PARTICIPATORY APPRAISAL OF
COMPETITIVE ADVANTAGES (PACA)
2013
LOCAL ECONOMIC DEVELOPENT IN
BERD
Table of Content
Introduction .................................................................................................................................................. 3
cooperating institutions ................................................................................................................................ 3
berd community............................................................................................................................................ 5
compettive advantages of berd .................................................................................................................... 6
Main economic sectors of berd .................................................................................................................... 7
Development Initiatives and Recommendations in Viticulture ........................................................... 9
farming ........................................................................................................................................................ 10
Development Initiatives and Recommendations in Farming Sector .................................................. 13
cattle breeding ............................................................................................................................................ 14
Development Initiatives and Recommendations in Cattle Breeding Sector ...................................... 18
comparison of the main economic sectors ................................................................................................. 19
Cheese and Dairy Production Sector .................................................................................................... 19
The Value Chain of Dairy Production in Berd..................................................................................... 20
Analysis of Dairy Production Value Chain .......................................................................................... 21
Women’s Participation in Dairy Value Chain ..................................................................................... 23
Other economic sectors .............................................................................................................................. 25
Development Initiatives and Recommendations for Small and Medium Entrepreneurship............. 26
2
INTRODUCTION
In May 2013, Caucasus Office of CARE International, SME Development National Center of
Armenia and “Business Pareta” LLC implemented a local economic development exercise
based on “Participatory Appraisal of Competitive Advantages” (PACA) methodology. The
exercise was implemented with participation of the local team and the Municipality of Berd.
COOPERATING INSTITUTIONS
Caucasus Office of CARE International
“Business Pareta” LLC
SME Development National Center if Armenia
3
The process included the following phases:
 General presentation of the process, introduction, team recruitment.
 Economic mapping of the communities- selection of the leading sectors of the community,
identification of main players in each sector.
 Analysis of available value chains, identification of reform activities.
 Workshops for analyzing of the leading sectors.
 Summary of the results, collection of initiatives.
 Field work - meeting with community stakeholders for verification of the received results
and initiatives.
 Finalization of the initiatives, collection of initiatives.
 Analysis of women’s participation in the leading sectors of economy.
 Finalization of Initiatives and development of brochure.
4
BERD COMMUNITY
Tavush Fortress was built in 7th century when the
region was governed by the Prince Tselik
Amram. It is located in hard-to reach side hill of
Tavush Gorge. The inhabitation was located at
the accessible part of the gorge, next to the
fortress. Remainings of this inhabitation are still
being excavated till now. During the time the
inhabitation was ruined and the inhabitants left
the location. After a while, a part of former population returned and established a new inhabitation
in front of the fortress and called it Berd (Fortress). Currently there are 2900 households in Berd with
8700 residents.
People are involved mainly in agriculture. Forest berry collection, retail trade and small productions
are also developed. A branch of “Pernod-Ricard Armenia”, which operates the Yerevan Brandy
Factory, functions in Berd.
Many intellectuals, state figures, economists and businesspeople, as well as many military figures have
Berd descent.
There are 880 ha of plough, 21.7 ha of perennial plantations (grape), 5 ha fruit plantation, mainly
with walnut, peach and apple trees. The community has also 126.83 ha of hayfield and 541.74 ha of
pastures.
5
COMPETTIVE ADVANTAGES OF BERD
Natural
 Picturesque forestry nature, virgin
forests.
 Reservoirs of forest fruits, berries and
very rare whortleberry
 River Salmon (Salmon trutta fario)
 Nature-climatic conditions for
growing special grape sorts for
cognac production
 Spring water reservoirs
 Fortress of Tselik Amram.
Human advantages

Traditional receipts (made with bread),
cornel and medlar marinade, mulberry
syrup, cornel vodka, bichina (homemade
meat product, which is famous in Berd subregion and became a traditional meal).
6
MAIN ECONOMIC SECTORS OF BERD
People are mainly involved in agriculture, especially cattle breeding, farming and grape growing
(viticulture).
