality to acquire other equipment, as necessary. The incremental resources will be channelled to address other needs of the municipality.

Improvement of field tracks

Gorhayk maintains over thousand kilometres of field tracks and municipal roads but the municipality does not have resources to renovate these infrastructures or even keep them in working condition. Annual expenditures of each farming household for cargo transportation through the field tracks is about 50 thousand drams (total of 25 mln drams), over twenty percent (approximately five million drams) of which is a consequence of dilapidated condition of these communication infrastructures. Regular maintenance of field tracks would enable more efficient cargo transportation opportunities for the farmers and increase profitability rate of the economy. Improvement of roads will require a grader vehicle and excavator. Their market prices are about 80 mln drams, including 40 mln for grader and some 40 mln for excavator. The vehicles may be used for winter maintenance of the roads, cleaning snow in particular.

Meghri, Syunik marz

37

МEGHRI: ANALYSIS OF ECONOMIC SITUATION SYUNIK MARZ

Table 7: Syunik marz: Memorandum Items15 Area 4 506 sq. m.






Share of urban population 67.3%


15


Meghri, Syunik marz

38

Meghri municipality The process of participatory diagnosis and planning was launched in Meghri municipality on 19 August, 2016. Meghri consolidated municipality embraces the following settlements: Meghri, Agarak, Aylvank, Gudemnis, Lehvaz, Litchk, Kartchevan, Kuris, Nrnadzor, Shvanidzor, Vahravar, Vardanidzor, and Tashtun.

Meghri is the southernmost municipality of Armenia; it is located in the south of Zangezur at the altitudes between 390m (in the Meghri Canyon) and 3904m (Kaputjur). It is extremely cross-country in surface. Meghri mountain range is in the Northern and North-east and Zangezur mountain range in the West. Substantial part of the municipal territory is occupied by the Meghri canyon. It is rich in gold, multi-metal, copper, molybdenum and lime mines.

The forests and Alpine fields dominate the landscape. The municipal economy is based on agriculture, processing of agricultural produce and mining.

Competitive advantages of Meghri The comparatives advantages of Meghri municipality have been identified through LED café methodology.

It is located right on the border between Armenia and Iran, opening wide perspectives for cross-border trade. Armenia-Iran border post is established within the administrative boundaries of the municipality.

The inter-state road runs through the municipality, which is the only road connecting Armenia and Iran.

Landscape of the municipality is multifarious. It maintains altitudes between 390 and 3904 meters, enabling cultivation of wide variety of plants, fruits and making use of the vast areas of Alpine fields.

The municipality is abundantly furnished with irrigation water reserves, with Meghri, Tashtun, Kartchevan, Malev and other rivers flowing through its territory.

There are gold, multi-metal, copper, molybdenum and lime mines, which to certain extent tackles the issue of employment in the municipality.

Meghri economy brief

Meghri, Syunik marz

39

With the objective to generate the overview of the economic landscape of the municipality, COMPASS participatory diagnostic and assessment toolkit was applied at the workshop.

Horticulture and fruit processing Horticulture is one of the conventionally well-developed branches of the municipal economy. Figs, pomegranates, quince, grapes, peaches, and other fruits have always been famous for their rich flavour and sweetness. Over the recent years, subtropical fruits have also proliferates in the municipal horticulture, including pine-apples, kiwi, olives, et cetera. The shares of produced fruits are set out in the Pie below, broken down by specific types (Source: data obtained during the workshops):

Produced fruits are primarily sold through local producers; the realised production is transported and sold in Kapan, Goris, Yerevan and other areas. A major complication is caused by the road and distance, which despite being asphalt covered but is fairly difficult due to numerous hairpin turns. Transportation of the produce significantly adds on to its costs.

Canneries and wine plants operate in the municipality, which procure part of the locally produced harvest. Small producers have increased in number over the recent years, involved in fruit processing (juice, jams, stewed and dry fruits), as well as refrigerating facilities the production of which is mainly realised in wholesale to the re-sellers operating in Yerevan. Some part of the produce is exported to the Russian Federation.

Fig 13%

Pomegranade 22%

Quince 16%

Peach 18%

Grape 8%

Pine-apple 9%

Kiwi 5%

Other 9%

Meghri, Syunik marz

40

Crop farming

Particularly in smaller settlements, virtually all households are involved in crop farming. All in all, some 750 hectares of arable lands are cultivated, where vegetables, cereals and fodder are grown. The profitability rate of the cultivated vegetables is 5-10 times over and above that of cereals, which explains why vegetables are grown in all those arable land areas where irrigation is available. The produced vegetables and cereals are mainly sold within the municipality and Kapan primarily through direct purchase from the households.

Some 5-6 types of perennial plants and silage fodder are grown across the municipality.

Pig breeding This branch is not quite developed in the municipality. What is widely observed is one or two pigs bred for the own needs of the households involved in cattle breeding.

Cattle breeding and bee-keeping Both neat and small cattle breeding are fairly well developed in Meghri. The overall indicators describing cattle breeding branch of the municipal agriculture are set out in the Table 8 below. Table 8: Cattle breeding indicators in Meghri municipality (official statistics)

Bee keeping There are approximately 3500 bee families in the municipality, the bases for development of which is the rich and diverse nature. Majority of bee-keepers in Meghri sell their produce to long established clients at 3500-5000 drams per kilo, the range depending on the abundance of

Consolidated municipalities Beekeeping Pigs Sheep and goats Neat cattle

Total Cows

1. Meghri 1200 0 350 156 76

2. Agarak 117 154 330 193 80

3. Aylvank 12 31 46 85 24

4. Gudemnis 0 0 200 15 8

5. Lehvaz 251 118 508 76 33

6. Lehvaz 175 19 55 72 35

7. Kartchevan 342 6 135 71 32

8. Kuris 33 0 5 27 14

9. Nrnadzor 0 28 0 125 0

10. Shvanidzor 0 19 0 138 48

11. Vahravar 52 0 0 23 10

12. Vardanidzor 209 333 770 217 76

13. Tashtun 87 1 139 134 59

Total 2478 709 2538 1332 495

Meghri, Syunik marz

41

harvest. Sales are arranged in both ordinary cans and those specially designed for honey and in special packaging.

Small animal breeding The mountainous landscape of the municipality is conducive to development of small cattle breeding. These animals are usually not milked, hence lambs and goat-lings are sold. Sales are usually arranged within the municipality, including local population and tourists arriving from Iran. The major challenge is the absence of demand for wool. It stays practically unsold thus giving rise to both financial issues and problems of maintaining a space to keep and/or store it.

Neat cattle breeding Caucasian grey type cattle prevail in the municipality. Milk yield is some 1300-150 litres per annum. The produced milk is sold in small lots within the municipality. Some households produce home-made cheese and sell it at 1300-1500 drams per kilo.

Mining Meghri holds abundant mineral resources, the most widespread being the raw copper and molybdenum ore. Direct impact on the municipal economy in general and Agarak in particular is exercised by Agarak CM ltd., which provides quite substantial number of jobs to local population.

Development initiatives The workshop to identify the potential development initiatives based on participatory diagnosis and planning techniques carried out with the population and major local stakeholders has been held. As a result, the following have been identified. Inter-settlement transport and garbage removal

This initiative has been recognised as enjoyed the highest demand among the local population. Absence of municipal transport communication directly affects mobility of population causing complexities in both attending work places and sales of harvest. Making necessary arrangements for garbage removal is currently a tangible challenge, which is a consequence of non-exiting machinery to deliver the service.

Water reservoir and irrigation network

Meghri, Syunik marz

42

Should the reserves of irrigation water available in the municipality be properly used and the existing irrigation networks be renovated, the irrigated areas of municipal land stock would increase as high as by 70%. These are the areas, where water is particularly scare in August.

Agricultural machinery and improvement of field tracks Agricultural machinery is desperate need of upgrading and modernisation. The old machinery is inefficient and obsolete in term of both quality of the delivered services and reliability of its performance.

Support to processing of agricultural produce Establishment of small processing production facilities will have substantial impact on the municipal economy, since it will enable significant increase in value produced locally, and avoid inherent difficulties in realising fresh agricultural produce. Refrigerators, drying facilities, as well as production of juices and stewed fruits (and vegetables), dairy and meat products have huge potential to operate in a productive and efficient manner.

Priority initiatives Participatory techniques applied in the workshop enable identification of priority initiatives, which, according to the local population, may have the most significant impact on local economic development.

Inter-settlement transport and garbage removal As mentioned earlier, absence of transport communication among the settlement has direct negative impact on mobility of population from the perspective of both attending work places and sales of harvest. This problem is overly urgent in the current circumstances, whereby Meghri, Agarak, Aylvank, Gudemnis, Lehvaz, Litchk, Kartchevan, Kuris, Nrnadzor, Shvanidzor, Vahravar, Vardanidzor and Tashtun settlements are merging to establish a single consolidated municipality of Meghri. People and participants of the workshop see solution of this problem in establishment of a transport network, which would secure municipal transport communication on a daily basis, in the beginning and the end of working days along the following three routes:

Kartchevan-Agarak-Meghri customs-Meghri regional hospital-Meghri-Aylvank-Shvanidzor-Nrnadzor, and back,

Agarak-Meghri customs-Meghri regional hospital-Meghri-Lehvaz-Vahravar-Gudemnis-Kuris, and back,

Agarak-Meghri customs-Meghri regional hospital-Meghri-Lehvaz-Vardanidzor-Litchk-Tashtun and back.

It is envisaged to set the fare for one-way route commuting at 200 drams. Implementation of this project would require:

4 passenger vehicles – 48 mln drams (price vs quality index taken into consideration, it may be «Gazel-Next» vans, which are capable of addressing the tasks as above),

Meghri, Syunik marz

43

11 bus-stops in the villages – 33 mln drams,

2 large bus-stops in Meghri town – 8 mln drams. Total: circa 90 mln drams Making appropriate arrangements to secure delivery of quality garbage removal services requires purchase of 4 garbage collection vehicles (80 mln drams) and 65 garbage containers (20 mln drams). Total: 100 mln drams

Project impact estimate The total project value has been estimated at 190 mln drams. Beneficiaries include the entire population of the municipality and the Project would services various aspects of municipal life, including commuting between work place and home, purchases, visits, education et cetera.

Water reservoir and irrigation networks Vast irrigation water reserves are available in the municipality, which are not pooled or any way collected hence used in an inefficient manner. As a result, effective August every year, irrigation becomes impossible in the areas where irrigation water is generously available. Taking into consideration that about 60% of households are involved in crop farming and horticulture, this Project may have significant impact on the municipal economy by promoting cultivation of most profitable plants and fruits and expanding the areas allocated for horticulture. The Project may be construed in two phases, namely:

1․ construction of main and auxiliary water reservoirs where the irrigation waters will be

collected; and

2․construction and renovation of internal irrigation networks of the municipality.

Overall, there is a need to construct 12km of networks and provide for capital renovation of incremental 15km. The decision on positioning the main reservoir, as well as the number, positioning and other parameters of secondary or auxiliary reservoirs will require technical surveys and drafting works.

Noyemberyan, Tavush marz

44

NOYEMBERYAN: ANALYSIS OF ECONOMIC SITUATION

TAVUSH MARZ

Table 9: Tavush marz: Memorandum Items16 Area 2 704 sq. m








16



45

Noyemberyan municipality

Participatory diagnosis and evaluation process was launched in Goris municipality on August 10, 2016.

Consolidated municipality of Noyemberyan embraces Noyemberyan, Dovegh, Koti, Barekamavan, Baghanis, Voskevan, Voskepar, and Jujevan settlement. Noyemberyan is very special in accommodating rural and urban populated settlement and characterised by the respective features. On the one hand, it is a well-developed agricultural area, and – on the other – the municipality sees commerce and services growing.

Competitive advantages of Noyemberyan

The competitive advantages of Meghri municipality have been identified through LED café methodology.

Competitive advantages of Noyemberyan are divided into two main parts. One encompasses those specific to an urban municipality and the other rural.

Climate is mild here and favourable for agricultural activities. In the Debed inter-vale frosts and extreme heat are frequent hence can

damage the seedlings and branches, but here in Noyemberyan drastic fluctuations of temperature are almost not observed.

The neighbouring forest zone is a rich resource of berries and fruits for population.

Inter-state road stretches through the municipality, which is in itself an opportunity to realise the grown agricultural produce.

The experience and knowledge necessary to produce canned vegetables, fruits, and is still available in the municipality since the Soviet era, and these can be invested in the processing branch of agriculture and production of agricultural produce.

Small production facilities for cheese and canned food operate in the municipality, and these may well be considered successful precedent for the development of this branch, if the appropriate human resources and markets are identified.

An advantage for development of cattle breeding od the availability of remote pastures and meadows, which are supplied with water reserves and the tracks are in fairly proper condition.

The population of this area are inclined to cooperative actions, perceptive to change and various alternatives of cooperation are observed in the municipality.


46

Almost all the households in the municipality produce home-made vodka and wine, which are famous throughout the republic and enjoy stabile and high demand.

Mines of Felsite, Basalt and Zeolite are many in the municipality. Noyemberyan also stands out with high quality specialists, such as:

o Wine makers, o Canning specialists, o Wood crafters and processors, o Experts of conventional craftsmanship, o Horticulturists, o Cheese makers, o Bee-keepers

Noyemberyan economy brief With the objective to generate the overview of the economic landscape of the municipality, COMPASS participatory diagnostic and assessment toolkit was applied at the workshop. The general description of the pivotal strategic branches of the municipal economy is set out in the subsequent paragraphs.

Trade Noyemberyan maintains pivotal significance from the perspective of goods turnover in the sub-region, as well as sales of goods produced in the marz, which is promoted by the two major factors, namely the geographic location of the town and the conventional role of a trade catalyst. There are no topical market in the town or sub-region, which affects development of this branch. There are some thirty food stores here, stores selling electric appliances, which provide services to the entire sub-region, construction materials, as well as garment and other household items. Sales of fruits primarily takes place from the yards or by transporting them from town to town in private vehicles.

Horticulture Horticulture saw its development in this region back in the Soviet times. Vineyards, orchards of peaches and walnuts supplied quality fruits to entire Armenia and enjoyed high demand. Dismantled Soviet establishment and the outburst of war in 90s caused annihilation of the majority of prosperous orchards. Now vineyards occupy only several dozens of hectares of land, mainly in Berdavan and Koti. Land plots are tiny (0,1-0,2 hectares) and belong to several owners. Sorts are diverse, and the harvest is 30% less than in other grape cultivating areas of the country. Lack of irrigation water adds on still another negative impact on development of viticulture. Nevertheless, people are still in good command of knowledge and skills in viticulture and are interested in establishment of new vineyards. Harvested grapes are used processed to get home made wine. There is no explicit success in vine production branch. The produced wine is used mainly for own consumption. Wine Plant in


47

Berdavan records tell about volatile success and it does not always procure grapes produced by local grape cultivators. Fruit-growing or horticulture has a historic account of 40-50 years in this area. The share of this branch has also significantly diminished after the collapse of the Soviet Union since the operations of the Berkaber water reservoir got suspended as a consequence of the unleashed war, while most of the vineyards were in the juxtaposition line. Currently, house adjacent plots are used to grow pears, apples, peaches and walnuts. The expected availability of irrigation water infers changes in the plans of population. Many plan establishment of new orchards to grow peaches, apples, pears, and pine-apples, and implementation of these plans strongly depend on existence of affordable resources and marketing opportunities. The produced fruit is mainly sold at kiosks along the main road, as the inter-state motor-way runs through the municipality. A new agricultural market is in operation since the last year in Baghanis, which also somewhat promotes production and marketing of local fresh fruits and vegetable.

A positive example of procuring fruits and berries in the area is the canning plant in Jujevan. On the one hand, the plant procures peaches and cornels, walnuts and forest harvest, and on the other, it is in itself a good example of a small processing facility. The employees of this facility explain its success in their daily hard work and improvement of technologies and market. Activities widespread in this area include collection of berries and

seasonal wild vegetables in the forests and sales in the kiosks along the main road, caning plant in Jujevan, or to large procurers (in case of cornel). Since early spring until late autumn hundreds of people in this area would collect Polygonatum (Solomon’s seal) and asparagus, and raspberry and dewberry, and the season is closed with collection of walnuts and cornel. Polygonatum and asparagus are marketed on the road or to the neighbours, berries and walnuts to the canning plant in Jujevan, while the cornel is procured by large wholesale clients. Incomes of people involved in collection of berries and fruits from the forests do not suffice to meet the minimum needs of their families. The work is hard and daily march is over 20 kilometres, while the gains are nil. Development of horticulture presupposes implementation of the following activities and measures:

Supply of relevant seedlings to the sub-region, including peaches, plums, pears and apples;

Piloting trickle irrigation systems to be replicated at large scale;


48

Piloting anti-hail networks and systems and extend the scale of their use based on the results of the pilot;

Upgrading vineyards and expansion of procurement opportunities;

Promotion of entrepreneurship for production of dried fruits by virtue of technological, business and financial tools;

Support to development of raspberry orchards by virtue of financial and technological tools.

