03/2021
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Agriculture Bulletin Japan, Georgia Discuss Deepening Cooperation in Agriculture GEL 65 million in IFAD Program Investments in 5 Years Milk Powder Imports on the Rise Georgian Wines Take Prizes at Japanese Wine Competition
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Georgian Agriculture Finance Bulletin Edition #103, March 2021
Contents State Initiatives ........................................................................................................... 2 1) 2) 3)
Japan, Georgia Discuss Deepening Cooperation in Agriculture ...................................................... 2 Call for Expressions of Interest in Agricultural Zone Development ................................................ 2 Government Launches Initiative to Prevent Bread Price Increases ................................................ 2
Foreign Aid ................................................................................................................. 2 4) 5) 6) 7) 8)
Grant Competition Announced to Support Startup and Existing Agribusinesses ........................... 2 EIB President Impressed by Georgia’s Agricultural Sector .............................................................. 2 GEL 65 million in IFAD Program Investments in 5 Years ................................................................. 3 EU4Business Portal Launched to Support Small Businesses ........................................................... 3 EU, FAO Support Enhancing Climate-Smart Agricultural Practices in Georgia ................................ 3
Private Sector.............................................................................................................. 3 9) 10) 11) 12) 13) 14) 15) 16) 17) 18) 19)
Alternative Wheat Markets to Russia for Imports .......................................................................... 3 Milk Powder Imports on the Rise .................................................................................................... 4 Russia’s Place in Georgian Trade ..................................................................................................... 4 French Company Examining Tvishi Microzone for Viticulture Potential ......................................... 4 New Dairy Cattle Insurance Project Launched ................................................................................ 4 Georgian Wines Take Prizes at Japanese Wine Competition .......................................................... 4 Economist Calls for Serious Changes to Boost Agricultural Export Potential.................................. 5 Georgia Exploring Possible Fishery Exports to the EU ..................................................................... 5 Georgia’s Has Three Months’ Worth of Wheat Reserves ............................................................... 5 Hazelnut Popularity Worldwide Diminishing .................................................................................. 5 February Wheat Imports Hit Record Level ...................................................................................... 5
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 »
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BFC. Georgian Agriculture Finance Bulletin. Edition #103, March 2021
State Initiatives 1)
Japan, Georgia Discuss Deepening Cooperation in Agriculture
March 1st, 2021, https://cbw.ge/economy/japan-plans-to-explore-georgian-agrarian-potential
The Ambassador of Japan to Georgia has met with the chair of the Georgian Parliamentary Committee on Agrarian Issues to discuss prospects of cooperation, with particular attention given to the agricultural potential of Georgia and development program assistance. It is believed that further cooperation will deepen relationships between the countries and open more opportunities for development.
2)
Call for Expressions of Interest in Agricultural Zone Development
March 3rd, 2021, https://mepa.gov.ge/En/News/Details/20245
The Ministry of Agriculture, in cooperation with the Dutch consulting company GeoHolding and KSH Consortium, have announced an expression of interest call with regard to the development of a greenhouse cluster in the Imereti Agro Zone. Interesting local and international parties are welcome to for various business initiatives on the 220-hectare area. The Ministry anticipates the development of low, medium- and high-technology greenhouses as well as a center for logistics and sales and processing enterprises. Expressions of interest will be accepted through April 30, 2021. More information can be found at www.iaz.ge.
3)
Government Launches Initiative to Prevent Bread Price Increases
March 14th, 2021, https://sputnik-georgia.ru/economy/20210314/251166718/
Several government officials have met to discuss issues related to wheat prices and how to best prevent an increase in bread prices in the country. This comes after Russia announced an increase in wheat export duties. To maintain bread prices, the government has launched a subsidy program to fix the price of firstgrade flour. In total, the government plans to spend GEL 10 million on such subsidies.
Foreign Aid 4)
Grant Competition Announced to Support Startup and Existing Agribusinesses
March 2nd, 2021, https://sputnik-georgia.ru/economy/20210302/251042945/
The Ministry of Agriculture has announced a grant competition for startup and existing agribusinesses in the municipalities of Keda, Khulo, Borjomi, Akhalkalaki, Tetritskaro, Kazbegi, Lagodekhi and Dedoplistskaro. In particular, grant co-financing is available for starting and developing entrepreneurial activities (grant amounts between GEL 6,000 and GEL 300,000, up to 80% of the total project cost) and initial stage energy efficiency and renewable energy projects (grant amounts between GEL 1,500 and GEL 30,000, up to 805 of the total project cost).
