6 steps to End hunger,achieve food security and improved nutrition, and promote sustainable agriculture in ARMENIA by 2030.

Reflections and Recommendations of the 2017 NATIONAL STRATEGIC REVIEW OF FOOD SECURITY & NUTRITION

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Prologue Sustainable Development Goal 2 (SDG2) of the 2030 Agenda - “End hunger, achieve food security and improved nutrition and promote sustainable agriculture”- outlines five main and three supplementary global targets aimed at ending hunger and malnutrition in all its forms and achieving food security to ensure no one is left behind. SDG2’s five main targets are:

End hunger and ensure access by all people to safe, nutritious and sufficient food all year round

End all forms of malnutrition and address the nutritional needs of adolescent girls, pregnant and lactating women, and older persons

Double the agricultural productivity and the incomes of small-scale food producers, including through secure and equal access to land, other productive resources and inputs, knowledge, financial services, markets, and opportunities for value addition and non-farm employment

Ensure sustainable food production systems and implement resilient agricultural practices that increase productivity and production, help maintain ecosystems, strengthen capacity for adaptation to climate change, extreme weather-related disasters, and progressively improve land and soil quality

Maintain the genetic diversity of seeds, cultivated plants, farmed and domesticated animals and their related wild species

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SDG2 is one of the cornerstones of the 2030 Agenda. Improved food security and nutrition is a foundation for progress in health, education, employment, women’s empowerment, poverty and inequality reduction.

As a signatory to the Sustainable Development Goals, Armenia marked its commitment to these ambitious goals, and the National Strategic Review (NSR) of Food Security and Nutrition in Armenia attempts to provide a comprehensive assessment of the current state of food security and nutrition in the country, revealing the underlying factors and key challenges, examining the policies and programmes being implemented and suggesting the necessary government actions required within the framework of the SDG2. The overarching goal of the NSR is to support and guide the Government and relevant stakeholders towards SDG2 fulfilment by 2030.

The Review process was carried out under Government stewardship with the close collaboration of stakeholders from the international community and Armenian civil society. The Government of Armenia established an intergovernmental committee on the SDGs under which the Social Subcommittee covering SDGs 1, 2, 3 and 17 was formed. The Social Subcommittee formed an SDG2 Steering Committee chaired by Mr. Armen Harutyunyan, Deputy Minister of Agriculture. With the support of Dr. Armen Yeghiazaryan, Chairman of the National Centre for the Regulation of Legislation, and that of the United Nations World Food Programme, AVAG Solutions provided research support and strategic analysis for the deliberation of the Committee, resulting in a comprehensive report validated by the SDG2 Steering Committee. The full NSR report forms the basis of this summary for decision-makers.

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Based on a thorough analysis of food security, nutrition and agriculture in Armenia, the National Strategic Review of Food Security and Nutrition in Armenia suggests the following six recommendations for achieving the SDG2 Targets in Armenia by 2030.

Ensure programmatic synergies that cover all pillars of food security in order to guarantee access to nutritious food for everyone, throughout the country. Apply well-targeted healthcare, social protection and territorial policies to reduce existing disparities in hunger and malnutrition throughout the country. Revise social protection policy instruments to cover the most deprived. Increase public awareness on healthy nutrition and SDG2 focus areas while building and maintaining a comprehensive evidence base. Implement innovative approaches and schemes to increase the productivity and competitiveness of smallholder farms and mitigate the consequences of extreme weather and climate change. Coordinate and manage the implementation and progress of policies related to food security and SDG2 on a sustainable basis.

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Context Armenia is a lower middle-income, net food-importer country vulnerable to external shocks. Limited fiscal space and weakening economic growth have strained the government budget, hindering implementation of effective social safety nets and reducing state budget expenditures on the education and health sectors to 2.4 and 1.7 percent of GDP, respectively. The global financial crisis negatively impacted the economy and despite moderate macro-economic progress, growth has not been inclusive. In 2015, one in three persons was living below the poverty line. Large disparities in infrastructures, assets, environmental factors and employment opportunities have led to diverse levels of socio-economic development between provinces. The household income is largely dependent on potentially unstable remittances, received from migrants and the diaspora.

According to national estimates, 6 percent of the Armenian population consumed an inadequate amount of calories needed to maintain an active and healthy lifestyle and were undernourished in 2015. Food insecurity increased sharply following the global economic crisis and is correlated to poverty. An estimated 16 percent of households were classified as food insecure in 2015, increasing almost twice since the global financial crisis of 2008. Even for those not qualified as food insecure, the quality of consumed food is often poor, as some 26 percent of households have diets with a high proportion of food energy from staples. Food insecurity goes hand in hand with double burden of child malnutrition and micronutrient deficiencies, presenting a persistent concern in Armenia. With a significantly higher prevalence among children under 18 months, 9 percent of children under 5 years were stunted, while 14 percent were overweight in 2015. The average prevalence of under-five anaemia stood at 16 percent and peaked at 34-49 percent in some provinces.

The structure of land ownership is highly fragmented, characterised by small plot sizes, all of which greatly affect both productivity and sustainability of the family farms, especially when compounded with issues around irrigation, mechanisation, financial access and agricultural insurance, amongst other factors.

While Armenia produces most of the food it consumes, cereals’ imports still make up a large proportion of national consumption, which consequently affects the stability and nature of supply and pricing. The food security of the poor and extremely poor households, most sensitive to price fluctuations, is directly impacted. Armenia is one of the most shock-prone country in Central Asia and Caucasus region which prompt significant economic losses and adversely impact food security.

