GOVERNMENT OF THE REPUBLIC OF ARMENIA

DECSION

No 927-L of 3 June 2021

(Title amended by No 1194-L of 22 July 2021)

Based on part 4 of Article 146 of the Constitution of the Republic of Armenia, part 4 of Article 28 and part 1 of Article 37 of the Law of the Republic of Armenia “On regulatory legal acts”, the Government of the Republic of Armenia decides:

1. To approve 2021-2023 Programme of State Support for Developing Intensive Horticulture, Introducing Modern Technologies, Promoting Production of Non-Traditional High-Value Crops in the Republic of Armenia, in accordance with the Annex.

(Point 1 amended by No 1194-L of 22 July 2021)

2. To repeal the Decision of the Government of the Republic of Armenia “On state support programme for establishing vineyards, modern technology-based intensive orchards and berry plantations in the Republic of Armenia” No 361-L of 29 March 2019, the Decision of the Government of the Republic of Armenia “On approving the programme of co-financing the introduction of modern irrigation systems” No 212-L of 7 March 2019 and the Decision of the Government of the Republic of Armenia “On approving the programme of subsidising interest rates of loans provided for installation of anti-hail nets in agriculture of the Republic of Armenia” N 362-L of 4 April 2019”.

3. This Decision shall enter into force from 1 August 2021, except for point 2 of the Decision, which shall enter into force from 1 January 2022.

(Point 3 edited by No 1194-L of 22 July 2021)

Acting Deputy Prime Minister of the Republic of Armenia	T. Avinyan
Yerevan

8 June 2021 CERTIFIED BY ELECTRONIC SIGNATURE

Annex to the decision of the Government  of the Republic of Armenia N 927-L of 3 June 2021

1. PROGRAMME DESCRIPTION

1. The implementation of 2021-2023 Programme of State Support for Developing Intensive Horticulture, Introducing Modern Technologies, Promoting Production of Non-Traditional High-Value Crops in the Republic of Armenia (hereinafter referred to as “ the Programme”) shall be conditioned by the necessity to expand areas of orchards and to increase the volume of the products produced, non-traditional high-value agriculture products produced in the Republic, to improve the quality of the product produced and the competitive position in the external market, to intensify the sector, to effectively use land and water resources, to prevent the damages caused by nature and climatic disasters.

(Point 1 amended by No 1194-L of 22 July 2021)

2. The main goal of the Programme shall — by means of state support to establishment of modern technology-based vineyards (cultivated only with technical wine grape varieties), intensive orchards and berry plantations, cultivating non-traditional high-value crops, as well as introducing modern irrigation systems and installing anti-hail nets — be as follows:

(1) to promote the establishment of modern orchards with high crop yield and development and increase of the productivity of fruit farming and wine growing;

(2) to increase the production and export volumes of competitive grapes, fruits and berries;

(3) to promote production of non-traditional crops ensuring high-value;

(4) to reduce the risks conditioned with hail and other natural and climatic factors;

(5) to contribute to rational and efficient use of water resources;

(6) to mitigate the climate change consequences and to contribute to the increase in the level of adaptability;

(7) to contribute to the increase in the revenues of the economic entities in the sector of agriculture.

(Point 2 supplemented by No 1260-L of 11 August 2022)

3. The Programme shall be expected to be implemented in 2021-2023 and shall cover the whole territory of the Republic of Armenia.

(Point 3 amended by No 1194-L of 22 July 2021)

4. The Programme shall envisage to promote the establishment of about 500 hectares vineyards, intensive orchards and berry plantations, construction and expansion of modern irrigation systems and (or) water basins on the area of about 360 hectares / expansion of the existing water basins (the construction or expansion of water basin is considered for irrigation of each 1 hectare area), the installation of anti-hail nets on the area of 130 hectares per year, as well as the cultivation of non-traditional high-value crops of about 50 hectares in 2022 and about 100 hectares in 2023.

(Point 4 amended and supplemented by No 104-L of 27 January 2022)

5. The Programme shall be implemented with two components: through partial subsidisation of loan interests and partial compensation of costs.

6. Participants of the Programme shall be as follows:

(1) natural and legal persons, communities (the communities only in case of construction or expansion of the water basins not included in the scope of subvention programme), individual entrepreneurs (hereinafter referred to as “the beneficiary”);

(2) commercial banks or credit organisations (hereinafter referred to as “the financial institutions”), meeting the requirements of the Programme and providing loans to the beneficiaries in accordance with the conditions of this Programme;

(3) The Ministry of Economy of the Republic of Armenia (hereinafter referred to as “the Ministry”);

(4) Rural financial institution of “Rural Areas Economic Development Programmes Implementation Unit” State Agency of the Ministry (hereinafter referred to as “RFI”).

(Point 6 supplemented by No 104-L of 27 January 2022)

7. Beneficiaries may not use other state support programmes implemented in the sector of agriculture for carrying out the same works on the same land plot within the scope of the Programme.

8. Each beneficiary may use only one component of the state support referred to in point 5 for the purpose of carrying out the same works on the same land plot.

9. For each beneficiary:

(1) the total area of the established orchards may not exceed 200 hectares in case of partial subsidisation of the loan interest rates, and 10 hectares — in case of partial compensation of the costs;

(2) the total cultivated area of non-traditional crops may not exceed 30 hectares in case of partial subsidisation of the loan interests;

(3) where modern irrigation systems are introduced without establishment of orchards, the total area shall not exceed 100 hectares in case of partial subsidisation of the loan interests (also for construction or expansion of water basins) and 10 hectares — in case of partial compensation of costs (only for introducing modern irrigation systems);

(4) where anti-hail nets are installed without establishment of orchards, the total area may not exceed 100 hectares in case of partial subsidisation of the loan interests.

(Point 9 amended by No 104-L of 27 January 2022)

10. It shall not be envisaged to purchase agricultural machinery and self-propelled vehicles for the purpose of establishing orchards, cultivation of crops and further care thereof, as well as to make payments for the consulting services referred to in point 11 through the state support provided within the framework of the Programme.

With the purpose of establishing orchard within the framework of the Programme, acquisition of land with the area of establishment of orchard shall be allowed only under the loan component, if the maximum thresholds of the costs estimated in point 16 of the Programme are not exceeded.

