GOVERNMENT OF THE REPUBLIC OF ARMENIA

D E C I S I O N

No 327-L of 29 March 2019

ON APPROVING THE 2019-2024 PROGRAMME FOR CATTLE BREEDING DEVELOPMENT IN THE REPUBLIC OF ARMENIA

Based on part 2 of Article 146 of the Constitution of the Republic of Armenia, and also in accordance with paragraph “e” of sub-point 1 of point 22 of Decision of the Government of the Republic of Armenia No 1515-N of 27 December 2018, the Government of the Republic of Armenia hereby decides:

1. To approve the 2019-2024 Programme for Cattle Breeding Development in the Republic of Armenia (hereinafter referred to as “Programme”), pursuant to the Annex.

2. To assign the Minister of Agriculture of the Republic of Armenia to submit proposals on making redistribution in Law of the Republic of Armenia “On the State Budget of the Republic of Armenia for 2019” and on making appropriate amendments and supplements to Decision of the Government of the Republic of Armenia No 1515-N of 27 December 2018 “On measures ensuring the performance of the State Budget of the Republic of Armenia for 2019”.

Prime Minister of the Republic of Armenia	N. Pashinyan
9 April 2019 Yerevan

Annex to Decision of the Government of the Republic of Armenia No 327-L of 29 March 2019

(Annex amended, supplemented by No 445-L of 18 April 2019)

Annex to Decision of the Government of the Republic of Armenia No 327-L of 29 March 2019

FOR CATTLE BREEDING DEVELOPMENT

IN THE REPUBLIC OF ARMENIA

MINISTRY OF AGRICULTURE

OF THE REPUBLIC OF ARMENIA

I. INTRODUCTION

1. Livestock breeding is one of the key branches of agriculture in the Republic of Armenia, supplying the population with almost indispensable animal-based food-products essential to life, and the industry — with valuable raw materials. Food security of the country and particularly the level of provision of population with such essential food-products as milk and meat, largely depends on the efficiency of this branch.

2. Livestock breeding in the Republic of Armenia provides more than 50% of the gross agricultural output. In 2018, in the Republic the gross output from livestock breeding amounted to AMD 477.9 billion, of which more than AMD 280 billion is from cattle breeding. However, due to low productivity indicators in beef and milk production, the current volumes of gross output from cattle breeding remain far from satisfactory.

3. As a result of fragmentation of number of heads of livestock and impossibility to carry out large-scale pedigree selection works in large horned cattle in the Republic of Armenia, the average milk yield of cows has constantly fluctuated at around 2000 kg for years, while the pre-slaughter weight of animals bred for meat production has not exceeded 320 kg. As a result, the milk yield has for years been ranging within the limits of 2000 kg; whilst the modern technologies for the management of cattle breeding and the use of the gene pool of highly-productive genera enable the cows to give milk of at least 4000 kg, and to sell the cattle fattened up for the meat, with the live weight of 450 kg and higher.

4. Considering the need to increase the volumes of production of high quality and safe milk and meat at low prime cost, the demand for products from cattle breeding in domestic and foreign markets increasing from year to year, as well as the importance of raising the effectiveness of use of pastures and hay-fields of the Republic, it is necessary to create preconditions for gradual intensification of cattle breeding, which is possible to carry out by qualitatively changing the herds existing in the Republic within the shortest possible time.

5. To intensify the management of cattle breeding in the Republic of Armenia and to develop pedigree cattle breeding, it is necessary to apply relevant mechanisms for promoting import of pedigree large horned cattle (hereinafter referred to as "pedigree LHC"), which will promote improvement and/or enhancement of pedigree and productivity characteristics of local cattle by using the gene pool of the best dairy and dairy-meat breeds, as well as realisation of the Programme for creation and development of pedigree farms (Schwyz and Holstein breeds of cattle, Suffolk sheep, Armenian Corridel type) approved by Protocol Decision of the Government of the Republic of Armenia No 53 of 21 December 2017.

