03/2017
#
55 Geo r g i a Agriculture Bulletin GEL 13 million to protect nut trees from insects
Special campaign to promote Georgian honey AFD to support Georgian farmers and entrepreneurs Sheep exports experience sharp rise
All materials are published “as is� and are the property of their respective owners.
Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4) 5) 6)
The state of agricultural testing laboratories .................................................................................. 2 Georgia outlines key areas for rural development.......................................................................... 2 Georgian plan for agricultural development ................................................................................... 2 GEL 13 million to protect nut trees from insects ............................................................................ 3 Agriculture Ministry meets with French specialists ........................................................................ 3 Special campaign to promote Georgian honey ............................................................................... 3
Foreign Aid ................................................................................................................. 4 7) 8) 9)
EU support for greater phytosanitary control ................................................................................. 4 AFD to support Georgian farmers and entrepreneurs .................................................................... 4 Businesses receive trainings on export opportunities .................................................................... 4
Private Sector.............................................................................................................. 5 10) 11) 12) 13) 14) 15) 16) 17)
Georgian wine exports up in January-February 2017 ..................................................................... 5 EBRD and FAO host first Caucasus Dairy Congress.......................................................................... 5 Sheep exports experience sharp rise............................................................................................... 5 Hazelnut quality needs to improve to be competitive .................................................................... 6 Fruit processing plant opens in Samegrelo ..................................................................................... 6 Study shows 19% increase in cooperative profits in 2015 .............................................................. 6 New consulting products available to hazelnut producers ............................................................. 6 Georgian kiwis enter Japanese mark ............................................................................................... 7
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 » 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 Agriculture Bulletin
State Initiatives 1)
The state of agricultural testing laboratories
March 1st, 2017, http://cbw.ge/economy/agro-test-laboratory-capacity-georgia/
The Deep and Comprehensive Free Trade Agreement (DCFTA) has provided a real opportunity for exporting Georgian products into European Union (EU) markets, unlocking a potential clientele base of 500 million people in 28 countries. In order to take advantage of this, Georgian agricultural producers need to test that their products meet EU quality and safety standards. To this end, an agricultural testing laboratory network has been set up and modernized in recent years, thanks to support from the government and donor organizations. Today, governmental and private laboratories are operating throughout Georgia, providing testing for animal and plant diseases, GMOs, microbiology and chemicals in water, food/feed and soil. Most of these laboratories have internal quality control systems in place and participate in regular external quality assessment programs of their activities. Furthermore, nearly all test laboratories are accredited and certified by ISO 17025:2005, giving consumers confidence in Georgian products and helping Georgian agricultural goods reach new customers all over the world.
2)
Georgia outlines key areas for rural development
March 16th, 2017, http://enpard.ge/en/government-georgia-presents-key-areas-rural-development-2017-2020/
The government of Georgia unveiled the National Strategy for Rural Development 2017-2020 and the Rural Development Action Plan 2017 to national and local authorities, civil society organizations, diplomatic missions and international agencies. The Strategy and Plan both highlight the importance of new approaches to rural development that are both grounded in best European practices and promote local entrepreneurship and civil engagement which improve the quality of people’s life. The Rural Development Strategy 2017-2020 was adopted by the government of Georgia in December 2016 with support from the European Union (EU) and in cooperation with the United Nations Development Program (UNDP), the Food and Agriculture Organization (FAO) and the EU-funded European Neighborhood Program for Agriculture and Rural Development (ENPARD). The adoption of the Strategy was also followed by the establishment of the Interagency Coordination Council on Rural Development, which will be led by the Ministry of Agriculture and coordinate the implementation of the Strategy as well as consider specific initiatives in Georgian regions.
3)
Georgian plan for agricultural development
March 22nd, 2017, http://www.sarke.com/cgi/search/news.asp?Code=10050264
Georgia’s strategy for agriculture development will invest GEL 320 million in up to 150 projects, aiming to give employment opportunities to 8,000 people, establish 1,300 micro and small enterprises and train 3,000 project beneficiaries in business skills and techniques which will help their businesses thrive. More specifically, financial support will be provided to about 110 new or already operating enterprises; up to 5,000 hectares of agricultural land plots will be insured; new orchards will be planted on 700 hectares; irrigation water supply will be improved on 7,500 hectares; about 1,600 hectares will be reclaimed after drainage; 800 kilometers of irrigation and drainage channels will be cleaned and brought in order; and up to 40 cooperatives will be equipped with needed items.
