The 1996 grain harvest is officially put at 1.02 million tons, some 100 000 tons above 1995. Output of wheat increased from 625 000 tons to 767 000 tons in 1996. Actual production is thought to be somewhat higher than estimates, as farmers divert production on state farms for private use.
The early outlook indicates a further increase in wheat production in 1997. The area sown to wheat for harvest in 1997 has expanded in response to planned liberalization of bread prices and the privatization of the wheat and bread distribution chain. With more resources being put into wheat production, output could improve, in spite of shortages of agricultural credit, spare parts and inputs.
Official data indicate that offtake of flour from official distribution channels has fallen by half. This is attributed to price increases, de facto privatization in distribution as well as a reduction in waste and feed use of bread. Bread prices are to be completely liberalized in April 1997 whilst the grain and bread distribution chain is to be privatized in two stages this year. Following increased production and reflecting foreign exchange constraints, the 1996/97 cereal import requirement is estimated to fall to about 500 000 tons, mostly wheat. The bulk of this will have to be mobilized commercially. However, up to half of the intervention reserve of 100 000 tons to avoid disruption of supplies during the privatization of the State Bread Corporation may be provided as food aid.
At present, WFP assists 130 000 persons, mainly people displaced from Nagorno Karabakh, with supplementary food rations. The relief food pipeline is secured until late summer 1997 but, given a total requirement of 14 400 tons, WFP would need an additional 6 800 tons, valued approximately at US$ 4.1 million, to continue food distributions throughout 1997.