II. OVERVIEW OF THE CURRENT SITUATION IN THE FIELD OF CATTLE BREEDING

6. In accordance with the data of the Statistical Committee of the Republic of Armenia (hereinafter referred to as "Committee"), as of 1 January 2018 a total of 590.6 thousand heads of large horned cattle have been record-registered in the Republic, including 266.8 thousand cows, 99 percent of which is centralised in the farms (having a status of a natural person) of the population. Pursuant to the data from the same source, the number of heads of large horned cattle, including the number of heads of cows, has decreased by 9.9 percent as compared to the data of 2017 (Table 1). In 2017 the drastic decrease in the number of heads of large horned cattle was mainly due to increase in the price for fodder (roughage), which was, in its turn, conditioned by comparatively dry conditions recorded during the given year, as well as by unprecedented large volumes of export (around 14 thousand heads). However, a clear picture on livestock number may be obtained only in case of their country-wide numbering and record-registration.

Table No 1

The number of heads of large horned cattle and volumes of meat production in the Republic of Armenia per years (ArmStat), 1000 heads

Indicator	Unit of measurement	Years
		2014	2015	2016	2017	2018
The number of heads as of 1 January
Total large horned cattle	1000 heads	677.5	688.5	701.5	655.8	590.6
including cows:		309.6	313.9	318.6	296.0	266.8
Average milk productivity of one cow	kg/year	2102	2144	2192	2260	-
Milk and meat production
Milk	1000 tonnes	700.4	728.6	754.2	758.2	697.7
Meat (with slaughter weight)		93.1	100.4	106.1	109.0.	190.3*
of which:
beef and veal		59.0	63.6	68.1	70.8	-
sheep and goat		9.1	9.8	10.3	11.0	-
pork		16.2	17.5	18.0	16.6	-
poultry		8.8	9.5	9.7	10.6	-

7. In 2017, maximum indicator of gross milk production constituting 758.2 thousand tonnes was recorded in the Republic. However, due to reduction in the number of heads of cows during the same year, the volumes of milk production in 2018 amounted to 697.7 thousand tonnes (8 percent decline). It should be stated that the direct effect of reduction in the number of heads of cows on the volumes of milk production is due to the fact that the share of the milk of cows in the gross milk products is around 93%. At the same time, the average milk yield of one cow has raised along with decline in the number of heads of cows. Thus, in 2017 the average milk yield of one cow amounted to 2260 kg/year (3.1 percent growth compared to the previous year).

__________________________

* with live weight

8. According to the Committee data, in 2017 a total of 109.0 tonnes of meat with slaughter weight was produced. The share of meat production in the farms having a status of a legal and natural person totalled to 8.3 thousand tonnes (7.6 percent) and 100.7 tonnes (92.4 percent), respectively. Since 2014, the share of beef and veal in the gross meat products in the Republic has not only stabilised, but has shown a tendency for growth. Hence, in 2014 beef and veal amounted to 63.3 percent in the total gross meat products, in 2017, beef and veal amounted to around 65 percent or 70.8 thousand tonnes of 109 thousand tonnes of gross meat products (with live weight) (Table No 1).

9. It is noteworthy that in 2017-2018 the volumes of meat production have grown along with decline in the number of heads of agricultural animals (in 2016/2015 by 5.6 percent, in 2017/2016 by 2.7 percent), which is due to the demand, fluctuations in feed price, application of high level of spoilage allowance in animals used in cattle breeding and preference given to meat in the food market.

Figure 1. Average sale prices of milk and meat producers in the Republic of Armenia

for 2014-2018 per years (ArmStat), AMD/kg;

10. Price study of livestock products has shown that the lowest prices for beef and milk sold by the producer were recorded in 2016, AMD 1970 and AMD 137, respectively (Figure 1), meanwhile the number of heads of large horned cattle record-registered as of January of the same year totalled to 701.5 thousand heads. While, given 590.6 thousand heads of large horned cattle in 2018 the average price of beef has grown by 38%, and the average price for milk — by 11% amounting to AMD 2720 and AMD 152, respectively. Hence, the average prices for milk and meat sold by the producer in the Republic are reverse comparative to the number of heads of livestock of the given year.

11. This picture of the number of heads of livestock and the prices for products of animal origin is inherent to extensive cattle breeding management techniques. However, on the one hand, current adequate meat prices, and on the other hand, low milk yield of animals, low quality of products, low profitability of milk production conditioned by the sale price, create necessary conditions conducive to making investments in the field of cattle breeding and intensification of this branch.

12. According to the data introduced by the Food Safety Inspection Body under the Government of the Republic of Armenia (hereinafter referred to as "FDIB GRA"), 484 heads of large horned cattle were imported into and 13 590 heads were exported from the Republic in 2017, while in 2018, 2439 heads of large horned cattle were imported into and 3292 heads were exported from the Republic. Thus, the net export of large horned cattle in 2017 amounted to 13 106 heads, and in 2018 — to 853 heads or around 15 times less compared to that of the previous year. It should be noted that only 25 percent (214 heads) of large horned cattle imported into and not exported from the Republic in 2018 were used for further breeding, 75 percent was sold for meat.

