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Agriculture Bulletin Government Assistance in Generating USD 1 Billion in Wine Export Revenue GEL 7 Billion in State Agricultural Investments by 2030
Beekeeping Center Opened in Tbilisi
Russia Still the Top Importer of Georgian Fruits
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Georgian Agriculture Finance Bulletin Edition #108, August 2021
Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4) 5)
GEL 100 Million in Subsidies for This Year’s Grape Harvest ............................................................ 2 Government Assistance in Generating USD 1 Billion in Wine Export Revenue .............................. 2 State Loan Portfolio for Agriculture Exceeds GEL 2 Billion .............................................................. 2 Government Support for Tea Sector Revival ................................................................................... 2 GEL 7 Billion in State Agricultural Investments by 2030 ................................................................. 2
Foreign Aid ................................................................................................................. 3 6)
Beekeeping Center Opened in Tbilisi .............................................................................................. 3
Private Sector.............................................................................................................. 3 7) 8) 9) 10) 11) 12) 13) 14) 15) 16) 17)
Wine Export Revenue Up 9% ........................................................................................................... 3 Russia Still the Top Importer of Georgian Fruits ............................................................................. 3 Uncertainty in Georgia’s Hazelnut Sector ....................................................................................... 3 Cattle Numbers Up in Second Quarter of 2021............................................................................... 4 Record High Goat and Sheep Exports .............................................................................................. 4 Peach and Nectarine Exports Up 25% ............................................................................................. 4 Alternatives to Russian Wheat Imports ........................................................................................... 4 Vintage Registration Available Online ............................................................................................. 4 4,600 Hectares of Vineyards Damaged in Kakheti .......................................................................... 4 Agricultural Exports Projected to Exceed USD 1 Billion .................................................................. 5 Shortage of Pickers for this Year’s Harvests .................................................................................... 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 #3, January 2013
State Initiatives 1)
GEL 100 Million in Subsidies for This Year’s Grape Harvest
August 2nd, 2021, https://agenda.ge/en/news/2021/2183
The government of Georgia will subsidize the 2021 grape harvest with GEL 100 million due to an excess grape yield as well as the negative impacts of the COVID-19 pandemic. The price per kilogram of the Rkatsiteli grape variety will be set at not less than GEL 0.90. The government considers the wine sector (and, by extension, grape production) to be an important part of Georgia’s agricultural development. The sector has grown from 39 wine companies generating revenues of GEL 35 million in 2012 to 350 wine companies generating revenues of GEL 323 million in 2020.
2)
Government Assistance in Generating USD 1 Billion in Wine Export Revenue
August 13th, 2021, https://agenda.ge/en/news/2021/2328
The government of Georgia intends to assist in the generation of USD 1 billion in revenue from wine exports over the next ten years. This will be accomplished via a set a assistance measures, including a subsidy program to help wine producers avoid the negative impacts of the COVID-19 pandemic. There are currently 300 Georgian wine companies that export their products.
3)
State Loan Portfolio for Agriculture Exceeds GEL 2 Billion
August 17th, 2021, https://sputnik-georgia.ru/20210817/Kreditnyy-portfel
The loan portfolio of the government of Georgia within the agricultural sector has exceeded GEL 2 billion in recent years. This includes numerous government initiatives aimed at co-financing agriculture and related food and processing industries. This is a stark increase from 2012, when the total of government loans to the agricultural sector amounted to just GEL 50 million per year. It should be noted that the government plans on investing up to GEL 7 billion into Georgia’s agricultural sector over the next 9 years. To this end, the Ministry of Agriculture is actively working to development a variety of programs, including a preferential agricultural loan program to help farmers gain access to finance.
4)
Government Support for Tea Sector Revival
August 20th, 2021, https://sputnik-georgia.ru/20210820/Chaynye-plantatsii
The government of Georgia is launching the Georgian Tea Program to help further the revival of tea production in the country. In particular, the state will begin leasing overgrown tea plantations to producers for a symbolic price. Additionally, Program participants are also eligible to receive 70% cofinancing from the state (up to GEL 2,500 per square meter) for restoration efforts.
