01/2021
101 Geo r g i a
#
Agriculture Bulletin Ministry of Agriculture Warns Against Fire Risks FAO, EU Provide Farmers GEL 3 Million in Grants in 2020 10 Tons of Georgian Honey Imported into Italy in 2020 Milk and Cheese Prices Up 11.3%
All materials are published “as is� and are the property of their respective owners.
Georgian Agriculture Finance Bulletin Edition #101, January 2021
Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4)
Ministry of Agriculture Warns Against Fire Risks ............................................................................ 2 Agriculture Minister Highlights State Support Amid COVID-19 Pandemic...................................... 2 Food Industry to Benefit from State Subsidy on Electricity Consumption ...................................... 2 State to Increase Flour Subsidies..................................................................................................... 2
Foreign Aid ................................................................................................................. 2 5) 6) 7) 8) 9) 10)
FAO, EU Provide Farmers GEL 3 Million in Grants in 2020 .............................................................. 2 FAO to Support Fight Against Locust Outbreaks ............................................................................. 3 13,000 Tons of American Wheat Delivered to Georgia................................................................... 3 EU, FAO Help Bolster Production Amid COVID-19 Pandemic ......................................................... 3 FAO, EU Programs Train More Than 700 Farmers in 2020.............................................................. 3 New Study on Freshwater Aquaculture .......................................................................................... 4
Private Sector.............................................................................................................. 4 11) 12) 13) 14) 15) 16) 17) 18) 19)
10 Tons of Georgian Honey Imported into Italy in 2020 ................................................................. 4 15% Increase in Fruit and Nut Exports ............................................................................................ 4 Georgia’s Potential to Become Top-25 Blueberry Exporter ............................................................ 4 Milk and Cheese Prices Up 11.3% ................................................................................................... 5 2020 a Successful Year for Georgia’s Horticultural Sector .............................................................. 5 Packaging Issue Puts a Halt to Apple Exports .................................................................................. 5 Tangerine Exports Up 22% .............................................................................................................. 5 Georgian Walnut Farmers Perplexed by Low Market Prices........................................................... 5 Georgian Wine Exports Since 2001 Valued at USD 1.86 billion ...................................................... 6
Note: The Georgian Agriculture Finance Bulletin presents a monthly roundup of headlines and news stories related to investments and financing flows to Georgia’s agricultural sector. This bulletin is prepared by Business & Finance Consulting—a Swiss-based development finance consulting company with a long history of working in Georgia. Currently, BFC is implementing the Agricultural Lending Programme for KfW. Read more »
BFC Max-Högger-Strasse 6 CH-8048 Zurich, Switzerland
Phone: +41 44 784 22 22 Fax: +41 44 784 23 23
info@bfconsulting.com www.bfconsulting.com
BFC. Georgian Agriculture Finance Bulletin. Edition #101, January 2021
State Initiatives 1)
Ministry of Agriculture Warns Against Fire Risks
January 9th, 2021, https://mepa.gov.ge/En/News/Details/20200
The Ministry of Agriculture is urging citizens in Western Georgia to adhere to all safety protocols to prevent the outbreak and spread of fires. The Ministry notes that the burning of agricultural waste is particularly dangerous as it can affect windbreaks, forests and any infrastructure nearby, resulting in decreased soil fertility. The risk of fires has increased in recent years due to the effects of climate change causing decreases in precipitation and drier soil.
2)
Agriculture Minister Highlights State Support Amid COVID-19 Pandemic
January 13th, 2021, https://mepa.gov.ge/En/News/Details/20203
Speaking on some of the government’s efforts to support agriculture amid the COVID-19 pandemic, Agriculture Minister Davitashvili noted that state assistance schemes empowered farmers to promptly adapt and boost their harvests. He also noted that, because of these efforts, Georgia is now in a state of “increased agricultural welfare”. In particular, the Minister pointed to the impact of direct aid such as the addition of points to agro-cards (which allowed farmers to easily procure goods like pesticides), an improved agricultural insurance scheme, grants for primary production, co-financing of storage and processing enterprises, the co-financing of technical assistance and agro-loans.
3)
Food Industry to Benefit from State Subsidy on Electricity Consumption
January 13th, 2021, https://netgazeti.ge/news/511983/
As part of a measure aimed at helping private households and businesses deal with an increased tariff on electricity consumption, the government of Georgia will subsidize some of the difference between 2020 and 2021 prices. Of particular interest is that this subsidy will amount to 50% for state-owned food producers. This includes companies active in both the production and processing of food products.
4)
State to Increase Flour Subsidies
January 22nd, 2021, https://commersant.ge/en/post/government-boosts-flour-subsidies
The government of Georgia is increasing flour subsidies for companies that have purchased at least 75 tons or imported at least 140 tons of flour over the past 90 days. The new subsidy rate will not exceed GEL 15 and will be available between February 1, 2021 and March 31, 2021. The government will allocate GEL 10 million for the subsidies from the state budget.