13. With the view to developing agriculture, including livestock breeding, the Ministry of Agriculture of the Republic of Armenia (hereinafter referred to as "Ministry") implements the Programme for subsidisation of interest rate of credits granted to the agricultural sector, under which economic entities are granted subsidised credits in the amount of AMD 3-15 million, at annual rate of 3-5 percent (instead of the actual 14 percent), with the repayment period of up to 5 years (given the investment focus). It should be stated that in 2018, around 60 percent of credits with subsidised interest rates were channelled to funding cattle breeding programmes.

14. To promote the pedigree cattle breeding in the Republic and to ramp up import of pedigree animals, Law of the Republic of Armenia "On approving the list of goods imported by organisations and individual entrepreneurs and not subject to taxation under excise tax, the import whereof is exempt from value added tax" stipulates exemption from value added tax for imports of live pedigree poultry, large and small horned animals, pigs, horses, rabbits.

15. According to the data submitted in response to an enquiry made by the Ministry to the State Revenue Committee of the Republic of Armenia, 2195 heads of pedigree LHC in total have been imported into the Republic during 2013-2018 (Holstein, Schwyz, Simmental, Jersey and Aberdeen Angus breeds), which constitutes around 49 percent of the total number of heads of large horned cattle imported into the Republic in the same period. During the above-mentioned period the maximum number of heads of pedigree LHC was imported into the Republic in 2013 (705 heads), and the minimum — in 2014 (65 heads) (Table No 2).

Table No 2

The number of pedigree LHC imported into the Republic of Armenia per years

(SRC GRA, FDIB GRA), heads

CN FEA Code	Short name of goods	Years						Total
		2013	2014	2015	2016	2017	2018
0102	Live large horned cattle	705	65	324	451	484	2439	4468
0102 21	Pedigree LHC	705	65	321	451	439	214	2195*
Share of pedigree animals in the total number of heads imported into the Republic, %		100	100	99	100	91	8.8	49.1

16. One of the important measures for improving the production and economic value of large horned cattle has also been the implementation of the 2007-2015 Programme for Cattle Breeding Development in the Republic of Armenia approved by Decision of the Government of the Republic of Armenia No 336-A of 22 March 2007, under which during the mentioned years 2506 heads of pedigree heifer calves, of which 981 heads of Holstein breed, 932 heads of Schwyz breed and 593 heads of Simmental breed, were imported into the Republic from European countries. This Programme is to account for comparatively high indicator of import of pedigree animals into the Republic recorded in 2013, 2015 and 2016 (the last consignment of heifer calves was imported in 2016).

17. Given the priorities of ensuring food security in the Republic, raising the competitiveness of domestic cattle breeding products in the market and the level of profitability of this branch, as well as increasing the share of pedigree animals in herds, improving the productivity characteristics of local bovines and the urgency of settling the above-mentioned issues in a short period of time, it is necessary to promote the import of the gene pool of cattle with high genetic potential into the Republic of Armenia and/or to organise the production of pedigree material on spot by applying more effective state support mechanisms.

_______________________

* of which 1174 heads under the 2007-2015 Programme for Cattle Breeding Development in the Republic of Armenia (2013, 2015, 2016)

III. THE GOAL AND OBJECTIVES OF THE PROGRAMME

18. The goal of the programme is supplying pedigree LHC to the economic entities engaged in cattle breeding in the Republic of Armenia under affordable conditions, in particular through partial subsidisation of the interest rates of credits, which will allow replenishing the herds with pedigree LHC having valuable production and economic characteristics instead of low-productivity animals of unknown origin, unfit for reproduction, developing the pedigree breeding, improving the productivity of local animals through bigeneric crossing, increasing the volumes of milk and meat production, reducing the cost price of the milk and meat produced, by making it more competitive as compared to the similar imported product.

19. The implementation of the Programme will allow settling the following issues:

(1) to ensure affordability of acquisition and/or import of pedigree LHC bred in the Republic;

(2) to gradually intensify the branch of cattle breeding;

(3) to increase the share of pedigree animals in cattle breeding farms, the production of cross-bred productive progeny as a result of bigeneric crossing with local animals;

(4) to increase the volumes of beef and milk production;

(5) to record-register the pedigree animals and create preconditions for keeping of pedigree books.