Page 2
BFC Agriculture Bulletin
Approximately GEL 40 million will be invested in up to 30 projects related to tourism, helping to employ an additional 800 people and mark 30 tourist routes and 20 hiking trails. In addition, the strategy will help 10 innovation centers to begin operating in villages and settlements.
4)
GEL 13 million to protect nut trees from insects
March 24th, 2017, http://cbw.ge/economy/government-spend-13-million-gel-protect-nut-trees-insect/
The government of Georgia is planning to spend GEL 13 million, including GEL 5.5 million from the United States government, to fight Asian Cassida Nebulosa, an insect known to harm nut trees. Under the state program, the National Food Safety Agency will purchase necessary equipment and technologies which will then be granted to local municipalities. In total, nut plantation protection procedures will be implemented on 485,400 hectares. Chemical treatment will begin in the middle of May and continue through the end of June. Asian Cassia Nebulosa was discovered in Georgian in 2015 and has caused an estimated GEL 50-60 million in damages since then.
5)
Agriculture Ministry meets with French specialists
March 24th, 2017, http://moa.gov.ge/En/News/1284
Representatives from the French Livestock Institute met with the Georgian Ministry of Agriculture within the frame of the ‘Improvement of the Private Sector’ project being carried out by the French Ministry of Economy. At the meeting, Georgian Deputy Ministers of Agriculture Nodar Kereselidze, George Khanishvili, Yuri Nozadze and Revaz Asatiani discussed with French specialists the potential of animal husbandry development in Georgia and assessed the current situation and capabilities of the Akhaltsikhe, Racha, Abasha and Senaki regions. The French specialists noted that livestock breeding has great potential in Georgia and expressed their willingness to step up cooperation with the Agricultural Scientific Research Center to improve local cattle breeds. Pilot farms are planned to be built in Abasha and Senaki regions for this purpose.
6)
Special campaign to promote Georgian honey
March 30th, 2017, http://www.businesscontract.ge/en/article/mtavroba-evrokavshiris-bazarze-taflis-popularizaciis-miznitmarketingul-aqtivobebs-gegmavs/10524
Economic Minister Genadi Arveladze has announced a special promotional campaign designed to help Georgian honey establish itself in niche markets in the European Union (EU). The Minister noted that the government will cooperate with the private sector in this endeavor and work to increase the exposure of Georgian honey at international exhibitions and trade missions. Last year, the EU completed all formal procedures which now allow Georgian honey to be imported into the Union.
Page 3
BFC Agriculture Bulletin
Foreign Aid 7)
EU support for greater phytosanitary control
March 1st, 2017, http://www.ge.undp.org/content/georgia/en/home/presscenter/pressreleases/2017/03/01/european-unionsupports-azerbaijan-and-georgia-to-raise-standard-of-veterinary-and-phytosanitary-control-at-the-border/
Georgia and Azerbaijan are joining with the European Union (EU) and the United Nations Development Program (UNDP) for construction projects at the Georgian-Azerbaijani border. A new laboratory for veterinary control is being constructed on the Georgian side while a customs terminal complex is being constructed on the Azerbaijani side. The laboratory on the Georgian side will be fully equipped to control for both live animals and food products of animal and non-animal origin, ensuring they are in line with EU standards. The construction projects on the Azerbaijan-Georgia border are part of an EU-funded initiative aimed at improving veterinary and phytosanitary control at the Red Bridge crossing point. This bilateral project is being implemented by the Tbilisi and Baku offices of the UNDP and in cooperation with the Ministry of Finance of Georgia and the State Customs Committee of Azerbaijan. The total value of the project is EUR 2,660,000, with the EU contributing EUR 2,128,000 and the rest being shared equally by the governments of Georgia and Azerbaijan.
