GOVERNMENT OF THE REPUBLIC OF ARMENIA

DECISION

No 1305-L of 19 September 2019

Based on part 2 of Article 146 of the Constitution of the Republic of Armenia and point 2 of the Annex to Decision of the Government of the Republic of Armenia No 667-N of 8 June 2018, the Government of the Republic of Armenia hereby decides:

1. To approve the Programme on support to development of sheep breeding and goat breeding for 2019-2023 in the Republic of Armenia, according to the Annex.

(Point 1 amended by No 68-L of 27 January 2022)

2. To assign to the Minister of Economy of the Republic of Armenia to submit, within a period of one month following the entry into force of this Decision, proposals on making reallocation under the Law of the Republic of Armenia “On State Budget of the Republic of Armenia for 2019” and on making relevant amendments and supplements to Decision of the Government of the Republic of Armenia N 1515-N of 27 December 2018 “On measures ensuring the execution of the State Budget of the Republic of Armenia for 2019”.

Prime Minister of the Republic of Armenia	N. Pashinyan
3 October 2019   Yerevan

Annex to Decision of the Government of the Republic of Armenia No 1305-L of 19 September 2019

(Annex supplemented and edited by No 1058-L of 24 June 2021, amended by No 68-L of 27 January 2022)

on the support to development of sheep breeding and goat breeding for 2019-2023 in the Republic of Armenia

INTRODUCTION

I. DESCRIPTION OF THE CURRENT SITUATION OF SHEEP BREEDING AND GOAT BREEDING IN THE REPUBLIC

II. NEED FOR IMPLEMENTATION OF THE PROGRAMME

III. THE MAIN GOAL AND MAIN GOAL AND OBJECTIVES OF THE PROGRAMME

IV. PROGRAMME DESCRIPTION

V. PROGRAMME MONITORING

VI. PROGRAMME RISKS

VII. FINANCIAL EVALUATION OF THE PROGRAMME

VIII. OUTCOMES EXPECTED FROM THE IMPLEMENTATION OF THE PROGRAMME

1. Cattle breeding is one of the key branches of agriculture in the Republic of Armenia, which ensured about 50 per cent of gross domestic product of the sector in 2018. Sheep breeding and goat breeding are the traditional branches of cattle breeding, the value of the raw material and products received wherefrom ranges to the extent of up to AMD 50 billion per year if existing favourable natural and climate and market conditions are good pre-conditions for receiving products with twice more and higher value.

2. Development of sheep breeding and goat breeding in the Republic of Armenia is conditioned with extremely favourable natural and climatic conditions for administering this branch and availability of extensive mountain pastures.

3. More than 50 per cent of agricultural lands of the Republic are pastures (according to the data of 2018 report on the availability and distribution of the land fund of the Republic of Armenia the pastures made up 1051.6 thousand hectares). Moreover, the land parcels of up to 1500 height and with a slope of up to 3 degrees make up about 30 per cent, the land parcels with a slope above 20 degrees make up 10 per cent of the total land cover, and as the sheep and goats are mostly pasture animals, it is obvious that there are possibilities for developing sheep breeding and goat breeding.

4. In the Soviet times, sheep and goat stocks drastically increased in the Republic, however due to privatisation of agriculture animals carried out within the framework of agrarian reforms, deterioration of social and economic situation, certain level of break of economic ties, the stock of sheep and goats gradually reduced and according to the latest official data (as of 1 January 2019) it made up 638.2 thousand heads, which is twice less than the stock recorded in 1990. Both sheep breeding and goat breeding have key significance in the Republic specifically for the communities with dry nature and climate conditions and those rich with strictly fragmented rocky pastures, as an alternative to dairy cattle breeding.

5. Like in other branches of cattle breeding, no activities on establishing dairy goat breeding and science-based pedigree selection were ever carried out in goat breeding branch before 2000. And the improvement of maternal gene pool may significantly contribute to increasing the stock.

6. The demand for live sheep reared in Armenia and mutton in external market (Islamic Republic of Iran, a number of Arabic countries), as well as very favourable nature and climate conditions for running sheep breeding in the Republic, on the one hand, and the growth of demand for variety of valuable cheese processed with goat milk, on the other hand, are reliable guarantees for the development of this sector.

