11/2018
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75 Geo r g i a Agriculture Bulletin Georgia to revive village support program
CEB approves EUR 5 million loan to Credo
Georgian wine exports up 12%
Citrus exports increase 11 times
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Contents State Initiatives ........................................................................................................... 2 1) 2) 3)
Georgia to revive village support program...................................................................................... 2 Expo Georgia hosts international agriculture exhibition................................................................. 2 New fruit processing factory opens in Kareli................................................................................... 2
Foreign Aid ................................................................................................................. 2 4) 5) 6) 7) 8) 9)
IFAD project to launch new livestock program ............................................................................... 2 CEB approves EUR 5 million loan to Credo ...................................................................................... 3 USAID ZRDA and BP Georgia sign cooperation agreement ............................................................. 3 New five-year USAID program to launch......................................................................................... 3 Livestock modernization programs set to begin in 2019 ................................................................ 3 New co-financing program for young entrepreneurs ..................................................................... 4
Private Sector.............................................................................................................. 4 10) 11) 12) 13) 14) 15) 16) 17)
Georgian wine exports up 12% ....................................................................................................... 4 SDC, UNDP to support agricultural vocational education ............................................................... 4 Fruit prices down 9.9% over last year ............................................................................................. 5 Why the agricultural sector is not developing ................................................................................ 5 Citrus exports increase 11 times ..................................................................................................... 5 Domestically-produced apples set to replace imported ones ........................................................ 6 Slaughterhouse, cold storage and elevator data............................................................................. 6 Milk, meat and egg production up in third quarter ........................................................................ 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)
Georgia to revive village support program
November 2nd, 2018, http://cbw.ge/economy/state-budget-to-finance-village-support-program-by-20-million-gel/
The government of Georgia is planning on reviving its village support program in 2019. Maia Tskitishvili, Minister of Regional Development and Infrastructure, has stated that the program will focus on financing infrastructure projects such as arranging parks, streets and cleaning sewage channels. The program will be supported with GEL 20 million in 2019.
2)
2) Expo Georgia hosts international agriculture exhibition
November 21st, 2018, http://georgiatoday.ge/news/13294/Expo-Georgia-Holds-International-Exhibition-of-Agriculture
Expo Georgia held an international exhibition of agriculture at its pavilion in Tbilisi. The three-day event was supported by the Ministry of Agriculture and showcased agricultural machinery, packaging material and equipment, greenhouse technologies and equipment, irrigation systems, laboratory equipment, planting and seed materials, fertilizers and pesticides, modern technologies and consulting services. More than 120 companies from 14 countries took part in the exhibition. Read More Âť
3)
New fruit processing factory opens in Kareli
November 26th, 2018, http://georgiatoday.ge/news/13389/New-Fruit-Processing-Factory-Opens-in-Central-Georgia
A new fruit processing factory has been opened in the village of Sagolasheni (Kareli municipality) with financial support from the state. The factory, equipped with modern technologies, employs 29 locals and is capable of processing 10 tons of raw materials per day into jams, fruit purees and other fruitbased products. Initially, production will be sold on the local market; however, the factory plans to implement ISO 22:000 international standards and eventually export production as well. In total, GEL 1,012,000 (USD 381,041) was invested in the new factory, GEL 405,000 (USD 152,341) of which was a grant and GEL 507,000 (USD 190,709) of which was in the form of preferential agro-credit.
Foreign Aid 4)
IFAD project to launch new livestock program
November 12th, 2018, http://www.sarke.com/cgi/search/news.asp?Code=10055508
Georgian governments declared that within the project of International Fund for Agriculture Development (IFAD), work is underway on launch of the new program in livestock farming. Estimated cost of the program amounts to 60 million lari. The government indicated that resource, necessary for this direction in next year, will be envisaged by the 3rd submission of draft of the state budget-2019 to the Parliament.
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BFC Agriculture Bulletin
5)
CEB approves EUR 5 million loan to Credo
November 16th, 2018, https://coebank.org/en/news-and-publications/news/ceb-supports-micro-enterprises-georgia/
The Council of Europe Development Bank (CEB) has approved a EUR 5 million loan to JSC Credo Bank (Credo) to provide credit to finance microenterprise investments in Georgia. CEB hopes that the loan will help boost the development of microenterprises in the country. Through Credo branches, CEB will extend financing to farmers running small agricultural businesses as well as small business owners in rural areas. It is expected that approximately 3,000 microenterprises will benefit from the funds, including many low-income self-employed entrepreneurs that often do not meet traditional banking requirements. This is second CEB loan extended to Credo for the financing of small businesses in Georgia as a similar project was successfully completed in 2016. Providing small businesses with access to financing is of major importance when it comes to promoting financial inclusion and strengthening social cohesion. To help achieve these goals, CEB aims to continue to find ways to help unlock access to financing for larger numbers of microenterprises and entrepreneurs.