(Point 10 amended and supplemented by No 104-L of 27 January 2022; No 1260-L of 11 August 2022)

10.1. In case of establishing orchard within the framework of the Programme it shall be allowed to carry out deep well construction works for the purpose of using underground waters in accordance with the costs estimated for the water basin under the Programme, if the maximum thresholds of the costs estimated in points 16 and sub-point 13 of point 24 of the Programme are not exceeded. Moreover, construction or expansion of a water basin or construction of deep wells shall be allowed per the same 1 hectare.

(Point 10.1 supplemented by No 1260-L of 11 August 2022)

10.2. With the purpose of establishing orchard within the framework of the Programme, construction or expansion of a common water basin jointly with other beneficiaries or other economic entities shall be allowed only under the component of partial compensation of costs, where the compensation of costs to the beneficiary is made based on the area of the established orchard.

(Point 10.2 supplemented by No 1260-L of 11 August 2022)

11. The contract concluded between the beneficiary and the consulting service provider and submitted to the Ministry and (or) the financial institution for the period of establishment of the orchard and the following three years shall be considered as a prerequisite for participation in the Programme component of establishing orchard. Moreover, the person providing consultancy must have higher education in agronomy and work experience in relevant field or international or other documents certifying the right to engage in the given type of activity. Where the contract referred to in this point is rescinded, the beneficiary shall, within 10 working days, conclude a contract with another consulting service provider which shall be submitted to the Ministry and (or) the financial institution within 5 working days following the entry into force thereof.

12. Under the Programme, the beneficiary shall be obliged to:

(1) carry out the establishment of orchard with the quantity of the nursery plants not less than the minimum quantity of nursery plants per 1 hectare indicated in Table No 1;

(2) carry out establishment of orchard with the nursery plants of the types grafted on bushy rootstock (dwarf and semi-dwarf, weak wooded) (this requirement is not binding in case of vineyards);

(3) in case of establishment of orchard (except for establishment of biodynamic vineyard) and (or) introduction of modern irrigation systems and (or) construction or expansion of water basins, ensure access to water resources and mandatorily introduce modern irrigation systems (installing anti-hail nets, constructing and expanding deep well) in the orchards (except for biodynamic vineyard);

(4) complete the establishment of orchards within maximum 2 years following the entry into force of the loan contract or compensation contract. Moreover, the planting of orchards in spring must be carried out before 1 June and in autumn — before 1 December;

(5) complete the cultivation of non-traditional crops within maximum 1 year after the loan contract enters into force (in case of asparagus — complete the major works within maximum 2 years);

(6) complete the introduction of modern irrigation systems and (or) construction or expansion of water basins and (or) installation of anti-hail net within maximum 1 year after the loan contract or compensation contract enters into force;

(7) keep a register for three years after establishing the orchard (template of the register shall be developed by the Ministry and, within 1 month following the approval of the Programme, shall be published on the website of the Ministry), where information on the works proposed by the consultant and implemented by the beneficiary shall be recorded;

(8) carry out establishment of vineyards only with technical wine grape varieties and priorly reach agreement on the varieties with the Ministry.

(Point 12 amended by No 104-L of 27 January 2022, supplemented by No 1260-L of 11 August 2022)

13. The following options of state support shall be applied upon the discretion of the Programme beneficiary:

(1) subsidisation of loan interests provided for the purpose of establishing orchards (including the maintenance costs for the first year) of 0.5 (for each type of fruit crop)-200 hectares;

(2) subsidisation of loan interests provided for the purpose of introduction of modern irrigation systems for an area of 0.5-100 hectares and (or) construction or expansion of water basins and (or) for installation of anti-hail nets for 0.5-100 hectares;

(3) subsidisation of loan interests provided for the purpose of cultivation of 1.0-30 hectares asparagus, leek, rocket, Brussels sprouts and napa cabbage, kohlrabi, kale, zucchini (yellow or dark green) and squash, sweet corn;

(4) partial compensation of costs incurred for establishing orchards for 0.5 (for each type of fruit crop)-10 hectares and those incurred for introduction of modern irrigation systems (in case of establishment of orchard without the maintenance costs for the first year) for 0.5-10 hectares.

(Point 13 amended by No 104-L of 27 January 2022)

14. The risk of the costs incurred by the beneficiary within the Programme shall be born by the beneficiary.

15. The Programme may be implemented both through a contractor and without it. The amount of the loan provided or the amount compensated shall not be subject to changes depending on co-operation with the latter.

16. The maximum limit on the total estimated costs for establishing orchard of 1 hectare, including the costs for introduction of modern irrigation systems (in case of introducing systems other than the drip irrigation system, the costs shall be estimated not more than the maximum limit on the costs for introduction of drip irrigation system) and (or) installation of anti-hail nets and (or) construction or expansion of water basin, maintenance costs for the first year, shall be as follows (the calculations are illustrated in Tables No 2, 3, 4 and 5):

(1) intensive orchard: spermaphyte, drupaceous, dry subtropical — AMD 30.3 million, with anti-hail nets — AMD 40.5 million;

(2) intensive orchard: nuts — AMD 12.6 million, with anti-hail nets — AMD 24.7 million;

(3) vineyard — AMD 18.5 million, with anti-hail net — AMD 21.3 million (in case of table grapes — AMD 27.9 million);

(4) berry plantation — AMD 19.3 million, with anti-hail nets — AMD 29.4 million.

(Point 16 amended by No 104-L of 27 January 2022)

16.1. When establishing orchards, costs for installation of drip irrigation system (including pump stations), installation of anti-hail system and construction and expansion of water basin, as well as costs for deep wells established by point 10.1 may not exceed the costs estimated in Tables Nօ 2, 3, 4 and 5.

(Point 16.1 supplemented by No 1260-L of 11 August 2022)

17. When establishing orchards without construction of a water basin, the costs for construction and expansion of water basin calculated in Tables No 2, 3, 4 and 5 shall be deducted from the total costs. When establishing a biodynamic vineyard, the costs for construction or expansion of water basin, installation of drip irrigation system (including the pump station) and the water fees, calculated in Table 4, shall be deducted from the total costs.

(Point 17 amended by No 104-L of 27 January 2022, supplemented by No 1260-L of 11 August 2022)

18. The maximum limit, per each beneficiary, for total costs for introducing an anti-hail net of 1 hectare without establishing orchards, shall be AMD 12.1 million (the calculations are presented in Table No 6).

