01/2018
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65 Geo r g i a Agriculture Bulletin GEL 1.7 billion plan for rural development approved FAO holds post-harvest and handling training EUR 12 million agricultural development project launches Five important events for Georgian agriculture in 2017
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Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4) 5)
GEL 1.7 billion plan for rural development approved ..................................................................... 2 Impact of Georgia’s state agricultural programs ............................................................................. 2 Government to issue internet vouchers for agriculture ................................................................. 2 Government prepares for 2018 fight against stinkbug ................................................................... 3 Farmers to have better access to agricultural equipment .............................................................. 3
Foreign Aid ................................................................................................................. 3 6) 7)
FAO holds post-harvest and handling training ................................................................................ 3 EUR 12 million agricultural development project launches ............................................................ 3
Private Sector.............................................................................................................. 4 8) 9) 10) 11) 12) 13) 14) 15)
Agriculture shows 2.8% decline in 3rd quarter of 2017 .................................................................. 4 Five important events for Georgian agriculture in 2017 ................................................................. 4 Georgian nut exports down USD 80 million in 2017 ....................................................................... 4 Chirchkhela planning to launch dried vegetable exports ................................................................ 5 Mitlider greenhouse method increasing in popularity.................................................................... 5 Georgian meat exports increase seven-fold in 2017 ....................................................................... 5 Cooperative production value at GEL 15 million in 2017 ................................................................ 5 Georgian exports to the EU make up 23% of all exports ................................................................ 5
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)
GEL 1.7 billion plan for rural development approved
December 28th, 2017, http://enpard.ge/en/georgia-will-invest-1-7-billion-gel-rural-development-2018-2020/
Georgia has adopted the National Rural Development Action Plan 2018-2020. The GEL 1.7 billion plan aims to address some of the key challenges identified by the national Rural Development Strategy 20172020 and sets 69 measurable targets to be achieved in the next three years. More specifically, the plan outlines state programs and initiatives that will promote rural development through the growth and diversification of local economies, the improvement of social and public services, the increase of employment and the sustainable use of natural resources. The Rural Development Action Plan was prepared with support from the European Neighborhood Program for Agriculture and Rural Development (ENPARD) and the United Nations Development Programme (UNDP).
2)
Impact of Georgia’s state agricultural programs
December 28th, 2017, http://cbw.ge/review-2017/georgian-agriculture-sector-review/
Eleven state programs have been financed with GEL 628,892,000 to help the agriculture sector develop since 2013. These programs include the preferential agricultural loan program, the agroinsurance program, vintage support programs, the ‘Plant the Future’ program, the ‘Georgian Tea’ program and agricultural cooperative support programs. To date, the programs have helped more than 750 existing enterprises and 165 new enterprises develop and expand operations. Perhaps more importantly is that Georgia is also helping introduce ISO-22000 and HACCP international standards, a crucial step for increasing export numbers and export value. Additionally, perennial gardens have been set up on 3,700 hectares, and more than 529 hectares of tea plantations have been rehabilitated. Since 2013, more than 27,000 loans have been issued, representing a total portfolio that exceeds GEL 1 billion. The agroinsurance program has involved five insurance companies and aided in the issuing of 20,680 policies. In short, the state programs have helped Georgia’s agricultural sector produce at a higher rate and quality as well as become more competitive, enabling Georgian products to find success both domestically and abroad.
3)
Government to issue internet vouchers for agriculture
January 8th, 2018, http://bizzone.info/agriculture/2018/1515451119.php
Beginning in 2018, the government will issue internet vouchers to agricultural producers and households. The internet voucher program, part of the agricultural development strategy for 2017-2020, will run through 2020 and will include GEL 230,000 in vouchers distributed each year. Along with the vouchers, beneficiaries will undergo a training in digital literacy and programming, and 300 manufacturers will undergo training in electronic reading. GEL 320,000 has been allocated each year for the trainings.
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4)
Government prepares for 2018 fight against stinkbug
January 18th, 2018, http://www.sarke.com/cgi/search/news.asp?Code=10052933
Deputy Minister of Agriculture Giorgi Khanishvili has announced the state’s preparatory measures for fighting the brown marmorated stinkbug in 2018 are nearly completion. In 2018, the state will change its method of fighting the pest and will also incorporate public cooperation into its plan. The 2018 plan envisages country-wide monitoring as well as treating up to 1 million hectares of land. In total, GEL 50 million are planned to be used in the fight this year.
