Lately grape procurement and suggested prices-related issues are being much discussed. Especially the speculations are about peasants’ permanent complaints on purchase prices. In his interview to “Arajin Lratvakan” the vice minister of Agriculture, Samvel Galstyan defined peasants’ complaints as “delirium” and put forward his arguments.
Let’s try to confirm or reject vice minister’s argument in case procurement price is 140 AMD.
In Ararat Valley grape crop yield under the perfect favorable conditions is almost 130-150 centner per hectare. But in the last 10 years the above mentioned index has changed decreasing to 100-120 centner due to weather, irrigation water, fertilizers and poor quality pesticide during grape cultivation.
During the land privatization an average family consisting of 4-5 members got 0,5-0,6 hectare of land in Ararat Valley. The family can get 5,5-6,5 tons of grape under the best crop yield. The latter may earn 770-910 thousand AMD for complete procurement.
Grape cultivation requires agricultural techniques; the service of it has become 30 % expensive during the last 6 years due to 50 % rise in petrol’s price. It needs medical substances, the price of which has become 20-25 % expensive and fertilizers. The latter has stated 50 % rise in prices and is being sold in 12000 AMD; more than 150 % expensive. Talking about the manpower is unnecessary. 8 years ago the cost price of grape was almost 75 AMD per kilogram, today it is 95-100 AMD.
Now in order to calculate the exact income of a family we should subtract the cost price of grape from that amount and we’ll have the following picture; a family consisting of 4-5 members earns 234-276 thousand AMD annually from the grape cultivation. To have a complete picture let us do monthly calculations. It turns out that a family consisting of 4-5 members earns 19,5-23,0 AMD monthly from the grape cultivation. It is even ironic that such a family in Armenia is considered to be a socially secured one and vice minister of Agriculture defines peasants’ complaints as “delirium”.
Now let us calculate the incomes of procurement companies. Factories engaged in producing cognac utilize 7 kg of grape to get one liter of cognac spirit and for this they pay 980 AMD to the peasants. For making one liter of cognac spirit old, they spend 100 AMD annually. After 5 years the factory gets 3 half-liter battles of ready product from one liter of cognac spirit and it spends 500 AMD for battling them. Totally the cognac producer spends 1980 AMD for 3 half-liter battles of 5 year-old cognac. Of course we can add 10 % to that number as other expenses but if we take into consideration that the price of half-liter battle of 5 year-old cognac ranges from 3500-5000 AMD it becomes clear that purchasing one kg of grape in 140 AMD is not only a low price but also ridiculous.