01/2019
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77 Geo r g i a Agriculture Bulletin ‘Take the Harvest’ project to provide co-financing to farmers Public discussion held regarding dairy product regulations Georgian mandarin exports up 25%
Georgian honey enters European markets
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Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4) 5)
‘Take the Harvest’ project to provide co-financing to farmers ....................................................... 2 Georgia to continue fight against stink bug in 2019 ....................................................................... 2 GEL 6.6 million allocated for Georgian wine promotion ................................................................. 2 Dried fruit plant to be constructed in Sagarejo ............................................................................... 2 ‘Georgian Milk’ brand presented .................................................................................................... 3
Foreign Aid ................................................................................................................. 3 6) 7) 8) 9) 10) 11)
Public discussion held regarding dairy product regulations............................................................ 3 USAID to provide technical assistance to agricultural cooperatives ............................................... 3 New energy efficiency loans for agriculture.................................................................................... 4 Adjara, EU and UNDP to boost rural development ......................................................................... 4 FAO, Georgia reach agreement for new EUR 2 million project ....................................................... 4 IFAD interested in Georgia’s continued agricultural development ................................................. 4
Private Sector.............................................................................................................. 5 12) 13) 14) 15) 16) 17) 18)
Wine exports increased in 2018 ...................................................................................................... 5 Georgian mandarin exports up 25% ................................................................................................ 5 EU rejected 7 Georgian hazelnuts shipments in 2018..................................................................... 5 Georgian honey enters European markets ..................................................................................... 6 2018 agricultural review .................................................................................................................. 6 Georgian tea exports increased in 2018.......................................................................................... 6 Co-investment Fund helps establish Georgian Greenhouse Corporation....................................... 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)
‘Take the Harvest’ project to provide co-financing to farmers
December 25th, 2018, https://kalo.ge/news/view?id=5473
The Project Management Agency of the Ministry of Agriculture is scheduled to launch the ‘Take the Harvest’ project in 2019. The project will help farmers acquire agricultural technologies related to crop harvesting via state co-financing. Under the project, beneficiaries are eligible to receive a grant to cover the cost of up to 50% of the value of equipment (up to GEL 150,000). Eligible participants include both individual entrepreneurs and legal commercial entities (including agricultural cooperatives). GEL 4 million has been allocated for the project.
2)
Georgia to continue fight against stink bug in 2019
January 14th, 2019, http://agenda.ge/en/news/2019/102
Georgia has compiled and approved a list of measures to be implemented in the fight against the brown marmorated stink bug in 2019. The measures include more effective communication with the population regarding the problem and planned measures. In particular, farmers will receive SMS messages regarding planned measures for specific days. The brown marmorated stink bug has become a nuisance pest to Georgian farmers since its first appearance in the country in 2015. In 2016, the stink bug destroyed a significant portion of the hazelnut harvest in western Georgia. In 2017, damages were even more devastating and widespread.
3)
GEL 6.6 million allocated for Georgian wine promotion
January 16th, 2019, http://cbw.ge/wine/66-million-gel-allocated-for-georgian-wine-popularization-on-international-market/
The National Wine Agency has allocated GEL 6.6 million for Georgian wine popularization on international markets. Activities to promote Georgian wine include international tastings, competitions, conferences, exhibitions and press tours as well as media campaigns, advertisements, market surveys and cultural events. Last year, the National Wine Agency spent less than GEL 1 million on similar activities; despite this however, Georgian wine exports reached a 30-year high of 86.2 million bottles (valued at USD 203 million).
4)
Dried fruit plant to be constructed in Sagarejo
January 23rd, 2019, http://cbw.ge/business/a-modern-standard-high-technology-dried-fruit-plant-will-be-constructed-sagarejo/
A modern high-tech dried fruit plant will be constructed in Sagarejo (Kakheti region) as part of the staterun ‘Enterprise Georgia’ program. Total investments into the plant are expected to exceed USD 1 million. The plant will produce 120 tons of products per year and sell finished goods in both domestic and European markets. In order to build the new plant, the National State Property Agency handed over a 36,785 square-meter plot of land to LLC Geo-Organics.
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BFC Agriculture Bulletin
5)
‘Georgian Milk’ brand presented
January 23rd, 2019, https://kalo.ge/news/view?id=5708
The ‘Georgian Milk’ brand was presented by the Ministry of Agriculture at a meeting with representatives from 70 dairy companies. The brand will be given to products that are made from raw Georgian milk and contain no milk powder or vegetable oil. The use of the brand will promote the popularity of Georgian milk products and contribute to the credibility of quality milk products in the country. Similar initiatives have proven to be effective and popular in other countries. The meeting was organized by the Swiss Development and Cooperation Agency (SDC) and Mercy Corps’ ‘Caucasus Alliance Program’. Information about the “Georgian Milk” brand will be promoted by the marketing company GMA.
