#104 Georgia Agriculture Bulletin, BFC

04/2021

104 Geo r g i a

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Agriculture Bulletin Georgia Plans to Cut Greenhouse Gas Emissions by 35% by 2030 IFC Support for Honey Exports to the EU New Grant Program Launched by USAID and TBC Partnership Exports of Agricultural Commodities Up 20%

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Georgian Agriculture Finance Bulletin Edition #104, April 2021

Contents State Initiatives ........................................................................................................... 2 1) 2) 3)

Agro-Insurance Enhancement Strategy Expected to Be Approved Unanimously ........................... 2 Georgia Plans to Cut Greenhouse Gas Emissions by 35% by 2030 ................................................. 2 Ministry of Agriculture Already Planning for Fall Grape Harvest .................................................... 2

Foreign Aid ................................................................................................................. 2 4) 5) 6) 7) 8) 9) 10)

IFC Support for Honey Exports to the EU ........................................................................................ 2 Seminar on Energy Efficiency Held for Wine Industry Representatives.......................................... 2 Snail Meat Processing Plant to Be Built in Georgia ......................................................................... 3 Georgia Preparing for UN Food Systems Summit ........................................................................... 3 Young Agronomy Students to Benefit from ENPARD III Internships ............................................... 3 Beekeeping Center Opens in Tbilisi ................................................................................................. 4 New Grant Program Launched by USAID and TBC Partnership ...................................................... 4

Private Sector.............................................................................................................. 4 11) 12) 13) 14) 15) 16) 17)

Russian Organization Declares 6 Georgian Wines “Low Quality” ................................................... 4 Exports of Agricultural Commodities Up 20% ................................................................................. 4 Potato Prices Plummeting ............................................................................................................... 4 Dried Fruit Exports Up 58.7% .......................................................................................................... 5 Wheat and Vegetable Production Up.............................................................................................. 5 Fruit, Nut and Vegetable Exports Increase ...................................................................................... 5 Onion Imports Decrease in 1st Quarter of 2021 .............................................................................. 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 #104, April 2021

State Initiatives 1)

Agro-Insurance Enhancement Strategy Expected to Be Approved Unanimously

April 1st, 2021, https://mepa.gov.ge/En/News/Details/20292

Agriculture Minister Levan Davitashvili hosted a meeting on the Agro-Insurance Enhancement Strategy with insurance company representatives. During the meeting, the Minister stated that he fully expects the Strategy to be approved unanimously, citing the importance of insurance as a protection device to safeguard farmer livelihoods. Once approved, the Strategy will help increase the penetration of insurance and the engagement of the majority of farmers with insurance in all the regions of the country.

2)

Georgia Plans to Cut Greenhouse Gas Emissions by 35% by 2030

April 8th, 2021, https://mepa.gov.ge/En/News/Details/20309

The government of Georgia has adopted three documents related to climate change that were presented by the Ministry of Agriculture. As a result, Georgia has committed to decreasing its total greenhouse gas emissions by 35% (as compared to 1990) by 2030. To do this, Georgia plans on examining solutions related to energy generation and transmission, the transportation sector, energy usage in buildings, energy consumption at enterprises, energy consumption in agriculture and waste management processes.

3)

Ministry of Agriculture Already Planning for Fall Grape Harvest

April 16th, 2021, http://georgianwine.gov.ge/En/News/33767

In order to improve the quality of Georgian wine as well as its overall production and distribution processes, the Ministry of Agriculture has already begun planning the organization process for collecting and storing the fall grape harvest. Once finalized, the Ministry plans to share all relevant information with viticulturists in all villages of the Kakheti and Racha-Lechkhumi regions.

Foreign Aid 4)

IFC Support for Honey Exports to the EU

April 5th, 2021, https://www.ifc.org/wps/wcm/connect/news_ext_content/

The International Finance Corporation (IFC) has recently published a success story of Georgian honey exports, which reached a record amid improved testing and more training. In the article published on their website, IFC notes that, although the legal framework with the European Union (EU) allows honey exports from Georgia, volumes of honey exports to the EU remain low due to inconsistent safety stemming from poor beekeeping practices, especially the unnecessary application of veterinary pharmaceuticals. In this regard, IFC is supporting beekeepers with training and advisory support, which has already resulted in the share of contaminated honey dropping significantly. IFC is also working to increase the capacity of inspectors and the State Laboratory of Agriculture to test honey for regulated residues.

