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Agriculture Bulletin Georgia, Turkey Discuss Bilateral Cooperation in Agriculture National Agricultural Olympiad to Be Launched AFD to Provide EUR 483 Million Loan for Development in Georgia Wine Exports Up 15%
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Georgian Agriculture Finance Bulletin Edition #106, June 2021
Contents State Initiatives ........................................................................................................... 2 1) 2)
Georgia, Turkey Discuss Bilateral Cooperation in Agriculture ........................................................ 2 20,000 Vineyards Registered ........................................................................................................... 2
Foreign Aid ................................................................................................................. 2 3) 4) 5) 6) 7) 8) 9)
National Agricultural Olympiad to Be Launched ............................................................................. 2 EU, FAO Provide Grant to Reduce Antibiotics in Meat Production ................................................. 2 EIB Group Program Helps Businesses Reopen Operations ............................................................. 3 National Food Agency Presents Annual Report .............................................................................. 3 AFD to Provide EUR 483 Million Loan for Development in Georgia................................................ 3 GRETA Project Supporting Agro-Tourism and Organic Production in Tsageri ................................ 3 Domestic Anti-Hail Net Manufacturer Receives 100 Pre-Orders .................................................... 4
Private Sector.............................................................................................................. 4 10) 11) 12) 13) 14) 15) 16) 17) 18) 19) 20) 21)
Hazelnut Export Numbers Up Over First Four Months of 2021 ...................................................... 4 Potato Producers Preparing for Disappointing Season ................................................................... 4 Wine Exports Up 15% ...................................................................................................................... 4 Is Georgia’s Dairy Industry in a Crisis? ............................................................................................. 4 Natural Honey Exports Hit Record High .......................................................................................... 5 Surge in Potato Exports to Russia Presents Opportunity ................................................................ 5 Slaughterhouses Produced 37,180 Tons of Meat in 2020............................................................... 5 Flour Subsidies to End ..................................................................................................................... 5 Non-Compliant Tomatoes and Frozen Chicken Meat Destroyed .................................................... 6 Lack of a Workforce to Meet Demand in Agriculture ..................................................................... 6 Blackberry Producers Look to Export Markets ................................................................................ 6 Watermelon Imports Up 209%........................................................................................................ 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 »
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BFC. Georgian Agriculture Finance Bulletin. Edition #106, June 2021
State Initiatives 1)
Georgia, Turkey Discuss Bilateral Cooperation in Agriculture
June 4th, 2021, http://bizzone.info/agriculture/2021/1622873751.php
Georgian Prime Minister Irakli Garibashvili has met with Turkish Agriculture Minister Bekir Pakdemirli to discuss possible bilateral cooperation initiatives in agriculture, something considered especially important for Georgia as its agricultural exports to Turkey have increased 91% in the last two years. The discussions included ongoing assistance measures provided by Turkey to support agricultural development in Georgia.
2)
20,000 Vineyards Registered
June 22nd, 2021, https://wine.gov.ge/En/News/33790
Since 2021, the registration of vineyards and the delivery of harvests by cadastral extract has become mandatory for all growers. In the Kakheti region, the registration of winegrowers and issuance of vineyard extracts for 20,000 vineyards has been completed, including 4,600 so far this year. Farmers can register their vineyards and update their cadastral information at one of 47 registration points, and obtaining a cadastral extract is free and does not require going to a public service hall as the Vineyard Cadaster has no connection with the Land Cadaster.
Foreign Aid 3)
National Agricultural Olympiad to Be Launched
May 31st, 2021, http://www.fao.org/georgia/news/detail-events/en/c/1402801/
The Ministry of Agriculture, with support from the Food and Agriculture Organization of the United Nations (FAO) and the Austrian Development Cooperation (ADC), are launching the first-ever National Agricultural Olympiad in Georgia. The Olympiad was designed to: (1) promote and raise awareness about agriculture and agricultural education, (2) create a qualified mechanism for professional knowledge evaluation and (3) support informal education in agriculture. The Olympiad will be held in three phases – registration, initial online testing in an agricultural field and further testing and awards. Winners will be awarded with certificates and prizes.
