10/2020
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98 Geo r g i a Agriculture Bulletin Ministry of Agriculture releases support initiative data
Is it time to stop subsidizing Georgia’s wine sector? EU, FAO support development of Black Sea commercial fishing quotas Georgia exports more than 25 tons of peaches and nectarines
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Georgian Agriculture Finance Bulletin Edition #98, October 2020
Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4)
State funding for tea farmers increased.......................................................................................... 2 Ministry of Agriculture releases support initiative data.................................................................. 2 1,000 hectares in Marneuli now have access to proper irrigation system ..................................... 2 Is it time to stop subsidizing Georgia’s wine sector? ...................................................................... 2
Foreign Aid ................................................................................................................. 3 5) 6) 7) 8)
EU, FAO support development of Black Sea commercial fishing quotas ........................................ 3 My Village campaign to highlight community-based development initiatives ............................... 3 Modern refrigerated warehouse established in Kvareli.................................................................. 3 New hazelnut processing enterprise opens with USAID support ................................................... 3
Private Sector.............................................................................................................. 4 9) 10) 11) 12) 13) 14) 15) 16) 17) 18) 19)
Georgia exports more than 25 tons of peaches and nectarines ..................................................... 4 New technical regulations could lead to poultry meat shortage .................................................... 4 Live sheep exports to Saudi Arabia up 6 times................................................................................ 4 90 tons of Georgian blueberries find export markets ..................................................................... 4 273,000 tons of grapes harvested and processed in Georgia ......................................................... 5 Adjara preparing for citrus harvest ................................................................................................. 5 Georgian hazelnut exports up 50% ................................................................................................. 5 More than 3,000 tons of apples exported....................................................................................... 5 USD 41.6 million in hazelnuts exported .......................................................................................... 5 Berry exports up nearly 300% ......................................................................................................... 6 Expo Georgia to host online agricultural and food industry export forum ..................................... 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 #98, October 2020
State Initiatives 1)
State funding for tea farmers increased
October 8th, 2020, https://www.newsgeorgia.ge/%d0%bf
The government of Georgia has increased funding for tea cooperatives and beneficiaries to 90% and 70% respectively. The increase was adopted following a series of meetings with tea producers, and it is believed that this increase will further spur the restoration of Georgia’s tea industry. Government support thus far has contributed to the restoration of 1,192 hectares of tea plantations.
2)
Ministry of Agriculture releases support initiative data
October 9th, 2020, https://bm.ge/en/article/agricultural-subsidy-for-farmers-exceeded-289-million-gel-/65661/
The Ministry of Agriculture recently published data on its support for farmers and the agricultural sector. According to the data, 165,000 farmers have benefitted from GEL 28.9 million in state subsidies under the Land Owners Stimulation Program; over 122,000 beneficiaries have received discount cards for 32,000 tons of agro-diesel under the Agro-Diesel Program; 17,000 policies have been issued (for 18,000 hectares of land) under the Agro-Insurance Program; more than GEL 12.4 million has been released in state co-financing for the modernization of the dairy sector; and 2,215 agricultural loans have been issued under the Preferential Agro-Credit Program.
3)
1,000 hectares in Marneuli now have access to proper irrigation system
October 15th, 2020, https://mepa.gov.ge/En/News/Details/20121
After three decades without proper irrigation, more than 1,000 hectares of agricultural land in the Marneuli municipality (specifically in the villages of Khikhani and Shaumiani) now have access to reliable irrigation systems thanks to recent amelioration efforts in irrigation undertaken by the state. These efforts include the construction of pumping stations and the arrangement of pressurized pipelines, division boxes, water collecting and other amelioration structures. Moreover, irrigation canals are also being repaired to reduce water losses. In total, GEL 3,659,900 has been invested into the project to improve the regions’ irrigation system.
4)
Is it time to stop subsidizing Georgia’s wine sector?
October 15th, 2020, http://georgiatoday.ge/news/22686/To-Subsidize-or
The government of Georgia has been active in supporting Georgia’s wine sector, especially through subsidizing grape production. While some studies conclude that these subsidies have had a positive impact on performance, it has also been demonstrated that they could, if not managed properly, lead to many market players becoming dependent on the state and producing lower-quality goods. Moreover, subsidies can also lead to a decline in private investment, something extremely important for sustainable sector growth. As such, it is time for the government to consider alternative ways to support the wine sector. More specifically, the government should concentrate its efforts on the creation of an efficient public policy and regulatory framework for businesses as well as promoting Georgian wine on international markets and diversifying trade partners. These will lead to a healthy and stable sector capable of supporting the entire value chain without the use of state resources.