Rural and agricultural development is a key focus of the current Government. The main goal of agricultural development is rightly the creation of the conditions for sustainable development by increasing the productivity and commercialization of family farms to assure food availability and fight rural poverty. However, key concepts within, and synergies between, related policies are yet to be defined more clearly at both the strategic and implementation levels.

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1 Focus Review and update the Concept on Ensuring Food Security in the Republic of Armenia based on SDG2 targets to include all pillars of food security.

Review the approach applied to the Action Plan of the Concept on Ensuring Food Security in the Republic of Armenia, in order to include actions aimed at food accessibility and utilization in addition to the planned actions on food availability and self-sufficiency.

Synchronize policies and programs aimed at agricultural development, agricultural subsidies, territorial development and social protection in order to achieve mutually reinforcing and synergistic effects.

Armenia’s cadre of strategies and programmes constitutes a solid base to increase agricultural national self-sufficiency, productivity, and incomes, reduce rural and urban poverty, and eliminate hunger and malnutrition in line with the United Nations Zero Hunger Challenge and SDG2 targets. There are, however, several gaps that should be addressed in national policies, as well as substantial gaps in the implementation of existing policies, which impede their ability to effectively achieve SDG2. Policies and programmes that affect food security should be structured to ensure that all Armenians are able to eat sufficient, safe and nutritious food.

Armenia’s macro-level policies addressing SDG2 target areas pertain to both the supply and demand sides of food security. While policies relating to agricultural production can be viewed as direct drivers for the supply of food, healthcare, social protection and education policies are drivers for the demand side. Food security is influenced naturally also by policies on overall economic development, labour, trade, food prices, and climate change.

The Armenia Development Strategy (ADS), the country’s flagship development policy until 2025, outlines that broadly “economic and social policies should channel economic growth and its redistribution to a direct and indirect increase in the incomes of the poorer population groups in a more targeted manner…”. The ADS prioritises agriculture as a driver of balanced regional development through the retail food value chain, acknowledging that agriculture accounts for 80 percent of rural employment. The dual focus of agricultural development envisions the attainment of “stable food security” through production (self-sufficiency) and poverty reduction (increasing competitiveness of smallholders in the food value chain).

Policies and action plans specific to food security and nutrition tend to focus predominantly on food availability, primarily through agriculture and self-sufficiency considerations, while food accessibility and utilization issues remain major gaps at both policy and implementation levels. A combination of poverty, structural inequalities, limited labour market opportunities limit access to healthy diets coupled with low awareness of good eating habits.

Ensure programmatic synergies that cover all pillars of food security in order to guarantee access to nutritious food for everyone, throughout the country.

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The main strategic policy documents directly dealing with food security are the Policy for Ensuring Food Security in the Republic of Armenia (2005) and the Concept on Ensuring Food Security in the Republic of Armenia (2011). While the first one determines the strategic view to achieving all pillars of food security, the second one mostly focuses on macro-level food availability through sufficient agricultural production and food imports. Thus, the Concept’s Plan of Action for 2017-21 deals mainly with food availability and stability at the expense of the access and utilization pillars, constituting a policy gap that should be addressed in order to achieve all dimensions of food security and SDG2 targets.

Promoting competitiveness of farmers and supporting increased exports has long been seen as a way to both produce more food and strengthen the domestic economy, and improve the livelihood of the poor. The current agricultural support is predominantly provided through broad market interventions (input and credit subsidies for all) and not targeted toward small-scale food producers.

Integrated policies that support an increase in the productivity of cash crops by combining the existing practice of input subsidies with income-based, direct producer support subsidies, might prove to be more effective if agricultural growth is indeed designed to benefit all segments of society. A gradual shift to income-based subsidies for smallholder farms would help to decrease rural inequalities and increase the competitiveness of smallholders. The need for policy redesign that better benefits small-scale food producers can have far-reaching effects, especially when taking into account that five percent of landholders effectively control more than 31 percent of Armenian agricultural land. Such targeted support has the potential to be distortive to agricultural markets and require more administration, so these policy initiatives should be based on clear and time-bound policy objectives, and take into account all associated direct and indirect costs.

Social Protection and Food Security

While economic and social protection policies mainly link their targets to poverty and extreme poverty alleviation, the alleviation of the undernourished (according to the Ministry of Health (MOH) recommended minimum food basket) is neither targeted nor directly linked to these policies. Thus, in order to achieve SDG2 Target 1, it is essential to link existing policies not only to indicators of poverty but also undernourishment.

Although food security is a focus of the Government's attention, the most deprived groups of the population and specific localities with lower access to food are not delineated in policies directly aimed at achieving food security, making it difficult to provide strategic, targeted support that can eliminate hunger and malnutrition. Thus, in order to achieve SDG2 Targets 1 and 2, it is essential to support increased accessibility to nutritious food through general economic, labour market and social protection policies, as well as through targeted policies aimed at the most food insecure and vulnerable populations and areas. Children under-five, the unemployed, the poor, and large-sized families are more likely to be undernourished. Armenia is also experiencing a rise in food insecurity in rural areas. While hunger and malnutrition in these areas can be partially addressed through improved agricultural policies, the situation of highly deprived groups would need to be addressed through well-targeted policies that can also address immediate needs.

