#109 Georgia Agriculture Bulletin, BFC

09/2021

109 Geo r g i a

#

Agriculture Bulletin Government Support for Marketing Wine Abroad Damaged Vineyards in Kakheti to Receive Insurance Compensation EU, UNDP Program to Assist Rural Entrepreneurs in Digitizing Their Businesses Wine Exports Up 19%

All materials are published “as is” and are the property of their respective owners.

Georgian Agriculture Finance Bulletin Edition #109, September 2021

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

Government Support for Marketing Wine Abroad ......................................................................... 2 Damaged Vineyards in Kakheti to Receive Insurance Compensation ............................................. 2

Foreign Aid ................................................................................................................. 2 3) 4) 5) 6)

New Call for Grant Proposals Under Livestock Enhancement Project ............................................ 2 Workshop Held on the Development of a National Aquaculture Strategy ..................................... 2 EU, UNDP Program to Assist Rural Entrepreneurs in Digitizing Their Businesses ........................... 3 FAO Provides EUR 10,000 Worth of Soil Analysis Equipment ......................................................... 3

Private Sector.............................................................................................................. 3 7) 8) 9) 10) 11) 12)

Wine Exports Up 19% ...................................................................................................................... 3 High Potential for Georgia’s Blueberry Industry ............................................................................. 3 Increased Focus on Quality for Georgian Wine ............................................................................... 4 Georgia’s Walnut Industry Still Faces Key Challenges ..................................................................... 4 164,000 Tons of Grapes Processed in Kakheti ................................................................................ 4 Surplus Wine Has Prices Declining Worldwide ................................................................................ 4

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 #109, September 2021

State Initiatives 1)

Government Support for Marketing Wine Abroad

September 6th, 2021, https://agenda.ge/en/news/2021/2538

In order to increase the export, sale, competitiveness and awareness of Georgian wine abroad, the government of Georgia has decided to co-finance the marketing campaigns of wine companies in export markets (with the exception of such campaigns in Commonwealth of Independent States (CIS) countries).

The National Wine Agency will be in charge of implementing the GEL 3 million measure. A maximum amount of GEL 600,000 per company per year has been set.

2)

Damaged Vineyards in Kakheti to Receive Insurance Compensation

September 21st, 2021, https://sputnik-georgia.ru/20210921/uscherb-nanesennyy-gradom

Grape producers in Kakheti whose harvest was damaged due to recent hail and are beneficiaries of the state’s agricultural insurance program will be compensated for their losses. On August 26, strong hail and wind damaged 4,600 hectares of vineyards. This was followed by another hailstorm on September 2, which damaged a further 180 hectares. The state’s agricultural insurance program is available to all Georgian farmers and covers 50% of the cost of an insurance policy for vineyards and 70% of the cost for other crops.

Foreign Aid 3)

New Call for Grant Proposals Under Livestock Enhancement Project

September 16th, 2021, https://mepa.gov.ge/En/News/Details/20493

A new call for grant proposals under the Safety and Quality Investment in Livestock (SQIL) project has been announced. This call will support dairy and beef producers in improving local value addition through measures that emphasize food safety and quality. Applications will be accepted through October 22, 2021.

The SQIL project is being implemented by Land O’Lakes Venture 37 and the Georgian Farmers’ Association, with funding provided by the United States Department of Agriculture (USDA).

4)

Workshop Held on the Development of a National Aquaculture Strategy

September 20th, 2021, http://www.fao.org/georgia/news/detail-events/en/c/1440291/

The Food and Agriculture Organization of the United Nations (FAO), under the European Union (EU)supported European Neighborhood Program for Agriculture and Rural Development (ENPARD), gathered stakeholders and representatives of local and international organizations to discuss the development of the National Aquaculture Strategy of Georgia. Specifically, discussions were held on the topics of the extensive aquaculture, mariculture and fish farming. These discussions will help policy-makers in writing the national Strategy, which will support the development of Georgian aquaculture in responsible and sustainable ways.

Page 2

BFC. Georgian Agriculture Finance Bulletin. Edition #109, September 2021

5)

EU, UNDP Program to Assist Rural Entrepreneurs in Digitizing Their Businesses

September 20th, 2021, https://agenda.ge/en/news/2021/2730

The European Union (EU) and the United Nations Development Program (UNDP) are inviting rural entrepreneurs from the Georgian municipalities of Dedoplistskaro, Kazbegi, Lagodekhi and Tetritskaro to take part in the third round of the Digitalize Your Business project. Eight entrepreneurs will be selected to participate in an incubation and mentoring program that is designed to prepare them for applying digital business tools in practice. Entrepreneurs will receive support in creating websites and other digital platforms for their businesses.

6)

FAO Provides EUR 10,000 Worth of Soil Analysis Equipment

September 23rd, 2021, http://www.fao.org/georgia/news/detail-events/en/c/1440720/

The Food and Agriculture Organization of the United Nations (FAO) has provided EUR 10,000 worth of soil analysis equipment to the Scientific Research Center of Georgia’s Ministry of Agriculture. The equipment will help Georgia study, promote and implement modern and innovative agricultural techniques as the country works toward reaching international standards. For their part, the Scientific Research Center was grateful for the equipment and pledged to continue its close collaborations with international projects aimed at improving Georgia’s agricultural sector.