5)

Seminar on Energy Efficiency Held for Wine Industry Representatives

April 8th, 2021, https://georgiatoday.ge/energy-efficiency-in-the-wine-industry/

The Center for New Technologies hosted winemakers in mid-March to give a Green Economy Program seminar. The goal of the seminar is to promote the introduction of energy efficient (EE) and renewable Page 2

BFC. Georgian Agriculture Finance Bulletin. Edition #104, April 2021

energy (RE) production as well as the utilization of EE- and RE-enabling technologies in the wine industry.

During the seminar, industry experts describe existing energy challenges facing the sector as well as possible solutions for overcoming them. They also discussed ‘green production niches’, winemaking procedures and funding opportunities for winemakers. One of the main topics of conversation at the seminar was the use of biomass technology to “press chacha” into cheap fuel suitable for industrial purposes.

Seminar participants were, overall, interested in EE and RE technologies and techniques but also noted that it is important that such solutions be economically viable in the long term and not cost prohibitive in the short term.

6)

Snail Meat Processing Plant to Be Built in Georgia

April 11th, 2021, https://cbw.ge/economy/snail-meat-processing-plant-to-be-built-in-georgia-with-italian-georgian-investment

A snail meat processing plant is planned to be built in Georgia thanks to an investment agreement with the Italian Farmers' Confederation of Snails. Under the terms of the agreement, the Confederation of Italian Snail Farmers in the Caucasus was established to oversee the construction and operation of the plant.

The potential for snail meat and mucus in the world is very high, provided that international standards are met and maintained.

7)

Georgia Preparing for UN Food Systems Summit

April 20th, 2021, http://www.fao.org/georgia/news/detail-events/en/c/1395986/

Georgia is getting ready for the Food Systems Summit of the United Nations (UN), which has been scheduled for September 2021. During the summit, participants will discuss the challenges posed by the COVID-19 pandemic to food security as well as potential global solutions. Prior to the Summit, all participant countries will conduct preparation dialogue meetings that lead to the development of recommendations for developing sustainable food systems. These will then be discussed at the Summit itself.

8)

Young Agronomy Students to Benefit from ENPARD III Internships

April 22nd, 2021, http://enpard.ge/en/eu-fao-internship-program

Six young agronomy students and undergraduates from four Georgian regions have been chosen (within ENPARD III) to join a paid internship program and enhance their skills in agronomy. This is the third cycle of internships under the program and allows students to learn from the best local and international professionals as well as work alongside Georgian farmers. Trainings for the interns cover the topics of modern climate-smart agricultural approaches, soil analysis, integrated pest management, seedling production and transplantation, crop nutrition, drip irrigation and no-tillage technology in cereal production. Interns will also spend much time working directly with farmers at demonstration plots supported by the Food and Agriculture Organization of the United Nations (FAO).

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BFC. Georgian Agriculture Finance Bulletin. Edition #104, April 2021

9)

Beekeeping Center Opens in Tbilisi

April 22nd, 2021, https://sputnik-georgia.ru/economy/20210422/251541137/

A multifunctional beekeeping center has opened in Tbilisi. The goal of the center is to conduct research into ways to help develop beekeeping in the country and boost honey production and exports. The Czech Development Agency invested more than EUR 400,000 in the creation of the center.

In 2020, Georgia exported 21.7 tons of honey, 3.4 times more than in 2019. Most of this honey (12.9 tons) was exported to European Union (EU) markets.

10) New Grant Program Launched by USAID and TBC Partnership April 23rd, 2021, https://georgiatoday.ge/usaid-ის-და-თიბისის-კოლაბორაცი/

The Agricultural Program of the United States Agency for International Development (USAID) and TBC Partnerships are offering joint funding to agribusiness entrepreneurs in the form of a co-participation grant program. The aim of the grant program is to develop collection, refrigeration and processing infrastructure for select crops (berries, herbs, mandarins, pears, perishable vegetables, seeds, some nuts and table grapes). Grants are available to both individuals and legal entities as well as agricultural cooperatives interested in purchasing production equipment and production inventory. The maximum grant amount is USD 75,000. Grant funding can support up to 40% of the total investment cost (70% for agricultural cooperatives). The deadline for grant applications is May 31, 2021.