Foreign Aid 5)
FAO, EU Provide Farmers GEL 3 Million in Grants in 2020
December 29th, 2020, http://www.fao.org/georgia/news/detail-events/en/c/1366589/
The Food and Agriculture Organization of the United Nations (FAO) and the European Union (EU) provided GEL 3 million (USD 937,500) in grants to Georgian farmers in 2020. Much of this funding was used to mechanize land cultivation and production as well as ensure the provision of equipment related to Page 2
BFC. Georgian Agriculture Finance Bulletin. Edition #101, January 2021
livestock, dairy and vegetable production. The ultimate goals of the funds were to increase production, create jobs and prevent food supply volatility, with a particular focus given to environmentally-sound costcutting practices. It should be noted that another GEL 2.6 million in grant funding was also allocated in 2020; however, its delivery is still in process due to complications stemming from the COVID-19 pandemic.
6)
FAO to Support Fight Against Locust Outbreaks
December 30th, 2020, http://www.fao.org/georgia/news/detail-events/en/c/1366590/
The Food and Agriculture Organization of the United Nations (FAO) is launching a new project to support the Ministry of Agriculture in its efforts to combat increasing locust outbreaks in the country. In particular, the one-year Preparedness and Emergency Response to Locust Infestations in Georgia project aims to secure the livelihoods and food security of populations living in locust-infested areas in Georgia. Under the project, FAO will provide comprehensive control measures and treatment on 40,000–50,000 hectares of land. This includes locust field surveys, ground treatment, monitoring missions and pesticide residue analysis as well as the purchase and distribution of all necessary equipment and supplies to conduct these activities. The project will also include a number of courses and trainings in locust management as well as the publication of practical guidelines.
7)
13,000 Tons of American Wheat Delivered to Georgia
January 11th, 2021, https://mepa.gov.ge/En/News/Details/20201
The Food for Progress program of the U.S. Department of Agriculture (USDA) has delivered 13,000 metric tons of wheat and 4,000 metric tons of soybean meal to Georgia. The wheat will be sold on the Georgian commercial market, with proceeds to be invested into the development of agricultural programs and beef value chains. The soybean meal will be used as feed in the livestock and poultry sectors.
8)
EU, FAO Help Bolster Production Amid COVID-19 Pandemic
January 11th, 2021, http://www.fao.org/georgia/news/detail-events/en/c/1369196/
Against the backdrop of the COVID-19 pandemic, the European Union (EU), the Food and Agriculture Organization of the United Nations (FAO) and the Ministry Agriculture teamed up to develop a funding program to support Georgian farmers. Between March 2020 and December 2020, this program awarded 132 matching grants (a total of GEL 8.5 million) to Georgian farmers, entrepreneurs and small- and medium-sized businesses operating in rural areas. These grants were mostly used for the procurement of drip irrigation kits, agricultural equipment and other necessary machinery for production and processing. The grants were viewed as both helping build farmer capacities as well as preventing food insecurity in the country (which is deemed a real threat amid the COVID-19 pandemic).
9)
FAO, EU Programs Train More Than 700 Farmers in 2020
January 22nd, 2021, https://agenda.ge/en/news/2021/173
More than 700 Georgian farmers participated in various training programs organized by the Food and Agriculture Organization of the United Nations (FAO) in 2020. The trainings included topics such as soil preparation, seed selection, irrigation, harvesting, post-harvest storage and transportation to markets. Trainings were also held on climate-smart agricultural methods such as drip irrigation, minimum tillage, no tillage, mulching and integrated pest management practices. Many of the trainings were held on the Page 3
BFC. Georgian Agriculture Finance Bulletin. Edition #101, January 2021
more than 40 demonstration plots established in various regions of the country, providing hands-on learning experiences. The trainings were supported by the European Union (EU), under the ENPARD program.
10) New Study on Freshwater Aquaculture January 25th, 2021, https://mepa.gov.ge/En/News/Details/20211
The Ministry of Agriculture and the European Union (EU) Delegation to Georgia are launching a study to analyze the potential of freshwater aquaculture value chains in Georgia. The study, part of the Value Chain Analysis for Development Project, will help in the creation of a new strategy for the development and sustainable growth of freshwater aquaculture, which is seen as an important sector to boost local value chain development and diversification as well as increase Georgia’s overall food security.
Private Sector 11) 10 Tons of Georgian Honey Imported into Italy in 2020 December 30th, 2020, https://agenda.ge/en/news/2020/4066
In recent years, Georgia’s honey sector has been actively working to improve its facilities and capacity to provide safe, high-quality honey to world markets. In late 2016, the European Commission (EC) made the decision to allow Georgian honey to be imported into the European Union (EU). This has resulted in 10 tons of Georgian honey being imported into Italy last year. Georgia hopes that this is just a small step along the development path of its honey sector.
12) 15% Increase in Fruit and Nut Exports December 30th, 2020, https://bm.ge/en/article/top-exported-fruits-from-georgia/72574/
Between January 2020 and November 2020, Georgia exported 94,667 tons of fruit and nuts (worth USD 140 million), a 15% year-on-year increase. The top items exported from this category were hazelnuts (13,942 tons worth USD 79 million), peaches (25,398 tons worth USD 21 million), tangerines (14,340 tons worth USD 7.5 million) and persimmons (8,908 tons worth USD 4.8 million). The top importing countries were Germany and Russia.
