08/2017
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60 Geo r g i a Agriculture Bulletin Call for government to cease viticulture subsidies
Georgian Almond Growers Association established Georgian olive oil producer to begin exports to the EU Milk, meat and egg production show decline in Q2 2017
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Contents State Initiatives ........................................................................................................... 2 1) 2)
Call for government to cease viticulture subsidies ......................................................................... 2 The fight against the brown marmorated stink bug ....................................................................... 2
Foreign Aid ................................................................................................................. 2 3) 4)
Informational meetings on animal identification system ............................................................... 2 Georgian Almond Growers Association established ....................................................................... 3
Private Sector.............................................................................................................. 3 5) 6) 7) 8) 9) 10) 11) 12) 13) 14)
Georgia has potential to be first-category nut producer ................................................................ 3 Agricultural investors can search land via web platform ................................................................ 3 Georgian olive oil producer to begin exports to the EU .................................................................. 4 Large grape harvest expected this year .......................................................................................... 4 Wheat harvest nearing completion ................................................................................................. 4 Milk, meat and egg production show decline in Q2 2017............................................................... 5 Georgian hazelnut company starts selling internationally .............................................................. 5 Significant losses to the hazelnut harvest ....................................................................................... 5 German company interested in Georgian crabapples .................................................................... 6 Domestically produced food will only last 3-4 months ................................................................... 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 » BFC Max-Högger-Strasse 6 CH-8048 Zurich, Switzerland
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BFC Agriculture Bulletin
State Initiatives 1)
Call for government to cease viticulture subsidies
August 1st, 2017, http://cbw.ge/business/govt-not-subsidize-winegrowers/
There are calls amongst some Georgian winegrowers for the government to stop subsidizing viticulture altogether. Wine producers believe that, if subsidies are completely cancelled, it will lead to pricing in the industry being carried out according to fair market principles, leading to an improved quality of grapes as farmers will be forced to produce more quality products instead of getting a minimum price for substandard grapes. The fair-market value for grapes this year remains unknown; however, demand is growing, and purchasing prices are also expected to grow with it this year.
2)
The fight against the brown marmorated stink bug
August 19th, 2017, http://moa.gov.ge/En/News/1349
Agriculture Minister Levan Davitashvili and his deputy ministers have become familiarized with the situation regarding the brown marmorated stink bug. The Minister declared that the brown marmorated stink bug should be regarded as a significant challenge for agricultural sector and that the Georgian government is implementing consistent and systematic measures to fight this pest. Necessary equipment to combat the spread of the pest was brought in by specialists of the National Food Agency. As a result of the implemented measures, the spread of the pest has been contained to the western part of Georgia. The fight against the brown marmorated stink bug is a long-term process which will require the cooperation and involvement of farmers.
Foreign Aid 3)
Informational meetings on animal identification system
August 9th, 2017, http://www.sarke.com/cgi/search/news.asp?Code=10051604
Informational meetings on the National Animal Identification, Registration and Traceability System (NAITS) have been held in the Samtskhe-Javakheti region. Such meetings are important as they pass along important information to cattle farmers about the system and about the new legislation starting next year that will only allow for the slaughter of cattle in slaughterhouses if they have been properly identified. This is the third region of Georgia where such meetings have been held. Similar meetings were previously held in the Kakheti and Kartli regions, and more meetings are planned for the Imereti, Racha and Samegrelo regions. The meetings are organized by the Food and Agriculture Organization of the United Nations (FAO) and Georgia’s National Food Agency. The NAITS project has been implemented with USD 5 million in support from the Swiss Agency for Development and Cooperation (SDC) and the Austrian Development Cooperation (ADC).
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4)
Georgian Almond Growers Association established
August 23rd, 2017, http://cbw.ge/investment/georgian-almond-growers-association-is-established/
With the demand for almonds increasing globally each year, investors have begun to look at Georgia as a hot spot for potential almond production as the climate and soil of eastern Georgia are excellent for almonds. To further this, the ‘Restoring Efficiency to Agriculture Production’ (REAP) project of the United States Agency for Development (USAID) commissioned Agro Solutions to conduct a research study about the potential of almond production in Georgia. According to the research, Georgia has the potential to become one of the leading countries in almond production and has already started moving in this direction with 10 hectares of almond orchards in 2015 blossoming into 900 hectares in the last year. This potential prompted Ago Solutions to found the Georgian Almond Growers Association (GAGA) to support the industry’s growth in the country. GAGA aims to create a platform that will involve farmers already engaged in almond production in Georgia while also helping farmers desiring to get started in the industry. Consultations will be guided by both Georgian and foreign experts who will share their expertise on modern technologies for setting up almond orchards and almond production. GAGA, with the support of international partners, will also assist Georgian almond growers in identifying and establishing business relationships with foreign markets. Additionally, GAGA plans to attend various meetings, conferences, seminars and exhibitions outside Georgia to promote the industry.