Vegetable growing In the Soviet period, namely, in 80s of the last century, vegetable growing has increased significantly as a result of supply of irrigation water from Berkaber water reservoir. In the span of several years Koti and adjacent communities have become famous of the tomatoes, cucumbers and water-melons grown here17. The yield rates were not less than that in prominent agricultural zones in the Ararat valley. In the outset of the military operations the irrigation network was annihilated, and horticulture gradually faded away to stay limited to cultivation of vegetables in house adjacent land plots only. The sub-region has gradually transformed from producers of these goods into their consumer. The following measures are required to promote development of horticulture in the municipality (and the sub-regions in general):

Rehabilitation of irrigation networks;

Supply of quality seeds and seedlings;

Training courses on modern technologies in growing fruits and vegetable and marketing;

Accessible financing for horticulture;

Accessible agricultural machinery, such as mini-tractors and appliances (machinery may be provided under a leasing arrangement or a municipal machinery and tractor stations established, which must deliver affordable services to the farmers)

Support to establishment of small green-house production facilities (under 200 sq. m.), which will be involved in growing vegetable in off-season, i.e. September-November and March-May. Some first steps towards this have already been undertaken in Koti18.

Processing of fruits This segment is the crucial basis for development of horticulture, which in some cases may be higher in its productivity than the horticulture per se. A variety of organisations supported establishment of dried fruit production facilities, and replication of this exemplary experience would have significant impact on the stability and development of this branch. In the Soviet times, fruit procurement and processing plants operated in the municipality, which have been, however, idle over the recent years. The only exception is the caning facility in Jujevan, which exports predominant share of its production.

17

All reservations valid, growing water melons is viewed here as part of vegetable growing and horticulture. 18

UNDP supported establishment of 16 green-houses in 2013-2014


49

Taking into consideration the competitive advantages of the Noyemberyan municipal economy as above, the need of establishing efficient horticultural value chain becomes a must for overall local economic development, which may play a role of locomotive dragging other constituents and promote establishment of adjacent and associated values chains, such as cattle breeding (milk and meat production) and trade centre of the region.

Growing cereals Wheat is the major cereals grown in this region. Yield rates of wheat in this municipality surrenders in its indicators to the leading regions of Armenia. The table below containing comparative data illustrates this conclusion: Table 10: Comparative analysis of wheat yields (Source: NSS, Armenia)

Plants Yield rates, 1 hectare/average, tons

Noyemberyan Leading marz Average republican

Winter wheat 1.5 - 2 t Ararat 3,31 2,12

Barley 1.5 - 1.9 t Ararat 2,54 2,01

Population of the municipality justifies growing wheat in this area through several factors, including:

Low cost operation,

Physical work limited, which is particularly substantial in the bordering areas, where long hours of work maintain hazards to health and life because of shelling by the foe;

On the one hand, wheat is easy for marketing and, on the other, it serves meeting the need of the producing households,

The areas where wheat is grown are in large part non-irrigated hence eligible for growing wheat only.

Nevertheless, the areas right along the borderline are without irrigation water will be still used to grow wheat for a long time, hence increasing its efficiency will require implementation of the following measures:

Supply of quality and regionally accommodated seeds,

Acquisition of new combine-harvesters for the rural areas, which would decrease loss of harvest by some 20%,

Support in acquisition of tractors to help cultivate arable lands, which have already become virgin,

Support in acquisition of quality fertilizers accommodated to the composition of the soil in this municipality as an incremental step to the already existing state support schemes,

Support to start-ups involved in fodder production.

Tobacco and maize


50

Tobacco and maize potentially secure high profitability rates relative to the beetroots and wheat. At the same time, cultivation of these plants requires irrigation of adequate quality. In addition, cultivation of these plants is laborious. Tobacco is cultivated with support of International Masis Tabak (IMT) Company. Average yield rate is 15-20 tons, which secures income of some 400-600 thousand drams. The existing support schemes are sufficient for this branch (extension services, financial support, guarantee market, etc.) in addition to stabile demand. The experience of cultivating maize in the municipality goes back to the Soviet times. Yield rate per hectare is approximately 8 tons. There are hybrid sorts securing 15 tons of yields per hectare. The price for these hybrid sorts is lower since they are used as fodder. Overall, growing hybrid maize on 1 hectare generates income of some 800000-1000000 drams. The main challenges in cultivating maize include lack of irrigated land plots, complexities in cultivation, inadequate and obsolete agricultural machinery, as well as volatility of demand.

Greenhouses Greenhouses represent swiftly growing economic facilities of the municipality. Even if vegetable is not produced in the greenhouses in the winter seasons, these facilities are nevertheless fairly profitable. Climatic conditions are also conducive to development of greenhouses. These facilities enable production of vegetables in the end of springs and late autumns, where the major supply of these goods diminishes in the market; hence the demand and 2-3 times higher prices. A greenhouse of 100m2 space may guarantee some 600000 drams of profit per annum. The produced yields is sold within the municipality and also marketed through re-sellers. There are specialists in the settlement who are in versatile command of empirical knowledge and skills to cultivate vegetables in greenhouses, including application of disease prevention measures.

Cattle breeding One of the dominating branches of local economy is cattle breeding. Orchards and vineyards got drastically downsized as a consequence of dismantled irrigation networks. People have gradually turned to increasing number of cattle. Cattle breeding are a conventional branch for the rural areas merged into the municipality of Noyemberyan. Almost 50% of the population in the constituent villages is involved in cattle breeding. There may be no doubt that majority of the households have only one or two cows sufficient to meet the needs of one family only, but there are also large cattle breeding facilities here. Households who own less than five animals keep them in the villages; in the meantime, those who own more practice cattle breeding in remote pastures and meadows. The remote pastures are 10-30km far from the villages, in forests and gorgeous areas. The problems in these areas are the lack of electricity and any communal conveniences. These are aggravated by


51

complications inherent to the involved labour and the fact that younger generation gradually refuse involvement in cattle breeding. Milk yield rate are low. Average milking per cow is some 1500-1700 litres. Part of the milk is used by the rural households to produce cheese, and the other is sold at 130-140 drams per litre. Major procurers of milk are the cheese producing facilities in Koghb and Noyemberyan. Larger producers are not represented here, which is explained on the one hand by the remoteness and, on the other, insufficient volume of milk produced in addition to the price established in the local market repel such large procurers. Produced cheese is sold to intermediary re-sellers at the price of 1300-1400 drams per kilo, or the producers take the cheese to Yerevan and other towns to sell to the stores and specialised dairy shops at the price of 1600-1700 drams per kilo. Overall, rural households are dependent upon meat traders and procurers, majority of the latter based in other municipalities. Production of beef in the reviewed region is profitable should a household maintain more than six animal, and if the calves in off-manger periods are kept in remote pastures. Some 30% of population of the municipality – and the sub-region in general - is involved in this type of cattle (cow) breeding. Sheep breeding is not developed in the municipality. People usually have less than 10 animals and even this tiny number is to be met in rare households. Negative impact on development of this branch is exercised by frequent theft of the animals from Azeri side, which adds on to complications in maintain sheep in remote pastures and extremely price volatility for mutton in the market. Pig breeding has drastically decreased due to the epizootics of African plague in 2011. Even now the hazard of contagious diseases causing fall of the animals is observed if rural households intend to maintain pigs in the forests. An alternative to free breeding in forests is manger-pegged breeding, which takes far larger expenses; however, the number of rural households preferring the former alternative gradually increases. All in all, over the recent three years the volumes of meat production steadily increases in both beef and mutton, which is triggered by quick returns of investment (people purchase calves in spring, send them to remote pastures, and in autumn they slaughter and sell them). Young generation is also interested in involvement in this type of cattle breeding.

Development initiatives Thoroughly discussed at the participatory workshop, the main stakeholders have raised the following economic development initiatives as crucial for development of their municipality:

- Improvement of remote pastures, namely installation of electricity supply, potable water for the animals, accessibility, etc.;

- Honey collection centre, i.e. laboratory, bottling conveniences, support to export, etc.; - Construction or improvement of irrigation networks; this initiatives has been stamped crucial for

all rural settlements; - Anti-hail equipment or nets; - Machinery and tractor fleet for both agriculture and renovation of field tracks; - Support to procurement and processing of locally produced milk and meat;


52

- Support to processing of locally produced fruits and vegetables; - Support to development of viticulture and wine making; - Support to exportation of fruits, including fresh, semi and full-chain products; - Establishment of wholesale and retail agricultural market; - Resource centre for horticulture and cattle breeding;

Population of the municipality indicated the following as priority initiatives to promote local economic development:

- Support to agricultural produce processing enterprises; and - Establishment of machinery and tractor fleet.


Small processing facilities (sorted and packaged fruits, frozen fruits, production of jams, stewed fruits and vegetables, compote, and dried fruits) Lack of value chains instigating higher added values in pivotal branches of Noyemberyan economy, i.e. both in horticulture and cattle breeding (enterprises processing fruits and forest berries, cargo transporters, whole-sellers, milk and meat small facilities operating at pursuant to standardised procedures and processes) preclude generating higher value at each subsequent phase of the value chain or give rise to higher efficiency values. At the same time, absence of processing enterprises has negative impact on pricing patterns in the market, whereas the share of loss of harvest is observed during the high-yield annual cycles since it is impossible to realise the entire harvest produced in such year.

Significant success may await the small enterprises united under compliance with identical standards of procedures and processes (below this principle of production is exemplified for the case of dried fruits):


53

Implementation of this project initiative presupposes the following steps:

- Selection of participants, - Training courses on technological and business skills and capabilities, - Development of unified standards of quality management, - Financing of the participants and support to establishment of small businesses, - Development of a shared brand and marketing promotion, - Establishment of a resource centre and comprehensive support to the newly created

enterprises. The costs associated with project implementation, including grant and lending financial support to the businesses is estimated to amount to some 150 mln drams. The Project will result in establishment of some twenty businesses, such as drying facilities, refrigerating business and small canning productive workshops.

Machinery and tractor fleet The table below contains data in support of devising a picture of cultivated agricultural land stock of Noyemberyan, and the data is disaggregated by constituent populated settlements. Table 11: Cultivation of agricultural lands in Noyemberyan (source: data obtained during the Project workshops)

Settlements Households cultivating land

Arable lands o/w irrigated Idle Grape/fruits

Noyemberyan 1400 701 29 630 27/4

Berdavan 860 1268 172 834(B19

)+200 92/27

Dovegh 176 230 - 170 6/6

19

“B” stands for bordering land plots, which are not cultivated because of danger of shelling

Unified quality standards

Shared Brand:

Tavush Dried Fruits

Drying enterprise

Drying

enterprise

Drying enterprise


54

Jujevan 180 110 - 80 -

Baghanis 262 285 30 110(B)+100 12/2

Voskevan 407 380 10 210 -

Voskepar 215 200 100 200 -

Koti 765 1594 - 890(B)+70 -

Barekamavan 100 410 - 350(B) -

Total

Predominant majority of arable lands cultivated in the municipality, i.e. 2110 hectares, or 65% of total, is used to grow cereals, primarily wheat, barley and rye. The remaining 35% of arable lands is allocated to potato, tobacco, horticultural plants, etc. and still another share is left idle, as necessary. Certainly, the profile of plants is very much changeable; the same is true for sown surfaces from year to year. These depend upon the capacities of the population in a given year, incomes generated in the preceding year, availability of quality seeds, accessibility and affordability of necessary financial resources, weather conditions when sowing winter plants, existence of agricultural machinery and a long range of other factors. In 2016, Baghanis village saw hit record of cereal harvest, i.e. 60 centners per hectare, because high quality seeds, good management practices, and high quality extension services were made available to the local households. Obsolete agricultural machinery is the major impediment for development of crop farming in the municipality. In addition, there is a need to improve the internal municipal roads, as well as organise winter maintenance of the municipal road network. Participatory discussions at the workshops have educed the list of agricultural and road maintenance machinery and vehicles needed by the community for the above purposes, including their quantities and brands:

combine harvester for cereals– two units,

caterpillar tractor with plough – 2 units,

wheeled tractor «Belarus T-82»,

mowing machine - 4 units,

grass bender – 2 units,

tractor for inter-aisle works in some 140 hectares of vineyards – 2 units,

excavator – 1 units,

small crane – 1 units,

passenger vehicle of 20-22 seats – 1 unit Total value of this initiative is estimated at approximately 250 mln drams.

Ayrum, Tavush marz

55

AYRUM: ANALYSIS OF ECONOMIC SITUATION TAVUSH MARZ

Table 12: Tavush marz, Memorandum Items20 Area 2 704 sq. m








20


Ayrum, Tavush marz

56

Ayrum municipality

The process of participatory diagnosis and planning in the municipality of Ayrum was launched on August 11, 2016. The consolidated municipality of Ayrum consists of Ayrum, Debedavan, Deghdzavan, Bagratashen, Ptghavan, Haghtanak, Ltchkadzor and Artchis settlement. The municipality is situated on the north-eastern border of Armenia and in the valley of the Debed River. The major occupation of local population is horticulture and crop farming. Proximity to the Georgian border and the Bagratashen customs post and the wholesale-retail Sadakhlo market (it was in operation since early 90s up until 2005) instilled new commercial skills and capacities among the local population. Such skills, connections, justified business risks are observed among characteristic features of the local residents, which are successfully implemented in their daily business activities. People are open to innovations, new business ideas, replication of success stories and expansion of their businesses; and one of the manifestations of these properties is the swift development of processing of agricultural produce and establishment of greenhouse facilities. People are not very demanding in respect of state support in the shape of subsidies or sponsorship, they dream of business promoting environment, which would enable them to reach their objectives through hard work and commitment.

Competitive advantages of Ayrum

The competitive advantages of Ayrum municipality have been identified and written down of by application of «LED cafe» techniques.

Ayrum railway station in the municipality, Bagratashen customs posts, Proximity of Yerevan-Tbilisi inter-state motor-way, Lowest altitude in Armenia (340m), Favourable and sub-tropical climatic conditions, mild winters, Prolonged land cultivation season, Shortest harvest maturity terms, Settlements are situated along the Debed River, which is an abundant source of

irrigation; Rare types and sorts of plants, which may be found in too few other areas, such as

olives, kiwi, pine-apples, pistachio, etc., Specialists of horticulture, knowledge and skills inherited from generation to generation, Business ties and connections in various areas of Armenia, as well as in Georgia and

Turkey, Inclination to localise success stories and best practices.

Ayrum economy brief With the objective to generate the overview of the economic landscape of the municipality, COMPASS participatory diagnostic and assessment toolkit was applied at the workshop.

Ayrum, Tavush marz

57

10%

15%

48%

8%

10% 9%

Peach Apple Kinglet Nectarine Plum Other

The basis of municipal economy is construed through the following five branches:

horticulture,

land cultivation,

cattle breeding,

processing of agricultural produce,

commerce.

Horticulture Low altitude and proximity of irrigation water make the municipal environment favourable for horticulture, which entails intensive pace of the branch development. Horticulture holds pivotal role for all settlements of the municipality. Since Soviet era, cultivation of peaches, apples, and plums was the most widespread engagement. In 90s, horticulture downsized significantly caused by complications in marketing and sales, as well as the proximity of the Sadakhlo market, which supplied trade as easier labour and incomparably higher incomes to the population of the neighbouring communities. Currently the municipality sees expansion of horticulture across its settlements. This process is preconditioned by the following four major factors:

relatively higher profitability of horticulture versus crop farming,

development of fruit processing businesses and their increase in quantitative terms,

palpable potential for exportation of Armenian fruits in the visible future,

early maturity terms of the fruits because of low altitude. Traditional cultivation of peaches gradually surrenders its leading position to other types of fruits. Only 10% of the orchards established over the recent five years are under peach trees. Distribution of newly established orchards by types of cultivated fruits is presented in the chart below (source: data obtained from the participants during the workshop and further discussions)

Ayrum, Tavush marz

58

Processing

The processing branch of local agriculture has gained momentum over the recent years and is currently in the stage of swift development. Among the new business facilities established here over the recent years are nine solar and 12 electricity-operated drying facilities, five modern refrigerators and dry fruit collection site, three facilities producing jams, stewed fruits and vegetables and juices. The production of these enterprises enjoys small but stabile and sustainable demand and provides reliable procurement for harvest produced in the settlements. Development of businesses in this branch, as well as establishment of new ones, which would be capable of producing quality and standardised goods, will enable significant trigger for further development of horticulture and increased income generation opportunity in the municipality.

