©FAO/Gagik Harutyunyan

Rapid assessment reveals the impact of pandemic on this dynamically growing industry.

The greenhouse industry has been an important contributor to the agriculture sector in Armenia and currently it is one of the most dynamically developing industries. And the increased demand for the country’s greenhouse products, including berries, vegetables and flowers offer promising export opportunities for farmers.

In early May, FAO in collaboration with the Department of Agriculture of the Armenian Ministry of Economy, conducted a rapid impact assessment on the COVID-19 pandemic’s impact on Armenia’s greenhouse industry. The assessment covered Ararat, Lori, Shirak and Tavush marzes.

About half the greenhouse owners surveyed are having issues with access to markets (both domestic and international), however only 9 percent considered the situation to be very serious. Hampered market accessibility arises from increased transportation costs, border bans, and declining consumption in both domestic and international markets.

Production volumes have not declined significantly, still more than half of the respondents registered a price decrease stemming from export restrictions and lower consumption. Despite the losses, 83 percent said that they could keep their permanent employees. An additional 13 percent had to lay off about 10 percent, while 4 percent even 20 to 30 percent of its permanent workers.

The survey results also suggest that while economic actors can still bear the challenges and problems emerging from the crisis, their situation is fragile, and they would need tangible help to stay afloat.

In 2018, the share of vegetables in the gross agricultural output was 12.4 percent or 628.2 thousand tonnes. More than 10 percent (68.2 thousand tonnes) were harvested from greenhouses.

According to the latest data of the Ministry of Economy, during the COVID-19 pandemic, no major fluctuations nor decline have been observed in the export volumes of fruits and vegetables from Armenia, yet the sector faced a number of challenges caused by the pandemic and global lockdown.

In Armenia, about 1 300 hectares of land are cultivated in greenhouses, out of which 177 hectares by using the latest technologies. About 90 percent of all greenhouses are located in Ararat, Armavir, and Kotayk marzes. 

To comply with export standards, the greenhouse sector needs to be modernized, particularly for new markets that emerged in addition to the Russian market. Moreover, limited labour market skills, poor infrastructure, and legal and regulatory obstacles are further limiting factors that hinder the sector from joining global supply chains. 

Therefore, over last few years the Government of the Republic of Armenia, in close cooperation with FAO and other international organizations, has been promoting the expansion of the greenhouse sector.  

RECOMMENDATIONS

According to the survey, the greenhouse industry representatives assure registering decline of sales, price decrease, logistic issues, etc. Thus, recommendations to help recover the industry include but are not limited, to the following:

• Provide technical assistance and training for better quality through adapting sustainable greenhouse production systems.
• Establish a flexible core working group with representatives of the producers and government, led by the Ministry of Economy for immediate response to transportation difficulties.
• Develop an umbrella brand for greenhouse products from Armenia for more effectiveness marketing and to create better standards for food producers.
• As Armenian export significantly depends on the Russian market, it is also exposed to the exchange rate, especially during crises. In addition to recommend export market diversification, the Central Bank could also consider the possibility of developing different financial hedging tools to mitigate the currency risk for food exporters.