IV. JUSTIFICATION FOR THE PROGRAMME AND THE NEED FOR ITS IMPLEMENTATION

20. Products from cattle breeding in the Republic of Armenia amount to around 60 percent of gross livestock products, and the cattle breeding is considered one of the branches of livestock breeding with the highest balance. However, it is mainly of extensive nature, and the vast majority of animals in the herds are of low value in terms of pedigree and has an insufficient level of productivity and forage compensation.

21. The conditions created in the cattle breeding branch do not allow to organise beef and milk production in required volumes and sufficient quality, which, in its turn, limits the opportunities of expanding the market, reducing the price cost of products and raising its competitiveness.

22. The difficulties related to replenishing the herds existing in the Republic with high-yield large horned animals and restoring the herds are mainly conditioned by high cost of acquisition thereof, shortage of basic assets of economic entities engaged in cattle breeding, high interest rates of credits, lack of institute of animal insurance and pledge of animals, drastic fluctuations in prices for livestock breeding products and feed and other factors.

23. State support programmes for the development of pedigree livestock breeding through subsidisation are also implemented in the EAEU member states, in the Russian Federation (Decision of the Government of the Russian Federation No 1257 of 4 December 2012 "Rules for provision and distribution of subsidies allocated to the budget of entities of the Russian Federation from the federal budget to support the pedigree livestock breeding", Decision of the Government of Perm Krai No 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 No 35 of 25 January 2013 "On approving the subsidisation rules for support to pedigree livestock breeding"). However, the price for pedigree animals acquired, as well as their maintenance and feeding costs are partially compensated under the above-mentioned programmes.

V. DESCRIPTION OF IMPLEMENTATION OF THE PROGRAMME

24. The Programme shall envisage provision of state support to acquisition of pedigree LHC at the expense of funds of the State Budget of the Republic of Armenia, which will allow to raise the pedigree value of herds and restore the pedigree breeding process in cattle breeding. As a result, the intensification of the branch of cattle breeding will enable the economic entities to produce meat and milk more competitive in the market, as pedigree animals having valuable production and economic characteristics show — under equal conditions — higher rates of feed compensation and food yield, thus reducing the price cost of the products.

25. Proceeding from the needs to develop dairy, dairy and meat and meat cattle breeding, to increase the volumes of beef and milk production and export, as well as to effectively and fully use the natural resources in the Republic, no preconditions shall be defined by the Programme for breeds of pedigree LHC by yield variation (dairy, meat and combined), exception is made for their sex and age groups: heifer calves (animals whose pregnancy is confirmed) and 14-17-month-old female calves (as of the date of placing under quarantine in the exporting country in case of import, and in the Republic of Armenia, as of the date of concluding a sale and purchase contract).

(point 25 supplemented by No 1082-L of 1 July 2021)

26. The Programme shall be designed for 6 years and cover the years of 2019-2024. During the specified period, the economic entities engaged in cattle breeding will be given an opportunity to acquire around 10 thousand heads of pedigree LHC, depending on the form of state support, acquisition price and sex and age group of an animal.

27. To ensure the affordability of acquisition of pedigree LHC under the Programme, the state support will be provided through partial subsidisation of the interest rates of credits:

(1) any bank or credit organisation (hereinafter referred to as "financial institution"), which grants a credit to economic entities in accordance with the terms of this Programme, as well as the Rural Financing Institution (hereinafter referred to as "the RFI") of the State Agency "Rural Areas Economic Development Programme Implementation Unit" of the Ministry may participate in the Programme.

(2) process of granting credits:

a. credits will be granted to individual entrepreneurs, legal or natural persons (hereinafter referred to as "beneficiary") participating in the Programme in AMD, at the maximum nominal interest rate of 14 percent, moreover, other fees (cash withdrawal fee, service fee, commissions, etc.) shall not be charged for the credit-related services of financial institutions ;

b. each beneficiary may acquire a maximum of 300 heads of pedigree LHC, and the aggregate balance of credits granted under the Programme may not exceed AMD 300 million;

c. crediting process shall be initiated by the beneficiaries by applying to the financial institution for receiving a credit before acquisition of pedigree LHC;

