10/2018
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74 Geo r g i a Agriculture Bulletin Foreigners must cultivate their agricultural land
EUR 4 million for organic farming development
New online platform supports agriculture
Qatar interested in Georgian agricultural products
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Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4) 5)
Foreigners must cultivate their agricultural land ............................................................................ 2 State cooperative program available in Racha-Lechkhumi ............................................................. 2 State rural assistance program to continue through 2019 ............................................................. 2 Tangerine harvest begins in Adjara ................................................................................................. 3 Foreigners can lease agricultural land for up to 50 years ............................................................... 3
Foreign Aid ................................................................................................................. 3 6) 7) 8) 9)
ENPARD stakeholders discuss gender issues in agriculture ............................................................ 3 USAID to continue support for agriculture in Georgia .................................................................... 4 EUR 4 million for organic farming development ............................................................................. 4 FMO preparing large-scale agricultural assistance program ........................................................... 4
Private Sector.............................................................................................................. 4 10) 11) 12) 13) 14) 15) 16) 17) 18)
New online platform supports agriculture ...................................................................................... 4 Historic vineyards have first grape harvest in 400 years................................................................. 5 Georgian wine exports up 13% ....................................................................................................... 5 Agricultural production decreased in the second quarter .............................................................. 5 Qatar interested in Georgian agricultural products ........................................................................ 5 TBC Bank holds Agro Forum in Abasha ........................................................................................... 6 Record grape harvest generates GEL 300 million............................................................................ 6 Olive harvest underway in Kakheti .................................................................................................. 6 A quick glance at the Georgian sheep market................................................................................. 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 Agriculture Bulletin
State Initiatives 1)
Foreigners must cultivate their agricultural land
October 3rd, 2018, https://commersant.ge/en/post/foreigners-will-have-to-cultivate-the-land-in-their-possession
Under the draft Law on Agricultural Land, foreigners are allowed to own agricultural land in the country under certain conditions. In particular, the draft law stipulates that agricultural land can be received as an inheritance from a citizen of Georgia if and only if the foreigner sends a formal request to the government of Georgia along with an investment plan. Foreign agricultural land owners will be required to fulfill investment obligations (including cultivating the land) or they will either be forced to sell the land or have the land appropriated by the state. Read More »
2)
State cooperative program available in Racha-Lechkhumi
October 4th, 2018, https://kalo.ge/news/view?id=4589
The state-run ‘Introduction of International Branding Standards in Agricultural Cooperatives’ program has been made available in the Racha-Lechkhumi region. The program provides financial support for agricultural cooperatives in the risk analysis and critical control point system (HACCP) as well as for procuring equipment needed for packaging products manufactured by cooperatives. The program also includes a component that assists cooperatives in the creation of packaging designs, trademarks, logo designs and other marketing materials. The program, available only to cooperatives that own their own processing plant, is expected to contribute to the strengthening of cooperatives’ potential, efficiency and sustainability. There are currently 102 agricultural cooperatives registered in the Racha-Lechkhumi region. Read More »
3)
State rural assistance program to continue through 2019
October 8th, 2018, http://www.sarke.com/cgi/search/news.asp?Code=10055206
Zaza Gabunia, chairman of Parliament’s Committee on Regional Policy and Self-Governance, has announced that the government’s rural assistance program is expected to continue through 2019. The program, launched in 2009, has been included in the draft budget for 2019. The program previously included GEL 50 million each year for rural infrastructure; however, that component was cancelled in 2017. Read More »
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BFC Agriculture Bulletin
4)
Tangerine harvest begins in Adjara
October 15th, 2018, https://commersant.ge/en/post/govt-subsidizes-only-non-standard-and-poor-quality-tangerines-farmers
The early tangerine harvest has begun in Adjara, with the main active phase set to start in the first part of November. Deputy Agriculture Minister Mamuka Turmanidze announced that a special headquarters to promote citrus sales will be set up to help farmers and other citrus-related businesses with exports. The Deputy Minister noted that 30 citrus packaging plants will be operational this year, representing a total capacity of 30,000 tons. The Deputy Minister also noted that two processing plants will start operating this year and that the region has been equipped with enough refrigeration units to store 5,000 tons of citrus. This year’s citrus harvest is expected to be of higher quality than last year’s and will be exported mainly to former Soviet markets and European Union (EU) markets. Read More »
