09/2018
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73 Geo r g i a Agriculture Bulletin Meat cannery opens in Dedoplistskaro
Discussions on marijuana export bill postponed ADB to increase investment in Georgia by over USD 1 billion Georgian wine exports increase
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Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4)
Meat cannery opens in Dedoplistskaro ........................................................................................... 2 Discussions on marijuana export bill postponed............................................................................. 2 Ban on wheat imports by road postponed ...................................................................................... 2 ‘Seed the Future’ project expands to include berries ..................................................................... 2
Foreign Aid ................................................................................................................. 3 5) 6) 7) 8) 9)
Agro-festival held in Kazbegi ........................................................................................................... 3 Workshop on dairy sector development held ................................................................................. 3 ‘Red Bridge’ border project completed ........................................................................................... 3 Georgia hosts regional OIE conference ........................................................................................... 4 ADB to increase investment in Georgia by over USD 1 billion ........................................................ 4
Private Sector.............................................................................................................. 4 10) 11) 12) 13) 14) 15) 16)
Imereti Agrozone LLC developing 80 hectares of greenhouses ...................................................... 4 Georgian greens to enter further into European markets .............................................................. 5 Georgian wine exports increase ...................................................................................................... 5 Chinese wine importers visit Georgia .............................................................................................. 5 Georgia’s substandard meat industry ............................................................................................. 5 Grape seed processing plant opens in Kakheti................................................................................ 6 142,000 tons of grapes harvested in Kakheti so far ........................................................................ 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)
Meat cannery opens in Dedoplistskaro
September 4th, 2018, http://agenda.ge/en/news/2018/1842
A new meat cannery has opened in the Dedoplistskaro municipality, employing 20 people. The cannery, with an annual production capacity of 100 tons, plans to target domestic markets initially and then expand into foreign markets. GeoNaturals built the new cannery with assistance from the state-run ‘United Agroproject’. In total, USD 380,660 was invested for its construction, including USD 190,300 in preferential agricultural credit and USD 152,300 in the form of a state-issued grant.
2)
Discussions on marijuana export bill postponed
September 17th, 2018, http://agenda.ge/en/news/2018/1940
Parliament is temporarily postponing discussions on an Interior Ministry-initiated bill regarding the export of marijuana due to misleading public information about the initiative. Specifically, the bill only relates to the export of marijuana for medicinal and cosmetic purposes. The misleading information stems from a Constitutional Court decision earlier this year that legalizes marijuana consumption for recreational and other purposes. A separate bill has been presented to Parliament for discussion regarding the regulation of the consumption of marijuana within the country.
3)
Ban on wheat imports by road postponed
September 20th, 2018, https://civil.ge/archives/254726
Georgian Finance Minister Ivane Machavariani has announced that the ban on the import of wheat by road transportation has been postponed until October 1, 2019. The postponement is the result of truck driver protests and subsequent meetings between them and government officials. Minister Machavariani stated that the year-long delay will allow for further discussions with truck drivers as well as help ensure that unemployment resulting from the ban will be kept to a minimum. The ban was originally scheduled to go into effect on September 15, 2018.
4)
‘Seed the Future’ project expands to include berries
September 21st, 2018, http://www.sarke.com/cgi/search/news.asp?Code=10055057
The ‘Seed the Future’ project has been enhanced to include a new subcomponent within its gardening co-financing measures. The new subcomponent envisages fully funding the cost of berry saplings and drip irrigation systems in several regions. Additionally, funding will be provided, as determined necessary, for the acquisition of materials necessary for planting. This new subcomponent is being implemented in the Guria, Imereti, Mtskheta-Mtianeti, Racha-Lechkhumi and Kvemo Svaneti, and Samegrelo-Zemo Svaneti regions. Read More »
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Foreign Aid 5)
Agro-festival held in Kazbegi
September 9th, 2018, http://www.fao.org/georgia/news/detail-events/en/c/1152306/
An agro-festival was held in Kazbegi with support from the European Union (EU) and the Food and Agriculture Organization of the United Nations (FAO), through the European Neighborhood Program for Agriculture and Rural Development (ENPARD). The event coincided with the traditional festival of Kazbegoba and the regional folk festival Phudzeoba. The events provided an opportunity for the promotion of Georgian culture and art as well as served as a way to support local farmers. Attendees included locals, Georgian guests and interested foreign visitors.