Currently, existing policies also use predominantly monetary instruments for increasing access to nutritious food that do not necessarily lead to improvements in food utilization (usage of healthy, diversified and quality food). Combining monetary instruments with the provision of food supplements or unconditional in-kind transfer schemes could ensure the diversity and nutritional value of consumed food.

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While several instruments of public awareness and nutrition education are present in healthcare and education policies, data shows that the nutritional habits and preferences need more systematic improvement. Public awareness on healthy nutrition should be increased through behavioural change communication and through regulating the sale of unhealthy foods, especially in and near educational institutions.

Gaps, inconsistencies and contradictions in the evidence base are an omnipresent challenge hampering food security and nutrition policy formulation. In order to make thoughtful changes in policy and policy instruments to successfully fight undernourishment, eliminate hunger and malnutrition and achieve SDG2, the methodology and resources for data collection and monitoring, including nutrition and micronutrient-specific information, would need enhancement. Existing regulations and their implementation should be monitored on a sustainable basis with appropriate indicators gathered through regular standardised surveys undertaken by national institutions, rather than sporadically by local and international actors.

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Focus

Review and update healthcare policies and action plans regarding maternal, infant and young child nutrition prioritizing and targeting the most deprived territories and population groups.

Review and update social protection and social assistance policies and action plans prioritizing and targeting the most deprived territories and population groups in terms of undernourishment and food insecurity.

Review and update territorial development policies and action plans to support the reduction of territorial disparities in undernourishment and food insecurity.

Review and update the Regional Development Plans prioritizing and targeting the most deprived territories and population groups in terms of undernourishment and food insecurity.

Review and consider combined usage of monetary and non-monetary (food stamps, unconditional food transfers, food supplements, etc.) instruments of social assistance to enhance food accessibility and utilization in the most deprived groups of population.

The Most Deprived Groups of Population

By identifying specific population groups that are the most predisposed to undernourishment, government policies can be specifically targeted towards the achievement of SDG2. The poor and extremely poor are naturally the most deprived groups of the population, with the highest levels of undernourishment by MOH standards. However, the NSR finds that age, family size, gender, location, environment and available infrastructure, among others, are all key factors in both identifying and addressing food insecurity and malnutrition. Children under two, five and 18 years of age, as well as the unemployed, people living in large-sized families and female headed households are the most deprived population groups.

Regional Disparities

Severe regional disparities exist in the prevalence of extreme poverty, undernourishment, food insecurity and malnutrition indicators in the country. The situation with the undernourishment and food insecurity is the most acute in Shirak, Lori and Tavush provinces and Yerevan. According to the 2015 Armenia’s Demographic and Health Survey (DHS), under-five stunting is more prevalent in Shirak, Aragatsotn, Ararat and Syunik provinces, while the under-five overweighting - in Ararat, Shirak and Vayots Dzor provinces. In the following four provinces at least two under-five malnutrition indicators significantly exceed the national average level: Shirak, Ararat, Aragatsotn and Vaiots Dzor. In addition, Gegharkounik and Lori provinces and

Apply well-targeted healthcare, social protection and territorial policies to reduce existing disparities in hunger and malnutrition throughout the country.

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rural areas experience high anaemia prevalence amongst both children under five and reproductive-age women.

The Rural-Urban Divide

Over sixty percent of Armenians are urban residents 1, with the capital Yerevan hosting one third of the population.2 Food insecure households are more prevalent in urban areas, however, between 2008 and 2014, the proportion of food insecure households in both urban and rural areas approached Armenia's average, reflecting a growing trend of rural food insecurity. Amongst urban residents, this figure has dropped dramatically since 2012, although not yet reaching pre-2008 levels. Growing food insecurity amongst rural households can be explained by a 5.4-fold increase in the share of households with poor dietary intake and a 42 percent increase in the rural extreme poverty rate relative to 2008. While the rural population is in fact slightly less deprived in terms of food security compared to the urban population, the nutritional quality of food the rural inhabitants consume is lower.

Age Disparities

29.1 percent of Armenians were multidimensional poor or deprived3 in 2015, and 64.5 percent of children under 18 years of age were deprived in two or more dimensions of deprivation, including some 5.9 percent were nutritionally deprived.4 According to the 2015 household's integrated living conditions survey (ILCS), 33.7 percent of children under 18 years of age are poor (compared to 29.8 percent nationally) and 2.5 percent are extremely poor in terms of monetary poverty (the national average being two percent). Nearly one-third of the extremely poor population are children under 18 years of age, of which 10 percent are children under 5 years of age. Thus, children are one of the most deprived shares of the population in terms of monetary and multidimensional poverty.

While wasting and overweight prevalence does not vary significantly across different age groups, the stunting prevalence is radically higher among children under 1.5 years age group and is within the range of 12 to 17 percent. Anaemia is most prevalent amongst children under one and half year of age (30 percent) and decreases with age. Anaemia is more prevalent among breastfeeding women, with an average of 16.1 percent, which indicates the necessity to strengthen policies aimed at iron supplementation amongst women not only during pregnancy, but also during lactation.

Household Spending and Food Price Volatility

Armenians remain vulnerable to shocks in external food markets and food prices, with 56 percent of cereal imports dependency ratio. The domestic food price volatility index5, which reflects the stability of economic access to food by the population, stood at 12 percent6 in 2014 - higher than in other lower middle-income economies (8.5 percent), low-income food-deficit countries (10 percent) and key economic partner countries such as the Russian Federation (5.2 percent). The poorest Armenians spend around 60 percent of their budgets on food, and higher food prices can lead to a shift in their food intake to less nutritious and cheaper diets, even if they spend the same or larger amount of money on food. While overall food prices increased by nearly 38 percent between 2008 and 2015, the prices of protein-rich meat and dairy products increased by over 50 percent, making them less affordable for the poor. There are provinces such as Tavush and Armavir, where two out of three households cannot afford the cost of a nutritious diet.