5)
Farmers to have better access to agricultural equipment
January 25th, 2018, http://agenda.ge/news/94543/eng
The government has approved amendments to the ‘Preferential Agro Credit Project’ that will enable Georgian farmers to purchase agricultural equipment with more favorable lending conditions. Specifically, the amendments introduced two new components: preferential agro-credit for agriculture mechanization and preferential agro-leasing for agricultural mechanization. Under the program, preferential agro-credits are available in amounts ranging from GEL 7,000 to GEL 1.5 million.
Foreign Aid 6)
FAO holds post-harvest and handling training
December 23rd, 2017, http://www.fao.org/georgia/news/detail-events/en/c/1074297/
The Food and Agriculture Organization of the United Nations (FAO), with support from the European Neighborhood Program for Agriculture and Rural Development (ENPARD), has conducted a training designed to help farmers in generating quality food and increase their economic benefits. 50 representatives of the Ministry of Agriculture’s Information Consulting Centers from 30 municipalities from all over Georgia attended the five-day training in order to gain advanced knowledge and experience in post-harvest technologies and the handling of perishable food. The Training of Trainers (ToT) included information on the entire cycle of post-harvest handling from harvesting to selling. Pre-harvest factors affecting product quality, main harvesting principles, packing and packaging, transporting and preventing insects and other damaging factors were the main highlights of the ToT. The ToT also included hands-on demonstrations at food storage and packaging facilities.
7)
EUR 12 million agricultural development project launches
January 24th, 2018, http://www.fao.org/georgia/news/detail-events/en/c/1098881/
Georgia and the Food and Agriculture Organization of the United Nations (FAO) have signed an agreement for the implementation of a EUR 12 million project as part of the third phase of the European Neighborhood Program for Agriculture and Rural Development (ENPARD). The five-year ‘FAO Support to the Georgian Agricultural Sector under ENPARD III’ project will work to make Georgia’s agricultural sector more competitive by improving access to finance, services and inputs for farmers, rural households, cooperatives and other small- and medium-sized enterprises (SMEs) in rural areas. It will also work to improve the capacity of the Ministry of Agriculture. Page 3
BFC Agriculture Bulletin
Under the terms of the agreement, FAO will support the Ministry in effective policy-making and with the implementation of the National Strategy for Agricultural Development 2015-2020. The project will also offer pilot activities for farmers, including various types of demonstrations, information dissemination and training events. Additionally, individual grants will be provided to small farmers, rural entrepreneurs, cooperatives and SMEs in order to encourage investment and improve overall competitiveness.
Private Sector 8)
Agriculture shows 2.8% decline in 3rd quarter of 2017
December 25th, 2017, http://www.sarke.com/cgi/search/news.asp?Code=10052809
The volume of Georgian agriculture in the third quarter of last year made up GEL 726 million, down 2.8% year-on-year. Negative growth was also recorded in the first (-1.5%) and second (-2.4%) quarters of last year. In 2016, the economic growth of Georgia’s agricultural sector was 0%. Despite low growth, the government is still actively participating in agricultural projects and has allocated more than GEL 0.5 billion to the sector in the last three years. Agriculture also accounts for the smallest amount of foreign direct investments. In the first three quarters of last year, only USD 9 million was invested into the sector, 0.6% of the total volume of foreign direct investments. Hindering this was the fact that agriculture was nearly completely closed to foreign investments following a ban that restricts the possession of agricultural lands by foreign citizens.
9)
Five important events for Georgian agriculture in 2017
December 28th, 2017, http://cbw.ge/review-2017/agro-solutions-names-5-important-events-agriculture-sector-2017/
Irakli Chikava, founder of the agricultural consulting company Agro Solutions, noted five important events in 2017 that have had an effect on agriculture in Georgia: (1) the appearance of the brown marmorated stink bug — which has brought serious problems to Georgia, especially to nut exports, (2) restrictions on land sales to foreign citizens — affecting direct foreign investments, (3) the abolition of the vintage subsidy — a positive step for sector recovery, (4) Georgia’s recognition as the home of winemaking — which will have a positive effect on wine exports and agro tourism and (5) the merger of the Ministry of Agriculture with the Ministry of Environmental Protection — which will make the decision-making easier and more flexible.