6)
USAID ZRDA and BP Georgia sign cooperation agreement
November 19th, 2018, http://cbw.ge/economy/bp-georgia-and-usaid-zrda-activity-to-support-communities-across-georgia/
USAID Zrda, an economic growth program, and BP Georgia have signed an agreement to improve cooperation in 41 villages where their activities currently overlap. The agreement will work to ensure that joint ventures respond to the needs of the local population, support community development initiatives and positively impact communities by creating jobs and income-generation opportunities. Focus areas of the partnership are agriculture, business development and community development.
7)
New five-year USAID program to launch
November 20th, 2018, http://agenda.ge/en/news/2018/2439
The United States Agency for International Development (USAID) is launching a new program to support agricultural business development in Georgia’s western city of Kutaisi. The five-year program is expected to create 3,000 new jobs, increase sales by USD 60 million and leverage more than USD 7 million of increased investments from the private sector. Specifically, the program will mobilize former USAID partners and leading Georgian agribusinesses to share their knowledge and skills with emerging Georgian enterprises.
8)
Livestock modernization programs set to begin in 2019
November 27th, 2018, https://kalo.ge/news/view?id=5200
Georgia is preparing for massive modernization to breeding programs around the country. The programs, set to begin in 2019, are being implemented in cooperation with the International Foundation for Agricultural Development (IFAD). The programs will help solve have a number problems, including bringing in new varieties of livestock, providing co-financing to breeders and livestock producers and sharing knowledge with breeders and producers about modern techniques in animal husbandry. There are two main directions for the programs: (1) setting up and properly arranging livestock farms and (2) providing mechanisms for breeder and producers to update technology and know-how. In the end, it is hoped that the programs will help improve the living standards of the rural population. Page 3
BFC Agriculture Bulletin
9)
New co-financing program for young entrepreneurs
November 27th, 2018, http://agroface.ge/news/a8995cf3-72d1-4b78-9684-e6e5ef614179
The Ministry of Agriculture, with support from the Danish government, has initiated the ‘Young Entrepreneur’ program. The program will provide funding to help young entrepreneurs (aged 18-40) that are registered in Georgia. Specifically, the program will provide funding only for new businesses, both agricultural and non-agricultural. Successful applicants will receive financing of up to 40% of the total cost of a project, up to GEL 60,000. The other 60% can be either own funds or credit obtained from a financial institution, including preferential agro-credit. The program has a total budget of USD 4,110,000.
Private Sector 10) Georgian wine exports up 12% November 5th, 2018, http://georgianwine.gov.ge/En/News/18611
Georgia exported 68.3 million bottles of wine to 53 countries during the January-October 2018 period, a year-on-year increase of 12%. Profit from these wine exports amounted to USD 162 million. The top five importers of Georgian wine were: Russia (42.34 million bottles), Ukraine (8.35 million bottles), China (5.41 million bottles), Kazakhstan (3.11 million bottles) and Poland (2.79 million bottles). In addition to wine, Georgia exported 15.7 million bottles of brandy to 22 countries, a 15% year-on-year increase. Brandy exports amounted to USD 32.2 million in value, an 8% year-on-year increase. Revenues from the export of all types of alcoholic beverages during this period amounted to USD 252.1 million, a 13% year-on-year increase.
11) SDC, UNDP to support agricultural vocational education November 5th, 2018, http://georgiatoday.ge/news/13060/Vocational-Education-%26-Training-to-Get-More-Support
The Swiss Agency for Development and Cooperation (SDC), United Nations Development Program (UNDP) and Ministries of Education and Agriculture have signed onto a new initiative to support vocational education and training in agriculture. With a budget of more than USD 6 million, the fouryear (2018-2022) initiative will offer Georgian farmers new educational opportunities and extension services. The initiative will be implemented in close partnership with the government of Georgia, the Georgian Farmers’ Association, vocational colleges, public and private agriculture extension centers, universities and local communities.
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BFC Agriculture Bulletin
12) Fruit prices down 9.9% over last year November 7th, 2018, http://cbw.ge/economy/79341prices-for-fruit-and-grapes-dropped-by-9-9/
In September 2018, the prices for fruits dropped by 9.9% compared to September 2017. Specifically, prices declined for plums (-35%), kiwi (-32%), apples (-24%), pears (-17%), lemons (-16%) and grapes (14%). The low prices of fruit are thought to be the result of a comparatively good harvest resulting in increased production in 2018. In 2017, a spring frost followed by a summer drought created unfavorable weather conditions for fruit production. Additionally, the invasion of the Asian stink bug damaged a large number of crops last year. These events resulted in a significant annual decrease in production in 2017. As of today, more than 230,000 tons of grapes have been processed, a 72% increase compared to last year (134,000 tons). Revenues of Georgian grape growers this year are also higher compared to last year, exceeding GEL 300 million. A similar trend is also true with many other fruits.