Private Sector 7)

Wine Exports Up 19%

September 8th, 2021, https://agenda.ge/en/news/2021/2569

Georgia exported 65 million bottles of wine to 59 countries during the first eight months of this year, a year-on-year increase of 19%. This generated USD 145 million in revenue, a year-on-year increase of 13%.

The biggest increases in exports were made to the Czech Republic (a 646% year-on-year increase), Mongolia (a 316% year-on-year increase), Canada (a 132% year-on-year increase), Turkey (a 156% yearon-year increase) and the United Kingdom (a 73% year-on-year increase). During this same period, Georgia also exported 22 million bottles of brandy (a 21% year-on-year increase) and 570,000 bottles of chacha (a 115% year-on-year increase).

8)

High Potential for Georgia’s Blueberry Industry

September 11th, 2021, https://bm.ge/en/article/jorge-duarte-an-effective-blueberry

Jorge Duarte, a Portuguese agronomist hired by the Agriculture Program of the United States Agency for International Development (USAID), believes Georgia’s blueberry industry has great potential. While the expert appreciates the care with which Georgian producers have in producing high-quality berries, he notes that low levels of mechanization are hindering the further development of the industry. To introduce mechanization, he notes that it will be important for producers to also introduce new varieties that are more resistant to mechanical harvesting and processing. This, in turn, will require rethinking how plantations are organized for growing. While many producers might not yet be ready to make such changes, there are other improvements that could help the industry develop, most notably installing modern irrigation systems and introducing post-harvesting cooling systems. Additionally, producers need to carefully monitor soil conditions to ensure it is ideal for blueberry growth. In short, the expert believes that the potential exists for a thriving Georgian blueberry industry, but much work will need to be done as the industry is currently in its nascent stage.

Page 3

BFC. Georgian Agriculture Finance Bulletin. Edition #109, September 2021

9)

Increased Focus on Quality for Georgian Wine

September 12th, 2021, https://bm.ge/en/article/wine-exporters-dependency

Georgia’s rich, 8,000-year history of winemaking has given it a unique opportunity to capitalize as being the “cradle of wine” in markets around the world. To fully take advantage of this however, Georgian wine producers need to stay on top of world wine consumption trends, the most important being the greater emphasis being placed on quality and healthier options. For this reason, Georgia’s National Wine Agency has introduced several initiatives designed to push wine producers toward more marketable (and profitable) products. These include mandatory quality control of wine intended for export and controls on grapes used in production. Such measures will be important for the sector going forward as it looks to diversify its markets and continue as one of Georgia’s most profitable sectors.

10) Georgia’s Walnut Industry Still Faces Key Challenges September 13th, 2021, https://commersant.ge/en/post/80-of-nuts-are-harvested

Although Georgia’s walnut industry has made important strides in recent years (e.g. increasing yields, boosting exports and overcoming pest invasions), the industry still faces key problems that are hindering further growth. The two biggest of these problems are the low level of mechanization and a shortage of laborers. In terms of mechanization, almost everything is currently done by hand. At the same time, many producers find it difficult to attract enough laborers to complete harvesting and other activities to prepare nuts for processing and export. These two issues have resulted in time-consuming processes that also negatively impact the overall quality of Georgian walnuts. Georgia has real potential to become a major international walnut producer, but more investments into the industry need to be made for this to come to fruition.

11) 164,000 Tons of Grapes Processed in Kakheti September 23rd, 2021, https://georgiatoday.ge/164000-tons-of-grapes-processed-in-georgia-as-of-september-22/

As of September 22, 2021, 164,000 tons of grapes have been processed in Georgia’s wine region of Kakheti. Of that amount, approximately 96,000 tons were of the Rkatsiteli variety; 60,000 tons were of the Saperavi variety; and 3,300 tons were of the Kakhuri Mtsvane variety. The government, through the Vintage 2021 Program, will provide subsidy support to any company buying and processing at least 100 tons of Rkatsiteli or Kakhetian varieties grown in the Kakheti region that provide grape producers a purchase price of at least GEL 0.90 per kilogram.

12) Surplus Wine Has Prices Declining Worldwide September 23rd, 2021, https://commersant.ge/en/post/quality-of-georgian-wine-has-got-bad-european-winemakers-say

According to the chairman of the National Wine Agency, wine prices around the world are declining due to surpluses caused by the COVID-19 pandemic. In particular, Georgian wine prices have dropped by an average of 10–20%. To combat this, the chairman is calling on Georgian wine producers and exporters to diversify their markets. At the same time, many wine producers remain relatively unconcerned, stating that retail prices for their products have not decreased. It is also worth noting that Tamaz Omanazdze, director of Khomli’s Cellar Company, does not consider prices to be a problem, rather, he is concerned by remarks from European importers regarding the lowering quality of Georgian wine.

Page 4

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.