10) Georgian nut exports down USD 80 million in 2017 January 15th, 2018, http://bizzone.info/agriculture/2018/1516063244.php
In 2017, Georgian nut exports fell by USD 80 million, mostly due to the poor harvest, poor quality and damage done by pests and climatic conditions. According to Deputy Minister of Agriculture Giorgi Khanishvili, a lack of knowledge of proper plant and nut care within the country has caused the majority of problems this year. This led to a situation in which Georgian nuts failed to meet European Union (EU) standards. As a result, Georgian nuts have largely lost their positions in European markets. For them to regain their place, a number of measures need to be taken, including some government actions. Perhaps the most effective measure would be the introduction of HACCP standards as they would promote the production of quality nuts. In addition, a number of comprehensive measures should be taken to protect walnut plantations from both diseases and pests.
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11) Chirchkhela planning to launch dried vegetable exports January 15th, 2018, http://cbw.ge/business/will-first-export-dried-vegetable-chirchkhela-introduces-innovative-idea/
Chirchkhela, a Georgian dried fruits and vegetables manufacturing company, is planning to launch the export of dried vegetables for soups. This will be the first such instance of a company exporting dried vegetables from Georgia. The launch, planned for spring 2018, has been preceded by domestic introduction of the product for testing. The company has taken care to meet all the European Union (EU) safety and quality standards necessary for export and have already been in contact with potential partners in Ukraine, China, Russia, Sweden and other Baltic countries.
12) Mitlider greenhouse method increasing in popularity January 24th, 2018, http://eugeorgia.info/ka/latestarticle/409/mitlaideri-sasatbure-meurneobis-mowyobis-efeqturi-metodi/
The Mitlider greenhouse method has made its way to Georgia, and many are seeing the benefits of its use. The Mitlider method uses special boxes to grow crops in a smaller area and in more unstable and strict climatic conditions, including on bad soil. Moreover, productivity is higher with this method, and the products are ecologically clean and characterized by a rich flavor. Farmers that have used the method have been happy with the results so far, saying that they are harvesting more with minimal investments and that their profits are stronger because they are selling an ecologically clean product.
13) Georgian meat exports increase seven-fold in 2017 January 24th, 2018, https://www.newsgeorgia.ge/eksport-myasa-iz-gruzii-vyros-v-sem-raz/
The export of meat from Georgia in 2017 increased seven-fold compared to 2016. The most striking upswing was recorded for Georgian lamb meat, the exports of which last year grew by 50,700 tons to amount to 361,700 tons. The drastic increase in meat exports is largely due to increased preventative measures helping reduce zoonotic diseases. In particular, the state provided free vaccines for about 6 million animals. The state also opened veterinary supervision posts in the Kakheti and Shida Kartli regions.
14) Cooperative production value at GEL 15 million in 2017 January 25th, 2018, http://cbw.ge/economy/surveyed-cooperatives-reported-production-
275 (out of 281 surveyed) cooperatives have reported that their production value in 2017 amounted to GEL 15 million. Of this, GEL 13 million is actual income received, and GEL 5.3 million (40%) is profit. This represents a 5% decline from 2016, largely due to unfavorable weather conditions and a stinkbug epidemic in Western Georgia. If excluding hazelnut cooperatives (the most-affected by the stinkbug epidemic), production value has been steadily increasing. In fact, cooperative production value has increased by 37% on average per cooperative since 2014 (the baseline year for these measurements).
15) Georgian exports to the EU make up 23% of all exports January 29th, 2018, http://www.commersant.ge/?view=post&id=138049&lang_id=en
In 2017, Georgia exported products worth USD 2.4 billion (13% of GDP), with the European Union (EU) accounting for 23% of the total exports, Russia accounting for 14% and other CIS countries accounting for 27%. Products worth USD 193.7 million were exported to China, and products worth USD 194.6 million were exported to Turkey. In 2017, Georgia imported goods worth USD 7.1 million, with 27% of them coming from the EU, 9.8% coming from Russia and 19% coming from other CIS countries. Page 5
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.