Viticulture
144 households are involved in viticulture in Berd. There are 26 ha of vineyards in community. 5 ha
of them are backyard vineyards. Soil plots in these vineyards are as big as 0.1-0.3 ha and in backyards
it is 100 sqm (0.01-0.05 ha). Mainly “Karmrahyut”, “Babants”, “Aligore” sorts are cultivated. In
addition, “Lalvari”, “Rkatsiteli” and “Saperavi” sorts are cultivated in Berd sub-region.
“Karmrahyut” sort is mainly used for homemade wine and vodka production.
“Banants” and “Aligote” sorts are used for cognac production and are stored at Tavush branch of
Pernod Ricard (Yerevan Brandy factory). The minimum storing price per kilogram is 130 AMD. The
factory provides the wine growers with medicines, new plants and consultation during the
cultivation period. Payment for the grapes is made during the storage.
20 tonnes of “Banants” sort and 12 tonnes of “Aligote” sort are harvested from one hectare. The
majority of vineyards are “Aligote” sort. Currently the farmers cultivate the vineyards by renting
them. This is why they do not change the grape sorts. It will be possible to upgrade the sorts and
replace them with more productive and effective sorts only after privatization of vineyards.
The vineyards are not protected against the hail. That’s why the wine growers don’t invest in
expanding and upgrading them.
7
Productivity Calculation
Specification
Aligote
Banants
1
Average harvest from one ha
12 000 kg
20 000 kg
2
Average wholesale price for one kg
130 AMD
130 AMD
3
Income from one ha (1x2)
1 560 000 AMD
4
Material expenses made for one ha
700 000 AMD
800 000 AMD
5
Labour expenses made for one ha
104 000 AMD
104 000 AMD
6
Profit from one ha (3-4-5)
756 000 AMD
1 696 000 AMD
7
Added value from one ha (3-4)
860 000 AMD
1 800 000 AMD
8
The number of persons/days for one ha
9
Daily production capacity of one person = (3-4): 8
50
17 200 AMD
2 600 000 AMD
50
36 000 AMD
In Berd, the entrepreneur/ farmer spends 50 days on processing
the vineyards and creates daily added value of 17 000 AMD for
“Aligote” sort and 36 000 AMD for “Banants” sort.
8
Development Initiatives and Recommendations in Viticulture
Activities
Supply with anti-hail systems
Raising the storing prices for the grapes.
Establishment of new vineyards.
Vineyards privatization.
Providing long-term and accessible loans.
Application of new equipment.
People in Charge
Government, supporting institutions
Brandy factory/storing enterprises.
Grape growers
LSG, entrepreneurs
Supporting institutions, financial institutions.
Mechanical engineers.
9
FARMING
There are 880 հa of arable lands in Berd. Only 113 ha are processed out of it.
Distribution of processed lands by sorts and volume of crops:
Crops
Processed
Wheat
Lucerne
Potatoes
Corn
Barley
Bean
44 ha
19 ha
28 ha
12 ha
7 ha
3 ha
Average crop from one ha
(tonnes)
2.5
8
20
3.2
1.6
4
Average crop in
Armenia
2.6
7
20.7
6.2
2.5
2.5
Around 240 households are involved in farming in Berd.
Distribution of households involved in farming by the scale:
Number of households
Classification of households
Volume of processed lands
10
Medium
1-6 ha
230
Small
0.1-1 ha
There is no concentration on specific crop in farming sector. Only sowing lands have more volume in
some extent exceed the volumes of other crops. It was made possible after the initiative of the
municipality.
The bean yield is more than the average in the country. However, the volumes of bean yield are not
being extended due to the not-irrigated lands. There are 20 ha of arable lands, which are favourable
for bean cultivation if irrigated (required length of irrigation pipeline is 800 m).
The price of green string beans in local market is 300-400 AMD/kg, and for red kidney beans the
price is 700 AMD/kg.