Foreign Aid 6)
Public discussion held regarding dairy product regulations
December 20th, 2018, http://cbw.ge/economy/overview-of-enforcement-challenges-of-technical-regulation-on-milk
The Georgian Farmers’ Association organized a public-private dialogue in December 2018 on the challenges of enforcing technical dairy regulations. The event opened with the first policy brief on the subject and was followed by an open discussion. The main recommendations to emerge from the event were the need to clearly distinguish the roles of the public and private sector and the need to develop a sophisticated approach to solve the problems in the dairy sector. The event was organized within the framework of the European Union (EU)-funded ‘Food and Agriculture SME Support Initiative’ (FASSI) project.
7)
USAID to provide technical assistance to agricultural cooperatives
December 24th, 2018, https://kalo.ge/news/view?id=5463
A memorandum of cooperation was signed between the Agricultural Cooperative Development Agency and the United States Agency for International Development (USAID). The memorandum aims to strengthen the potential of agricultural cooperatives and increase their efficiency and sustainability through joint efforts of the two organizations. Specifically, cooperation efforts will focus on promoting analysis and critical control point systems (HACCP) as well as the preparation of agricultural cooperative marketing materials. The memorandum also provides for individual and/or group trainings for cooperative members.
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BFC Agriculture Bulletin
8)
New energy efficiency loans for agriculture
January 12th, 2019, http://agenda.ge/en/news/2019/87
The Green for Growth Fund (GGF) has provided a loan of USD 10 million to Georgia’s BasisBank to support energy efficiency lending to medium- and large-sized enterprises in the agriculture and construction sectors. The synthetic GEL loan will enable BasisBank to on-lend to eligible Georgian businesses in local currency, thereby avoiding risks associated with currency exchange rates. The loan will be further supported through tailored capacity building activities (via the GGF Technical Assistance Facility) that will enable the lender to better assess the environmental impact of prospective investments. GGF invests in measures designed to cut energy use and CO2 emissions as well as those designed to improve resource efficiency. It currently works in 19 markets across Southeast Europe, the Caucasus, Ukraine, Moldova, the Middle East and North Africa. The Fund provides financing to local partners that then on-lend funds to enterprises and private households. It also provides some direct investments in renewable energy projects.
9)
Adjara, EU and UNDP to boost rural development
January 21st, 2019, http://cbw.ge/economy/ajara-joins-forces-with-eu-and-undp-to-boost-rural-development-2/
The government of the Adjara Autonomous Republic has agreed to contribute EUR 230,000 to enhance the implementation of regional components of the EUR 10 million European Union (EU)-funded ‘ENPARD-3: Improving Rural Development in Georgia’ project, which is aimed at promoting rural development and small- and medium-sized enterprises (SMEs). Under the agreement, the EU will work with the United Nations Development Program (UNDP) to develop economic alternatives outside of agriculture for families in Adjara’s rural areas as well as support the Adjaran government in developing and implementing effective rural development policies. This will help the region provide social and economic progress opportunities for all citizens by giving Adjara families a chance to build sustainable livelihoods where and when farming is no longer profitable.
10) FAO, Georgia reach agreement for new EUR 2 million project January 23rd, 2019, https://kalo.ge/news/view?id=5707
A draft agreement has been signed in Berlin by Minister of Agriculture Levan Davitashvili and Raimund Ilem of the Food and Agriculture Organization of the United Nations (FAO). The agreement is for a EUR 2 million project that will help: (1) further develop rural development policies, (2) improve value chains, (3) encourage the sustainable use of natural resources and (4) develop environmentally-compatible agricultural practices. The project will be financed by the Austrian Development Agency (ADC) through the FAO.
11) IFAD interested in Georgia’s continued agricultural development January 24th, 2019, http://cbw.ge/economy/prime-minister-and-ifad-president-discuss-agricultural-development
Georgian Prime Minister Mamuka Bakhtadze met with Gilbert Houngbo, president of the International Fund for Agricultural Development (IFAD), to discuss possible cooperation in developing Georgia’s agricultural sector. The two sides both believe that agriculture is an important sector for inclusive economic growth in Georgia as it accounts for 40-45% of employment in the country as well as 9% of GDP. An IFAD delegation will be sent to Georgia to discuss more concrete measures in the near future. Page 4
BFC Agriculture Bulletin
Private Sector 12) Wine exports increased in 2018 January 4th, 2019, http://georgianwine.gov.ge/En/News/23618
Georgia exported 86.2 million bottles of wine to 53 countries in 2018, a year-on-year increase of 13% and the highest volume in nearly 30 years. The top five importing countries of Georgian wine were: Russia (53.68 million bottles), Ukraine (10.69 million bottles), China (6.95 million bottles), Kazakhstan (3.60 million bottles) and Poland (3.51 million bottles). In addition to wine, Georgia exported 20 million bottles of brandy to 26 countries (a 9% year-on-year increase) and 422,000 bottles of chacha to 26 countries (a 47% year-on-year increase). Brandy exports were valued at USD 40.7 million (a 3% year-on-year increase), and chacha exports were valued at USD 1.2 million (a 44% year-on-year increase).
