#87 Georgia Agriculture Bulletin, BFC

11/2019

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87 Geo r g i a Agriculture Bulletin Memorandum signed to improve epizootic and phytosanitary reliability Ministry of Agriculture plans to introduce bill on aquaculture USAID launches grant program to develop processing infrastructure Wine exports up 11%

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BFC. Georgian Agriculture Finance Bulletin. Edition #87, November 2019

Georgian Agriculture Finance Bulletin Edition #87, November 2019

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

Memorandum signed to improve epizootic and phytosanitary reliability...................................... 2 Ministry of Agriculture plans to introduce bill on aquaculture ....................................................... 2 Simplified land registration procedures made permanent ............................................................. 2 Changes made to Support for Viticulture Cooperatives program ................................................... 2 National guidelines for safe and quality honey developed ............................................................. 3 Georgia to tighten cattle export requirements ............................................................................... 3

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

Ministry of Agriculture continues consultation on agricultural strategy ........................................ 3 USAID launches grant program to develop processing infrastructure............................................ 4 Mechanization Field Day held in Lagodekhi .................................................................................... 4 Pilot drip irrigation systems installed in Kareli, Kvareli and Tsalka ................................................. 4 Forum to promote business in Georgia ........................................................................................... 5 Safe honey training held for Keda beekeepers ............................................................................... 5

Private Sector.............................................................................................................. 5 13) 14) 15) 16) 17) 18) 19) 20) 21) 22)

Olive season opens in Kakheti ......................................................................................................... 5 Food prices up 13.5% ...................................................................................................................... 5 Wine exports up 11% ...................................................................................................................... 6 Georgia to join International Olive Council ..................................................................................... 6 Georgia to produce black caviar ...................................................................................................... 6 Chicken imports increase as chicken production decreases ........................................................... 6 Livestock numbers down ................................................................................................................. 7 Pedigree cattle breeds imported into Georgia ................................................................................ 7 Online viticulture platform created ................................................................................................. 7 Tangerine exports already over 1,600 tons ..................................................................................... 7

BFC. Georgian Agriculture Finance Bulletin. Edition #87, November 2019

State Initiatives 1)

Memorandum signed to improve epizootic and phytosanitary reliability

November 1st, 2019, https://agroface.ge/news/e8c10f04-3c3c-41d0-8e2b-4868c2ff1a26

The National Food Agency has signed a memorandum of understanding with the Turkish Cooperation and Coordination Agency regarding cooperation in training Georgian and Turkish veterinarians and plant protectors. Collaboration between the two countries is considered essential for risk assessment and the surveillance of infectious and fungal bacterial diseases. Cooperation should help improve laboratory methods for the diagnosis and early detection of virus penetration, which will further strengthen the epizootic and phytosanitary reliability of the country.

2)

Ministry of Agriculture plans to introduce bill on aquaculture

November 1st, 2019, https://agroface.ge/news/5f130954-3a1f-47d7-80e5-a0aa36b81846

The Ministry of Agriculture has planned to introduce a new bill regarding the sustainable development of aquaculture. The new bill, if passed, will protect the country’s water resources by ensuring their proper management as well as pave the way for investments into aquaculture development so that Georgia can take advantage of its water resources to create new jobs and generate greater income.

Specifically, the bill will: create aquaculture zones in Georgia’s sea waters, develop a permit system for the use of these aquaculture zones and regulate aquaculture facilities.

The bill has been developed in accordance with international best practices and is currently under review by non-government organizations, academics and other experts. Following this review, it will be sent to parliament for consideration.

3)

Simplified land registration procedures made permanent

November 7th, 2019, https://agenda.ge/en/news/2019/3008

Simplified procedures for land registration, initially-planned only through January 1, 2020, will become the general rule of land registration. The decision to make the reformed process permanent is the result of high public interest in the reform. Since land registration reform came into force in 2016, the number of citizens asking for land registration services has increased five times, and the rate of land registration has increased more than three times. The government has the goal of having all land registered within the next three years.

738,483 applicants have successfully registered land since 2016.

4)

Changes made to Support for Viticulture Cooperatives program

November 7th, 2019, https://mepa.gov.ge/En/News/Details/11736

The state’s Support for Viticulture Cooperatives program, being implemented by the Agricultural and Rural Development Agency, envisages providing greater support to agricultural cooperatives through the co-financing of equipment purchases for the primary processing of grapes. Changes made under the program hope to simplify the terms and conditions of the program as well as promote agricultural cooperatives by creating an environment where cooperative members will be provided with an extra incentives. Under the program, agricultural cooperatives are eligible for co-financing of up to 90% of the cost of grape processing machinery (up to GEL 500,000). Agricultural cooperatives located in government-defined highland areas are eligible for co-financing of at least 50% of the cost of investment (but not more than 95%).