13) Georgia’s Potential to Become Top-25 Blueberry Exporter January 6th, 2021, https://commersant.ge/en/post/georgia-will-be-among-the-25-largest-exporters-of-blueberries-in-2021
According to a new forecast from the EastFruit website, Georgia’s blueberry exports could reach 5,000 tons by 2023. This forecast is based on the area of blueberry plantations in the country (1,000 hectares) as well as the fact that blueberry production is growing in popularity. In 2020, Georgia produced 750 tons of blueberries, exporting 665 tons of them. Barring any serious weather anomalies, Georgia is expected to produce 1,300–1,500 tons of blueberries this year, which will likely make it one of the 25 largest blueberry exporters in the world.
Page 4
BFC. Georgian Agriculture Finance Bulletin. Edition #101, January 2021
14) Milk and Cheese Prices Up 11.3% January 6th, 2021, https://commersant.ge/en/post/milk-and-dairy-products-prices-rose-119
According to the National Statistical Office, the prices of milk and cheese experienced a year-on-year increase of 11.3% in December 2020. Compared to November 2020, prices rose 4.2%.
15) 2020 a Successful Year for Georgia’s Horticultural Sector January 14th, 2021, https://commersant.ge/en/post/eastfruit-2020-was
According to EastFruit, 2020 was an overall successful year for the Georgian horticultural sector, with production volumes, for the most part, significantly higher than in 2019 and exports reaching record levels. In fact, preliminary estimates indicate that revenue from the fruit and vegetable sector may reach as much as USD 185 million, a 40% year-on-year increase. The largest export breakthroughs in terms of revenue were with hazelnuts, peaches, nectarines, mandarins, persimmons, blueberries, other berries, oranges and plums. Experts believe that the success of 2020 can be used as a springboard to further development in 2021, particularly in the establishment of new markets and the stabilization of particular sectors.
16) Packaging Issue Puts a Halt to Apple Exports January 15th, 2021, https://commersant.ge/en/post/packaging-issues-prevented
Tiriphoni Gardens, Kvarkhiti Agro and AgroGori have yet to begin the export of apples despite good harvests due to a packaging issue. In particular, they have been unable to procure the packaging materials necessary (corrugated cardboard boxes with a waterproof layer and alveolar inserts) for international transport at a reasonable price. This issue has prevented the companies from properly presenting products globally and completing export requests to Colombia, India, Indonesia, the Middle East, Russia and Thailand. The companies have been able to transport to domestic markets, using plastic packaging not suitable for international transport. Once the packaging issue can be resolved, the companies plan to continue to promote their products both domestically and internationally.
17) Tangerine Exports Up 22% January 18th, 2021, https://agenda.ge/en/news/2021/128
In the last six months, exports of tangerines have amounted to 35,400 tons (a 22% year-on-year increase), worth USD 17.3 million (a 16% year-on-year increase). The three largest importers of Georgian tangerines have been Russia (20,500 tons), Armenia (7,600 tons) and Ukraine (5,300 tons). Georgian tangerines were also exported to Azerbaijan, Belarus, Germany, Kazakhstan, Kyrgyzstan, Lithuania, Moldova, Slovenia, Tajikistan, Turkmenistan and the United States.
18) Georgian Walnut Farmers Perplexed by Low Market Prices January 21st, 2021, https://commersant.ge/en/post/low-walnut-prices-in-georgia-have-nut-growers-perplexed
Georgian walnut farmers expecting an increase in walnut prices due to frosts damaging part of the 2020 harvest are surprised by the current low walnut prices. In fact, the average prices for in-shell walnuts in Georgia are 14% lower year-on-year as of mid-January 2021. The reason for this is due to the fact that the Georgian walnut market is well integrated into the world market. Current walnut prices on the world market are at historically low levels due to a record increase in the supply of quality walnuts from the United States combined with a lack of growth (and even decline) in worldwide demand.
Page 5
BFC. Georgian Agriculture Finance Bulletin. Edition #101, January 2021
19) Georgian Wine Exports Since 2001 Valued at USD 1.86 billion January 25th, 2021, https://commersant.ge/en/post/wine-exports-amounted-to-1856-billion-in-2001-2020
Georgian wine exports amounted to USD 210 million in 2020, 6.3% of total exports. Although this represents a nominal decline of USD 13 million, it is also 0.4% more in terms of total exports. Moreover, Georgia’s share of the global wine market is now 0.6%. Since 2001, Georgia has exported USD 1.86 billion worth of wine, with the majority (60%) of that wine exported to Russia.
Page 6
Prepared by Business & Finance Consulting (BFC) www.bfconsulting.com Articles are taken directly from local sources without any fact-checking; they are provided as a convenience and for informational purposes only. Business & Finance Consulting (BFC)’s editing is limited to providing a short summary in English of the texts, highlighting the main points of the original articles. All rights reserved by the authors. BFC takes no responsibility and does not make any representation or warranty, express or implied, or assume any responsibility whatsoever for the content, accuracy, and reliability, or completeness of any of the articles.
