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Agriculture in Armenia

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Through Agricultural land, Orchard and Privatization

Land privatization

In 1990, Armenia became the first Soviet republic to pass a land privatization law, and from that time Armenian farmland shifted into the private sector at a faster rate than in any other republic. However, the rapidity and disorganization of land reallocation led to disputes and dissatisfaction among the peasants receiving land. Especially problematic were allocation of water rights and distribution of basic materials and equipment. Related enterprises such as food processing and hothouse operations often remained in state hands, reducing the advantages of private landholding.

Swift and decisive privatization quickly eliminated the collective and state farms, which had dominated Armenian agriculture in the Soviet period. Already by 1992 privatization of the state and collective farms had put 63% of cultivated fields, 80% of orchards, and 91% of vineyards in the hands of family farmers. In 2006, family farmers were producing 98% of gross agricultural output, i.e., in 15 years Armenian agriculture transformed completely from the traditional Soviet model of large agricultural enterprises to the market-oriented model of individual or family farms.

The privatization program yielded an immediate 15% increase in gross agricultural output between 1990 and 1991. Agricultural growth continued unabated, and by 2006 gross agricultural output had increased by 75% compared with its level in 1990. This growth record has not been matched by any of the CIS countries, putting Armenia in a unique position of stellar agricultural performer in CIS. In 1993, the government ended restrictions on the transfer of private land, a step expected to increase substantially the average size (and hence the efficiency) of private plots. At the end of 1993, an estimated 300,000 small farms (one to five hectares) were operating. In that year, harvests were bountiful despite the high cost of input; only the disastrous state of Armenia's transportation infrastructure prevented relief of food shortages in urban centers.

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