BFC. Georgian Agriculture Finance Bulletin. Edition #87, November 2019

Since launch, 13 grape processing cooperatives (12 in the Kakheti region and 1 in the Imereti region) have received a total of GEL 6 million in funding under the program.

5)

National guidelines for safe and quality honey developed

November 14th, 2019, https://mepa.gov.ge/En/News/Details/11748

The Ministry of Agriculture, with support from the European Union (EU), has developed guidelines for the production of safe and high-quality honey in an effort to raise Georgian entrepreneurs’ awareness of European Union (EU) standards in honey production. The guidelines, developed by German experts, are based on practical experience and provide honey producers with a series of recommendations on how to produce and ensure quality honey production so that it can be exported to the EU. During a presentation of the guidelines, Deputy Agriculture Minister Khatia Tsilosani outlined the importance of promoting Georgian production and improving the competitiveness of Georgian agricultural products (including honey), especially those with a strong export potential to the EU. The Guidelines for Safe and Quality Honey Production were developed in coordination with the Ministry of Agriculture within the framework of the EU-funded Small and Medium Entrepreneurship Development and DCFTA in Georgia project. The project is being implemented by the German International Cooperation Society (GIZ) on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ).

6)

Georgia to tighten cattle export requirements

November 22nd, 2019, https://sputnik-georgia.ru/economy/20191122/247085432/V-Gruzii

The Ministry of Agriculture plans to tighten export requirements on cattle as a way to increase the presence of domestically-produced beef and beef products in the country as well as reduce prices for beef, beef products and dairy products. Specifically, the Ministry plans to submit a draft to the government by the end of the year that will require the export weight for cattle to be increased from 140 kilograms to 200 kilograms.

According to the National Statistics Service, the number of cattle in the country has declined 2.1% in the last year, with the number of small cattle numbers declining 7.3%. Similarly, meat production in the country declined 3.3%.

Foreign Aid 7)

Ministry of Agriculture continues consultation on agricultural strategy

November 1st, 2019, http://www.fao.org/georgia/news/detail-events/en/c/1250764/

The Ministry of and Agriculture continued public consultations on the adoption of the revised Agricultural Extension Strategy of Georgia 2018-2020 during a discussion with major stakeholders, international donor organizations and development partners. The primary goal of the strategy is to improve the competitiveness of the Georgian agricultural sector by delivering quality and cost-efficient advising services to farmers. The strategy is being prepared by the Ministry, with support from the Food and Agriculture Organization of the United Nations (FAO) (under the European Union (EU)-funded European Neighborhood Program for Agriculture and Rural Development (ENPARD)). Remarks made by stakeholders during the discussion will be processed by the extension working group in charge of updating the strategy and presenting a final draft version.

BFC. Georgian Agriculture Finance Bulletin. Edition #87, November 2019

The biggest changes incorporated into the strategy have been related to the creation of a network of demonstration plots as well as placing the responsibility for managing the country’s 54 information and consultation centers under the relatively Agricultural and Rural Development Agency.

8)

USAID launches grant program to develop processing infrastructure

November 1st, 2019, https://agroface.ge/news/11bd07d0-29aa-4bcb-8744-b345066e51c3

The United States Agency for International Development (USAID) is launching applications for a grantbased program aimed at developing processing infrastructure in Georgia within selected value chains.

To promote the grant program as well as inform potential applicants about application procedures, USAID will hold a series of informational meetings throughout Georgia. The deadline for applications is December 20, 2019.

9)

Mechanization Field Day held in Lagodekhi

November 8th, 2019, http://www.fao.org/georgia/news/detail-events/en/c/1251588/

The Food and Agriculture Organization of the United Nations (FAO), under the European Union (EU)funded European Neighborhood Program for Agriculture and Rural Development (ENPARD), organized Mechanization Field Day for farmers and stakeholders in the village of Chiauri (Lagodekhi municipality).

At the event, local mechanization suppliers had the opportunity to observe and test tractors and other agricultural equipment showcased by Agromotors, one of the main mechanization suppliers in Georgia.

In addition, they also learned about the benefits of conservation agriculture as well as had the opportunity to see specialized equipment used for this purpose. Such agricultural practices reduce the risks and impact of climate change (including reducing greenhouse gases emissions) and increase productivity sustainably.

Attendees were also informed about the ongoing EU-funded FAO-ENPARD grant competition, which provides cost-shared investments opportunities for farmers, rural households, cooperatives and other small and medium enterprises (SMEs) in rural areas.

