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Official News

Thursday, 23 May 2013

Prime Minister Tigran Sargsyan: Government To Extend Sizeable, Targeted Aid In Armavir Marz



Four of today’s Cabinet sitting’s agenda items related to relief action after the devastating hailstorm in Armavir Marz.

In particular, decisions were made to increase the number of hail stations, provide comprehensive assistance to disaster-affected communities. These issues were introduced by Prime Minister Tigran Sargsyan.

“Dear colleagues.

The issue of providing assistance to Armavir Marz is on the government’s agenda.

I suggest starting today’s meeting with agenda item 26 that I will report to you. Later yesterday I traveled to Armavir Marz, accompanied by the Deputy Prime Minister and the Minister of Agriculture, as well as by the President of the Central Bank. We tried to summarize the work done over the past ten days.

As a matter of fact, the hailstorm of May 12 was unprecedented with regrettable consequences for many households. 17 thousand hectares are affected, with 100% damage caused to the crop in 23 of 46 communities.

The problem is a threefold one: vineyards, orchards and truck farms. The vineyards will take three years to recover, the orchards – one or two years, while the truck farms are expected to recover more quickly.

The affected farms may have repayment problems with trade banks and other lending institutions, coupled with outstanding tax liabilities and water fees.

It is just where we should support and help our farmers. After in-depth discussions held with the local farmers and administrations, we propose the following measures.

The first question relates to the land tax. We agreed to proceed with the following principle: 22 hardest-hit communities with nearly 100% losses will be indemnified in full for land tax payments, as far as the remaining 24 communities are concerned, where we may face 20, 30 or 50% losses, we have agreed that community leaders should work with the farmers to make up the priority lists.

Should those communities prove to have suffered say 50% or 100% losses, they will be indemnified to the extent of 50% and 100%, respectively, which can take the total amount of support to nearly AMD200 million.

The second problem has to do with the water bills where we face a much larger sum - AMD530 million.

The agreement is as follows: those farms with 100% loss from said 22 communities will be given full compensation immediately. The same principle will be applied to the other 24 communities, with a 50% co-financing available in case of a 50% loss. Note that the lists will be drafted by the communities themselves and the whole process will be put on record so that people could make sure that those having suffered are the ones to get support. Instead, there are such landowners who do not develop their land or live outside the country. It goes without saying that they will not be exempted from property or land tax.

The third issue raised by the farmers is that they need to be safeguarded against future hailstorms. We have already held an expert counsel and the findings will be summarized within a week’s time.

We have come to the following conclusion. It is clear that the hail stations cannot provide a 100% guarantee, especially in instances like this, but they may be 60% effective against hailstorms of medium intensity. This was also testified by the farmers and community heads.

If we are to ensure effective risk management, we should build a second protective layer consisting of some 50 hail stations in Armavir Marz, each with a cost of around AMD6.2 - 6.3mn. We are planning to disburse 350 million drams which is the estimated cost of said 50 hail stations. In addition, we will have to finance the building of an integrated anti-hail radar network.

At the same time, during yesterday’s consultation we agreed that those communities having their own hail stations should join the network, considering that two protective layers might provide higher security against hailstorms if managed from a single headquarter. For this very reason we have envisaged a separate item for the purchase of 50 hail stations.

The fourth issue relates to the interest rates of trade banks, as well as the deadlines for repayment. Mr. Javadyan gave detailed explanations and answered all the questions. It has been agreed that individual work is to be carried out with the affected farmers, because we deal with different loan amounts, maturities and collaterals. Therefore, the assistance will be structured based on the outcome of individual talks.

Our decision incorporates a clause concerning the government. Namely, we have promised that the loans denominated in foreign currency would be converted into dram loans. To this end, the Central Bank will be provided with dram-denominated resources available on our CBA accounts. Either this has been included in our program.

At the same time, I would like to inform you that the MPs from Armavir Marz have moved that a relief fund be set up for private contributions to help the most vulnerable households.

In turn, we promised that the government would give part of their personal income to the fund. Besides, we will call on our colleagues and such citizens as are able to help the affected farmers to make allocations to the fund.

You may know that the Speaker of the National Assembly, as well as a number of MPs have already made contributions to the fund, and we, too, are going to take a share in this campaign.

When in Armavir Marz, we were joined by Minister of Labor and Social Affairs Artem Asatryan, because it was also question of welfare assistance, as there were families whose position worsened dramatically after the disaster, placing them in need of financial support. This means that if those families meet the criteria specified in the legislation, they should be eligible for welfare assistance in accordance with the rules laid down by law.

Insurance was the next issue discussed. We discussed it with the community heads and the farmers. It was found inexpedient to make efforts in this direction, because the insurance scheme implies that they must take responsibility to make insurance payments every month, while they cannot do so. The insurance system is an expensive one and can only be effective if applied nationwide in agriculture. So, it is a question of time.

Dear colleagues, these are the main points included in the government’s support program for Armavir Marz.

I suggest approving it and instructing the Minister of Finance to work with the relevant ministries, the Ministry of Agriculture and the Central Bank in order to make the figures and the wording more accurate.”

 

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