7. Thus, by application of relevant state support mechanisms it is possible to make the field of sheep breeding and goat breeding more profitable and competitive in the Republic. In this regard, this Programme is aimed at creating favourable conditions for sheep breeding and goat breeding in the Republic of Armenia, in particular proposing mechanisms for accessible lending and compensation of costs.

8. Sheep breeding in the Republic of Armenia has traditionally been developing in the meat, wool and milk direction. Armenia has accumulated extensive experience through the centuries, and the long-standing development of the sector has developed national traditions among the population, such as unique national dishes, folk crafts and carpet making. As a result of this, in certain period of time and in individual regions, the sheep breeding has become one of the key branches of cattle breeding in the Republic.

9. Sheep breeding and goat breeding, being one of the branches of cattle breeding having the lowest risks and the highest profitability, supplies the population with food, wool and raw leather. In 2018, gross domestic product of cattle breeding in the Republic made up AMD 477.9 billion, of which only 10.5 per cent was generated due to sheep breeding, moreover, the sheep milk made up only 6.5 per cent of gross domestic product of milk in the Republic.

10. The following marzes are mainly engaged in sheep breeding in the Republic: Syunik marz of the Republic of Armenia (16.9 per cent of the stock of the Republic), Gegharkunik Marz (15.1 per cent), Armavir Marz (15.1 per cent), Ararat Marz (13.1 per cent) and Aragatsotn Marz (12.7 per cent).

11. It should be noted that the stock of sheep in individual marzes is not in direct ratio to the environmental economic capacities of these marzes, due to which the proportion of pasture utilisation has changed drastically. This not only resulted in the reduction of efficiency of pasture utilisation but may also lead to undesirable environmental implications, as long-term grazing of sheep in pastures close to villages may both result in erosion phenomena, and bring to disappearance of valuable plants in the vegetation of pastures, whereas the distant pastures are almost not used.

12. In 80-s of the last century, the stock of the sheep reached about 2.3 million in the Republic; later it started to reduce and in 1991, ahead the reforms initiated in the sector of agriculture, the stock made up about 1.0 million. The tendency of reduction of the stock of sheep continued in the following years and already in 1998 it made up 521.0 thousand heads. Actually, in the period of 1981-1998, the stock of sheep in the Republic reduced for more than 4 times. This process was conditioned both by the difficulties related to the sales of sheep wool and meat, and the fragmentation of big economies, long-standing absence of pedigree selection activities, which in its turn resulted in non-efficient use of forage lands and mountainous pastures.

13. Maximum stock of goats in the Republic was recorded in 1930 (about 350 thousand heads), and minimum stock was recorded in 1991 (about 14 thousand heads), having been reduced for more than 95 per cent. However, the stock of goats was stabilised in the last two decades and in 2018 the index (22.6 thousand heads) exceeded the 1991 index for 60 per cent.

14. The local pedigree goats breeds currently reared in the Republic are characterised with low productivity and texture indexes, i.e. the live mass of goats makes up 35-36 kg, the milk producing ability is 6-8 months and the average milk producing ability per one goat ranges to the extent of up to 160 kg.

15. According to the data published by the Statistical Committee of the Republic of Armenia (hereinafter referred to as “the Committee”), tendency of reduction of the stocks of sheep and goats has been also observed during recent years, as a result of which the stock of sheep and goats in the Republic made up 638.2 thousand heads as of 1 January 2019 as compared with 745.8 thousand heads recorded in the same period in 2015. The variations in the stock of sheep and goats during recent years are shown in Chart 1.

Chart 1. Dynamics of the stock of sheep and goats in the Republic of Armenia by years, heads (as of 1 January)

16. Unlike the reduction of the stock of sheep and goats recorded during recent years, the volumes of meat production increased. In 2018 about 19.0 thousand tonnes of meat was produced as compared with 9.8 thousand tonnes in 2015. Parallel to the growth of the volumes of meat production, certain raise in average retail prices of around 1.2 times was recorded in the Republic as compared to 2015. During recent years, the variations in the volume of mutton production and the average retail prices are shown in Chart 2.