Private Sector 5)
Georgia has potential to be first-category nut producer
August 3rd, 2017, http://bizzone.info/agriculture/2017/1501804253.php
Giuseppe Kalkani, head of the International Organization of Nuts Producers, has stated that Georgia should be considered in the first category of nut producing countries in the world instead of the third. According to him, the main problem Georgia faces in obtaining this is its struggle against various diseases which either destroy crops or spoil quality. He further noted that all the diseases Georgian nuts now face, however, are temporary situations that can be resolved if the proper steps are taken and if there is cooperation between businesses and the government. Because of diseases, an estimated 10-15% of nuts are lost annually, and many do not know what can be done to resolve this. The solution, he adds, is simple: the ground must be clean and the nuts themselves must be washed. If Georgia gradually makes strides to rectify this situation, it could easily be considered a first-category country. This would allow Georgian nuts to be exported directly to chocolate producers and better open up some of the largest and growing nut markets in the world, such as the European Union (EU), India and China.
6)
Agricultural investors can search land via web platform
August 3rd, 2017, http://cbw.ge/business/available-lands-via-web-platform-for-agriculture-investors/
Startup Georgia is funding the Agropark project with GEL 38,000 (of a total project budget of GEL 43,000). The project will support a web platform expected to launch in September 2017 that will enable users to search for available agricultural lands. Agricultural land plots of owners willing to sell Page 3
BFC Agriculture Bulletin
agricultural land will be placed on the platform and offered to investors who are willing to invest but want to avoid any operational work. The moratorium on selling agricultural land to foreigners prompted the project to change its model slightly. As it is now, a foreigner cannot buy agricultural land; however, the platform will allow him/her to become a sponsor and still receive income.
7)
Georgian olive oil producer to begin exports to the EU
August 8th, 2017, http://www.messenger.com.ge/issues/3945_august_8_2017/3945_econ_one.html
Geolive, a Georgian olive producer founded in 2009, is expected to shortly begin exporting olive oil to the European Union (EU). The main target of the company will be the Netherlands, where Georgian olive oil is already established. The company has also planned exports to Kazakhstan and Russia. Georgian olive oil is cheaper than other imported options, making it competitive in most markets. Geolive owns a 250-hectare olive plantation in the Sighnaghi region. It also operates a factory which employs 100 people and is equipped with modern technology. The factory was built with assistance from the Agricultural Project Management Agency (APMA) of the Georgian Ministry of Agriculture.
8)
Large grape harvest expected this year
August 11th, 2017, http://www.sarke.com/cgi/search/news.asp?Code=10051630
Giorgi Samanishvili, chairman of the National Wine Agency, has announced that a large grape harvest is expected this year. In total, between 140,000 and 150,000 tons of grapes are projected to be industrially processed. Even with a larger harvest, the winemaking industry is expected to fully support and process all grapes. Moreover, grape quality is expected to increase following the government’s decision to cancel subsidies for some grape varieties. Subsidies were cancelled for standard grapes in the Kakheti region but will be maintained in the Racha-Lechkhumi region for Aleksandrouli and Mujuretuli grape varieties. State compensation will also be given to winemaking companies which purchase Rkatsiteli and Kakhuri Mtsvane grape varieties.
9)
Wheat harvest nearing completion
August 16th, 2017, http://www.sarke.com/cgi/search/news.asp?Code=10051666
The cereal harvest has been completed in the Kakheti and Kvemo Kartli regions, and the collection of wheat is nearing completion throughout the rest of the country. Preliminary indicators point to a successful year for Georgian wheat producers as the price and quality are competitive with imported counterparts. The purchasing price for wheat this year is GEL 420 per ton, an expected price that brings relief to many farmers who experienced lower prices last year. Average production this year for wheat was 3 tons per hectare.