4)
EU, FAO Provide Grant to Reduce Antibiotics in Meat Production
June 1st, 2021, http://www.fao.org/georgia/news/detail-events/en/c/1403516/
The European Union (EU) and Food and Agriculture Organization of the United Nations (FAO) have awarded a matching grant of USD 150,000 to Biochimpharm, a Georgian biotech company with worldwide recognition for producing bacteriophages (sustainable alternatives to antibiotics). The grant will help the company produce “PowerPhage”, a natural antimicrobial veterinary solution that reduces the use of antibiotics in meat production. Initially, the solution will be focused on poultry meat production.
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BFC. Georgian Agriculture Finance Bulletin. Edition #106, June 2021
5)
EIB Group Program Helps Businesses Reopen Operations
June 7th, 2021, https://bm.ge/en/article/georgian-hazelnut-plant
InnovFin: EU Finance for Innovators (InnovFin), a joint initiative by the EIB Group (European Investment Bank (EIB) and European Investment Fund (EIF)) under the Horizon 2020 program, aims to support micro-, small- and medium-sized enterprise (MSME) investments in research and innovation. Since the COVID-19 pandemic, InnovFin has helped business in Georgia with the short-term financial support necessary to keep them operational under COVID-19 measures. Their aim is to support businesses that support entire value chains, thereby helping many business at once. This, in turn, allows for a return to some sense of normalcy in terms of employment, buying materials, production and selling outputs (including in export markets). In 2020 alone, EIB Group provided EUR 70 million in loans for MSMEs under InnovFin.
6)
National Food Agency Presents Annual Report
June 8th, 2021, http://www.fao.org/georgia/news/detail-events/en/c/1410726/
The National Food Agency of Georgia presented its annual report at a celebration for World Food Safety Day. During the presentation of the report, Agriculture Minister Levan Davitashvili noted the significant progress made over the last year in boosting food safety in the country. In particular, the Minister pointed out support received from several international organizations, adding that Georgia has now been able to bring 146 legislative measures regarding food safety and veterinary and plant protection in line with European Union (EU) legislation. The Minister also noted that much work remains, including creating a collaborative environment with the society at large to ensure food safety efforts in the country come to full fruition.
7)
AFD to Provide EUR 483 Million Loan for Development in Georgia
June 10th, 2021, https://www.newsgeorgia.ge/%d1%
The French Development Agency (AFD) has provided Georgia with a loan of EUR 483 million as part of a new partnership agreement. Georgia will receive the funds from over the next three years in three parts. The funding will support a number of initiatives related to water resource management, irrigation, agriculture, urban development and communications, energy, social security and healthcare.
8)
GRETA Project Supporting Agro-Tourism and Organic Production in Tsageri
June 17th, 2021, https://bm.ge/en/article/production-of-organic-tea
The Green Economy: Sustainable Mountain Tourism and Organic Agriculture in Georgia (GRETA) project has been ongoing since 2018, with the aim of improving the business environment and increasing income for the Georgian economy in two important sectors, mountain tourism and organic agriculture. Recently, the project has found success in both sectors with the Tsageri region, demonstrating the potential for both in the country. The project is supporting the production of organic tea in the region, which is a sector that has strong potential due to Georgia’s long tradition of producing tea as well as local markets having opening for domestically-produced teas. The project is also supporting a fishery in the region that is focused on developing agro-tourism as well as the production and use of organic food for fish. The project, which is being implemented with the support of the European Union, Austria and Sweden, is helping producers find ways to reduce costs and boost incomes, thereby becoming profitable businesses that will serve as examples for similar business across the country.