19. The maximum limit, per each beneficiary, for total costs for introducing a modern irrigation system of 1 hectare without establishing orchards in case of a drip irrigation system shall be AMD 2.5 million, in case of a sprinkler irrigation system — AMD 2.6 million (the calculations are presented in Tables No 7 and 8), in case of construction and expansion of water basins — AMD 2.0 (as per irrigation of 1 hectare).

(Point 19 amended by No 104-L of 27/ January 2022)

20. The maximum limit for the total costs established for cultivation of non-traditional high-value crops of 1 hectare shall be as follows (the calculations are presented in Tables No 9, 10, 11, 12, 13, 14, 15, 16 and 17):

(1) asparagus — AMD 7.2 million,

(2) leek — AMD 3.9 million,

(3) rocket — AMD 3.8 million,

(4) Brussels sprout — AMD 4.3 million,

(5) napa cabbage — AMD 4.2 million,

(6) kohlrabi —AMD 4.8 million,

(7) kale — AMD 4.5 million,

(8) zucchini and squash — AMD 2.9 million,

(9) sweet corn — AMD 2.2 million.

21. Apart from non-traditional high-value crops referred to in sub-point 3 of point 13, the beneficiary may, upon the assignment of the Ministry, cultivate also other non-traditional high-value crops, where the maximum limit for total costs for 1 hectare shall be estimated AMD 4.2 million.

21.1. The costs included in separate lines of Tables No 2 and No 17 in the Programme shall be estimated costs and shall have an indicative nature.

(Point 21.1 supplemented by No 1260-L of 11 August 2022)

22. For the purpose of establishing orchard, the beneficiary shall submit to the financial institution (before receiving the loan) and to the Ministry the carbon copy (issued maximum 6 months before) of the conclusion of the laboratory expertise of the agrochemical composition of the land, in case of establishing a biodynamic vineyard — the description of cultivation measures, as well as information approved by the head of the community (administrative district) on the crops cultivated in the given area during the previous three years. Where necessary, the Ministry shall provide consultancy to the financial institution with regard to the submitted documents.

(Point 22 amended by No 104-L of 27 January 2022, supplemented by No 1260-L of 11 August 2022)

23. The procedure for partial subsidisation of loan interests provided within the framework of the Programme shall be as follows:

(1) with a view of participating in the Programme, the beneficiaries shall, prior to starting the implementation of works, apply to the financial institutions participating in the Programme to check the sufficient level of creditworthiness;

(2) where the creditworthiness requirements of the financial institution are met, in order to receive a loan the beneficiaries shall submit the following:

a. carbon copy of the personal identification document,

b. carbon copy (s) of the certificate of state registration of the right over immovable property. Where the registered right appears to be common joint ownership or lease (use), the notary-certified consent of the owner or co-owner (s) of immovable property to participate in the Programme shall be submitted (where new immovable property is acquired within the framework of the Programme, the required documents shall be submitted within a period of two month following the entry into force of the loan contract), moreover, in case of establishing orchard, the lease (use) period for immovable property shall not be less than 20 years starting from the day of submission of the application, in case of introduction of a modern irrigation system — not less than 4 years, in case of anti-hail nets — not less than 7 years and in case of non-traditional high-value crops — not less than up to 2 years,

c. in case of establishing orchard, the documents prescribed by points 11 and 22 of the Programme, the estimates of the costs to be incurred in accordance with the works specified in Tables No 2, 3, 4 and 5 shall be submitted as well (other works shall not be subject to financing, except for the works on construction of deep wells, in case of implementation whereof the estimates of the costs to be incurred and the water use permit issued by the water resources management and maintenance body (in the cases prescribed by legislation of the Republic of Armenia) shall be submitted,

d. in case of cultivating non-tradition high-value crops, the estimate for the costs being incurred shall be submitted;

(3) the beneficiary shall, following the completion of works for establishing orchard, submit to the financial institution the following:

a. a document (certificate) certifying the origin and the quality of planting material (in case of pistachio — the planting material or the seed) acquired from a foreign country or that of local production (after introduction of planting material certification system in the Republic),

b. phytosanitary quarantine control (surveillance) act for the planting material acquired from foreign country,

c. documents certifying the import of the planting material, and in case of local production (prior to introduction of a planting material certification system in the Republic) — a plant passport (issued prior to establishing the orchard),

d. documents justifying the costs on works of establishing orchard;

(4) following the completion of works of installation of anti-hail nets and introduction of modern irrigation systems, as well as construction and expansion of water basins, the beneficiary shall submit to the financial institution documents justifying the costs on acquisition and installation of anti-hail nets and modern irrigation systems, as construction or expansion of water basins;

(5) the beneficiary shall, following the completion of cultivation of non-traditional high-quality crops, submit to the financial institution the following:

a. a document (certificate) certifying the origin and the quality of the seedling or the seed and (or) the box and (or) the label, in case of local seeds — a document (certificate) certifying the origin and the quality thereof,

b. phytosanitary quarantine control (surveillance) act for seedling acquired from foreign country,

c. documents certifying the import of the seedling or the seed, and in case of local production — the plant passport,

d. documents justifying the costs on cultivation works;

(6) the intended amount of loan provided to the beneficiary shall be transferred to the account thereof in a non-cash form, one-time or in phases;

(7) the amount of loan provided to the Programme beneficiary shall be calculated based on the area to be introduced within the framework of the maximum limits for 1 hectare area specified in points 16, 18, 19 and 20, taking into consideration — in case of establishing orchard — the provisions of points 10.1, 16.1 and 17 of the Programme, and in case of non-traditional high-value crops — the provision of point 21 of the Programme. Within the framework of the Programme, the loan shall be provided for the works to be performed after commencement by the beneficiary of the process prescribed by this Programme (entry into force of the loan contract);

(8) in case of establishing orchard, the amount of loan estimated by the financial institution per 1 hectare may be increased for not more than 10% of the maximum costs per 1 hectare estimated by the Programme (product price, number of nursery plants, foreign currency fluctuations, etc.);

(9) where the beneficiary has, at his or her own will, been credited for establishing orchard without an anti-hail net, he or she may, within one year following the entry into force of the contract concluded between the beneficiary and the financial institution, apply to the financial institution in order to obtain additional loans aimed at installation of anti-hail net.

