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Agriculture
Reflecting Nagorno Karabakh's unique climate and nutrient
rich soil, the local agriculture thrived through the 1980s. Its prosperity,
however, was adversely affected by the military activity of the 1990s.
With cessation of hostilities, this sector of economy is once again
ready to flourish. With ongoing improvements in agriculture and trade
policies, as well as financial support from Diaspora and foreign investors,
the sector can further develop and regain its past prosperity.
NKR's fertile lands allow for the harvesting of numerous
crops. Between 1998 and 2002, the primary culture grown were cereals,
vegetables, potatoes, melons and gourds, tobacco, fruit and grapes used
to make wine. Roman and garbanzo beans are also cultivated. Within the
category of cereals, fall-sown wheat is the most grown crop, making
up 80-85% of all cereals; barley, corn and oats follow.
The production of vegetables is primarily aimed at
meeting local consumption needs. Annual production currently averages
6-11 thousand tons, depending on seasonal conditions. Potato production
averaged 8-12 thousand tons per annum, but has increased to approximately
13,785 tons reflecting enacted government incentives.
Within NKR's agriculture sector, viticulture is the
largest. Its annual production between 1981 and 1985 averaged 145,651
tons of grapes. In 1984, more than 160,000 tons were produced. Unfortunately,
the war and severe spread of philoxera curtailed the number and size
of vineyards by several times, thus reducing grape production as well.
Now there are about 2500 acres of vineyards, which produce an average
of 3.25 thousand tons of grapes per year.
In an attempt to restore and expand on the past levels
of production (grapes in particular), the government has initiated a
credit programs to farmers in recent years. More specifically, a government
program appropriately entitled, "Grapes," was recently developed
with the intention of returning close to 12.4 thousand acres of arable
land to producers of grapes. However, an investment of $38 million is
required for this program to be fully realized.
In addition to "Grapes" and other governmental
efforts to boost the agricultural industry, the NKR tax code waives
all value-added tax (VAT) payments for food processing companies that
have a complete production cycle and use locally grown agricultural
materials.
Nagorno-Karabakh also enjoys favorable conditions
for cattle breeding, which has a long history in the Republic. The climate
is generally mild, with no long hot summers or cold winters. The territory
is rich with pastures, making up 55% of all agricultural lands, with
duration of 210 days. In the 1980s, 31,400 cow-heads were bred mainly
through artificial insemination. The average yield of milk per cow was
2,800 liters. However, as a result of the war, the number of cattle
has sharply declined, thoroughbred cows in particular, which decreased
by 50%. The decrease in the number of cattle was also accompanied by
a decline in the yield of milk. In 2002, the annual average milk yield
through lactation per cow was 1,200 liters.
The intensive development of livestock breeding and
fodder production will gradually reinvigorate this industry, which is
supported by a favorable climate and abundant pastures. The creation
of small farms along with investments into formerly productive cattle
breeding enterprises and poultry farms will also speed up the growth
process.
Great attention has also been paid to the development
of bee keeping, since Karabakh honey has long been famous for its high
quality. Recent experiments have shown that relatively small investments
in this field can bring significant profits.
Since 1995, NKR has also engaged in agricultural reforms.
Land has been provided to villagers, which opens many new opportunities
for the creation of farms. The development of an irrigation system,
which is expected to multiply the pre-war production levels, possesses
particular importance.
* * *
Agriculture remains the primary bases of Nagorno Karabakh's
economy. The agricultural produce grown in this region is ecologically
clean, which provides it with a competitive edge, and with more efficient
agricultural production the Republic could not only meet its own needs,
but also export part of its production abroad. However, today Nagorno
Karabakh imports 55-60% of all agricultural products.
As a result of the war, the agricultural infrastructure
was almost completely destroyed. In the years of fighting nearly 19,700
acres of agricultural lands (7,400 acres of cultivated land, about 3,700
acres of gardens, and 8,600 acres of pastures) were mined and are now
unusable. The irrigation system for 59,300 acres of agricultural lands,
including 25,000 acres of vineyards, was completely destroyed. Hydro-technical
facilities, water reservoirs, and pumping stations were disabled, which
made much of the agricultural lands unusable.
During the war, 1,643 agricultural facilities ($27
million) were destroyed as well as 789 pieces of agricultural machinery
($1.3 million) and 1,387 trucks and cars ($8.4 million) were looted.
Twenty-five percent of all cattle (159,400 heads - $7 million) has been
either stolen or slain and 81% ($67.5 million) of perennial plants have
been destroyed.
The irrigation system has also sustained serious damage:
about 22 miles of irrigation channels and seven pumping hydrostations
that irrigated over 47,000 acres of land were destroyed.
Suggested Programs and Estimated Cost:
Restoration of the irrigation infrastructure - $92 million;
Acquisition of farming machinery - $8 million;
Assistance to farmers and agricultural small businesses -- $ 10 million;
Construction of warehouse facilities - $1 million;
Food processing small business support -- $ 2 million;
Vineyard restoration (small scale) - $7 million.
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