05/2017
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57 Geo r g i a Agriculture Bulletin Agricultural Support Program helped 34,000 Georgians Agribusiness internship program announced Georgian milk needs to develop to be exportable First quarter meat production up 30.6%
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Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4) 5) 6) 7) 8)
Agricultural development project for Tusheti ................................................................................. 2 First agricultural market opens in Adjara ........................................................................................ 2 No ban for the sale of agricultural land to foreigners ..................................................................... 2 Plant the Future project has financed 506 orchards ....................................................................... 2 Unstable weather causes massive damage across Georgia ............................................................ 2 Georgia to harmonize legislation as part of DCFTA ......................................................................... 3 Agricultural Support Program helped 34,000 Georgians ................................................................ 3 Georgia to cease grape subsidy program ........................................................................................ 3
Foreign Aid ................................................................................................................. 4 9) 10) 11) 12) 13)
Agribusiness internship program announced ................................................................................. 4 Introductory workshop held for Tetritskaro project ....................................................................... 4 SMS system to give Georgian farmers agricultural tips................................................................... 4 Meeting held to review agricultural insurance program................................................................. 5 Workshop on food loss and waste in Georgia ................................................................................. 5
Private Sector.............................................................................................................. 6 14) 15) 16) 17) 18)
Great profitability potential in Georgian onions ............................................................................. 6 Georgian milk needs to develop to be exportable .......................................................................... 6 Georgian Tea program to rehabilitate 1,000 hectares .................................................................... 6 First quarter meat production up 30.6% ......................................................................................... 6 Georgian wheat can satisfy 60% of domestic demand ................................................................... 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 »
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BFC Georgian Agriculture Bulletin
State Initiatives 1)
Agricultural development project for Tusheti
May 4th, 2017, http://www.sarke.com/cgi/search/news.asp?Code=10050669
The Scientific-Research Center of the Ministry of Agriculture has signed a memorandum of cooperation with the Czech-based non-governmental organization Caritas. The memorandum targets the development of traditional agriculture in Tusheti (Kakheti region). The associated project will, among tasks, evaluate and distribute new varieties of agricultural crops, study available land for increasing soil productivity and work to make improvements in the local sheep population.
2)
First agricultural market opens in Adjara
May 10th, 2017, http://cbw.ge/business/first-agomarket-opens-ajara/
The Ministry of Agriculture of the Adjara region has worked to open a 1,000 square-meter agricultural market in the village of Gvara. The new market was unveiled as part of a new project which is aimed at enabling farmers to buy high-quality products and receive qualified consultations in the same space. The agricultural market will offer agriculture products, plants, seedlings and pesticides — all of a higherquality than those offered by street sellers. The market will also include room for financial organizations to issue credits and will have space available for commercial leasing. A veterinary clinic is also being built.
3)
No ban for the sale of agricultural land to foreigners
May 11th, 2017, http://www.apsny.ge/2017/eco/1494566691.php
Irakli Kobakhidze, Speaker of the Georgian Parliament, has announced that government authorities do not intend to take actions which will ban the purchase of agricultural land by foreign citizens; nor do they intend to take actions to give foreign citizens full, unlimited rights in purchasing agricultural lands. Instead, the Speaker noted that government authorities will pursue a middle ground between the two sides which will balance both economic and national interests.
4)
Plant the Future project has financed 506 orchards
May 12th, 2017, http://agenda.ge/news/79351/eng
The government’s Plant the Future project has helped to fully equip 506 orchards across Georgia. Costing a total of GEL 16.37 million, the project has provided constant irrigation systems over 3,343 hectares which produce nuts, apples, almonds and plums. The program began in 2015 with the goal of giving farmers the means to produce high-quality products which can compete with imported products in local markets and can also increase the export potential of Georgian agriculture.
