11/2020
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99 Geo r g i a Agriculture Bulletin New dairy regulation goes into effect
Changes made to Produce in Georgia program UNDP commits USD 700,000 to support local economic and social initiatives Georgian Agro Business Association founded
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Georgian Agriculture Finance Bulletin Edition #99, November 2020
Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4)
New dairy regulation goes into effect ............................................................................................. 2 Changes made to Produce in Georgia program .............................................................................. 2 Enterprise Georgia program to include farmers who cultivate perennial crops ............................. 2 State programs continue to support agricultural producers throughout the pandemic ................ 2
Foreign Aid ................................................................................................................. 2 5) 6) 7) 8) 9)
FAO, EU continue training Georgian farmers on business basics ................................................... 2 USAID, TBC Bank collaborate to support the agricultural sector .................................................... 3 Field visit day organized to share best agricultural practices with farmers .................................... 3 UNDP commits USD 700,000 to support local economic and social initiatives .............................. 3 FAO launches grant competition to support rural women ............................................................. 4
Private Sector.............................................................................................................. 4 10) 11) 12) 13) 14) 15) 16) 17) 18) 19) 20) 21) 22)
Expo Georgia hosts agriculture and food industry export forum ................................................... 4 Georgian Agro Business Association founded ................................................................................. 4 More than 2,250 tons of fish exported from Georgia this year ...................................................... 4 Citrus harvest projected at 20,000 tons less than last year ............................................................ 4 Meat and meat product prices up 3.4% .......................................................................................... 5 GABA highlights challenges for agricultural development .............................................................. 5 653 tons of tangerines exported ..................................................................................................... 5 Dairy producers call for a freeze on credit liabilities ....................................................................... 5 Preliminary third-quarter animal husbandry data released............................................................ 5 More than GEL 9 million in nonstandard apples sold within state program .................................. 6 Hazelnut exports up 38% ................................................................................................................. 6 1,928 tons of mandarins exported .................................................................................................. 6 12-fold increase in apple exports .................................................................................................... 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 #99, November 2020
State Initiatives 1)
New dairy regulation goes into effect
November 2nd, 2020, https://bm.ge/en/article/new-regulations-are-enacted-for-dairy-industry-from-november-1-/67681/
A new regulation for the dairy sector went into effect on November 1, 2020. Specifically, this regulation requires that the packaging of dairy products indicate that it is made from raw milk.
2)
Changes made to Produce in Georgia program
November 12th, 2020, https://agenda.ge/en/news/2020/3572
Changes have been made to the state-run Produce in Georgia program. These changes allow event companies and farmers engaged in growing grapes, citrus and other tropical fruits to be involved in the program’s credit guarantee mechanism, which guarantees up to 90% of principal amount for each loan disbursed through the program.
3)
Enterprise Georgia program to include farmers who cultivate perennial crops
November 12th, 2020, https://bm.ge/en/article/some-farmers-will-be-guaranteed-a-state-loan--what-does-that-mean/68606/
The government of Georgia has made a change to the Enterprise Georgia program to increase COVID-19 support to those engaged in the cultivation of perennial crops. In particular, the change will allow these farmers to participate in the program’s credit guarantee scheme, which covers up to 70% of collateral requirements for small- and medium-sized enterprises when obtaining credit.
4)
State programs continue to support agricultural producers throughout the pandemic
November 17th, 2020, http://bizzone.info/agriculture/2020/1605653657.php
State programs to support small- and medium-sized farms during the COVID-19 pandemic are still being carried out to support the sector during this crisis period. In particular, these state programs have provided more than GEL 29.5 million in state subsidies to farmers to carry out their works as well as provided farmers with 32,000 tons of diesel fuel at discounted prices. Moreover, about 3,000 farmers have become beneficiaries of a special component of the Preferential Agricultural Loan Program, which provides state co-financing for interest rates on bank loans taken for current expenses in connection with growing annual crops. Another 387 farmers have been provided with 50% grant support under the Promotion of Agricultural Production Program, which helps farmers procure agricultural equipment and set up greenhouses and irrigation systems.
Foreign Aid 5)
FAO, EU continue training Georgian farmers on business basics
November 12th, 2020, http://www.fao.org/georgia/news/detail-events/en/c/1329797/
The Food and Agriculture Organization of the United Nations (FAO), under the European Union-supported ENPARD program, continues its training of Georgian farmers on business, finance and marketing basics. The main objective of the training sessions is to help rural producers and farmers turn their agricultural Page 2
BFC. Georgian Agriculture Finance Bulletin. Edition #99, November 2020
and farming activities into a successful business model. Knowledge of marketing and business basics will allow them to not only enhance their profit potential but also acquire valuable skills needed to write business plans, a necessary condition when applying for agricultural grants and bank loans. In the long term, this is expected to result in increased revenues, better profitability and more effective utilization of resources by producers. The interactive sessions are being conducted in line with national COVID-19 regulations.