Chart 2. Dynamics of mutton production and average retail prices in the Republic of Armenia

17. Sheep breeding in the Republic has mainly an extensive nature and coarsewool (balbas, mazekh, bozakh, Karabakh-related) and semicoarsewool (Armenian semicoarsewool) breeds of sheep and half-breeds оf different breeds received from mating thereof, as well as small quantity of semi-fine, meet and wool sheep with cross-bred wool cover of Corriedale type meat, wool and milk sheep are reared. Average annual wool yield per one sheep in the Republic is 2.2 kg, and the volume of wool production is 1415.5 tonnes on average. However, given the absence of wool processing infrastructure and failure to carry out pedigree selection activities aimed at improving the quality of wool cover of sheep, according to the average data of the Committee published for recent five years, about 35 per cent of produced wool remains in the farms as a residual, 25 per cent is used by the farms and only 30 per cent is sold.

18. In general, the development of sheep breeding and goat breeding in the Republic implies implementation of complex actions, which in its turn will contribute to establishing infrastructure, introducing a management system of pastures located in administrative districts of the communities, effective organisation of veterinary services and pedigree selection, as well as raising of animal productivity.

19. Implementation of the Programme is conditioned by the need to improve sheep and goat pedigree (breed) reared in the Republic and production and economic indicators, to intensify branch administration, to effectively use the natural resources, to increase the volume of sheep breeding and goat breeding production, to raise the level of profitability, to promote investment in the field, to stabilise the competitive position in external market, as well as to increase the volume of export of live sheep and (or) mutton and goat cheese.

20. According to the data published by the Committee in 2017, the Republic is self-sufficient as to sheep mutton and this indicator makes up 138.9 per cent, therefore, the branch has a big exporting potential. During recent 4 years, 21.6 thousand heads of sheep and 2.1 thousand tonnes of mutton per year on average was exported from the Republic. According to the updated data of the Food Safety Inspection Body Adjunct to the Government of the Republic of Armenia (hereinafter referred to as “ the FSIB SG RA”), 16.3 thousand heads of sheep and 82 tonnes of mutton was exported from the Republic only in 2019 (as of 1 August). The main export destinations are the Islamic Republic of Iran, United Arab Emirates, the State of Qatar, the State of Kuwait, Georgia. Export indicators show that the mentioned goods have great demand in external market, which is a reliable guarantee for improving the main production and economic indicators of the branch and holding competitive positions. The dynamics of live sheep and mutton export volumes is shown in Chart 3.

Chart 3. Comparative assessment of live sheep and mutton export volumes

21. According to the data of Food and Agriculture Organization of the United Nations, more than 1300 breeds and breed types are included in the world gen pool. The diversity of genetic resources may serve as a basis for creating new breeds of animals, which will have high productivity features and adaptability to the local natural conditions.

22. Taking into consideration that the regions rich in forage lands, one of the main means of production is sheep breeding, the development of sheep breeding will also contribute to raising the level of employment and welfare of rural population, increase in the volumes of production of high quality products.

23. It should be noted that state support programmes aimed at developing sheep breeding are implemented also in EAEU Member States, particularly in the Russian Federation (“Development of sheep breeding and goat breeding in the Russian Federation in 2012-2014 and the planned time period up to 2020” branch targeted programme, “Development of sheep breeding and goat breeding in the Republic of Dagestan” republican targeted programme for 2013-2020, Decision of the Government of the Russian Federation N 1257 of 4 December 2012 “On the rules for provision and distribution of subsidies allocated to the budget of entities of the Russian Federation from the Federal Budget in order to support the pedigree livestock breeding”, Decision of the Government of Perm Krai N 550-P of 27 May 2013 “On approving the procedure for supporting the pedigree livestock breeding” ) and in the Republic of Kazakhstan (Decision of the Government of the Republic of Kazakhstan N 35 of 25 January 2013 “On approving the subsidisation rules for supporting the pedigree livestock breeding”). Within the framework of the mentioned programmes the price of pedigree animals to be acquired, as well as their maintenance and feeding costs shall be partially compensated.

24. The goal of the Programme is to create favourable conditions for sheep breeding and goat breeding in the Republic through state support mechanisms, in particular application of accessible terms for lending and compensation for expenses, to promote the acquisition (import) of high-value pedigree sheep and goats and development of highly efficient herds, to improve bred being reared, to develop the pedigree, to increase the stock of pure-bred animals having valuable production and economic features and half-bred animals received from mating, as well as to increase the volumes of production and export of sheep breeding and goat breeding product.

