State-Supported Programs in the Agricultural Sector: Part 1
In 2020, agriculture in Armenia contributed around 11.99 % of the country’s GDP. The agricultural sector employed around 24% of the total workforce. An even higher share is expected in 2021.
Armenia has introduced many state-supported programs in the past few years to boost agriculture in the country.
As a result, foreign investors can set up legal entities in Armenia and become eligible for one of the state-supported programs listed below.
Subsidizing the interest rates on loans provided to the agricultural sector
The goal of this program is to contribute to the expansion of the economic capacity of business entities, the introduction of modern technologies, and the increase of agricultural efficiency in the agri-food sector of Armenia.
The subsidized loans are provided at a 0% annual interest rate. The loan amount differs based on the specific sector of activity (3-30 million AMD for the development of sheep and goat breeding and establishment of a traditional garden, and 3-50 million AMD for the development of cattle breeding). The loan repayment period also varies (between 3-7 years) based on the sector.
Development of cattle breeding in Armenia for 2019-2024
Within the program framework, beneficiaries can purchase highly productive pedigree bovine animals through subsidized loans available at a 0% annual interest rate, for a period of up to 5 years of loan repayment, and up to 1 year with preferential terms.
The maximum loan amount per beneficiary is set at 300 million AMD.
Construction or reconstruction of small and medium “smart” cattle houses and state assistance for their technology provision
This program aims to improve the conditions of animal management and increase the productivity indicators of animals.
Within the framework of the program, beneficiaries will be reimbursed by the state for expenses incurred for the construction or reconstruction of “smart” cattle houses.
There are 3 models available based on the size of the cattle house. The compensation by the state is in the range of 5.5 million AMD up to 17.5 million AMD depending on the specific model.
Co-financing the introduction of modern irrigation systems
The program is designed to promote the introduction of efficient irrigation methods in agricultural lands in Armenia.
As a result, the assistance is provided either through partial subsidy of the loan interest rates or partial compensation of the costs incurred.
The loans are provided at a 0% interest rate, up to 3 years of the repayment term, and up to 6 months with preferential terms. The maximum loan amount is up to 150 million AMD.
The second option reimburses 16% of the costs incurred.
Subsidizing the interest rates on loans provided for the introduction of hail protection nets
The goal of the project is to mitigate the risks of losses in the agricultural sector.
The maximum amount of money provided is 85 million AMD for intensive fruit gardens and 36 million AMD for vineyards (intended for installation of a hail protection nets system on an area of 10 hectares).
The loan is provided at a 0% interest rate, for 7 years of the repayment term and 1 year with preferential terms.
State assistance for the establishment of vineyards, intensive fruit gardens, and berry orchards cultivated with modern technologies
The program aims to promote the development of fruit growing and viticulture, the increase of volumes of grape, fruit, and berry production, and the replacement of imported fruits and berries.
There are 2 options available:
- Subsidize the interest rate on loans for the establishment of gardens and costs for the first year of care (0% interest rate, 8 years of repayment term, 5 years with preferential terms). The maximum loan amount is up to 2.5 billion AMD;
- Reimburse 50% of the capital costs incurred by beneficiaries for establishing gardens excluding the costs for the first year of care.
The compensation is provided for vineyards, intensive fruit gardens, and berry orchards. For further details, click here.
Subsidizing the interest rates on loans provided to the agricultural processing sector for the acquisition of agricultural raw materials
This program was designed to increase the level of accessibility to loan borrowing.
It includes 4 acquisition schemes:
- fruits and vegetables,
- grapes,
- milk,
- farm animals by slaughterhouses.
Further details are available here.
In case you missed it, on the 10th of June Kingsmen CEO Angelo Hani gave an interview, during which he presented the benefits of investing in the agricultural sector of Armenia and shared an interesting insight into the specifics of walnut farming.
In case you are interested in investing in the agricultural sector of Armenia, you should check out our investment opportunities here or give us a call at (+374) 95 110 301. We are ready to address all your concerns and guide you through your investment journey in Armenia. High return on investment guaranteed!