State Initiatives
1) State Launches Hazelnut Support Program
December 3rd, 2022, https://mepa.gov.ge/En/News/Details/21115
To support hazelnut producers and those involved in the sector, the state is launching an assistance program that will provide GEL 500 per hectare in subsidies to individuals who have planted a hazelnut orchard of between 0.2 hectares and 3.0 hectares. Hazelnut farmers will receive the assistance through accrued points on their agro cards, which can be used at specialized stores to buy products necessary for cultivating hazelnuts. To receive the assistance, hazelnut farmers must register their orchards in the hazelnut cadaster by January 31, 2023. Approximately 100,000 farmers are expected to participate in the program.
2) Alcoholic Beverages for Sale Domestically Now Require Certification
December 14th, 2022, https://wine.gov.ge/En/News/34970
In order to boost the quality of Georgian wine and ensure it fully meets international standards, all alcoholic beverages produced in Georgia and intended for sale in Georgia require undergoing a mandatory certification process. This requirement was first introduced in 2021 amendments to the Law of Georgia on Grapes and Wine and went into effect on January 1, 2023.
Foreign Aid
3) Draft Law on Food Loss and Waste Reduction Presented
December 15th, 2022,
https://www.fao.org/georgia/news/detail-events/en/c/1626930/
The draft Law on Food Loss and Waste Reduction and Food Donation has been presented by Parliament’s Agrarian Issues Committee. The draft law was developed with the support of the Food and Agriculture Organization of the United Nations (FAO) within the European Neighborhood Program for Agriculture and Rural Development (ENPARD) with the aim of improving food security and reducing food waste, both of which will positively impact social, economic and environmental conditions in the country as well as support the achievement of the global sustainable development goals.
4) Catalog of Traditional Georgian Dairy Products Created
December 25th, 2022, https://mepa.gov.ge/En/News/Details/21144
The first catalog of traditional Georgian dairy products has been created within the framework of the Safety and Quality Investment in Livestock (SQIL) project. The SQIL project advocates for the development of cattle farming in the country, aiming to bring the country’s livestock sector to a new level. In addition to the catalog, the project also provided training courses to Georgian farmers and developed several new guidelines to strengthen and enhance the sector. The SQIL project is funded by the United States Department of Agriculture (USDA) and is being implemented by Land O’Lakes Venture37 in cooperation with the Georgian Farmers Association.
5) Ten Years of ENPARD in Georgia
December 26th, 2022, https://georgiatoday.ge/10-years-of-enpard
The European Neighborhood Program for Agriculture and Rural Development (ENPARD) is celebrating ten years of work in Georgia. With total budgetary expenditures exceeding EUR 234 million, the program has assisted in aligning Georgia’s institutional, legal and administrative systems with European Union (EU) standards as well as introduced European models of rural development. Within the program’s most recent third phase, the following successes have been made:
• The creation/retention of 2,600 jobs in key program areas, 1,700 of which are held by women
• 7,000 rural inhabitants receiving vocational education on new skills necessary for employment opportunities
• The establishment of local action groups (LAGs), which have achieved gender parity in terms of board membership
The EU, through the program, remains committed to supporting further initiatives aimed at the development of sustainable, inclusive and green rural economies that lift people out of poverty.
Private Sector
6) 45,000-Ton Citrus Harvest Expected
December 5th, 2022, https://bm.ge/en/article/fruit-harvest-expected-to-hit-45000-tonnes-of-citrus pm/122071/
This year’s citrus harvest is expected to reach 45,000 tons. In support of the citrus sector, the government will subsidize the purchase of non-standard tangerines. In particular, state subsidies per kilogram of nonstandard tangerines will amount to GEL 0.15, meaning that processing enterprises will only pay GEL 0.05 per kilogram.
7) Honey Exports on the Rise
December 7th, 2022, https://commersant.ge/en/post/our-honey
Georgian honey exports in 2022 increased to 211 tons, with 90% of products being exported to European Union (EU) countries. This is a good sign for Georgia’s honey sector as it continues to work through some issues that are inhibiting its potential, most notably transportation issues due tension in the Black Sea. Overall, demand for Georgian honey in the EU is estimated at 1,400 tons. Currently, Georgia’s maximum capacity, however, is only 500 tons. In addition to finding ways to increase production, Georgia’s honey sector would also benefit from increasing its production of acacia honey, which is in high demand but is not produced in large quantities.