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9)
Domestic Anti-Hail Net Manufacturer Receives 100 Pre-Orders
June 21st, 2021, https://commersant.ge/en/post/not-yet-opened-agronet-received-orders-for-anti-hail-nets
Although not yet open for business, the company Agronet has already received 100 orders for anti-hail nets. The company received USD 500,000 in investment co-financing from the United States Agency for International Development (USAID) and expects to immediately compete in the domestic market with foreign competitors by offering higher-quality products at lower prices.
Private Sector 10) Hazelnut Export Numbers Up Over First Four Months of 2021 June 4th, 2021, https://bm.ge/en/article/georgias-revenue-from-hazelnut-exports-101-higher-during-jan-april-2021-/84201/
In the first four months of 2021, Georgia exported 4,922.3 tons of hazelnuts to 30 countries, earning USD 29.18 million in revenue. During the same period in 2020, Georgia exported only 2,272.7 tons of hazelnuts, which earned USD 14.52 million in revenue. The top importers of Georgian hazelnuts are: Russia (489 tons), Armenia (408 tons), Lithuania (304 tons), Belarus (287 tons) and the Czech Republic (247 tons).
11) Potato Producers Preparing for Disappointing Season June 4th, 2021, https://commersant.ge/en/post/potato-prices-in-georgia-may-remain-at-a-record-low-levels-in-202122
Following a disappointing 2020/2021 season, many Georgian potato producers are preparing for yet another disappointing season this year. Prices have been lower so far this year than in recent years (e.g. 28% lower in January 2021 as compared to January 2019 and 60% lower in April, when prices usually rise due to lower availability). The reasons for this seems to be a combination of weak local demand and a significant surplus of Turkish potatoes. In response, some potato producers are replanting much of their stock, hoping for better prospects in the next harvest season. Meanwhile, others are importing higherquality seed potatoes, aiming to recoup losses with higher quality products.
12) Wine Exports Up 15% June 8th, 2021, https://commersant.ge/en/post/georgia-exported-wine
During the first five months of 2021, Georgia exported 36.4 million bottles of wine to 55 countries, a 15% year-on-year increase. This resulted in USD 82.4 million in revenue, 8% more year-on-year. The top five importing countries were: Russia (22.4 million bottles), Ukraine (4.2 million bottles), Poland (2.3 million bottles), China (1.9 million bottles) and Kazakhstan (1.4 million bottles). During the same period, Georgia also exported 13.5 million bottles of brandy and 209,000 bottles of chacha.
13) Is Georgia’s Dairy Industry in a Crisis? June 9th, 2021, https://bm.ge/en/article/georgias-dairy-industry-in-crisis--all-you-need-to-know/84576/
Dairy farms around the country are concerned about the state of the industry in the country, with some closing their doors (at least temporarily). This is due to a combination of the depreciation of the lari and a rise in prices of necessary inputs (e.g. feed for dairy cows). There are also issues with imported milk products being sold at cheaper prices than domestically-produced ones. Some dairy producers have requested state intervention in the form of subsidies or VAT exemptions to help them; however, state Page 4
BFC. Georgian Agriculture Finance Bulletin. Edition #106, June 2021
officials have, thus far, been reticent to move forward with any such measure. For their part, they do state the availability of numerous support projects aimed at helping the dairy sector develop and believe that the dairy farms currently facing issues are having management issues, not industryimpacting issues.
14) Natural Honey Exports Hit Record High June 12th, 2021, https://bm.ge/en/article/natural-honey-exports-from-georgia-record-high-in-jan-april-2021/84770/
31.44 tons of natural worth, worth USD 116,880, was exported from Georgia between January 2021 and April 2021. The honey was exported to eleven countries: Bulgaria, Kazakhstan, the United Arab Emirates, the United States of America, Hong Kong, Bahrain, Canada, Qatar, Saudi Arabia, Singapore and Azerbaijan. Between January 2020 and April 2020, only 2.52 tons of Georgian honey (worth USD 19,230) was exported.