5)
Unstable weather causes massive damage across Georgia
May 22nd, 2017, http://georgiatoday.ge/news/6593/Agriculture-Minister%3A-State-Cannot-Help-Disaster-Affected-Farmers
Agriculture Minister Levan Davitashvili has announced that the recent unstable weather of heavy rains and hailstorms has resulted in millions of Lari in damages for farmers, an amount too large for the state budget to afford to give compensation for. Page 2
BFC Georgian Agriculture Bulletin
In the Imereti region, heavy rainfall caused losses estimated at more than GEL 600,000. Heavy rain and hail also hit the Kvemo Kartli region, damaging roads, vegetable gardens and orchards. In the winemaking Kakheti region, hail totally destroyed vineyards in several areas, leaving numerous farmers without a harvest for the year. The governor of Lagodekhi stated that the anti-hail system was used and reduced losses, though the damage is still widespread. In the Gori Municipality (Shida Kartli region), witnesses reported a hailstorm lasting 20 minutes which damaged vegetable gardens and orchards in the villages of Jariasheni and Variani.
6)
Georgia to harmonize legislation as part of DCFTA
May 25th, 2017, http://www.sarke.com/cgi/search/news.asp?Code=10050867
According to Georgia’s Deep and Comprehensive Free Trade Agreement (DCFTA) with the European Union (EU), Georgia’s codes regarding foods as well as veterinary and plant protections should be brought into harmony with EU legislation this year. In this respect, the Ministry of Agriculture has announced that the project to accomplish this has already been prepared and will be introduced for consideration by Parliament this autumn. For farmers, however, the point of emphasis will be on addressing issues related to a recent decline in harvests, most specifically the low quality of production means and an inadequate use of agricultural preparations by farmers. Farmers note that, in order to resolve this issue, the quality of pesticides and agrochemicals must be increased along with agricultural technologies, skills and access to finance.
7)
Agricultural Support Program helped 34,000 Georgians
May 29th, 2017, http://cbw.ge/business/34-000-farmers-received-20-million-gel-agro-insurance-program/
This year’s Agricultural Support Program was launched on April 10, 2017. If compared to last year, activity has more than doubled, with the number of policies going from 3,000 to 7,500 and more than 1,000 messages regarding insurance claims being received. As a result of this, there are now 34,000 Georgians who have received more than GEL 20 million in support for damaged crops. The 2017 state budget for the Agricultural Support Program is GEL 7 million, GEL 3 million less than in 2016. Despite this budgetary reduction, authorities are working to improve the program and conditions each year.
8)
Georgia to cease grape subsidy program
May 29th, 2017, http://cbw.ge/economy/government-to-suspend-state-subsidies-on-all-grape-varieties/
According to a statement from the Ministry of Agriculture, the state will not subsidize the production of Saperavi grapes this year and is still deciding whether or not to continue subsidies for Rkatsiteli grapes. While many farmers are upset about the move, claiming that small-scale production without subsidies is unprofitable, others claim that the state subsidy program for grapes has led to overproduction and a lesser quality of the subsidized grape varieties. Some companies, such as Agro Solutions, welcome the government’s decision and note that farmers will have to work to bring appropriate technologies and improve preparations in order to make a profit, increasing both the quality and variety of grapes produced in Georgia. Agro Solutions also recommends that the government plans the subsidy removal with a simultaneous redirection of funds to programs which enhance grape-grower knowledge and technical capacities in order to increase per unit production and drive down production costs. Page 3
BFC Georgian Agriculture Bulletin
Foreign Aid 9)
Agribusiness internship program announced
May 5th, 2017, http://eugeorgia.info/en/latestarticle/354/saqartvelos-moqalaqeebistvis-ashsh-shi-agrobiznesshi-stajirebisprograma-gamocxadda/
The US Department of Commerce has started receiving applications for a special three-week internship program designed to allow participants to become better acquainted with existing regulations, innovative technologies, equipment and services as well as to build relationships for future business cooperation and gain knowledge on the methods of market business. The program includes specialists from 18 post-Soviet countries, including Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan and Ukraine. The American government will cover the costs of travel, accommodations, teaching, interpreter services and medical insurance from Kiev, Moscow or Istanbul as well as provide a scholarship of USD 400. Over the course of the program, topics such as agrochemicals, plant breeding, animal breeding, processing, marketing, product distribution and agriculture equipment will be discussed. Participants will also attend the Farm Progress Show, a large agricultural exhibition, to gain knowledge on issues related to regulations, legislation, business plans, intercultural communications and negotiations and business management. Additionally, participants will visit American companies engaged in agribusiness and will meet with various specialists in agriculture.