d. the beneficiary shall submit to the financial institution an on-line application on acquisition of pedigree LHC, indicating their quantity, place(s), of their acquisition, (address), in case of import thereof — time limits for import, and shall also submit to the Ministry the pedigree certificates and cards of large horned animals to be acquired, for the purpose of advising, where necessary, on the basis of those certificates and cards, the financial institution about the pedigree origin of the large horned animals to be acquired;

e. where the beneficiary so desires, a grace period of maximum 12 months may be set for the principal amount of the credit at the beginning of the initial year;

f. the financial institution shall transfer, by direct credit, by instalments or as a one-off payment, the amount of the credit granted to the beneficiary to the appropriate account of the beneficiary (in case he or she meets the creditworthiness requirements of the financial institution);

g. the credit repayment period shall be up to 5 years, the process of credit repayment shall be carried out according to the credit repayment schedule set by the contract concluded between the financial institution and the beneficiary, and the credit interest rate shall be calculated against the principal balance;

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

i. the process of subsidisation of credit interest rates shall be initiated by financial institutions that perform transactions that meet the terms of this Programme;

j. credit interest rates shall be subsidised in an amount enabling to grant the beneficiary the credits at the interest rate of 2% for acquisition of pedigree LHC bred in the Republic of Armenia, at the interest rate of 3% for acquisition of imported LHC, and at the interest rate of 0% to economic entities of border communities included in the list approved by Decision of the Government of the Republic of Armenia No 1444-N of 18 December 2014 (hereinafter referred to as "border communities") and cooperatives carrying out activities in the sector of agriculture (hereinafter referred to as "cooperative");

k. subsidisation of credit 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 credit; fines and/or penalties shall not be subject to subsidisation;

l. the amount of subsidisation of the credit interest rate shall be transferred by the RFI to the relevant account of the financial institution based on requests of the given financial institution. The requirements for the content of the request shall be defined by the contract concluded between the RFI and the given financial institution. The standard form of the contract shall be designed by the RFI, agreeing it with the Ministry;

m. the financial institution shall submit the request on subsidisation of the credit interest rate to the RFI once a month, not later than the fifth working day of the following month. The RFI shall, within 10 working days following the receipt of the request, uphold the request and transfer the amount of subsidisation of the credit interest rate to the account of the relevant financial institution, where the request meets the requirements of the Programme;

n. the acquisition of pedigree animals, also the import, in case they are imported, shall be carried out within three months after approval of the credit, in the last ten days of the expiry of which the acquisition of pedigree animals, and also their import, in case they are imported, may be extended for another one month at the initiative of the beneficiary and upon consent of the Ministry;

(3) Following the acquisition (import) of pedigree LHC, the beneficiary shall submit the following to the financial institution:

a. a copy of the acquisition contract;

b. pedigree certificates (cards) of acquired animals;

c. receipts of payment for animals, invoices;

d. a copy of the contract with transporting company (if any);

e. veterinary certificate certifying the health condition of animals (in case of import — also the form provided in the country of export);

f. statement of information on record-registration of animals in the community;

g. bank account;

(4) Following the acquisition (import) of pedigree LHC, the beneficiary shall submit the following to the Ministry:

a. a copy of the acquisition contract;

b. pedigree certificates (cards) of acquired animals;

c. (paragraph repealed by No 445-L of 18 April 2019)

d. statement of information on record-registration of animals in the community.

(5) subsidisation of credit interest rate shall be terminated in the following cases:

a. violations of the terms prescribed by point 28 of the Programme;

b. (paragraph repealed by No 445-L of 18 April 2019)

c. where the borrower has overdue obligations towards the creditor for more than sixty days in aggregate in the period of one year (previous 12 months), or as a result of the overdue obligations towards the creditor, the credit is not classified into the standard class in accordance with current procedure for classification of credits;

d. where the contract concluded between the beneficiary and the financial institution is early rescinded;

e. falsifications are detected in the information submitted by the beneficiary;

f. in cases of misuse of the credit and provision of false information by the beneficiary, the amount of subsidisation provided up to that moment shall be subject to return within 3 months (the return of the subsidised amount to the RFI shall be carried out by the financial institution). In the other above-mentioned cases , the subsidisation of the credit shall be terminated starting from the day of the previous credit repayment set by the repayment schedule of the given credit;

g. violation of the terms defined by paragraph "n" of sub-point 2 and point 31.