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10) Milk, meat and egg production show decline in Q2 2017 August 18th, 2017, http://cbw.ge/economy/milk-meat-egg-production-declines-georgia/
Milk production in the second quarter of 2017 amounted to 183.6 million liters, a decrease of 7.7% as compared to the same period in 2016. Meat and egg production also declined during the second quarter. Meat production amounted to 14,400 tons, a 13.8% decrease, while egg production amounted to 151.4 million, a 4.2% decrease. During the same period, the number of bovine animals amounted to 1.02 million, down 8.5%, with the number of dairy cows and buffalo amounting to 492,300. At the same time, poultry numbers feel 0.4% to 11.72 million. The total number of sheep and goats increased to 1.23 million, a 5% increase, and the number of pigs was 194,600, a 10.4% increase.
11) Georgian hazelnut company starts selling internationally August 18th, 2017, http://www.ipress.ge/new/82140-tkhilis-gadamamushavebelma-qartulma-kompaniam-produqciisrealizacia-saertashoriso-bazarze-daitsyo
With the support of the ‘Produce in Georgia’ program, the Georgian company Georgian Products Renaissance (GPR) has started selling hazelnut products on the international market. The hazelnut processing company offers a diverse range of products and exports several kinds of hazelnut products abroad. GPR is certified by the ISO 22000 standard and is the only hazelnut company in Georgia to own a BRC certificate. The company currently exports to more than 25 countries, including Brazil, Bulgaria, Canada, England, France, Germany, Holland, Italy, Mexico, Singapore, Spain and Switzerland. GPR is also planning to increase its product range and potential export markets in the near future.
12) Significant losses to the hazelnut harvest August 21st, 2017, http://netgazeti.ge/news/215206/
Hazelnuts are an important export product for Georgia. In 2016, hazelnut exports accounted for 8.5% of total exports, up from 8% in 2015, 6.4% in 2014 and 5.7% in 2013. According to Geostat, the National Statistics Office of Georgia, the income from hazelnuts in 2016 was USD 179.5 million, up from USD 176.6 million in 2015. Despite these indicators, Georgian hazelnut producers still face serious problems in maximizing the potential of the industry. Although exact numbers are not known, some experts estimate that as much as 20-40% of Georgian hazelnuts will be lost this year, with that number reaching as high as 70% in some places and some producers experiencing total loss. Such losses make it hard for many producers to make much profit, if any. It should be noted that in upper zones, such as Martvili and Tsalenjikha, harvests are not experiencing any losses. The losses are blamed on three problems: (1) the invasion of the brown marmorated stink bug from Asia, (2) widespread fungal diseases and (3) lack of proper care. To combat the brown marmorated stink bug, government officials have invited U.S. researchers who have the richest experience fighting the pest. Fungal diseases are another serious issue. 4-5 species of fungal diseases have been found, each of which requires time and effort to study and implement combative measures. Even after these issues have been resolved, however, hazelnut producers still need to take care if they are to avoid similar results in the future. They must begin to properly prepare and take care of the land and the nuts. Experience has shown that, when producers take the proper and necessary measures to ensure a fruitful, quality harvest, the harvest is almost always a good one. Page 5
BFC Agriculture Bulletin
13) German company interested in Georgian crabapples August 29th, 2017, http://cbw.ge/economy/german-company-rose-office-is-interested-in-georgian-crab-apple/
The German company Rose Office has expressed interest in Georgian crabapples. At this stage, the company has put in a demand for 2 tons of the product, with hopes that it will appear in German markets later this year. Rose Office is also interested in a wide range of products, including black hawthorn berries, blackberries, yarrow and sweetbrier. If the quality of these Georgian products meets European standards, they have a great potential in European markets.
14) Domestically produced food will only last 3-4 months August 30th, 2017, http://bizzone.info/agriculture/2017/1504121491.php
2017 was a particularly bad year for harvests in Georgia due to inclement weather. In spring, late frosts caused much damage to crops, which were further destroyed by a drought this summer. This means that local products are expected to last 3-4 months in domestic markets instead of the usual 6-7 months. It also means that imports for agricultural food products will have to begin sooner. This has caused concern among the population that already expensive products will become even more expensive in time. According to the forecasts, the next wave of rising food prices will start at the end of October and continue throughout the winter. Georgia is becoming increasingly dependent on food imports. To overcome the current situation, Georgia needs to create a healthy environment for the development of local production; however, measures towards this direction are not currently on the horizon and rural labor is becoming increasingly unpopular as living in rural areas has become more difficult. Additionally, farmers are finding fewer opportunities to bring their products to the city and sell them. Instead, they need to work with resellers, causing food prices to rise. In addition to bad weather and having to work with resellers, the rise in prices was also promoted by the rise in price of fuel, and it is possible this trend will continue as oil prices in the international market have recently increased.
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