As a former Soviet republic, Armenia was left with the legacy of a centrally planned economy
that was highly dependent on its Soviet trading partners and poorly equipped to function with the
lack of infrastructure investment and support after Soviet withdrawal. Many rural residents use
subsistence farming to supplement low incomes (Republic of Armenia 2003), but rural poverty rates
remain high, with nearly one in four rural households living below the poverty line (National
Statistical Service of Armenia 2009).
Independence also left Armenia with an oversupply of rural infrastructure that has not been
properly maintained for the past 20 years. A study by the World Bank (2004) found that irrigation
systems were in a poor state or entirely non-operational for more than 52 percent of previously
irrigated land in the country. The study found reductions in the proportion of arable land being
irrigated, declining from 54 percent in the early 1990s to 39 percent in 2003. Rural roads were in no
better condition, with 61 percent in poor or very poor condition, and only 16 percent fully passable
during the winter. Finally, the study found that only 60 percent of farms were efficiently irrigated as
a result of the high cost of water, high water losses, and high electricity costs. Common throughout
rural Armenia, these conditions increase the cost of farm operations and exacerbate rural isolation