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Engaged in Processing of Plant-Growing Products in Tavush Marz, August 2011

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Engaged in Processing of Plant-Growing Products in Tavush Marz, August 2011 AM Partners Consulting Company September 2011 STUDY FOR IDENTIFICATION OF ACTUAL CAPACITIES AND DEVELOPMENT OPPORTUNITIES OF ENTREPRENEURSHIP AND AGRICULTURAL FOOD PRODUCTION, PROCESSING AND EXPORT PROMOTION IN TAVUSH MARZ Ministry for Foreign Affairs of Finland United Nations Development Program AM Partners Consulting Company LLC Study for identification of actual capacities and development opportunities of entrepreneurship and agricultural food production, processing and export promotion in Tavush Marz // Content Content EXECUTIVE SUMMARY............................................................................................................................................. 4 1 FOREWORD ........................................................................................................................................ 7 1.1 OBJECTIVES OF THE STUDY............................................................................................................................. 7 1.2 METHODOLOGY OF THE STUDY ........................................................................................................................ 8 1.2.1 Sources of information ............................................................................................................................................. 8 1.2.2 Information collection tools ................................................................................................................................... 10 1.2.3 Deliverables............................................................................................................................................................. 10 2 CURRENT SITUATION AND DEVELOPMENT OPPORTUNITIES OF AGRICULTURE AND PROCECCING INDUSTRY ............................................................................................................................................. 11 2.1 TAVUSH MARZ. GENERAL SNAPSHOT ............................................................................................................ 11 2.2 GENERAL DESCRIPTION OF AGRICULTURE AND PROCESSING ......................................................................... 14 2.2.1 Historical Data ......................................................................................................................................................... 14 2.2.2 Development opportunities.................................................................................................................................... 15 2.2.3 Land cultivation ...................................................................................................................................................... 18 2.2.3.1 Status-quo and problems .................................................................................................................................... 18 2.2.3.2 Leading products ................................................................................................................................................ 22 2.2.4 Animal husbandry .................................................................................................................................................. 24 2.2.4.1 Current situation and problems ........................................................................................................................... 24 2.2.4.2 Leading products ................................................................................................................................................ 27 2.2.5 Processing of agricultural products...................................................................................................................... 28 2.2.5.1 Current situation and problems ........................................................................................................................... 28 2.2.5.2 Leading areas of agricultural products’ processing ............................................................................................. 30 2.3 PRODUCTION AND EXPORTS .......................................................................................................................... 31 2.3.1 Production and export potential ............................................................................................................................ 31 2.3.1.1 Primary agricultural production ........................................................................................................................... 31 2.3.1.2 Processed products ............................................................................................................................................ 33 2.3.2 Justification of production and export potential .................................................................................................. 34 2.3.2.1 Primary agricultural products .............................................................................................................................. 35 2.3.2.2 Processed products ............................................................................................................................................ 37 2.3.3 Factors hindering production/exports and opportunities for overcoming them ............................................... 38 2.3.4 Sales markets of potential products ..................................................................................................................... 48 2.3.5 Exports legislative framework ............................................................................................................................... 50 2.3.5.1 General information ............................................................................................................................................ 50 2.3.5.2 Influence of the availability of VAT threshold ....................................................................................................... 50 2.3.5.3 Influence of the exports’ exemption from VAT ..................................................................................................... 51 2.3.5.4 Influence of Free Economic Zones ..................................................................................................................... 52 2.3.5.5 Influence of tax hindrances and ways to overcome them .................................................................................... 53 2.3.5.6 Influence of customs hindrances and ways to overcome them ............................................................................ 55 3 SMES ACTIVITIES AND BUSINESS ENVIRONMENT ............................................................................... 57 3.1 DYNAMICS OF SMES ESTABLISHMENT AND CLOSURE .................................................................................... 57 3.2 ASSESSMENT OF THE MARZ BUSINESS ENVIRONMENT ................................................................................... 58 3.2.1 Conditions for the establishment of new businesses .......................................................................................... 58 3.2.2 Ways of overcoming the problems and support needs ....................................................................................... 59 3.2.2.1 Proposed ways for overcoming the problems ..................................................................................................... 59 1 Study for identification of actual capacities and development opportunities of entrepreneurship and agricultural food production, processing and export promotion in Tavush Marz // Content 3.2.2.2 Advisory support needs of start-up businesses ................................................................................................... 61 4 MONOPOL MARKETS INFLUENCE ON TAVUSH MARZ AGRICULTURE AND PROCESSING SECTORS .......... 63 4.1 INFLUENCE OF MONOPOLIES ON NATIONAL LEVEL ......................................................................................... 63 4.2 MONOPOLIES ON MARZ LEVEL ...................................................................................................................... 64 5 IMPLEMENTATION OF DEVELOPMENT PROGRAMS ............................................................................... 65 5.1 STATUS OF DEVELOPMENT PROGRAMS ......................................................................................................... 65 5.1.1 Awareness on implemented and current development programs ...................................................................... 65 5.1.2 Lessons learned and replication potential............................................................................................................ 66 6 MARKETING INFORMATION CENTER ................................................................................................... 68 6.1 AWARENESS ON EXISTING MARKETING INFORMATION CENTERS ..................................................................... 68 6.1.1 Status of existing entities ...................................................................................................................................... 68 6.1.2 Features of provided information .......................................................................................................................... 69 6.1.2.1 Types of information available and ways of provision .......................................................................................... 69 6.1.2.2 Assessment of available information ..................................................................................................................
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