#81 Georgia Agriculture Bulletin, BFC

05/2019

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81 Geo r g i a Agriculture Bulletin Parliament approves land ownership legislation at first reading Cheese Master program created within UNDP project USDA to invest USD 10 million in livestock development in Georgia Georgian female winemakers participate at Women in Wine Expo 2019

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Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4) 5) 6)

Parliament approves land ownership legislation at first reading.................................................... 2 Increased co-financing available under Plant the Future program ................................................. 2 Biosafety points set up to reduce the spread of diseases ............................................................... 2 Agricultural Insurance Program has issued 4,217 polices so far in 2019 ........................................ 2 Grant program to help IDPs get started in agriculture .................................................................... 3 Project bolsters Japanese interest in Georgian wine ...................................................................... 3

Foreign Aid ................................................................................................................. 3 7) 8) 9) 10) 11) 12)

FAO, EU organize field visit for potato farmers ............................................................................... 3 First Ozurgeti Tea Festival held to promote tea industry and tourism ........................................... 4 Cheese Master program created within UNDP project................................................................... 4 USAID announces grant competition .............................................................................................. 4 New grant program opens to encourage innovation ...................................................................... 4 USDA to invest USD 10 million in livestock development in Georgia ............................................. 5

Private Sector.............................................................................................................. 5 13) 14) 15) 16) 17) 18)

Free vending kiosks to be set up in Tbilisi for agricultural products ............................................... 5 Vegetable, fruit and meat prices up ................................................................................................ 5 Georgian wine exports up 4%.......................................................................................................... 5 Kazakhstani grain imports resume .................................................................................................. 6 Blueberry companies prepare to launch European exports ........................................................... 6 Georgian female winemakers participate at Women in Wine Expo 2019 ...................................... 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)

Parliament approves land ownership legislation at first reading

May 6th, 2019, https://kalo.ge/news/view?id=6386

Parliament has approved the ‘Law on Agricultural Land Ownership’ and the ‘Law for the Sustainable Management of Agricultural Land’ at their first reading. The laws define the ownership of agricultural lands and also stipulate the conditions under which the government of Georgia can compel foreigners to sell agricultural land.

2)

Increased co-financing available under Plant the Future program

May 10th, 2019, http://agenda.ge/en/news/2019/1248

In order to further encourage the creation of nurseries and gardens across Georgia, the government has announced its decision to increase the amount of co-financing available under the state’s Plant the Future program from GEL 100,000 to GEL 250,000. This increase is expected to allow entrepreneurs to more easily purchase perennial plants and modern irrigation systems. In addition, co-financing is now available for up to 70% of the total cost of the proposed project (the previous limit was 50%).

The Plant the Future program was created in 2015 with the aim of stimulating Georgian agriculture and helping replace imported products with locally-produced ones.

3)

Biosafety points set up to reduce the spread of diseases

May 17th, 2019, https://kalo.ge/news/view?id=6510

The National Food Agency has started offering free-of-charge inspections of cattle being transferred to seasonal pastures at special biosafety points. Currently, there are six such biosafety points operating in the country, each of which offers inspection services and high-quality disinfection treatments.

The biosafety points have been set up as part of an effort to protect animals from the spread of infectious and invasive diseases.

4)

Agricultural Insurance Program has issued 4,217 polices so far in 2019

May 20th, 2019, https://kalo.ge/news/view?id=6545

In 2019, GEL 8 million was allocated from the state budget for the state’s Agricultural Insurance Program. So far, 4,217 policies have been issued within the framework of the program this year, with 3,381 of them issued in the Kakheti region. As with previous years, the state co-finances 70% of the cost of the policies under the program (50% for vineyards). The program is open to physical or legal entities and covers up to 5 hectares of land (30 hectares for wheat). Policies under the program cover damages resulting from hail, floods, storms and fall frosts.

Since the start of the program in 2014, more than 81,000 policies have been issued, covering more than 71,000 hectares. In total, the state has paid nearly GEL 34 million in insurance subsidies under the program. The main aims of the program are: develop the insurance market in the agricultural sector, promote agricultural activities and ensure stable incomes for people engaged in agriculture activities against the most common weather-related risks.

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BFC Agriculture Bulletin

5)

Grant program to help IDPs get started in agriculture

May 21st, 2019, https://agroface.ge/news/c60fecb7-6ee1-4c2d-a259-c51824987d27

A grant program has been initiated in Georgia to help internally-displaced persons (IDPs) by supporting their integration into new communities. Under the program, IDP families that have received private homes under the Village House project will be given small-to-medium grants (GEL 3,000 — GEL 12,000) to help them get started in agricultural and food processing activities.

