02/2017
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54 Geo r g i a Agriculture Bulletin 13,936 beehives delivered to apicultural cooperatives EBRD credit lines to support free trade with the E
January wine exports at 4 million bottles
Georgian honey sector development ongoing
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Contents State Initiatives ........................................................................................................... 2 1) 2) 3)
Investors discovering agriculture in Georgia ................................................................................... 2 State agricultural development aid to be issued in lari ................................................................... 2 13,936 beehives delivered to apicultural cooperatives .................................................................. 2
Foreign Aid ................................................................................................................. 3 4) 5) 6) 7) 8) 9)
Demonstration greenhouse complex set up in Marneuli ............................................................... 3 Contract farming being promoted in Georgia ................................................................................. 3 ENPARD retraining program underway in Eastern Georgia ............................................................ 3 Traktor app to boost farmer learning .............................................................................................. 4 Study tours display the work of local action groups ....................................................................... 4 EBRD credit lines to support free trade with the E ......................................................................... 4
Private Sector.............................................................................................................. 5 10) 11) 12) 13) 14)
Spanish company to build pig farm in Racha .................................................................................. 5 January wine exports at 4 million bottles ....................................................................................... 5 Agricultural exports increase in 2016 .............................................................................................. 5 Call to improve Georgian hazelnut quality ...................................................................................... 6 Georgian honey sector development ongoing ................................................................................ 6
Note: The Georgia Agriculture Bulletin presents a monthly roundup of headlines and news stories related 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. Read more »
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BFC Agriculture Bulletin
State Initiatives 1)
Investors discovering agriculture in Georgia
February 6th, 2017, http://cbw.ge/business/investors-discovered-agrarian-georgia/
Despite some difficulties in the agricultural sector, Georgia is a unique country with rich soil, ideal climate conditions and an immense source of water. As such, Georgia has been identified as a country with great agricultural potential, and investors are starting to take notice of the opportunities offered by the Ministry of Agriculture and the Project Management Agency. In particular, Georgia is eager to develop post-harvesting technologies, expand and modernize storage and processing infrastructure, implement international manufacturing standards, upgrade farmer knowledge and competitiveness, and diversify its export markets. Georgia’s signing of an association agreement with the European Union (EU) in 2014, which includes free trade measures, has also helped open Georgia up to more markets for their products and provides investors with greater economic opportunities. Investors are also encouraged by the ease with which it is to start a business in Georgia as registration is quick and taxation is simple. Read More 
2)
State agricultural development aid to be issued in lari
February 9th, 2017, http://www.sarke.com/cgi/search/news.asp?Code=10049878
The Ministry of Agriculture has declared that financial assistance for state programs aimed at developing the agricultural sector will be provided in the national currency going forward. The decision affects the preferential agrilending program and the co-funding for agro-processing and storage enterprises program. The decision came in the form of amendments which also remove the restriction requiring a maximum loan repayment term of seven years for the fixed asset replenishment component of the preferential agrilending program. So far, more than 27,000 preferential agro-credits have been issued to more 16,000 beneficiaries, helping establish 154 new factories and upgrade 700 others. In total, bank lending exceeds GEL 759 million under the preferential agrilending program.
3)
13,936 beehives delivered to apicultural cooperatives
February 9th, 2017, http://www.sarke.com/cgi/search/news.asp?Code=10049880
The Ministry of Agriculture has reported that 13,936 beehives have been delivered to 164 agricultural cooperatives as part of the state program to support apiculture. The state-run program supporting apiculture began in 2015 and has helped register 34,615 beehives in Georgia. The government has also decided to provide additional support to the sector by providing beneficiary cooperatives with honey extractors, honey storage reservoirs and specialized knives for slicing honeycombs.
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BFC Agriculture Bulletin
Foreign Aid 4)
Demonstration greenhouse complex set up in Marneuli
February 7th, 2017, http://www.finchannel.com/world/georgia/63270-greenhouse-complex-in-marneuli
A demonstration greenhouse complex in the village of Shulaveri (Marneuli municipality) has been set up with modern technology as part of the Georgian-Chinese ‘Technical Cooperation Project’. The modern greenhouse complex was built by the Chinese Hunan Agriculture Group on five hectares of land and comprises 6 large and 27 small greenhouses. These types of greenhouses are considered very important for the region as they allow local farmers to learn more about modern technologies and increase their income at minimum costs. The ‘Technical Cooperation Project’ aims to promote greenhouses and increase vegetable production in Georgia while also giving farmers opportunities to develop theoretical and practical skills on modern vegetable cultivation practices and become acquainted with management issues, disease control, solar greenhouses and the use of bio-fertilizers and bio-pesticides.
