The break-up of the Soviet Union at the end of 1991 left Armenia scrambling to feed itself. In the initial years of independence, the republic of 3 million people was able to count on international assistance to avert famine. Humanitarian relief, however, was never seen as more than a stopgap measure, and now Armenia is increasingly being forced to take stock of its own resources.

Armenia can hardly expect to be completely self-sufficient in agriculture, but neither can the country afford to spend its scarce foreign reserves on large-scale imports of food. Fortunately, a new class of private farmers in Armenia has taken up the struggle for Armenia's survival. The obstacles the farmers face are enormous. Not only must they cope with the cruel twists of nature, but they are called upon both to overcome severe shortages of fertilizer, fuel, and seeds and to rebuild their country's agricultural infrastructure. Less than a decade ago, few could have imagined the road that lay ahead.

Crisis in the countryside
Under Soviet rule, Armenia had been one of the most industrialized of the USSR's fifteen republics. By the late 1980s, agriculture accounted for less than 17 percent of Armenia's economic output. Moreover, Armenia occupied a very narrow agricultural niche within the Soviet command economy. Most of Armenia's approximately 1.2 million arable acres were devoted to speciality crops, especially grapes and tree fruit. Eighty percent of Armenia's wheat was shipped in from other republics.

The collapse of the Soviet Union rippled like the 1988 earthquake through Armenia's countryside. Suddenly, the landlocked republic was cut off from the supplies of seed, fertilizer, herbicides, insecticides, fuel, and machinery that had come from the Soviet government. The processing plants in the republic that had once canned apricots and bottled cognac for the Soviet market shut down. The fledgling Armenian state lacked the resources to make up the funding shortfall. In addition, Azerbaijan had imposed a transportation and energy blockade to pressure Armenians to drop their support for their countrymen in Mountainous Karabagh.

Armenia hit bottom in 1992 and 1993. The country's economic output plunged to one-fifth of its former level. The grain harvest fell to 192,000 metric tons in 1992 and 218,000 metric tons in 1993, partly due to drought. (In 1988, Armenia had reaped a record harvest of 374,000 metric tons.) The United Nations World Food Program classified the country as suffering from "pre-famine" conditions. In many once prosperous farming villages, even bread was hard to come by.

The privatization gamble
At the same time, Armenian agriculture was adjusting to a revolutionary land privatization program. Beginning in 1991, Armenia's 600 huge collective farms were dismantled and the land was divided up among the people who tilled the soil. As a result, nearly 282,000 private farms were created. The average parcel was a little over three acres in size.

According to conventional economic wisdom, Armenia's land privatization program did not make much sense. Government advisers argued that larger land holdings were needed to spur mechanization and technological progress. Armenia's privatization, however, coincided with a period of economic upheaval that turned conventional rules upside down. Without fuel to run machinery and access to outside markets, the country was thrown back into the 19th century.

Many farmers were reduced to a subsistence level. Without the means to preserve and market highly perishable grapes, peaches, and other prized specialty crops, some were compelled to uproot fruit trees and vines. Much of Armenia's livestock was slaughtered because of the shortage of feed. Large-scale dairy operations were abandoned, leaving villagers to tend to cows in their backyards.

Even the most entrepreneurial farmers were often stymied. Many hoped to take advantage of privatization by raising fresh produce for consumers in Yerevan and other Armenian cities. Instead, they ran into glutted markets for vegetables and fruits in the summer and fall of 1992.

The struggle ahead
The profile of Armenia agriculture that has emerged from the initial crisis of independence has placed a new emphasis on staple food crops, such as wheat and potatoes. Many of the country's newly privatized farmers, however, lack the expertise and the resources to make the shift.

Most fundamental is the lack of essential inputs. The 1988 earthquake that struck northern Armenia knocked the republic's only fertilizer plant out of operation. Few farmers can afford imported fertilizer. Armenia's Ministry of Food and Agriculture reports that the fertilizer shortfall has caused soil nutrient levels to decline sharply, with crop yields falling in tandem. The situation regarding other inputs, such as herbicide and insecticide, is no better. In 1997, 20-30 percent of Armenia's arable land went untilled.

Quality treated seed is also out of reach for most farmers. ATG's wheat seed project has introduced new varieties of wheat seed into the country, but serious problems remain unresolved. The Soviet-era agricultural research centers that safeguarded the genetic health of Armenia's main crops have suffered severe budget cuts. Meanwhile, private seed companies have yet to gain a foothold in the republic. For the most part, farmers must look out for themselves.

Armenia's stock of agricultural machinery presents another concern. Under the privatization program, tractors, combines, and other pieces of farm equipment were often turned over with little planning to individual farmers. Almost no new equipment has been bought since 1990. By the end of the decade, most of the machinery will have reached the limits of its durability. Spare parts are increasingly scarce and expensive. Many farmers are hard-pressed even to pay for diesel fuel.

Part of the problem in the countryside is linked to land privatization. Among the former Soviet republics, Armenia moved the swiftest and went the furthest in breaking up inefficient state-run farms. Armenia's privatization was singled out for praise in the U.S. Department of Agriculture's report on farming in the former Soviet Union. The small plot sizes, however, pose a new constraint on agricultural efficiency. Farmers with three or four acres can hardly justify investing in expensive machinery or gambling on new technologies. The reconsolidation of Armenia's land holdings is beginning to gather momentum. The privatization reform permitted farmers to form cooperatives. The Armenian government, however, has yet to develop laws to govern the selling and leasing of land.

Privatization also introduced the vocabulary of business into the lexicon of farming. Again, however, the support structure to turn Armenian farmers into successful entrepreneurs does not exist. Only a handful have access to credit. The rest are generally expected to pay cash for their planting expenses, fuel, and other necessities. When farmers bring in their harvest, they have few options for selling their crops. The web of farmer cooperatives, wholesalers, and marketing specialists that crisscrosses the United States has yet to take shape. ATG recognizes that its future programs must address the world of the market as much as the world of the farm.