10) Introductory workshop held for Tetritskaro project May 16th, 2017, http://enpard.ge/en/introductory-workshop-organised-within-eu-supported-tetritskaro-rural-developmentproject/
The Rural Development Association for the Future of Georgia (RDFG) held an introductory workshop for the new four-year ‘Rural Development for Sustainable Growth of the Tetritskaro Municipality’ project being implemented through the European Neighborhood Program for Agriculture and Rural Development (ENPARD). The workshop aimed to introduce the project to implementing partners and stakeholders as well as to define plans for future cooperation. At the workshop, Ekaterine Zviadadze, head of the Policy and Analysis Department of the Ministry of Agriculture of Georgia, introduced Georgia’s 2017-2020 Rural Development Strategy and 2017 Action Plan. Nunu Mosiashvili then presented on the goals, objectives and projects of the ENPARD program in Georgia. At the end of the introductory workshop, RDFG Chairman Vano Grigolashvili spoke about the innovative approaches that will be implemented throughout the project in the Tetritskaro municipality.
11) SMS system to give Georgian farmers agricultural tips May 17th, 2017, http://www.fao.org/georgia/news/detail-events/en/c/887218
Beginning in June 2017, nearly 8,000 farmers in Georgia’s Kakheti region will start receiving free SMS messages with agricultural tips. The SMS initiative is aimed at reducing the spread of crop diseases in the country and will recommend when farmers should apply treatments to their crops, what kind of treatment to apply and how much to apply. The SMS recommendations will be based on information obtained from 22 Austrian agrarian meteorology stations installed on agricultural plots in all eight municipalities of the Kakheti region. Each station has 10 sensors which measure air temperature, atmospheric precipitation, relative humidity, atmospheric pressure, wind speed, wind direction, soil temperature, soil humidity, leaf wetness and sun Page 4
BFC Georgian Agriculture Bulletin
radiation every hour. The National Food Agency of Georgia’s Ministry of Agriculture is responsible for the weather stations and for the analysis and dissemination of the information received from them. The information will be processed by the Agency and disseminated to farmers from 57 villages in Kakheti. The innovation stems from a Food and Agriculture Organization of the United Nations (FAO) project which aims to create a network of agro-meteorology stations that use data on air temperature, humidity and other factors to forecast when the risk of crop disease spread will be high. Armed with this information, farmers can treat their plants according to weather conditions, use less agrochemicals overall and produce a higher-quality, healthier crop.
12) Meeting held to review agricultural insurance program May 22nd, 2017, http://moa.gov.ge/En/News/1310
The ‘Governing for Growth’ (G4G) project of the United States Agency for International Development (USAID) and the Georgian Ministry of Agriculture organized a meeting with media representatives in the Kakheti region to discuss and raise awareness for agricultural projects, including the state agricultural insurance program. Speaking at the meeting, Agriculture Minister Levan Davitashvili noted that, due to its biodiversity and unique climatic conditions, Georgia has great potential for agricultural development. He drew particular attention to the importance of agricultural insurance in reducing damages caused by natural disasters such as the recent weather events in the country. The Minister went on to state that all available resources should be used efficiently to encourage the development of agriculture as a profitable sector of the economy and as a net contributor to Georgia's economy. The Director of the Agricultural Projects Management Agency, Mamuka Kvaratskhelia, also gave a presentation underlining the importance of the projects implemented by the Agricultural Projects Management Agency. The main objective of the meeting was to provide a detailed review of the agricultural insurance program. Levan Magradze, project manager of the Agro Insurance Company, gave a detailed account of the terms and technical details of the agricultural insurance program, including the future development and strategic planning of the program. Minister Davitashvili and the representatives of the Project Management Agency also responded to all questions posed by media representatives. In the near future, the G4G project plans to organize a meeting with the participation of the private sector and hold a public discussion on the agricultural insurance policy.