25. In order to achieve the mentioned goal, the following tasks must be resolved:

(1) proposing effective mechanisms for state support;

(2) ensuring affordability of acquiring and (or) importing pedigree growing stock reared in the Republic;

(3) creating favourable conditions for increasing the share of pedigree sheep and goats, improving local breeds, receiving highly productive half-bred generations through mating in the Republic;

(4) assessing potential risks of implementation of the Programme and developing measures aimed at mitigation thereof.

26. The Programme is designed for five years and comprises the years of 2019-2023. Within the framework of the Programme, the economic entities engaged in sheep breeding and goat breeding will be given the opportunity to acquire around 30 thousand heads of pregnant sheep and goats, pedigree growing rams and ewes and bucks and does (hereinafter referred to as “pedigree SHC”) with affordable conditions.

27. Based on the need for developing sheep breeding and goad breeding in the Republic, increasing the volume of production and export of mutton and goat meat and milk, as well as effective and full use of natural resources, no precondition is set for selection of the breed made according to the type of yield (milk, meat, wool) for pedigree SHC, except for sex and age groups thereof, i.e. sheep and goats of up to 18 month pregnancy, 4-16 months female and 6-16 month growing male, where it is set to the 20:1 ratio (1 male per 20 females) (in case of importing — as of the date of taking the animal for quarantine in the country of export, and in the Republic of Armenia — as of the date of concluding the purchase and sales contract).

28. State support within the framework of the Programme is expected to be provided in two ways:

(1) partial subsidisation of the interest rate of the loan provided for acquisition of the pedigree SHC:

a. banks or credit organisations (hereinafter referred to as “ the financial institution”) providing loans to economic entities in accordance with the conditions set by this Programme, as well as Rural Financial Institution of the State Agency “Rural Areas Economic Development Programs Implementation Unit” (hereinafter referred to as “the RFI”) may be participants of the Programme;

b. loans in Armenian Dram shall be granted to legal or natural persons, individual entrepreneurs (hereinafter referred to as “the beneficiary”) expressing interest in participating in the Programme, with the maximum interest rate of 14 per cent, moreover, other fees (cash withdrawal fee, maintenance fee, commissions, etc.) shall not be charged for the services of financial institutions related to the loan;

c. the amount actually paid for 1 head of pedigree SHC — for an animal acquired with the price of up to AMD 450 thousand (without transportation costs), but not more than AMD 900 million per year (maximum 2000 heads of pedigree SHC, including not more than head of pedigree growing male (sheet and goat)) — will be subsidised for each beneficiary within the framework of the Programme, moreover, the balance of the sum of loans being provided to one beneficiary within the framework of the Programme may not exceed AMD 900 million, and only for 2019, not more than AMD 450 million (maximum 1000 heads of pedigree SHC, including not more than 50 heads of pedigree growing male (sheep and goat)), moreover, the balance of the sum of the loans being provided to one beneficiary within the framework of the Programme may not exceed AMD 450 million;

d. the lending process is initiated by the financial institutions whereto the beneficiaries apply;

e. the beneficiary shall submit to the financial institution and application-request on acquisition of pedigree SHC, by indicating the number of the pedigree SHC to be acquired, the place (places) of acquisition (import), the time periods of acquisition, the certifying documents (certificates, cards) of the SHC to be acquired, as well as shall submit to the Ministry of Economy of the Republic of Armenia (hereinafter referred to as “the Ministry”) the certifying documents (certificates, cards) of the pedigree SHC to be acquired with the purpose of providing consultancy, where necessary, to the financial institution on the small horned cattle to be acquired being pedigree, based thereon;

f. a grace period of maximum 12 months may be established for repayment of the principal amount of the loan if the beneficiary so wishes;

g. the financial institution shall make a non-cash transfer of the specified amount of the loan being granted to the relevant account of the beneficiary, by instalments or in the form of one-time payment (where the creditworthiness requirements of the financial institution are met);

h. the time period for repayment of the loan shall be set up to 4 years;

