#84 Georgia Agriculture Bulletin, BFC

08/2019

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84 Geo r g i a Agriculture Bulletin Hazelnut harvest expected to rebound with successes against stink bug Georgia, Germany agree to increased food safety cooperation Japanese agricultural experts to develop training courses for Georgian farmers Plan to replace Russian wheat with Kazakh wheat

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Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4)

Hazelnut harvest expected to rebound with successes against stink bug ...................................... 2 Georgia, Germany agree to increased food safety cooperation ..................................................... 2 Livestock breeding project under development ............................................................................. 2 Winemakers in Kakheti ask the state to subsidize grapes .............................................................. 2

Foreign Aid ................................................................................................................. 3 5) 6) 7) 8)

Unified certification system for nurseries under development ...................................................... 3 Specialist examines Georgia’s potential for pistachio and olive cultivation ................................... 3 Japanese agricultural experts to develop training courses for Georgian farmers .......................... 3 USAID launches new grant-based program..................................................................................... 3

Private Sector.............................................................................................................. 4 9) 10) 11) 12) 13) 14)

Wine exports up 4%......................................................................................................................... 4 Plan to replace Russian wheat with Kazakh wheat ......................................................................... 4 Overview of 2018 agricultural markets and fairs ............................................................................ 4 Georgia to face challenging grape harvest ...................................................................................... 4 Milk and meat production up .......................................................................................................... 5 Livestock numbers on the decline ................................................................................................... 5

Note: The Georgia Agriculture Bulletin presents a monthly roundup of headlines and news stories related 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. Read more »

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BFC Agriculture Bulletin

State Initiatives 1)

Hazelnut harvest expected to rebound with successes against stink bug

August 16th, 2019, https://agenda.ge/en/news/2019/2190

The brown marmorated stink bug, first reported in Georgia in 2015, has been a real nuisance to Georgian farmers since 2016 when it destroyed a significant portion of Georgia’s hazelnut harvest. To combat the pest, the government of Georgia adopted a strategy that consisted of four main directions: an information campaign, the implementation of a monitoring system, stink bug control measures and scientific research. The government was supported in this effort by USD 6.5 million and special equipment from the United States. As a result of the efforts, experts expect Georgia’s hazelnut production to rebound in 2019 with a harvest of more than 40,000 tons (as compared to just 17,000 tons last year). Moreover, the hazelnuts are expected to be of an overall higher quality. Hazelnut exports this year are expected to be valued at USD 110 million.

2)

Georgia, Germany agree to increased food safety cooperation

August 22nd, 2019, https://agroface.ge/news/b9234a3e-f1e7-4cc2-ab89-de6136812e48

The Agricultural Research Center of the Ministry Agriculture has signed a memorandum of understanding with the German Institute for Risk Assessment. The memorandum will enhance the scientific potential of the food safety system and, consequently, the health of consumers in both countries. Specifically, the memorandum will establish an information exchange and communication mechanism as well as develop new programs and increase staff qualifications. This will largely be accomplished through joint seminars and trainings.

3)

Livestock breeding project under development

August 24th, 2019, https://kalo.ge/news/view?id=7672

A livestock breeding project is being developed as part of an initiative of the Ministry of Agriculture. If approved for implementation, it is likely to be a cooperative effort with the Ministry of Economy and will likely be geared toward helping develop rural economies. It is expected that the project, if approved, will also help the development of the silk industry in the country through increased silkworm production.

4)

Winemakers in Kakheti ask the state to subsidize grapes

August 26th, 2019, http://georgiatoday.ge/news/17049/Kakhetian-Winemakers-Ask-for-Grape-Subsidies

Winemakers in Georgia’s Kakheti region have asked the state for grape subsidies this year. The winemakers believe grape prices will be very low and have called on the government to step in to solve the problem. Fears of a Russian embargo on Georgian wine have only served to heighten concerns over the price of grapes. For its part, the National Wine Agency is taking measures to ensure that grapegrowers do not face any problems selling their harvest and believes that there will be no need for state subsidies. They also note that new vineyards have been cultivated. Grapes were subsidized in Georgia until 2017, when the state determined that private sector interest was enough to sustain the sector.

