12/2019
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88 Geo r g i a Agriculture Bulletin Prime Minister emphasizes importance of the agricultural sector FAO, EU support development of draft law on aquaculture Two new exotic agricultural products to be cultivated next year Georgian fruit and nut exports up 4.4%
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Georgian Agriculture Finance Bulletin Edition #88, December 2019
Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4)
Prime Minister emphasizes importance of the agricultural sector ................................................. 2 8 agricultural cooperatives receive modern equipment under state program .............................. 2 Amendments to the Law on Agricultural Cooperatives approved .................................................. 2 Georgian Agriculture and Rural Development Strategy 2021-2027 approved ............................... 2
Foreign Aid ................................................................................................................. 3 5) 6) 7) 8) 9) 10) 11)
FAO, EU support development of draft law on aquaculture ........................................................... 3 27,000 tons of high-quality US wheat to be imported .................................................................... 3 Green Economy Financing Facility launched in Georgia ................................................................. 3 EU, UNDP hold meeting to discuss rural development in Georgia ................................................. 3 EUR 250 million credit line for Eastern Partnership counties ......................................................... 4 USAID to support improving certification procedures for seedlings............................................... 4 100 Ministry of Agriculture staff participate in FAO trainings ........................................................ 4
Private Sector.............................................................................................................. 5 12) 13) 14) 15) 16) 17) 18) 19) 20) 21) 22) 23)
Livestock numbers on the decline ................................................................................................... 5 Two new exotic agricultural products to be cultivated next year ................................................... 5 Wine exports up 10% ...................................................................................................................... 5 Tangerine harvest expected to reach 55,000 tons .......................................................................... 5 Georgian milk production decreasing ............................................................................................. 6 Georgia, China sign memorandum to develop tobacco and tea in Adjara ..................................... 6 Georgian fruit and nut exports up 4.4% .......................................................................................... 6 American expert presents information on growing wine exports to the US .................................. 6 Tangerine exports up 6.2% .............................................................................................................. 6 USD 54.76 million in hazelnut exports so far this year.................................................................... 7 Average Georgian citrus production and export levels ................................................................... 7 Honey exports on the decline ......................................................................................................... 7
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 #88, December 2019
State Initiatives 1)
Prime Minister emphasizes importance of the agricultural sector
December 9th, 2019, http://bizzone.info/agriculture/2019/1575937918.php
Prime Minister Giorgi Gakharia has emphasized the importance of growing Georgia’s agricultural sector, both in terms of increasing exports and reducing agricultural imports. He also noted that an emphasis should be given to improving quality standards and ensuring that land registration is completed as soon as possible. Additionally, the Prime Minister indicated the importance of taking effective steps in the direction of animal husbandry, starting with the development of a livestock strategy and concrete action plan.
2)
8 agricultural cooperatives receive modern equipment under state program
December 16th, 2019, https://mepa.gov.ge/En/News/Details/11788
Eight agricultural cooperatives have been provided with modern farm equipment under the Georgian Tea program as part a state effort to reestablish tea production in Georgia. The eight cooperatives have worked to rehabilitate 140 hectares of tea plantations and are expected their first harvest in 2020. There have been 49 beneficiaries across the country under the Georgian Tea program since its inception in 2016. The total area of rehabilitated plantations is 1,024 hectares, and the total investment for rehabilitation efforts amounts to GEL 2,551,642 (GEL 1,775,488 of which was provided under the program).
3)
Amendments to the Law on Agricultural Cooperatives approved
December 19th, 2019, https://kalo.ge/news/view?id=8071
Parliament has approved amendments to the Law on Agricultural Cooperatives. The amendments update organizational-legal issues related to cooperatives, including necessary documentation to gain legal status as an agricultural cooperative as well as legal responsibilities cooperatives have to their members and shareholders. Additionally, the amendments raised the minimum number of members necessary for obtaining (and maintaining) legal status as an agricultural cooperative from five to nine. The amendments will go into effect on January 1, 2020.