5)
GEL 7 Billion in State Agricultural Investments by 2030
August 26th, 2021, http://bizzone.info/agriculture/2021/1630039695.php
Prime Minister Irakli Garibashvili has committed to invested GEL 7 billion into agriculture by 2030, including GEL 2.5 billion to encourage local production. The government also plans to invest in making agricultural machinery more accessible, exploring new export markets and creating greenhouses. The government also plans to continue support for orchard development as well as modernizing livestock and
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BFC. Georgian Agriculture Finance Bulletin. Edition #3, January 2013
poultry farms. The Prime Minister expects that these investments will help open 1,000 new agricultural enterprises and create 100,000 new jobs.
Foreign Aid 6)
Beekeeping Center Opened in Tbilisi
August 29th, 2021, https://georgiatoday.ge/sustainable-development
The Czech non-governmental organization People in Need, the Czech Development Agency, Tbilisi City Hall and the Agora Union Association have joined forces to open a modern beekeeping center in Tbilisi. The center has laboratories that meet international standards and will conduct scientific activities and studies. The center will also conduct trainings and other professional-growth measures for Georgian apiarists, including regarding the technologies and equipment. The center was opened within the Sustainable Development of Beekeeping in Georgia 2018–2020 project.
Private Sector 7)
Wine Export Revenue Up 9%
August 6th, 2021, https://wine.gov.ge/En/News/33807
In the January–July 2021 period, revenue from exported wine reached USD 125 million, up 9% year-onyear. The amount of exported wine also increased by 12%. The top five countries to import Georgian wines were Russia, Ukraine, Poland, China and Kazakhstan. In addition, 18.6 million bottles of brandy were exported, a 17% year-on-year increase. 421,000 bottles of chacha were also exports, a 63% year-on-year increase. Total exports of wine, brandy and chacha amounted to USD 202.4 million, up 14% year-on-year.
8)
Russia Still the Top Importer of Georgian Fruits
August 9th, 2021, https://commersant.ge/en/post/most-of-georgias-fruits-are-sold-in-russia
Russia is still the leading sales market for Georgian fruits, despite the government’s export diversification efforts. This is due to higher purchasing prices in Russia. Although some headway has been made in export market diversification (e.g. blueberries now being exports to the Netherlands), fruits are generally cheaper in European markets than in Russia. To boost market diversification efforts, there are a number of ongoing efforts, including branding/packaging efforts, better refrigeration and the production of new varieties that are more attractive to niche markets throughout Europe.
9)
Uncertainty in Georgia’s Hazelnut Sector
August 16th, 2021, https://bm.ge/en/article/uncertainty-in-the-hazelnut-sector-in-georgia/89213/
Due to a cold spring, the harvest of hazelnuts in Georgia began later than expected. While exporters hold out hope for a high yield and better quality, rains (which have been flooding Western Georgia) may delay the harvest, and high humidity could negatively affect the quality of the kernels. This has led to some uncertainty among hazelnut buyers and exporters, although ongoing fired in Turkey (the world’s largest hazelnut producer) have also led to uncertainty in regard to their production as well. As contracts are being concluded, it remains to be seen exactly what effect climate conditions will ultimately have on Georgia’s hazelnut producers.
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BFC. Georgian Agriculture Finance Bulletin. Edition #3, January 2013
10) Cattle Numbers Up in Second Quarter of 2021 August 16th, 2021, https://commersant.ge/en/post/number-of-cattle-up-in-q-ii2021
According to preliminary data, the number of cattle showed a year-on-year 2.2% increase at the end of the second quarter, reaching 1 million. At the same time, the total number of dairy cows and buffaloes decreased by 2.1%. The total number of sheep and goats decreased by 17.7% (amounting to 984,700), and the total number of pigs decreased 13.3% (amounting to 192,100). The number of poultry decreased by 11.2% (amounting to 11.5 million).