The arable lands in Berd have not been processed for a long time, which was the reason they become
hardened and rooted. Average-powered wheeled tractors are not available to plough these hardened
lands. Only track-laying tractors and high-powered equipment is available to do first softening and
10
plough. The municipality purchased a track-laying ДТ-75 tractor (over worn) and organized
softening and ploughs of 24 ha unprocessed lands. After that the farmers implemented wheat seeding
in that area. The reason why the farmers did not implement first plough and were not involved in
farming in these areas is that the first ploughs of rooted lands are very hard and consumable. This is
why the municipality took care of the softening and first ploughs motivating the farmers to do the
further seeding and processing works and create income from the wheat cultivation.
In addition to the abovementioned equipment, the community needs to upgrade its agricultural
equipment and machinery in general. Existing equipment is not enough for organizing efficient
works, as it is old and over worn.
Expenses made for ploughing/processing of one hectare of lands for wheat cultivation:
Expenses
Description
Price/AMD
Plough
Diesel included
35 000
Seed corn
350 kg x 400 AMD (elite seed)
140 000
Medicines
Applied twice
30 000
Nitrogenous fertilizer
5 sacks x 6 000 AMD
30 000
Seeding
20 000
Reaping
30 000
Transportation
From field to houses
6 000
Unloading
Two people are involved with 4 000
AMD for each.
8 000
Total
299 000
In the case of elite seed corns, yield of wheat from one hectare is 3 - 3.5tonnes, and the income is 241
000 AMD.
If the seed corn is regular, the yield is 2-2.5 tonnes, and the income is 131 000 AMD.
11
Production calculation of one person/day in the wheat cultivation sector.
Classification
Index
1
Average harvest from one ha
3000 kg
2
Average wholesale price for one kg
180 AMD
3
Income from one ha (1x2)
540 000 AMD
4
Material expenses made for one ha
291 000 AMD
5
Labour expenses made for one ha
8 000 AMD
6
Profit from one ha (3-4-5)
241 000 AMD
7
Added value from one ha (3-4)
249 000 AMD
8
The number of persons/days for one ha
9
Daily productivity of one person = (3-4): 8
10
24900 AMD
The entrepreneur/farmer spends ten days in average for
ploughing one hectare of wheat field creating around 25
000 AMD added value daily.
12
Development Initiatives and Recommendations in Farming Sector
Activities
Providing the anti-hail defence systems.
Softening, ploughing of hardened ploughs and providing
them to the farmers.
Purchasing powerful agricultural machinery (ДТ 75)
Providing long-term and accessible loans
People in Charge
Supporting institutions
LSG
LSG, supporting institutions
Supporting institutions
Purchasing and application of new agro-machinery.
Farmers, mechanical engineers
Ensuring accessible conditions for agro-machinery
Supporting institutions
Construction of 800 m irrigation pipeline
Kidney bean acreage expansion
LSG, supporting institutions
Farmers
13
CATTLE BREEDING
Almost 223 households are involved in cattle breeding in Berd.
There are 1000 large cattle in the community, out of which 480 are cows. The average milk yield of
cows is 2000 litres. There are no new cow sorts/breeds in farms: only Caucasus Grey cows are breed.
Distribution of cattle-breeding farms by scale
Classification
Households
Livestock
Large
3
50-110
Medium
20
10-20
Small
200
1-10
The pledges of effective cattle breeding in Berd are Alpine pastures and short-lasting winter (i.e.
cattle are stores in cattle sheds for shorter period), which lasts from late November till April.
The cattle in the community are mainly fed with grass and lucerne. Cattle breeders produce the
forage mainly by themselves. During the warm months cattle farm workers take the cattle to the
long-distance pastures. The monthly fee for the long-distance pastures for each cattle is 3000 AMD.
There is a lack of agro-machinery used to collect the forage. Existing ones are overworn.
14
Analysis of cattle breeding
Capacities of leading farmers
Strengths
Devotion to the work and participation of the family in the
works. Enough professional skills. Readiness to purchase new
agro-machinery.
Production of forage by the farmers.
Capability to stand/adopt to the sector and market vibrations.
Weaknesses
The farms do not correspond to the modern
standards
The works are not automated.
Absence of upgraded sorts.
Not enough forage base.
No cattle registry.