i. the loan repayment process shall be carried out according to the loan repayment schedule defined by the contract concluded between the financial institution and the beneficiary, and the loan interest rate shall be calculated against the balance of the principal amount;

j. no fine and penalty shall be calculated and charged by financial institutions for early repayments of principal amount of the loan by the beneficiary;

k. the process of subsidisation of loan interest rates shall be initiated by financial institutions performing transactions that meet the conditions of this Programme;

l. subsidisation of the loan interest rates shall be carried out in an amount so that the loans are granted to the beneficiaries with 2 per cent interest rate and for the bordering settlements receiving social assistance and cooperatives carrying out activities in the sector of agriculture approved by Decision of the Government of the Republic of Armenia No 1444-N of 18 December 2014 — with 0 per cent interest rate;

m. subsidisation of 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;

n. the amount of subsidisation of the loan interest rate shall be transferred by the RFI to the relevant account of the financial institution based on requests of the financial institution. The requirements to the content of the request shall be defined by the contract concluded between the RFI and the given financial institution. The model form of the contract shall be developed by RFI, by coordinating it with the Ministry;

o. the financial institution shall submit the request for subsidisation of the loan interest rate to the RFI once in a month, but not later that on the fifth working day of the following month. The RFI shall, within 10 working days following the receipt of the request, examine the request, and in case of absence of inconsistencies and given that the request meets the requirements of the Programme the amount of subsidisation of the loan interest rate shall be transferred to the account of relevant financial institution;

p. following the acquisition (import) of pedigree SHC, the beneficiary shall submit the following to the financial institution:

- carbon copy of the contract concluded for acquisition of the pedigree SHC following the submission of the application provided for by paragraph “e” of sub-point 1 of point 28 of the Programme,

- pedigree certifying documents (certificates, cards) of acquired animals,

- payment receipts, invoices for animals,

- veterinary certificate certifying the health condition of animals (in case of import — also the form provided in the country of export),

- statement of information on record-registration of animals in the community,

- bank account;

q. the financial institution shall, within one week following the receipt of documents and information provided for by paragraph “p” of sub-point 1 of point 28 of the Programme, submit them, in an electronic form, to the Ministry;

r. the beneficiary shall, within one working day following the submission of the documents required by sub-point 1 of point 28 of the Programme to the financial institution, submit a written letter of commitment to the Ministry on ensuring the use of pedigree SHC to be acquired for reproduction of cattle herd of sheep and goat for at least three years in the Republic of Armenia and on submitting (by 15 January of the following year) an annual report on maintenance, fertility and the generation stock by sex composition;

s. not later that within three working days following the death and (or) sanitary slaughter or alienation of pedigree SHC, the beneficiary shall submit information to the Ministry by attaching thereto a protocol on death of the animal and veterinary opinion, as well as a statement of information provided by the head of community on record-registration of the animal in the new community being the place of alienation;

t. after the ear tags of the pedigree growing animal are damaged, the beneficiary shall recover the tag as prescribed by Decision of the Government of the Republic of Armenia No 1315-N of 12 November 2015;

u. where the pedigree SHC acquired within the framework of the Programme (with identified number and documents) is alienated, it shall not be granted a double loan;

v. where information regarding the provisions provided for by paragraphs “s” and “t” of sub-point 1 of point 28 of the Programme is not submitted and where it is detected as a result of monitoring, the full amount of subsidisation of the loan interest rate shall be subject to return, except on the part of pedigree animals dead or subjected to sanitary slaughter in 2020 where no information was submitted to the Ministry in a prescribed manner due to the epidemic and martial law in the Republic, provided that the beneficiary of the Programme has repaid at least AMD 70 thousand of the principal amount of the loan for each dead animal until 1 July of 2021 and submitted the payment receipt to the Ministry;

w. natural persons, legal persons and individual entrepreneurs having overdue obligations within the scope of the programmes of state support by the Ministry and (or) other state programmes may not be the beneficiary of the Programme.

x. subsidisation of loan interest rate shall terminate in the following cases:

- the conditions prescribed by letter of commitment set forth in paragraph “r” of sub-point 1 of point 28 of the Programme are violated;

- the condition set forth in paragraphs “s” and “t” of sub-point 1 of point 28 of the Programme is violated;

- the contract concluded between the beneficiary and the financial institution is early rescinded;

