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ARMENIAN GOVERNMENT EXPANDS OPPORTUNITIES OF PILOT PROGRAM ON STATE SUBSIDIZATION OF AGRICULTURE
Noyan Tapan
June 5, 2009
YEREVAN, JUNE 5, NOYAN TAPAN. At the June 4 sitting, the Armenian
government took a decision to make changes in the government decision
of July 12, 2008 on state subsidization of the interest sums of
agricultural loans. RA Minister of Finance Tigran Davtian said
that the purpose of these changes is to expand the pilot program on
subsidization of interest sums of agrucultural loans in 60 communities
with scarce resources in Shirak and Gegharkunik marzes.
According to him, under the program, up to 10% of interest of
loans taken from commercial banks by economic entities engaged in
agricultural production of these communities is subsidized from the
state budget. The June 4 decision of Armenian government envisages
that the loans taken by entities engaged in agrucultural production
of the indicated communities will be subsidized under the credit
programs of the International Fund for Agricultural Development
(IFAD) and the Millennium Challenge Account-Armenia as well. Besides,
it is envisaged subsidizing the whole sum of interest on a loan if
an economic entity files a bid for loan for the first time. It means
receiving an interest-free loan.
Another change is related to the end of the program on state
subsidization of agricultural loans: it has been extended from July
to late 2009.
T. Davtian said that the above mentioned steps are part of the
anti-crisis measures taken by the Armenian government. In his words,
the pilot program attaches importance not to large-scale crediting
but to testing the state subsidization mechanisms under conditions
of the current market risks. He noted that as a result of the pilot
program's implementation, the amount of state budgetary allocations to
be provided in 2010 under a non-pilot program will be determined based
on the formed demand for state subsidization of agricultural loans.
The minister said that according to conditions of the World Trade
Organization, state subsidization of agricultural sector must not
exceed 5% of the gross agricultural output, whereas in Armenia the
sector's subsidization is much less than this index.
Noyan Tapan
June 5, 2009
YEREVAN, JUNE 5, NOYAN TAPAN. At the June 4 sitting, the Armenian
government took a decision to make changes in the government decision
of July 12, 2008 on state subsidization of the interest sums of
agricultural loans. RA Minister of Finance Tigran Davtian said
that the purpose of these changes is to expand the pilot program on
subsidization of interest sums of agrucultural loans in 60 communities
with scarce resources in Shirak and Gegharkunik marzes.
According to him, under the program, up to 10% of interest of
loans taken from commercial banks by economic entities engaged in
agricultural production of these communities is subsidized from the
state budget. The June 4 decision of Armenian government envisages
that the loans taken by entities engaged in agrucultural production
of the indicated communities will be subsidized under the credit
programs of the International Fund for Agricultural Development
(IFAD) and the Millennium Challenge Account-Armenia as well. Besides,
it is envisaged subsidizing the whole sum of interest on a loan if
an economic entity files a bid for loan for the first time. It means
receiving an interest-free loan.
Another change is related to the end of the program on state
subsidization of agricultural loans: it has been extended from July
to late 2009.
T. Davtian said that the above mentioned steps are part of the
anti-crisis measures taken by the Armenian government. In his words,
the pilot program attaches importance not to large-scale crediting
but to testing the state subsidization mechanisms under conditions
of the current market risks. He noted that as a result of the pilot
program's implementation, the amount of state budgetary allocations to
be provided in 2010 under a non-pilot program will be determined based
on the formed demand for state subsidization of agricultural loans.
The minister said that according to conditions of the World Trade
Organization, state subsidization of agricultural sector must not
exceed 5% of the gross agricultural output, whereas in Armenia the
sector's subsidization is much less than this index.