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IFAD
in Armenia
IFAD has financed five programmes and projects in Armenia since 1995, investing a total of US$64.2 million. The organization’s experiences have shown that providing essential support for agricultural activities is effective in rapidly reducing poverty. All programmes and projects have focused on the development of local institutions. The Irrigation Rehabilitation Project, the first IFAD-funded operation in Armenia, included an innovative participatory approach to water management that promoted development of water users’ associations. Under the North-West Agricultural Service Project and later under the Agricultural Services Project, IFAD investments supported financial services for people in rural areas. The North-West Agricultural Service Project fostered development of key sectors such as crops and livestock and local irrigation systems, in particular by strengthening water users’ associations. The Agricultural Services Project invested in support for irrigation and seed development, and for local groups and associations. Through these projects the organization provided creative financing for the Agricultural Cooperative Bank of Armenia (ACBA), established by the Government of Armenia’s Ministry of Finance with support from the European Union. Based on village associations grouped in regional unions, the bank has attained profitability and sustainability and has expanded nationwide, becoming the only commercial bank in the country that is oriented towards the needs of rural people. The objective of the Rural Areas Development Programme is to stimulate sustained growth of rural enterprises by delivering an interrelated package of business development training and financing. Loans are organized through the innovative Rural Finance Facility, which has attracted financing from several major donors. IFAD’s strategy in ArmeniaThe key elements of IFAD’s strategy include broad-based poverty reduction through agricultural growth and a focus on the poorest rural areas in the country, mainly in the highlands and border areas. IFAD also builds and strengthens local institutions by involving grass-roots groups in implementing and managing activities, and by making them responsible and accountable for those activities. The strategy includes targeting poor groups that have not benefited from growth in the agricultural sector. IFAD investments support poor farm families so they can produce a surplus to be sold for additional income. Small- and medium-scale rural service providers such as traders, processors and suppliers also are targeted for support because of their important role as links between farmers and markets. Subsistence farmers continue to receive support, including small loans to improve their production. Because many farmers are increasingly showing interest in market opportunities, IFAD has shifted its focus from food security alone to include market-oriented agricultural production as well. New IFAD investments in Armenia favour effective responses to rapid changes in the business, financial and agricultural sectors as the country’s economy continues on the road to recovery. Investments have the objective of increasing production and productivity where the returns are highest, using private-sector development as the main engine for poverty reduction. IFAD loans support diversification of the non-farm rural economy, encouraging poor people to start up small and medium-size enterprises. The organization continues to direct resources towards improving the living conditions of rural poor people, mainly in mountain areas, and particularly those of women and other disadvantaged people. It supports the government’s efforts to expand business opportunities for women in rural areas.
Source: IFAD |
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