#85 Georgia Agriculture Bulletin, BFC

09/2019

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85 Geo r g i a Agriculture Bulletin Davitashvili speaks to parliament about agricultural projects Swiss Agricultural School in the Caucasus

Georgia ranks 17th in the wine exports 2019 hazelnut harvest expected to be 40,000–45,000 tons

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Georgian Agriculture Finance Bulletin Edition #85, September 2019

Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4) 5) 6) 7)

Davitashvili speaks to parliament about agricultural projects ........................................................ 2 Discussion of new agricultural and rural development strategy begins ......................................... 2 Mobile laboratory to help keep Georgia pest, disease free ............................................................ 2 Georgian seed project named 6th best in the world ...................................................................... 2 Implement the Future project launches .......................................................................................... 3 Snail farm opens in Western Georgia .............................................................................................. 3 Geographical origin designation a priority for Georgian agriculture .............................................. 3

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

FAO hold Farmer Field Day in Lagodekhi......................................................................................... 3 Swiss Agricultural School in the Caucasus ....................................................................................... 4 22nd meeting of ENPARD stakeholders held .................................................................................. 4 EBRD, EU financing helping Georgian hydroponic producer ........................................................... 4

Private Sector.............................................................................................................. 5 12) 13) 14) 15) 16)

Georgia ranks 17th in the wine exports .......................................................................................... 5 2019 hazelnut harvest expected to be 40,000–45,000 tons ........................................................... 5 Intensive dairy farms expanding ..................................................................................................... 5 Grape harvest expected to reach 200,000–250,000 ....................................................................... 5 123,000 tons of grapes processed in Kakheti so far ........................................................................ 6

Note: The Georgian Agriculture Finance Bulletin presents a monthly roundup of headlines and news stories related to investments and financing flows 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. Currently, BFC is implementing the Agricultural Lending Programme for KfW. Read more »

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BFC. Georgian Agriculture Finance Bulletin. Edition #3, January 2013

State Initiatives 1)

Davitashvili speaks to parliament about agricultural projects

September 6th, 2019, http://bizzone.info/agriculture/2019/1567825896.php

Levan Davitashvili, a candidate for Minister of Agriculture, spoke at a parliamentary hearing about the importance and success of the state’s agricultural insurance project. According to him, agricultural insurance is a tool by which agriculture will become more predictable and investment more attractive, although he also noted that it needs improvement if it is to become maximally effective. He hopes to eventually create a program that will include more farmers and cheapen insurance premiums.

Mr. Davitashvili also spoke about ongoing projects for co-financing perennial crops related to the tea sector, promoting the production of vegetables in the Imereti region and continued efforts to assist apiarists, livestock breeding and agricultural cooperatives.

2)

Discussion of new agricultural and rural development strategy begins

September 6th, 2019, https://kalo.ge/news/view?id=7813

The Ministry of Agriculture held the first public hearing on the Draft Strategies for Agriculture and Rural Development of Georgia 2021-2027 and the associated 2021-2023 Action Plan. The event was chaired

by Giorgi Khanishvili, First Deputy Minister of Agriculture. Mr. Khanishvili spoke about the importance of strategy as a political document and emphasized the importance of both agriculture and rural development. The new strategy reflects the state vision of agricultural and rural development and will replace the current strategy. The key areas of the new strategy are to increase the competitiveness of agricultural and non-agricultural sectors, improve the social status of rural people, increase the rational use of natural resources, adapt to climate change and improve food, veterinary and plant protection systems.

3)

Mobile laboratory to help keep Georgia pest, disease free

September 7th, 2019, https://sputnik-georgia.ru/economy/20190907/246432656/

A mobile laboratory has begun traveling around the villages of Western Georgia as part of an effort to protect plants from marble bugs and other harmful organisms. The laboratory, which is equipped with modern equipment, will check plants, vegetables and fruits for various diseases. If a pest of disease is detected, specialists will give locals recommendations for what action(s) to take.

The Georgian government developed and operates a special pest control project that has three main areas: an active information campaign, full-scale monitoring and chemical spraying. It is widelyrecognized as the one of the most exemplary in the world.