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Drinking Water Availability

Availability and access to safe drinking water is an important determinant of good nutrition. Despite considerable improvements in water quality and in the reliability of the water supply, disparities between households residing in urban and rural areas remain. In 2015, the proportion of urban households with a 24-hour daily drinkable water supply was 73.3 percent, while in rural communities it was only 51.1 percent. The Government of Armenia committed to deepen reforms in the water sector by consolidating the efforts of the public and private sectors to improve service delivery and to address existing disparities in the access and availability of water in both urban and rural areas.

Rural Infrastructure

Road density and quality has a direct impact on the access to markets, agricultural production and marketability of small farmers’ produce. While over two-thirds of national roads are in fair condition, local roads are in poor condition, with approximately two-thirds needing improvement. Disparities in regional infrastructure exacerbate the inability of many in remote or rural communities - often already amongst the most deprived - to improve production, marketability and sale of rural produce. In addition, the network of storage and refrigeration facilities is under-developed in rural communities, which leads to waste of agricultural products, including 21 percent of all produced vegetables.

One potential source of affordable and reliable transportation could be the Soviet era railway system, which was designed to handle large traffic volumes and is wholly electrified. Currently, less than two thirds of the network have been rehabilitated. Thus, the system is both deteriorated and under-loaded—the share of railway passenger turnover is only 1.7 percent of the overall yearly turnover of passengers, and only 17.1 percent of annual cargo turnover.7

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Focus

Develop and expand the existing limited active support schemes to unemployed, combining them with the provision of passive schemes of assistance—unemployment allowances and food vouchers to the unemployed.

Consider revision of the childcare allowance system in order to cover all children under two through different kinds of child assistance grants, regardless of their mothers’ status in the labour market.

Elaborate social assistance schemes for all children in the age group of 3-5, combining monetary and non-monetary instruments of grant provision.

Revise and update the Family Living Standards Enhancement Benefits (FLSEB) policy instruments, combining monetary and non-monetary schemes of assistance provision to ensure nutritious food utilization amongst beneficiary families, and especially those with children under five.

Improve the FLSEB targeting mechanisms to enhance efficiency of the system.

Economic growth remains the main driver of poverty reduction in Armenia. Despite slower economic growth between 2009 and 2015, the post-financial crisis (2008) economy more equally benefits the poor than during Armenia’s period of rapid economic growth in the early 2000s.

However, this progress has not offset the fact that widespread poverty in Armenia is still largely related to a lack of inclusive growth, decently paid jobs, and labour market regulations aimed at eliminating informal employment. The gains of economic development are not distributed equitably and economic polarization remains high, especially between regions, urban versus rural environments, and amongst various age and population groups. The Gini coefficient of income inequality stood at 37.4 percent in 2015 (an increase from 33.9 percent in 2008). In 2015, the incomes of the poorest 10 percent of the population were 16 times lower than the incomes of the wealthiest 10 percent.8 Existing instruments of growth redistribution have the potential to greatly increase equity by better targeting poorer populations, ensuring to leave no one behind.

Employment and Deprivation

The unemployment rate is consistently high in Armenia and stands nationally at 18.5 percent. The highest unemployment rates were observed in Yerevan and provinces with a predominantly urban population.

Revise social protection policy instruments to cover the most deprived.

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A majority of the extremely poor in the age group of 25-63 are unemployed (57 percent) and 67 percent of extremely poor households have five or more members. Average food energy consumption in families headed by an unemployed person is lower than the national average, and food insecurity amongst these households is higher. Extreme poverty amongst the unemployed is 3.8 percent, which is nearly twice the national average. Almost 12 percent of the unemployed were undernourished based on MOH standards in 2015, which is also nearly twice the national average.

While there is no significant difference in extreme poverty and undernourishment between the male and female unemployed, women in Armenia are generally more educated than men yet have fewer jobs. The share of economically active women stands at 54.3 percent compared to 72.6 percent of men. The employment rate among women is 43.8 percent compared to 59.8 percent amongst men. Women are predominantly employed in the lowest-paid sectors (e.g. education, healthcare, public services, farming) and generally receive lower wages compared to men with the same qualifications. There is a horizontal and vertical gender imbalance within the labour market in Armenia, which likely contributes to higher undernourishment amongst employed women. In 2015, 23.8 percent of employed women were poor, 1.2 percent were extremely poor and 3.7 percent were undernourished based on MOH nutrition standards.

Having a job in Armenia does not guarantee a decent living standard nor does it ensure that workers and their families will avoid remaining or dropping under the poverty line. While the real average salary between 2003-2015 increased 2.7 times9, some 24 percent of employed people were poor in 2015. Concomitantly, a significant share of the population occupies low-income or informal jobs, which results in low living standards. Some 15 percent of the employed receive a salary below the minimum wage and 18 percent of the non-agricultural employment was in the informal sector in 201510.