13) Georgian mandarin exports up 25% January 4th, 2019, http://agenda.ge/en/news/2019/28
Georgia has exported 26,775 tons of mandarins so far during the 2018-2019 season, a year-on-year growth of 25%. Georgian mandarins were mainly exported to Russia, Ukraine and Armenia. 140 tons of non-standard mandarins have also been delivered to factories for non-food processing. The price of Georgian mandarins varies from GEL 0.40 to GEL 0.70 per kilogram. Adjara’s local government provides a GEL 0.10 subsidy per kilogram for non-standard mandarins to be processed.
14) EU rejected 7 Georgian hazelnuts shipments in 2018 January 21st, 2019, http://agenda.ge/en/news/2018/2723
The European Union (EU) refused seven shipments of Georgian hazelnuts in 2018 due to the discovery of large amounts of aflatoxin. The head of the Food Safety Department for Georgia’s National Food Agency, Giorgi Mikadze, explained that hazelnuts are inspected before export but may become contaminated during transport. Similar rejections occurred in 2017 (nine rejected shipments) and 2016 (nine rejected shipments). Rejected hazelnuts are destroyed or processed as non-food products.
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BFC Agriculture Bulletin
15) Georgian honey enters European markets January 23rd, 2019, http://cbw.ge/economy/first-batch-of-georgian-honey-goes-to-europe/
Two Georgian honey producers presented their products at International Green Week, a one-of-a-kind annual international food, agriculture and gardening exhibition. The event, held earlier this year in Berlin, brought together 1,700 exhibitors from all over the world. While the exhibition featured a range of products this year, it was the first time that European consumers and trade visitors could try Georgian honey. Georgian honey is set to enter European markets under the brand name TAPLI (the Georgian word for honey). The Georgian stand at International Green Week was organized by the Ministry of Agriculture. The TAPLI branding was created within the framework of the EU4Business ‘SME Development and DCFTA in Georgia’ project, which has the aim of assisting Georgian small- and medium-sized enterprises (SMEs) in becoming more competitive and adapting to the new regulatory environment created under the Deep and Comprehensive Free Trade Agreement (DCFTA) with the European Union (EU).
16) 2018 agricultural review January 28th, 2019, http://georgiatoday.ge/news/14259/ISET-Agri-Review%3A-Sector-At-A-Glance
Georgian wine recorded a 30-year high in terms of export volume in 2018, exceeding 86 million bottles exported and reaching a value of USD 200 million. Similarly, Georgia’s food and agricultural exports amounted to nearly USD 1 billion in value, the highest since independence. In addition to increases in wine exports, tobacco exports also increased (240% by value to USD 160 million). Other exports products also increased in 2018, with only hazelnut and live cattle exports showing notably decreases. Although these are record-setting figures, import figures for 2018 were also record-setting. As a result, the trade balance remained virtually unchanged at USD -394 million. Overall, domestic prices for agricultural products remained relatively steady, with the Consumer Price Index (CPI) increasing 1.5% year-on-year. Fish prices in the domestic market were the most notable increase, growing 11.1% year-on-year overall (chiefly due to increases in the price of frozen fish (by 13%) and smoked fish (also by 13%)). International prices continued their downward trend in 2018. The Food Price Index, measured by the Food and Agriculture Organization of the United Nations (FAO), decreased by 4.3% year-on-year. This was mostly driven by weaker prices for vegetable oil (-22.6%), sugar (-12%), dairy (-7.8%) and meat (-3.6%).
17) Georgian tea exports increased in 2018 January 28th, 2019, http://agroface.ge/news/4bde4591-a7b9-4404-a27b-6b9ba337ee25
Exports of Georgian tea increased 50% year-on-year in 2018 and were worth USD 3.6 million. At the same time, tea imports into Georgia amounted to USD 8.9 million.
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BFC Agriculture Bulletin
18) Co-investment Fund helps establish Georgian Greenhouse Corporation January 28th, 2019, https://commersant.ge/en/post/georgian-greenhouse-corporation-40-of-products-are-exported-abroad
According to the Greenhouse Corporation of Georgia, 25% of its production is sold in large retail chains, 35% is sold to wholesalers and 40% is exported. The Corporation received USD 30.2 million in investments from the Co-investment Fund to begin production. The Corporation currently employs 235 people, 95% of which are locals. Its production process is based on high-tech greenhouses from the Netherlands and France. The Greenhouse Corporation of Georgia produces vegetables under the Planta brand and owns a land plot of 12 hectares in the village of Gardabani.
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