5)
EIB President Impressed by Georgia’s Agricultural Sector
March 2nd, 2021, http://www.fao.org/georgia/news/detail-events/en/c/1382207/
During his recent visit to Georgia, EIB president Werner Hoyer expressed how impressed he is with Georgia’s agricultural sector, in particular the creative approaches used to develop the sector. He promised continued support for further development initiatives aimed at integrating Georgia with the Page 2
BFC. Georgian Agriculture Finance Bulletin. Edition #103, March 2021
markets of the European Union (EU), especially as related to agricultural and environmental programs and reforms.
6)
GEL 65 million in IFAD Program Investments in 5 Years
March 4th, 2021, http://bizzone.info/agriculture/2021/1614916884.php
The International Fund for Agricultural Development (IFAD) has made GEL 65 million in investments to Georgia in five years under the framework of the Agriculture Modernization, Market Access and Flexibility (AMMAR) program. The program, which began in 2016 with the aim of increasing rural income, has helped improve water supplies on 6,486 hectares of land, built two costal damns to protect agricultural land from flooding, planted 26 kilometers of windbreaks and issued 591 grants to support primary production.
7)
EU4Business Portal Launched to Support Small Businesses
March 5th, 2021, https://georgiatoday.ge/eu-launches-eu4business-information-portal-to-support-small-businesses/
The European Commission (EC) has launched a new EU4Business portal that provides information on the scope of EU support to small- and medium-sized businesses in Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine. The central page of the portal gives an overview of how the program works, and six individual country pages (in local languages) provide entrepreneurs with up-to-date information on exactly how they can benefit from the EU4Business initiative. Based on the most recent EU4Business annual report, over 78,000 companies received assistance under the initiative in Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine in 2019.
8)
EU, FAO Support Enhancing Climate-Smart Agricultural Practices in Georgia
March 10th, 2021, http://enpard.ge/en/eu-fao-support-georgian-government-enhancing-climate-smart-agriculture-practices/
With the support of the European Union (EU) and the Food and Agriculture Organization of the United Nations (FAO), the Ministry of Agriculture has established the Climate Agriculture Working Group, which conducts regular online sessions to address climate change challenges in the country. The group aims to raise awareness on climate smart agriculture as well as develop a set of recommendations for Georgian authorities to minimize climate change effects, including reducing greenhouse gases emissions in the agricultural sector. The working group, which meets quarterly, is made up of representatives of Ministry departments and subordinated agencies and is facilitated by FAO representatives under the ENPARD program. Interested stakeholders are also invited to meetings to give their input and specific issues. So far, the group has discussed the agricultural chapter of the Climate Change Action Plan 2021—2023 as well as the steps and activities needed to accomplish Plan goals. The group hopes to establish a concrete roadmap, including concrete recommendations for climate change policies related to agriculture, in the near future.
Private Sector 9)
Alternative Wheat Markets to Russia for Imports
March 2nd, 2021, https://bm.ge/en/article/which-markets-are-considered
Levan Silagava, the executive director of the Georgian Flour Producers Association, has listed a number of alternative export markets for importing wheat following Russia’s decision to increase its wheat export tax to EUR 50 per ton. In particular, he noted how wheat from Kazakhstan, Romania and Ukraine can be used to replace Russian wheat imports, at least partially. Page 3
BFC. Georgian Agriculture Finance Bulletin. Edition #103, March 2021
10) Milk Powder Imports on the Rise March 8th, 2021, https://bm.ge/en/article/georgia-imported-milk-powder-worth-101-mln-usd-in-2015-2020/77427/
Between 2015 and 2020, Georgian imports of milk powder have been increasing, from USD 13 million worth in 2015 to USD 20 million worth in 2020. At the same time, Georgian imports of non-condensed milk is also growing, from USD 3.1 million in value in 2015 to USD 8 million in value in 2020. Milk powder is mostly imported from Belarus, France, Germany and Ukraine, while non-condensed milk is mostly imported from France and Poland.
11) Russia’s Place in Georgian Trade March 9th, 2021, https://sputnik-georgia.ru/economy/20210309/251079255/
After Russia lifted a ban on the import of agricultural products from Georgia, Russia quickly regained its position as the top importer of Georgian wines, vegetables and fruits. Trade between the two countries is strong despite strained diplomatic relations and the absence of a free trade agreement. In fact, Russia accounted for 11.7% of Georgia’s total foreign trade turnover last year, second behind only Turkey. This is likely due to the fact that, for the most part, Georgia and Russia do not compete in terms of products but rather complement each other, leading to a stable demand in Russia for Georgian products. At the same time, Georgia is constantly trying to expand its market opportunities, with China looking to become Georgia’s primary trading partner in the near future.