4)
Georgian Agriculture and Rural Development Strategy 2021-2027 approved
December 23rd, 2019, https://kalo.ge/news/view?id=8074
The government has approved the Georgian Agriculture and Rural Development Strategy 2021-2027 and the associated Action Plan 2021-2023. Stakeholders were involved in the development of both documents via a series of public hearings held throughout the past year, allowing farmers, entrepreneurs, academics, businesses non-governmental organizations and the civil society to provide invaluable feedback. The Georgian Agriculture and Rural Development Strategy 2021-2027 was developed based on an analysis of existing strategies, the results of current programs and implemented reforms and the experience of the European Union (EU). It sets out the priorities of the government as well as sectoral development directions that are related to agriculture and rural development. Both the Strategy and Action Plan were developed by the Ministry of Agriculture, with active cooperation and support provided by the United Nations Development Program (UNDP), the Food and Agriculture Organization of the United Nations (FAO) and the European Neighborhood Policy for Agriculture and Rural Development (ENPARD).
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Foreign Aid 5)
FAO, EU support development of draft law on aquaculture
December 2nd, 2019, http://www.fao.org/georgia/news/detail-events/en/c/1253436/
The National Environmental Agency of the Ministry of Agriculture has presented a draft law on aquaculture to regulate aquaculture activities in the country, a sector with significant potential to increase production from the current 2,300 tons per year to as much as 30,000 tons per year. The draft law was developed in line with international best practices. Specifically, the law aims to promote and regulate the aquaculture sector in Georgia as well as to help attract investments into the sector by defining critical steps for the authorization of aquaculture activities. It also safeguards the interests of local people. The sustainable development of aquaculture, environmental protection and the conservation of biodiversity is expected to further stimulate the development of Georgia’s economy by creating jobs and increasing incomes. The development of the draft law was supported by the Food and Agriculture Organization of the United Nations (FAO) and the European Union (EU) within the context of the European Neighborhood Program for Agriculture and Rural Development (ENPARD).
6)
27,000 tons of high-quality US wheat to be imported
December 4th, 2019, https://mepa.gov.ge/En/News/Details/11769
Three years ago, the US and Georgia signed an agreement that launched the Food for Progress program, which is aimed at supporting the development of the agricultural sector in Georgia as a means of poverty reduction and boosting economic welfare. Under the program, 27,000 tons of high-quality wheat will be imported from the US in the beginning of 2020. This will help Georgia diversify its wheat imports and not be dependent on wheat from only one or two sources. Additionally, the high quality of the wheat will help Georgia boost its wheat-based products. The five-year, USD 14 million program is being implemented by Land O'Lakes in collaboration with the Georgian government, the University of Michigan and the Georgian Farmers’ Association.
7)
Green Economy Financing Facility launched in Georgia
December 10th, 2019, https://www.ebrd.com/news/2019/ebrd-and-partners-deepen-green-finance-in-georgia-.html
The European Bank for Reconstruction and Development (EBRD) has announced the launch of a new Green Economy Financing Facility (GEFF) in Georgia as part of a concerted effort to strengthen Georgia’s energy efficiency. GEFF Georgia will have a volume of USD 54 million and support small- and mediumsized enterprises (SMEs), corporations and residential households by making loans available through local partner banks for energy efficiency, climate adaptation and mitigation projects. Possible investments include energy-efficient construction materials, double-glazed windows and doors, thermal insulation, lighting, construction, agricultural equipment and machinery, photovoltaic solar panels, geothermal heat pumps and water-efficient irrigation systems. Businesses can identify typical green technologies available in Georgia by using the GEFF Technology Selector.
8)
EU, UNDP hold meeting to discuss rural development in Georgia
December 17th, 2019, http://enpard.ge/en/rural-networking-action/
More than 50 representatives, including representatives from the government, rural businesses and international organizations, met at the annual Georgian Rural Development Network (GRDN) meeting to Page 3
BFC. Georgian Agriculture Finance Bulletin. Edition #88, December 2019
discuss the prospects of public-private partnerships in promoting rural development in Georgia as well as the role of young people in growing successful rural businesses that can create income opportunities beyond agriculture. They also discussed how the GRDN can facilitate and enhance rural development by creating a coalition of protagonists and supporters. The meeting was organized with assistance from the European Union (EU), the United Nations Development Program (UNDP) and the Civil Development Agency (CiDA).
9)
EUR 250 million credit line for Eastern Partnership counties
December 20th, 2019, https://www.ebrd.com/news/2019/ebrd-and-eu-boost-export
The European Bank for Reconstruction and Development (EBRD) and the European Union (EU) are stepping up their support for small- and medium-sized enterprises (SMEs) in Eastern Partnership countries with new financing. Specifically, the bank will provide more than EUR 250 million in credit to local financial institutions as part of an effort to increase the competitiveness of businesses in those countries. The loans will help SMEs benefit from the opportunities brought about by the Deep and Comprehensive Free Trade Area (DCFTA) as well as other EU partnerships agreements.
