YEREVAN, January 23./ARKA/. Rates of interest on loans extended to farms should be reduced from 14% to 5%, head of “Farmers’ Movement” NGO Sarkis Sedrakyan told a press conference Wednesday.

Under a government decree of April 1, 2011, Armenian farmers can get soft loans on an annual interest rate of 14%, 4% of which is subsidized by the government. Loans are extended in Armenian drams, the average loan amount is 625,000 drams.

“It is very difficult for farmers to pay the 10% specified by the government every year, especially in the first two years, as it takes about five years to get income from the cultivated land. Hence, farmers are forced to take out new loans and get into debts,” Sedrakyan said.

Sedrakyan stressed that the government should not only reduce the interest rates, but also increase the repayment period for agricultural loans from the current two to four or five years.

A farmer from Sisavan village of Ararat region Sos Harutiunyan, in his turn, said that the size of the loans extended is not sufficient either.

“The current maximum size of a loan is 1 million drams, whereas it is too littler for a farmer. For achieving positive results a minimum of 2-2.5 million is needed,” he said.

Armenian minister of finance Vache Gabrielyan said in October 2012 that the government found it not expedient to lower rates of interest on agricultural loans.–0—