The additional loan for installation of anti-hail nets shall be provided by the financial institution within the framework of the contract concluded between the beneficiary and the financial institution, within the framework of limits prescribed by points 16 and 17 of the Programme, by means of recalculation of the amount of loan. The conditions of loan provision, prescribed by the contract concluded between the beneficiary and the financial institution, shall not be subject to changes;

(10) the loans shall be provided to the Programme beneficiaries, expressed in Armenian Drams, maximum with 14% actual interest rate;

(11) subsidisation of interest rates of the loan shall be carried out in an amount so that the loan is provided to beneficiaries for introduction of modern irrigation systems without establishing orchards — with 5% interest rate, or for construction or expansion of water basins — with 2% interest rate, and to economic entities of borderline communities, farming cooperatives, citizens having become disabled as a result of combat duty or operations during the performance of military service duties, young people engaged in economic activities in the sector of agriculture (natural persons under 18-35 (at the time the loan contract entered into force)), as well as to those investing in land areas with excessive water demand — with 0% interest rate, in case of establishing orchards and (or) introducing modern irrigation systems (the list of communities having lands with excessive water demand is included in the manual “The norms and regimes of irrigation of agricultural crops in irrigable lands of the Republic of Armenia” approved by the Joint Order of the Minister of Territorial Development and Infrastructure of the Republic of Armenia No 18-A of 2 April 2007 and the Minister of Agriculture of the Republic of Armenia No 77-A of 2 April 2007) — included in the list approved by the Decision of the Government of the Republic of Armenia No 1444-N of 18 December 2014 receiving state support;

(11.1) Programme subsidisation shall start on 1 January 2022 in accordance with conditions of sub-point 11 of this point. In case of applying for the Programme in 2021, the loan interest rate for the period of up to 1 January 2022 shall be paid by the beneficiary;

(12) no fees for other services related to the loan shall be envisaged by financial institutions;

(13) the loan repayment periods shall be as follows:

a. in case of establishing orchards — 8 years, with grace period of the principal amount — 5 years,

b. in case of installing anti-hail nets without establishing orchards — 7 years, with grace period of the principal amount — 3 years,

c. in case of introducing modern irrigation systems without establishing orchard (drip or sprinkler irrigation system), as well as constructing or expanding water basins — 4 years, with grace period of the principal amount — up to 1 year,

d. in case of cultivation of non-traditional high-value crops — 2 years (for asparagus — 5 years), with grace period of the principal amount — up to 1 year (for asparagus — 4 years),

e. upon the consent of the beneficiary a shorter grace period may be established, and where the time period is already established, it may be reduced or terminated according to the procedure of the financial institution,

f. where the loan is provided by stages or under more than one loan contract (instalments) for the same project, each next loan shall be considered as continuation of the first loan and the loan repayment period and grace period of principal amount must comply with the repayment period and with the grace period of principal amount of the first loan;

(14) loan repayment process shall be carried out by monthly payments of the principal amount; the loan interest rate shall be calculated for the residual of the principal amount. In case of early payment of the loan, no fines and penalties shall be imposed;

(15) the process of subsidisation of loan interest rates shall be initiated by financial institutions that perform transactions in line with the conditions of this Programme;

(16) subsidisation of the loan interest rates shall be carried out based on the actual repayments of non-subsidised part of the principal amount and the interest rate of the loan; fines and penalties shall not be subject to subsidisation;

(17) the amount of subsidisation of the loan interest rate shall be transferred by the RFI to relevant account of the financial institution based on applications of given financial institution. The content of the application, as well as the requirements to documents and information to be submitted by the financial institution to the RFI shall be defined by the contract concluded between the RFI and the given financial institution. The contract template shall be developed by the RFI, being agreed with the Ministry;

(18) The contract concluded between the RFI and the given financial institution shall stipulate the submission by the financial institution of the documents prescribed by sub-points 2, 3, 4 and 5 of point 23 of this Programme to the RFI;

(19) the financial institution shall submit to the RFI the application for subsidisation of the interest rate of loan for the previous month but not later than the fifth working day of the following month. The RFI shall, within five working days following the receipt of the application, jointly with the financial institution, revise the applications, check their compliance with Programme requirements and in case of a positive opinion it shall submit them to the Ministry, which shall, within 5 workings days, record-register the applications and the positive opinion thereon received from the RFI, and shall transfer the amount of subsidisation of loan interest rate to the RFI, which shall, within 5 working days, transfer the amount to the account of relevant financial institution;

(20) subsidisation of interest rates provided for establishing orchard, anti-hail nets, introduction of modern irrigation system, construction or expansion of water basins and cultivation of non-traditional high-value crops may be terminated:

a. where the requirements prescribed by the Programme (particularly, by points 10, 12, paragraph (d) of sub-point 2 of point 23 and sentence 2 of sub-point 7 of point 23) were not met, the loan was not used with the intended purpose, or as a result of monitoring referred to in point 25, violation of conditions of this Programme was detected,

b. where the beneficiary provided obviously false information,

c. where the borrower has overdue liabilities of more than 60 days in total within one year (past 12 months) with regard to the given loan or as a result of overdue liabilities to the financial institution, the loan is not classified with objective criteria to a standard class in accordance with the procedure for classification by the Central Bank of the Republic of Armenia of loans and receivables of banks operating in the territory of the Republic of Armenia and formation of reserves for possible losses,

d. where the contract concluded between the beneficiary and the financial institutions is early terminated;

(21) subsidisation of the loan shall be terminated starting from the day of the previous loan repayment established by the repayment schedule of the given loan;

(22) where the loan is used by the borrower with non-intended purpose or where the submitted information appears to be obviously false, the financial institution shall be obliged to remove the current loan of the borrower from the Programme of subsidisation of loan interest rates and unilaterally change the loan interest, by establishing a higher interest rate applied in the given financial institution for agriculture or business loan;

(23) where the loan is used by the borrower with non-intended purpose (including the cases of early termination of the loan contract upon the initiative of the borrower and failure to complete the works envisaged by the Programme) or where obviously false information is submitted, the amount of subsidisation provided until then shall be subject to return within three months (the subsidised amount shall be returned by the financial institution).