6)
USAID, TBC Bank collaborate to support the agricultural sector
November 16th, 2020, https://netgazeti.ge/news/498789/
The Agriculture Program of the United States Agency for International Development (USAID) and TBC Bank are joining forces to offer financing to entrepreneurs engaged in the agricultural sector. Financing is available for the purchase and installation of land, buildings, vehicles, technology lines, machinery and equipment as well as for working capital. In addition to the financing credit, there is also a grant component and technical assistance available from USAID. The joint effort is aimed at supporting those engaged in the production and storage of berries, herbs, legumes, seeds, perishable vegetables, mandarins, table grapes and nuts.
7)
Field visit day organized to share best agricultural practices with farmers
November 17th, 2020, https://www.finchannel.com/world/georgia/79294
A field visit day was organized within the framework of the European Union-funded AFD-ENPARD Program for Access to Agricultural Finance for Small Scale Semi-Commercial Farms and Cooperatives (FinExCoop) to a potato and fodder beet demonstration plot in the village of Artsevani (Tsalka municipality). The purpose of the field visit was to demonstrate the value of certified experimental high-quality seeds for potatoes and for fodder beets to Georgian farmers. The Artsevani demonstration plot produces triple the average regional production level for both potatoes and fodder beets. FinExCoop has a mandate to develop technical assistance to farmers and is doing so via a test, train and transfer strategy. In particular, they test new agricultural inputs and equipment provided by leading international technological partners and their local representatives and train extensionists and innovative farmers in their use. They also transfer knowledge of the best piloted results to a large array of farmers via awareness-raising activities such as this field visit day.
8)
UNDP commits USD 700,000 to support local economic and social initiatives
November 20th, 2020, https://www.finchannel.com/world/georgia/79468
As part of an effort to support the resilience of rural communities within the context of the ongoing COVID-19 pandemic, the United Nations Development Program (UNDP) is committing USD 700,000 to promising local economic and social initiatives in Georgia. This support is being provided as direct funding to municipalities in four regions (Racha-Lechkhumi-Kvemo Svaneti, Samegrelo-Zemo Svaneti, Guria and Kvemo Kartli) and will continue throughout 2020. This assistance is part of a broader program for regional and local development that is funded by the Swiss Agency for Development and Cooperation (SDC), the Austrian Development Agency (ADC) and the government of Georgia.
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BFC. Georgian Agriculture Finance Bulletin. Edition #99, November 2020
9)
FAO launches grant competition to support rural women
November 24th, 2020, http://www.fao.org/georgia/news/detail-events/en/c/1333099/
The Food and Agriculture Organization of the United Nations (FAO) has announced a grant competition for women living in the Ateni, Plevi, Tvishi and Sori communities. The competition, which is part of the Agriculture and Rural Development in Georgia project, is for the procurement of labor-saving agricultural machinery or equipment. The overall objective of the initiative is to improve the quality of life for rural women by providing them with agricultural technologies. The main target beneficiaries are single parents, women with three or more children, women with disabilities and women living with sick and/or disabled family members.
Private Sector 10) Expo Georgia hosts agriculture and food industry export forum November 1st, 2020, https://cbw.ge/economy/expo-georgia-to-host-agro-exports-forum-in-online-b2b-format
Expo Georgia hosted an agriculture and food industry export forum in late November 2020. The main objective of the forum was to assist agricultural and food product manufacturers (especially smaller ones) in attracting sales channels and expanding on both domestic and international markets. To this end, representatives of 50 major exporters from target countries participated in the forum. Moreover, agricultural and food product manufacturers also received important information how to export products. Given the ongoing COVID-19 pandemic, the forum was held in an online format.
11) Georgian Agro Business Association founded November 2nd, 2020, https://cbw.ge/economy/agro-business-association-founded-in-georgia
The Georgian Agro Business Association (GABA) was founded on October 2, 2020 with the aim of uniting Georgian agricultural sector representatives. GABA hopes to attract major businesses to the agricultural sector, increase food supplies, diversify foreign markets and boost export indicators within the sector.
12) More than 2,250 tons of fish exported from Georgia this year November 5th, 2020, http://bizzone.info/agriculture/2020/1604610109.php
Over the first nine months of this year, more than 2,250 tons of fish valued at USD 1.17 million have been exported from Georgia. The main export markets were Turkey (2,190 tons valued at USD 876,700), Azerbaijan (50.6 tons valued at USD 255,400) and Armenia (18.3 tons valued at USD 35,000). These are promising figures, especially given that the government plans to intensify the development of aquaculture in the country in the coming years.