Crop farming

Cultivation and production of sun-flower is dominant in the municipality over the recent ten years period, having turned this direction into the one of the local economy shaping sub-branch of the municipality. This shift is preconditioned by easy cultivation of sun-flower, high demand and relatively low labour-intensiveness versus other plants. Overall, average area under sun-flower in the municipality is 450 hectares. In average, productivity of this plant per hectare is 0,7-1,2 tons, at average sales price of 600 drams. Profit per hectare is circa 300 thousand drams. There are two sub-flower toaster facilities in Bagratashen, which procure sun-slower at in unlimited volumes. The dynamics of sun-slower cultivation by years and areas is set out in the graph below. Dynamics of sun-flower cultivation in Ayrum (Source: data obtained during the workshop and community meetings)

0

200

400

600

800

1000

1200

1400

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Ayrum, Tavush marz

59

The data in the graph demonstrates that cultivation of sun-flower over the recent years has declined to reach record low in 2016, which is a consequence of shrunk yield rate. Shrinkage of yield rate is preconditioned by two major factors:

use of unchanged, same seeds, and

decline in qualitative properties of soil. In parallel with decline in areas under sun-flower, gradual increase is observed in cultivation of vegetables and cereals. Vegetables also secure relatively high profitability, while cultivation of cereals is temporary and it targets change in the qualitative properties of the soil.

Cattle breeding Cattle breeding are a relatively weakly developed branch in the settlements of this municipality. The predominant share of produced milk and meat is channelled to meeting household needs and own consumption. It is evident that productivity in cattle breeding is fairly low versus that in horticulture hence it requires large investments. For comparison reasons it should be stated that per capita productivity in a household having 10 fattened calves is substantially lower than that in case of cultivating a hectare of apple orchard.

Commerce and cargo transportation Sadakhlo market has had its role in pooling commercial skills and experiences in the municipality. Over the ten years of its operation, this market had enabled formation of specific commercial skills and ties among the population of neighbouring communities with businessmen and entrepreneurs both within Armenia and in Turkey, Georgia and Russia. In the aftermath of market closure, part of population purchased small trucks and continued their involvement in commerce by importing goods primarily from the southern regions of Russia, Georgia and Turkey. Currently, there are some 28 traders here (people involved in small commerce) who use their own vehicles, i.e. small trucks, («Ford» or «GAZEL») import a variety of goods (e.g.: fruits, garment, sun-flower, dried fruits, etc.) and sell them in various regions of Armenia.

Labour productivity in a

household owning 10

fattened calves

16000 drams

Labour productivity in

cultivating one hectare of

apple orchard

42000 drams <

Ayrum, Tavush marz

60

In November-December commerce and import of goods significantly increases and some 400 people get involved in small trading.


Participatory exercise deployed during the workshop and beyond has identified priority initiatives, which, according to population, may have the largest impact upon local development in Ayrum. These include:

construction and improvement of irrigation networks,

Establishment of machinery and tractor station,

Establishment of horticultural resource centre,

Processing and export of fruits and vegetables,

Construction of a market very close to the border,

Production of home-made vodka.


Establishment of machinery and tractor station Geographic position and climatic conditions in Ayrum help the municipality secure competitive standing in agriculture, in particular in terms of development of horticulture and crop farming. Local population do associate agricultural development directly with the availability of agricultural machinery. Unfortunately, the existing machinery is morally and physically obsolete and in dilapidated state, which directly affects the quantity and quality of cultivated plots and generated harvest. In addition to the worn-and-torn condition of the existing machinery, it may not be used for recurrent care of orchards, such as spraying, etc. Table 13: Land cultivating households by settlements (source: data obtained during the workshop and meetings with population) Ayrum Cultivators Ayrum Cultivators Ayrum Cultivators Ayrum Cultivators

Ayrum 630 Bagratashen 772 Deghdzavan 92 Haghtanak 220

Artchis 340 Debedavan 177 Ltchkadzor 95 Ptghavan 270

Total 2596

Taking into consideration that this branch is one of the leading ones in the local economy, support to acquisition of modern machinery transforms into a crucial and decisive precondition from the perspective of increase in incomes of population and municipal economic development.

Ayrum, Tavush marz

61

Establishment of machinery and tractor station will have direct positive effect in terms of increasing the productivity of 2596 households. Moreover, efficacy of land cultivation (currently, 1400 hectares) will also increase, while the space of cultivated lands will increase by some 20-30% in the coming years. The list of necessary machinery is set out below:

Universal combine harvester for cereals, sun-flower and maize (e.g.: «Massey Ferguson MF 9790») - 60-100 mln drams,

Four wheel tractors including their auxiliary equipment (plough, sowing machine, baler, cultivator) – 80 mln drams,

One caterpillar tractor and a plough – 30 mln drams,

Two mini-tractors and a trailer to work as a sprayer in the orchards – 10 mln drams,

Grader - 50 mln drams.

Total: 230-270 mln drams

Horticulture resource centre and support to export Climatic conditions prevalent in the municipality significantly increase the competitiveness of local branch of horticulture. Growth in horticulture is dependent upon procurements of quality inputs, professional skills and sustainable connections and ties on the market. Unfortunately, only low or poor quality inputs are currently available on the market (namely, medicaments, chemicals, seedlings, etc.), which has immediate negative impact on both yields and quality of the cultivated fruits and vegetables. In contrast to other municipalities of this marz, Ayrum maintains sustainable market ties and the only remaining problem is associated with supply of quality inputs and establishment of full fledge value chain. Professional knowledge and skills crucial for increasing efficiency of growing fruits are also fairly poor in the municipality. In general, the closed cycle taking place in the branch of agriculture may be illustrated through the graphic below.

Lack of knowledge of modern technologies

in horticulture

Poor quality of inputs, erraneous use thereof and lack of demanding

position as to the inputs

Unpredictability of harvests, declien in

quality

Volatile markets, huge fluctuations of prices, lack of homogenous produce

Low productivity and income

Decline in motivation

Ayrum, Tavush marz

62

Further development of this branch hugely depends on establishment of a horticulture resource centre specialised in delivery of the following services:

• Standardised and specialised sale of medicament, fertilisers, chemicals, tools and seedlings,

• Training courses in horticulture and delivery of extension services (advice and consultancy),

• Provision of agricultural machinery under leasing, and delivery of associated services, • Establishment of ties with markets to sell processed and fresh fruits, guidance, advisory

services on customs procedures and coaching. Approximate value of this project is estimated at 200 mln drams, including 110 mln drams for establishment of the centre, and 90 mln for acquisition of tools and equipment and the value of acquisition of kick-off turnover resources.

Koghb, Tavush marz

63

KOGHB: ANALYSIS OF ECONOMIC SITUATION TAVUSH MARZ

Table 14: Memorandum items, Tavush marz21 Area 2 704 sq. m.








21


Koghb, Tavush marz

64

Koghb municipality Participatory diagnosis and planning works were launched in this municipality on 11 August, 2016. Koghb consists of Koghb and Zorakan rural settlements. Historically, Koghb was the centre of Koghbavor district of Gugarats state of Armenia. Ruins of Mshavank, Tavaraeghtsi, Vardgyugh, Lomus and other monasteries and churches are found in the surroundings and vicinities of this village. The three bridges over the Koghbaget River crossing through Koghb connect the two parts of the village. Zorakan village was inhabited by Azeri before 1988. Ethnic conflicts resulted in settlement of some 320 families, refugees from Chardakhlu village of Shamkhor region. Majority of population is engaged in horticulture, plant growing and cattle breeding. Others are involved in small trade and catering facilities, stone polishing and wood processing, collection of forest berries and processing industries. In addition, significant is the engagement of local population in the military garrison established right in the village.

Competitive advantages of Koghb Competitive advantages of municipal economy have been identified by applying «LED cafe» techniques.

Municipality is surrounded by forest zones rich with berries and loads of other natural goods;

Weather and climatic conditions are favourable for development of horticulture and greenhouse economy;

Winters are relatively mild (down to -6C) in comparison with other communities (regions) of the country;

Majority of population is specialised in viticulture and conventional wine-making;

M-16 Yerevan-Tbilisi motor-way passes through the municipality, which creates opportunities for establishing commercial kiosks and organising retail trade along the road;

«Zikatar» environment protection, which implements scientific tests to preserve the unique natural heritage, development, maintenance, reproduction of natural resources, as well as promotes tourism development;

Favourable conditions for growing sub-tropical plants and fruits (olives, kiwi, pistachio, almonds, citron);

Huge resources of timber from the forests.

Koghb economy brief M. Porter’s Diamond techniques were applied with the objective to generate the understanding of overall economic situation in the municipality and devise the potential economic development initiatives.

Koghb, Tavush marz

65

The major branches of Koghb local economy are

horticulture,

crop farming,

cattle breeding,

trade,

wood craft and production of hand-made crafts.

Fruit growing and viticulture Almost 80% of population is involved in fruit and vegetable growing. Majority of these people maintain orchards in their house adjacent land plots. Some 100 households do horticulture outside off their house plots. The main fruits cultivated include apples, plums, peaches and kinglets. In addition to these, people grow also walnuts, figs, kiwi, lemon, pomegranates and other orchards but to significantly lesser scale. Irrigated sections of the land parcels are fully cultivated. Expansion of orchard areas is preconditioned by availability of irrigation water. Currently, some 30% of the lands are irrigated. Processing or storing of fruits is practically not done in the municipality. There are some refrigerators and drying facilities, which are primarily used for maintenance and/or processing of own harvest. Fruit growing here is compatible with leading horticultural regions of Armenia in both yields and profitability. Dry fruit production is quite developed here in addition to refrigerators, and in some areas of the municipality viticulture is observed, which makes the branch even more profitable and competitive. Grapes are cultivated in Koghb with emphasis on technical sorts, such as Lalvar, Rkatsiteli, and Tavrizeni. Main share of cultivated grape is procured by wine and cognac plants. Part of the harvest is used to produce wine for own needs. Almost all wine-makers maintain own production of wine. In procuring technical sorts of grapes, 145 drams per kilo is paid. Average profit from cultivation of one hectare of grapes is estimated at circa 2 mln drams.

Crop farming The major plants cultivated in crop farming include wheat, barley, maize and potato. Households also cultivate onion, beans, tomato and rye. Over the recent three years new plants

Koghb, Tavush marz

66

are tested in Zorakan, namely onion and garlic. Cultivation of onions provides profit of some 1200000 drams per hectare, which is several times more than that from barley and wheat. Here cultivation of onion in non-irrigated lands is meant. In turn, cultivation of onion in irrigated land plots would generate double values of profitability. Yield indicators are in close proximity with the average republican values. The branch of plant protection does not have any significant advantage versus the region or other municipalities except for potato which matures early and is marketed when the prices for it are at the highest. Other plans and cereals are sold at ordinary prices established across the country and maintain the profitability identical to that elsewhere. Cultivation of one hectare of wheat and barley generates profit of 100000 drams in average. These plants are cultivated in non-irrigated lands hence their replacement by high value alternatives and orchards is not justified whatsoever. Nevertheless, an opportunity to create new added value in the municipality lies with establishment and development of greenhouses. Geographic position and climatic conditions inherent to this municipality are favourable for running greenhouse facilities.

Cattle breeding Approximately 65 percent of population residing in Koghb municipality is involved in cattle breeding. Primarily this means breeding of neat cattle. Milk yield of cows is 1300-1800 litres per annum. Animals are fed by grass only. Table 15: Cattle breeding data by settlements (Source: data obtained during the workshop and community meetings)

Zorakan Koghb

Neat animals 750 1200

o/w cows 420 547

Smaller animals 800 72

Pigs 351 265

Meadows 55 hectares 270 hectares

Pastures 1000 hectares 2000 hectares

Milk produced in the municipality is entirely consumed and proceed locally by the producing households. Matsun, high-fat sore cream, tan, cheese and butter are produced. Milk is not procured. Part of dairy products is sold to the local stores, another part to neighbours and relatives directly from the households. Maintaining one animal secures 140000 drams of annual income to the farmer in average. Production and sales of meat is not of profitable occupation either because meat is sold to outsiders, i.e. intermediaries who purchase meat from producers at low prices (1800 drams per kilo).

Koghb, Tavush marz

67

Commerce and services Settlements of this municipality are located along Yerevan-Tbilisi inter-state motor-way M-16, which provides favourable conditions to organise catering and commercial facilities along the road. The military garrison located in the municipality also promotes additional certain activity and development of the branch. Currently, several public catering facilities and small kiosks operate. The quality of service delivered in catering facilities is fairly poor. The rooms are not clean, nor are priced menus offered. In terms of quality of the food served the situation is different; dishes made of local meat, dairy products and traditional cuisine is available. Should the service quality be improved, the number of clients would increase to eventually entail increase in incomes.

Wood processing Wood processing is carried out by a few workshops located in Koghb settlement. Furniture, wooden accessories, boxes, as well as semi-products are produced here. Furniture is ordered from various marzes and Yerevan. In view of cheap raw wood acquired from the primary market and skilful craftsmen this branch of local economy is competitive with leading municipalities across the country. The by-products and sawdust emerging from the main production are not processed. Should the facilities be furnished with appropriate equipment these items may also be processed to generate incremental income.

Development initiatives Participatory diagnosis and planning techniques have been applied together with the population and main stakeholders of Koghb municipality to identify the major local economic development initiatives:

supply of irrigation and installation of counters in the pastures,

establishment of cattle breeding resource centre,

establishment of machinery and tractor station,

irrigation water,

resource centre for horticulture and crop farming,

support to establishment of refrigerating fruit drying and greenhouse facilities,

installation anti-hail stations,

support to establishment of meat processing facilities.

Application of participatory assessment techniques has identified the following as the two highest priority initiatives for the municipality:

establishment of machinery and tractor station, and

irrigation pipeline.

Koghb, Tavush marz

68


Construction of an irrigation pipeline Municipality maintains 933 hectares of arable lands. With the objective to address the issue of irrigation, a gravity irrigation pipeline was constructed here in 2003-2004 fed from the Koghb River running through the municipality. However, the capacity of the pipeline shrunk (15-20 l/sec) as a consequence of diminished water in the river. It is sufficient for only one district of the village. In order to increase the volume of water in the gravity pipeline, construction of 3900 meters of pipe was launched (Akhtik-Khlagom-Koghb) but the works were left half-done because of insufficiency of financial resources. Construction of 2300 linear meters of pipeline would enable irrigation of 245 hectares of house adjacent land plots, 32 hectares of vineyards and 23 hectares of orchards, in addition to 18 hectares of land parcels under vegetables and plants. Addressing the issue of irrigation is possible also by virtue of a collector alternative. More specifically, a reservoir of 15000-25000 m3 capacity may be constructed as a quite convenient location is also available in the municipality (Salerk). Total cost of the project is estimated at 40 mln dram (excluding the construction of the reservoir).

Establishment of machinery and tractor station Predominant majority of households in Koghb municipality are involved in crop farming along three main directions, i.e. horticulture, crop farming and cultivation of plants and cereals. The overall picture of crop framing in Koghb is presented in the table below, the data broken down by settlements. Table 16: Crop farming in figures (source: data obtained at the workshops and community meetings)

Zorakan Koghb

Population 1050 4838

Households 324 1453

Arable lands 656 hectares 933 hectares

Cultivated plants (hectares) 552 350

Orchards 83 140

Meadows 53 271

Being one of the main income-generating branches of the municipality, crop farming is not furnished with necessary agricultural machinery. The field tracks are not improved in due time either. Availability of the machinery, as stated below, will support development of crop farming and tackle the issue of appropriate organisation of works implemented by the households in this branch.

Excavator («Погрузчик JCB ECX») - 35-45 mln drams,

«DT 75» caterpillar tractor -25 mln drams,

Koghb, Tavush marz

69

Wheel mini-tractor (Indian) 3 units - 30 mln drams,

Sowing machine -5 mln drams,

Sprayer 2 units -5 mln drams,

Manually operated scythes 4 units - 5 mln drams,

Grader - 40-50 mln drams. Total project value is estimated at 150 mln drams.

Vayk, Vayots Dzor marz

70

VAYK: ANALYSIS OF ECONOMIC SITUATION

VAYOTS DZOR MARZ

Table 17: Memorandum Items, Vayots Dzor 22 Area 2 308 sq. km

Area vs. Republic 7․8%



Number of population as at end 2014 51․4 thousand people

Share of marz population in total, 2014 1․7%



22



71

Vayk Municipality In Vayk, the process of participatory diagnosis and planning was launched through the workshop held on August 4 in the premises of the municipal administration.

Location

Vayk municipality is situated in Vayots Dzor marz, on the right bank of the Arpa River. Vayk is 135km to south-east of Yerevan, and located on the Yerevan-Sisian motor-way. Consolidated municipality of Vayk consists of Vayk, Arin, Zedea, Por, and Azatek settlements. Roads Vayots Dzor marz is quite abundantly furnished with transport communication infrastructures. Yerevan-Vayk-Goris motor-way passes through the territory of the municipality, which – according to the current plans – is to be relocated to the left bank of the Arpa River, which would promote improvement in ecological, transport and urban development challenges of the municipality. Municipal roads in quite proper condition and as such are conducive to development of entrepreneurship. Capital renovation is needed on the roads connecting Arin and Zedea settlement with the motor-way, as well as internal road networks in the rural settlements of the municipality. Real estate There are numerous unused structures and buildings in Vayk, which are the administrative and production blocks of former Soviet industrial enterprises privately owned in our days. The real estate does not enjoy any architectural uniqueness. Majority of those are unattractive five-storey buildings erected along the main motor-way. The main street of Vayk town, which stretches in parallel to the motor-way, is nice-looking and green. Two-storey mansions create a pleasant environment characteristic of conventional towns.