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BFC Georgian Agriculture Finance Bulletin. Edition #98, October 2020
Foreign Aid 5)
EU, FAO support development of Black Sea commercial fishing quotas
October 1st, 2020, http://www.fao.org/georgia/news/detail-events/en/c/1310901/
The government of Georgia has worked closely with the European Union (EU) and the Food and Agriculture Organization of the United Nations (FAO) to establish Black Sea commercial fishing quotas for 2020-2021. The quotas were determined in large part due to an in-depth FAO survey and will ensure compliance with the EU standards and GFCM requirements for Georgia. They will also lead to sustainable, long-term fishing yields and the responsible management of fisheries. This, in turn, will generate sustainable economic growth and employment.
6)
My Village campaign to highlight community-based development initiatives
October 1st, 2020, https://bm.ge/en/article/eu-launches
The European Union (EU) has long been committed to helping boost the sustainable and inclusive economic growth in rural areas of Georgia. In more recent years, the EU has worked toward this end by bringing local citizens, civil society organizations and municipalities together to develop solutions for their regions in the form of Local Action Groups (LAGs). To date, LAGs have been established in 12 municipalities throughout Georgia and have already identified and funded over 500 local initiatives that diversify local economies, provide better employment and improve living conditions. Given the recent success of LAGs, the EU has decided to launch the My Village informational campaign to raise awareness about them and the impact they can have on a community and its population. This will be accomplished via a series of interviews, a LAG fact sheet, a LAG campaign website and a LAG Facebook page.
7)
Modern refrigerated warehouse established in Kvareli
October 2nd, 2020, https://mepa.gov.ge/En/News/Details/20109
A modern refrigerated warehouse has opened in the Kvareli municipality thanks to support provided by the Agriculture Program of the United States Agency for International Development (USAID). The new warehouse will help farmers preserve perishable products for longer, expand markets and increase product quality and value, thereby generating greater revenues and creating more jobs. The warehouse, which is expected to employ six locals permanently and up to 150 seasonally, was built using USD 72,436 in funding from USAID.
8)
New hazelnut processing enterprise opens with USAID support
October 5th, 2020, https://mepa.gov.ge/En/News/Details/20111
Agriculture Minister Levan Davitashvili and U.S. Ambassador to Georgia, Kelly Degnan, visited a hazelnut manufacturing enterprise located in Lagodekhi that was established under the United States Agency for International Development (USAID)-supported Georgia Hazelnut Improvement Project. The enterprise, which has been equipped with modern hazelnut cleaning, drying and storage centers, is the sixth to Page 3
BFC Georgian Agriculture Finance Bulletin. Edition #98, October 2020
start operations under the project and is capable of supporting more than 200 farmers in increasing their income. In total, more than USD 250,000 was invested in the enterprise. This includes a USD 50,000 grant obtained within the project, a GEL 275,000 grant from the state and GEL 277,000 in preferential agricultural credit.
Private Sector 9)
Georgia exports more than 25 tons of peaches and nectarines
October 6th, 2020, https://mepa.gov.ge/En/News/Details/20115
Between May 1 and October 4 of this year, Georgia exported 25.3 tons of peaches and nectarines worth a total of USD 21.3 million. This is an increase in volume of more than two times and an increase in revenue of USD 8.8 million. Georgian peaches and nectarines were mainly exported to: Russia (16,769 tons), Armenia (7,510 tons) and Azerbaijan (567 tons).
10) New technical regulations could lead to poultry meat shortage October 8th, 2020, https://bm.ge/en/article/threatens-or-not-shortage-of-poultry-meat-to-georgia-/65517/
New technical regulations that came into force at the end of October 2020 regarding the import of poultry meat have some importers concerned that there may be a shortage of poultry meat in Georgia in the near future. In particular, importers are concerned that their foreign counterparts may find it difficult to provide newly-required documentation (e.g. veterinary certificates) and will probably not be willing to go through much efforts to provide them to sell smaller quantities. If importers are correct in their expectations, the price of poultry meat in Georgia could see a rise.