(Point 23 supplemented and amended by No 1194-N of 22 July 2021, No 104-L of 27 January 2022, supplemented and amended by No 1260-L of 11 August 2022)

24. The procedure for partial compensation of the costs incurred shall be as follows:

(1) the compensation process shall be initiated by the beneficiaries prior to commencement of the works of establishing orchard and (or) introduction of modern irrigation system, by applying, in an electronic or paper-based form, to the Ministry after 1 January 2022, with an indication on the location, size of land parcel, the sizes and type of the orchard to be established, in case of establishing orchard — the planting formula, by attaching the following:

a. carbon copy of the personal identification document,

b. carbon copy of certificate of state registration of the right over immovable property. Where the registered right appears to be common joint ownership or a lease (use), the notary-certified consent of the owner or co-owner (co-owners) of immovable property to participate in the Programme shall be submitted, moreover, in case of establishing orchard, the lease (use) period for immovable property shall not be less than 20 years, and in case of introduction of modern irrigation system — less than 4 years starting from the date of submission of the application,

c. in case of establishing orchard, the documents prescribed by point 22 of the Programme, as well as in case of construction of deep wells — water use permits issued by the water resources management and maintenance body (in the cases prescribed by the legislation of the Republic of Armenia) shall be attached;

(2) the representative of the Ministry shall, within 15 working days following the acceptance of the application, conduct site inspection aimed at examination of the information indicated in the application, and draw up a protocol;

(3) in case of a positive opinion of the site inspection protocol, the beneficiary shall be record-registered by relevant sub-division of the Ministry and shall, within 5 working days, be informed in writing on being record-registered as a beneficiary and on conclusion of a contract. In case of a negative opinion, the beneficiary shall, within 5 working days, be provided with a carbon copy of the protocol;

(4) the beneficiary having been record-registered for establishment of orchard shall, within four months following the receipt of the offer to conclude a contract, submit to the Ministry the document referred to in point 11 of the Programme, whereafter, within 5 working days a contract shall be concluded therewith;

(5) in case of introducing modern irrigation systems, a contract shall be concluded with the beneficiary within 5 working days;

(6) following the completion of the works of establishing orchard, the beneficiary having concluded a contract, shall, with the purpose of receiving compensation, apply, in an electronic or paper-based form, to the Ministry, by attaching to the application the following:

a. information on planting formula,

b. document (certificate) certifying the origin and the quality of planting material (in case of pistachio — the planting material or the seed) acquired from a foreign country or that of local production (after introduction of a certification system in the Republic),

c. phytosanitary quarantine control (surveillance) act for the planting material acquired from a foreign country,

d. documents certifying the import of the planting material, and in case of local production (prior to introduction of a planting material certification system in the Republic) — plant passport (issued prior to establishing the orchard),

e. documents justifying the costs for works of establishing orchard, and, where the provision of point 10.2 is in place — also the notary-certified carbon copy of the contract signed with the beneficiaries or economic entities having constructed the water basin, which shall mandatorily contain the size of the area of the orchard established (to be established) by each beneficiary or the economic entity, the documents justifying the costs for constructing or expanding the water basins, including payment receipt of the costs incurred by the beneficiary,

f. digital photo of the established orchard;

(7) following the completion of the works of introduction of modern irrigation system, the beneficiary having concluded a contract, shall, with the purpose of receiving compensation, apply, in an electronic or paper-based form, to the Ministry, by attaching to the application the documents substantiating the purchase and location costs;

(8) in case of establishing orchard, the beneficiary must ensure 75% adhesion of nursery plants planned by the formula and planted. In case of failure to ensure it, the compensation amounts provided for in sub-point 10 of point 24 shall be subject to return to the State Budget within a period three months;

(9) the assistance envisaged by the Programme shall be provided only for the works carried out after starting, by the beneficiary, the process prescribed under this Programme (conclusion of the contract under sub-point 4 of this point);

(10) compensation amount shall be provided to the beneficiary based on the results of monitoring, the procedures for the conduct whereof shall be established by the Ministry;

(11) the following shall serve as a basis for rejecting compensation:

a. provision of obviously false information by the beneficiary,

b. non-compliance with the provisions of the Programme,

c. negative opinion of monitoring protocol;

(12) each beneficiary shall be compensated 30% of the actual costs incurred for establishment of 0.5-10 hectares of orchards within the framework of the Programme (maintenance costs for the first year are not included) based on the documents substantiating the costs (the costs incurred for the works other than those indicated in Tables No 2, 3, 4 and 5 shall not be compensated, except for the costs for construction of deep wells within the framework of the Programme);

(13) maximum costs incurred by each of the beneficiaries for establishing orchards of 1 hectare, including modern irrigation systems (in case of installing systems other than drip irrigation systems, the estimated costs shall not exceed the maximum thresholds of the costs for introducing drip irrigation system), water basin, anti-hail nets (without maintenance costs for the first year) shall include:

a. intensive orchard: spermaphyte, drupaceous, dry subtropical — AMD 28.5 million, with anti-hail nets — AMD 38.6 million,

b. intensive orchard: nuts — AMD 11.5 million, with anti-hail nets — AMD 23.5 million,

c. vineyard — AMD 17.1 million, with anti-hail net — AMD 19.9 million (in case of table grapes — AMD 26.5 million),

d. berry plantations — AMD 17.6 million, with anti-hail nets — AMD 27.7 million;

(14) the total amount of compensation per 1 hectare in case of establishment of orchard must not exceed the 30% of the maximum costs estimated in sub-point 13 of this point, taking into account the provisions of points 10.1, 16.1 and 17;

(15) each beneficiary shall be compensated 50% of the actual costs incurred for introduction of 0.5-10 hectares of modern irrigation system without establishment of orchard within the framework of the Programme, which must not exceed, per 1 hectare, the 50% of the maximum thresholds of the costs indicated in point 19 of the Programme.

(Point 24 supplemented by No 1194-N of 22 July 2021, amended, supplemented and edited by No104-L of 27 January 2022, No 1260-L of 11 August 2022)

25. The Programme monitoring shall be conducted in accordance with the procedure established by the Ministry, as well as in case of loan interest rate subsidisation component — by the financial institution.

26. The financial institution shall, within 1 calendar year following the provision of loan (in case of provision of a loan for cultivation of non-traditional high-value crops —within 2 months following the provision of loan), mandatorily conduct a targeted monitoring and financial monitoring in accordance with internal legal acts of the financial institution.

27. The financial institutions shall submit a report to RFI in the format established by the contract concluded with the RFI.

28. As a result of summing up the applications for subsidisation of loan interests within the framework of the Programme, the RFI shall set up a statistical database, which shall include the information related to Programme implementation, the problems identified and implementation challenges.