4)

Georgian seed project named 6th best in the world

September 10th, 2019, https://agroface.ge/news/1daaec5f-c996-412f-b51e-848438bcc799

At the 14th Conference of the Parties to the Desertification Convention in New Delhi, representatives of Georgia’s Ministry of Agriculture presented the results of a pilot project to reduce fungal diseases by introducing new varieties of pea and buckwheat seeds. The project, which saw fungal diseases decline and yields increase, was named the 6th best pilot project in the world. The project was planned by the Page 2

BFC. Georgian Agriculture Finance Bulletin. Edition #3, January 2013

Ministry of Agriculture, funded with help from the Global Environment Facility and implemented within the framework of the Implementation of Sustainable Land Management in Rural Areas to Reduce Land Degradation project of the Caucasus Regional Environmental Center.

5)

Implement the Future project launches

September 19th, 2019, https://kalo.ge/news/view?id=7850

The State Budget Agency for Rural Development is implementing the new Ministry of Agriculture Implement the Future project in Georgia. The aims of the project are to improve socio-economic conditions in rural areas as well as support the production of high-quality planting materials. This will be accomplished through two project components: (1) co-financing for orchards and (2) co-financing for nurseries. Project beneficiaries will also receive technical assistance that includes practical training, implementing integrated plant protection systems and resolving watering and nutrition issues.

6)

Snail farm opens in Western Georgia

September 21st, 2019, https://agenda.ge/en/news/2019/2535

The state-run United Agro Project has helped a snail farm open in the Western Georgian region of Samegrelo. The farm, located in the village of Akhali Khibula (Khobi Municipality) is capable of producing approximately 50 tons of snail meat per year, most of which is exported.

The United Agro Project has helped a total of 200 enterprises, including 25 in Samegrelo.

7)

Geographical origin designation a priority for Georgian agriculture

September 24th, 2019, https://agenda.ge/en/news/2019/2561

One of the main priorities of Georgia’s agricultural and rural development strategy is protecting and promoting products with geographical origin designations as they help increase the credibility of and add value to Georgian products, especially in foreign markets. It is also one of the key parts of the Deep and Comprehensive Free Trade Area Agreement (DCFTA) with the European Union (EU).

Currently, there are 48 products with protected geographical origin designations, including wine, mineral water, cheese, potato and tea products.

Foreign Aid 8)

FAO hold Farmer Field Day in Lagodekhi

September 10th, 2019, http://www.fao.org/georgia/news/detail-events/en/c/1208302/

The Food and Agriculture Organization of the United Nations (FAO), as part of the European Neighborhood Program for Agriculture and Rural Development (ENPARD) of the European Union (EU), held the Farmer Field Day for farmers and stakeholders in Lagodekhi, Georgia. At the event, the benefits of conservation agriculture in maize production were demonstrated and a discussion of integrated pest management systems was held.

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BFC. Georgian Agriculture Finance Bulletin. Edition #3, January 2013

The event was held to support agricultural extension services, one of the components of a FAO-ENPARD project that supports the Ministry of Agriculture in the implementation of the National Strategy for Agricultural Extension 2018-2019. Under this component, the FAO organizes farmer field schools as well as theoretical and practical training activities, including various types of demonstration plots.

9)

Swiss Agricultural School in the Caucasus

September 25th, 2019, https://kalo.ge/news/view?id=7858

The Swiss Agricultural School in the Caucasus (SASC) is set to open in the village of Sarkineti (Dmanisi municipality). The school, an unprecedented nonprofit private initiative, will specialize in cattle breeding and dairy processing and is being set up according to Swiss standards. The school will also offer farmers and amateurs the opportunity to take short-term professional courses. SASC will start its educational program in the fall semester of 2020 with a long-term goal of educating 100 strong, professional farmers in Georgia over a 10-year period.

One of the most prominent agricultural schools in Switzerland, Plantahof, has been selected as the main partner of the school. Plantahof will support SASC in the following aspects: broad concept development, the transfer of knowledge, curriculum development and the training of employees/teachers. Financial support for the school is being provided by the Swiss South Caucasus Foundation (SSFC).

10) 22nd meeting of ENPARD stakeholders held September 25th, 2019, http://enpard.ge/en/enpard-stakeholders-update-agriculture-rural-development-georgia/

The Food and Agriculture Organization of the United Nations (FAO) organized the 22nd meeting of stakeholders and implementing partners of the European Neighborhood Program for Agriculture and Rural Development (ENPARD). The meeting featured updates of several ENPARD projects as well as presentations on the updated agricultural extension strategy, the draft law on aquaculture, agricultural grants, youth initiatives and the rural development governance system.

