Expert: Programs on provision of advisory services and subsidization of fertilizers and fuel are ineffective

ArmInfo. The governmental programs on provision of advisory services and subsidization of fertilizers and fuel are ineffective, Karine Harutyunyan, Representative of the Economic Development and Research Center (EDRC), said during the presentation of the findings of the survey of budget programs on December 21. The monitoring was conducted by Oxfam Armenia and the EDRC. 

She noted that these programs are ineffective in terms of both expenses and public involvement. In particular, Harutyunyan pointed out that the farmers can receive government-subsidized fertilizers at more affordable prices unless there are monopolies in this field.  "The fertilizer prices are artificially raised both after being imported from Georgia and after subsidization. There is a possibility to provide fertilizers to the farmers at prices, which are by 30-35% lower than the current ones," Harutyunyan said. She added that prices may be reduced if fertilizers are imported from Israel, not from Georgia.  "The required fertilizers can be replaced by the local ones at least partly, particularly, with the products of Vanadzor-Khimprom Chemical Plant. In addition, it is necessary to choose the supplier via a tender and to divide the whole volume of supplies into parts in order to prevent any possible monopolies and to allow various companies to take part in the tenders," Harutyunyan said. The expert pointed out that in 2015 64% of the farmers were the beneficiaries of the fertilizer subsidization program, with 15% being beneficiaries of the fuel subsidization program. In 2016, the former dropped by 10%, and the latter - by 4%. 

For her part, Margarita Hakobyan, Country Director at Oxfam Armenia, said that the program on advisory services for agriculture is ineffective, because it involves only 20% of beneficiaries. She thinks that provision of high-quality advisory services needs integrated solutions and a transition to advanced technologies.  "Probably, it is necessary to change the format, particularly, to transform the regional centers supporting the rural communities into a republican center and to authorize a rural administration employee to provide such services or to render the services online, which is more affordable," she stressed. 

Armenian Deputy Minister of Agriculture Ashot Harutyunyan, in turn, agreed with the opinion that there are some flaws in the program implementation process, however, he thinks they are generally effective. He also shares the view that it is necessary to apply new approaches and advanced technologies. "We have received the relevant instructions from the Minister and we are working to enhance the efficiency of the regional centers to support the rural communities," the deputy minister noted.     

Harutyunyan also said that there are some shortcomings in the program supporting farmers. He noted that the Minister has already instructed revision of subsidization mechanisms. "As regards the fertilizer supplies, they are carried out through a tender won by a company offering a lower price," he added. He noted that he campaigns for supplies of locally made fertilizers, which will be both more affordable and of better quality.

The budget of the program on advisory services for agriculture for 2016 is 397.3 mln AMD. Since 2008, the program funding has increased 2.8-fold or by an average of 13.9% per annum. According to the survey, only 20% of farm entities are aware of this program or have participated in it. Only 9.8% of the participants in the survey of farm entities made use of the advisory services. 46.6% have never used the skills or recommendations, because the provided information was useless.

The budget of the program on government support to land users for 2016 is 3.1 bln AMD or 23.1% of the funds allocated for agriculture and 0.2% of the budget. As much as 2.8 bln AMD has been allocated for subsidization of fertilizers, and 0.3 bln AMD for subsidization of fuel. The survey conducted by Oxfam and EDRC says that over the past three years 65.9% of the respondents took part in the given program, 64.3% acquired fertilizers, and 15.6% acquired fuel. 

To note, Oxfam is an independent charitable organization founded in Oxford, UK, in 1942. The organization covers more than 70 countries.  In Armenia the program was approved in March 1993 and supports the Armenian Government in implementation of national development priorities. The EDRC is an independent research institute based in Yerevan in 2001 to conduct independent surveys in social development.