8)
AFD to support Georgian farmers and entrepreneurs
March 22nd, 2017, http://www.sarke.com/cgi/search/news.asp?Code=10050251
The French Development Agency (AFD) is planning to implement projects aimed at providing support for small farms and entrepreneurs in Georgia and has opened an office in Tbilisi for project administration. AFD has met with the Ministry of Agriculture to discuss ways to enhance cooperation between the two entities. At the meeting, the Ministry emphasized its desire for French support in helping Georgian niche production reach European Union (EU) markets.
9)
Businesses receive trainings on export opportunities
March 30th, 2017, http://www.finchannel.com/world/georgia/64224-businesses-in-georgian-regions-learn-about-exportopportunities
The EU-funded ‘SME Development and DCFTA in Georgia’ project held a training on food safety for 30 entrepreneurs in the fruit industry at the DCFTA Information Center in Gori. Participants learned about quality categories, food safety policy, obligations under the free trade agreement with the European Union (EU), procedures for exports, hygiene requirements and other legislative and practical issues. The five DCFTA centers (in Gori, Tbilisi, Zugdidi, Kutaisi and Sighnaghi) provide valuable advice to the business sector about the opportunities and standards for exporting products to the EU. The ‘SME Development and DCFTA in Georgia’ project assists small- and medium-sized enterprises in Georgia to become more competitive and adapt to the new regulatory environment created under the free trade agreement with the EU. It is part of the European Union's EU4Business Initiative.
Page 4
BFC Agriculture Bulletin
Private Sector 10) Georgian wine exports up in January-February 2017 March 8th, 2017, http://georgiatoday.ge/news/6032/Georgia-Exports-8-Million-Bottles-of-Wine-in-January-February
In January and February 2017, nearly 8.8 million bottles of wine were exported to 32 countries, a 94% year-on-year increase. The income from the exported wine amounted to USD 20.5 million. The top importers of Georgian wine were: Russia (5.7 million bottles), Ukraine (860 thousand bottles), China (833 thousand bottles), Kazakhstan (389 thousand bottles) and Poland (313 thousand bottles). Exports of wine grew in key markets such as the United States (a 3,206% increase), China (a 280% increase), Canada (a 238% increase), Germany (a 151% increase) and Russia (a 123% increase). January and February 2017 also saw more than 2 million bottles of brandy be exported to nine countries, a 51% year-on-year increase amounting to USD 5.2 million. The export of Chacha also increased by 138%, amounting to USD 99 thousand. In total, export income from alcoholic drinks in January 2017 reach USD 40.1 million, more than double the USD 20 million in January 2016.
11) EBRD and FAO host first Caucasus Dairy Congress March 14th, 2017, http://www.ebrd.com/news/2017/ebrd-and-fao-hosting-first-caucasus-dairy-congress-in-georgia.html
The European Bank for Reconstruction and Development (EBRD) and the Food and Agriculture Organization (FAO) of the United Nations have joined forces to host the first Caucasus Dairy Congress for more than 250 commercial dairy farmers, processors, equipment suppliers, industry experts and government representatives from the Caucasus and Eastern Europe. The event was designed to build capacity in the dairy sector and promote Georgia’s commercial dairy farming. It also provided an opportunity to share knowledge about state-of-the-art technologies and food safety practices, something particularly important for Georgia as it works to align its food safety legislation with that of the European Union (EU). The EBRD and FAO have been supporting commercial dairy farmers in Georgia to produce more highquality milk that is safe to drink, investing USD 2.5 million in sector development. So far, they have trained 40 commercial farmers in all aspects of modern dairy production and arranged for 20 farmers to visit dairy farms in Ukraine and attend workshops led by top Ukrainian dairy experts.
12) Sheep exports experience sharp rise March 20th, 2017, http://bizzone.info/agriculture/2017/1490040191.php
The price of sheep and sheep meat in Georgia has nearly doubled in the past year due to a shortage of available sheep in the market. The shortage is a result of drastically increased sheep exports, specifically to Iran and Iraq, which has seen more than 200,000 sheep be sold abroad since September 2016. An expected increase of 250,000 sheep will help resolve the deficient and stabilize prices at the current level; however, prices are not expected to fall back previous levels as demand for Georgian sheep is expected to further grow beginning in July.