11) EBRD, EU financing helping Georgian hydroponic producer September 26th, 2019, https://www.ebrd.com/news/2019/ebrd-and-eu-help-georgian-hydroponic-farm-expand-.html

The European Bank for Reconstruction and Development (EBRD) and the European Union (EU), via its EU4Business project, are helping Georgian hydroponic producer Imereti Greenery expand its operations by extending financing (under an EU4Business-EBRD credit line) to the company in order to allow it to expand its greenhouse and purchase new equipment. Under the program in which this credit line is available, the EU will also provide a grant worth up to 15% of the value of the loan as well as technical assistance from local and international experts. The financing and technical support will allow Imereti Greenery to promote sustainable farming, boost production and bring fresh vegetables to market. In addition, the expansion of this business is expected to also generate new job opportunities, which will boost socio-economic conditions in the region.

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BFC. Georgian Agriculture Finance Bulletin. Edition #3, January 2013

Private Sector 12) Georgia ranks 17th in the wine exports September 5th, 2019, http://georgiatoday.ge/news/17187/Georgia-Ranked-17th-Country-in-World-for-Wine-Exports-

The Association of American Wine Economists (AAWE) has ranked Georgia 17th in the world in terms of wine exporting countries. Based on data from 2018, Georgian wine companies exported 86.2 million bottles of wine, totaling USD 196.6 million in value. A total of 284 wine companies, 34 more than in 2017, sent bottles to 53 countries around the world.

As one of the oldest wine regions in the world and with 525 grape varieties, Georgia has a strong winemaking tradition. Indeed, unique wine methods, such as Qvevri, which is a UNESCO-protected winemaking technique, have helped to put Georgian wines on the map. Despite some setbacks in recent years (i.e. challenging grape harvests and a Russian embargo), Georgia’s wine industry is rapidly moving from small home-based makers into an important industry, and Georgian wine exports are expected to continue to rise each year well into the future.

13) 2019 hazelnut harvest expected to be 40,000–45,000 tons September 6th, 2019, https://bm.ge/en/article/georgia-expects-40-45000-tones-of-hazelnuts-in-2019/39474/

Georgia is project to have a hazelnut harvest of 40,000–45,000 tons this year. This is a positive sign for Georgia’s hazelnut industry as, in recent years, it had struggled due to a stink bug invasion that began in 2015 and destroyed a significant portion of the hazelnut harvest in Western Georgia in 2016. In 2017, the impact of the invasion was even more widespread. Measures to combat the pest came into full swing in 2018 and were refined, to much success, this year.

14) Intensive dairy farms expanding September 10th, 2019, https://agroface.ge/news/8ca282fa-c93e-4ab2-972c-6f94f9f5810e

Dairy production in Georgia has been on the rise in recent years, with year-on-year growth in milk production increasing 27% (as of August 2019). Most of this (85%) has been achieved through an increase in the number of dairy cattle, indicating that intensive dairy farms are growing in size in the country. Such growth is being driven by a combination of breeding improvements and production technology improvements.

It is important to note that intensive dairy farm production often hits a lull in warmer months, during which their productivity somewhat falls. During this period, non-intensive dairy farms produce as much as 90% of milk production in the country.

15) Grape harvest expected to reach 200,000–250,000 September 19th, 2019, https://commersant.ge/en/post/minister-of-agriculture-this-years

This year’s grape harvest is entering its active phase, with between 200,000 and 250,000 tons of grapes expected to be harvested in total. So far, about 140 winemakers have purchased 80,000 tons of grapes.

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16) 123,000 tons of grapes processed in Kakheti so far September 23rd, 2019, https://commersant.ge/en/post/123-thousand-tons-of-grapes-processed-in-kakheti

As of September 23, 2019, a total of 123,000 tons of grapes have been processed in the Kakheti region, including 80,000 tons of Rkatsiteli grapes, 36,000 tons of Saperavi grapes and 3,000 tons of Kakhetian Green and other grapes. According to the National Wine Agency, as many as 14,000 farmers have already sold their grape harvests to producers this year.

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