By Albert Khachatryan

The New Year is perceived in different ways by our fellow countrymen. Children are looking forward to presents and dainties, while businessmen of every stripe are rubbing their hands with joy. As to ordinary needy families, they shudder at the thought about expected shopping. To each his own! Each square inch on the table laid on the occasion at the modern-day nabobs’ homes is worth much more than all the cash on this piece of furniture in poor households. Still, every family does its best to “put up a good show” during its favorite holiday. And they go to market to buy goods at much higher prices.

In civilized countries businessmen follow the classical principles of market economy as the New Year and Christmas celebrations come near: selling more at lower prices. So they lower prices to consumers’ joy! As to “us”, although we have switched over to market economy, we have not, for some reason, adopted the aforementioned principles. If not, what then accounts for the skyrocketing prices at the agricultural markets? It is not at all a new phenomenon in Armenia – it is a feature of long standing.

In Soviet times, besides state-run shopping centers and, which was known as “cooperative trade”, kolkhoz markets were working in cities, with prices there fluctuating, depending on demand and supply. Since the demand considerably exceeded the supply just before the New Year, the market prices reached he highest limit possible. So the “free trade islands” were prospering to the dealers’ joy, causing the population’s discontent. Any attempts to curb the price rise at the markets did not produce any results.

Deficit accounted for the problem. Small holdings, which constituted an insignificant percentage of the total cultivated areas, yielded from 15% (grapes) up to 60% (potatoes) of the gross crop production. Except for such crops as grain, sugar beet and some others, small holdings played an essential role in the agricultural sector. They also showed high figures in meat, milk and egg production. The state was unable to complete with the free market, and the market prices exceeded the “fixed” prices in state-run shopping centers many times. An important fact should be taken into account: the state prices for consumer goods depended not only on economic, but also on social and ideological factors.

Since the land was privatized and collective and state farms collapsed, the sector has been managed by homebred farmers. One can only guess at what is going on in the agricultural sector now, but the favorable official reports say that the farmers “are doing well,” producing as much — or almost as much – as in “good old days.”

Specifically, RA Deputy Minister of Agriculture Samvel Galstyan reported that the current grapes yield is 205,000 tons (214,000 tons about 20 years ago), grain yield 361.5 thousand tons (against 373.5 thousand tons). Other crops are expected to show similar “excellent figures” as well. Processing enterprises have purchased a total of 127,000 tons of grapes at 115.4 AMD for 1 kg from farmers. Good export figures have been reported as well – a total of 2.4 thousand tons of grapes, almost 13.8 thousand tons of apricots, 1,000,000 ton of peaches… True, this November the retail prices for grapes were, for some unknown reason, 5.1% higher than last November. So we can only be happy over the high yield or the prices could have been even higher…

Despite the achievements, what is the reason for the outrageous prices at the Armenian markets just before the New Year? The prices for ham, which is not usually in special demand, are now beating he world records! Overjoyed at this, the ham dealers only regret that fact that geneticists have not yet “invented” a multi-hoofed pig! Last year, interested in the “unclear” price rise before the New Year, the RA State Commission for Protection of Economic Competition had to exert pressure on farmers. It was clear with companies. But what about the informal markets, with legions of market dealers?

The Government does not seem to be able to prevent speculation at agricultural markets. Indeed, how the greengrocers at the markets be pressured? But the price for the greens was as much as 40% higher this November than last November! Can the global crisis be the reason? When one comes to think of it, the market chaos is the result of the Government’s omissions.

The first reason is the farmers who have to sell their produce at their own risk. They, however, cannot afford the luxury of spending all day long at the market. So after selling the produce “dirt cheap” to dealers, the farmers go back to their villages. Thus most of the sale proceeds are the profit of the dealers, rather than of farmers, who are far from being well off. These are the “side effects” of individual farms in the Armenian agricultural sector with its underdeveloped infrastructure.

Secondly, Armenia lacks companies specializing in bulk purchase of agricultural produce, and large shopping centers, like store chains, have resolved the problem by themselves. So the processing enterprises are the only wholesale buyers of agricultural produce. As we can see, Armenian businessmen are just afraid of going into this “unpredictable” business. It requires goods transport, refrigerated warehouses and, the most important, wholesale buyers. As regards the last-named, we have less than nothing of them! The entire retail trade system is hundreds of shopping centers of different size.

But the Government is supposed to protect the citizens’ rights – of both consumers and farmers. In mid-1990s grandiose plans of constructing a wholesale agricultural market near Yerevan were in the air. Hope-inspiring promises of negotiations with foreign investors were made, and things seemed to be progressing… Unfortunately, the idea was never implemented. The unfinished market building can still be seen on the Yerevan-Echmiadzin highway as a symbol of “official” approach to the problem.

T.P.