5)
Foreigners can lease agricultural land for up to 50 years
October 18th, 2018, https://commersant.ge/en/post/minister-of-economy-aliens-are-allowed-to-rent-the-land
Economic Minister Giorgi Kobulia is trying to quell the concerns of many foreign investors regarding a new draft law that will ban the sale of agricultural land to foreigners. The Minister noted that foreign investors, while not able to purchase agricultural land, are able to lease land for periods of up to 50 years under the draft law. Read More »
Foreign Aid 6)
ENPARD stakeholders discuss gender issues in agriculture
October 1st, 2018, http://www.fao.org/georgia/news/detail-events/en/c/1155595/
The Food and Agriculture Organization of the United Nations (FAO) brought together stakeholders and implementing partners of the European Union (EU)-supported European Neighborhood Program for Agriculture and Rural Development (ENPARD) to discuss gender, agriculture and rural development in Georgia. Participants talked about the existing gender inequalities in agriculture, their causes and their impact on the economic and social development of rural areas. They also discussed the challenges, gaps and practices that are being improved or need to be considered by policymakers to support the economic empowerment of rural women in Georgia. Special attention was given to the FAO gender assessment presentation that identified gender gaps in earnings as well as gender-based segregation in employment. On average, Georgian women earn 75% of what men do. Moreover, there is gender-based segregation in employment, with men being overly-represented in higher-paid managerial and technical positions. The report gives a set of recommendations for FAO, policymakers and program implementers as well as for practitioners and service providers in agriculture and rural development. Read More »
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BFC Agriculture Bulletin
7)
USAID to continue support for agriculture in Georgia
October 15th, 2018, https://kalo.ge/news/view?id=4710
Minister of Agriculture Levan Davitashvili met with representatives of the United States Agency for International Development (USAID) to discuss future cooperation. The sides agreed to further cooperation on agricultural and environmental projects. Specifically, the sides discussed the development of cooperative farms and reforms in the forestry sector as well as the importance of sustainable waste management and natural resources. Read More »
8)
EUR 4 million for organic farming development
October 18th, 2018, http://agenda.ge/en/news/2018/2159
The Austrian Development Agency has allocated approximately EUR 4 million for the development of organic farming in Georgia. One of the planned initiatives includes liberalizing the tax regime on organic production. Deputy Agriculture Minister Nodar Kereselidze noted that organic farming represents an important component of the green economy and that there are numerous opportunities for Georgia with organic production, including high-value export opportunities to the European Union (EU), China and other countries. Read More »
9)
FMO preparing large-scale agricultural assistance program
October 22nd, 2018, http://www.sarke.com/cgi/search/news.asp?Code=10055330
Giorgi Kobulia, Georgia’s Minister of Economy and Sustainable Development, met with Peter van Mierlo, executive director of the Netherlands Development Bank (FMO), to discuss directions for future cooperation. At the meeting, the two agreed that FMO will continue to intensively work on agricultural development in Georgia. Specifically, the two sides agreed to the preparation of a large-scale assistance program that will cover both financial and technical components within the agricultural sphere. FMO has been working with Georgia for 15 years and sees numerous growth opportunities in Georgia’s energy, banking and agricultural sectors. The FMO portfolio in Georgia is currently EUR 350 million. Read More »
Private Sector 10) New online platform supports agriculture October 5th, 2018, http://georgiatoday.ge/news/12582/New-Online-Platform-to-Support-Agriculture
Credo Bank and Traktor Technologies have teamed up to launch www.kalo.ge, an online shop and service platform for farmers. The platform represents a modern approach to providing services to farmers. Specifically, the platform disseminates educational news and video instructions, gives farmers access to agro-consultations and a precise agro-calendar and features a convenient online shop and service delivery option for agricultural products, pesticides, fertilizers and equipment. It also allows users to make orders remotely by using Credo Bank’s Online Credit Purchase function. The platform was created with intensive input from the Zrda Activity of the United State Agency for International Development (USAID) and was funded through a grant provided by the Development Facility of the European Fund for Southeast Europe (EFSE DF). Read More »
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BFC Agriculture Bulletin
11) Historic vineyards have first grape harvest in 400 years October 5th, 2018, http://agenda.ge/en/news/2018/2077
Restored historic terraced vineyards in the mountainous Meskheti region have produced their first grape harvests in 400 years. The restoration of Meskhetian terraces began several years ago and covered a total of 23 hectares of land. The project, a joint endeavor between the state and private sector actors, aims to bring the ancient Meskhetian wine-making tradition back to life. Currently, 12 terraces have been restored, and 25 rare and unique vine varieties have been planted. Another 11 terraces are planned to be restored in the near future. Ancient Meskheti was the home of stonewall terraces designed for vineyards and orchards. The area was once renowned for its unique grapes that made some of the best wines in the country. Read More »