72

Qualified labour force The pivotal advantage is the business potential and the inclination of population towards entrepreneurship. There are high quality geologists in the municipality, experts of producing natural juices and lemonades, bakers, experts of tourism management, technologists and engineers qualified in the Soviet period. Labour force and human resources in other sectors and areas are not eye-striking in their strengths, either in technical occupations or services. Table 18: Agriculture indicators, Vayk municipality (source: official statistics) Population Agricultural

lands,

hectare

Arable

lands,

hectares

Orchards Bee-families Small

animals

Larger

animals

o/w

cows

Vayk 6772 105 0 0 21100 257 617 176

Arin 337 3468 295 62 374 1379 497 172

Azatek 589 6542 785 76 392 597 542 247

Zedea 173 2744 302 46 83 57 83 40

Por 145 1890 194 12 226 150 160 72

Total 7966 14751 1577 198 22175 2440 1899 707

Competitive advantages of Vayk The competitive advantages of the municipality have been identified through application of LED Café techniques. There are several competitive advantages inherent to Vayk economy, part of which maintains economic characteristics in the current period and is used by the existing enterprises. Natural competitive advantages:

- Diversity stemming from vertical zoning - Water resources - Gold, basalt and lead mines - Neighbouring Jermuk, which is a health and resort centre - Clean environment and nature - Mild and warm climate - Record number of sunny days - Interstate motor-way, which in future will turn into North-South corridor, stretches

through the municipality - Abundant natural and historic monuments - Vast areas of agricultural lands - Gravity water irrigation - Diverse plants and medicinal plants.


73

Professional and human competitive advantages

- Tourism development specialists - Technologists, engineers and geologists - Large share of people bestowed with entrepreneurship potential and spirit - High quality specialists of apiculture

Large share of people with university education

Technological competitive advantages

- Home-made wines, vodka and thick syrups making technologies

- Refrigerating facilities - Modern wine-making

technologies - Modern horticulture technologies - Competitive technologies of fruit

processing (dry fruits, vodka).

Vayk economy brief With the objective to generate the overview of the economic landscape of the municipality, COMPASS participatory diagnostic and assessment toolkit was applied at the workshop. Running enterprises and branches Vayk economy is diverse. On the one hand, there are several competitive, productive and efficiently organised businesses, and on the other many enterprises with low level of economic competitiveness. Competitive ones are concentrated in wine-making, hydro-construction, restaurant and lodging services; competitive are also gas stations. Low level of competitiveness is observed in trade, food industry, household and communal services, as well as in cattle breeding and crop farming.

Profitability high Profitability low

Cooperation prone branches

Strategic branches - Hotels - Horticulture

Improved branches - Food industries - Services - Apiculture

Branches not inclined to Furnished branches Hopeless branches


74

Analysis of municipal economy has been carried out on the basis of two major criteria. On the one hand, attention is paid to profitability of the branches versus neighbouring municipalities, and to the inclination of branch enterprises towards change and cooperation on the other (or, in other words, to what extent a given branch is inclined to collaborate with other branches of municipal economy). Economic prospect of Vayk economy is embedded in strategic and improvement-prone branches where economic development potential is concentrated. The axis of economic development of Vayk should be construed around tourism and horticulture. Cattle breeding stay among weak branches of local economy. Milking volumes are lower than republican average and do not trigger reasonable profitability. Profitability of meat production is high in view of vast pastures and natural and climatic properties of the region. Average productivity of cereal cultivation observed in Vayk is lower than average republican values.

Start-ups and new investments Over the recent two years, majority of investments in Vayk have been channelled to horticulture and fruit processing. Modern technologies are applied in these branches in parallel with higher yield rate securing seedlings. Competitive and efficient businesses are established also in the fruit processing branch. The technologically well-furnished wine factory,

apricot vodka plant, dry fruit workshop, and refrigerating facilities are among the facilities operating in Vayk. Cultivation of plums, apricots and peaches is among the branches of local economy enjoying relatively high productivity. At the same time, productivity of leach production is lower than the respective indicators in Armavir and Noyemberyan peach-producing regions, while Vayk unchallenged holds the leading position in cultivation of plums and apricots. The same applies to cultivation of walnuts. Productivity of viticulture is low as there are complexities with procurements and paybacks.

Development initiatives By applying participatory diagnosis and planning toolkits the following economic development initiatives (project ideas) have been identified are taken note of:

Machinery and tractor fleet (station) with equipment adequate for cultivation of arable lands, fodder grass harvesting and delivery of other associated services

cooperate - Gas stations - Mining industries - Retail commerce - Restaurant services

- Cattle breeding - Viticulture - Cereal production


75

New technologies for processing of agricultural produce and support in establishment of productive facilities

Support in installation of anti-hail stations or nets

Identification of additional markets (agricultural market a place along the motor-way)

Support in profitable use of solar energy

Business incubator, major operations of which to be concentrated on enterprise support with particular emphasis on the sphere of service delivery

Honey test-laboratory and general resource centre, including support to packaging, branding and marketing

Support in renovation and improvement of irrigation networks

Renovation of the road network in Arin and Zedea (6 and 8km, in particular)

Upgrading and modernisation of medical with particular emphasis on diagnostic equipment and tools

Efficient management of pasture and other lands

The following priorities were identified by the main role-players present at the workshop through participatory tools envisaged by the Project:

- Establishment of machinery and tractor fleet (station)

- Renovation of roads connecting Arin and Zedea with the motor-way

- Multi-direction support to introduction of new technologies and new enterprises in the branch of processing agricultural produce

- Road market for marketing agricultural produce and enhancing touristic attraction of Vayk


A․ Machinery and tractor fleet (station)

Population in all four rural settlements of the cluster is entirely involved in crop farming. Approximately 350 households cultivate some 1300 hectares of land, including 200 hectares in the house adjacent land plots. 250 hectares are under orchards. Main cultures include apricots, apples and walnuts. The remaining lands are allocated for cereals and perennial plants.

Table 19: Main indicators of crop farming in Vayk

Settlements Beneficiary households Cultivated arable lands Orchards (ha) Idle

Azatek 180 440 130 300

Arin 47 280 100 40


76

Zedea 61 100 109 100

Por 70 130 19 90

Total 358 950 358 530

Agricultural machinery either worn-and-torn or, in some cases, absent, prevent households from cultivating about 500 hectares of land, while land works are incomplete and deficient in those areas where the land is cultivated. This causes decline in productivity of orchards and arable lands hence shrinking profitability. In order to secure timely and quality implementation of agricultural activities, establishment of a machinery and tractor fleet (station) is required, which would have the following vehicles:

1 combine-harvester for cereals – 35-50 mln drams 1 tractor (90-100 hp) – 13 mln drams 2 wheat sowing machines – 6 mln drams 2 grass balers – 11 mln drams 2 plough - 2 mln drams 1 mini-tractor - 8-10 mln drams 2 mowing machines - 2.5 mln drams 2 cultivators - 1.5 mln drams Total: 90-100 mln drams.

Implementation of this project would enable cultivation of current idle lands and expansion of orchard areas, while the income from the currently cultivated lands will increase by 20-30%.

Renovation of the roads connecting Arin and Zedea settlements with the motor-

way

The road connecting Arin with the main motor-way is some 6km. Population of Arin is 337 people in 80 farming households. Arin is prominent of fruit and milk production, and sheep rising. Poor condition of the road creates complexities to marketing agricultural produce of the settlement. Each household here markets about a ton of agricultural produce in Vayk or other towns per annum, namely, fruits, wheat, meat, dairy products, et cetera. From the perspective of economic efficacy, renovation of roads is not profitable, nevertheless, taking into consideration the importance of keeping the rural settlement in question going, increasing efficiency of agricultural households, and transporting cargo and people, the renovation of the roads is an important project. In case of partial renovation of the roads, the project value is estimated at about 400 mln drams, and in case of capital renovation it will be about 580 mln drams. The same applies to renovation of the road to Zedea. This rural settlement is 6.5km far from Yerevan-Vayk motor-way. Population of Zedea of is 173 people. The number of population and the volume of agricultural produce do not trigger economic efficiency of road renovation. It bears much more of social implication, such as suspending migration and enhancing socio-economic activities of local population.


77

Partial renovation of Zedea road is estimated around 450 mln drams, while capital renovation would cost around 650 mln drams.

New technologies of agricultural processing and multi-direction support to new

enterprises

Population of Vayk perceive establishment and development of efficient enterprises processing agricultural produce as the major and fundamental trigger for development of municipal economy as a whole. The participatory planning exercise carried out during the workshop with the local population the centre for support to processing enterprises was named “Innovative Technologies Centre” (ITC). The major functions of the ITC as seen by the participants are set out below:

- Practical education in new technologies for start-ups of the region - Study visits to best practice Armenian or foreign companies - Provision of initial capital to companies to get registered and launch operations; these

can be small grants schemes, interest free loans or subsidised bank loans - Sales and refurbishment of technologies, training of specialists, dissemination of didactic

materials on new equipment or technologies - Recurrent advisory services to start-ups on introduction of technologies or accessibility

of markets - Creation and development of local brands and unified branding for companies from the

region. ITC will have dedicated advisory service in both fruit, including dry fruit, pozzies, stewed fruit, jams, etc. and processing of diary and meat products. A dedicated structural unit will be involved in supporting introduction of new technologies in horticulture, including seedlings, anti-hail nets, trickle irrigation, support to marketing, et cetera. Overall, the following investments are needed to

secure operations of the ITC:

- Kick-off investment for the building, furnishing and basic equipment in the estimated 50 mln drams

- Operational expenses for the first two years in the amount of about 50 mln drams (effective the beginning of the second year, the services will be payable and since the third year of operation the centre become sustainable and self-sufficient)

- Initial equity capital in the amount of 100 mln drams - Acquisition of equipment for sales in the amount of circa 100 mln drams.


78

In total, the establishment of the Centre and its operations in the first two years will cost about 300 mln drams. The centre may be established by the municipality by attracting private investment to become an exemplary public-private partnership and secure further stability of its operations.

Road market

This initiative is not new in the history of Vayk. Every year, between early spring and late autumn, these markets may be spotted in various parts of the inter-state motor-way, where people sell fruits, home-made wine, vodka and other stuff.

A structured, well-organised road market

would enable concentration of similar

services in one single place and make it

much more attractive to the clientele,

especially to tourists.

The market will embrace:

- Ten-twelve primary counters embellished with conventional national decorations and attributes, where agricultural produce or other goods, including souvenirs, will be traded;

- A small cafeteria, where home and foreign tourists will be able to get refreshment and have rest

- Communal utilities - Information centre, which will provide presentation of Vayk municipality and its tourist

attractions and sights - Tours and visits will be arranged and organised here.

Analogous projects involving construction of buildings and support in the first two years of operations are usually estimated at about 100 mln drams. Effective the second year of operation the centre becomes sustainable and self-sufficient. The market may be registered as a municipally owned organisation, but its constituents, such as counters, cafeteria, tourist information centre, may be operated by private entrepreneurs, who will pay rentals for the use of the space.

Jermuk, Vayots Dzor marz

79

JERMUK: ANALYSIS OF ECONOMIC

SITUATION

VAYOTS DZOR MARZ

Table 20: Memorandum Items, Vayots Dzor marz23 Area 2 308 sq. km

Area vs. Republic 7․8 %



Number of population as at end 2014 514 thousand people




23



80

Jermuk municipality Participatory analysis of the municipal economy and identification of priority initiatives Jermuk municipality consists of Jermuk town including Ketchut district, and Herher, Karmrashen and Gndevaz rural settlements. The workshop held on August 3 2016 in Jermuk municipal Palace of Culture launched the process of participatory diagnosis and planning in this municipality. Jermuk is famous as touristic and health resort by virtue of springs of healing mineral waters and gorgeous landscape. There are more than ten health resorts and hotels in the town. Rural settlements are predominantly involved in land cultivation, including horticulture, cereals, as well as cattle breeding. The main cultures here are apricots, apples, walnuts and cereals.

Competitive advantages of Jermuk

The competitive advantages of the municipalities have been identified through application of Led Café techniques.

Extensive number of sunny days, over and above the republican average Healing and drinking mineral water springs, which have preconditioned operations of

numerous health recreation centres and large bottling potable water companies “Jermuk” famous brand and a recognised touristic centre Availability of minerals, including gold, construction stones, et cetera Rich historic and cultural heritage, which fill out the time of the visiting tourists Favourable geographic position in climatic and weather terms for establishment of

orchards of late maturation; apricots mature here in the end of the season and are sold at high prices

Vast agricultural land stock for expansion and development of agriculture Alpine meadows, where multifarious plants and medicinal plants are grow; population

harvest them and sell the medical plants to home and foreign tourists Cable car facility, which makes the place even more attractive in terms of tourism

development


81

Santa Claus Festival Potential for development of winter tourism, the place actually well attended by winter

sportsmen and amateur sporting tourists.

Jermuk economy brief COMPASS participatory diagnosis and evaluation tool has been applied in this municipality with the objective to identify the economic situation along the major branches. The main branches of Jermuk municipal economy include:

Health and recreation as major constituent of tourism Bottling mineral waters Operation of mines Land cultivation and cattle breeding.

Predominant majority of jobs in the municipality are supplied by mineral water bottling facilities and the health resorts. Existence of the health resorts per se promotes establishment of service points, restaurants and hotels. In 2008, the new cable-car and skiing piste, which crewed winter tourist fans into Jermuk. In winter times, sportsmen from Russian Federation and other foreign countries visit Jermuk for trainings. There are 10 health resorts and hotels and some 10 flats are available for rent. Restaurants and open-air cafés operate. Visitors spend the first half of the days in the health resorts facilities to get their treatments and therapies, and use the second half for sightseeing, the hall of hot healing waters where the mineral water is supplied from various tubes divided on the basis of their temperature, as well as the waterfall and cable car, et cetera. The park, which used to be an entertainment and recreation centre years ago, is unattractive now and in need of vast renovation. There are no entertainment centres or B&Bs. The main share of households in rural settlements of the cluster is involved in horticulture and other types of land cultivation. Orchards are expanded in the favourable areas (these are mainly apricot gardens). In comparison with other regions Jermuk is in forelands hence apricot matures 20-25 days later than elsewhere (here the last apricot harvest is gathered). This factor promotes relatively high pricing and quick sales of apricots.


82

In contrast to other horticultural regions of Armenia, the budding and blossoming season in Jermuk region starts later when freezing hazards are less realistic and usually there are no losses of harvest observed. According to local orchard cultivators, one of the priority preconditions for development of horticulture in the cluster is the installation of anti-hail nets and introduction of trickle irrigation systems. The municipality is blessed with forests full of various berries. People are involved in picking berries and selling them to visiting tourists and those on health recreation terms. One of the current trends observed in the cluster is the development of B&B facilities and infrastructures. However, the process stumbles and is slow because establishment and development of this branch requires financial (affordable credits), technological, information and business development oriented support.


The participatory diagnosis and assessment exercises were deployed with the participants of the workshop to identify cluster economic development initiatives, which as listed below:

Renovation of roads connecting Karmrashen and Herher settlements with the inter-state motor-way

Establishment of machinery and tractor station Acquisition of machinery and vehicles for winter maintenance of the roads Acquisition of garbage removal machinery; being a touristic centre, Jermuk does

not have garbage removal fleet to organise service delivery to an appropriate standard.

Advertising the attractions of Jermuk municipality with the objective to increase inflow of tourists

Support to enhancing the quality of services delivered Equipment and human resource upgrading of the maternity house and the

hospital Supply of equipment and tools for mass events Improvement of irrigation networks and introduction of trickle irrigation

infrastructures Installation of anti-hail stations (nets are preferred alternative) Renovation of roofs Re-commissioning of the airport Rehabilitation of the Jermuk City Park (12 hectares of space) and construction of

playgrounds. Here the population and visitors may spend their leisure and get


83

rest. Rehabilitation of the City Park will also provide engagement and entertainment to the tourists hence prolong their stay in Jermuk.

Support to arrangement and regulation of municipal and inter-settlement transport communication

Support to establishment of small-scale milk and fruit processing facilities; there are no milk or fruit processing workshops in the municipality otherwise they would have procured locally produced milk and fruits and, in turn, promote expansion of the municipal agricultural sector. It is necessary to provide financial and technological assistance to those who are interested and intend to establish processing facilities

Support to establishment and expansion of B&B network; inflow of tourists gives rise to demand for B&Bs. Users of health recreation services and other tourists will be able stay overnight in B&B facilities in rural areas, which are more affordable and curious. However, there are no B&Bs in the cluster that would have been compliant with minimum of usual facilities

Residential construction for young families

Priority initiatives The participatory diagnosis and assessment exercise held with the participants of the workshop resulted in designing the list of priority initiatives and project ideas, which, according to the population, are high on the agenda and may have significant impact on economic development of the reviewed cluster. These are set out below.

