ArmInfo.The Ministry of Economy of Armenia has finally found an effective way for agricultural producers not to use medieval methods of work. Thus, the Armenian government decided to subsidize only those loans to harvesting companies that, before June 1, will conclude agreements with farms for the purchase of grapes and other crops. Minister of Economy of Armenia Vahan Kerobyan stated this at the RA National Assembly.
According to him, this measure should help to significantly fix the problem that drags on from year to year, when procurement enterprises, for the sake of their own market conditions, conclude agreements on the spot during purchases and actually "fool" the farmers. Another problem is that purchasing companies are usually interested in concluding contracts half an hour before the purchase. This puts the farmers in a vulnerable position, in terms of predictability - they do not know whether the products will be purchased or not.
It is known that such agreements, which, according to the apt definition of the head of the Ministry of Economics, are just receipts, create significant problems in the market and, through manipulation, reduce prices, leaving the farmers without benefits. This bad practice has been around for years and stems from the fact that crop suppliers and buyers do not trust each other. Moreover, as a rule, harvesters blackmailed the government by not being able to buy crops at fair market prices, because they were short of resources and needed help. As a rule, they received funds, but the situation was not fundamentally corrected.
The Ministry of Economy has also developed indicative terms and conditions of procurement contracts and their indicativeforms in order to avoid possible problems in the procurement process. By the way, this idea with agreements was voiced several years ago in a question by an ArmInfo correspondent to former Minister of Economy, now Minister of Finance Tigran Khachatryan, who, being a strong monetarist, considered this interference in the market economy and restriction of freedoms, clearly confusing the market with the bazaar. Earlier, Kerobyan urged all purveyors to follow the example of the Yerevan Brandy Company (YBC), which has ten-year contracts with peasant farms and special incentive programs that give farmers confidence in the volumes and prices of purchases. By the way, ArmInfo's numerous requests to YBC, owned by the French Pernod Ricard company, to share its international experience and rich practice, unfortunately, remain unanswered.
