AGRICULTURE BULLETIN All materials are published “as is” and are the property of their respective owners. Government to Subsidize 2022 Grape Harvest Google-Based Agricultural Map of Georgia Created New Program to Help Agricultural Companies Reach High-Value Markets Wine Exports Down 2.9% #120 GEORGIA 08/2022
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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.
Edition #120, August 2022
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1) Government to Subsidize 2022 Grape Harvest 2 Government Will Subsidize the Sale of Sub Standard Apples Regulation on Calf Protection Approved Aid Google Based Agricultural Map of Georgia Created New Program to Help Agricultural Companies Reach High Value Markets
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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Private Sector.............................................................................................................. Tomato Prices Up 170% Peach, Nectarine Exports Decline 24% Between May and July 3 Excess of Apples in Georgia 3 Georgian Fruit and Vegetable Export Prices Down 30 50% 3 Livestock Numbers Down in the Second Quarter Georgia Exports More than 115 Tons of Honey Russia Has a De Facto Monopoly on Georgian Flour, Grain Imports Georgian Agricultural Sector Falls Short of Potential Wine Exports Down 2.9%
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August 11th, 2022, https://georgiatoday.ge/eu undp
2) Government Will Subsidize the Sale of Sub-Standard Apples
The government of Georgia will subsidize the 2022 grape harvest due to it being a “record high yield”. In total, the subsidy is expected to cost the government GEL 150 million (USD 55.15 million). Winemaking is considered a strategic industry for Georgia and has been supported through various measures by the government since 2012.
The government of Georgia has approved a new regulation to protect calves. The regulation defines the conditions in which calves must be kept, including rules for arranging and cleaning stalls, feeding rules, necessary equipment for the health and well being of calves and a list of conditions for meeting the behavioral and physiological needs of calves. The new regulation comes into force on January 1, 2028.
August 30th, 2022, https://bm.ge/en/article/govt decision on subsidizing apple sales/115594/
4) Google-Based Agricultural Map of Georgia Created
August 15th, 2022, https://agenda.ge/en/news/2022/3101
State Initiatives
BFC. Georgian Agriculture Finance Bulletin Edition #120, August 2022 Page 2
August 29th, 2022, https://agenda.ge/en/news/2022/3270
The Agricultural Program of the United States Agency for International Development (USAID), Enterprise Georgia and the Rural Development Agency are launching a new program to establish export market connections for Georgian companies involved in agriculture. In particular, the program aims to connect Georgian producers with interested buyers in Germany and Persian Gulf countries. Most (80%) of the export oriented companies targeted under this program are engaged in blueberry and walnut production or food processing.
Launched as a pilot in 2020, AgroMap now contains a list of 50 rural locations and 500 agricultural companies/organizations active in Georgia. The interactive Google based information system pinpoints the locations of specific companies and allows users to easily search and contact companies as well as obtain information and other relevant data on the companies listed. AgroMap also contains a list of programs and initiatives supporting agricultural entrepreneurship. AgroMap was developed with support from the Georgian Farmers’ Association, the European Union (EU) and the United Nations Development Program (UNDP).
3) Regulation on Calf Protection Approved
1) Government to Subsidize 2022 Grape Harvest
Foreign Aid
5) New Program to Help Agricultural Companies Reach High-Value Markets
The government has taken the decision to subsidize the sale of sub standard apples in the country in order to incentivize and support apple producers. This will ensure that apple producers will receive due revenues for sub standard products. In total, 20 enterprises are expected to participate in the program and purchase sub standard apples.
August 31st, 2022, https://jnews.ge/?p=97817
The export prices of Georgian fruits and vegetables have fallen 30 50%. Much of this is due to problems in the Russian market (the main market for Georgian fruit and vegetable exports), including market saturation and decreased solvency. To resolve this issue, Georgia fruit and vegetable exporters need to diversify their markets; however, this will require joint cooperation between private and public entities as entering new export markets has proven difficult without such cooperation.