Establishment of machinery and tractor fleet (park), which would incorporate agricultural and road maintenance & operation vehicles serving communal needs at the same time Renovation of the roads connecting Karmrashen and Herher settlements with the inter-state motor-way

Establishment of machinery and tractor fleet

Acquisition of agricultural machinery/vehicles Majority of households in Gndevaz and Herher rural settlements are involved in horticulture. The main cultures produced are apples and apricots. Total area of orchards is about 200 hectares. It is envisaged that additional 110 hectares of lands will be allocated to horticulture in the coming years. The season of apricots maturing in the cluster in mind, the harvest is sold at quite high prices, i.e. between 700 and 1000 drams per kilo. Average yield rate per hectare of orchards is 20 tons.


84

Rural settlements do not have relevant machinery to secure timely and quality cultivation of the orchards, which results in postponement of establishing new orchards.

Project value The machinery and tractor station (park) should include 4-5 tractors (40h.p. at 8-10 mln drams per unit), the same quantity of sprayers (2-5mln drams per unit), 5 manual mowing machines to mow grass in between the aisles of trees (as well as in meadows; 1.-1.5 mln drams per unit), 4-5 grass collectors (1.5-2 mln drams) and construction of the garage for these vehicles and equipment (30-40 mln drams), one tractor (80-90h.p. at 8-10 mln drams), one and grass baler (5-6 mln drams). Total costs for acquisition of the above machinery and vehicles are estimated about 150 mln drams.

Beneficiaries and economic impact Beneficiaries of this project initiative are about 350 households of the cluster who are involved in horticultural activities. Should adequate agricultural machinery and equipment be in place, there will be additional 110 hectares of orchards established in the cluster within a period of 2-2.5 years. Existence of the machinery will enable timely organisation of quality cultivation of orchards, which will have direct impact on increased yields and quality of the cultivated fruits.

Acquisition of machinery and vehicles for winter maintenance of roads Being an appropriate zone for winter sports and health recreation, winters see many home and foreign tourists in Jermuk. Enhancing efficacy of municipal hospitability also in winter takes


85

timely servicing of roads to preclude impediments to commuting visitors and tourists, which, currently does not take place in lack of adequate machinery and vehicles. Garbage removal is also far from acceptable standards, which is a problem in a tourist oriented location. The few and depreciated vehicles currently operated in Jermuk are used both for garbage removal and removal of snow from the streets, which hampers proper establishment and development of tourism in the municipality. The properties of snow layers and sanitary cleaning inherent to Jermuk cluster as are follows: Jermuk town – 37 km, 222000m2

Gndevaz rural settlement – 11km, 66000m2

Herher rural settlement - 9.5km, 57000m2

Karmrashen rural settlement - 6.5km, 57 000m2

Inter-settlement roads: 23km between Karmrashen and Yerevan-Goris inter-state motor-way.

Overcoming the above challenges and implementing regular road service will become possible by supplying the following machinery, vehicles and equipment to the municipality: Excavator CAT 428F - 1 unit Grader D3-98 - 1 unit Rotor snow-cleaner - 1 unit Vacuum sweeper - 1 unit Garbage collecting vehicle (side charge) ГАЗ КО 440-3 - 2 units Garbage collecting vehicle (side charge) КАМАЗ КО 440-3 - 1 unit Small dump truck «Fiori D100 sl» - 1 unit Bins – - 120 unit Project value Acquisition of the above vehicles and machinery will incur costs of about 250 mln drams, and some 400 mln drams for establishment of the entire municipal station (which includes horticultural machinery).

Renovation of the road connecting Karmrashen and Herher with the inter-state

motor-way

The main road connecting Herher and Karmrashen with the inter-state motor-way (20km) is entirely in dilapidated physical condition. The asphalt coating of the road is totally dismantled. Large part of the roads stretches along the Herher water reservoir, where traffic is highly dangerous. This road is the communication with Jermuk as well. Because of the road condition even the taxi drivers refuse to transport people to and out of the village. Naturally, it hampers marketing local agricultural produce and other economic activity. Another branch affected is tourism. Tourists visiting Jermuk cannot attend historical and cultural heritage or valuable sights in Herher. This road was last renovated in the early 1980s.

Project value According to the preliminary estimates, the capital renovation of this road will incur costs of about 1.5-2 bln drams.

Zaritap, Vayots Dzor marz

86

ZARITAP: ANALYSIS OF ECONOMIC

SITUATION Vayots Dzor Marz

Table 20: Memorandum Items, Vayots Dzor marz24 Area 2 308 sq. km

Area vs. Republic 7․8 %







24



87

Zaritap Municipality The process of participatory diagnosis and planning in Zaritap municipality was launched on August 4, 2016, through the workshop under this Project. The workshop was held in the premises of municipal administration of Vayk as preferred by the participants from Zaritap. Zaritap cluster municipality is located in Vayots Dzor marz and consists of the following nine settlements: Zaritap, Saravan, Artavan, Nor Aznaberd, Khndzorut, Bardzruni, Sers, Martiros, and Gomk.

Competitive advantages of Zaritap

Picturesque nature and

landscape, nature and forests

Historic monuments and

heritage

Animals on the IUCN Red List

of Threatened Species

Renovated road network in

Martiros, Sers and Zaritap

Availability of drinking water

Conditions and realities of the cluster for development

of eco and agro tourism include numerous pieces of

historic and cultural heritage, picturesque landscape,

unique and diverse fauna. The roads connecting

Martiros, Zaritap and Sers settlements with the inter-

state motor-way are capitally renovated.

Availability of irrigation water

There is a huge resource of irrigation water in the

cluster, which is sufficient for irrigation of the existing

land plots

Favourable natural and

climatic conditions for

horticulture

Regional specificities and the number of solar days

convey unique taste to the cultivated fruits and plants

Vast land resources

Fertile lands

Vast areas of fertile lands are conducive to

development of both crop framing and cattle breeding


88

High share of people with

university education

Young labour force

Prominent craftsmen

High share of people with university education is a

sound precondition for inflow of information, news and

investments in the cluster

There are prominent craftsmen in the cluster who

deliver services both in the marz and beyond its

boundaries

Zaritap economy brief

The main sector of local economy here is

agriculture, where some 90% of households

are involved. Relatively developed are

craftsmanship and delivery of other metiers

services (constructors, welders, blacksmiths,

carpenters, etc.). B&B services are also

gaining stance over the recent years.

Agriculture

The backbone of the local economy is agriculture. People are primarily involved in cattle breeding, horticulture, crop farming and bee-keeping. The following competitive advantages form the bases for development of agriculture in the cluster

Availability of irrigation water Irrigation water is accessible to all settlements of the cluster, which is a direct trigger for development of agriculture. Despite the availability of irrigation water, almost all settlements desperately need renovation, construction and/or modernisation of irrigation infrastructures.

Favourable natural and climatic conditions for horticulture The geographic position of the cluster conveys unique taste and sweetness to the fruits cultivated here, which explains their own specific pricing and niche in all markets in Armenia. In addition to the taste and recognition, the harvest matures later relative to other areas hence the prices for the local produce relatively higher (especially in the case of apricots). Local population peg further development of horticulture to establishment of small production and processing facilities, which would enable processing a portion of their harvest to produce


89

dried fruits, juices, stewed fruits, etc., which would significantly increase profitability and income generated in the cluster.

Vast land stock and fertile lands The cluster owns possesses vast acreage of fertile lands, enabling to secure high yield rate in crop farming, which, in turn, triggers tangible increase in profitability of the cultivated plants. Existence of land resources enhances competitiveness of cattle breeding as well. Pastures, meadows and cultivation of perennial plants secure stabile supply of fodder. Despite the availability of fodder, the milking is deficient. The prevailing sort of animals is Caucasian Grey, the milk yield rate of which is 1300-1600 litres per annum.

Perennial plants and medicinal plants Availability of over 1000 plants and medicinal plants in the Alpine zones of the cluster promotes development of bee-keeping. There are 3909 bee families in the cluster, almost a bee family per capita. Table 22: Main agricultural indicators (source: data obtained in community meeting and discussions)

Arable lands 3814 hectares

Perennial plants 74 hectares

Meadows 976 hectares

Pastures 23 993 hectares

Cows 3925 / 1634

Sheep and goats 3087

Pigs 280

Bee families 3903


90

Craftsmanship and delivery of other metier services There are prominent construction specialists, welders, blacksmiths and other craftsmen in the cluster who deliver services to clients in the entire marz. These specialisations are usually hereditary, which explains availability of young specialists competitive by virtue of their skills and knowledge both in Armenia and abroad.

Lodging and accommodation

Gorgeous nature and picturesque landscape, plenty of historic and cultural sights encourage tourists to visit these places. Unfortunately, local people or administration does not have either a tourism development strategy or vision, which the tourist hosting infrastructure includes only a few B&Bs, catering facilities and small shops.

Development initiatives The participatory diagnosis and planning techniques and methodologies applied, the following economic development initiatives have been identified during the workshops and meeting with community population and administration.

Support to renovation and improvement of irrigation networks

Support to establishment of machinery and tractor station (park)

Acquisition of machinery for improvement of field tracks and municipal roads

Renovation of Martiros-Khndzorut and Sers-Bardzruni roads, 12km and 5km, respectively

Support to establishment of fruit, meat and milk processing facilities

Support to establishment of milk procurement station

Support to introduction of new sorts, seeds, animals and technologies in the municipality

Arrangements to deliver garbage removal in the municipality

Priority initiatives The priority initiatives have been selected form the identified development initiatives (see earlier), which according to the local population are the ones to have the most significant impact


91

on economic development of Zaritap. These are set out and detailed in the subsequent paragraphs. Establishment of machinery and tractor station

Nine settlements of Zaritap municipality have approximately 4000 hectares of arable lands in aggregate, of which some 200 hectares are currently cultivated. Large share of arable lands is under cereals, i.e. 1000 hectares. Perennial plants are cultivated on 700 hectares (alfalfa and sainfoin, etc.). Some 240 hectares is allocated for orchards. Finally, approximately 700 households are involved in land cultivation. Cultivation of the above areas under cereals is done by obsolete agricultural machinery entailing vast losses of harvest and discrepancies in natural course and sequence of the associated works and the failure to expand cultivated areas. Efficient organisation of agricultural works requires availability of the following machinery:

2 combine-harvesters – 70-100 mln drams

2 wheel-tractors - 20 mln drams

2 ploughs – 2 mln drams

2 aerator-fluffiers – 1.5 mln drams

2 grass balers – 11 mln drams

2 mowing machines – 2.5 mln drams Total: 130 mln drams

Construction and renovation of irrigation networks

Agriculture is the pivotal branch in the economies in all 9 settlements of Zaritap cluster as 90% of households are involved in agriculture. Large animal husbandry prevails in cattle breeding, while in land cultivation the dominating sub-branches are crop farming and horticulture. Population perceives availability of irrigation water as a precondition for development of both cattle breeding and land cultivation, because it would enable:

1. Growing perennial plants in arable lands to be used as incremental fodder for cattle. High yields and unit value of fodder in the sown meadows will enable increase of milking rates

Table 23: Yield rate of sown and natural meadows and fodder coefficient (source: extension and advisory service)

Type of fodder Yields

( c/ha) Total fodder by

type (c) Cost of fodder vs 1 c of

milk (c/tf) Milk (c) Meat (kg)

Alfalfa 75 39 1.1 35.45 410

Sainfoin 65 35 1.1 31.8 368

Oats 40 19.2 1.1 17.45 202

Natural grass 18 8.1 1.1 8 100


92

2. Increasing yield rates of sown plants (in cases of wheat and barley the yield rate value may increase three times, reaching 45 centres from the current 15 accompanied with direct impact on the profitability)

3. Cultivating higher profitability generating plants, such as vegetables, and developing horticulture; securing availability of irrigation water will requirement implementation of the following projects in the settlements of Zaritap municipality:

SERS SETTLEMENT

Main canals are the challenges in this settlement. Main canals entering the settlement are in dilapidated condition of total length of 2.5km, and it is necessary to install semi-tubes or tubes. 44 farming households make use of this irrigation network, which supplies water to 35 hectares of house adjacent land plots with newly established orchards. GOMK SETTLEMENT Two initiatives need to be undertaken in Gomk settlement, namely:

1․ main irrigation line of 6.5km; the water should be brought down from the Akhta River

at the elevation of 2010m to the settlement (1940m) through gravity supply

2․ renovation of the internal irrigation network (around 3km)

These two initiatives will enable irrigation of 108 hectares of arable lands, 40 hectares of meadows, and establishment of 30 hectares of new orchards. 78 farming households (total of 105) will be direct beneficiaries of this project. NOR AZNABERD SETTLEMENT

1. A new main line should be

constructed of 500m length; currently, it is

damaged with landslide. Construction of this

line will favour 16 farming households and

irrigate 35 hectares of land. It is envisaged to

cultivate horticultural plants and establish

orchards.

2. The challenge in this settlement is

the capital renovation of internal network of

500m length, which would irrigate 14 hectares

of area. Beneficiaries will be 20 farming

households. It is envisaged to establish

orchards here as well.

ZARITAP SETTLEMENT It is necessary to construct an internal irrigation network in this settlement; total length of the network is approximately 6.5km.


93

The beneficiaries of this project are expected to be 90 farming households to cultivate 75-80 hectares of land. The main plants grown here is cereals, alfalfa and sainfoin. Upon installation of this irrigation network will enable establishment of new orchards. MARTIROS SETTLEMENT

In Martiros it is necessary to partially renovate

the main line (880m) and construct internal

irrigation network (3000m). The project will

have 130 beneficiaries (150 hectares) to be

involved in horticulture and who will establish

orchards.

KHNDZORUT SETTLEMENT

In Khndzorut it is necessary to construct a 5km long external irrigation network (150mm in diameter), which would irrigate about 80 hectares of lands, in addition to 3km of lines (200mm in diameter) to irrigate incremental 60 hectares of land. It is also necessary to renovate the distribution sections of the infrastructure. Total number of beneficiaries of this project will be 187 farming households, who grow alfalfa, sainfoin and cereals in the above lands. Once irrigation installed, the yields rates of the indicated plants will increase 2-3 times, and new orchards will be established.

Urtsadzor, Ararat marz

94

URTSADZOR: ANALYSIS OF ECONOMIC SITUATION

ARARAT MARZ

Table 24: Memorandum items, Ararat Marz25 Area 2 090 sq. m.

Area vs. Republic 7%







25



95

Urtsadzor Municipality The process of participatory diagnosis and planning in Urtsadzor municipality was launched through the Workshop held on 16 August 2016, in the Community Centre. Urtsadzor municipality is situated in the Ararat marz, on the slopes of the Urts Mountains, which are adjacent to the Vedi River valley. The consolidated municipality consists of Urtsadzor, Shaghap and Lanjanist settlements. Total number of population is 4200 people. Local population is mostly involved in cattle breeding, crop farming, poultry husbandry, collection of wild medicinal and other plants and horticulture. Eco-Centre operates in the municipality established and constructed by Foundation for Preservation of Wildlife and Cultural Assets (FPWC). Certain steps and measures are undertaken to sustain and develop tourism branch.

Competitive advantages of Urtsadzor The competitive advantages of Urtsadzor municipality have been identified and written down of by application of «LED cafe» techniques.

Abundance of irrigation water reserves in Urtsadzor settlement,

Favourable conditions for growing tobacco, crops and horticultural plants,

Sufficient pastures areas,

Availability of diverse medicinal and other nutrient plants,

Ecologically clean environment for agricultural development,

high quality and experienced specialists in agricultural sector,

Eco-centre as locomotive for tourism development.

Urtsadzor economy brief

M. Porter’s Diamond participatory diagnosis and assessment techniques were applied with the objective to generate the understanding of overall economic situation in the municipality and devise the potential economic development initiatives. The major branches of Urtsadzor economy include:

Cattle breeding,

Crop farming,

Horticulture,

Collection of wild plants and berries.

Cattle breeding One of the leading branches of local economy is cattle breeding. There are 15 large neat animal businesses, each having 25-30 animals. Average annual milk yield of neat animals is 1500 litres.

Pasture and meadow areas are sufficient to support development to cattle breeding, moreover to upscale this branch. At the same time, however, agricultural machinery is lacking, which


96

makes collection and storage of fodder cumbersome. In addition, the field tracks are in poor physical condition. In pasture areas the main problem is the lack of potable water for animals. It takes animals to migrate up to several kilometres to have access to potable water and return to the pasture, which affects milk yields. Water resources, though, are available in the pastures but there is no infrastructure which would permit collection and pooling the water from entrails and supply it to the mangers, which, as a matter-of-fact, are also non-existent. Thus, water is lost in the fields, abandoned and unused, which would otherwise guarantee increased efficacy of cattle breeding. Approximately 2000-2200 animals graze in these areas, while the remaining 1000 are taken to remote pastures. Part of produced milk is supplied to the Vedi Dairy factory, part is used for producing home-made cheese, and this part is mostly produced in the remote pastures.