Factor quality
Demand quality
Strengths
Weaknesses
Rich pasture zones (1000 ha, distance-30-50
km, upland /Alpine-2000 m.).
800 ha of meadow lands.
State support in cattle vaccination and
veterinary services.
Acorn and spelt rich forests for the forage
“Green Path” professional; information centre.
Shortage of pastures: 100 ha. Poor road
conditions of long-distance pastures.
Shortage of work force. Absence of
infrastructures (power, fresh water,
toilets) in pastures.
Bordering location of pastures with
Azerbaijan.
Sometimes, state-supported vaccinations
are late.
Consultation provided by the Agricultural
Support regional Centre.
Accessible loans, high interest rates.
There is no milk storing in Berd due to the low storing
price. Some 5% of milk is sold in the community with 200250 AMD per litre. Other part is processed by the dairy
producers.
The resellers buy the meat with average of 2000 AMD.
Some part of it is sold inside the community; other part is
sold in Yerevan.
Supporting Branch/Sector Quality
Strengths
Veterinary services.
Agro-machinery-mowing machine-1, combine-1, tractor,
assembling machine, baling machine-3.
Veterinary pharmacies.
One expert for artificial insemination.
Meat resellers.
Weaknesses
Absence of milk and meat processing centres.
Shortage of agro-machinery and tools, sometimes even absence of
them.
Significant shortage of mechanical engineers.
No meat procurement.
No slaughterhouse.
15
Expenses for care of one cow in large farms.
Unit
Daily expenses
Annual expenses
For keeping during the winter season in cattle sheds for five months (150 day)
Grass
12 kg * 20 AMD
Water
50 l * 175 AMD/1 m³.
36 000*
1 500
Annual expenses
Salt
50 gr. * 100 AMD/1 kg
2 000
Yield of milk/salary
3000 AMD/month
30 000
Veterinary costs
5000 AMD/year
5 000
Attender salary
2 persons *70 000AMD *
12 months/ 20 cows
84 000
Pasture season expenses (for six months)
Fee for long-distance pasture
3000 AMD/month
18 000
Water
1000 AMD/month
6 000
TOTAL
182 500 AMD
Price for one kg of forage is calculated as 20 AMD. This is the price of farmer-produced forage. If
purchased from market, the price will be 40 AMD per kg. Price for one kg of lucerne is 30 AMD, if
purchased from market it will be 60 AMD.
Feeding the cattle with bran is not traditional in Berd (bran feeding does not have any significant
impact on milk yield for purchasing all-mash feed additional money is equired). This is why it is not
included in the presented calculation.
16
Calculation of production capacity of leading farmers from cattle breeding sector.
Name
Milk-producing
cow
20 livestock
Meat-bearing
calf
30 livestock
1
Optimal household
2
Annual yield from one cattle
3
Overall annual result of a household.
40 t. of milk
20 calves
3000 kg
4
Wholesale price for 1 kg of meat and 1 l of milk,
and 1 calf
150 AMD
60 000 AMD
2000 AMD
5
Overall income from sale
7 200 000
6 000 000
6
Material expenses
2042 000
3064 000
7
Labour expenses
1 608 000
1 068 000
8
Profit from one household (5-6-7)
3 550 000
1868 000
9
Added value from one household (5- 6)
5 158 000
2 936 000
10
The number of necessary persons/days for one ha
250
150
Daily production capacity of one person = (5-6) :
10
20 632 AMD
19 500 AMD
2000 l of milk
1 calf
100 kg meat
Compared with cattle breeding of other leading communities, the milk yield and meat-bearing
capacity in Berd is lower. However, thanks to the short winter and formed culture of using the longdistance pastures (this brings fewer work hours for the farmers), the production capacity of Berd is at
the same level as other leading communities.
If the cattle sorts/breeds are upgraded, Berd can be included in the list of leading cattle breeding
communities.
17
Development Initiatives and Recommendations in Cattle Breeding Sector
Activities
Establishment of special farms.
Providing long-term and accessible loans for the
establishment of farms
Providing with high-quality forage seeds.