11) Record High Goat and Sheep Exports August 23rd, 2021, https://cbw.ge/economy/georgias-sheep-exports-see-record-high-exports-markets
The export of goats and sheep during the January–July 2021 period was up 500% year-on-year, representing a new record for Georgia. During this period, Georgia exported 4,973 tons of livestock (worth USD 16.5 million). The top five export markets were Saudi Arabia, Azerbaijan, Kuwait, the United Arab Emirates and Qatar.
12) Peach and Nectarine Exports Up 25% August 24th, 2021, https://commersant.ge/en/post/georgia-exported-peaches-and-nectarines-worth-261-million
Georgia has exported 28,700 tons of peaches and nectarines, valued at USD 26.1 million, since May 1, 2021. Compared to the same period of last year, this represents an increase of 5,700 tons (25%) in terms of volume and USD 6.9 million (36%) in terms of value. The top export markets have been Russia, Armenia, Ukraine, Azerbaijan, Belarus, Moldova, Poland and Slovenia.
13) Alternatives to Russian Wheat Imports August 25th, 2021, https://commersant.ge/en/post/georgias-alternative-to-russian-wheat
In the past 10 days, new regulations introduced by the Russian government have resulted in the price of Russian wheat increasing by an average of USD 20 per ton. Given that Russian wheat dominates Georgian wheat imports, import diversification and grain delivery from Kazakhstan have becomes urgent. France, Hungary, Romania and Ukraine are also being explored as alternative options, although they traditionally offer only more expensive wheat. In 2020, Georgia imported 490,900 tons of wheat, including 488,300 tons from Russia (99.5% of total imports).
14) Vintage Registration Available Online August 26th, 2021, https://wine.gov.ge/En/News/33817
Wine companies wishing to join the vintage coordination effort can register online on the website of the National Wine Agency. According to established rules, wine companies should register with the Vintage Coordination Headquarters before starting to receive grapes. All varieties of grapes received and processed will then be sent to the Headquarters to ensure maximum quality as well as traceability for all vintage wines.
15) 4,600 Hectares of Vineyards Damaged in Kakheti August 27th, 2021, https://agenda.ge/en/news/2021/2453
Heavy hail and wind hit the Kvareli, Gurjaani and Telavi municipalities in Georgia’s wine region of Kakheti, damaging 4,600 hectares of vineyards. In some areas, the damage was 80–100%. Prime Minister Irakli Page 4
BFC. Georgian Agriculture Finance Bulletin. Edition #3, January 2013
Garibashvili noted that no victims will remain without government assistance. Meanwhile, the state’s Crop Management Company has committed to purchasing damaged grapes.
16) Agricultural Exports Projected to Exceed USD 1 Billion August 27th, 2021, https://sputnik-georgia.ru/20210827/vlasti-gruzii
According to Agriculture Minister Levan Davitashvili, 2021 revenues from agricultural exports are expected to exceed USD 1 billion. The optimistic figure is due to the economy’s strong rebound from the pandemic, as evidenced by July’s export numbers 20.6% higher than in July 2019. The government is actively working to boost agricultural exports and hopes that they will exceed USD 3 billion by 2030.
17) Shortage of Pickers for this Year’s Harvests August 30th, 2021, https://commersant.ge/en/post/farmers-complain-about-a-shortage-of-pickers
The agricultural sector, including both individual farmers and large companies, is facing a shortage of pickers for the harvest season. The main reason for this is the outflow of seasonal workers to Greece and Turkey, places where (especially with the national currency devaluation) they can earn more. Additionally, many former rural workers are moving to cities to work in construction. There are also some issues with the COVID-19 pandemic as, when one worker tests positive, all workers within their wider group must go into quarantine.
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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.