12/2018
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76 Ge o r g i a Agriculture Bulletin 39 tea plantation rehabilitation projects financed
GEL 7 million for promoting Georgian wine in 2019
FAO, ADC to launch new development project
8,595 tons of mandarins exported this year
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Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4) 5) 6) 7)
State agricultural funding to increase 22% in 2019......................................................................... 2 39 tea plantation rehabilitation projects financed.......................................................................... 2 GEL 7 million for promoting Georgian wine in 2019 ....................................................................... 2 Marmorated stink bug a short-term, albeit major challenge.......................................................... 2 Agricultural land sale moratorium declared unconstitutional ........................................................ 2 ‘Produce in Georgia’ program has supported 5,313 projects ......................................................... 3 Georgia to launch organic certificate program in 2019 .................................................................. 3
Foreign Aid ................................................................................................................. 3 8) 9) 10) 11) 12) 13)
19th ENPARD Stakeholders’ Meeting held ...................................................................................... 3 Informational event highlights EU4Business-EBRD credit line ........................................................ 3 USDA to implement ‘Food for Progress’ project ............................................................................. 4 Project to develop mountain tourism and organic agriculture ....................................................... 4 FAO, ADC to launch new development project ............................................................................... 4 Foreigners obligated to cultivate agricultural lands they own ........................................................ 4
Private Sector.............................................................................................................. 5 14) 15) 16) 17) 18)
8,595 tons of mandarins exported this year ................................................................................... 5 Georgian nut prices remain low ...................................................................................................... 5 Georgian olive oil, whisky and tea to be exported to China ........................................................... 5 Wine exports up 11% by volume, 19% by value.............................................................................. 5 Agrofood production exports to approach USD 1 billion ................................................................ 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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State Initiatives 1)
State agricultural funding to increase 22% in 2019
December 3rd, 2018, http://agroface.ge/news/57447cf6-cea8-4138-acd4-62d9be7595bb
The 2019 state budget is expected to be approved by the end of year and is likely to include GEL 332 million for the Ministry of Agriculture. GEL 285 million has been earmarked for direct spending in the agricultural sector, while the remaining GEL 47 million will be used for environmental protection. In total, this represents a 22% budgetary increase for agriculture.
2)
39 tea plantation rehabilitation projects financed
December 5th, 2018, http://agroface.ge/news/34d93e0a-0bd5-4458-9e97-a8923879e9c0
According to the Agriculture Projects Management Agency (APMA), 39 projects have been financed for the rehabilitation of a total of 907 hectares of tea plantations. This has resulted in the fulltime employment of 310 people and the seasonal employment of 620 more.
3)
GEL 7 million for promoting Georgian wine in 2019
December 7th, 2018, http://georgiatoday.ge/news/13609/Investing-in-the-Promotion-of-Georgian-Wine
According to the National Wine Agency, GEL 7 million will be spent in 2019 marketing activities to promote Georgian wine. Strategic export markets for Georgian wine include Germany, South Korea and Sweden, places where Georgian companies plan on participating in activities to raise awareness of their brands. In January-November 2018, 78 million bottles of Georgian wine were exported to 53 countries, an 11% year-on-year increase.
4)
Marmorated stink bug a short-term, albeit major challenge
December 12th, 2018, http://www.sarke.com/cgi/search/news.asp?Code=10055759
Minister of Agriculture Levan Davitashvili has declared that the marmorated stink bug represents one of the largest challenges in Georgia’s agricultural sector. Nevertheless, the Minister insisted that the problem is only short-term as leading entomologists believe that they will be able to solve this issue within 2-3 years. The Minister also noted that combative measures already undertaken have the situation under control.
5)
Agricultural land sale moratorium declared unconstitutional
December 12th, 2018, http://cbw.ge/economy/foreign-persons-are-no-longer-prohibited-to-purchase-agricultural-lands/
The Constitutional Court of Georgia has declared that the moratorium prohibiting foreign persons from purchasing agricultural land is unconstitutional. The Court ruled on the case, brought by Greek citizens, without reviewing the specific content of the case as it had previously on the same matter in both 2012 and 2014. Page 2
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6)
‘Produce in Georgia’ program has supported 5,313 projects
December 12th, 2018, http://cbw.ge/business/produce-in-georgia-initiative-supported-5313-region-projects-so-far/
The ‘Produce in Georgia’ program has supported a total of 5,313 regional projects with a total investment value of GEL 50 million so far. This translates to a total of approximately 8,412 beneficiaries. The program began in 2015 as a way to support micro- and small-sized enterprises. It has been vital to the sustainability and development of certain regions in the country.
