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Georgian Agriculture Sector in Review

 

The Caucasus Business Week (CBW) has inquired how efficiently state programs were implemented in 2017 and how successfully the agriculture sector was developed in 2017.

According to the state budget, 11 state programs have been financed by 628 892 000 GEL since 2013. The state budget has financed the preferential agro loan program by 48 900 000 GEL in 2016, while the 2017 plan constituted 47 000 000 GEL.

Agroinsurance

  • 7.200 million GEL – 2016
  • 7.000 million GEL – 2017
  • Vintage Support Programs:
  • 36.000 million GEL in 2016
  • 16.000 million GEL in 2017

Plant the Future

  • 6.861 million GEL in 2016
  • 7 million GEL in 2017
  • Georgian Tea
  • 67 000 GEL in 2016
  • 400 000 GEL in 2017

Agriculture Cooperatives Support Programs

  • 2.500 million GEL in 2016
  • 4.870 million GEL in 2017

According to the information of Agriculture Projects Management Agency of Georgian Agriculture Ministry, the office has been implementing various large-scale projects of Joint Agro Project. Today the current state projects are as follows: preferential agribusiness credit, co-financing of agriculture products processing and storehouse enterprises, agro insurance, plant the future, agro production support program, Georgian Tea. Objective of these projects is to promote development of chain of agriculture values.

State financial support has given additional stimulus to entrepreneurs for development and expansion of production and this is confirmed by the statistics. At this stage, as part of Joint Agro Project program, more than 750 enterprises and 165 new enterprises have been financed,  gardens of perennial plants have been arranged on more than 3700 hectares and tea plantations were rehabilitated on more than 529 hectares, they noted.

According to Agriculture Projects Management Agency, financial resources should become maximally attainable for farmers and entrepreneurs. New enterprises have stimulated agriculture sector development and production of exports products was expanded. As a result, since 2013, more than 27 000 loans have been issued and the portfolio exceeds 1 billion GEL.

Number of those wishing to arrange gardens of perennial fruit trees is growing in significant volumes, they said. «This year the program beneficiaries have picked the first harvest from apple gardens. Year to year the mentioned indicator will grow further; Since the program inauguration  gardens of perennial plants have been arranged on more than 3 700 hectares. State co-financing  hit 19 million GEL, the agriculture projects management agency representatives said.

Georgian Tea program is being implemented successfully too. Tea plantations were rehabilitated on 529 hectares. It is important that a major part of the program beneficiaries were cooperatives.

«Support by state and donor organization is of crucial importance for valuable and efficient development of agrarian sector and Agro Production Support Program is an evident sample. The program is being implemented with the support of agriculture modernization, market access and resilience (AMMAR) project. The program finances both primary production and processing enterprises. Since the project inauguration, 93 beneficiaries received co-financing component of more than 1.4 million GEL», the Agency representatives said.

Establishment of international standards remains a key direction, namely, this support is of crucial importance for exports-oriented companies, they said.

All enterprises financed under the program of processing and storehouse enterprises projects, will introduce ISO-22000 or HACCP international standards.

The agency finances 80% of costs for standards introduction, including 30% is financed by state budget and 50% by donor organizations. Beneficiaries have to pay only 20%.

«Agriculture projects management agency will also support beneficiaries of Plant the Future and Georgian Tea program in establishment of Global Gap primary production standard. In case with Global Gap, 50% will be financed by the beneficiary and another 50% will be financed by donor organization (USAID/REAP). More than 50 beneficiaries have already enjoyed the mentioned program opportunities», the agency said.

AgroInsurance program budget in 2017 is 7 million GEL. The program involves 5 companies: Aldagi, GPI holding, IC Group, ARDI, Alpha.

A total of 20 680 policies were issued in 2017, including October,the agency reports.

Today Georgian Farmers are able to become competitive actors thanks to international standards and modern technologies, produce top quality products and find their niche on both domestic and international markets, the agency officials said.

Irakli Chikava, founder of Agro Solutions agro consulting company, noted that the year of 2017 was full of agro innovations. Namely, there were several important events, which have determined a general situation.

  1. Appearance of marmorated stink bugs, which have brought serious problems to Georgia and which is expected to worsen situation in 2018. Marmorated stink bug has inflicted serious damages to nuts exports.
  2. Restrictions on land sales to foreign citizens – this radical decision will be reflected on foreign direct investments in the agribusiness sector.
  3. Abolition of vintage subsidy – very positive step for the sector recovery.
  4. Georgia’s recognition as a homeland of winemaking – this fact will also make positive effect on wine exports growth and incentivize Georgia’s agro tourism.
  5. Merger of Ministry of Environment protection with Ministry of Agriculture – this decision will make these sector more flexible, because these two Ministries had substantial connection earlier too.