Crop farming The major directions in crop farming branch are cultivation of vegetables and tobacco. The major plant cultivated in Urtsadzor is the pepper, which is quite famous and enjoys stabile market. Harvest is sold in the domestic market or bartered versus potato and/or cabbage with farmers of Gegharkunik marz. The highest yield rate is 45 tons and the lowest is 35 tons per hectare, and these fluctuations depend upon level of professionalism of the farmers. The major sort cultivated here is the so-called Bulgarian Crystal, a sweet type of pepper. Availability of irrigation water and the inherent climatic conditions secure the highest republican yield rate of this plant grown in Urtsadzor. Homemade production of red ground pepper is very popular in the municipality and especially among those who are involved in cultivation of pepper. Majority of the harvest, i.e. up to 80%, is sold in fresh in the local markets and through intermediaries. Price is 150-200 drams per kilo the difference depending on the size and quality. The rest is dried, ground and sold in the shape of red pepper powder. The price per kilo is 2000-3000 drams, again depending on the quality. Cultivation of a hectare of pepper generates an annual income of 5 mln drams in average. Sales of fresh and quality product are more profitable relative to the ground powder. In the meantime, poor quality, damaged and small pepper is very cheap and it oftentimes does not see any demand. This explains why drying and grinding is relevant as it creates additional value by generating incremental income (one kilo of ground pepper (12kg of fresh) provides an income of 100-1500 drams). Tobacco plantings in the municipality cover some 30 hectares, and 30 households are involved in cultivation of this plant. The procurement and drying facility of International Masis Tabak Company is based in Urtsadzor, which procures the entire stock of the tobacco produced here. Average yield per hectare is 35 tons (sometimes up to 30 tons). One kilo of green tobacco is procured at the price of 40-90 drams, depending on the quality of the produce. Per hectare horticultural activities in this municipality secure and annual income of 2-4 mln drams, depending on the type of fruit produced, while cultivation of tobacco sets the income level at 1 mln drams in average. Cultivation of one hectare of vegetables (especially pepper) generates income of 4-6 mln drams per annum. The plantings of pepper has significantly decreased over the recent years, a consequence of market volatility and lacking stabile sales.


97

People are gradually changing their labour accents towards orchards in apprehending that cultivation of pepper is far more profitable than that of fruits. Nevertheless, cultivation of vegetables is considered to be one of the crucial branches, which would boost local economic development. In addition, vegetable growing is much more frost-proof than fruit-tree orchards. Upon establishment of long-term reliable market, the plantings under pepper would again increase.

Collection of wild plants In addition to the above branches, part of population is actively involved in collection and harvesting wild plants and berries, which are later sold, making use of the hill and mountain forests rich in these values. Some of these plants and berries are sold only after certain processing (e.g.: drying nutrient plants, hornbeam is marinated, etc.). Estimated 30 people are actively involved in this activity, mainly women. Collection commenced in end March in valleys of Karabagh before the plants matures in the municipality. Since May, the women return to their native community. Fields are rich in thyme and other plants. The collected plants are procured to processing and packaging producers.

Poultry There are quite a substantial number of people involved in poultry. The major bird bred here is turkey. The poultry is fed exclusively by natural fodder, mainly grasshoppers, as turkeys graze in open fields. This explains high quality and absolute ecological cleanness of these poultry. The demand gradually increases. The produce is sold to individuals, restaurants and public catering facilities.

Bee keeping Majority of households in the municipality are involved in bee keeping as side activity. Total number of beehives in the municipality is circa 15000. The minimum annual yield is 150 tons. The honey produced here is specific in its qualitative properties because of the diversity of plants and flowers in the fields.

Horticulture

Relatively small volumes are attributed to orchards with fruit trees, i.e. 20 hectares, where apples can be found of Golden sort 70%, Semerenko 20%, and Demirtchyan 10%, as well as peaches and apricots. Total harvest of apple in the municipality is about 300 tons per annum, which is sold in green market. At the same time, orchards of peaches and apricots gradually expand. Yields of horticulture in this municipality do not surrender to other horticultural areas of the Ararat valley.

Development initiatives The workshop to identify the potential development initiatives based on participatory diagnosis and planning techniques carried out with the population and major local stakeholders has been held. As a result, the following have been identified:

Establishment of bee keeping resource centre,


98

Support to processing of milk and meat,

Establishment of a slaughter house,

Supply of irrigation water to Shaghap settlement,

Establishment of machinery and tractor station,

Support to fruit processing and storing infrastructures. The following two priority development initiatives were selected through a participatory process during the workshop and through community meetings and discussions with the current administration:

Support to fruit processing and storing infrastructures (refrigerators),

Establishment of machinery and tractor station.


Establishment of machinery and tractor station Urtsadzor do not have adequate or modern machinery to organise agricultural works and activities (grass collection, sowing, ploughing, etc.) in an efficient manner. Natural course of agricultural business is also impeded by dilapidated physical conditions of the field tracks. It is absolutely necessary to arrange annual improvement of these tracks, if at all trucks are to transport grass, harvest, animals or other goods and cargo. Establishment of municipal machinery and tractor station is required comprising the following machinery in order to enhance the efficiency of agricultural work in Urtsadzor:

Manually operated mowing machine 5 units – 7 mln drams,

Excavator 1 unit - 50 mln drams,

grader 1 unit - 50 mln drams,

tractor 1 unit - 15 mln drams,

Grass baler 1 unit - 6 mln drams. Total estimated value of the project is 128 mln drams.

Support to processing and storing milk, vegetables and fruits (establishment of refrigerating facilities) Currently, there is no structured or in any way organised processing of produce is taking place in the municipality apart from limited cheese and ground pepper. There are no value chains in any branch of the local economy. A variety of support to development of business activities (technological, financial, marketing, etc.) made available to the municipality would help commission establishment of small processing facilities which operate in a sustainable and regular manner, such as:

Milk processing – production of cheese, Processing of ecologically clean poultry and packaging, Drying and packaging wild medicinal and other plants, and packaging of ground

pepper, Production of dried and canned fruits, Establishment of refrigerating facilities.


99

All the inputs necessary for the above initiatives to materialise are produced locally and they are competitive – in quality terms – with leading agricultural zones elsewhere in the country. The pepper, thyme and other plants grown and processed in Urtsadzor may well be used in the locally produced cheese. In the framework of technological support to local cheese production, it would be appropriate to devise Urtsadzor branded cheese, 1-2 types of local traditional and 2-4 types of new sorts, which would be able to meet demands of large variety of clientele. In the course of market promotion of this brand ties may be established with the Areni wine produced in the neighbouring marz. Other branches also have realistic potential to develop should similar peculiar and unconventional approaches and solutions be exercised.

Consecutive steps required for implementation of this project include:

- selection of participants,

- training courses on business organisation and management, as well as business planning,

- training courses on productive technologies,

- financing of participants (low interest rate loans, credits), technological support,

- general resource support in the shape of kick-off equipment for the newly created Centre, including packaging, branding, terming, etc.,

- creation of a shared brand and promotion,

- coaching the newly established enterprises. Total estimated costs of establishment and commissioning of 12 enterprises and the resource centre for the initial period of two years will amount to some 120 mln drams.

"URTSADZOR"

SHARED BRAND

Cheese production

Packaging poultry Production of

ground pepper Processing of fruits

DESIGN AND INTRODUCTION

OF GENERAL QUALITY

STANDARDS

Sarapat, Shirak Marz

100

SARAPAT: ANALYSIS OF ECONOMIC SITUATION SHIRAK MARZ

Table 25: Memorandum items, Shirak marz26 Area 2 680 sq. m.








26



101

Sarapat municipality The process of participatory diagnosis and planning in Amasia municipality was launched on 23 August 2016. Sarapat municipality is located in Shirak marz and it consists of 15 settlements, namely Arpeni, Bashgyugh, Goghovit, Lernagyugh, Torosgyugh, Kaqavasar, Hoghmik, Hartashen, Dzorashen, Musaelyan, Salut, Sarapat, Vardaghbyur, Tsoghamarg and Pokr Sariar. The main branch of local economy is agriculture, where some 90% of households are involved.

Competitive advantages of Sarapat The competitive advantages of Sarapat municipality have been identified and written down of by application of «LED cafe» techniques.

Vast arable lands, pastures and meadows

Quality mechanisation experts

Availability of extensive irrigation and drinking water

reserves

Vast arable lands, pastures and meadows promote development of cattle breeding and crop farming Vast reserves of irrigation water in the municipality is sufficient for irrigation of the existing land areas

Weather and climatic conditions favourable for

generating alternative sources of energy

The specific climatic conditions of the area include the number of sun-days and winds, which may be used to generate alternative energy

Potential for developing eco-tourism

Picturesque landscape and forests

Historic monuments and other heritage

Reserves of quality mineral waters

Picturesque landscape, Trchkan waterfall, forests and historic and cultural heritage create viable opportunity for development of agro and eco-tourism


102

Sarapat economy brief M. Porter’s Diamond techniques were applied with the objective to generate the understanding of overall economic situation in the municipality and devise the potential economic development initiatives.

Agriculture The basis of local economy is agriculture. Developed branches of agriculture are cattle breeding, crop breeding and bee keeping. Agricultural lands are used for arable lands, meadows and pastures. Main cultivated plants are fodder (such as alfalfa, sainfoin, etc.) and cereals.

Cattle breeding Approximately 90% of households in the municipality are involved in cattle breeding. Alpine zones are very many but milk yield remain at average levels. Caucasian grey breed is predominant in the cattle, the milk yield of which is 1200-1500 litres per annum. 90% of the produced milk is sold to procurers at 120 drams per litre in summer season, and it may reach 140 drams in winters. The remaining share, i.e. 10%, is used for own consumption. Beef is mainly sold to intermediaries at 1800 drams per kilo. Sheep breeding is also developed in this municipality, but there is no market for wool and it is difficult to market mutton (800 drams per kilo).

Bee keeping Alpine zones of the municipality are very favourable for bee keeping. There are 926 bee families. One kilogramme of honey is sold at 3000-3500 drams.

Crop farming Irrigation water is available in almost all settlements, which is a favourable prerequisite for development of agriculture. Despite the availability of water, there is an imperative to construct internal irrigation network in practically all settlements.


103

Vast land resources are accessible in the municipality, which enables reaching record indicators in crop farming. This advantage significantly increases profitability of the sown plants. Vast land resources make cattle breeding branch of this municipality competitive. The issue of fodder is solved by virtue of availability of pastures and meadows and cultivation of perennial plants. Agricultural lands are used as arable fields, meadows and pastures. Main cultivated plants are fodder (such as alfalfa, sainfoin, etc.) and cereals. Table 26: Main indicators of municipal agriculture (source: municipal administration)

Arable lands 5 246 hectares

Perennial plants 5 hectares

Meadows 1 985 hectares

Pastures 16 782 hectares

Neat animals / cows 8543/ 3869 animals

Sheep and goats 10 500 animals

Pigs 271

Bee families 926


The workshop to identify the potential development initiatives based on participatory diagnosis and planning techniques carried out with the population and major local stakeholders has been held. As a result, the following have been identified.

Renovation and improvement of irrigation networks; implementation of this initiative would enable generation of more yields and downsizing of inherent costs.

Establishment of machinery and tractor station; creation of such a station (fleet) would promote cultivation of larger areas of lands and downsizing the inherent costs.

Acquisition of machinery for improvement of settlement connecting roads and field tracks and public transportation means; in the aftermath of consolidation movability of population in the settlements becomes an imperative. Improvement of roads and purchase of public transport vehicles will promote unrestricted commuting among settlements, which would entail growth in turnover of goods.

Pedigree breeding; despite the availability of many Alpine zones in the municipality, milk yields are only 1200-150 litres per annum. The initiative of support to pedigree breeding, once implemented, would promote jump of milk yields and subsequent increase in incomes.

Quality seeds and new plants; this initiative would promote cultivation of plants new to the municipality at the same time increase the yield rate of the traditionally cultivated ones.


104

Through participatory prioritisation techniques applied at the workshop, meetings and discussions, population considered the following two the highest priorities for the economic development of their municipality:

1․establishment of machinery and tractor station,

2․acquisition of machinery to improve roads connecting the settlements, roads within the

settlements and field tracks.


Machinery and tractor station (fleet) Sarapat municipality with its 15 settlements have approximately 5246 hectares of arable lands. Currently, only 1584 hectares are cultivated (about35%). Predominant share of arable lands is under perennial plants (alfalfa, sainfoin, oats, etc.), namely about 1000 hectares. Some 700 hectares are allocated for cultivation of cereals. The available agricultural machinery is worn-and-torn, which causes huge losses in the yields of plants and cereals. Lack of agricultural machinery vast areas of quality lands remain idle, which is further aggravated by poor – if not dilapidated – condition of the field tracks. Establishment of municipal machinery and tractor fleet would address the above challenges and problems, as urgent as they are. At the same time, the station would promote more active cultivation of their land parcels. The following machinery and vehicles are required to provide municipal services in improvement of state-of-affairs in local agriculture and road networks:

Combine harvester 1 unit – 40 mln drams,

“Belarus” tractor 1 unit - 10 mln drams,

Plough 4 units – 2 mln drams,

Sowing machine 1 unit – 2,5 mln drams,

Scarifier 2 units – 3 mln drams,

Miller cultivator 1 unit – 3 mln drams,

Mowing machine 6 units – 6 mln drams. Total estimated costs of this project amount to circa 67 mln drams. Table 27: Sown plants, indicators for Sarapat municipality (source: municipal administrations)

Plants Currently cultivated (ha) Expected indicators (ha) Barley 283 510 Wheat 409 723 Potato 87 120 Alfalfa 278 318 Sainfoin 194 236 Oats 148 225 Other 185 387 Total 1584 2519


105

Analysis of the tabled data above demonstrates that the area of arable lands would significantly increase from the current 1584 to 2519 hectares, which is a tangible change in agriculture.

Municipal transport and road improvement machinery With the objective to improve commuting among the 15 settlements constituting the municipality of Sarapat (including transporting within individual settlements) it is imperative to acquire the following machinery and vehicles, which should also be used for improvement of field tracks:

Mini vans 3 units - 36 mln drams,

Excavator 1 unit - 30 mln drams,

Trailer-equipped digger-flattener (grader) - 50 mln drams,

Dumper-truck 1 unit - 25 mln drams. Total: 141 mln drams.

Table 28: Roads subject to improvement, by types (km)

The data in the table show that road improvement machinery will be used in the roads of 347km of length and 4-5m of average width, including 100km of roads connecting settlements of the municipality.

Roads

Municipal inter-settlement 103

Municipal 43

Field tracks 203

Amasia, Shirak marz

106

AMASIA: ANALYSIS OF ECONOMIC SITUATION SHIRAK MARZ

Table 29: Memorandum items, Shirak marz 27 Area 2 680 sq.km.

Area vs. Republic 9 %







27


Amasia, Shirak marz

107

Amasia municipality The process of diagnosis and planning in Amasia municipality was launched on 24 August 2016. Amasia consolidated municipality consists of the following 9 settlements, namely Amasia, Byurakn, Meghrashat, Aregnadem, Gtashen, Vorji, Bandivan, Hovtun and Jradzor. The municipality is in Shirak marz at the altitude of 1800-200 metres above the sea level. The climate here is mildly mountainous and the winters are long, frosty and solid snow. Strong and brisk winds are usual, and mists and snow storms frequent. Summers are warm and relatively humid. Annual precipitation is 600-700mm. Natural landscapes are black earth and montane level desert. The main engagement of population is cattle breeding and crop farming. Branches of banks and representative offices of national government bodies are present in the municipality.

Competitive advantages of Amasia Competitive advantages of the municipality have been identified at the workshop by applying participatory «LED cafe» techniques.

Vast areas of fertile arable lands (6201.62 hectares),

Huge reserves of irrigation water, availability of gravity irrigation networks,

Alpine zone providing competitive realities for development of cattle breeding and bee keeping,

Quality agriculturists, mechanisation and animal health specialists,

The municipality is close to the Armenian-Georgian border, particularly the districts populated by Armenians, with extensive family and reciprocal economic ties,

There are state, financial services and infrastructures in the municipality (such as branches of banks, offices notary, etc.).

Amasia economy brief With the objective to generate the overview of the economic landscape of the municipality, COMPASS participatory diagnostic and assessment toolkit was applied at the workshop. The bases of Amasia local economy is formed through milk cattle breeding and crop farming (including cereals, potato and production of fodder plans). In addition, relatively developed is poultry husbandry. There are two cheese plants in the municipality which produce Lori and Chanakh types of cheese; the production of these plants is marketed in the entire republic.

Amasia, Shirak marz

108

Incomes generated by the population in Amasia municipality stem from the following sources (data: community meetings):

There are four hydro-electric power stations in Amasia. These stations do not have any substantial impact on the economic life of the municipality as the staff is hired from Gyumri city.