Role of the Social Protection System

The social protection system plays an important role in protecting and promoting food security. The pension system is the main channel of state social transfers to the population and the largest component of the social protection system, while the biggest state social assistance program in Armenia is the “Family living standards enhancement benefits” (FLSEB) program. There is a high dependency amongst the poorest segments of the population on social transfers, including pensions and different types of state benefits, which make up 26 percent of per capita monthly incomes of the poor and 42 percent of the extremely poor population. Amongst the non-poor, social transfers amount to only 14 percent of their income. Without the existing social protection system in Armenia, the share of the extremely poor population would increase nine-fold (to 18.2 percent), while the share of the poor would increase by 47 percent (to 44 percent). Thus, state social transfers, especially pensions, have a significant impact on reducing poverty and food insecurity in the country.

Without the FLSEB, the poverty rate would be 31.1 percent and the extreme poverty rate would be 4.2 percent. Although the FLSEB serves to reduce extreme poverty, the decrease in effectiveness of the system to some extent, and the inclusion-exclusion errors of the system invoke the need to improve its selection criteria and targeting mechanisms. The system covers 76 percent of the poorest 40 percent of families. The effectiveness of the FLSEB in reducing extreme poverty significantly decreased after 2010, despite an increase in average size of benefits in nominal terms.11 Thus, the FLSEB policy would need refinements in order to contribute meaningfully to achieving SDG2. A partial shift from sole monetary transfers to voucher or unconditional in-kind transfer schemes may be considered as an option to assure the adequate dietary intake of the beneficiary families. If regulated to cover only locally-produced agricultural and food products, the scheme could serve as an additional growth factor for domestic agricultural and food producers. However, creation and development of these

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instruments, as well as the incorporation of graduation mechanisms would demand the implementation of a thoughtful regulatory and logistical regime in order to guarantee efficient and transparent distribution.

Out of the 244,000 unemployed persons in Armenia, around 20,000 are covered by the FLSEB and the unemployment benefits programme was halted in 2015. Thus, while some minor active schemes of assistance are provided to those who have registered as unemployed (provision of seasonal employment opportunities as well as small some livestock support programs), passive schemes of assistance such as unemployment insurance/benefits or food vouchers, are absent, other than the very limited coverage of the FLSEB. This is an immediate policy gap, which, if addressed, would directly contribute to improving the food security of the unemployed. Provision of passive schemes of assistance to the unemployed along with existing active schemes of assistance that complement the FLSEB could be considered as a policy option to prevent undernourishment of the unemployed and/or families headed by unemployed persons.

The main instruments of social assistance targeting children are a one-time childbirth allowance, a childcare allowance for children up to two years of age for working mothers, a motherhood allowance for both working and non-working mothers, and the national school feeding programme, directed at all enrolled primary school children. Analysis of current policies reveals that the majority of children under five years of age are not covered by any sustainable or efficient state child support grants/assistance program. Concomitantly, large disparities exist in state allowances for children in families with working and unemployed mothers.

Considering the prevalence of poverty and undernourishment amongst under-five children, covering all children under two years through childcare allowances is both justifiable and recommended. The support schemes’ design should be tailored specifically according to the level of deprivation, for example, implementation of monetary and supplementary feeding provision schemes for non-working mothers with children under two, and income tax credits for working mothers with children under two. Children in the age group of three to five are not covered directly by any social assistance program with the exception of the FLSEB.12 Feeding programmes in community kindergartens and pre-schools could be considered as an option for those who are enrolled, linking these programmes to the existing school feeding system and the social protection system at large. In addition, food stamps or supplementary feeding could be provided to those who are not enrolled.

Role of Migrant Remittances

Migrant remittances also have a significant impact on reducing poverty and food insecurity. Over the past three decades, about 800,000 residents of Armenia have emigrated to different countries13. This process continues to this day, but with less intensity. Remittances make up 12 percent of the per capita monthly incomes of the non-poor population, eight percent of the incomes of the poor and five percent of the extremely poor. Should remittances be absent, 11 percent of the non-poor population would fall into poverty or extreme poverty. Moreover, ten percent of the poor population would fall into extreme poverty, the extremely poor population would increase 4.5 times (to nine percent), and the share of the poor would stand at 38 percent of the overall population. The volume of migrant remittances depends on the economic situation in host countries (mainly Russia) and fluctuates in accordance with economic fluctuations abroad. Hence, the dependence of incomes on unstable migrant remittances negatively affects income sustainability and, consequently, living standards and food security.

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Focus

Revise existing public awareness programs to disseminate and promote SDG2 and its targets amongst the population.

Organize public awareness and public education campaigns at the regional level to reach remote areas and communities.

Develop and implement Social and Behaviour Change Communication approaches and tools aimed at prevention of malnutrition and undernourishment.

Develop, improve and synchronize the methodologies and resources for food security data collection and monitoring on a sustainable basis, including nutrition and micronutrient-specific information.

Ensure the elaboration of SDG2 and food security indicators on a sustainable basis and at different disaggregation levels, including territorial and population group levels.

Ensure elaboration of the undernourishment prevalence indicator at sustainable basis, on the different disaggregation levels and based on the minimum food basket recommended by the MOH.

Improve the Agricultural Census methodology in order to have production module and information on productivity increase among smallholders.

With 9 percent of Armenian children under the age of five stunted and 14 percent overweight in 201414, the country faces a double burden of malnutrition in addition to micronutrient deficiencies. Maternal and child health indicators related to SDG2 Target 2 are very well considered within Government healthcare policies and predominantly appear achievable by 2030. Yet, significant differences in these indicators persist at different disaggregation levels, with various areas and groups experiencing dramatically high levels, and eventually multiple combinations of some conditions. Nutrition-related policies should go beyond national average values when targeting and monitoring their implementation and should have special, well targeted sub-national policies for the most deprived, in order to achieve SDG2 Targets 1 and 2 across the country.

