Assessment of Food Security System of Armenia: Market Functionality and Supply Chain Dynamics

The Republican Union of Employers of Armenia (RUEA) in cooperation with the World Food Programme of the United Nations during August, 2020 to June, 2021 developed and implemented a study on food security system in Armenia.

The study was co-sponsored by the Republican Union of Employers of Armenia and the UN World Food Programme.

This systematic study assessed the food security system in Armenia during crises, especially during the months of the COVID-19 pandemic,  and established knowledge base for contribution to future food security new policy developments in Armenia.

The research team studied food security system in Armenia and examined the policy framework and legislation, market functionality and supply chain dynamics of food and essential non-food items. In particular, the study assessed the strengths, weaknesses, contradictions of the food security policy and legislation, food market and supply chain stability and resilience in the event of disasters in Armenia, such as during the 44-day war in Nagorno-Karabakh, or the global COVID-19 pandemic, as well as the extent of the dependence of food supply chains on external factors. The study also examined the challenges faced by agribusinesses in Armenia during COVID-19.

The study examined food security in three levels in Armenia: at the country level, marz/region-level and marz-center cities of Armenia. The analyses discussed the specificities of food security problems at each of these levels and suggested recommendations for their possible solutions. 

Because food security issues are unique to seasons of the year, the research team constructed the study in 3 phases so as to also investigate and address seasonal dynamics: spring-summer, fall and winter.

This multi-stage study used triangulation of several methods:

• 4222 standardized survey interviews with traders in Yerevan and all regions of Armenia,
  • Spring-summer (1378 survey interviews)
  • Autumn (1444 survey interviews
  • Winter (1400 s survey interviews)
• 232 standardized surveys with suppliers, importers, distributors and food processing companies,
  • Spring-summer (56 survey interviews)
  • Autumn (76 survey interviews)
  • Winter (100 survey interviews)
• 500 electronic standardized surveys with agribusinesses,
• 211 in-depth interviews with select traders, suppliers, marz-governors, mayors, policy-makers, food security experts, 
• analysis of legislation, food security policy frameworks, statistics, and related literature.

During the assessment, the Republican Union of Employers of Armenia also developed and tested methodology for future regular assessments of food security in Armenia. 

The research showed that in Armenia, unlike developed countries in the West, COVID-19 did not create food shortage problems. This was particularly due to the fact that consumption in Armenia decreased during COVID-19 as the purchasing power of the population declined. Also, most shops in Armenia are small and have limited infrastructure and hence, small  stockpiles  of inventory. This in turn forces shops to replenish their stockpiles frequently, but in small quantities. The frequent replenishment of inventory, albeit in small amounts, gives flexibility to traders to quickly react and adapt to consumer demand changes.

This finding should not be interpreted that Armenia does not have a food security vulnerability. Armenia's main vulnerability is in its supply system, which is not diversified and depends on a handful of countries. Changes in prices of raw materials and products in those countries affect the prices in Armenia. Thus, food security vulnerabilities in Armenia are manifested in terms of price volatility rather than product deficit.

The analysis also revealed that food security policy in Armenia is also limited and has narrow conceptualization of food security. Namely, food security is conceptualized within only agriculture. Meanwhile, vulnerabilities of food security in Armenia are related to the development of other sectors of the economy. For example to ensure sound  infrastructure it is important to have water reservoirs, irrigation system, food refrigeration systems, transportation systems, packaging and marketing, etc. Many sectors of the economy contribute to the food production value chain, and food security is inevitably linked to the development of several sectors of the economy in Armenia. 

Therefore, food security policy is a cornerstone that links other sectors of the economy and around which many economic sectors can be linked to develop. Thus, in order to develop food security in Armenia, food security policy must be conceptualized as to  how to develop food security in Armenia so that it also includes and develops other sectors of the Armenian economy.

PUBLICATIONS FROM THIS ASSESSMENT:

Analytic Reports

- Assessment of Food Security System of Armenia: Market Functionality and Supply Chain Dynamics. Summer, 2020. 

- Assessment of Food Security System of Armenia: Market Functionality and Supply Chain Dynamics. Summer and Autumn Seasons, 2020. 

- Assessment of Food Security System of Armenia: Market Functionality and Supply Chain Dynamics. Summer, Autumn and Winter Seasons 2020-2021. 

Policy Briefs

- Food Security System in Armenia: Policy over Years, Market Functionality, Supply Chains. December, 2020. 

- Food Security in Marzes of Armenia. May, 2021. 

- Food Security and One Year of COVID-19 in Armenia: Market Functionality and Supply Chain Dynamics. June, 2021. 

- Overview of Armenia’s Food Security Policy and Action Plans, 1991-2021. June, 2021. 

- The Strategy on Main Directions Ensuring the Economic Development of the Agricultural Sector of Armenia for 2020-2030. June, 2021