Page 5
BFC Agriculture Bulletin
13) Hazelnut quality needs to improve to be competitive March 20th, 2017, http://www.sarke.com/cgi/search/news.asp?Code=10050235
Georgian hazelnuts receive the cheapest price in world markets due to a lack of quality assurance. Most Georgian hazelnut producers point to improper care of hazelnut trees and poor harvesting and storing techniques as the reason why hazelnut quality suffers in Georgia. While processing plants in Georgia began taking measures to improve quality two years ago, hazelnut production worldwide is projected to increase considerably. If the quality of the Georgian nut is not raised, this may put the sector in jeopardy. In 2016, Georgia ranked fourth in global hazelnut production, but prices for the Georgian nut are lower than that of its Italian, Turkish, American and Azerbaijani counterparts.
14) Fruit processing plant opens in Samegrelo March 22nd, 2017, http://www.sarke.com/cgi/search/news.asp?Code=10050260
Gemuani, a new fruit processing plant has been opened in Zeda Etsera village of the Zugdidi municipality (Samegrelo region). Investments in the plant total USD 851,024, including a grant of USD 250,000 and a preferential agro credit of USD 484,512, which was obtained as part of the ‘Co-Financing of Agriculture Processing and Storage Enterprises’ program of the ‘Unified Agro Project’. Employing 30 people and purchasing raw materials from more than 150 small and medium farmers in the area, the plant is capable of an annual production of 22 tons. The plant’s production will be sold in local markets and delivered for export. In total, 20 new plants have been opened and 36 existing ones expanded in the Samegrelo region under the ‘Unified Agro Project’, with investments totaling to nearly USD 25 million.
15) Study shows 19% increase in cooperative profits in 2015 March 29th, 2017, http://www.sarke.com/cgi/search/news.asp?Code=10050329
A study from the European Neighborhood Program for Agriculture and Rural Development (ENPARD) has shown that the total average income per cooperative in Georgia increased from GEL 64,433 to GEL 76,953 in 2015, an increase of 19%. Of the 79 cooperatives which disclosed revenue figures for the study, GEL 6 million in total income was reported from all cooperatives, 30% of which is net profit. The average net profit per cooperative grew by 41% from GEL 16,613 to GEL 23,495, with 8 cooperatives declaring losses averaging GEL 8,800. The majority of cooperatives have declared that a significant part of their profits will be reinvested. The study was conducted in partnership with CARE and its Georgian partner, the International School of Economics at Tbilisi State University (ISET) and other ENPARD partners such as Oxfam, Mercy Corp. and People in Need.
16) New consulting products available to hazelnut producers March 29th, 2017, http://cbw.ge/economy/agro-solution-submitted-market-new-agricultural-consulting-product/
The company Agro Solution has launched a new product which provides consultancy services for hazelnut orchards. The aim of the product is to increase the production and quality of hazelnut harvests. Under the project, Agro Solutions will provide customers a full range of agronomy and expert Page 6
BFC Agriculture Bulletin
consultancy within three options: (I) a year-long full consulting service, (II) a six-month garden cultivation service or (III) a two-month service directed at harvesting and storage. Agro Solution consultants are experienced in working with hazelnut producers on soil works, drainage systems, species selection, plot planning, planting, watering, and feeding (mineral and organic fertilizers as well as filling dates and dosages).
17) Georgian kiwis enter Japanese mark March 29th, 2017, http://www.georgianjournal.ge/business/33443-georgian-kiwi-enters-japanese-market.html
Beginning in February 2017, Georgian-produced kiwis became available in various Japanese supermarkets in Tokyo, Osaka, Kyoto, Hiroshima, Nagasaki and Fukuoka as a result of a partnership between Georgian kiwi producer Nergeta and a Japanese fruit distribution company. Nergeta stated that it is always looking to expand into markets which pay a high premium for quality products and that they hope to make Georgian Kiwis as popular as their New Zealand counterparts. The company also exports kiwi to European Union (EU) markets and is constantly striving to raise their standards and develop their brand.
Page 7
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.