Ensuring affordable conditions for purchasing
agricultural equipment.
Purchasing new agricultural equipment for processing
the forage.
Organizing professional trainings.
Improving the cattle sorts by artificial insemination.
Developing the infrastructures for long-distance
pastures.
Application of insurance mechanisms n case of
catastrophes.
Organizing developed dairy/milk production.
Improving the veterinary services and ensuring the
timeliness.
Use of concentrated feed.
People in Charge
Entrepreneurs/farmers
Supporting financial institutions
LSG, supporting institutions
Supporting institutions
Farmers, engineers
Supporting institutions
Farmers, supporting institutions
LSG, government, supporting institutions
Supporting institutions, insurance
companies
Entrepreneurs, farmers
Veterinaries, Ministry of Agriculture
Farmers
18
COMPARISON OF THE MAIN ECONOMIC SECTORS
Necessary number of
days/persons
Production capacity of one
person
Grain production
Milk production
Meat production
Viticulture
10
250
150
50
24 900 AMD
20 632 AMD
19 500 AMD
17 200 AMD
Currently, the highest productivity is registered in grain growing and processing. In other sectors the
development is expected if the abovementioned initiatives are implemented.
Cheese and Dairy Production Sector
Some 50 milk producers (in houses) are involved in dairy production in Berd. There is no organized
production and packaging. Cheese, butter/fat, matsoun, and sour-cream are produced.
Below is the analysis of the whole value chain of dairy production.
19
The Value Chain of Dairy Production in Berd
Market
Providers / Suppliers
Processing
Milk production
|
Veterinary services-4 units
Veterinary pharmacy- 4 units
3 Large farms
Stores in Yerevan
3 Large cheese producers
Agricultural equipment
services - 6
Stores in Berd
20 medium farms
Croppers
- 3 groups
47 medium-size dairy producers
Forage producation 800
households
Households in Berd
200 households
combined feed saleshouse
1
Bran/husk saleshouses 3
SUPPORTING INSTITUTIONS
Heifer
RCAS
Green Path-
Financial
institutions
STATE SUPPORT
LSG
Government
20
Analysis of Dairy Production Value Chain
Micro-environment
Supply
800 households/farms produce forage: Majority use the forage for their own needs, other part for sale.
Six engineers provide agricultural equipment services. Three groups of croppers provide cropping
services.
Some sale houses for medicines and feed function in the community.
Four veterinaries provide veterinary services. One of them also provides artificial insemination
service.
Milk producers
223 cattle breeding farms produce milk. There is no milk storage except when the long-distance
pasture season starts and majority of cattle is in pastures for two months. During this period the
livestock of community is located as far as 40 km.
Processing farms
50 farms produce dairy products in Berd, mainly in household conditions. They produce cheese,
butter, sour-cream and matsoun. Three large producers produce only cheese: annually around ten
tones. Small cattle farms produce mainly matsoun, small volumes of cheese, butter/fat and sourcream, all together: around 80 tonnes annually.
Sale/realization
95% of dairy products are sold inside the community. Small producers sell their products in the
market of Berd, provide to the shops or distribute directly to the customers. Large cheese producers
provide their product to the shops in Berd; some of them sell to the customers directly. Only one
large producer sells 10% of their production in Yerevan, which is 1-2% of total production in the
community.
Supporting institutions
Heifer International Armenia. In 2012 the organization provided 18 small milk producers with one
pregnant heifer each. Later, the calves were supposed to be provided to other families. Also medicines
and veterinary consultation are provided.
21
Green Path (Kanach arahet) NGO provides trainings on bio humus, organic food and other topics and
services as a resource centre for the farmers and cattle breeders.
Banks and micro-financing companies provide loans in every part of the value chain.
State Support
Government –subsidizes the diesel, seeds and fertilizers for the grain and forage producers and
organizes free-of-charge vaccination of cattle. In the spring of 2012, the farmers were provided with
nitric fertilizers with prices significantly lower than market price (6000 AMD per sack) and grain
seed (with condition to return the twice higher amount of grain), as well as diesel for 350 AMD per
litre (average market price in July 2013 was 450 AMD). The government subsidizes the difference
between the market price and the realization price of abovementioned resources.