29. The RFI shall submit monthly reports to the Ministry.

30. The report must contain detailed information on the progress of the Programme, including:

(1) information on loans as of marzes and communities, personal and contact details of the beneficiaries, loan amounts, amount of subsidisation of the loan interest rates, the areas, types of the established orchards and berry plantations, cultivated non-traditional high-value crops, introduction of modern irrigation systems and anti-hail nets;

(2) information on the results of the monitoring conducted by financial institutions and identified violations.

31. The potential risks related to implementation of the Programme shall be as follows:

(1) impossibility of repayment of the principal amount of the provided loan funds and payment of interest rates and fulfilment of contract obligations due to unfavourable climate conditions, damages and losses caused by diseases and pests;

(2) inadaptability of the imported nursery plants to the nature and climate conditions of the Republic;

(3) absence of applications equivalent to the planned amounts of loan interest rate subsidisation, or higher than the planned demand thereof due to incomplete settlement of the planned loan resources;

(4) level of revenues of beneficiaries, lower than that expected, conditioned with different economic factors (drop in market price for the product, foreign exchange fluctuations, etc.);

(5) emergence of non-affordable conditions for securing the loan by the financial institutions.

32. The requirement to establish the orchard with certified nursery plants and within the established time period, the possibility of insurance of orchards and areas, as well as the assistance provided within the framework of the Programme shall be aimed at mitigation of the Programme risks.

33. The Programme shall be financed from the State Budget of the Republic of Armenia.

34. No financial resources shall be required for implementation of the Programme in 2021, and the estimated costs for implementation of the Programme in 2022 shall constitute AMD 2 351,5 million. Financing of the Programme during the following years shall be carried out based on the budget bids submitted under each budget process by allocating the necessary amount for the given year.

(Point 34 supplemented by No 1194-L of 22 July 2021, amended by No 104-L of 27 January 2021)

35. In order to estimate the Programme implementation cost for 2022, a conditional distribution was carried out, according which the establishment of orchard of 450 hectares, 220 hectares out of which — without anti-hail net, introduction of modern irrigation systems for 260 hectares and (or) water basins, installation of anti-hail nets for 130 hectares and cultivation of non-traditional high-value crops of 50 hectares shall be carried out under subsidisation of interest rates of the loan, and establishment of orchards of 50 hectares, 25 hectares out of which — without anti-hail net, introduction of modern irrigation systems for 100 hectares shall be carried out under partial compensation of the costs.

(Point 35 amended by No 1194-L of 22 July 2021, No 104-L of 27 January 2021)

36. Where the Programme indicators planned by the State Budget of the Republic of Armenia or the financial resources are exceeded, loan and compensation contracts shall be concluded under the Programme, if sufficient budget resources are available.

(Point 36 amended by No 1194-L of 22 July 2021)

37. It is expected to have both quantitative and qualitative outputs as a result of implementation of the Programme. In particular, in case of ensuring the target indicators planned by the Programme, the following outputs shall be expected:

(1) quantitative:

a. increasing orchard areas equipped with modern irrigation systems and (or) anti-hail nets, modern and competitive types of planting materials, for about 1000 hectares — 500 hectares per year,

b. increasing the land areas protected with anti-hail nets, for about 260 hectares — 130 hectares per year,

c. increasing the land areas having modern irrigation systems and furnished with water basins, for about 720 hectares — 360 hectares per year,

d. increasing the areas of non-traditional high-value crops, for about 150 hectares, in two years,

e. reducing the cost price of agriculture product at the expense of increasing efficiency of production;

(2) qualitative:

a. establishing high-yielding orchards instead of low-yielding traditional orchards,

b. increasing investment attractiveness of the horticulture sector,

c. producing fruits and berries that are competitive, seasonally produced, have long-term storage period, high quality and good taste features,

d. creating prerequisites for improving quality features of cognac and wine,

e. increasing the revenues, improving the solvency of economic entities participating in the Programme,

e. effective use of water resources due to introduction of modern irrigation systems,

f. reducing the risk of hail due to introduction of anti-hail nets,

g. mitigating nature and climate disaster risks due to implementation of agricultural insurance.

(Point 37 amended by No 104-L of 27 January 2022)

38. The Decision of the Government of the Republic of Armenia “On approving state support programme for establishing vineyards, modern technology-based intensive orchards and berry plantations” No 361-L of 29 March 2019, the Decision of the Government of the Republic of Armenia “On approving the programme of co-financing of modern irrigation system” No 212-L of 7 March 2019 and the Decision of the Government of the Republic of Armenia “On approving the programme of subsidising interest rates of loans provided for installation of anti-hail nets in agriculture of the Republic of Armenia” N 362-L of 4 April 2019, shall extend to the relations arisen before the date of their repeal.

NN i/s	Name	Minimum acceptable number of nursery plants in 1 hectare orchard
1.	Apricot tree	800
2.	Peach tree	1000
3.	Plum tree	1000
4.	Cherry tree	800
5.	Wild cherry tree	800
6.	Almond tree	300
7.	Nectarine tree	1000
8.	Apple tree	1000
9.	Pear tree	1000
10.	Queen-apple tree	1000
11.	Walnut tree	417
12.	Hazelnut tree	500
13.	Pistachio tree	500
14.	Eastern Persimmon	625
15.	Fig tree	800
16.	Pomegranate tree	1000
17.	Kiwi tree	1000
18.	Grapes	2500
19.	Berries	5000 (for blueberry 3800)

Minimum acceptable number of nursery plants for establishing vineyards, intensive orchards and berry plantations within the framework of Programme

(Table amended and supplemented by No 1260-L of 11 August 2022)