6)
Workshop on dairy sector development held
September 12th, 2018, http://www.fao.org/georgia/news/detail-events/en/c/1152460/
A two-day workshop on dairy sector development in Armenia and Georgia was held to highlight the challenges associated with dairy value chain development as well as the opportunities associated with strengthening the sector through better infrastructure, facilities, training and capacity development. At the workshop, case studies from both countries were presented to provide insight on how specific actions and improvements can lead to the enhanced quality and safety of dairy products while also increasing productivity and incomes. It is expected that the workshop will validate current efforts to strengthen the dairy sector in both countries as well as forge coordination mechanisms among key stakeholders. The workshop was organized by the Center for Agribusiness and Rural Development Foundation and the Georgian Farmers Association within the scope of a project funded by the Food and Agriculture Organization of the United Nations (FAO). Attendees included representatives from both governments, key local stakeholders and development partners.
7)
‘Red Bridge’ border project completed
September 14th, 2018, http://www.sarke.com/cgi/search/news.asp?Code=10054991
The Georgian Finance Ministry has announced the completion of a three-year project designed to increase sanitary, veterinary and phytosanitary control along the Georgian-Azerbaijan border. The ‘Red Bridge’ project created a 6,500 square meter area that is dedicated to conducting full sanitary, veterinary and phytosanitary control measures that are in compliance with European Union (EU) standards. The project also included the implementation of a training program for border staff. The ‘Red Bridge’ project was implemented by United Nations Development Program (UNDP) within the EU’s Eastern Partnership Program. The total cost of the project was EUR 2.6 million, EUR 2.13 million of which was provided by the EU. EUR 0.47 million was provided by the governments of Georgia and Azerbaijan.
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BFC Agriculture Bulletin
8)
Georgia hosts regional OIE conference
September 17th, 2018, http://www.fao.org/georgia/news/detail-events/en/c/1153436/
Georgia hosted the 28th Regional Conference of the World Organization for Animal Health (OIE), which took place September 17-21, 2018. Approximately 120 delegates from 53 countries participated at the conference, which focused on animal health and well-being as well as food safety issues. In addition, recommendations for the epidemiological well-being of the region were prepared for finalization at the May 2019 OIE Delegates' International Assembly. During the four-day conference, challenges related to implementing Georgia’s National Animal Identification and Traceability System (NAITS) were also discussed. The implementation of NAITS has been ongoing since 2016 and is seen as an important project not only for Georgia, but also for the greater region. The project is being implemented by the Food and Agriculture Organization of the United Nations (FAO) and the National Food Agency; it is funded by the Swiss Agency for Development and Cooperation (SDC) and the Austrian Development Agency (ADA).
9)
ADB to increase investment in Georgia by over USD 1 billion
September 26th, 2018, http://agenda.ge/en/news/2018/2011
Asian Development Bank (ADB) is planning to increase its investment portfolio in Georgia by USD 300 million by the end of 2018 and by USD 1.08 billion by 2021. In particular, ADB has expressed interest in increasing investments to Georgia’s energy sector, pension reform and public-private partnership law implementation. The bank is also looking at expanding its activity in small- and medium-sized enterprise (SME) development by expanding technical and financial support initiatives for SMEs. In total, ADB has already invested approximately USD 3 billion in Georgia.
Private Sector 10) Imereti Agrozone LLC developing 80 hectares of greenhouses August 31st, 2018, https://commersant.ge/en/post/imereti-agrozone-searches-for-a-company-to-arrange-greenhouse-farming
Imereti Agrozone LLC is working to develop an 80-hectare area for greenhouse production. Initially, 2030 hectares will be developed and then gradually expanded over time. The company is currently exploring offers from various international and local companies for the construction of the greenhouses and expects greenhouses to be ready and available for use by the end of 2019. The greenhouse will provide farmer entrepreneurs with free soil surveys as well as information regarding farming techniques necessary for export to European markets. Additionally, farmer entrepreneurs will not have to pay additional amounts for infrastructure development. Imereti Agrozone LLC will work as an independent entity within the agrozone and will provide sorting, freezing and packaging services. The company will also buy greens and vegetables for sorting and export.