7)
Georgia to launch organic certificate program in 2019
December 13th, 2018, http://agenda.ge/en/news/2018/2650
As part of Georgia’s Green Policy, the country will launch an organic certificate program in 2019. Georgian authorities are hoping to harness the fragmented assistance from international donor organizations into a larger-scale effort that includes not only certification but also financing assistance and tax benefits. They believe organic production has a large potential in Georgia, especially given the increasing popularity of organic products in international markets.
Foreign Aid 8)
19th ENPARD Stakeholders’ Meeting held
December 3rd, 2018, http://www.fao.org/georgia/news/detail-events/en/c/1173837/
The Food and Agriculture Organization of the United Nations (FAO) has brought together stakeholders and implementing partners of the European Neighborhood Program for Agriculture and Rural Development (ENPARD) for the 19th ENPARD Stakeholders’ Meeting. Discussions at the meeting revolved around updates of European Union (EU)-supported agricultural and rural development projects as well as opportunities for the trade of Georgian agricultural products throughout the world. Specifically, attendees discussed the Agriculture Development and Rural Development Strategy and its Action Plan, the upcoming merge of the Agricultural Cooperatives Development Agency (ACDA) with the Agricultural Projects Management Agency (APMA), support for agricultural cooperatives in the milk and wine sectors, measures being undertaken to increase Georgia’s agricultural export potential and ways of integrating climate actions into ENPARD’s development projects. Special attention was paid to the topic of the day – the trade of agricultural products. Attendees discussed ways to develop trade infrastructure, support measures for new trade and production opportunities and ways to increase logistics capacity in the country. They also discussed the efficiency of the trade missions in Georgia, focusing on the results of the recent Dutch trade mission.
9)
Informational event highlights EU4Business-EBRD credit line
December 6th, 2018, http://eu4business.eu/news/bank-georgia-hosts-information
The Bank of Georgia recently hosted an informational event to present opportunities for loans and grants provided under a new EU4Business-EBRD credit line. The EU4Business-EBRD credit line is intended to help companies invest in processes and equipment that both: (1) help them develop their capacity and competiveness and (2) help them align with relevant European Union (EU) directives. This includes investments that modernize equipment, foster workplace safety practices and/or upgrade sanitary conditions. Within the EU4Business initiative, financing offered by the European Bank for Page 3
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Reconstruction and Development (EBRD) is complemented by an EU grant of up to 15% and also includes technical assistance from local and international experts. In total, 150 people from a broad spectrum of commercial and industrial companies attended the informational event.
10) USDA to implement ‘Food for Progress’ project December 10th, 2018, http://georgiatoday.ge/news/13630/Developing-the-Agriculture-Industry-in-Georgia
The United States Department of Agriculture (USDA) will implement a new project in Georgia with the help of the Land O'Lakes International Development organization. The five-year USD 17 million ‘Food for Progress’ project is expected to focus on the development of the livestock sector. It will be implemented by the Ministry of Agriculture, the National Food Agency, the Georgian Innovations and Technologies Agency, the Georgian Farmers Association and various private sector and non-governmental organizations.
11) Project to develop mountain tourism and organic agriculture December 12th, 2018, http://agenda.ge/en/news/2018/2636
The European Union (EU), Sweden and Austria are teaming up to help develop mountain tourism and organic agriculture in the mountainous areas of Georgia’s Zemo Svaneti, Racha-Lechkhumi and Kvemo Svaneti and Imereti regions. The new ‘Green Economy: Sustainable Mountain Tourism and Organic Agriculture’ (GRETA) project is expected to start in 2019 and will run for four years. It has a total budget of EUR 6.8 million, including EUR 3 million from the European Commission, EUR 2.8 million from Sweden and EUR 1 million from the Austrian Development Cooperation (ADC). The project is expected to boost economic development and raise incomes in mountainous regions while also fully-respecting and preserving natural beauty and cultural heritage.