(point 27 amended, supplemented by No 445-L of 18 April 2019, supplemented by No 1082-L of 1 July 2021, amended, edited by No 102-L of 27 January 2022)

28. The beneficiary shall submit, together with the documents required by sub-point 2 of point 27 of the Programme, a written letter of commitment on ensuring the use of acquired pedigree LHC for reproduction of cattle herd in the Republic of Armenia for at least three years.

(point 28 amended by No 445-L of 18 April 2019)

29. The beneficiary shall, not later than within three working days following the fall and/or sanitary slaughter or expropriation of pedigree LHC, submit information to the Ministry, attaching thereto a record on fall 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 constituting the place of expropriation.

(point 29 amended by No 445-L of 18 April 2019, edited by No 1082-L of 1 July 2021)

30. The pedigree LHC acquired under the Programme (with identification number and documents) shall not be subject to double crediting in case of expropriation.

31. It should be stated that in the event that information regarding provisions provided for by point 29 emerges as a result of monitoring, the amount of subsidisation of the credit interest rate with respect to those animals shall be subject to return, except with respect to pedigree animals fallen or subjected to sanitary slaughter in 2020 and where no information has been submitted thereon to the Ministry in the prescribed manner due to the epidemic and martial law in the Republic, provided that the beneficiary of the Programme has repaid at least AMD 300 000 of the principal amount of the credit and submitted the receipt for the payment to the Ministry.

(point 31 supplemented by No 1082-L of 1 July 2021)

32. Natural and legal persons and individual entrepreneurs having distressed debts within the scope of state support and/or other programmes of the Ministry cannot be considered as beneficiaries of the Programme.

VI. PROGRAMME MONITORING

33. Programme monitoring shall be conducted by the Ministry jointly with the FDIB GRA and "Pedigree Animal Breeders Association" (hereinafter referred to as "Association") Non-Governmental Organisation.

34. As a result of summarisation of requests for subsidisation of credit interest rates, the RFI shall set up a statistical database which includes the information on subsidised credit interest rate related to the Programme implementation, the issues identified and implementation challenges.

35. Credit monitoring shall be conducted by the financial institution in accordance with the internal legal acts (procedures) thereof, moreover, the first monitoring shall be conducted within two months after the credit is granted.

36. The financial institution shall submit a report to the RFI in the format established by the contract concluded between the RFI and the financial Institution.

37. In case of misuse of credit or provision of false information by the beneficiary, the financial institution shall withdraw the existing credit of the beneficiary from the Programme for subsidising the interest rates of credits and shall have a right to change the interest rate of the credit unilaterally by applying a higher interest rate set for credits existing in the given financial institution.

38. The RFI shall, at least once for 30 days, submit a report to the Ministry.

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

(1) information on credits, per regions and communities, number, amount of credits, amount of subsidisation of the credit interest rate;

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

VII. Risk Assessment for Implementation of the Programme

40. The main Programme risks shall be the following:

(1) failure to ensure the planned volumes of acquisition of pedigree LHC due to low level of solvency of economic entities engaged in cattle breeding;

(2) impossibility to return the principal amount of credit resources granted and to pay the interest rate due to epidemics;

(3) challenges related to transfer to the Republic in the case of import.

41. Risk mitigation measures shall be the following:

(1) subsidising interest rates of long-term credits granted under the Programme and setting a 12-month grace period;

(2) implementing the Programme "Vaccination of agricultural animals" by the Ministry, involving the FDIB GRA in the monitoring, promoting the introduction of animal insurance institute;

(3) production of pedigree LHC in the Republic of Armenia.

VII. FINANCIAL COMPONENT OF THE PROGRAMME

42. The financial source for implementation of the Programme shall be the State Budget of the Republic of Armenia.

43. The total budget of the Programme for 2019-2024 shall amount to around AMD 2.447 billion, and for 2019-2028 — around AMD 3.102 billion, and the total value of credits shall be estimated at AMD 9.960 billion (Table No 3).

44. The following factors shall serve as a ground for financial assessment of the projected costs of credits granted:

(1) AMD 1.0 million has been taken as an estimated value for 1 head of pedigree LHC acquired under the Programme (tenders for the 2007-2015 Programme for cattle breeding development in the Republic of Armenia, analysis of prices for large horned pedigree animals in the EAEU member states and in Europe);

(2) credits will be granted with a repayment period of up to 5 years, at a maximum interest rate of 14%, of which the subsidisation shall be provided in an amount allowing that the credits for acquisition of pedigree LHC bred in the Republic of Armenia are granted to the beneficiary at the interest rate of 2%, for acquisition of imported LHC — at the interest rate of 3%, and to cooperatives or economic entities of border communities —at the interest rate of 0%:

(3) the maximum amount of credit granted to one beneficiary has been set at AMD 300 million.