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11) Georgian greens to enter further into European markets September 5th, 2018, https://commersant.ge/en/post/georgian-greens-to-be-exported-to-poland-the-baltic-countries
Herbia, a Georgian company specialized in producing greens, is expanding its sales markets in November 2018 to include Poland, the Baltic States and the Netherlands. The company, which owns greenhouses in Western Georgia, is currently working to further expand its production capacity as well as add new products in order to meet demand from European countries. In order to further penetrate into European markets, Herbia will need to be able to guarantee a steady flow of products to buyers in Europe, something difficult for the company at the moment. However, Herbia recently took a loan of EUR 500,000 for this purpose. Europe is one of the world's largest consumers of greens, and Herbia is currently the only Georgian company that meets the strict conditions for importing greens into the European Union (EU).
12) Georgian wine exports increase September 6th, 2018, http://georgianwine.gov.ge/En/News/17579
Georgia exported 52.7 million bottles of wine to 52 countries during the January-August 2018 period, a year-on-year increase of 16%. Profit from these wine exports amounted to USD 125.5 million, a 25% year-on-year increase. The top five importers of Georgian wine were: Russia (33.27 million bottles), Ukraine (6.07 million bottles), China (4.11 million bottles), Kazakhstan (2.31 million bottles) and Poland (2.12 million bottles). In addition to wine, Georgia exported 11.7 million bottles of brandy to 21 countries, a 19% year-on-year increase. Brandy exports amounted to USD 23.9 million in value, a 9% year-on-year increase. Georgia also exported 238,900 bottles of Chacha to 24 countries, an 80% year-on-year increase. Chacha profits during this period amounted to USD 692.400.
13) Chinese wine importers visit Georgia September 14th, 2018, http://agenda.ge/en/news/2018/1927
A group of eight Chinese wine importers are touring Georgia to investigate the potential of increasing Georgian wine’s footprint in China. The group tasted various wines from different companies and learned about the unique wine-making tradition in Georgia as they visited leading wineries in the regions of Kartli and Kakheti. China is an important market for Georgian wine and has demonstrated a strong potential for growth in recent years. Over the last four years, Georgian wine has moved from 18th place in the Chinese market to 9th. So far this year, more than 4 million bottles of Georgian wine have been exported to China.
14) Georgia’s substandard meat industry September 20th, 2018, http://georgiatoday.ge/news/12365/Georgia%E2%80%99s-Meat-Market
Georgia’s meat industry is lacking compared to most western countries. Few effective regulations, improperly identified meat products and a lack of attention to quality have led to Georgian meat products being widely untrusted and more than 20% of domestic meat demand being filled by imports. The problem largely stems from meat being predominantly sold in bazaars and markets with no effective standards or regulations. But even among meat sold in stores, there is rampant intentional mislabeling (especially failing to label products as containing donkey and/or horse meat) from many companies. Moreover, the penalties for these violations are relatively small and do not incentivize Page 5
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companies to change their behaviors. Finally, Georgians tend to consume meat that has not had time to fully mature, meaning that it has a reputation of being tough and not particularly flavorful. Meat production in Georgia has a long way to go to meet the normative standards of western countries, and the small improvements being made here and there are not making a large enough impact. While many older Georgians do not seem to mind lesser meat quality, the westernization of Georgian standards and the desire to move towards the European Union (EU) mean that changes in the way Georgia processes meat is high on the list of necessary actions.
15) Grape seed processing plant opens in Kakheti September 24th, 2018, http://agenda.ge/en/news/2018/1995
A new grape seed processing plant has opened in Georgia’s Kakheti region. The plant is capable of processing 3,000 tons of grape seed and producing 55-60 tons of grape seed oil and flour. Ukrainian company EcoGeorgian Group invested GEL 1 million for the construction of the plant, which makes use of modern equipment to produce biologically clean materials. The plant also provides employment for 25 locals. The opening of the plant also coincides with negotiations that, if successful, would lead to Georgia beginning to export grape seed oil and flour to Spain and Turkey.
16) 142,000 tons of grapes harvested in Kakheti so far September 24th, 2018, http://agenda.ge/en/news/2018/1990
The grape harvest in Georgia’s Kakheti region is well-underway, with more than 142,000 tons of grapes already having been harvested and processed. This has resulted in approximately 15,000 grape growers in the region receiving more than GEL 204 million for their efforts. The most grapes have been processed in the Gurjaani municipality (41,300 tons), followed by: Kvareli (40,000 tons), Telavi (31,000 tons), Sighnaghi (12,000 tons), Sagarejo (5,000 tons), Dedoplistskaro (4,700 tons), Akhmeta (4,200 tons) and Lagodekhi (3,800 tons). More than 200 wine companies are involved in the grape processing. The grape harvest in the Racha region is expected to begin in the near future.
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