WHO recommends six global targets for maternal and child nutrition in order to monitor progress on the SDGs.15 The dynamics of the indicators corresponding to these targets in Armenia show that the 2025 target values related to under-five stunting and wasting, low birth weight, exclusive breastfeeding, and anaemia in women can, with concerted effort, be achieved.

Increase public awareness on healthy nutrition and SDG2 focus areas while building and maintaining a comprehensive evidence base.

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Targeting malnutrition amongst the poorest 20 percent of Armenians is of special importance in this effort. The prevalence of under-five stunting and wasting within the poorest quintile of the population is approximately double that of the wealthiest quintile.16 Under-five anaemia is 1.6 times higher, while the prevalence of anaemia amongst women of reproductive age is 20 percent higher within the poorest quintile.

Food security and malnutrition are generally highly related to the individual nutritional awareness and knowledge of the population, education level, reproductive and breastfeeding behaviours, household and individual nutritional habits, lifestyle traditions and awareness on healthy lifestyles.

General nutritional awareness and knowledge, together with healthy lifestyles’ practice are important factors affecting the nutrition situation. Though data on awareness and knowledge about healthy nutrition are missing, this can be revealed by looking at nutritional indicators amongst the population with different educational levels. As an example, prevalence of anaemia among reproductive age women is higher amongst women with secondary education than those with higher education (14.9 percent versus 10.7 percent, respectively). Malnutrition and Education

Anaemia prevalence is a prime example of the significantly positive impact of nutritional education and public awareness. Anaemia prevalence decreases markedly with education, from 17.3 percent amongst women with basic education to 10.7 percent amongst those with higher education. This suggests a clear priority for government policies aimed at reducing anaemia within the most affected population groups in order to meet WHO benchmarks regarding SDG2 Target 2.

Micronutrient deficiencies amongst pregnant and lactating women and infants contribute in large part to poor child health and malnutrition generally. The 2015 DHS revealed an improvement in the intake of micronutrients amongst reproductive-age women and under-five children compared to 2005, and as an outcome a significant improvement in prevalence of anaemia in both groups. Over the past decade, anaemia prevalence within reproductive-age women decreased by about 38 percent, standing at 13.4 percent in 2015 and thus approaching the WHO benchmark of <15 percent.17 At the same time, anaemia amongst children under five declined by 52 percent.

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Focus

Develop an official definition of “small-scale food producers”. Elaborate and implement approaches and system for provision of targeted support to small-scale food producers through income-based direct producer support subsidies. Elaborate and implement schemes for combining the existing practice of input subsidies with income-based direct producer support subsidies. Elaborate and implement innovative policies to support food producers mitigate the risks from extreme weather and natural disasters, with a particular focus on small farmers. Elaborate and implement an efficient and transparent system of agricultural insurance based on Private-Public Partnership (PPP) principles. Elaborate and implement schemes for promotion of non-agricultural job creation in rural settlements. Promote and support development of organic agriculture, particularly, in smallholder farms. Promote and support implementation of drip irrigation practices, particularly, in smallholder farms.

While a definition for “smallholder farms” has not officially been determined in Armenia in order to elaborate and implement targeted policies, disaggregating agricultural data can provide a basis for recommending a constructive definition. Analysis suggests that small-scale food producers in Armenia currently are family farms that own or operate land plots from 0.2 to 2.0 hectares of agricultural land. According to SDG2 Target 3, the productivity and incomes of smallholders should be doubled by 2030, which means that the average productivity of small scale food producers (in 2014 prices) should be no less than 1.670 million AMD, which can be achieved with an annual average productivity growth rate of no less than 4.7 percent.

Gross agricultural output in Armenia increased by 59 percent18 during 2008-2015 and the share of the agricultural sector in GDP reached 17.2 percent in 2015. Sustainable availability of food largely depends on domestic agricultural production, which in Armenia is produced predominantly by family farms (97.2 percent of gross agricultural output in 2015).19 Several factors, analysed below, negatively affect the productivity and sustainability of the family farms such as: (a) land ownership and size (small and fragmented lands), (b) irrigation, (c) low level of mechanisation, d) crop pattern, (e) access to financial resources, and (f) climate change and extreme weather.

a. Land ownership and size. After its independence in 1991, Armenia started a land reform privatizing all lands cultivated by large collective farms and state farms in the Soviet period. The land was allocated to rural families and plot size was determined by family size. Nearly 79 percent of all family farms in Armenia operate with less than two hectares of land per farm. These farms constitute about one-third of the total family-operated farmland in the country.

Implement innovative approaches and schemes to increase the productivity and the competitiveness of smallholder farms and mitigate the consequences of extreme weather and climate change.

