Armenia Rural Economic Development – New Economic Opportunities (RED-NEO)

The Rural Economic Development – New Economic Opportunities (RED-NEO) is planned as an up to 60-month activity that aims to promote inclusive, sustainable economic security and economic growth in targeted areas, with an emphasis on: (a) facilitating market linkages between producers and buyers; (b) promoting local economic development by establishing networks, and; (c) improving SME/farms/firms/cooperatives development and growth. While specifically focusing on these aspects, the activity will also improve the qualitative (production, turnover etc.) performance of rural businesses and cooperatives and strengthen their capacity and performance to meet certain quality standards, thus fostering the continued development of a competitive agricultural sector.

The funding priority and technical area of this activity is the Horticulture value chain[1], including orchards and dried fruit, viticulture, greenhouses, and berries, as well as hospitality (Food and Beverage (F&B) and Farmer-to-Table (F2T)), weather stations (early warning on irrigation, pests and disease management), and light agricultural machinery repair. RED-NEO will work with small and medium sized established rural businesses, i.e. firms, farmers, coops, and rural SMEs (established but still having growth potential and unable to meet market demand, but will not work with subsistence level farms or oligarchs).

The project will strengthen SME/businesses/coops skills, improve their ability to generate income, and foster enduring market linkages to strengthen the market system, bolstering the resilience and livelihoods of target communities. This activity will scale up established businesses, including prior USAID beneficiaries that still have growth potential or are unable to meet demand. While agriculture sector growth has been strong, closer examination shows that the high growth rate is unsustainable. The recent strong growth has largely been driven by increased productivity of semi-subsistence farms rather than the widespread adoption of improved technology and a shift towards modern, commercial agriculture. In USAID/Armenia’s experience implementing agriculture projects, a combination of Technical Assistance and Small Grants, as well as access to low interest special lines of credit, would make RED-NEO interventions attractive and contribute to improved sustainability and ownership.