5)
Contract farming being promoted in Georgia
February 10th, 2017, http://www.fao.org/georgia/news/detail-events/en/c/470842/
The Food and Agriculture Organization (FAO) of the United Nations and the European Neighborhood Program for Agriculture and Rural Development (ENPARD) are working together to promote contract farming in Georgia. Contract farming is based on an agreement between a buyer and farmers and establishes conditions for the production and marketing of farm products. Under the agreement, farmers receive a guaranteed market for their products and buyers are guaranteed a consistent supply of the agricultural products they need. Contracts generally include specific terms such as price, quantity, quality and delivery dates. To be sustainable in the long run, a contract farming agreement must be mutually beneficial to both buyers and farmers. To promote the concept, a two-day training workshop was organized in Tbilisi to discuss basic concepts, planning and implementation issues, legal and regulatory aspects and case studies of contract farming. The workshop was facilitated by Dr. Carlos da Silva, professor of agro-industrial economics and management at the Federal University of Vicosa in Brazil and former senior agribusiness economist at FAO Rome. The workshop was attended by participants from the Ministry of Agriculture, the private sector, research organizations and international non-governmental agencies.
6)
ENPARD retraining program underway in Eastern Georgia
February 17th, 2017, http://www.sarke.com/cgi/search/news.asp?Code=10049966
A new stage of retraining has been launched for agricultural cooperatives in eastern Georgia as part of a European Neighborhood Program for Agriculture and Rural Development (ENPARD) project to strengthen agricultural cooperatives. The Spanish company Evoluxer will implement trainings for 558 participants in the Shida-Kartli, Kvemo Kartli, Mtskheta-Mtianeti and Kakheti regions as well as for 2 groups in Tbilisi. Previously, Evoluxer had held country-wide retraining for managers and cooperative members on various subjects, including tax and financial accounting (410 trainees), cooperation issues (999 trainees), business planning (360 trainees) and hazelnut production and primary processing (171 trainees).
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BFC Agriculture Bulletin
7)
Traktor app to boost farmer learning
February 20th, 2017, http://georgiatoday.ge/news/5884/Dutch-Geo-Traktor-App-%26-
Despite being the most common occupation throughout Georgia, many farmers rely on outdated methods and have little access to modern methods or programs from which to learn. To help combat this and modernize Georgian agriculture, a joint Dutch-Georgian team has launched the Traktor application. Through the application, Georgian farmers will have access to quality information and supplies previously unavailable to them. To start, Traktor has compiled more than 50 instructional videos for Georgian farmers on the best modern farming practices. So far, the videos have more than 600,000 views. Traktor has also established its own order service to allow farmers to easily obtain needed supplies. Traktor even supports payments for the ordered products via Georgia’s extensive PayBox system. In order to help overcome the fact that just 30% of Georgian farmers have internet access and a working knowledge of mobile technologies, Traktor developers have partnered with Geocell, the country’s largest mobile network provider, to allow farmers to purchase modern mobile phones for monthly payments of just GEL 9 – 18. The new application has also been endorsed by the Ministry of Agriculture and numerous organizations in the private sector.
8)
Study tours display the work of local action groups
February 20th, 2017, http://enpard.ge/en/eu-promotes-best-rural-development-practices-georgia/
The European Union (EU) has concluded a series of study tours organized by the European Neighborhood Program for Agriculture and Rural Development (ENPARD), the United Nations Development Program (UNDP), the Georgian Ministry of Agriculture, the Civil Development Agency (CiDA) and international non-governmental organization Mercy Corps. The tours to Borjomi, Lagodekhi and Kazbegi aimed at sharing the experiences of local action groups engaged in rural development. Study tour participants met with the local authorities and local action group members and also visited small initiatives which had received EU funding in 2016 to promote rural development. Tour participants included representatives from different regions in Georgia as well as representatives from government ministries and agencies. The local action groups in Borjomi, Lagodekhi and Kazbegi are the first in Georgia and were established to help promote and assist in rural development plans adopted by the government of Georgia. The EU will continue supporting the work of local action groups by establishing groups in Dedoplistkaro, Akhalkalaki, Tetritskaro, Keda and Khulo this year.