15) Surge in Potato Exports to Russia Presents Opportunity June 13th, 2021, https://bm.ge/en/article/georgias-potato-exports-surge-might-become-a-permanent-opportunity/84843/
There was a surge recorded in potato exports in the second quarter of this year, particularly during April and May. This surge is due to Russian importers working to fill market demand as their potato stocks from last year run dry due to a weaker Russian potato harvest. While some may think this could lead to a more permanent opportunity for Georgian potato producers, most believe this to be an anomaly unlikely to become a yearly part of Georgia’s potato business. If Georgia is to take advantage of this opportunity, potato producers need to quickly modernize their logistics chain and market to demonstrate their capacity to handle increased demand and become a reliable supplier.
16) Slaughterhouses Produced 37,180 Tons of Meat in 2020 June 16th, 2021, https://commersant.ge/en/post/slaughterhouses-produced-37-1804-tons-of-meat-in-2020
According to a survey of slaughterhouses, 288,300 heads of livestock were slaughtered in 2020, resulting in 37,180.4 tons of meat (46.7% of which was chicken, 30.8% of which was beef and 21.7% of which was pork). Slaughterhouse services were provided to 27,500 people in total, 37.2% of which were households. Slaughterhouses also employed 906 people on average each month. The average cost to slaughter an animal in a slaughterhouse in 2020 was GEL 26.8 per head of cattle and GEL 24.3 per pig. The active number of slaughterhouses in 2020 was 110, 50% of which are fully equipped with modern technologies.
17) Flour Subsidies to End June 17th, 2021, http://bizzone.info/agriculture/2021/1623963394.php
At the end of June 2021, a subsidy on flour prices is expected to end. And with no consensus within the government on a possible extension, it is likely that the prices of bakery products will rise in Georgia. At the same, many experts believe that now is an appropriate time for the subsidy program to end as international grain prices are falling. The Ministry of Agriculture plans to arrange meetings with representatives engaged in the bakery value chain to discuss the subsidies and whether or not they should be extended.
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18) Non-Compliant Tomatoes and Frozen Chicken Meat Destroyed June 25th, 2021, https://agenda.ge/en/news/2021/1743
Employees of the Sanitary, Phytosanitary and Veterinary Control Division of the Customs Department discovered 1,952 kilograms of tomatoes and 82,500 kilograms of frozen chicken meat that was noncompliant with import requirements at the Sarpi and Poti Port customs checkpoints. More specifically, quarantine pests were found in tomatoes imported at the Sarpi checkpoint, and pests dangerous to health were found in frozen chicken meat at the Poti Port checkpoint. All non-compliant products were destroyed, and the manufacturing company that produced the frozen chicken meat has been banned from further imports for a period of one year.
19) Lack of a Workforce to Meet Demand in Agriculture June 25th, 2021, https://bm.ge/en/article/there-is-a-serious-workforce-problem
According to the Deputy Minister of Agriculture, demand for ordinary workers in the agricultural sector is high, especially for those who can operate agricultural machinery (including tractors). The Deputy Minister stated this at a sitting of a Parliamentary Committee on agriculture.
20) Blackberry Producers Look to Export Markets June 27th, 2021, https://bm.ge/en/article/will-exports-save-georgian-blackberry-season-this-year/85916/
As Blackberry producers in Georgia are preparing for their main harvest season, there is concern among many as to the price they will ultimately be able to get for the produce. This concern stems from last year, when, at peak harvest, the market became oversupplied, sending prices plummeting. To combat this, most blackberry producers have joined forces under the Georgian Berry Growers’ Association. The Association is currently working to ensure blackberries will find markets with reasonable prices for producers. This includes both local and export markets. It is expected that most blackberries produced in Georgia this year will be sold in either Gulf states or Russia.
21) Watermelon Imports Up 209% June 28th, 2021, https://bm.ge/en/article/watermelon-exports-up-by-209-in-georgia/85947/
In the first five months of this year, Georgia has imported 209% more watermelons than during the same period last year. Most of these imports are from Turkey (9,891 tons), Iran (251 tons), Azerbaijan (190 tons) and the Netherlands (10 tons).
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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.