10) USAID to support improving certification procedures for seedlings December 22nd, 2019, https://mepa.gov.ge/En/News/Details/11798
Under its agricultural support program, the United States Agency for International Development (USAID) is assisting the Ministry of Agriculture in improving certification procedures for seedlings, including improving relevant legislation. Currently, the vast the majority of nurseries do not meet relevant standards; however, many believe that there is a great potential for Georgian nurseries to eventually export seedlings to other countries. As such, it is important for certification procedures to meet international standards. The process of voluntary certification of planting materials in Georgia has been underway since 2017 and is being implemented by the Agricultural Research Center of the Ministry of Agriculture. To obtain certification, a nursery must first obtain a qualified nursery status and then engage in the certification process.
11) 100 Ministry of Agriculture staff participate in FAO trainings December 25th, 2019, http://www.fao.org/georgia/news/detail-events/ru/c/1256630/
The Food and Agriculture Organization of the United Nations (FAO), within the European Union (EU)supported European Neighborhood Program for Agriculture and Rural Development (ENPARD), has successfully implemented a four-month training module for Ministry of Agriculture staff. Under this module, more than 100 Ministry staff participated in training courses on leadership, public speaking, Microsoft Office, human resource management and the English language. The trainings were specifically designed to cover several gaps identified in Ministry staff skills and increase their professional performance. Enhancing the capacities of Ministry staff is considered crucial for the country to move forward with agricultural sector reforms that are necessary for it to comply with requirements set forward in the Association Agreement between the European Union and Georgia.
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Private Sector 12) Livestock numbers on the decline December 3rd, 2019, https://sputnik-georgia.ru/infographics/20191203/247155769/Zhivotnovodstvo-v-Georgia.html
The number of livestock in Georgia are decreasing. According to the National Statistics Service, the number of cattle in the country is now 902,100, down 3.7% over last year. The number of pigs and sheep have also declined, by 8.8% and 7.3% respectively. There was also a recorded 3.7% decline in the productivity of poultry farms.
13) Two new exotic agricultural products to be cultivated next year December 5th, 2019, http://geotimes.ge/index.php?m=5&news_id=71621&cat_id=5
Loladzes Farms is exploring the possibility of growing two new exotic agricultural products – okra and pepinos – in the Kakheti region. Neither has appeared in the Georgian market before and presents an intriguing opportunity for Georgian producers to diversify their product offering and increase their influence in niche markets. Okra is a pepper-like vegetable that is especially useful for people with diabetes and also burns fat and lowers cholesterol. Pepino is an aromatic and sweetish seedless fruit that can ben eaten raw or boiled or roasted.
14) Wine exports up 10% December 5th, 2019, http://georgianwine.gov.ge/En/News/32702
For the period of January-October 2019, Georgia exports 86 million bottles of wine to 53 countries, a 10% year-on-year increase. In monetary terms, this amounted to USD 220 million, a 20% year-on-year increase. The top four countries importing Georgia wine during this period were: Russia (53.9 million bottles), Ukraine (8.3 million bottles), China (6.3 million bottles) and Poland (3.7 million bottles). Georgia also exported 24.8 million bottles of brandy to 24 countries during the same period, a 60% yearon-year increase. In monetary terms, this amounted to USD 60.7 million, a 63% year-on-year increase. In total, exports of wine, brandy and vodka amounted to USD 325 million during this period, an increase of 15% year-on-year.
15) Tangerine harvest expected to reach 55,000 tons December 10th, 2019, http://geotimes.ge/index.php?m=5&news_id=71760&cat_id=5
Georgia’s tangerine harvest is well under way, with this year’s harvest expected to reach 55,000 tons. The main region for tangerine production in Georgia is Ajara, which is home to more than 25 companies that are engaged in activities related to the storage and processing of tangerines (including 14 dedicated to export activities). A coordination center serving tangerine farmers and processing factories opened in the region in October in order to facilitate the storage of the fruit as well as the distribution of state subsidiaries to farmers growing tangerines. The center will work until February 1, 2020. Georgian tangerines are expected to get a higher market price this year due to Georgia’s increasing reputation as a quality producer of the fruit. Additionally, Georgian tangerine producers are expected to benefit from a more diversified export market, with four new markets (Lithuania, Qatar, Singapore and Slovenia) opening this year.
