Factors behind Persistent Rural Poverty in Armenia

Poverty monitoring through household surveys in the period 1996-2003 did not reveal poverty reduction in rural areas. At the same time poverty reduction in urban areas especially in the capital was significant. This paper attempts to contribute to a better understanding of the factors behind persisting rural poverty in Armenia. Rural poverty in Armenia has been largely stagnant in the context of continuous growth in agriculture as rural farm incomes did not respond to the growing agricultural value-added. Further, negative relative price shocks may have held back agricultural growth significantly below the level of economic growth, thus impeding its potential to reduce rural poverty. Incomes from non-farm employment of rural households failed to increase while the growing state benefits and remittances were insufficient to serve as a safeguard from poverty. We use the data available from household surveys, national statistics as well as expert estimations to examine the factors impeding rural poverty reduction