Applications for IDPs interested in participating in the program will be accepted through June 20, 2019.

6)

Project bolsters Japanese interest in Georgian wine

May 27th, 2019, http://georgiatoday.ge/news/15793/New-Perspective-for-Georgian-Wine-Producers-Following-Tokyo

The two-month Georgia: Homeland of Wine project was launched in Tokyo in March 2019 and helped capture Japan’s attention. The project featured products from 20 Georgian wine producers (large and small) and helped promote Georgian wine and Georgia’s wine culture and history in Japan.

In terms of wine exports, Japan is a strategic market for Georgia as Japan is a trendsetter across the entire Asian market. In 2018, Georgian wine exports to Japan increased by 37%, a trend expected to continue in the light of the successful project.

Foreign Aid 7)

FAO, EU organize field visit for potato farmers

May 3rd, 2019, http://www.fao.org/georgia/news/detail-events/en/c/1192714/

The Food and Agriculture Organization of the United Nation (FAO), with support from the European Neighborhood Program for Agriculture and Rural Development (ENPARD) of the European Union (EU), arranged a visit for potato farmers to a farm in the Bolnisi municipality. During the visit, the farmers learned about the potato production cycle, including land preparation, planting, irrigation, crop protection, harvesting and post-harvest handling. They also became acquainted with modern equipment and machinery.

The event was held as part of an FAO-ENPARD project that is supporting the Ministry of Agriculture in its implementation of the National Strategy for Agricultural Extension 2018-2019. The Strategy aims at improving the competitiveness of the agricultural sector in Georgia by delivering quality advisory services to farmers and upgrading the capacities of existing information and consultation centers throughout the country.

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BFC Agriculture Bulletin

8)

First Ozurgeti Tea Festival held to promote tea industry and tourism

May 6th, 2019, http://georgiatoday.ge/news/15523/Ozurgeti-Hosts-First-Local-Festival-of-Georgian-Tea-Producers-

More than 20 Georgian tea producers took part in the first Ozurgeti Tea Festival. Organized by and hosted in the Ozurgeti municipality, the festival is part of the Tea Route project, which aims to promote the culture of growing tea in the context of industry and tourism. The festival also gave participants the opportunity to attend a conference on the industrial and tourism opportunities of Georgian tea as well as visit an ethnographic area to explore traditional cuisine and other local products.

The Ozurgeti municipality was supported in its organization of the festival by the administration of Guria, the United Nations Development Program (UNDP) in Georgia and the governments of Austria and Switzerland.

9)

Cheese Master program created within UNDP project

May 8th, 2019, https://kalo.ge/news/view?id=6417

The Modernization of Georgia’s Vocational Educational System in Agriculture project of the United Nations Development Program (UNDP) has created the Cheese Master program to address the shortage of specialists in the country. The 40-day program, which is being supported by the Swiss Agency for Development and Cooperation (SDC), offers participants the chance to learn about a wide variety of cheese products and cheese-making techniques. Graduates of the program will be able to work in almost every cheese production company with any production line of cheese.

Initially, the program will be implemented in three regions: Samtskhe-Javakheti, Samegrelo and RachaLechkhumi.

10) USAID announces grant competition May 15th, 2019, https://kalo.ge/news/view?id=6433

The United States Agency for International Development (USAID) has announced a grant competition in Georgia for agricultural producers. The grant competition will require interested registered entities (physical or legal) engaged in agriculture to produce a business plan for the purchase of agricultural and technological equipment (funding for activities such as construction, vehicles, planting materials, fertilizers, etc. are not eligible). If approved, USAID will provide grant amounts covering up to 40% of the total cost of the equipment, with the rest covered by the applicant via own funds or credit.

11) New grant program opens to encourage innovation May 24th, 2019, https://kalo.ge/news/view?id=6634

Prime Minister Mamuka Bakhtadze has opened a two-year grant program to spur innovations in the country. The program aims to create innovations and innovative enterprises that stimulate the economy. Through the program, Georgian micro-, small- and medium-sized enterprises that have the potential to develop and present their innovations at the world level will be eligible for up to GEL 650,000 in co-financing. Fields and directions are not limited, meaning that young entrepreneurs engaged in the agricultural sector have a chance to boost primary production, processing and logistics in agriculture through new and innovative ideas.