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The remaining 21 percent of farms operate 64.5 percent of land. There are significant regional differences in land concentration and a strong correlation between monetary income generated by family farms and the structure of the land size. Small plots and fragmentation of agricultural lands owned by farmers restrict the possibilities for sustainable agriculture and sufficient agricultural income generation. The agricultural holdings of nearly half of producers are divided into three or more separate land plots, which reduces the effectiveness of crop production when taking into account the small size of land per farm.20

Registration of land ownership has been principally carried out by male household heads. Only 31.5 percent of rural women own land alone or jointly with other members of the household, while amongst rural men of the same age this figure stands at 64 percent. A direction of agricultural policy nationwide should be to increase the size of the average family farm, especially in areas where the family farm is lower than the national average.

b. Irrigation. According to the recent Agricultural Census of 2014, some 31 percent of cultivated lands are irrigated, which indicates insufficient coverage by the irrigation system. Despite government’s irrigation subsidizations, volumes of irrigated land did not increase substantially. The irrigation system is rather deteriorated, and is suffered due to non-reliable supply of water (not enough water supplied when needed), losses, fragmentation of the land plots etc. A 30 percent increase in irrigated land for an average farm would generate sufficient incremental net income to lift a family out of poverty, provided other sources of income remained unchanged.

c. Low agricultural mechanisation. The low level of agricultural mechanization, as well as limited use of modern technologies, causes low labour productivity and low incomes for farmers, which leads to limited opportunities to ensure a satisfactory quality of life through farming and higher levels of poverty. While gender equality in Armenia is ensured by the law, traditionally women have limited access to agricultural assets in rural family farms.

d. Crop patterns. The family farmlands are mostly sown with grains (mainly wheat) and leguminous crops (57 percent of total sown lands), followed by forage crops (22 percent), potatoes (9.5 percent) and vegetables (8.3 percent). Family farms are not able to change crop patterns (minimize wheat and barley production and produce commercially viable cash crops) and increase the levels of marketization due to insufficient access to financial resources, subsidies and systems.

e. Access to financial services. The average cash flow for a person employed in the family farm amounts to about 46.9 percent of the average monthly salary nationwide, indicating insufficient availability of financial resources necessary for changing crop patterns and organizing the production of more income-generating crops. Although the ratio of credits to gross agricultural output (an indicator of credit accessibility) has increased fourfold during 2008-2015, these credits are not affordable for the average farm or poor family farms. Women in rural areas especially have limited access to credit and entrepreneurship, markets and agricultural inputs, which limits their income earning opportunities.21 Broad access to affordable financial services is a critical condition for the commercialization of family farms, and especially for enhancing their ability to change crop patterns. Some improvements in financial access were instituted between 2007 and 2015 across the economy, including within the agriculture sector, however current levels of accessibility and affordability of agricultural credits are still low, especially for small family farms.

As of October 2013, 20.3 percent of active family farms and 25 percent of commercial organizations had credits from banks with an average credit size of 1.52 million AMD.22 Considering that the burden of loans and interests are hardly affordable for the average farm, the Government decided to issue agricultural loans under milder conditions from 2018.

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According to household-level data, in 2015, some 16 percent of rural households withdrew loans for agricultural activities from banks. The majority of them (76 percent) were non-poor, 22.5 percent were poor, and 1.1 percent were extremely poor households.23 Thus, for the poor, these agricultural loans were much less accessible or affordable and for extremely poor households almost entirely unaffordable.

f. Climate change and extreme weather. Cropping in Armenia is highly influenced by climatic shocks and hazards causing great damage to agricultural production and losses which are estimated at USD 32-64 M annually.24 The productive potential of agricultural lands is also affected by inappropriate land-use practices: over-grazing of mountain pastures, lack of crop rotation, use of excessive irrigation and poorly maintained drainage systems. It is estimated that more than 60 percent of arable lands and 15 percent of pastures are subject to degradation and erosion.25 A comprehensive system of agricultural insurance is non-existent. Important tools such as agricultural insurance, productive and protective assets and technologies, and access to credit all serve to help mitigate the risk of losses or manage their consequences in a sustainable manner. Smallholders/subsistence farmers are at a particular risk of falling into poverty and food insecurity in the event of natural disasters. In this regard, Government current policies are limited to (i) provision of emergency support to farmers in order to partially cover incurred losses from natural disasters and (ii) provision of public funds for the operation of hail protection systems. In terms of the latter, there is no statistical proof of the effectiveness of these systems. Thus, policies targeted at mitigating the risks of extreme weather and natural disasters are required, and in particular tailored to small farmers. A suggested policy option would be an efficient and transparent system of agricultural insurance based on Private-Public Partnership principles.

Agricultural Exports and Growth

One of the main drivers of agricultural growth is agricultural exports. Improved commercialization and increased exports of agriculture products are key priorities in the agenda of the Armenian government. Food exports in Armenia are the lowest in the Eurasian Economic Union (EAEU), and agricultural production is highly concentrated on domestic consumption. The main markets for agricultural exports are the Commonwealth of Independent States (CIS) markets, with the major share attributed to agricultural exports to the Russian Federation (approximately 78 percent). Bringing Armenian agricultural and food exports even to the level of the Kyrgyz Republic, which is rather low, would imply a 2.3-fold increase in agricultural exports and corresponding cash flows from these exports to family farms.

Rural Non-Agricultural Jobs

The promotion of non-agricultural job creation in rural settlements is a policy option of paramount importance. It can create strong incentives for increasing productivity in regions with low agricultural productivity and, together with policies aimed at increasing the size of family farms and output, will diminish hidden agricultural unemployment, one of the main causes of low productivity in various territories.

Overall, the current agricultural policy must be tailored to the needs of small-scale food producers, starting from access to quality irrigation and financial resources to promoting more income-generating crop patterns, knowledge dissemination and agricultural export promotion. A comprehensive system of agricultural insurance and a system of decoupled agricultural subsidies is also needed.

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6

Focus

Create an inter-agency working group on SDG2 and food security, with participation of NGO sector and private sector.