10) Pilot drip irrigation systems installed in Kareli, Kvareli and Tsalka November 14th, 2019, https://mepa.gov.ge/En/News/Details/11747

Drip irrigation systems have been installed in the Kareli, Kvareli and Tsalka municipalities under the Sustainable Water Management Demonstration Project. Under the project, three pilot agricultural crops (grapes, potatoes and onions) were selected to be studied in three villages (Ennisel, Bedian and Ruis) for the impact of drip irrigation on production. Local farmers and representatives of farmers’ associations will also be trained to improve their knowledge on how to use and manage drip irrigation systems under the project.

The project, which is aimed at supporting the development of farming as well as the reduction of the adverse effects of climate change, is being implemented by the Ministry of Agriculture, the United Nations Development Program (UNDP) and the Global Environment Facility (GEF). The project is part of a broader UNDP-GEF program being carried out in Azerbaijan and Georgia to harmonize water consumption policies and practices between the two countries. The Kura II program has a total budget of USD 5.3 million, which is shared between the two countries. The program is in its third year of implementation and will be concluded in 2020.

BFC. Georgian Agriculture Finance Bulletin. Edition #87, November 2019

11) Forum to promote business in Georgia November 21st, 2019, http://www.fao.org/georgia/news/detail-events/en/c/1252050/

Over 100 representatives of private companies, business associations and international organizations took part in a stakeholder forum in Tbilisi to discuss business development trends in Georgia as well as the competitive potential of the private sector in national and European Union (EU) markets. The forum focused on the roles of business clusters, suppliers and associates as well as ways to maximize the potential of the private sector and make it more competitive. Forum participants agreed that clustering can derive benefits such as cutting supply chain costs, stimulating new business and increasing innovation, collaboration and productivity.

The event was organized by the EU and four United Nations (UN) agencies – the United Nations Development Program (UNDP), the Food and Agriculture Organization of the United Nations (FAO), the United Nations Industrial Development Organization (UNIDO) and the International Organization for Migration (IOM) – under a joint effort to develop a strong and competitive private sector in Georgia. The forum was attended by officials from the Ministry of Agriculture, the Ministry of Economy, the Ministry of Foreign Affairs and the Parliamentary Committee on Diaspora and Caucasus Issues.

12) Safe honey training held for Keda beekeepers November 25th, 2019, http://www.messenger.com.ge/issues/4532_november_25_2019/4532_econ_two.html

Beekeepers from the Keda municipality participated in the Production of Safe Honey training, which is aimed at raising awareness about sources of honey pollution, ways to prevent them and the production, processing and sale of harm-free honey. At present, honey production in Georgia is exposed to various threats of pollution, including those that stem from the environment as well as those stemming from beekeepers themselves.

The training was carried out under the European Union (EU)-funded European Neighborhood Program for Agriculture and Rural Development (ENPARD) as a way to build the capacity and increase the knowledge and skills of beekeepers. There were a total of 22 participants at the training, including members of the Adjara Beekeeping Business Association.

Private Sector 13) Olive season opens in Kakheti November 1st, 2019, http://geotimes.ge/index.php?m=5&news_id=70584&cat_id=5

The olive season has opened in the Sakobo village of Sighnaghi (Kakheti region), where olive gardens were planted and an olive processing plant was established with GEL 5 million in financial support from the state (via Dutch and Turkish investments). In total, olives gardens are cultivated on more than 1,000 hectares in Kakheti, employing 800 people. In the future, the Kakheti Traditional Farming Company plans to double its olive crop due to the strong potential of the crop in export markets.

14) Food prices up 13.5% November 4th, 2019, https://www.interpressnews.ge/en/article/104410-geostat-price

According to the National Statistics Office, prices of various food products have risen, including fruit and grapes (up 26.9%), meat (up 14.7%) and bread and cereals (up 11.0%). At the same time, the consumer prices index for October 2019 rose 0.8%, while it has risen 6.9% so far for 2019. Other food groups

BFC. Georgian Agriculture Finance Bulletin. Edition #87, November 2019

experiencing price increases include: milk, cheese and eggs (up 16.0%), fish (up 15.8%) and vegetables (up 12.4%). On average, the prices for the food and non-alcoholic beverages category have risen 13.5%.

15) Wine exports up 11% November 5th, 2019, http://georgianwine.gov.ge/En/News/32692

Through the end of October this year, 302 Georgian companies have exported 75.6 million bottles of wine, an 11% year-on-year increase, to 53 countries. This amounts to USD 195 million in revenue, up 20% year-on-year. The five largest importing countries so far this year are: Russia (21.4 million bottles), Ukraine (8.3 million bottles), China (6.1 million bottles), Poland (3.2 million bottles) and Kazakhstan (3.0 million bottles). In addition to wine, Georgia has also exported 23.8 million bottles of brandy to 23 countries (up 52% year-on-year), representing USD 50.8 million in revenue (up 58% year-on-year).

