Government recognizes the importance of livestock sector development and pasture management. Sustainable agricultural development strategy of the RA Government for 2010-2020 relates the milestones of livestock development to food safety and maintenance issues. The main objective of the strategy is to increase livestock productivity through breeding, artificial insemination, provision of veterinary services and improvement of pasture management activities. Though there is no special legal and institutional system for the regulation of pasture reserve management, the existing laws including Land Code, Law on local self governing bodies, as well as relevant laws on association and leasing, provide sufficient legal background for the implementation of reforms in livestock. Local self-governing bodies and communities are aware of the situation and are ready to change the situation.  

Agriculture has been a buffer and safety net during the economic downturn, amplifying challenges in this labor-intensive agricultural system. For some 186,000 rural households, raising livestock is the main source of livelihood. Among the poorest rural people in mountainous communities, revenues from livestock production are essential for subsistence and a the major source of cash income.    Higher altitude small-scale farmers and livestock breeders are particularly vulnerable,  as their livelihood often rely on combined subsistence agriculture and seasonal labor migration to the Russian Federation. The economic downturn has increased their vulnerability by making them more dependent on livestock and natural resources for their livelihoods.

Uncontrolled and unmanaged exploitation of grazing lands since the collapse of the Soviet system has resulted in unprecedented resource destruction clearly visible in most mountainous villages, especially on nearby pastures. This has reduced soil fertility and vegetative cover, increased soil erosion due to poor soil and water management, and diminished overall biomass, all of which has constrained livestock sector development, a key source of economic growth and rural livelihoods.

Infectious diseases are common, pose severe risks to food safety and human health for producers and consumers, and are now of national concern. Among the several diseases, brucellosis, tuberculosis and foot-and-mouth disease are the most prevalent. These zoonotic diseases pose multiple threats: human infection, environmental contamination, reduced livestock production, and limit exports of live animals and dairy products.

Farm advisory services are developing, but need to be further strengthened to better address livestock and pasture-related issues.  In 2005, the advisory system was fully donor-funded, but was gradually shifted by 2010 to a system with all core funding provided through the government budget and additional funds generated from cost recovery and through consultancy services.  In 2009, around 10 percent of total advisory system costs were covered by retained earnings from paid services.

This project builds on World Bank experience and successes in agriculture, rural development, pastures and livestock management, and participatory community development to help Armenia address these urgent challenges and provide investment support. The project combines and applies these experiences, providing a unique window of opportunity to integrate a strategic approach to natural resource management, human and animal health, and food safety in Armenia. This includes experience gained from previous and ongoing World Bank projects in Armenia, notably RESCAD, which introduced successful participatory community development and competitive grants procedures, both highly applicable to this project. Also, the Bank has played a major role in establishing an effective agricultural advisory system that can now be used to deliver extension programs for project livestock-related activities.In addition, the project builds on the Avian Influenza Preparedness Project (AIPP), which strengthened veterinary services capacity to monitor and control avian flu and other zoonotic diseases.

The project accomplishes the protection of vulnerable population and strengthening of competitiveness for post-crisis growth by targeting vulnerable people in mountainous areas while strengthening livestock sector competitiveness to meet growing demand on the domestic market.