Cattle breeding Approximately 80% of the income generated in the municipality is created in the branch of cattle breeding. 90% of households are involved in this branch even if the households have alternative sources of income. According to the official data, the following exist in the municipality:

7281 neat animals, including o Cows – 3784,

Sheep and goats – 12204, pigs – 490,

bee keeping – 1619։ Official statistics for the recent five years shows growth in both neat and small cattle breeding (circa 60%). In parallel with growth in cattle breeding, the crop farming has reduced over the same period, which turns cattle breeding into a branch that merely supplies additional fodder. Indigenous qualitative features of cattle breeding

pastures are primarily mountainous located 7-10km away from the inhabited areas, which has negative impact on milk yields of cows. This factor, i.e. mountainous and relative remoteness of pastures, does not have significant impact on sheep breeding.

Average annual milk yield per cow is 1500 litres, and 120 litres per cow.

Cows are mainly mixed in breeds and of low milking.

Grazing season of neat animals is May-October, and April-November for small ones.

80%

10%

5% 5% Cattle breeding

Crop farming

State and other jobs

Production, services andtrade

Amasia, Shirak marz

109

Pastures lack water supply, which is yet another impediment in the grazing seasons. The farmers are forced to take flocks further for more than five kilometres to make water available to the animals.

Demand for dairy products and sales of milk:

More than 90% of the produced milk is supplied to four major procurers, and the remaining 10% is used to produce home-made cheese. The price of milk depends on its fat content and thus fluctuates between 120 and 140 drams per kilo in various seasons.

Sheep milk is not sold as it is almost entirely used for feeding the lambs and only tiny part of that goes to production of cheese.

The main market for sale of both sheep and cow cheese is Gyumri, where sheep cheese is sold at the average of 1200 dram, and the cow cheese for 1500 drams per kilo.

Meat is sold through meat stores and intermediaries. Sales price of quality meat is 2000 drams. At the same time, in cases when farmers slaughter several animals they face complications and various impediments. It is not possible to immediately market relatively large volumes of meat.

Crop farming Crop farming is a source of additional fodder for cattle and it is a usual reality for the municipality. Cereals and fodder plants are cultivated in the arable lands. Cultivation of potato and vegetables is widespread in house adjacent land plots, where these and other plants (i.e. beans, carrots, cabbage, greens) are designed for primarily own consumption. The major factors impeding crop farming in the municipality include:

Lack of irrigation pipelines,

Worn-and-torn agricultural machinery,

Volatile and unpredictable weather.

Development initiatives Participatory diagnosis, discussions and planning techniques helped population identify the following development initiatives, which, according to the population, are to be high on the agenda when talking about local economic development: Information and knowledge on new technologies This is considered a problem in the municipality; information on new technologies applied in cattle breeding and crop farming is crucial so that such technologies are deployed in the municipality and significantly enhance the efficacy of these branches entailing cost and labour term reduction, as well as increasing yield rates and quality. Irrigation in the pastures

Amasia, Shirak marz

110

Irrigation infrastructures installed in the pastures would provide for mangers, which will significantly reduce the paths to be covered by animals to reach water sources. These initiatives will have immediate impact on increased milk yields. Quality seeds, anti-hail station, combat against rodents and storage facilities These four initiatives will promote growing quality, productivity and storing of harvest, as well as on the yield rates of cultivated plants, which is the fundament of development of crop farming.


Support to establishment of machinery and tractor station The major factor hampering development of crop farming in Amasia municipality is the lack of modern quality agricultural machinery, which has significant, if not crucial, impact on all phases of plant cultivation, in the entire chain from soil preparation to harvesting and transportation. The machinery needed according to the population in set out in the subsequent paragraph:

2 combine harvesters – 80 mln drams Modern combine harvesters are necessary in the phase of harvesting cereals. Several combine harvester of Soviet make available in the municipality are in worn-and-torn technical

condition, which entails loss and damage of harvest and inflated fuel and service costs.

2 wheel tractors – 20 mln drams, o 2 ploughs – 2 mln drams, o 2 scarifiers – 1.5 mln drams, o 2 grass balers – 11 mln drams.

The following universal tractors are required for preparation of soil and cultivation activities (these must be furnished with trailers):

2 caterpillar tractors - 40 mln drams

Amasia, Shirak marz

111

It is impossible to cultivate the fields with wheel tractors, especially those unused for the recent years. Caterpillars are, in the first instance, necessary to cultivate lands which have been idle for years.

2 mowing machines – 2.5 mln drams

Fortschritt E302 mowing machine – 15 mln drams Quality new mowing machines are high priority needs to secure timely harvesting of fodder.

Grader – 50 mln drams,

Practically all settlements need improvement of roads connecting settlements and field tracks, which is possible to address should municipally owned machinery be available.

Dump truck – 25 mln drams,

This vehicle is required primarily for transportation of seeds and harvest. Total: 247 mln drams

Project impact estimate

Beneficiaries of this project will be almost 80% of the population in all settlements (about 800 households) directly involved in agriculture. Availability of such machinery in the municipality would enable increase of cultivated land areas by 100 hectares per annum, which in several years will entail 2.5-3 times increase of agriculture versus the current indicators.

Improvement and construction of irrigation networks Despite the actual existence of huge volumes of irrigation water in the municipality, lack of irrigation networks or their dilapidated physical condition in almost all settlements, it is impossible to use the available water in any efficient manner. More than 70% of arable lands in Amasia have irrigation water problem. Solution of this problem would enable drastic increase in yield rates of plants, as well as make a partial shift to plants of higher profitability, such as vegetables, irrigated fodder plants, etc. Almost all settlements need renovation of internal irrigation infrastructures while in some of the settlements mainstream pipelines must be constructed. Overall, there is a need of improving some 30km of internal networks and 15km mainstream pipeline. Project value may be assessed only after engineering measurements and drafting. Some 1000 households will be beneficiaries of this project and it will enable irrigation of more than 3000 hectares of agricultural land.

Examples: Aregnadem

Amasia, Shirak marz

112

Internal irrigation network has been damaged, and in some segments it is just non-existent. It is necessary to capitally renovate 2.3-4km of internal network by installing concrete semi- or full tubes. Implementation of this project would allow irrigating 47 hectares of house adjacent land plots and some 500 hectares of agricultural lands; 80 households will be direct and full beneficiaries of this project, who are currently cultivating wheat, barley, oats, alfalfa and sainfoin; in the meantime, they are ready to cultivate buckwheat, potato, cabbage, carrot, beats, etc. Byurakn In Byurakn it is necessary to clean and concrete plating of 2km internal irrigation network. The local irrigation network serves 320 hectares of lands. 32 households are to be the direct beneficiaries of this project, who will thus be involved in cultivation of cereals, potato, vegetables and other horticultural plants. Jradzor In Jradzor it is necessary to provide for capital renovation of internal irrigation water network, namely a 3-4km section by installing inner pipelines. Implementation of this project will secure irrigation to some 420 hectares of land, which will have direct impact on 92 households involved in agriculture in this settlement by increasing the productivity of their activities.

Ashotsk, Shirak marz

113

ASHOTSK: ANALYSIS OF ECONOMIC SITUATION

SHIRAK MARZ









28



114

Ashotsk municipality The process of participatory diagnosis and planning in Ashotsk municipality was launched on 23 August 2016. Ashotsk consolidated municipality consists of Ashotsk, Bavra, Zuigaghbyur, Tavshut, Karmravan, Ghazanchi, Krasar, Mets Sepasar, Saragyugh Poqr Sepasar and Sizavet settlements. Ashotsk is situated in the north-western part of Armenia, in the upper segments of the Akhuryan River basin. Total population of the municipality is 7700 people. Main occupation of population is agriculture, namely cattle breeding, crop farming, and, to smaller extent, bee keeping and poultry. Predominant share of population holds university education.

Competitive advantages of Ashotsk The competitive advantages of Ashotsk municipality have been identified and written down of by application of «LED cafe» techniques.

Abundance of gravity irrigation water, Vast pastures in Alpine zones, Diversity of plants for development of bee keeping, Availability of experienced agriculturists and labour force, Armenia-Georgia inter-state road passes through the municipality, Sufficient arable lands for development and expansion of crop farming, Relatively developed communication infrastructures, institutions (hospital, arts school,

etc.).

Ashotsk economy brief With the objective to generate the overview of the economic landscape of the municipality, COMPASS participatory diagnostic and assessment toolkit was applied at the workshop. Population of Ashotsk is involved primarily in cattle breeding and crop farming.


115

Cattle breeding The main branches of cattle breeding in the municipality are small (sheep and goat) and neat animal breeding. Meat and milk are the main products. Total number of neat animals is approximately 10600 animals, including 5000 milking. Annual milk yield per cow is 1500 litres in average. Almost 90% of the milk produced here is supplied to processing companies, and the rest is used for own consumption. The procurement price is 120 drams per litre. Majority of households have meadows, where they secure winter fodder for their animals. Municipality maintains about 3000 hectares of meadows and 9000 hectares of pastures. There is a problem of drinking water in pastures, which forces the shepherds to walk the flocks for several kilometres to get water daily, which significantly diminishes milk yields. Meat is sold through intermediary traders at 1800-2000 drams per kilo. There are almost no other alternatives to intermediaries, and farmers are extremely vulnerable and dependent on the former. Total number of sheep and goats in the municipality is circa 8000. The major product of sheep breeding is meat. No industrial milking is undertaken. Lambs are fattened and sold at 25000 drams. The wool is not marketed (as in many other municipalities).

Crop farming The next major economic branch of local economy is crop farming. The municipality maintains 7540 hectares of arable lands. Here, wheat and barley are primarily cultivated, while rye, oats, buckwheat, flax and potato are also grown but in far too small volumes. Majority of fields and lands are not irrigated because of the absence of internal networks. Gravity water reaches the municipality but it does not fully address the needs. Wheat yields are 2-4 tons depending on the geographic position of a settlement and the zone. Barley yields are 1.2-2 tons per hectare. Particularly prospective is the production of flax in the agricultural sector of this municipality. Yields in non-irrigated fields are 1 ton per hectare, which is assessed as average indicator. When harvesting is done, one ton of flax oil is produced in the municipality and supplied to “Natali Pharm” Company. The remaining small quantities are sold in various markets. Should demand increase, expansion of flax cultivation and processing will be expected.


116

Development initiatives Participatory exercise entailed prioritisation of the development project ideas, which, according to the participants, would have the most significant impact on economic development of their municipality.

Capital renovation of irrigation networks: internal irrigation networks in the settlements are totally dilapidated. Water reaches the settlement but absence of internal networks precludes its use in the cultivated plots.

Irrigation of pastures.

Installation of anti-hail stations.

Machinery and tractor station.

Establishment of a high quality animal health resource centre.

Planting field protection forest belts.

Improvement of field tracks and roads connecting settlements.

Accessibility of quality seeds.

Support to marketing wool.

Production of combined fodder.

Support to processing and marketing of meat products.

Priority initiatives Participatory assessment exercise has revealed the following two as the highest priorities for the municipality:

Establishment of machinery and tractor station, and

Support to processing and marketing of milk and meat.

Establishment of machinery and tractor station

Total area of arable lands in Ashotsk municipality, including all its ten constituent settlements, is approximately 7500 hectares, in addition to circa 3000 hectares of meadows. Majority of arable lands are under cereals, namely wheat and barley. However, the harvesting season starts every year with a struggle to find a combine harvester and harvest the cereals in time. The machinery available in the municipality is too inadequate, it is too few and obsolete hence 20-40% of yields remain in the fields un-gathered. This gap is a huge impediment for expansion and development of crop farming. Establishment of a machinery and tractor station furnished with modern vehicles and equipment will significantly facilitate agricultural works in the municipality and expansion of cultivated land stock hence increase of household incomes. The list of necessary agricultural machinery is set out below:

4 combine harvesters - 140 mln drams,

2 tractors (130 horse force) - 30 mln drams,

Excavator - 45 mln drams,

3 grass collector-presses - 16,5 mln drams,

Sowing combine harvester «Fortschritt E402 » - 28 mln drams,


117

Total value of this project is estimated at 259 mln drams.

Support to processing and marketing of milk and meat Households in Ashotsk breed 5200 meat cows and the same number of milk neat animals. Marketing of the produced milk and meat is a permanent problem the farmers encounter. Procurement price per litre of milk is 120 drams, which is very cheap for the households, while intermediaries buy meat for 1800-2000 drams per kilo and in small lots; at the same time, in the market the price of meat is minimum 2500 drams. Households may not have any significant influence on the market prices shaped by large producers, while in case small production facilities were established in the municipality (cheese, dairy products, sujukh, basturma, and semi-products, etc.) the local households could have created added value and secure high incomes. By providing technological, financial (long maturity and low interest rates, and small grants) and market accessibility support should result in establishment of 10-15 processing facilities, which would add value to their produce and sell it at higher prices, as well as procure meat and milk produced by smaller households and producers. Implementation of this priority initiative is estimated at 150-200 mln drams.

Arpi, Shirak marz

118

ARPI: ANALYSIS OF ECONOMIC SITUATION SHIRAK MARZ









29


Arpi, Shirak marz

119

Arpi municipality The process of participatory diagnosis and planning in the municipality of Arpi was launched on 24 August 2016. Nine settlements merged to form Apri municipality, and these are Berdashen, Aghvorik, Ardenis, Alvar, Garnaritch, Zarishat, Zorakert, Tsaghkut, and Shaghik. All these rural settlements are situated around the Apri Lake, i.e. neighbouring or within the area of the National Park. High mountains and harsh climate have their say on the local economy of this municipality. People in the villages are mainly involved in cattle breeding. Almost half of the year is winter accompanied with thick snow layer and frost. There is no lack of pastures or meadows and population is primarily involved in neat cattle breeding. Aggregate population in nine settlements is less than 200 people, while agricultural lands amount to more than 20 thousand hectares. Apri is among the municipalities of Armenia leading in the indicator of per household meadows and pastures.

Competitive advantages of Apri The competitive advantages of the municipality have been identified through application of LED Café techniques. They are set out below in bullet points:

Favourable conditions for development of cattle breeding, such as vast pastures, meadows and mountainous crystal-clean water springs.

Pastures re relatively close to the settlement, the mileage of animals is short, which has positive impact on milk yields.

Area of the municipality is rich in irrigation and potable water springs.

Alpine meadows are favourable both for development of bee keeping and their implications on the quality of cattle breeding products.

Traditional experience of people in cattle breeding is very much coherent with their inclination to acquire new knowledge.

Proximity to Georgian border bears positive implications for purchase and sales of products produced in the municipality.

Ecological standard of the municipality is among the best in Armenia and the produced goods are clean and healthy.

Ancient heritage is preserved in the regions, including ruins of castles and forts, as well as tombs.

National Park is rich with birds and animals recorded in IUCN Red List of Threatened Species.

Arpi economy brief

With the objective to generate the overview of the economic landscape of the municipality, COMPASS participatory diagnostic and assessment toolkit was applied at the workshop.

Arpi, Shirak marz

120

The main branch of Arpi municipal economy is cattle breeding. This is preconditioned both by climatic and natural conditions, as well as traditionally professional prerequisites.

Neat animal breeding There are over seven thousand neat animals in Arpi, half of which are cows. Cattle breeding branch generates two major products, meat and milk at practical par quantities. Milk yields of cows do not overstep the indicator of 1500 litres per annum. This is close to average republican indicator, but is too far behind the ones observed in the leading municipalities. This low an indicator is preconditioned by the following factors:

- Breeds are not refreshed, there is no artificial insemination or pedigree breeding; the overall situation deteriorates every subsequent year because of the unstructured breeding,

- Maintenance standards are not respected; cows are properly fed only during the three summer months, while throughout the remaining months in a year they are undernourished, especially in the manger period. Fodder additives or combined fodder is not practised, and basically only grass is used,

- In the lack of any planning, the calving season is winter and early spring, while the peak of milk yields falls into summer months when milk is abundant anyway and the prices are at the lowest. Calving planning regulation would enable shifting the peak of milking to other months when the demand is much higher and the supply starts to diminish,

- Modern technologies are not applied, automated milking is too narrow and the stall conditions are unfavourable.

Produced milk is mainly supplied to four procuring companies. In summer, the price per litre of milk is 120-130 drams, which is 30-40 drams higher than the input costs. Households in Arpi maintain 5-10 cows in average, which is not sufficient to address basic costs of the households, the market prices taken into account, to say nothing about a thought to upscale the flock. Loans and credits offered by financial institutions are cumbersome:

- State subsidies of such loans are tiny, and they are not sufficient to address the demand, while even the maximum threshold of bank loans is not enough to upscale the cattle breeding activities.

- Interest rates of other loans are very high, while the collateral requirements are impossible for villages.

- The maturity terms of the loans offered on the market are very short and they may not satisfy normal pace of reproduction.

Complications are pertinent to production and marketing of meat as well, namely:

Meat is marketed very slowly, while the prices are dictated by the intermediaries,

Intermediaries make more profit than the producers.

