By Csaba Csaki
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Additional resources for Armenia: the challenge of reform in the agricultural sector
With the emergence of new private farms, the state enterprises have been unable to provide timely supplies of inputs and procurement of agricultural products. An incentive system providing the right motivation and financial resources for newly established private farms has yet to be created. Page 7 Chapter 2 Overall Strategy for Continuing Reforms in Food and Agriculture The ongoing reforms and future strategies for agriculture in Armenia suggest that the Government is fully committed to continuing reforms in the overall economy of the country, as well as in food and agriculture, and to completing the transition to a market system based on private ownership.
It cannot be overemphasized that world market food processing standards will only be attained in Armenia by the introduction of modem equipment and organization of processing facilities. The development of food processing in a way that is clearly linked to export strategy is an indispensable condition for competitiveness and the improvement of export efficiency. The improvements will also serve the demands of Armenians as they increasingly desire higher and more uniform quality processed food products.
Leaving monopolized structures in food processing, marketing, and input supply unchanged would undercut the reforms that have already been achieved and the potential contributions of privatized agriculture. Without completing the development of a market structure and the related legal and institutional framework, as well as adequate incentives and support services and infrastructure for private agriculture, the efficiency of agriculture will continue to remain low and the sector will not be able to fully achieve its role in the economic recovery of Armenia.