- inconsistencies in information submitted by the beneficiary are detected;

- the borrower has overdue obligations in respect of the loan for more than 60 days in the aggregate within the period of one year (previous 12 months), or due to overdue obligations towards the financial institution the loan is not classified under standard class in accordance with current procedure for classification of loans;

- In case of non-expedient use of the loan by the beneficiary the subsidy amount provided up to that moment shall be subject to return within 3 months (the return of the subsidy amount to the RFI is carried out by the financial institution). In other cases indicated above, subsidisation of the loan shall be terminated starting from the day of the previous repayment of the loan established by the repayment schedule of the given loan;

- where the conditioned prescribed by paragraphs “y” and “v” are violated;

y. the acquisition of pedigree animals, also the import in case they are imported, shall be carried out within three months following the approval of the loan, during the last ten days of completion whereof the acquisition of pedigree animals, and also their import in case they are imported, may be extended by another month by the initiative of the beneficiary and upon consent of the Ministry;

(2) compensation of the expense incurred:

a. compensation process shall be initiated by the economic entities operating in the sector of agriculture by sending an electronic or paper-based application to the Ministry prior to starting the works on acquisition (import) of pedigree SHC, by indicating the number of pedigree SHC to be acquired, the place (places) of acquisition (import), the time periods of acquisition, by attaching also the certifying documents (certificates, cards) of the SHC to be acquired;

b. after acquiring a pedigree growing animal, the record-registered beneficiary, shall, for the purpose of receiving compensation, send electronic or paper-based application to the Ministry, by submitting the following documents attached to the application:

- carbon copy of the contract concluded for acquisition of the pedigree SHC following the submission of the application provided for by paragraph “a” of sub-point 2 of point 28 of the Programme,

- certifying documents (certificates, cards) of acquired animals,

- payment receipts, invoices for animals,

- veterinary certificate certifying the health condition of animals (in case of import, also the form provided in the country of export),

- statement of information on record-registration of animals in the community, bank account;

c. together with the documents referred to in paragraph “b” of sub-point 2 of point 28 of the Programme, the beneficiary shall submit to the Ministry a written letter of commitment on ensuring the use of pedigree SHC to be acquired for reproduction of cattle herd of sheep and goat for at least three years in the Republic of Armenia and annual report (by 15 January of the following year) on maintenance, fertility and the generation stock by sex composition;

d. not later that within 72 hours following the death and (or) sanitary slaughter or alienation of pedigree SHC, the beneficiary shall submit to the Ministry information, by attaching thereto an excerpt from the register-book for record-registration of animals and veterinary measures kept by the veterinary attending the community, as well as a statement of information provided by the head of community on record-registration in the new community being the place of alienation and an excerpt from the register-book for record-registration of animals and veterinary measures kept by the veterinary attending the community.

e. where the ear tags of the pedigree growing animal are damaged, the beneficiary shall recover the tag as prescribed by Decision of the Government of the Republic of Armenia No 1315-N of 12 November 2015;

f. the relevant sub-division of the Ministry shall, within 5 working days following the receipt of the application, examine the submitted documents and information (observations in the economy) and inform the beneficiary on granting or rejecting the compensation;

g. inconsistencies in information contained in the documents set forth in paragraph “b” of sub-point 2 of this point shall be the basis for rejecting to grant compensation;

h. the Ministry shall transfer the amount to be compensated to the account of the beneficiary within 5 working days following the adoption of decision on granting compensation based on relevant contract;

i. where as a result of monitoring carried out by the Ministry it appears that the beneficiary has violated the requirements set forth in paragraphs “c”, “d” and “e” of sub-point 2 of this point, the compensation amount shall be subject to return within one month;

j. actual expense for acquisition, by each beneficiary, of maximum 100 heads of pedigree SHC, including not more than 5 heads of pedigree male growing animal (sheep and goat) (without transportation costs), but not more than 23-27 per cent of AMD 45.0 million will be compensated within the framework of the Programme;

k. 23 per cent of the actual amount paid by the beneficiary for pedigree SHC acquired at the price of up to AMD 450 thousand per each head (without transportation costs) and 27 per cent for pedigree SHC acquired, at the price of up to AMD 450 thousand per each head, by cooperatives in bordering settlements carrying out activities in the sector of agriculture approved by Decision of the Government of the Republic of Armenia No 1444-N of 18 December 2014, will be compensated within the framework of the Programme;

l. natural persons, legal persons and individual entrepreneurs having overdue obligations within the scope of programmes for state support by the Ministry and (or) other state programmes may not be the beneficiary of the Programme.