11) Live sheep exports to Saudi Arabia up 6 times October 14th, 2020, https://mepa.gov.ge/En/News/Details/20122
The value of live sheep experts has increased 36% year-on-year, with Saudi Arabia representing a major market for such exports. In fact, live sheep exports to Saudi Arabia have increased six times through the first nine months of this year, amounting to USD 4.5 million in total value so far. To help boost sheep exports to Saudi Arabia, a special quarantine space has been set up near Madatapi Lake (Ninotsminda municipality) to ensure sheep are properly inspected and determined as fit for export.
12) 90 tons of Georgian blueberries find export markets October 15th, 2020, https://bm.ge/en/article/90-tons-of-blueberries-were-exported
More than 90 tons of blueberries valued at USD 500,000 and produced in the village of Laituri have been successfully exported, mostly to Russia. The blueberries, produced on an area of 32 hectares, are in high demand in Russia and command a price 20-25% higher than last year. In the near future, blueberry producers in the area hope to diversify their export markets into the European Union.
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BFC Georgian Agriculture Finance Bulletin. Edition #98, October 2020
13) 273,000 tons of grapes harvested and processed in Georgia October 16th, 2020, https://sputnik-georgia.ru/economy/20201016/249725774
According to the National Wine Agency, as much as 273,000 tons of grapes have been harvested and processed in Georgia this year. This includes more than 270,000 tons in the Kakheti region as well as an unprecedented amount of more than 2,000 tons in the Racha region, which is known for growing the high-quality of Alexandrouli and Mujuretuli grapes used to make some of the best and most well-known Georgian wines.
14) Adjara preparing for citrus harvest October 17th, 2020, https://www.newsgeorgia.ge/%d0%b2-%d0%
The region of Adjara is preparing for this year’s citrus harvest, during which between 35,000 and 40,000 tons of citrus fruit are expected to be collected. The majority of this is intended for export, especially to Russia, Ukraine and Armenia. In preparation for the harvest, a coordination has been set up in Adjara to help citrus farmers sell their harvest to more than 30 processing and sorting companies.
15) Georgian hazelnut exports up 50% October 19th, 2020, https://agenda.ge/en/news/2020/3238
Georgia has exported just over 7,000 tons of hazelnuts since the beginning of August, 50% more than during the same period in 2019. This has generated USD 37.6 million in revenue, an increase of nearly USD 14 million over last year. The top five importers of Georgian hazelnuts are: Germany (2,145 tons), Italy (1,307 tons), the Czech Republic (404 tons), Poland (254 tons) and Bulgaria (220 tons). About 50,000 tons of high-quality hazelnuts are expected to be harvested in Georgia this year.
16) More than 3,000 tons of apples exported October 26th, 2020, https://commersant.ge/en/post/3-005-tons-of-apples-worth-13-million-exported-from-georgia
Georgia exports 3,005 tons of apples worth USD 1.3 million between August 1 and October 25 of this year. This is a seven-fold year-on-year increase in terms of volume and a USD 1.1 million increase in terms of value. The main export markets were Russia, Kazakhstan, Armenia, Singapore and Hong Kong.
17) USD 41.6 million in hazelnuts exported October 26th, 2020, https://bm.ge/en/article/how-much-hazelnut-was-exported-from-georgia-and-where---ministry-/67008/
Between August 1 and October 25 of this year, Georgia exported 7,684 tons of hazelnuts worth USD 41.6 million. This represents a year-on-year increase of 41% in terms of volume and a year-on-year increase of 52% in terms of value. The main export markets for Georgian hazelnuts are in Europe.
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18) Berry exports up nearly 300% October 27th, 2020, https://bm.ge/en/article/berries-exports-2958-up---where-does-georgia-sell-blueberries-/67135/
665 tons of berries value at USD 3.8 million have been exported from Georgia through the first nine months of 2020, a 295.8% year-on-year increase. The main export markets for Georgian berries this year have been Russia, the United Arab Emirates, Poland, Armenia, Ukraine and Qatar.
19) Expo Georgia to host online agricultural and food industry export forum October 27th, 2020, https://cbw.ge/economy/expo-georgia-to-host-agro-exports-forum-in-online-b2b-format
Expo Georgia will host an agriculture and food industry export forum at the end of November. Given the ongoing pandemic, the forum will be held in an online format. The objective of the forum is to assist agricultural and food product manufacturers in attracting sales channels and expanding in both domestic and international markets. The forum will allow smaller companies to meet with representatives of domestic retail networks, distribution companies and other potential partners.
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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.
