Armenia offers subsidies to exporters amidst Russian restrictions

Editor’s note: The article has been updated to include EU official confirmation of the aid to Armenia.

The Armenian government has adopted a support programme for exporters of products meant for Russia in a bid to ‘diversify’ export markets. The move comes as Russian continues tightening its restrictions on Armenian imports ahead of the elections.

Announced on Thursday, the programme covers exporters of greenhouse-grown fresh fruits, vegetables, and flowers, and will run for a one-month period, retroactively applied from 1 June, with a possibility of extension.

Under the scheme, exporters can receive government support for four products: ֏770 ($1.9) per kilogramme of strawberries, ֏275 ($0.69) per kilogramme of tomatoes, ֏400 ($1) per kilogramme of peppers, and ֏37 ($0.09) per flower.

These products, among others, have been restricted from import to Russia over alleged ‘violations’. Russia is the primary market of Armenian exports.

‘The consistent goal of the Ministry of Economy is to diversify markets, reduce dependence on a single market, and position Armenian products in the global market. In this context, there is a need to support Armenian economic operators in diversifying markets and forming new supply chains’, Deputy Economy Minister Arman Khojoyan said during a cabinet meeting.

He elaborated that Armenian authorities expect that within the framework of the programme, ‘more than 4,250 tonnes of vegetables and strawberries, as well as around 10 million flowers, will be exported during June’.

Deputy Prime Minister Mher Grigoryan, who chaired the meeting, said the measure is the first in a planned series of support programmes that will cover other fruits, wines, brandy, and mineral water exports — all products that are also under Russian restrictions.

In turn, Foreign Minister Ararat Mirzoyan said discussions are ongoing with several countries to secure preferential import tariff regimes for certain Armenian goods, which he said would further support exporters.

According to RFE/RL, amidst the Russian restrictions, the EU is expected to allocate financial assistance to Yerevan.

According to Rikard Jozwiak, RFE/RL’s Europe editor, the EU Commission ‘announced €50 million ($58 million) in support of Armenia’ and ‘will import, to start with, 10,000 Armenia flowers that were blocked by Russia’.

On Thursday, EU Ambassador to Armenia Vassilis Maragos confirmed the upcoming announcement on EU assistance.

On Thursday afternoon, European Commission President Ursula von der Leyen announced the aid package in a phone call with Pashinyan, adding that the first batch of flowers would be exported to Latvia.

Earlier in June, Prime Minister Nikol Pashinyan said that shipments of roses and vegetables originally intended for the Russian market had already been redirected to alternative destinations, though he did not specify which countries had received them.

Since the 1 April meeting between Pashinyan and Russian President Vladimir Putin, and especially since mid-May, Russia has introduced near-daily restrictions on Armenian imports, citing alleged violations.

In addition to measures targeting alcoholic beverages, Jermuk mineral water, and fish products, the restrictions have affected Armenian fruit and vegetable exports at the peak of the export season. Some measures have targeted products not yet harvested, including apricots and grapes.

While Russia continues introducing new restrictions, Deputy Russian Prime Minister Aleksei Overchuk has claimed that Russia did not ‘introduce any restrictions for Armenian imports at all’, calling it a ‘usual normal work’.

Other Russian officials have said they would replace Armenian products in the Russian market with Azerbaijani goods, and called on Armenians to ‘save’ their country in the upcoming elections.

In turn, Russian Deputy Foreign Minister Sergei Ryabkov said they hope that Yerevan’s choice ‘will be historically correct — in favour of strengthening the traditional, deep, brotherly relations with Russia’ — an apparent nod to Armenia’s potential shift towards the EU and away from Eurasian Economic Union (EAEU).