Name of work	Unit of measurement	Physical volumes	Unit price (AMD)	Total (AMD)	Total (AMD) (without anti-hail system)
Orchard establishment costs
Deep tillage	hectare	1	60 000	60 000	60 000
Stone collection (once)	hectare	1	200 000	200 000	200 000
Cultivation	hectare	1	20 000	20 000	20 000
Land layout	hectare	1	200 000	200 000	200 000
Galvanized wires of the cable system	Armenian Dram	-	-	700 000	2 500 000
Drilling planting holes	piece	4 166	300	1 249 800	1 249 800
Planting material price	piece	4 166	4 000	16 664 000	16 664 000
Organic fertilisation	Armenian Dram	-	-	750 000	750 000
Superphosphate	kilogramme	300	300	90 000	90 000
Potassium salt	kilogramme	150	300	45 000	45 000
Preparing soil mixtures and planting materials and establishing orchard	Armenian Dram	-	-	1 041 500	1 041 500
Other contingencies	Armenian Dram	-	-	1 051 015	1 041 015
Installation of drip irrigation system (including pump station)	hectare	1	-	2 500 000	2 500 000
Anti-hail system	hectare	1	-	12 082 862	0
Construction and expansion of water basin	hectare	1		2 000 000	2 000 000
Total costs for establishing orchard, including (anti-hail net and irrigation system)	Armenian Dram	-	-	38 654 177	28 461 315
Orchard maintenance costs for the first year
Water fee	cubic meter	3 500	11	38 500	38 500
Weeding, loosening of distances between the trunks (five times) or mulchation	Armenian Dram	-	-	350 000	350 000
Inter-row cultivation (four times)	Armenian Dram	-	-	120 000	120 000
Fight against diseases and pests, automated (eight times)	Armenian Dram	-	-	160 000	160 000
Healing materials	Armenian Dram	-	-	400 000	400 000
Fertilisation and nutrition (with macro and micro elements, leaf nutrition, six to eight times)	Armenian Dram	-	-	400 000	400 000
Tree trimming - decoration	Armenian Dram	-	-	250 000	250 000
Other contingencies	Armenian Dram	-	-	85 925	85 925
Total costs for orchard maintenance for the first year	Armenian Dram	-	-	1 804 425	1 804 425
Total costs	Armenian Dram	-	-	40 458 602	30 265 740

(Table amended by No 104-L of 27 January 2022)

Name of work	Unit of measurement	Physical volumes	Unit price (AMD)	Total (AMD)
Orchard establishment costs
Deep tillage	hectare	1	60 000	60 000
Stone collection (once)	hectare	1	200 000	200 000
Cultivation	hectare	1	20 000	20 000
Land layout	hectare	1	150 000	150 000
Drilling planting holes	piece	1 250	300	375 000
Planting material price	piece	1 250	4 000	5 000 000
Organic fertilisation	Armenian Dram			600 000
Superphosphate	kilogramme	240	300	72 000
Potassium salt	kilogramme	120	300	36 000
Preparing soil mixtures and planting materials and establishing orchard	Armenian Dram	-	-	312 500
Other contingencies	Armenian Dram	-	-	341 275
Installing drip irrigation system (including pump station)	hectare	1	-	2 300 000
Anti-hail system	hectare	1	-	12 082 862
Constructing and expanding the water basin	hectare	1		2 000 000
Total costs for establishing orchard, including (anti-hail net and irrigation system)	Armenian Dram	-	-	23 549 637
Orchard maintenance costs for the first year
Water fee	cubic meter	3 000	11	33 000
Weeding, loosening of distances between the trunks (five times) or mulchation	Armenian Dram	-	-	350 000
Inter-row cultivation (four times)	Armenian Dram	-	-	120 000
Fight against diseases and pests, automated (five times)	Armenian Dram	-	-	100 000
Healing materials	Armenian Dram	-	-	250 000
Nutritions (with macro and micro elements, leaf nutrition, five times)	Armenian Dram	-	-	250 000
Other contingencies	Armenian Dram	-	-	55 150
Total costs for orchard maintenance for the first year	Armenian Dram	-	-	1 158 150
Total costs	Armenian Dram	-	-	24 707 787

(Table amended by No 104-L of 27 January 2022)

Name of work	Unit of measurement	Physical volumes	Unit price (AMD)	Total (AMD)
Orchard establishment costs
Deep tillage	hectare	1	60 000	60 000
Stone collection (once)	hectare	1	200 000	200 000
Cultivation	hectare	1	20 000	20 000
Land layout	hectare	1	250 000	250 000
Drilling planting holes	piece	3400	200	680 000
Planting material price	piece	3400	2 000	6 800 000
Organic fertilisation	Armenian Dram	-	-	375 000
Potassium salt	kilogramme	150	300	45 000
Superphosphate	kilogramme	300	300	90 000
Preparing soil mixtures and planting materials and establishing orchard	Armenian Dram	-	-	712 000
Acquiring support pillars and transferring to the field	piece	585	2 000	1 170 000
Drilling holes for support pillars (50 cm deep)	piece	585	500	292 500
Installing support pillars, fastening wires	man/day	50	5 000	250 000
Purchasing support pillar wires (galvanised wires, 3 mm)	kilogramme	1000	900	900 000
Other contingencies	Armenian Dram	-	-	592 225
Anti-hail system without support pillars	hectare	1	-	2 800 000
Installing drip irrigation system (including pump station)	hectare	1	-	2 700 000
Constructing and expanding a water basin	hectare	1		2 000 000
Total costs for establishing orchard, including (anti-hail net and irrigation system)	Armenian Dram	-	-	19 936 725
Orchard maintenance costs for the first year
Water fee	cubic meter	3000	11	33 000
Weeding, loosening of distances between the trunks, (four times) or mulchation	Armenian Dram	-	-	280 000
Inter-row cultivation (thrice)	Armenian Dram	-	-	90 000
Fight against diseases and pests, automated (three to four times)	Armenian Dram	-	-	80 000
Healing materials	Armenian Dram	-	-	200 000
Fertilisation and nutritions (with macro and micro elements, leaf nutrition, eight times)	Armenian Dram	-	-	400 000
Vine burying or mulchation	Armenian Dram			200 000
Other contingencies	Armenian Dram	-	-	64 150
Total costs for orchard maintenance for the first year	Armenian Dram			1 347 150
Total costs	Armenian Dram	-	-	21 283 875

(Table amended by No 104-L of 27 January 2022, No 1260-L of 11 August 2022)