(Point 28 supplemented and edited by No 1058-L of 24 June 2021, amended by No 68-L of 27 January 2022)

29. Each economic entity may apply only for one option provided by the Programme, moreover, it may avail only once of an option of compensation of the expenses incurred.

30. Programme monitoring shall be carried out by the Ministry jointly with FSIB SG RA and “Pedigree Animal Breeders Association” Non-Governmental Organisation.

31. As a result of summing up the requests for subsidisation of loan interests, the RFI shall set up a statistical database, which shall include the information on subsidised loan interest rate related to Programme implementation, the identified problems and implementation difficulties.

32. Monitoring shall be conducted by the financial institution in accordance with the internal legal acts (procedures) of the latter, moreover, the first monitoring shall be carried out within two months after the loan is granted.

33. The financial institution shall submit a report to RFI in a form established by the contract concluded with the RFI.

34. In case of non-expedient use of the loan by the beneficiary the financial institution shall withdraw the active loan of the beneficiary from the Programme and shall reserve itself the right to change the interest rate of the loan unilaterally by applying a higher interest rate established for active loans of the given financial institution.

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

36. The report shall contain detailed information on the progress of the Programme, including:

(1) information on loans, by regions and communities, number, amount of loans, the amount of subsidy for the loan interest rate;

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

37. Where the expenses are compensated, the Ministry shall conduct annual monitoring for three years.

38. The report prepared as a result of monitoring shall contain detailed information on the progress of the Programme, including:

(1) pedigree SHC and the stock of received generation by sex,

(2) the degree of productivity and the volumes of the produced product,

(3) channels and volumes of sales.

39. The potential risks of the Programme shall be as follows:

(1) failure to ensure the planned volumes of acquisition of pedigree SHC due to low creditworthiness of economic entities engaged in sheep breeding and goat breeding,

(2) impossibility for repayment of the principal amount and the interest rates of provided loan resources due to pandemic,

(3) overestimation of resources expected in the form of state support,

(4) difficulties in importing animals to the Republic of Armenia and big contingency expenses for transportation.

40. Risk mitigation measures shall be as follows:

(1) promoting introduction of agriculture animals insurance system,

(2) implementing the Programme “Vaccination of agricultural animals” by the Ministry, involving FSIB SG RA in monitoring,

(3) creating centralised animal market for pedigree SHC in the Republic of Armenia.

41. The Programme will be financed from the State Budget of the Republic of Armenia.

42. The total budget of the Programme shall make up AMD 3.097.125.000 (Table).

43. For the purpose of financial evaluation of foreseen expenses, the maximum estimated cost per head of a sheep and a goat to be acquired within the framework of the Programme shall be set to AMD 450 thousand. Table

(Title amended by No 68-L of 27 January 2022)

(Table amended by No 68-L of 27 January 2022)

44. Economic entities engaged in sheep breeding and goat breeding under the state support in 2019-2023 shall be provided with the opportunity to acquire (import) about 30 thousand heads of small horned cattle of different sex and age groups (pregnant sheep and goats, growing female and male) with affordable conditions.

45. The stock of sheep and goats will increase. A generation of about 100 thousands heads having valuable production and economic features as per the high pedigree animals acquired within the framework of the Programme will be received by 2027.

46. The volumes of sheep breeding and goat breeding products will increase. Meat amounting to about AMD 3.5 billion and milk amounting to AMD 0.5 billion will be produced in 2019-2027.

47. The level of profitability of sheep breeding and goat breeding branch will increase.

48. Conditions will be created for increasing the export volumes.

49. Opportunities will be created for more effective use of pastures and greenlands of the Republic.

(Annex supplemented and edited by No 1058-L of 24 June 2021, amended by No 68-L of 27 January 2022)

Chief of Staff TO THE PRIME MINISTER of the Republic of Armenia

E. AGHAJANYAN

Published on a joint site 06.06.2024