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Georgia Works on Filbert Bill Mechanism

The Ministry of Agriculture of Georgia, jointly with international donor organizations, is developing the so-called Filbert Bill. The new mechanism is expected to come into action at the end of 2016.

Initially, more than 500 shareholders of Darcheli Filbert agriculture cooperative will employ this mechanism, Tengiz  Kalandadze, head of the Agriculture Ministry department for food products, told the Business Contact.

“This will be an innovative mechanism for Georgia. I would refer to the Italian experience too. The famous Italian cheese of Parmigiano – there is the Parmigiano Cheese Bank in Italy. This signifies the commercial bank preserves cheese instead of gold and about 200 million EUR is issued in loans. The same experience will be introduced in Georgia too.

The shareholder that will store 1 ton filbert at the Darcheli Filbert, the cooperative will issue a bill to this shareholder proving he/she owns this 1 ton filbert. Based on this bill, a crediting organization will issue a preferential loan”, Tengiz Kalandadze said and added that the final version of this mechanism will be introduced to financial institutions.

“We will offer this mechanism to banks and they will decide whether to join this project or not. The filbert bill will make preferences for entrepreneurs, because they will be able to store filbert at the drying complex and take a cheap loan when the filbert market price is low”, Kalandadze said.

It is not ruled out that other cooperatives and filbert manufacturers also use the so-called Filbert Bill preferences, he added.

“Initially, this mechanism will work for only cooperative members. In this way we will promote the amalgamation process and creating new cooperatives, because cooperation format provides more preferences and in whole, this mechanism aims at promoting cooperatives”, Tengiz Kalandadze noted.

Note that in 2015 Georgian Agriculture Minister Otar Danelia unveiled a filbert enterprise in the village of Darcheli, the Zugdidi Municipality as part of the program – Filbert Production Development through Support of Cooperatives. The enterprise was transmitted to Darcheli Filbert agriculture cooperative under a 5-year leasing agreement (for a symbol price of 1 GEL). The enterprise unites 542 shareholders. The enterprise is capable for drying 24 tons of filbert and storing 500 tons of filbert simultaneously.