02/2019
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78 Geo r g i a Agriculture Bulletin Rural support program resumes after two years Blockchain technology helps boost land registration in Georgia FAO upgrading Georgia’s market information system Agricultural exports reach record high
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Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4) 5)
Rural support program resumes after two years ............................................................................ 2 Agriculture Minister tasked with resolving hazelnut sector issues ................................................. 2 Blockchain technology helps boost land registration in Georgia .................................................... 2 Voluntary certification of nurseries to start this year ..................................................................... 3 New GEL 4 million program to help farmers procure equipment ................................................... 3
Foreign Aid ................................................................................................................. 3 6) 7)
FAO upgrading Georgia’s market information system .................................................................... 3 APMA, CNFA sign cooperation agreement...................................................................................... 4
Private Sector.............................................................................................................. 4 8) 9) 10) 11) 12) 13) 14)
Georgian wine quality suffering from low prices ............................................................................ 4 First agricultural drone registered in Georgia ................................................................................. 4 How Georgia’s wine industry is preparing for climate change........................................................ 5 Challenges in regulating Georgia’s dairy sector .............................................................................. 5 Wine export volumes up 22% ......................................................................................................... 5 Agricultural exports reach record high ............................................................................................ 6 Partnership Fund financing new poultry farm in Kaspi ................................................................... 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)
Rural support program resumes after two years
February 4th, 2019, http://agenda.ge/en/news/2019/333
Georgian Prime Minister Mamuka Bakhtadze has praised the government’s rural support program, calling it “one of [his] favorite programs”. The program is based around rural communities deciding together with government officials what projects they feel would best support their community. By March 1st of this year, 3,700 rural communities will have decided what projects they feel are most important for them. The program was recently resumed following a two-year break. The budget for the program has been doubled to GEL 40 million (approximately USD 15.05 million).
2)
Agriculture Minister tasked with resolving hazelnut sector issues
February 11th, 2019, http://agenda.ge/en/news/2019/403
Georgian Prime Minister Mamuka Bakhtadze has tasked Agriculture Minister Levan Davitashvili with solving the country’s stink bug problem as well as issues related to agricultural fungi – two major challenges facing Georgia’s hazelnut producers. To help in the fight against the brown marmorated stink bug, the government plans to purchase 2,000 modern spray machines for the Georgian Hazelnut Producers Association to use. The Association will also organize meetings with groups of farmers to inform them about planned works and government goals regarding the issue. The government also plans on sending SMS messages to farmers regarding planned measures for each day. The brown marmorated stink bug is widespread in Georgia and a real nuisance to Georgian farmers. In 2016, the bugs destroyed a significant portion of the hazelnut harvest in Western Georgia. In 2017, the damage was even more widespread. The pest was first reported in Georgia in 2015.
3)
Blockchain technology helps boost land registration in Georgia
February 12th, 2019, http://agenda.ge/en/news/2019/410
More than 600,000 private owners of Georgian land have taken advantage of simplified and cheaper procedures to officially register their land since August 1, 2016. This represents a total of approximately 300,000 hectares of land. The simplified and cheaper procedures were part of a government effort to have lands in Georgia registered while also providing greater protection to land owners. The land registration project makes use of blockchain technology to ensure the highest level of protection of the data in the land registration system.
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BFC Agriculture Bulletin
4)
Voluntary certification of nurseries to start this year
February 25th, 2019, https://kalo.ge/news/view?id=5799
Voluntary certification of planting materials at nurseries will start this year and will be administered by the Agricultural Research Center. As part of the certification process, specialists will conduct field inspections and issue certificates based on a variety of laboratory analyses. The issuance of these certificates will help Georgian nurseries comply with international standards. The certification process is regulated by the ‘Law on Access and Maturity for Distribution of Agricultural Cultures of Subordinate Certification’. The law entered into force on June 1, 2017 and regulates the production, reproduction, processing, certification, realization, traceability and localization of seeds and planting materials in Georgia.