Local Self Government Bodies –Provision of pastures, controlling the state activities (cattle
vaccination, distribution of subsidized seed and fuel, etc.), and provision of lands for a rent top the
farmers. In addition, the LSG provide financial and technical support for the farming sector
development.
22
Women’s Participation in Dairy Value Chain
Procurement
In the forage production farms 60% of women participate in field works (cropping the grass), as well
as storing in cattle breeding farms.
One of three veterinary pharmacies is established and run by a woman.
Six women are involved in household store (bucket, gloves, uniform, etc.) as sales consultants.
Milk production
The management of large cattle farm is implemented by men. The cows are milked exclusively by
women.
Medium cattle farms
The role and participation of women
Work
Women
Men
Running and management of the farm
40%
60%
Milking
99%
1%
Care of calves
30%
70%
Cleaning of farms/cattle sheds
50%
50%
Cheese and matsoun production.
100%
In small cattle breeding farms 80% of women are involved in all stages of work.
Milk processing and sale
The large milk producers hire only women as their technologists.
Women also sell the product inside the community.
From February 2011, “Women’ Resource Centre of Berd” functions in Berd.
23
Main missions of the Centre are to help the women in community, to find jobs for them, to protect
their rights, awareness and self-confidence rising with corresponding educational programmes.
The following are the programs implemented by the Centre

Making and sale of teddy bears and other toys and souvenirs from pure wool;


Web site for presentation and sale of the products: http://www.shoplavenk.com;
Women’s seminar on strengthening and gender equality (30/09/2012 );

“We are” women’s magazine edited and published by the women in Berd.
24
OTHER ECONOMIC SECTORS
Services
Trade
Production
5 taxi services with 47 cars
Grocery stores :2 big, 100 small and medium
Metal-plastic doors and windows-3
Hotel-2
Guest house-3
Butchers’-7
Semi-prepared food production -1
Catering- 6
Furniture stores-3
Refreshment production-2
Cafeterias-3
Building material stores-6
Dairy production-1
Hairdresser’s-7
Flower shops-4
Bakery production-10
Car service-10
Car wash-5
Stone production-1
Tailor’s -3
Car spare parts-5
Pastry-6
Shoemaker-3
Fridge housework-1
Photo-1
Medical services-1
Electric device repairment-3
Wedding accessories rental-3
Drying room-1
Dental clinic-3
Banks-3
Credit organizations-4
Compulsory car insurance-6
25
Development Initiatives and Recommendations for Small and Medium
Entrepreneurship
Activities
Business development trainings, consultations
Accessible loans with no collateral
Establishment of agro-product and berry processing
factories
Improvement of service quality
Providing the community entrepreneurs with the
sources of cheap and quality production equipment.
Establishment of greenhouses and drying rooms.
Production, packaging and sale of traditional food
(bichina).
People in Charge
SME DNC/ supporting institutions
SME DNC/ supporting institutions
Entrepreneurs
Entrepreneurs
SME DNC/ supporting institutions
Entrepreneurs
Entrepreneurs
26
Special thanks to the staff of Berd Municipality in the person of the Mayor Mr. Harutyun
Manucharyan for hosting and supporting the programme.
LED team in Berd
Artur Yeranyan
Farmer
094-86-62-57
Lusine Grigoryan
Director of Berd branch of FAR
077-72-11-18
Elmira Melikyan
Entrepreneur
094-22-28-78
Samvel Hovsepyan
Director of Berd CU
093-88-77-79
Marieta Manucharyan
NGO director
093-46-10-80
Hrachik Melkumyan
Assistant to the Mayor
093-94-75-14
Arevik Machkalyan
Chief of Staff
093-90-56-90
Armen Shakaryan
Expert of department of Agriculture
094-41-79-90
Hrach Badalyan
Entrepreneur/farmer
093-60-05-63
Martin Apresyan
Entrepreneur
093-79-57-15
Expert group
A. Dadoyan
A. Grigoryan
27