The Changing Face of Agriculture

There are about 320,000 farms in Armenia, a number that has remained roughly steady over the past decade. Given a population of about 3 million, this is quite sizable and reflects the privatization policy of the early 1990s whereby farms were distributed to the workers and members of the various state cooperatives and collective farms.

The agricultural sector has made significant gains in output over the past decade, virtually in all sub sectors (see here). Grain output as well as that of fruits, vegetables, and eggs grew by over 50 percent between 1995 and 2005. A similar pattern is also observed for available poultry and pigs. Notwithstanding the advances made, the agricultural sector is undergoing serious changes in organizational (or rather ownership) structure.

Local businesses have been making steady inroads into this sector, as suggested by the statistics reported in the various publications of Armstat. For the most part, these commercial enterprises account for less than 5 percent of the output. But they do account for 12 percent of the potato and 20 percent of the grain output. In the case of poultry, however, they account for about 40 percent of the 5 million chicken available to be brought to market. Similarly, they account for about 45 percent of the eggs produced.

The share of Commercial Organizations in Poultry Output


Undoubtedly the commercialization of the agriculture sector has great benefits. [Not sure how many commercial entities are engaged in this sector, but I assume ownership is highly concentrated.] It is potentially more efficient and cost effective to cultivate the land by commercial entities than by the farmers and villagers each with their own small plots. But is there a risk that the latter will be (are already) displaced, thereby exacerbating rural poverty? Are the commercial entities truly more productive? Is anyone writing on the subject?

[March 10: Graph is replaced -- it disappeared again]