5)
New GEL 4 million program to help farmers procure equipment
February 26th, 2019, http://agenda.ge/en/news/2019/528
The government of Georgia is launching a new GEL 4 million program to help Georgian farmers purchase agricultural equipment. The co-financing program will be carried out by the United Agricultural Project. Prime Minister Mamuka Bakhtadze hopes that this new program will help Georgia’s agricultural sector continue its growth, especially as related to exports. The Prime Minister added that the government plans on creating more programs in the near future to further support Georgia’s agricultural sector.
Foreign Aid 6)
FAO upgrading Georgia’s market information system
February 14th, 2019, http://enpard.ge/en/fao-eu-support-improvement-market-information-system/
In 2015, the Food and Agriculture Organization of the United Nations (FAO) and Georgia’s Ministry of Agriculture developed a Market Information System for agricultural products. The system monitors the market prices of more than 100 agricultural products in 59 municipalities across Georgia. Data-collectors in each region gather prices on each agricultural product on a weekly basis and upload the data to an online database, providing users across the country with the latest price-related information and the Ministry of Agriculture important information for policymaking. The FAO is now working to upgrade the systems by improving data collection and analysis processes. Specifically, the FAO has developed an online application to collect necessary data electronically through tablets and to transfer the collected data automatically to the Ministry’s main server. These upgrades significantly simplify the monitoring process and reduce the chance of mistakes. Training on how to use the new processes has already been conducted in the municipalities of Shida Kartli and MtskhetaMtianeti. The trainings will soon be conducted in other municipalities of Georgia. This project is being implemented with support from the European Union (EU) through the European Neighborhood Program for Agriculture and Rural Development (ENPARD) program.
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BFC Agriculture Bulletin
7)
APMA, CNFA sign cooperation agreement
February 26th, 2019, https://kalo.ge/news/view?id=5814
Georgia’s Agriculture Projects Management Agency (APMA) and Cultivating New Frontiers in Agriculture (CNFA) Georgia have signed a cooperation agreement for a program that will help introduce international food safety and bio production standards into agricultural value chains in Georgia as well as help with marketing and branding of agricultural products. The United States Agency for International Development (USAID) will be responsible for implementing the program, including providing training to Georgian enterprises. USAID will also finance 50% of marketing and branding services provided under the program. For its part, APMA has committed to providing information on international systems and standards as well as funding for bio-certification and marketing. APMA will also help coordinate and assist with the trainings.
Private Sector 8)
Georgian wine quality suffering from low prices
January 30th, 2019, https://commersant.ge/en/post/in-the-last-two-years-winemakers-have-been-competing-in-price
Georgia’s wine industry has been experiencing problems in exporting products over the past two years. The problems have arisen from trying to find the right price point for Georgian wine. While some winemakers want to sell products for USD 10 per bottle, others think that the best way to establish a strong foothold is to offer products for USD 1 per bottle. Such a low price, however, has resulted in diminished quality. Many experts argue that this is not the proper solution as Georgia is simply not capable of keeping up with the mass production of powerhouse grape producers like Spain. Instead, they argue that the Georgian wine industry needs to concentrate on higher-priced market segments. To accomplish this, however, the government will need to tighten control over Georgian wine quality, and the private wine sector will need to come to a mutually-beneficial understanding that more and cheaper will hurt them in the long run.
9)
First agricultural drone registered in Georgia
February 1st, 2019, http://agenda.ge/en/news/2019/315
The first agricultural drone in Georgia has been registered, ushering in a new level of efficiency and manageability into the Georgian agricultural sector. Specifically, the drone is expected to aid in the aerial application of pesticides, fertilizers and herbicides. The drone is also capable of taking spectral images that allow for the analysis and monitoring of soil and plant structures. The use of a drone allows for pesticides, fertilizers and herbicides to be introduced in a much more precise manner, helping avoid pollution and reduce overall usage. A drone is also capable of covering areas 40-60 times faster than currently used methods.