Arpi, Shirak marz

121

Average price of meat on the market is around 1800 drams per kilo. An average household maintains five or six calves, which are sent to the pastures in spring, and sold in autumn. Fattening of calves is not implemented. The following measures need to be implemented to develop cattle breeding and processing of milk and meat in Arpi municipality. Physical labour is extensive and hard in cattle breeding, and younger generation avoids doing it. Measures should be taken to minimise manual and physical work in this branch of local economy, mechanise both maintenance of the animals and grass gathering and grass supply. Some processes are already observed in the municipality and it is necessary to trigger and support these. More specifically:

Improvement of stall conditions, construction, automation of removal of manure;

Supply of modern machinery and leasing to the farmers; in particular, this is true for small tractors and sowing machines, as well as equipment to bale the grass.

Widespread application of automated milking equipment. Within the diagnosis and planning period under the Project, it became know that many households have an intention to expand the number of animals they have, but there is no affordable or accessible financing, especially in cases when it relates to development of a household maintaining more than 10 animals into a bigger business. State subsidised loans primarily target households, who have 2-5 animals (below one mln drams). Larger farming households may not be developed by virtue of these funds, while development of a rural settlement or municipality crucially depends on establishment of medium-size farming households and that’s the significant development factor is rural jurisdictions.

Introduction of financing mechanisms for optimally sized farming households (10 and more animals); loans of over and above four million drams and less than 10% annual interest rate may tangibly promote development of such farming households.

The most widespread breed of animals in this region is the so-called Caucasian Grey. In case standard compliant maintenance of this breed is secured the milking may reach as high as 3500-4000 litres per annum. Unfortunately, beyond the two-three summer months, the animals are under-nourished which stems from the quality of fodder grass and absence of additional fodder and entails reduction of milk yields down to 1500 litres per annum. In addition, calving here takes place in January-March. In this period there is no milk in the entire republic hence the prices are high (170-200 drams), while in the summer which is the peak of milking, the prices are at the minimum, i.e. 120 drams per litre. In order to remove this inconsistency it is necessary to implement the following measures:

Widespread introduction of artificial insemination practices,

Introduction of new animal nutrition system and training of farmers on this topic; supply of fodder production equipment and tools to the farmers and promoting interest among start-up businessmen of the branch accompanied with financial support schemes,

Support to cultivation of fodder plants with emphasis on seeds, machinery, as well as introduction of new types of plants.

In the area of meat marketing and processing, the measures to be undertaken include the following:

Establishment of at least one slaughter-house in the region furnished with all necessary equipment,

Small meat processing facilities could also be established to produce traditional basturma, sujukh, meat semi-products, etc.

Arpi, Shirak marz

122

Small animal breeding

There are around 6500 animals in the municipality. Sheep breeding is incomparably better developed than that of other small animals. An average farmer household maintains some ten sheep. Several years ago when mutton was intensively exported to Iran sheep breeding branch saw quite active development. The prices jumped had significantly increased which almost doubled the number of sheep stock in the municipality. However, over the last two years the prices again fell dragging down also the number of animals. Currently farmers primarily sell lambs, each at 25000 drams and at 8000 drams per kilo. Marketing of meat is complicated, the demand volatile and if the farmer households slaughtered large number of animals sales would be impossible. The initiative to establish a slaughter house and meat primary processing facilities will promote also development of small animal breeding in the municipality.

Crop farming and grass harvesting In spite of the availability of over 6000 hectares of arable lands in the municipality, crop farming does not hold any significant share in the incomes of local population. Predominant share of arable lands are used merely as meadows, while other bits cultivated to grow wheat, barley, alfalfa and oats. Yields of plants are in the vicinities of republican average indicators, fields are flat and the soil fertile. The challenges crop farming face are generalised in the following three statements:

- Obsolete and worn-and-torn agricultural machinery,

- Poor quality seeds, and

- Lack of crop rotation practices and relevant knowledge, etc. Grass harvesting in Arpi municipality commences in July and may stretch to October. Over the recent past years population had marketed some 30% of the harvested grass securing quite stabile income. This year, 2016, reduction of number of maintained animals and drastic decline in prices for grass entailed a situation whereby people would harvest only the quantity of grass that is needed for their own animals and the rest is just abandoned on the fields. The cost to produce one 20-kilo bale of grass is around 300 drams, while the market price in 2016 is 400-500 drams. In the meantime, the prices used to be 1000 drams in the past several years.

Development initiatives By applying participatory techniques and methods, population identified the following initiatives, which may promote economic development of their municipality.

- Acquisition of machinery to provide for winter maintenance of the roads and recurrent improvement,

- Agricultural machinery and vehicles for development of crop farming,

Arpi, Shirak marz

123

- Quality seeds and professionally identified fertilizers (suitable for the climatic and other parameters of the soil in the municipality),

- Knowledge and skills to design and manage project and programmes,

- Cattle breeding resource centre, which will deliver animal health, artificial insemination and other (extension) services and provide necessary machinery and equipment,

- Anti-hail stations,

- Storage facilities to store and maintain wheat,

- Irrigation networks,

- Support to meat and milk processing companies,

- Support to establishment of green house facilities. As the next step, the population identified two initiatives, which they considered the highest priority for their municipality, namely:

- Machinery for winter maintenance and recurrent improvement of the municipal road network;

- Agricultural machinery and vehicles targeting development of crop farming.


Machinery for winter maintenance and recurrent improvement of the municipal road network Located at the average elevation of 2000m above the sea-level, the municipality endures harsh, severe winters, and in these long seasons the majority of roads are oftentimes just blocked because of frequent snow storms, which prevent transportation and commuting among settlement as well as other municipalities. Population of the municipality is unanimous in prioritising the need for machinery that would help them implement road maintenance and snow removal in winter seasons, since it will enable the municipality to improve the road conditions in general and to keep them in operation in winter times in particular. Beneficiaries of this project are all the residents of the municipality. The roads that are first priority in terms of improvement and winter maintenance are set out below:

Shaghik-Garnaritch-Tsaghkut-Dzorakert-Berdashen, total length of 14,3km

Berdashen-Amasia, total length of 15,6km

Berdashen-Ardenis, total length of 6,3km.

Arpi, Shirak marz

124

The roads that have been qualified by the participants as the second tier of priority include those within the settlement and field tracks. The machinery and vehicles required for improvement of road conditions and provision of winter maintenance, include:

1․ grader - 50 mln drams,

2․ snow cleaning and removal machinery - 40 mln drams.

Total cost of the project is estimated at 90 mln drams.

Agricultural machinery for development of crop farming For a municipality where the major source of income of the population is agriculture, availability of the agricultural machinery is more than crucial. Currently, majority of arable lands is used as meadows, while others are under wheat, barley, alfalfa, and oats. Availability of municipal agricultural machinery will enable development of crop farming as a stand-alone income-generating branch and will enhance the efficiency of cattle breeding in general, a branch where 90% of local economy is concentrated, including production of additional fodder. The list of agricultural machinery necessary for the above purposes is set out below:

Combine harvester for cereals - 40 mln drams Cereals are cultivated in the municipality for the recent several years, while the areas under their cultivation are gradually increasing. As a consequence, the need for combine harvester is becoming more decisive in proportion with the increased areas.

Harrowing tractor and plough - 30 mln drams Lands that have been abandoned idle for protracted period of time may not be harrowed with an ordinary wheel-tractor. Harrowing of idle land requires powerful machines, e.g.: caterpillar tractor «ДТ-70», or wheel-tractor «Т-150», etc.

Arpi, Shirak marz

125

4 grass harvesting combine harvester (e.g.: «Fortschritt E302») - 70 mln drams

Quality and new grass harvesting machines are priorities for timely gathering of fodder plants. Very powerful machines are needed, which would enable timely harvesting far larger volumes of grass than it is done now, and significantly reduce the costs of the associated works.

Trailers and trailer equipment for wheel tractors (sowing, plough, cultivators, etc.) – 20 mln drams.

There are quite a number of wheel tractors in the municipality, but there is no adequate number of trailers and their accessory equipment. Approximately 20 mln drams would be needed to purchase such equipment in adequate quantities.

The total project costs are estimated at 160 mln drams.

Appendix 1. Key Data on 15 consolidated municipalities

15 New Clusters for Enlargement of Municipalities In accordance with the Law on Introduction of Amendments to the Law on Local Self-Government, and Law on Introduction of Amendments to the Law on Territorial Administrative Division of Armenia, both adopted by the National Assembly on 17 June 2016

No. Region/

Marz

Clusters, with Election

Dates

Centre of the Cluster

Settlements Previous

Municipalities

Population as of

01.01.2016

1 Ararat Urtsadzor, (18 Sept.

2016) Urtsadzor

1. Urtsadzor 1. Urtsadzor 3127

2. Lanjanist 2. Lanjanist 157

3. Shaghap 3. Shaghap 913

Sub-Total 3 3 4,197

2 Shirak Amasia

(2 October 2016)

Amasia

4. Amasia 4. Amasia 1963

5. Aregnadem 5. Aregnadem 516

6. Bandivan 6. Bandivan 284

7. Byurakn 7. Byurakn 830

8. Gtashen 8. Gtashen 479

9. Kamkhut

10. Hovtun 9. Hovtun 190

11. Meghrashat 10. Meghrashat 376

12. Voghji 11. Voghji 539

13. Jradzor 12. Jradzor 351

Sub-Total 10 9 5,528

3 Shirak Ashotsk

(2 October 2016)

Ashotsk

14. Ashotsk 13. Ashotsk 2903

15. Bavra 14. Bavra 635

16. Zuigaghbyur 15. Zuigaghbyur 562

17. Tavshut 16. Tavshut 389

18. Karmravan 17. Karmravan 245

19. Krasar 18. Krasar 529

20. Ghazanchi 19. Ghazanchi 624

21. Mets Sepasar

20. Mets Sepasar

914

22. Saragyugh 21. Saragyugh 253

23. Sizavet 22. Sizavet 391

24. Poqr Sepasar

23. Poqr Sepasar

260

Sub-Total 11 11 7,705

4 Shirak Arpi

(2 October 2016)

Berdashen

25. Berdashen 24. Berdashen 370

26. Paghakn

27. Alvar 25. Alvar 279

28. Aravet

29. Aghvorik 26. Aghvorik 146

30. Ardenis 27. Ardenis 207

31. Garnaritch 28. Garnaritch 321

127

32. Yeghnajur

33. Zarishat 29. Zarishat 74

34. Yerizak

35. Zorakert 30. Zorakert 216

36. Darik

37. Tsaghkut 31. Tsaghkut 247

38. Lorasar

39. Shaghik 32. Shaghik 112


5 Shirak Sarapat

(2 October 2016)

Torosgyugh

40. Torosgyugh 33. Torosgyugh 372

41. Arpeni 34. Arpeni 376

42. Bashgyugh 35. Bashgyugh 63

43. Goghovit 36. Goghovit 394

44. Lernagyugh 37. Lernagyugh 23

45. Kaqavasar 38. Kaqavasar 133

46. Hartashen 39. Hartashen 133

47. Hoghmik 40. Hoghmik 471

48. Dzorashen 41. Dzorashen 192

49. Musaelyan 42. Musaelyan 405

50. Salut 43. Salut 93

51. Sarapat 44. Sarapat 117

52. Vardaghbyur 45. Vardaghbyur 125

53. Tsoghamarg 46. Tsoghamarg 578

54. Poqr Sariar 47. Poqr Sariar 239

Sub-Total 15 15 3,714

6 Syunik Goris

(18 Sept. 2016)

Goris

55. Goris 48. Goris 21302

56. Akner 49. Akner 1103

57. Bardzravan 50. Bardzravan 136

58. Khndzoresk 51. Khndzoresk 2021

59. Hartashen 52. Hartashen 687

60. Nerkin Khndzoresk

53. Nerkin Khndzoresk

260

61. Shurnukh

54. Shurnukh 151 62. Albullagh

63. Dzorak

64. Vanand

65. Vorotan 55. Vorotan 286

66. Verishen 56. Verishen 2109

67. Karahunj 57. Karahunj 1368

Sub-Total 13 10 29,423

7 Syunik Meghri

(18 Sept. 2016)

Meghri

68. Meghri 58. Meghri 4655

69. Agarak 59. Agarak 4742

70. Aylvank 60. Aylvank 289

71. Gudemnis 61. Gudemnis 36

72. Lehvaz 62. Lehvaz 629

73. Litchk 63. Litchk 270

74. Kartchevan 64. Kartchevan 270

75. Kuris 65. Kuris 52

76. Nrnadzor 66. Nrnadzor 153

77. Shvanidzor 67. Shvanidzor 336

78. Vahravar 68. Vahravar 35

128

79. Vardanidzor

69. Vardanidzor 266 80. Aygedzor

81. Tkhkut

82. Tashtun 70. Tashtun 116

Sub-Total 15 13 11,849

8 Syunik Gorayk

(18 Sept. 2016)

Gorayk

83. Gorayk 71. Gorayk 517

84. Tsghuk 72. Tsghuk 386

85. Sarnakunk 73. Sarnakunk 517

86. Spandaryan 74. Spandaryan 452

Sub-Total 4 4 1,872

9 Syunik Tegh

(18 Sept. 2016)

Tegh

87. Tegh 75. Tegh 2259

88. Aravus 76. Aravus 169

89. Khnatsakh 77. Khnatsakh 852

90. Khoznavar 78. Khoznavar 374

91. Kornidzor 79. Kornidzor 1102

92. Vaghatur 80. Vaghatur 404

93. Karashen 81. Karashen 536

Sub-Total 7 7 5,696

10 Vayots Dzor Vayk

(2 October 2016)

Vayk

94. Vayk 82. Vayk 6722

95. Azatek 83. Azatek 589

96. Arin 84. Arin 337

97. Zedea 85. Zedea 173

98. Horadis[i]

99. Por 86. Por 145

Sub-Total 6 5 7,966

11 Vayots Dzor Jermuk

(2 October 2016)

Jermuk

100.Jermuk 87. Jermuk 7647

101.Kechut

102.Gndevaz 88. Gndevaz 822

103.Karmrashen 89. Karmrashen 237

104.Herher 90. Herher 728

Sub-Total 5 4 9,434

12 Vayots Dzor Zaritap

(2 October 2016)

Zaritap

105.Zaritap 91. Zaritap 1416

106.Artavan 92. Artavan 328

107.Saravan 93. Saravan 310

108.Ughedzor

109.Khndzorut 94. Khndzorut 501

110.Nor Aznaberd 95. Nor Aznaberd

159

111.Bardzruni 96. Bardzruni 397

112.Sers 97. Sers 206

113.Martiros 98. Martiros 621

114.Gomk

99. Gomk 254 115.Akhta

116.Kapuyt


13 Tavush Noyemberyan

(18 Sept. 2016)

Noyemberyan

117.Noyemberyan 100.Noyemberyan 6042

118.Baghanis 101.Baghanis 917

119.Barekamavan 102.Barekamavan 483

120.Dovegh 103.Dovegh 618

121.Koti 104.Koti 2194

122.Voskepar 105.Voskepar 937

129

123.Voskevan 106.Voskevan 1431

124.Jujevan 107.Jujevan 595

125.Berdavan 108.Berdavan 3556


14 Tavush Ayrum

(18 Sept. 2016)

Ayrum

126.Ayrum 109.Ayrum 2608

127.Archis 110.Archis 1326

128.Bagratashen 111.Bagratashen 3087

129.Debedavan 112.Debedavan 789

130.Deghdzavan 113.Deghdzavan 410

131.Lchkadzor 114.Lchkadzor 422

132.Haghtanak 115.Haghtanak 1519

133.Ptghvan 116.Ptghavan 931


15 Tavush Koghb

(18 Sept. 2016)

Koghb 134.Koghb 117.Koghb 4888

135.Zorakan 118.Zorakan 1080

Sub-Total 2 2 5,968

TOTAL 135 118 127,381

[i] This settlement was part of previous municipality of Zaritap

130

Appendix 2: Number of participants in the participatory diagnosis and

planning workshops, by municipalities30

N Municipality Number of participants

1st

workshop 2nd

workshop

1 Goris 25 13

2 Tegh 23 7

3 Gorhayk*

9

4 Jermuk 30 12

5 Vayk 18 17

6 Zaritap 22 19

7 Noyemberyan 29 21

8 Ayrum 29 21

9 Koghb* 24

10 Urtsadzor* 28

11 Meghri** 24 20

12 Ashotsk 30 26

13 Sarapat* 26

14 Amasia 31 31

15 Arpi 35 17

Total 383 204

30

The attendance lists of the participants (scanned originals) go as separate attachment to this report *

In the municipalities marked with asterisk, the workshops were held in one exercise

** The Diagnosis and Planning Workshops for Meghri were held in Agarak.

GORIS TEGH GORHAYK MEGHRI VAYK JERMUK ARITAP U … · municipalities include: Goris, Tegh, Gorhayk...

Documents

Transcript of GORIS TEGH GORHAYK MEGHRI VAYK JERMUK ARITAP U … · municipalities include: Goris, Tegh, Gorhayk...