Exports of tomatoes and cucumbers from Armenia have increased over the past few years.
According to statistics of Armenia’s Ministry of Agriculture (Food Safety Service), tomatoes and cucumbers are mainly sent to Russia, Georgia, Belarus and the Czech Republic.
According to the ministry, 1,178 tons of tomatoes and 4,029 tons of cucumbers were exported to these countries in 2015.
Armenia’s Ministry of Finance reports that in 2015, 124.6 tons of tomatoes and 218.7 tons of cucumbers were exported to Georgia in 2015. These amounts are much less than those provided by the agricultural ministry.
Deputy Minister of Agriculture Robert Makaryan told Hetq that the export increase of tomatoes and cucumbers in the current year is due to increased acreage of hothouses. He says that during the past two years, some 120 hectares of hothouses, using modern technology, have been put into operation, and that another 70 hectares are planned for this year.
The Ministry of Finance reports that 56 individuals exported tomatoes from Armenia in 2015. For cucumbers, there were 43 individual exporters and the company, Armyanski Urazhai. We couldn’t get the names of the individual exporters from the ministry. They’ve been working on it for the past two months.
According to the agricultural ministry, the main exporters of tomatoes and cucumbers are: Mavas Group, Mak-Agroexport, Spayka, Fresh Fruit, Madar-Mar, Alternative Energy, Foodarm and Progress Agro.
Hetq has already written about the importers of tomatoes and cucumbers to Armenia.
One of the large importers of tomatoes and cucumbers to Armenia is an outfit called Aknadzor Ltd. Founded in 2008, it’s wholly owned by Narek Sargsyan, the son of President Serzh Sargsyan’s brother Aleksandr.
It also turns out that Sargsyan also exports tomatoes and cucumbers.
The next largest exporter is Armyanski Urazhai Ltd., founded in 2014 by Aram and Abel Gharibyan. Aram is the chief advisor to Armenia’s president. He sold his shares in the company in 2015.
Markos and Ara Gharibyan, the sons of Aram’s uncle, now own 13% and 27% respectively. Abel owns 20% and the remaining 40% is owned by Aram’s close friend Armenak Sandoyan.
The government has looked favorably on the company ever since its founding.
On May 29, 2014, the government decided to postpone the payment of VAT by the company by three years for imported goods surpassing 200 million AMD. In essence, more than 730 million in taxes will be paid from the state budget for the next three years.
On November 5, 2015, the government passed another favorable decision regarding the company that will postpone by three years the payment of customs duties on the value of company imports from October 15, 2015 until January 31, 2016. This means that some 267.5 million AMD will be paid into the state budget three years late.
It should be noted that except for Abel Gharibyan, the other three shareholders of Armyanski Urazhai Ltd. have used their shares as collateral at AmeriaBank.
In other words, the company has huge financial debts which raises the risk factor of the company ever paying the taxes it owes the government.
Mom and pop hothouses, naturally, don’t get such favorable deals from the government. They face unfair competition from the big guys. The government isn’t even interested in supporting small hothouse operations.
During the winter, Armenia’s gas provider has no problem shutting off fuel supplies to hothouses with an unpaid utility bill.
The government’s response is standard. The gas company is a private concern and the government has no leverage over it.
In the meantime, the large importers and exporters, many with ties to the government, get special tax deals and undercut local growers by importing cheap Turkish agricultural products.