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BFC Agriculture Bulletin

12) USDA to invest USD 10 million in livestock development in Georgia May 27th, 2019, http://agenda.ge/en/news/2019/1401

The US Department of Agriculture (USDA) will allocate more than USD 10 million to improve food safety and quality in Georgia’s dairy and beef production chains. The five-year Safety and Quality Investment in Livestock program is being implemented by Land O’Lakes International Development in partnership with the Georgian Farmers’ Association (GFA). The goals of the program are to increase agricultural productivity and expand trade among the more than 54,000 program participants, especially those in the East-West Highway corridor. The program will incorporate technical assistance from Land O’Lakes International Development as well as leverage an innovative, demand-driven approach to improve food safety and quality along Georgia’s dairy and beef value chains.

Private Sector 13) Free vending kiosks to be set up in Tbilisi for agricultural products May 1st, 2019, http://agenda.ge/en/news/2019/1154

Farmers in Georgia will be able to sell their products in Tbilisi at free-to-use vending kiosks located in all 10 city districts. The free kiosks are being set up to help solve the problem of people illegally selling products on the street by offering them a legal alternative location.

A tender for the construction of the kiosks is expected in the near future.

14) Vegetable, fruit and meat prices up May 3rd, 2019, http://agenda.ge/en/news/2019/1183

According to the latest inflation data, the prices of food and non-alcoholic beverages have increased in Georgia by an average of 0.7%. In particular, the prices of vegetables, fruits and meat have increased by 5.6%, 5.0% and 1.0% respectively. At the same time, the prices of milk, cheese and eggs saw a 3.8% decrease.

15) Georgian wine exports up 4% May 6th, 2019, http://georgianwine.gov.ge/En/News/27634

Georgia exported 26 million bottles of wine to 38 countries between January 2019 and April 2019, a year-on-year increase of 4%. This represents USD 63.2 million in value, a year-on-year increase of 7%.

Most notable, Georgian wine sales have increased to the United States (up 108%), Israel (up 102%), Belarus (up 88%), France (up 81%), Mongolia (up 72%) and Canada (up 70%).

In addition to wine, Georgia exported 8.4 million bottles of brandy (up 67% year-on-year) to 16 countries, amounting to USD 18.0 million in value (up 74% year-on-year). 140,000 bottles of Chacha (up 68% year-on-year) were also exported to 18 countries, amounting to USD 382,000 in value (up 31% year-on-year).

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BFC Agriculture Bulletin

16) Kazakhstani grain imports resume May 17th, 2019, https://commersant.ge/en/post/georgian-flour-producers-comment-on-the-resumed-import-of-kazakh-grain

The import of Kazakhstani grain into Georgia has resumed, offering somewhat greater diversification of available grains in the market. The final price of imported grains from Kazakhstan remains unknown as they must transit through Azerbaijan; however, Kazakhstani authorities have announced that they will subsidize transit costs in an effort to reduce the final price for Georgian buyers. There are also calls for the government of Georgia to subsidize the import of grain from Kazakhstan in order to reduce the reliance on Russian grains and increase diversification of the market.

In the past, Kazakhstani grain accounted for 30-40% of grain available in the Georgia market, but Russian grain currently dominates in Georgia with its 90% share.

17) Blueberry companies prepare to launch European exports May 21st, 2019, https://commersant.ge/en/post/blueberry-company-is-set-to-export-60-t-of-berries

Four Georgian blueberry producers from the Ozurgeti region (Blueberry Ltd., Georgian Blueberry Ltd., Blue Valley Ltd. and Geoberry Ltd.) are planning to launch blueberry exports to European markets in June of this year. Blueberry Ltd. announced its plans to also launch exports to Middle Eastern countries at the same time. In total, Blueberry Ltd. plans on exporting 60 tons of blueberry products this June.

18) Georgian female winemakers participate at Women in Wine Expo 2019 May 24th, 2019, http://agenda.ge/en/news/2019/1376

Eight Georgian female winemakers showcased their wines at the Women in Wine Expo 2019, the first international exhibition of female winemakers, that was held in the Netherlands and Belgium. In total, 30 winemakers from eight countries participated in the exhibition, including Keti Wine, Baia's Wine, Marani Sachino, Madamwine, Demi’s Winery, Nino Mori’s Cellar, Miranda Chkhetiani and Tamar Wines from Georgia.

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