12) Georgian wine exports up 13% October 8th, 2018, http://georgianwine.gov.ge/En/News/18595
Georgia exported 60 million bottles of wine to 60 countries during the January- September 2018 period, a year-on-year increase of 13%. Profit from these wine exports amounted to USD 142 million, a 22% year-on-year increase. The top five importers of Georgian wine were: Russia (37.06 million bottles), Ukraine (6.75 million bottles), China (4.82 million bottles), Kazakhstan (2.66 million bottles) and Poland (2.47 million bottles). In addition to wine, Georgia exported 13.5 million bottles of brandy to 22 countries, a 19% year-on-year increase. Brandy exports amounted to USD 27.6 million in value, a 10% year-on-year increase. Revenues from the export of all types of alcoholic beverages during this period amounted to USD 222.7 million, a 15% year-on-year increase. Read More »
13) Agricultural production decreased in the second quarter October 9th, 2018, http://www.sarke.com/cgi/search/news.asp?Code=10055220
The International School of Economics at Tbilisi State University (ISET) has found that agricultural production in the second quarter decreased by 0.8% year-on-year. At the same time, foreign direct investments in the agricultural sector increased to USD 6.92 million, a three-year high and nearly USD 3 million more year-on-year. Read More »
14) Qatar interested in Georgian agricultural products October 16th, 2018, http://www.sarke.com/cgi/search/news.asp?Code=10055287
Qatar has expressed interest in importing agricultural products from Georgia. Specifically, Qatar is interested in importing live sheep, mutton, beef, fowl, dried fruits, fresh vegetables and honey. Qatar also expressed interest in simplifying the transport of agricultural products between the two countries. Georgia exported USD 725,000 of goods to Qatar through the first six months of 2018. Read More »
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BFC Agriculture Bulletin
15) TBC Bank holds Agro Forum in Abasha October 16th, 2018, http://cbw.ge/banking/tbc-bank-held-agro-forum-for-farmers-in-abasha/
TBC Bank held an Agro Forum for farmers in Abasha, the seventh organized by the bank so far (Telavi, Dedoplistskaro, Sagarejo, Gori, Marneuli and Akhaltsikhe also played host to TBC Bank Agro Forums). As with previous forums, farmers and others interested in agriculture received comprehensive information from various experts. The Abasha forum was divided into two main parts: (1) introducing farmers to a new startup loan product and (2) information about poultry production, including effective production, modern standards and how to effectively manage broiler farms. The Agro Forums are fully-funded and implemented by TBC Bank for the development of Georgia’s agriculture sector. Admission to the forums is free, and topics vary by region. Read More »
16) Record grape harvest generates GEL 300 million October 19th, 2018, http://agenda.ge/en/news/2018/2178
More than 230,000 tons of grapes have been processed during the 2018 grape harvest, generating over GEL 300 million for 22,000 grape growers in Georgia. Agriculture Minister Levan Davitashvili announced that this year’s harvest is a record high for independent Georgia. In total, approximately 280 private companies were involved the harvest. Moreover, this was the first year that grapes were not subsidized by the state. Minister Davitashvili noted that this was due to the strong development of the sector in recent years leading to increased wine exports and the creation of new wine enterprises. Today, there are 800 small- and medium- and large-sized companies registered with the National Wine Agency, up from just 50 in 2012. Read More »
17) Olive harvest underway in Kakheti October 26th, 2018, http://cbw.ge/business/olive-harvest-in-kakheti-oil-and-soap-of-georgian-olive-to-go-to-foreign-markets/
The harvesting of olives has begun on 300 hectares in the village of Saqobo (Kekheti region). The olives will be processed by an olive processing plant opened in 2016 by Dutch-Turkish investments as part of the state-run ‘Co-financing of Agricultural Processing Plants’ program. The plant represents a total investment of GEL 5 million and is equipped with modern technologies capable of producing highquality products. The plant mainly concentrates on the production of olive oil and soaps for foreign markets.
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BFC Agriculture Bulletin
18) A quick glance at the Georgian sheep market October 29th, 2018, http://georgiatoday.ge/news/12962/Sector-at-a-Glance%3A-The-Georgian-Sheep-Market
The Georgian sheep market has seen some changes in the past few years due to increased demand for sheep and sheep products in Arab countries. Although the export of live sheep is now decreasing, the export of sheep meat is on the rise, signaling the development of the sheep market and increased potential for higher value-added goods. 2018 has also seen a dramatic increase in the import of live sheep and sheep meat, which could prove to have a negative impact on domestic production. Additionally, re-exporters must be cautious to not export imported sheep meat as being Georgian. In general, Georgia’s agricultural exports amounted to USD 59 million in September 2018 (down 4% year-on-year), accounting for nearly a quarter of total Georgian export value. Agricultural imports into the country during September 2018 reached USD 88 million (down 7% year-on-year), 16% of total Georgian imports for the month. September also saw Georgia’s export diversification stay at the same level as June 2018 (Herfindahl-Hirschman Index (HHI) =0.11), although export diversification by product slightly decreased. Georgia performed quite well in terms of its import diversification in September 2018, with the HHI index falling to 0.09, mainly due to a shift from the Ukrainian market to other trading partners. Import diversification by product increased, although it has remained more concentrated than usual since July 2018.
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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.