major sectors of the economy : jewelry and diamond processing : manufacturing : information technology : natural resources : chemicals and pharmaceuticals : agriculture : food processing : tourism : construction and construction materials : energy : transport : telecommunications : water

Agriculture

Agriculture is the largest employer in the country and accounts for over one quarter of GDP. However, only 17 per cent of Armenian land is arable. The agricultural sector suffers from a lack of investment and a lack of availability of long-term credits. However, action is being taken to start addressing this problem (see Case study: Agricultural Cooperative Bank below).
The country produces grain crops, vegetables and superior quality fruits including grapes, figs, pomegranates, apricots, peaches, potatoes, sugar-beets, tobacco, cotton, grains, essential oils (such as geranium), rose, peppermint and specialty teas. In the Soviet era, fruits and grapes provided 25-30 per cent of budgetary revenues, but in the early transition years they were partly replaced with cereal crops. Grapes traditionally brought income from wine exports (up to 10 million deciliters a year), and fruits were either canned or exported fresh. By 1998 the area cultivated with cereal crops had grown by over 50 per cent, to the detriment of orchards and vineyards. One of the motives was to replace the import of cereals with self-sufficiency. With adequate supplies of pesticides, fertilizers and high-quality seeds, the potential exists to increase cereal production to 340,000 tones a year by 2005.
The grain harvest in 1999 was affected by adverse weather, which also reduced potential grape production. In spite of this, the wine grape harvest rose 25 per cent in 1999 over 1998, with a crop of 52,500 tones. However, prices were down by 25 per cent. The main purchaser of the grapes was the Yerevan Brandy Plant (see below). The total grape harvest in 1999 was 100,000 tones, about the same as in 1998. The Ministry of Agriculture and Natural Resources forecasts a grain harvest in 2000 of 315,000 tones, and in 2001 of 321,000 tones.