Vodka exports from Georgia are also up (62% year-on-year) to 521,700 bottles, representing USD 1.5 million in revenue (up 58% year-on-year).

Total exports of wine, brandy and vodka through the end of October have amounted to USD 284 million in revenue, a 12% year-on-year increase.

16) Georgia to join International Olive Council November 7th, 2019, https://agenda.ge/en/news/2019/3005

Georgia is set to become a member of the International Olive Council, largely due to its position as the third-largest olive hub in Europe (behind only Italy and Spain). Moreover, Georgia is expected to preside over the council in 2020.

The olive industry has been developing in Georgia for the last 10 years and is very promising in the country, especially given the thinner skin, smaller pit and reduced acidity of Georgian-grown olives as well as the capacity for Georgian-grown olives to produce more high-quality olive oil per kilogram than olives grown in other countries. Georgia’s olive industry is being supported by the state Plant the Future program, which has helped more than 30,000 hectares of olives be planted in the country. In fact, the olive industry is expected to surpass nuts and grapes in terms of export potential in the somewhat near future. This is important given that the global olive market is expected to reach USD 11 billion by 2025.

17) Georgia to produce black caviar November 18th, 2019, https://agroface.ge/news/08c15ea6-267f-44cd-bd55-d9f127acbecb

Local production of black caviar is set to begin in Georgia, with products expected to be ready for sale by March 2020. In total, the producer, BMG Chateau Zegaani, is expected to produce about 10 tons of black caviar annually, making Georgia the fourth-largest caviar producer in the world. The company is currently working on developing markets, including those in Georgia.

18) Chicken imports increase as chicken production decreases November 20th, 2019, http://geotimes.ge/index.php?m=5&news_id=71133&cat_id=5

Chicken production in Georgia has been on the decline for the last few years in Georgia; unsurprisingly, chicken imports have been on the rise during this same time. When asked why domestic production is declining and imports are increasing, manufacturers point to the current tax code exemption for all agricultural products from VAT except chicken and eggs. Chicken and egg producers also point to a dependence on imported grain and the depreciation of the Georgian lari as major obstacles.

BFC. Georgian Agriculture Finance Bulletin. Edition #87, November 2019

19) Livestock numbers down November 20th, 2019, http://geotimes.ge/index.php?m=5&news_id=71132&cat_id=5

According to preliminary data published by the National Statistics Office, the number of livestock in the country has decreased 2.1% year-on-year as of the end of quarter 3 2019. This includes 9,100,000 poultry (a 3.7% year-on-year decrease), 813,600 sheep and goats (a 7.3% year-on-year decrease), 436,600 cows and female buffalo (a 7.1% year-on-year decrease) and 225,400 pigs (an 8.8% year-onyear decrease).

160.3 million liters of milk was produced in quarter 3 2019( down 4.8% year-on-year), while meat production amounted to 14,500 tons (down 3.3% year-on-year).

20) Pedigree cattle breeds imported into Georgia November 25th, 2019, https://sputnik-georgia.ru/world_economy/20191125/247106263/

Over the past four years, Estonia has exported 650 breeding calves to Georgia, with roughly 100 more thoroughbred animals expected in the near future. Estonian breeders are also sharing their experience on breeding issues with Georgian counterparts. This is part of an initiative to increase the number of pedigree cattle in the country.

The BreedExpo cooperation project, launched this year, is also expected to expand opportunities for livestock breeding in Georgia. The ultimate goal of the project, which runs through June 2021, is to find new markets for Estonian, Finnish and Latvian cattle breeds in Georgia, Kazakhstan and Ukraine.

21) Online viticulture platform created November 26th, 2019, https://agroface.ge/news/b6193037-d2be-40ea-bf64-20c1e8310bc1

The online platform VVINE has been created in Georgia to allow users to own their own vineyard and produce their own wine. VVINE allows users to choose their own vineyard area and grape variety to produce their own wine. The VVINE team takes care of each customer's vineyard and sends one bottle of wine to the user each year.

The VVINE platform hopes to promote vine culture as well as revolutionize the way customers interact with the wine sector.

22) Tangerine exports already over 1,600 tons November 26th, 2019, https://agenda.ge/en/news/2019/3210

Exports of tangerines (from mid-October to mid-November) amounted to 1,658 tons, with most exports going to Russia (905.7 tons), Armenia (467.7 tons), Ukraine (221.9 tons), Latvia (40.6 tons) and Azerbaijan (22.0 tons). This year’s tangerine harvest is of a relatively high quality, meaning that tangerine farmers can expect a high price for their harvests. It is important to note that Georgia has also recently begun tangerine exports to Poland and other countries in Central Asia and the Persian Gulf.

Georgia is also looking for new export countries in order to support the diversification of tangerine exports in the future.

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.

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