12) French Company Examining Tvishi Microzone for Viticulture Potential March 9th, 2021, https://mepa.gov.ge/En/News/Details/20255
French company Terraclima is examining the likely economic and environmental impact of potential activities carried out in the Tvishi microzone. In particular, the company is assessing possible viticulture activities in the zone, which is home to a protected designation of origin. The assessment will include research on climate change issues around large reservoirs and how they impact temperature, humidity and other growing conditions important for successful viticulture activities.
13) New Dairy Cattle Insurance Project Launched March 10th, 2021, https://agroface.ge/news/928125b5-9688-4ff1-b95b-43c90a962736
A new project launched by the insurance company Irao aims to support small- and medium-sized dairy farmers in insuring their livestock. Specifically, the company has launched a pilot for a tailored insurance product in the Samtskhe-Javakheti region to test and modify its terms before a larger launch. In addition to the standard risks covered by the policies of other companies, this new product will also provide insurance against non-infectious and specific disease risks. Cattle between the ages of 2 and 9 are eligible to be insured at a rate of GEL 30 per cow per year.
14) Georgian Wines Take Prizes at Japanese Wine Competition March 11th, 2021, https://agenda.ge/en/news/2021/651
Georgian wines have received 13 gold medals and 1 silver medal at the Sakura Japan Women’s Wine Awards 2021 competition held in Japan. More than 32 wine varieties from 32 countries participated in the competition. The Georgian winners were: GWS Winery (four gold medals), Chateau Mukhrani (three gold medals), Kindzmarauli Corporation Winery (two gold medals), Mtevino (two gold medals), Schuchmann Wines (one gold medal), Vaziani Company (one gold medal) and Pavilion Wines (one silver medal). Page 4
BFC. Georgian Agriculture Finance Bulletin. Edition #103, March 2021
15) Economist Calls for Serious Changes to Boost Agricultural Export Potential March 15th, 2021, https://sputnik-georgia.ru/radio/20210315/251176450/
Economist and professor Soso Archvadze believes that Georgia needs to make serious changes if it is to maximize its agricultural export potential. In particular, he holds that Georgia needs to focus on greater exports of processed products (as opposed to just raw produce) as these add much better value and serve as a further stimulus for markets to try more products from the manufacturer and country or origin. This, in turn, will help Georgia improve its foreign trade balance, which still is a large deficit figure.
16) Georgia Exploring Possible Fishery Exports to the EU March 18th, 2021, https://agenda.ge/en/news/2021/726
Georgia hopes to begin exporting fishery products to European Union (EU) markets in the near future. Currently, Georgian officials are in discussions with their EU counterparts on expanding existing trade opportunities to include fishery products and jointly promote them in EU markets. Georgia is also working to introduce solutions to challenges small- and medium-sized businesses in Georgia face in terms of quality compliance.
17) Georgia’s Has Three Months’ Worth of Wheat Reserves March 19th, 2021, https://sputnik-georgia.ru/economy/20210319/251211564/
Georgia’s wheat stocks are unprecedentedly high, at about 115,000 tons. This is enough to last the country for three months. The Food and Agriculture Organization of the United Nations (FAO) recommends countries maintain two months of reserves for proper food security. By having three months of reserves, Georgia hopes to avoid price fluctuations that may appear over the summer and autumn months and more easily maintain bread prices in the country.
18) Hazelnut Popularity Worldwide Diminishing March 22nd, 2021, https://commersant.ge/en/post/georgia-is-among-seven-leading-hazelnut-producers
The production and trade of hazelnuts is highly concentrated in the world, with the seven largest producers being Turkey, Italy, Azerbaijan, USA, Chile, Georgia and Iran and the main consumers being from the EU confectionery industry. In order to diversify hazelnut sources, many consumers have been promoting the rapid development of hazelnut production capabilities in many locations throughout the world. This has resulted in new plantations that utilize the most modern technologies being built in many locations. Moreover, production is trending away from being concentrated in certain locations and toward more localization. This, coupled with the fact that other nuts are becoming more popular throughout the world, has led to a decrease in worldwide demand for hazelnuts. As such, investors and producers in Georgia’s hazelnut industry should carefully examine their positioning and what steps to take going forward.
19) February Wheat Imports Hit Record Level March 22nd, 2021, https://commersant.ge/en/post/georgia-bought-a-record-amount-of-wheat-in-february
In February 2021, Georgia imported a record 37,877 tons of wheat (valued at USD 9.22 million) from Russia, the United States and Kazakhstan. This is an increase of 103% from February 2020, when Georgia imported 18,645 tons of wheat valued at USD 4.11 million.
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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.