8) FAO Project to Support Sustainable Pasture Development
December 8th, 2022, https://georgiatoday.ge/sustainable-agriculture
A new Food and Agriculture Organization of the United Nations (FAO) project is underway in Georgia, with the aim of improving sustainable agricultural practices in livestock grazing. The project is expected to result in a number of improvements, including better pasture management policies and legislation, the leveraging of rural pastures as a social benefit for communities and increased livelihoods for rural inhabitants. In particular, the project plans to draw on the experience of French grazers, who have formed associations that lease, manage and maintain rural pastures. This, in turn, will result in local stakeholders having collective responsibilities for pastures, improved pasture conditions and, ultimately, better livestock-based products.
9) Forecasted Decline in Fruit Exports
December 9th, 2022, https://www.freshplaza.com/europe/article/9485627/georgia-is-to-reduce-fruit-exports-in-2022/
Increased domestic demand (due to increased tourism and migration into Georgia) and some quality and packaging issues are expected to result in a decline in fruit exports this year. The Georgian fruit sector also has technological and logistical issues such as a lack of modern processing and packaging technologies, insufficient refrigeration and storage capacities and an inability to conduct trade with some markets due to the war in Ukraine causing logistical impracticalities. Currently, Russia remains the main export market for Georgian fruits; however, there are increased calls for greater market diversification given the uncertainty surrounding that market.
10) Apple Export Volumes Disappointing
December 15th, 2022, https://commersant.ge/en/post/georgia-has-reached
Despite an estimated record apple harvest of 130,000 tons this year (the previous record was 90,000 tons), the export of Georgian apples over the first three months of the season has been disappointing, reaching only 5% of total export potential. At the same time, apple exports have been growing, with November’s export volume 65% higher than October’s. Overall, apple exports are down 12% year-on-year and down 55% from the record-breaking 2020 season. Export revenues are also down (10% and 30% as compared to 2021 and 2020, respectively). Nearly all apple exports have gone to Russia.
11) Wine Exports to Russia up 26%
December 20th, 2022, https://bm.ge/en/article/wine-exports-from-georgia-to-russia-up-by-26/123122/
Wine exports to Russia increased 26% over the first eleven months of 2022, amounting to USD 150 million. Most experts believe this increase to be temporary as it is connected to sanctions and other war-related impacts on the Russian economy. In particular, there has been a 35–40% decrease in the import of alcoholic beverages into Russia in 2022. Overall, the top five export markets for Georgian wine through the first eleven months of 2022 are: Russia (USD 150 million), Poland (USD 13.8 million), Ukraine (USD 11.5 million), China (USD 11.4 million) and Kazakhstan (USD 9.4 million).
12) Russia the Only Grain Supplier for Poultry Production in Georgia
December 21st, 2022, https://commersant.ge/en/post/russia
According to the chair of the Poultry Development Association, Russia has become the only grain supplier for local industry actors. Moreover, he believes that, at this point, it would be fruitless to search for new suppliers given that no other country in the region is exporting wheat and grain and that grain from Europe would be prohibitively expensive for operations. In his opinion, Georgian poultry producers must settle for Russian grain until Russia’s war with Ukraine ends and Ukraine returns to the global grain market.
13) Quick Look at Georgia’s Wine Sector
December 26th, 2022, https://georgiatoday.ge/an-overview-of-the-georgian-wine-sector/
Wine is one of the top export commodities for Georgia, constituting 21% of all Georgian agricultural exports in terms of value in 2021. In fact, wine exports since 2012 have grown an average of 21% per year in terms of volume and 22% per year in terms of value. The main export markets for Georgian wine remain Commonwealth of Independent States (CIS) countries, which import, in an average year, 78% of all Georgian wine exports. Much of this growth has been spurred by government support programs aimed at boosting the quantity and quality of Georgian wine as well as promoting Georgian wine in key markets
across the globe. Moving forward, there is expected to be major push to help diversify export markets and establish Georgian wine as a high-quality wine in new and growing markets.
14) Agricultural Exports Down, Imports Up
December 26th, 2022, https://commersant.ge/en/post/turkey-is-a-key-exporter-of-horticulture-to-georgia 2022 was a challenging year for Georgian agriculture due to a variety of factors, including increased energy prices, Russia’s war in Ukraine disrupting normal trade and a labor deficit in the sector. Georgia was negatively impacted by Turkey’s decision to limit its exports as a means of subduing prices on its own market. Overall, Georgian agricultural exports were 17% lower than in 2021, amounting to USD 166 million in value. The top three destination markets were Russia (USD 67 million), Germany (USD 25 million) and Italy (USD 25 million). At the same time, imports grew by 30%, from USD 74 million in value to USD 96 million in value in 2022. Despite limited exports, Turkey (USD 36 million) remained the leading importer of agricultural goods into Georgia, followed by Ecuador (USD 23 million) and Uzbekistan (USD 7 million).
Prepared by Business & Finance Consulting (BFC) www.bfconsulting.com
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