Create working groups on SDG2 and food security, with participation of NGO sector and private sector at the regional level.

Ensure effective collaboration of these working groups between regional and national levels.

Ensure collaboration of national working group with policymakers and responsible authorities at the national level.

Initiatives to reach the Armenia Development Strategy (ADS) targets related to the unemployment rate, poverty reduction, minimum salary and the average pension are in place although could be further enhanced. Slower-than-expected economic growth rates and patterns projected in the ADS have resulted, on the one hand, in a reduction in the rates of per capita income growth, and stagnation of unemployment, poverty and inequality on the other. Another consequence is the reduction in the fiscal space hindering greater investments for implementation of adequate social protection programmes aimed at poverty reduction and the elimination of hunger and malnutrition. Implementation gaps in framework policies at the national and sectoral levels, as well as labour market and territorial development policies addressed in the ADS, also obstruct increases in employment and reduction of instability in household incomes caused by the significant role of migrant remittances.

ADS implementation gaps in the social protection system affecting food security are related mainly to gaps in the achievement of targets associated with pensions and social assistance programs. While the ADS targeted an average pension increase to 125 percent of the upper poverty line in 2017, it reached only 97 percent in 2015 and the real value of the average pension did not change in 2016. Despite the fact that 75 percent of state social transfers (which already account for one-third of public expenditures) goes to the pension system, about 33 percent of pensioners were poor, and nearly 18 percent of them were food insecure in 2015.

The FLSEB also experiences implementation gaps related to its low level of coverage of the poor and extremely poor population, targeting of beneficiaries, even as it underwent an increase in its transparency-putting it under community and public control and simplifying procedures in order to enhance management and minimize corruption risks. These gaps could be filled through an increase in monitoring and evaluation activities as well as more efficient management of the system.

The School Feeding Program (SFP) can serve as an efficient instrument for improving health and nutrition of pre-primary and primary school children, assuming that the right diets are

Coordinate and manage the implementation and progress of policies related to food security and SDG2 on a sustainable basis.

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provided. In order for the programme to be fully sustainable, its financing should be taken over entirely by the state budget as planned. Enlargement of the program beyond pre-primary and primary school aged children in communities and regions that are more vulnerable to food insecurity is recommended, especially to enhance the nutrition-sensitivity of the programme. One policy option would be to fully embed the SFP into the social protection system. The Sustainable School Feeding Foundation and Training Centre have been established with the main objective of ensuring adequate coordination between central, regional and school levels. Both institutions will need father technical support in the near future.

The creation and effective functioning of inter-agency coordination mechanisms may be the most important institutional gap in most food security-related policies. To improve the programmes’ quality, regulations and public control, there is a need to foster synergies to maximise the impact of each individual programme or project as well as form a network of knowledge, skills and resources to include communities, private sector and farmer organizations. In order to fight malnutrition and hunger and root out its causes, a thoughtful, coordinated and legally binding combination of policy instruments and public awareness campaigns directed at the importance of healthy diets and lifestyles should be used.

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References

1 The Demographic Handbook of Armenia, NSS, 2016 2 1075 thousand as of January 1 2017, according to the NSS 3 Based on the human poverty concept. See: Social snapshot and Poverty in Armenia”, 2016, NSS 4 Social Snapshot and Poverty in Armenia, NSS, 2016. 5 The domestic food price volatility index measures the variability in the relative price of food in a

country. FAO Food Security Indicators, 2015; The State of Food Insecurity in the World, FAO, 2015.

6 A higher percentage means food prices are more volatile. 7 Statistical Yearbook of Armenia, 2016. NSS. 8 Social snapshot and poverty in Armenia, NSS, 2016. 9 With annual average growth rate of 8 percent. 10 Labour Market in Armenia, NSS, 2016 11 See the ADS, page 119-120. In 2010 the FLSB contributed to a decrease in the extreme poverty

rate by 3.5 percentage points, while in 2015 only 2.2 percentage points. 12 In 2015, the FLSEB covered nearly 42,500 children under the age of 5, of which nearly 22,000

were between three and five years of age. 13 Migration and Remittances Factbook 2016, WB. 14 2014 ILCS data, “Social Snapshot and Poverty”, NSS, 2015 15 Comprehensive Implementation Plan on Maternal, Infant and Young Child Nutrition, WHO, 2014. 16 Here the distribution of the child malnutrition indicators amongst the wealth quintiles in DHS-2015

is used for the analysis, taking into account that i) the ILCS-2014 did not provide these data, ii) previous DHS -2010 data are too old to use for SDG 2030 Agenda as a baseline, and iii) although there are problems with the indicators in DHS-2015 (probably caused by measurement errors), it can be assumed that the errors were equally scattered throughout the sample, and the distribution of the indicators by wealth quintiles reflects the real differences between them.

17 See: “Comprehensive Implementation Plan on Maternal, Infant and Young Child Nutrition”, WHO, 2014.

18 In current prices. 19 99.6% of plant growing and 93.6% of animal husbandry. 20 Main Findings Agricultural Census 2014 of the Republic of Armenia. NSS, 2016 21 Gender, Agriculture and Rural Development In Armenia. FAO, 2017 22 Main Findings Agricultural Census 2014 of the Republic of Armenia. NSS, 2016 23 Social Snapshot and Poverty in Armenia. NSS, 2016 24 Disaster Risk Management National Strategy of the Republic of Armenia. Approved on 6 April,

2017. 25 Armenia Agriculture and Rural Development Policy Note. WB, 2013.