12) FAO, ADC to launch new development project December 13th, 2018, http://www.fao.org/georgia/news/detail-events/en/c/1174839/
A funding agreement for a four-year agricultural and rural development project has been reached between the Austrian Development Cooperation (ADC) and the Food and Agriculture Organization of the United Nations (FAO). The EUR 2 million project aims to improve rural policies, strengthen value chains, instill sustainable management for natural resources, develop environmentally-friendly practices and improve the capacity of Georgia’s Ministry of Agriculture. The expected results of the project will make Georgia’s agricultural producers more competitive as well as lessen climate change damages from agricultural production.
13) Foreigners obligated to cultivate agricultural lands they own December 19th, 2018, https://commersant.ge/en/post/foreigners-owning-agrarian-lands
The amount of agricultural land in Georgia is relatively small, and foreigners currently own 45,00050,000 hectares of it. The problem arises not in foreign ownership but in the fact that there are numerous cases where foreigners who own large plots of agricultural land do not cultivate it. The government is now discussing measures to impose sanctions on foreign owners of agricultural lands who do cultivate their land, including possible confiscation. The government is considering similar, albeit less severe measures for Georgian citizens as well. Page 4
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Private Sector 14) 8,595 tons of mandarins exported this year December 4th, 2018, http://agenda.ge/en/news/2018/2566
As of December 3, 2018, Georgia has exported 8,595 tons of mandarins this year. Georgian mandarins have been mainly exported to Armenia, Belarus, Kazakhstan, Kyrgyzstan, Latvia, Russia, Ukraine and Uzbekistan. The price of the mandarins varies from GEL 0.40 to GEL 0.70. It is important to note that the government is currently subsidizing the cost of mandarins as a way to support fruit growers and processing companies.
15) Georgian nut prices remain low December 4th, 2018, https://commersant.ge/en/post/nut-producers-complain-about-low-prices
The price for Georgian nuts traditionally experiences an uptick at this time of year; however, this has not been the case this year. Currently, nuts from Western Georgia are getting a price of GEL 2.5-5.5 per kilogram, while the higher-quality nuts of Eastern Georgia are getting a price of approximately GEL 7. The reason for the prices not increasing as usual is due to two factors: (1) the relative low quality of Georgian nuts this year and (2) the low quality of Turkish nuts this year driving down nut prices worldwide.
16) Georgian olive oil, whisky and tea to be exported to China December 5th, 2018, http://agenda.ge/en/news/2018/2580
Georgia is increasing its role as a trade partner with China by adding new products to its exports to the Asian country. After successfully exporting wine to China, the Partnership Fund has announced that olive oil, whisky and tea will be Georgia’s next export products to reach Chinese markets. The decision to export new Georgian products to China came at a Chinese forum for trade and economic relations in which 15 Georgian companies were represented. Georgian wine is becoming increasingly popular in China, with China becoming the third-largest importer of Georgian wine. Many hope that these new Georgian products entering the Chinese market will find similar success.
17) Wine exports up 11% by volume, 19% by value December 5th, 2018, http://georgianwine.gov.ge/En/News/21617
Georgia exported 78 million bottles of wine to 53 countries during the January-November 2018 period, a year-on-year increase of 11%. Profit from these wine exports amounted to USD 184 million, a 19% yearon-year increase. The top five importers of Georgian wine were: Russia (48.59 million bottles), Ukraine (9.53 million bottles), China (6.28 million bottles), Kazakhstan (3.40 million bottles) and Poland (3.03 million bottles). In addition to wine, Georgia exported 17.8 million bottles of brandy and 360,000 bottles of chacha. In total, Georgia exported USD 281 million worth of alcoholic beverages in the January-November 2018 period. Page 5
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18) Agrofood production exports to approach USD 1 billion December 12th, 2018, http://www.sarke.com/cgi/search/news.asp?Code=10055757
The export of agrofood production in Georgia is expected to reach nearly USD 1 billion for 2018. This represents important growth for the country, which currently has a negative trade balance of USD 900 million in agrofood production.
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