13) Workshop on food loss and waste in Georgia May 24th, 2017, http://www.fao.org/georgia/news/detail-events/en/c/888863/
The European Union (EU) and Food and Agriculture Organization of the United Nations (FAO) organized a stakeholders’ consultation workshop in Tbilisi to discuss information on food loss and waste reduction in Georgia. The workshop was attended by government representatives and ENPARD stakeholders. The aim of the workshop was to raise awareness among Georgian policymakers on the importance of reducing food loss and food waste and to investigate the magnitude of the issue in the country and the impact of food loss on the income and livelihood of smallholder producers. At the workshop, FAO expert Maryam Rezaei presented her study on food loss and waste in Georgia. According to the study, the major causes for food losses were identified as a lack of awareness among farmers and processors on best agricultural practices, poor post-harvest management skills and a lack of knowledge about new technologies coupled with a lack of access to those technologies. Access to education, training and new technologies as well as an exchange of best practices and experiences at an international level is the key to reduce food losses in the country. One of the main recommendations of the study was the adoption of a national strategy on food loss and food waste reduction. Page 5
BFC Georgian Agriculture Bulletin
Private Sector 14) Great profitability potential in Georgian onions May 1st, 2017, http://www.sarke.com/cgi/search/news.asp?Code=10050616
According to a recent European Union (EU)-funded study conducted by the PMCG research center and Samtskhe-Javakheti State University, onion production in Georgia should be increased. From 2010 to 2015, domestic onion production dropped from 19,000 tons to 12,700 tons, with annual imports of onions ranging between 9,000 and 13,000 tons. The soil and climate in Georgia is suitable for onion cultivation, which can see profits of GEL 12,000 per hectare if cultivated correctly. This could be especially advantageous for farmers in the Samtskhe-Javakheti region who are mainly engaged in potato growing, a soil-damaging and increasingly unprofitable crop for them. The key onions producer regions in Georgia are Kvemo Kartli (70%), Shida Kartli (15%) and Kakheti (10%); in Samtskhe-Javakheti, onions were sown on just 230 hectares in 2014 and on 252 hectares in 2015.
15) Georgian milk needs to develop to be exportable May 8th, 2017, http://www.sarke.com/cgi/search/news.asp?Code=10050693
According to recent research conducted by the Food and Agriculture Organization of the United Nations (FAO) and the European Bank for Reconstruction and Development (EBRD), the very low supply of raw milk in Georgia is leading to a situation in which Georgia cannot produce enough milk to satisfy domestic demand, which, in turn, is inflating the price for Georgian milk and making it noncompetitive. The research suggests new cattle breeds, artificial insemination programs and updated cattle feeding practices will all help increase the supply of raw milk in the country. This, coupled with improved sanitary and phytosanitary measures, will eventually help the industry not only meet domestic demand but also be a viable export product.
16) Georgian Tea program to rehabilitate 1,000 hectares May 9th, 2017, http://cbw.ge/economy/total-space-tea-plantations-rehabilitation-will-rise-1000-hectares-2018/
With 17 beneficiaries involved currently, more than 500 hectares of tea plantations will be rehabilitated as part of the Georgian Tea program. The program is working to revitalize the tea industry by developing high-quality tea for niche markets in Europe, especially through the production of bio tea products. The program aims rehabilitate 1,000 hectares of both state- and privately-owned tea plantations in total.
17) First quarter meat production up 30.6% May 22nd, 2017, http://www.sarke.com/cgi/search/news.asp?Code=10050817
In the first quarter of 2017, meat production in Georgia amounted to 11,100 tons, a 30.6% year-on-year increase. Milk production also grew in the first quarter and amounted to 106.1 million liters, a 14.3% increase. Egg production grew 1% to 147.9 million eggs. As of the end of the first quarter, the cattle population in Georgia was 1.1 million heads (1.4% growth) while the poultry population amounted to 147.9 million (2.5% growth). At the same time, the pig population declined to 166,000 (2%) while the sheep and goat population declined 13% to 1.04 million.
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18) Georgian wheat can satisfy 60% of domestic demand May 30th, 2017, http://cbw.ge/business/georgia-imports-70-80-of-wheat-whereas-country-can-produce-60-itself/
The recently founded Georgian Wheat Producer Association is trying to revive the Georgian wheat industry by both improving the overall quality of the product and by popularizing it within the country. According to the association, 70-80% of the wheat in Georgia is imported; however, Georgian wheat has the potential to satisfy up to 60% of domestic demand. Moreover, the association hopes to change attitudes about wheat production and move it from an industry focused on quantity to one that gives more of an emphasis to producing quality goods.
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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.