Private Sector 11) Russian Organization Declares 6 Georgian Wines “Low Quality” April 1st, 2021, https://commersant.ge/en/post/russia-rejects-georgian-wines

The Russian non-profit organization Roskachestvo has conducted a rating of the most popular wines imported into Russia, resulting in 15 wines being declared as “low quality”. The rating system used includes appearance, smell and taste. Of the 15 declared as “low quality”, 6 are Georgian. This includes 2 of the 3 to receive the lowest ratings – the red semi-sweet Kindzmarauli-Dugladze and the white dry Tsinandali-Dugladze. The other Georgian wines to includes as being of “low quality” were the red dry Saperavi-Dugladze, the red semi-sweet Kindzmarauli helmet, the red semi-sweet Kindzmarauli Betaneli and the semi-sweet Brojanica.

12) Exports of Agricultural Commodities Up 20% April 6th, 2021, https://commersant.ge/en/post/exports-of-agricultural-commodities-up-by-20-agro-imports-down-13

According to an ISET study, the export of agricultural commodities from Georgia during the first two months of the year is up 20%, while the import of agricultural commodities into Georgia during the same period is down 13%. If Georgia can maintain growth in the export of agricultural commodities over the long term, it is expected that Georgia’s overall trading position internationally will be positively affected.

13) Potato Prices Plummeting April 15th, 2021, https://commersant.ge/en/post/in-georgia-potato-prices-hit-historic-lows

The prices for potatoes in Georgian markets are significantly lower than those of last year as supplies surge to unusually high numbers, with imports driving the available number even higher. Potato prices decreased by an average of 49% in USD value and 37% in GEL value compared to the same period in 2020.

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BFC. Georgian Agriculture Finance Bulletin. Edition #104, April 2021

In fact, the consumer price index for potatoes is at an all-time low, with the indicator for the first quarter of 2021 being 8% lower than the average 2015–2020 indicator. On a monthly basis, the March 2021 index is 33% lower than in the same period in 2020. While some experts believe this is partially attributed to panic buying during the beginning of the pandemic, prices are still lower as compared to those in 2019.

An additional impetus is for increased volumes and reduced consumption is also the lack of tourism (due to the pandemic) as well as rich harvests in Georgia and in countries that import potatoes to Georgia.

Despite difficulties, potato farmers plan on continuing to cultivate potatoes in the same volumes for the foreseeable future, although further changes in price dynamics could have them rethinking this decision and planting less potatoes in coming seasons.

14) Dried Fruit Exports Up 58.7% April 16th, 2021, https://bm.ge/en/article/dried-fruit-exports-from-georgia-up-by-587/80460/

According to the official data, dried fruit exports from Georgia are up 58.7% over last year, reaching 610.3 tons (amounting to USD 1.9 million in value). The top importers of Georgian dried fruit are: Germany (298.4 tons), Russia (120.7 tons), China (81.7 tons), Armenia (35.9 tons) and Lithuania (7.5 tons).

15) Wheat and Vegetable Production Up April 16th, 2021, https://commersant.ge/en/post/georgias-wheat-yields-increased

According to preliminary data, Georgian wheat production for 2020 amounted to 101.2 tons, 0.6% more than in 2019. Corn and potato production also increased by 13.8% (46,100 tons) and 10.8% (215,700 tons) respectively. At the same time, oat production decreased by 13.8% to 46,100 tons. In total, 180,100 tons of vegetables (excluding potatoes) were grown in the country, an 11.8% year-on-year increase.

16) Fruit, Nut and Vegetable Exports Increase April 21st, 2021, http://bizzone.info/agriculture/2021/1619048756.php

According to the National Statistics Service, fruit and nut exports for the first quarter of 2021 reached USD 36.55 million in value, including USD 23.41 million of hazelnuts, USD 4.69 million of tangerines and USD 3.70 million of apples. Year-on-year, this is a 71.5% increase in fruit and nut exports. At the same time, vegetable exports reached USD 4.52 million in value, including USD 0.62 million of potatoes, USD 0.49 million of tomatoes and USD 0.29 million of cucumbers. Year-on-year, this is a 7.4% increase.

17) Onion Imports Decrease in 1st Quarter of 2021 April 21st, 2021, https://commersant.ge/en/post/onion-imports-decreased-exports-increased

According to the National Statistical Office, Georgia imported 5,688 tons of onions (valued at USD 3.078 million), a 37% year-on-year decrease, in the first quarter of 2021. The top countries Georgia imported onions from were Turkey (5,472 tons), Russia (128 tons) and Ukraine (64.7 tons).

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