(point 44 supplemented by No 445-L of 18 April 2019, edited by No 102-L of 27 January 2022)

45. In 2019, around 170 million Armenian drams will be required for implementation of the Programme (Table No 3).

Table No 3

of the 2019-2024 Programme for the cattle breeding development in the Republic of Armenia

Financial estimate of subsidisation of credit interest rates

Indicator	Year										Total
	2019	2020	2021	2022	2023	2024	2025	2026	2027	2028
Total credit, AMD	1,660,000,000	1,660,000,000	1,660,000,000	1,660,000,000	1,660,000,000	1,660,000,000	-	-	-	-	9,960,000,000
Interest rate, %	12	12	12	12	12	12	-	-	-	-	-
Grace period for the principal amount during the initial year, month	12	12	12	12	12	12	-	-	-	-	-
Subsidy size, %	10	10	10	10	10	10	10	10	10	10	-
Subsidisation amount, AMD	169,984,000	320,490,667	428,501,333	494,016,000	517,034,667	517,034,667	347,050,667	196,544,000	88,533,333	23,018,667	3,102,208,000
Subsidised interest rate, %	2	2	2	2	2	2	2	2	2	2	-
Interest amount after subsidisation, AMD	29,216,000	55,084,333	73,648,667	84,909,000	88,865,333	88,865,333	59,649,333	33,781,000	15,216,667	3,956,333	533,192,000
Pedigree LHC, head	1,660	1,660	1,660	1,660	1,660	1,660	-	-	-	-	9,960

VIII. Expected Outputs

46. As a result of the Programme implementation:

(1) in 2019-2024, the economic entities engaged in cattle breeding with state support will be provided with the opportunity to acquire around 10 thousand heads of pedigree large horned animals of different sex and age groups, which creates preconditions for:

a. restoring the pedigree practice in the cattle breeding sector and implementation of large scale pedigree measures;

b. increasing the number of heads of pedigree LHC in herds;

c. gradually intensifying the branch of cattle breeding;

d. increasing the level of profitability of cattle breeding products;

e. increasing the volumes of beef and milk production;

f. increasing the competitiveness of economic entities engaged in cattle breeding.

(2) development of cattle breeding in the Republic will allow for more effective use of pastures and hay-fields, which will contribute to increase in income of rural population;

(3) where 90 percent of the total number of heads of animals subject to state support are pedigree cows and heifer calves, then in 2019-2028 milk and beef of around AMD 25 billion in total will be produced in the Republic, of which around AMD 16 billion in 2019-2024 (98 thousand tonnes of milk in the amount of AMD 14 billion and 0.9 thousand tonnes of beef with slaughter weight in the amount of around AMD 2.1 billion), and AMD 8.9 billion in 2025-2028 (49 thousand tonnes of milk in the amount of AMD 7 billion and 0.8 thousand tonnes of beef with slaughter weight in the amount of around AMD 1.9 billion).

Prime Minister of the Republic of Armenia	N. PASHINYAN
9 April 2019 Yerevan

Standard form

From: Resident of ....... Community........ Marz

of the Republic of Armenia

………..….....………… *

To: Ministry of Agriculture of the Republic of Armenia

APPLICATION

for participation in the 2019-2024 Programme for cattle breeding development in the Republic of Armenia Please be informed that I would like to acquire pedigree large horned animals with state support. As per the following parameters:

 ………………………………………………….…. number (breed, sex and age);

 …………..............................................…. place of acquisition (address);

 .................. time limits for import (if imported).

Please enroll me (name of the organisation where the applicant is a legal person or an individual entrepreneur) as a beneficiary in the 2019-2024 Programme for Cattle breeding development in the Republic of Armenia.

Signature ....................................  (position,	......................................................  name, surname, father's name)
........................................ (signature)   ..... ..................... 20___     Seal

(Annex amended, supplemented by No 445-L of 18 April 2019, supplemented, edited by No 1082-L of 1 July 2021, amended, edited by No 102-L of 27 January 2022)

____________________________

* The relevant data shall be filled in where the applicant is a legal person or an individual entrepreneur.

Published on a joint site 06.06.2024.