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16) Georgian milk production decreasing December 12th, 2019, https://commersant.ge/en/post/georgia-decreases-natural-milk-production
Georgian milk production is on the decline is expected to continue to decline, especially as rules designed to encourage more milk production (i.e. legislation requiring that dairy products made with milk powder be labeled as such) as largely unfollowed. The problem is two-fold. On the one hand, dairy products are often produced in small home workshops that are not controlled. At the same time, the number of cattle in the country is on the decline and now amounts to only 902,100 head, lead to a drop of 4.8% in raw milk production since 2016. For the situation to change, farms must be enlarged to the point where raw milk production become economically viable and a more profitable solution than the use of imported powdered milk.
17) Georgia, China sign memorandum to develop tobacco and tea in Adjara December 18th, 2019, https://agenda.ge/en/news/2019/3468
Georgia and China have signed a memorandum of understanding that aims to develop tobacco and tea businesses in Georgia Black Sea region of Adjara. The memorandum seeks to take advantage of the previously-signed Free Trade Agreement between the two countries and encourage foreign investment in Georgia’s agricultural sector.
18) Georgian fruit and nut exports up 4.4% December 18th, 2019, http://bizzone.info/agriculture/2019/1576709000.php
According to the National Statistics Service, Georgia exports USD 78.9 million worth of fruits and nuts during the January-October period of this year, a year-on-year increase of 4.4%. At the same time, the share of fruits and nuts in total exports amounted to 2.6%. The main fruit and nut exports were: hazelnuts (USD 42.3 million), peaches (USD 12.5 million), bananas (USD 4.8 million), apples (USD 4.5 million), persimmons (USD 2.3 million), mandarins (USD 2.2 million), pistachios (USD 1.4 million) and walnuts (USD 1.3 million).
19) American expert presents information on growing wine exports to the US December 18th, 2019, http://georgianwine.gov.ge/En/News/32705
An expert from the American marketing company Mark Energy has met with representatives of about 60 Georgian wine companies at the National Wine Agency to present information on the US wine market, including fundamental steps necessary for Georgian wine producers to take to build a long-term sustainable plan for the US market. The presentation was important for Georgian wine producers as the National Wine Agency considers the US a strategic market and hopes to intensify exports to the country in 2020. Georgia wine is growing in popularity in the US, as evidenced by 660,000 bottles of wine being exported to the US over the first 11 months of this year (a 48% year-on-year increase).
20) Tangerine exports up 6.2% December 20th, 2019, https://agenda.ge/en/news/2019/3494
From the middle of October through the middle of December, Georgian tangerine exports amounted to 21,300 tons, a 6.2% increase year-on-year. The increase in exports is largely due to new markets
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(Lithuania, Qatar, Singapore and Slovenia) opening up. The leading importers of Georgian tangerines are: Russia (13,075 tons), Ukraine (4,047 tons) and (3,333 tons).
21) USD 54.76 million in hazelnut exports so far this year December 20th, 2019, https://bm.ge/en/article/hazelnut-export-from-georgia-is-increased-in-11m-of-2019/45665/
Over the first 11 months of 2019, 10,879 tons of hazelnuts were exported from Georgia, including 2,391 tons of unshelled nuts and 8,488 tons of shelled nuts. The total export value amounts to USD 54.76 million, 8.6% more year-on-year. Georgian hazelnut production and exports have fallen sharply in recent years due to damage caused by the brown marmorated stink bug and various fungal diseases; however, the hazelnut production and exports appear to be slowly recovering.
22) Average Georgian citrus production and export levels December 23rd, 2019, https://bm.ge/en/article/how-much-does-georgia-get-from-citrus-export--statistics-/45804/
According to official data, 60,000-65,000 tons of citrus is harvested in Georgia annually, with annual citrus exports reaching 24,000-28,000 tons. Statistics show that the value of citrus exported from Georgia varies from year to year; however, the value of exports averages approximately USD 13 million annually. In 2018, the value of citrus exports was USD 14.8 million.
23) Honey exports on the decline December 25th, 2019, https://bm.ge/en/article/honey-export-decreased-within-11m-in-2019-/45956/
During the January-November 2019 period, 6.4 tons of honey was exported to more than 15 countries, amounting to USD 56,200. In terms of value, this represents an 18.2% year-on-year decline. It should be noted that honey exports have been on a steady decline since 2015, with the exception of last year.
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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.