Name of work	Unit of measurement	Physical volumes	Unit price (AMD)	Total (AMD)	Total (AMD) (without anti-hail system)
Orchard establishment costs
Tillage	hectare	1	50 000	50 000	50 000
Stone collection (once)	hectare	1	200 000	200 000	200 000
Cultivation	hectare	1	20 000	20 000	20 000
Land layout	hectare	1	300 000	300 000	300 000
Galvanized wires of the cable system	Armenian Dram			900 000	2 717 500
Planting material price	piece	9200	800	7 360 000	7 360 000
Preparing soil mixture and grooves, planting bushes	Armenian Dram			460 000	460 000
Organic fertilisation	Armenian Dram			750 000	750 000
Potassium salt	kilogramme	150	300	45 000	45 000
Superphosphate	kilogramme	250	300	75 000	75 000
Other contingencies	Armenian Dram	1	-	508 000	598 875
Anti-hail system	hectare	1	-	12 082 862	0
Installing drip irrigation system (including pump station)	hectare	1	-	3 000 000	3 000 000
Constructing and expanding a water basin	hectare	1		2 000 000	2 000 000
Total costs for establishing orchards, including anti-hail	Armenian Dram	-	-	27 750 862	17 576 375
net and irrigation system)
Orchard maintenance costs for the first year
Water fee	cubic meter	10000	11	110 000	110 000
Healing materials	Armenian Dram	-	-	150 000	150 000
Fight against diseases and pests (seven times)	man/day	7	20000	140 000	140 000
Fertilisation and nutritions (with macro and micro elements, leaf nutrition, six to eight times)	Armenian Dram	-	-	400 000	400 000
Weeding, loosening of distances between the trunks (eight times) or mulchation	Armenian Dram	-	-	560 000	560 000
Inter-row cultivation, automated (four times)	Armenian Dram	-	-	100 000	100 000
Bush trimming - decoration	Armenian Dram	-	-	150 000	150 000
Other contingencies	Armenian Dram	-	-	80 500	80 500
Total maintenance costs for the first year	Armenian Dram	-	-	1 690 500	1 690 500
Total costs	Armenian Dram	-	-	29 441 362	19 266 875

* The calculation is made based on the examples of raspberry and blackberry and it is accepted as estimated calculation cost for all berries.

(Table amended by No 104-L of 27 January 2022)

Name	Unit	Quantity	Value	Amount
Shower	piece	400	2000	800 000
PE pipe d=32 mm	meter	2500	150	375 000
PE pipe d=75 mm	meter	100	900	90 000
Connection parts				150 000
Pump unit				500 000
Installation, including earthworks				700 000
Total				2 615 000

Table No 9

Name of work	Unit of measurement	Physical volumes	Unit price (AMD)	Total (AMD)
Tillage	hectare	1	40 000	40 000
Manure	tonne	20	5 000	100 000
Nitrogen fertiliser	kilogramme	150	150	22 500
Superphosphate	kilogramme	100	300	30 000
Potassium salt	kilogramme	120	300	36 000
Distributing the manure	hectare	1	50 000	50 000
Diffusing fertilisers	hectare	1	30 000	30 000
Replowing	hectare	1	20 000	20 000
Chisel	hectare	1	20 000	20 000
Cultivation	hectare	1	20 000	20 000
Levelling and preparing seedbeds	hectare	1	20 000	20 000
Seedling price	piece	100000	25	2 500 000
Planting of seedlings (in pots)	man/day	12	7 000	84 000
Water fee	cubic meter	5600	11	61 600
Irrigation	man/day	8	7 000	56 000
Weeding, hilling, loosening (thrice)	man/day	60	7 000	420 000
Disease and pest control measures (twice)	hectare	1	20 000	40 000
Nutrition	hectare	1	50 000	50 000
Harvesting	man/day	18	7 000	126 000
Transporting the crop	Armenian Dram			20 000
Other contingencies 5%	Armenian Dram			187 305
Total costs				3 933 405

Table No 11

Name of work	Unit of measurement	Physical volumes	Unit price (AMD)	Total (AMD)
Tillage	hectare	1	40 000	40 000
Manure	tonne	20	5 000	100 000
Nitrogen fertiliser	kilogramme	100	150	15 000
Superphosphate	kilogramme	30	300	9 000
Potassium salt	kilogramme	150	300	45 000
Distributing the manure	hectare	1	50 000	50 000
Diffusing fertilisers	hectare	1	30 000	30 000
Replowing	hectare	1	20 000	20 000
Chisel	hectare	1	20 000	20 000
Cultivation	hectare	1	20 000	20 000
Levelling and preparing seedbeds	hectare	1	20 000	20 000
Seed price	kilogramme	4	100 000	400 000
Sowing	hectare	1	20 000	20 000
Water fee	cubic meter	5600	11	61 600
Irrigation	man/day	20	7 000	140 000
Weeding, loosening (thrice)	man/day	60	7 000	420 000
Disease and pest control measures (thrice)	hectare	1	20 000	60 000
Nutrition	hectare	1	50 000	50 000
Harvesting manually (5-6 pick-ups)	man/day	300	7 000	2 100 000
Transporting the crop	Armenian Dram			20 000
Other contingencies 5%	Armenian Dram			182 030
Total costs				3 822 630

Name of work	Unit of measurement	Physical volumes	Unit price (AMD)	Total (AMD)
Tillage	hectare	1	40 000	40 000
Manure	tonne	20	5 000	100 000
Nitrogen fertiliser	kilogramme	120	150	18 000
Superphosphate	kilogramme	90	300	27 000
Potassium salt	kilogramme	120	300	36 000
Distributing the manure	hectare	1	50 000	50 000
Diffusing fertilisers	hectare	1	30 000	30 000
Replowing	hectare	1	20 000	20 000
Chisel	hectare	1	20 000	20 000
Cultivation	hectare	1	20 000	20 000
Seed price	kilogramme	25	40 000	1 000 000
Sowing	hectare	1	50 000	50 000
Water consumption	cubic meter	4800	11	52 800
Irrigation	man/day	14	7 000	98 000
Weeding, loosening (twice)	hectare	1	40 000	40 000
Disease and pest control measures (once)	hectare	1	20 000	20 000
Nutrition	hectare	1	50 000	50 000
Harvesting	man/day	60	7 000	420 000
Transporting the crop	Armenian Dram			40 000
Other contingencies 5%	Armenian Dram			106 590
Total costs				2 238 390

(Annex supplemented, amended by No 1194-N of 22 July 2021, amended, supplemented and edited by No 104-L of 27 January 2022, No 1260-L of 11 August 2022)

First Deputy Chief of Staff to the Prime Minister of the Republic of Armenia

Ts. Soghomonyan

8 June 2021 CERTIFIED BY ELECTRONIC SIGNATURE

Published on a joint site 06.06.2024.