13) Citrus harvest projected at 20,000 tons less than last year November 10th, 2020, https://commersant.ge/en/post/georgia-will-harvest-20000-tons-less-citrus-fruits
Georgia is expected to harvest 40,000 tons of citrus fruit this year, 20,000 tons less than last year. The drastic decline in production is due to a combination of fertility issues and abnormal frosts last year. At least 50% of the harvest is expected to be exported. Given the increased demand for citrus fruits (as a source of vitamin C) due to the COVID-19 pandemic, it is expected that this year will still be a successful year despite the drop in production. The main export markets for Georgian citrus last year were Russia, Ukraine and Armenia. Page 4
BFC. Georgian Agriculture Finance Bulletin. Edition #99, November 2020
14) Meat and meat product prices up 3.4% November 13th, 2020, https://bm.ge/en/article/meat-price-increased-/68663/
According to Geostat, meat and meat product prices are up 3.4% over last year. The increase is driven by a rise in the cost of animal feed as well as the exchange rate of the lari (GEL). Currently, the average cost per kilogram of meat is approximately GEL 24, with average prices slightly lower in local markets. Meat production is increasing in general in the country. According to Geostat, 16,300 tons of meat was produced in Georgia in the second quarter of this year.
15) GABA highlights challenges for agricultural development November 17th, 2020, https://cbw.ge/economy/gaba-radical-changes-are-required-in-agribusiness-sector
The Georgian Agro Business Association (GABA) has examined the current challenges facing the agricultural sector, noting that radical changes are needed for the sector to develop further. In particular, GABA noted the lack of knowledge-based solutions, the low concentration of land resources and the inactivity of the existing cooperatives, the low level of value addition, a deficit of qualified personnel, a shortage of seed and plant materials, a lack of modern machinery, poor irrigation, unorganized supply chains and unreasonable consumption.
16) 653 tons of tangerines exported November 17th, 2020, https://bm.ge/en/article/where-is-georgian-citrus-sold-/68945/
So far this year, Georgia has exported 653 tons of tangerines valued at USD 295,000. This is a year-onyear increase of 138% in terms of volume as well as an increase of USD 149,000 in terms of value. The main export markets have been Armenia (411 tons) and Russia (185 tons).
17) Dairy producers call for a freeze on credit liabilities November 19th, 2020, https://bm.ge/en/article/dairy-producers-demand
Dairy producers are demanding a freeze of credit liabilities over the next 2—3 years. Their rationale for this is that the dairy sector did not receive any support benefits during the COVID-19 pandemic. Many involved in the dairy industry fear that, without such support, dairy farms could fail en masse, leading to the collapse of the industry as a whole. Dairy producers are also calling for an exemption of raw processed milk products from VAT.
18) Preliminary third-quarter animal husbandry data released November 20th, 2020, https://www.finchannel.com/world/georgia/79439
The National Statistics Office of Georgia has published preliminary third-quarter data on animal husbandry. According to the preliminary data, the number of bovine animals increased by 4.9% year-onyear, reaching 955,000 heads. Of this, the total number of dairy cows and buffaloes increased by 0.7%, amounting to 453,800 heads. The total number of sheep and goats was down 9.9% year-on-year, amounting to 846,100 heads. The number of pigs amounted to 237,200 heads, which is up 3.0% year-onyear. The number of poultry increased by 22.5% year-on-year, amounting to 11.5 million heads. Milk production increased by 2.0% year-on-year, reaching 168.4 million liters. At the same time, meat production decreased 6.4% (amounting to 14,700 tons), and egg production fell 9.6% (amounting to 154.8 million eggs). Page 5
BFC. Georgian Agriculture Finance Bulletin. Edition #99, November 2020
19) More than GEL 9 million in nonstandard apples sold within state program November 21st, 2020, https://cbw.ge/economy/farmers-earn-over-gel-9-million-from-sales-of-nonstandard-apple
The Ministry of Agriculture has released information on the implementation of the state support program for the sale of nonstandard apples. As November 20, 2020, farmers had already sold over 41,000 tons of nonstandard apples within the program, resulting in earning of more than GEL 9 million. 14 companies are involved in the state program, which provides a subsidy of GEL 0.10 per kilogram of nonstandard apple to processing companies if they provide farmers with a purchase price of at least GEL 0.22. The program ran until December 1, 2020.
20) Hazelnut exports up 38% November 24th, 2020, https://www.agenda.ge/en/news/2020/3701
During the period of August 1, 2020 through November 23, 2020, Georgia exported 10,848 tons of hazelnuts worth USD 57.2 million. This represents a year-on-year increase of 38% in volume and USD 48 million in value. The main export markets were Germany (3,131 tons), Italy (2,124 tons) and the Czech Republic (594 tons).
21) 1,928 tons of mandarins exported November 24th, 2020, https://www.agenda.ge/en/news/2020/3705
Georgia exported 1,928 tons of mandarins worth USD 941,000 between August 1, 2020 and November 23, 2020. The main export markets were Russia (899 tons) and Armenia (883 tons), with some exports also made to Kazakhstan, Moldova and Ukraine.
22) 12-fold increase in apple exports November 24th, 2020, https://www.agenda.ge/en/news/2020/3702
Between August 1, 2020 and October 23, 2020, Georgia exported 5,045 tons of apples worth USD 2.2 million. This represents a 12-fold year-on-year increase in terms of volume and a USD 1.9 million increase in terms of value. The main export market was Russia (4,884 tons), with some exports also made to Armenia, Hong Kong, Kazakhstan and Singapore.
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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.
