Leverage migration for agricultural development

Agriculture remains a sector of high importance in Armenia. Given its substantial role, it is paramount that the country ensures that migration helps, rather than harms, the sector. Yet the IPPMD data show that migration has little positive effect on the sector in Armenia. Remittances seem to be channelled into agricultural asset expenditures but at low levels, and they are not being used to diversify into different farming activities or non-agricultural businesses. On the other hand, government policies, particularly those related to agricultural subsidies, seem to be discouraging emigration and encouraging return migration. Recommendations for policy include the following:

  • • Make it easier for remittances to be channelled towards productive investment, by ensuring money transfer operators are present and affordable in rural areas, providing households with sufficient training in investment and financial skills and putting in place adequate infrastructure that make it attractive to invest in rural areas. Bottlenecks that limit investments in the agricultural sector are a lost opportunity to harness the potential of remittances and return migration for development in the sector.
  • • Ensure that agricultural subsidies are channelled into investment and diversification of activities and conditional on subsequent yields, so that they can continue to help households remain productive. This should avoid stimulating emigration due to lack of opportunities in the home country.
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