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BFC Agriculture Bulletin
10) How Georgia’s wine industry is preparing for climate change February 1st, 2019, http://www.investor.ge/article.php?art=5
Every year climate change causes billions of dollars of damage to wine industries, with Georgia among the most-affected wine producing countries. In addition to increasing average temperatures, the Georgian wine industry is predicted to also face reduced annual precipitation and decreased humidity as a result of climate change. To combat these effects on Georgian wine, both wine producers and the government of Georgia are taking action. Many wine producers in the country have introduced drip irrigation systems to reduce water usage and increase water efficiency. Some growers are even considering moving to cooler areas, changing fertilizer regimes and switching to more climate-resistant varieties. For its part, the government is supporting minimum grape prices (when necessary), offering compensation for weather damages and providing loan assistance for irrigation installations and new plantings. The government is also working with the European Union (EU) and the Austrian Development Program to establish a network of agro-metrology stations to better inform growers about wind speeds, air pressure, sun radiation, temperature and humidity levels. The Georgian wine industry has seen the potential impact of climate change and is working to find ways to ensure its effect in the future is minimal. Georgia gave the world wine approximately 8,000 years ago; now, Georgia is looking to safeguard this product from climate change.
11) Challenges in regulating Georgia’s dairy sector February 4th, 2019, http://georgiatoday.ge/news/14344/We-Don%27t-Need-No-Regulation%3A-On-Georgia%E2%80%99s
Dairy production is a hot topic in Georgia right now, especially following recent changes in state regulations governing the sector. The most widely-discussed of these changes defines terms like “butter” and “cheese” as products not containing milk powder or vegetable fat. While this represents a leap forward for consumers, the execution of this regulation is not without its own set of challenges, and Georgian consumers are still offered products not meeting the new standards of dairy products. The biggest challenge is the large number of unregistered family farms. According to sector experts, up to 90% of cheese is produced by unregistered households. These unregistered producers usually sell their unlabeled produce (mostly cheese) at open markets. Another challenge is related to registered producers who find different ways to overcome regulations, mostly through confusing and vague labeling. By doing so, the producer does not explicitly violate the law, but consumers are typically fooled into buying a product they think is a dairy product. Finally, consumers also represent a challenge as they rarely report expired and/or spoiled products to the National Food Agency (NFA). Although Georgia’s dairy sector is developing, it remains clear that much work remains to be done if it is to reach its full potential.
12) Wine export volumes up 22% February 5th, 2019, http://agenda.ge/en/news/2019/348
Georgia exported 6.25 million bottles of wine to 24 countries in January 2019, a year-on-year increase of 22%. This represents USD 15.2 million in value, a year-on-year increase of 33%. The top five importing countries of Georgian wine were: Russia (4,602,218 bottles), Ukraine (553,164 bottles), China (281,229 bottles), Poland (268,724 bottles) and Kazakhstan (156,120 bottles). In addition to wine, Georgia exported 2.2 million bottles of brandy and 4,400 bottles of Chacha. In total, Georgia exported USD 23 million worth of alcoholic beverages in January 2019. Page 5
BFC Agriculture Bulletin
13) Agricultural exports reach record high February 8th, 2019, http://agenda.ge/en/news/2019/388
In 2018, USD 959.2 million worth of agricultural products were exported from Georgia, up 23.2% compared to 2017. This also represents a record high in the country’s history. The top importers of Georgian agricultural products were Azerbaijan, the European Union (EU), Kazakhstan and Ukraine. The top exported goods were alcoholic drinks, non-alcoholic beverages (including water) and sheep and goat meat.
14) Partnership Fund financing new poultry farm in Kaspi February 19th, 2019, http://cbw.ge/economy/partnership-fund-to-finance-poultry-farm-in-kaspi-with-1-5-million-usd/
A new poultry farm is set to be built in the village of Metekhi (Kaspi municipality) this spring. The farm will grow broiler chickens and supply both raw and frozen chicken meat to Georgian markets. Once operational, the farm is expected to produce 250 tons of chicken meat. A total investment of USD 5 million is being made in the construction of the farm, including USD 1.5 million from the Partnership Fund. The farm will be owned and operated by GLC, a company that began operations in 2008 and already owns farms that supply chicken meat in Armenia and Azerbaijan.
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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.