August 16th, 2022, https://commersant.ge/en/post/number of bovine animals down in q2 2021
According to preliminary data, the number of bovine animals in Georgia amounted to 1 million heads in the second quarter of 2022, a year on year decrease of 1.8%. This includes 470,900 heads of dairy cattle and buffalo, 2% more year on year. The number of sheep and goats decreased 23% (to 954,600 heads), and the number of pigs decreased 5.9% (to 194,800 heads). The number of poultry in the country decreased 8.2% (to 11.1 million heads).
August 16th, 2022, https://commersant.ge/en/post/georgian fruits and vegetables prices have almost halved frutilia
6) Tomato Prices Up 170%
Apple producers are having issues selling in local markets due to market saturation, which is the result of a bountiful harvest. In fact, many producers reported a harvest yield of three times more than in 2021. This has led to very low purchase prices as well. Some producers have looked to export excess apples to other markets such as Azerbaijan as a solution; however, these opportunities are quickly closing. Apple producers are worried that they may have to soon start throwing away much of their harvest.
Private Sector
8) Excess of Apples in Georgia
7) Peach, Nectarine Exports Decline 24% Between May and July
BFC. Georgian Agriculture Finance Bulletin Edition #120, August 2022 Page 3
August 10th, 2022, https://bizzone.info/agriculture/2022/1660161372.php
August 1st, 2022, https://bizzone.info/agriculture/2022/1659387569.php
10) Livestock Numbers Down in the Second Quarter
August 2nd, 2022, https://agenda.ge/en/news/2022/2943
The export of peaches and nectarines declined by 24% between May and July and 6% year on year. This equals 5,400 tons and USD 1.3 million in revenue. The decline is due to poor weather conditions causing a two week delay to the start of the harvest season. A working group under the Ministry of Agriculture has been created to enhance the collection and systematization of harvest as well as to connect producers with buyers.
9) Georgian Fruit and Vegetable Export Prices Down 30–50%
The average wholesale price of red round tomatoes in Georgia hit an all time high of GEL per kilogram in July, a year on year increase of 170%. This sharp increase is due to the earlier start of the season in 2022, which left a larger gap between supplies from early harvests and later harvests. It is noteworthy that tomato producers are reporting cold temperatures in Western Georgia, which could delay the start of open field harvesting and result in higher tomato prices for a longer period than usual.
Over the first seven months of 2022, Georgia exported wine valued at USD 121 million, a 2.9% year on year decline. The top 5 export markets were Russia (USD 72.2 million), Poland (USD 8.6 million), China (USD 8 million), Kazakhstan (USD 5.13 million) and Ukraine (USD 4.9 million). Georgian wine export during this period also saw a 27.7% year on year increase to the United States, which is considered a key market for future growth.
11) Georgia Exports More than 115 Tons of Honey
14) Wine Exports Down 2.9%
During the first seven months of this year, Georgia exported more than 115 tons of honey, amounting to more than USD 846,000 in value. The main importing countries of Georgian honey were Bulgaria and France, followed distantly by Japan, Saudi Arabia and the United Arab Emirates. In total, more than 100 tons of Georgian honey were exported to European Union (EU) markets.
BFC. Georgian Agriculture Finance Bulletin Edition #120, August 2022 Page 4
August 18th, 2022, https://commersant.ge/en/post/80 of georgian honey goes to eu countries
August 22nd, 2022, https://www.newsgeorgia.ge/na rossiju prihoditsja 99 importa muki v gruziju i pochti 90 zerna/ Russia remains the main importer of both flour products and grain into Georgia, with Russian flour making up 99% of all flour imports and Russian grain making up 86% of all grain imports. It should be noted that flour imports have increased drastically this year as grain imports have fallen.
13) Georgian Agricultural Sector Falls Short of Potential
The World Bank’s On the Development and Problems of the Agricultural Sector in Georgia report highlights that, despite opportunities in both internal and external markets, the growth rate of Georgia’s agricultural sector is far below its potential. The report notes that the combination of small farm sizes and low productivity is a particular hinderance to growth, as is the overall lack of integration within value chains and markets.
12) Russia Has a De Facto Monopoly on Georgian Flour, Grain Imports
August 23rd, 2022, https://ru.netgazeti.ge/41726/
August 23rd, 2022, https://bm.ge/en/article/pace of decline in wine exports is down/115263/
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