Agricultural cooperatives

In the beginning of the 90ies of the XX century Armenia was the first country among the former Soviet republics that implemented mass privatization of agricultural assets including land, livestock, poultry and machinery. As a result, more than 340,000 private small size farms (1.5 ha per farm) with over 1.3 million land parcels had been created. However small and fragmented farms as well as application of mostly outdated and resource-extensive farming techniques and technologies was hindering efficient organisation of agricultural production. Old and dilapidated infrastructure, difficulties in marketing agricultural produce, lack of access to financial services, inadequate opportunities for skills enhancement and vocational training, and poor professional extension services played a drastic role in deepening rural poverty that in 2014 comprised 30% of the whole Armenia population.

Today the rural poor rely on markets that are informal, often monopolised and not intended to meet their basic needs. Given the mentioned factors Shen came up with new ideas and approaches to assist smallholder farmers to switch from mostly subsistence agriculture to cash crop production. Since 2010 Shen implements Making Markets Work for the Poor (M4P) innovative approach in its income generation projects. Essentially Shen facilitates smallholders to get better involved in the main profitable value chains that ultimately converts into higher incomes for them.

 

Furthermore, in 2013 Shen initiated new projects putting the main emphasis on income generation of rural households through community mobilization, particularly, organisation and development of agricultural cooperatives. It aims mobilizing community members to identify common agriculture problems and find consolidated solutions for the latter. As a first step, Shen promotes creation of simplest community based entities – consumer aka marketing (non for profit) cooperatives (see Berdavan Cooperative in Annual Report 2013).

 

Shen NGO promotes also development of conventional agriculture in those regions of Armenia where organic agriculture is not feasible yet putting special emphasis on cultivation of high value crops – fruits, vegetables and high value cereals. In this regard Shen conducted several value chains of which apricot is most promising one in many regions of Armenia. In many cases the production of such agriproduce complement more traditional low value crops produced in relatively big volumes in most of mountainous regions of the country thus bringing additional incomes to those households. These projects are implemented also in the communities mostly populated by refugees who have problems of economic integration. Our strategy is to support maximum number of beneficiaries through strengthening the operational value chains where we apply various facilitative approaches. Therefore, we try to promote activities that potentially result in substantial quality agricultural produce providing higher income for the entire community.

Since 1999, establishment of orchards on unused reserve lands was an important part of Shen's activity. The profits of the orchards are used for the needs of the local communities. After analyzing the outcomes achieved so far Shen decided to review the strategy of establishing new fruit orchards on idle lands. Particularly more favorable conditions had been created for fostering rural entrepreneurship, and Shen decided to support individual farmers who have determination but do not have enough means for planting orchards on poor lands. In the beneficiary communities where agriculture development potential is in place Shen supported farmers through ameliorating their barren and poor lands and rehabilitating irrigation systems. Thus all these efforts are being spent anticipating that gradually farmers will realize the benefit of cooperation in all stages of agricultural production and marketing.