13) Why the agricultural sector is not developing November 13th, 2018, http://www.sarke.com/cgi/search/news.asp?Code=10055512
The government of Georgia spent more than GEL 1 billion between 2013 and 2018 to support the development of the agricultural sector. Despite this however, the average growth rate of the sector between 2014 and 2018 is -0.4%. Moreover, agriculture’s share in the economy has dropped from 28% in 1998 to only 8% this year, and the total value of production has dropped from GEL 1.9 billion in 2003 to GEL 1.8 billion in 2017. Some experts believe the reason for the decline is wrong economic policies. Specifically, they point to the ban on the sale of land to foreigners, small land sites and a lack of knowledge about proper modern agricultural techniques. The current dilemma to resolving this situation is figuring out how to consolidate land into larger agricultural holdings while at the same time helping other sectors of the economy develop (in order to create new employment opportunities for those displaced from agricultural production). Experts argue that this must happen at a much quicker pace than is currently happening if the country’s economy is to reach its full potential.
14) Citrus exports increase 11 times November 13th, 2018, http://cbw.ge/economy/citrus-exports-grow-11-times/
According to the Ministry of Agriculture, citrus exports have grown 11 times year-on-year. For the period of November 1-11, Georgia exported 610 tons of citrus in 2018, up from 55 tons in 2017. For the period of September 1-November 11, Georgia exported 718 tons of citrus in 2018, up from 106 tons in 2017. This boom in exports is due to one of the best harvests in recent years. Export markets for Georgian citrus remain unchanged from last year, with most citrus exports going to Armenia, Kazakhstan, Russia and Ukraine.
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15) Domestically-produced apples set to replace imported ones November 15th, 2018, https://commersant.ge/en/post/imported-apples-in-georgia-will-be-replaced-with-local
Imported apple varieties in Georgian markets are expected to be replaced by domestically-produced varieties in the coming years. In fact, experts point out that this trend has already begun, as can be seen in the decline of the wholesale price of apples from GEL 1.5 last year to GEL 0.70-1 this year. One of the companies leading the charge to replace imported apples with domestically-produced ones is Alioni. Alioni grows apples on 20 hectares in Tsinandali, from which 600 tons were harvested this year and sold in local markets. Alioni also plans to launch apple processing capacities in the near future to begin manufacturing vinegar.
16) Slaughterhouse, cold storage and elevator data November 19th, 2018, https://www.finchannel.com/world/georgia/76566-livestock-slaughterhouses-elevators-and-cold
According to a Geostat survery, there were 100 livestock and poultry slaughterhouses active in Georgia in the third quarter of 2018, with 21% in Kvemo Kartli, 15% in Kakheti, 14% in Shida Kartli, 12% in Imereti and 10% in Samegrelo-Zemo Svaneti. In total, 186,800 heads of livestock were slaughtered during this period. Slaughterhouse services were provided to 11,500 people, 40% of which were households. Also during the third quarter, there were 51 cold storage facilities active in Georgia, most which are located Shida Kartli (35%) and Tbilisi (18%). Cold storage services were provided to 339 customers during this period. In total, 51,000 tons of products were stored in cold storage facilities, with 57% being chicken meat, 16.8% being other meat or meat products, 9.3% being fruits and vegetables and 8.9% being fish. GEL 19.2 million in products were sold by cold storage facilities in the third quarter. Finally, 24 elevators were active in Georgia during this same period, most of which are located in Kvemo Kartli (38%), ShidaKartli (21%) and Tbilisi (21%). These services were used by 15 customers to store 143,900 tons of production, 77.8% of which was wheat. In total, GEL 60.6 million in products were sold by elevators in the third quarter.
17) Milk, meat and egg production up in third quarter November 20th, 2018, http://www.sarke.com/cgi/search/news.asp?Code=10055581
According to recent estimates released by Sakstat, meat production in the third quarter of this year amounted to 14,500 tons, a year-on-year increase of 2.1%. It was also estimated that 162.1 million liters of milk were produced (up 10.4% year-on-year) as were 148 million eggs (up 3.2% year-on-year). The number of animals in the country was also included as part of the estimate: cattle – down 4.4% year-onyear to 923,000; poultry – down 4.1% year-on-year to 9.6 million; pigs – up 3.2% year-on-year to 237,600; and sheep and goat – up 4.0% year-on-year to 980,000. Numbers for the export of live animals included: 670,700 poultry (down 12.0% year-on-year), 46,300 sheep and goats (down 9.0% year-on-year) and 34,700 cattle (down 18.0% year-on-year). No pigs were exported during the third quarter. At the same time, the import of live animals included: 424,300 poultry (down 11.5% year-on-year), 11,500 pigs (up 12.7% year-on-year), 900 sheep and goats (up 12.5% year-on-year) and 300 cattle (down 4.3 times year-on-year).
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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.