9)
EBRD credit lines to support free trade with the E
February 23rd, 2017, http://www.ebrd.com/news/2017/supporting-free-trade-with-the-eu-in-georgia.html
The European Bank for Reconstruction and Development (EBRD) is providing up to EUR 380 million in credit lines and trade finance through local partner banks in Georgia, Moldova and Ukraine to support them in entering European Union (EU) markets following their signing of association agreements with the EU. In Georgia, several workshops for Georgian entrepreneurs have been held on the workings of the credit line for businesses engaged in eligible activities such as nut farms, wine exporters and meat processors. Credit lines extended to businesses are also being supported with technical assistance measures which will help develop a technical standard for each sector and shape suitable investment plans. The combination of the credit line and technical assistance will ensure that Georgian goods are produced and handled in such a way as to meet the quality requirements necessary to enter EU markets. Page 4
BFC Agriculture Bulletin
Private Sector 10) Spanish company to build pig farm in Racha February 3rd, 2017, http://cbw.ge/business/spanish-company-build-pig-farm-racha/
Spanish company Native Georgian is planning to build a pig farm in Racha as part of a joint project with the Partnership Fund and Agricultural Research Center. They will also expand in coming years to include pig farms in all nine regions of Georgia. The project envisages helping Georgian farmers breed pigs which will then be purchased by the Native Georgian company for processing. The project is scheduled to run for eight years, with a total investment of GEL 10 – 15 million.
11) January wine exports at 4 million bottles February 6th, 2017, http://agenda.ge/news/74194/eng
Georgia exported almost 4.3 million bottles of wine to 26 countries in January 2017, bringing USD 8.8 million into the Georgian economy. Revenue from the exported wine increased by 141% in comparison to January of 2016 while the volume of exports increased by 184%. The top five countries importing Georgian wine were: Russia (2.8 million bottles), Ukraine (403 thousand bottles), China (372 thousand bottles), Poland (156 thousand bottles) and Kazakhstan (106 thousand bottles). Georgian wine exports saw increases of over 100% to eight key markets in January 2017, including China, Russia and the United States. Georgia also exported nearly 897 thousand bottles of brandy to eight countries during the same period, a 59% year-on-year increase which has generated USD 2.25 million. In total, Georgia sold USD 21.7 million worth of alcoholic beverages in January 2017, a 229% year-on-year increase.
12) Agricultural exports increase in 2016 February 16th, 2017, http://www.sarke.com/cgi/search/news.asp?Code=10049946
The Ministry of Agriculture reported that the value of agricultural products exported from Georgia in 2016 amounted to USD 692.2 million, the volume of which increased by 13.1% as compared to 2015. At the same time, agricultural imports decreased 4% in 2016. The key exports in agriculture were hazelnuts, natural grape wines, alcoholic beverages, livestock, and mineral and fresh drinking water. In particular, the export of alcoholic beverages amounted to USD 91.8 million (up 41.5%) while wine exports were valued at USD 113.5 million (18.5% growth) and livestock exports came in at USD 36.8 million (83.3% growth). The Ministry also noted that the cost to export agricultural products also rose by USD 12.1 million (a 5.8% increase), mainly due to costs associated with exporting alcoholic beverages (including wines), hazelnuts and mineral and fresh water. In 2016, Georgia exported agricultural products to 88 countries, up from 79 countries in 2015.
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BFC Agriculture Bulletin
13) Call to improve Georgian hazelnut quality February 21st, 2017, http://cbw.ge/business/sharpest-competition-georgias-filbert-market-frequently-creates-deficit/
Aleksandre Motserelia, the head of the Association of Hazelnut Processing Companies and Exporters, is calling on Georgian hazelnut producers to think about the future in order to guarantee continued success. He notes that Georgian hazelnuts currently have lower prices than their Turkish and Azerbaijani counterparts but that Georgia cannot compete with countries like Turkey in terms of overall volume. As a result, Georgia should first improve its hazelnut quality and then work to maintain that quality to ensure Georgian hazelnuts are a well-known and respected brand.
14) Georgian honey sector development ongoing February 21st, 2017, http://www.sarke.com/cgi/search/news.asp?Code=10049999
Georgia is continuing to develop apiculture, with the goal of finding a niche for Georgian honey in domestic and international markets. To this end, honey production in the Kakheti region has significantly increased, almost equaling the production in the high-yielding Samegrelo – Zemo Svaneti region. Despite this, there are two main problems hindering the development of the honey sector in Georgia today: (1) environmental issues and an absence of honey plants on the landscape and (2) China declining to list Georgia as a country which can import honey products into China. If these problems can be solved, the future for Georgian honey is bright.
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Prepared by Business & Finance Consulting (BFC) www.bfconsulting.com In this bulletin, BFC provides extracts from articles that have been published by others and as a result cannot be held responsible for such content. The articles do not necessarily reflect the opinions of BFC, its staff, its associates or its partners. Copyright of articles is retained by their authors.