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BFC Agriculture Bulletin

Foreign Aid 5)

Unified certification system for nurseries under development

August 1st, 2019, https://kalo.ge/news/view?id=7566

The Ministry of Agriculture, with the support of the United Nations Food and Agriculture Organization (FAO), is launching a new project to develop and implement a unified certification system for nursery farms in Georgia. Such a system will help ensure compliance with international standards for nurseries and will likely lead to growth in productivity. The project will be implemented in conjunction with the National Food Agency, the Agricultural Research Center and the Rural Development Agency.

6)

Specialist examines Georgia’s potential for pistachio and olive cultivation

August 12th, 2019, https://agenda.ge/en/news/2019/2153

A specialist from the Department of Plant Sciences of the University of California visited Georgia to examine the country’s potential for pistachio and olive cultivation. As part of the visit, the specialist went to a local research center in Jighaura that has more than 300 varieties of plants. According to the specialist, Georgia has the proper climate and necessary water resources to cultivate subtropical crops.

The specialist’s assessment comes at about the same that the Ministry of Agriculture announced its plan to support Georgian farmers in cultivating pistachios and olives as part of its Plant the Future program.

7)

Japanese agricultural experts to develop training courses for Georgian farmers

August 14th, 2019, https://kalo.ge/news/view?id=7676

Within the framework of the Creation of Business-Oriented Agricultural Cooperatives project, Japanese agricultural experts will develop training courses for Georgian farmers and cooperative members. The decision comes after Japanese specialists studied agricultural cooperatives operating in Georgia and met with various Georgian representatives. The Creation of Business-Oriented Agricultural Cooperatives project is being carried out by the Ministry of Agriculture and the Japan International Cooperation Agency (JICA).

8)

USAID launches new grant-based program

August 21st, 2019, https://kalo.ge/news/view?id=7753

The Agricultural Program of the United States Agency for International Development (USAID) is launching a grant-based program aimed at assisting agricultural and inter-business associations in Georgia involved in horticulture value chains. In particular, grants will be awarded for improving access to modern agricultural production facilities as well as developing modern approaches and mechanisms to support the export of horticulture products. Applications will be accepted through mid-September.

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BFC Agriculture Bulletin

Private Sector 9)

Wine exports up 4%

August 5th, 2019, http://georgianwine.gov.ge/En/News/29659

DThrough the first seven months of 2019, Georgia exported 47.2 million bottles of wine to 47 countries, a 4% year-on-year increase. This amounted to USD 114.2 million in value, a 6% year-on-year increase.

The top five importers of Georgian wine were: Russia (29.1 million bottles), Ukraine (4.9 million bottles), China (4.2 million bottles), Poland (2.3 million bottles) and Kazakhstan (1.9 million bottles). In total, 243 Georgian companies were engaged in wine exports during this period.

During the same period, Georgia also exported 14.5 million bottles of brandy to 18 countries, a 46% year-on-year increase. This amounted to USD 31.5 million in value, a 57% year-on-year increase. Georgia also exported 306,200 bottles of chacha to 24 countries, a 40% year-on-year increase. This amounted to USD 810,000 in value, a 27% year-on-year increase.

10) Plan to replace Russian wheat with Kazakh wheat August 5th, 2019, http://georgiatoday.ge/news/16795/Can-Georgia-Replace-Russian-Wheat-Import-with-Kazakh%3F

Following Russia’s ban on flights with Georgia, many expect Russia to also restrict Russian wheat exports to Georgia in the future. This has prompted numerous discussions on ways to diversify Georgian wheat imports. Many believe that Kazakhstan, the second-largest exporter of wheat to Georgia, might be able to fill any void left by a Russian ban. In fact, Georgia’s Ministry of Economy announced last month that they are already planning to increase wheat imports from Kazakhstan. The success of such a measure is largely contingent, however, on the final price of Kazakh wheat in the Georgian market. To aid in this, the government of Kazakhstan has agreed in principle to subsidizing transportation costs.

11) Overview of 2018 agricultural markets and fairs August 6th, 2019, https://kalo.ge/news/view?id=7620

The National Bureau of Statistics of Georgia surveyed the number of economic entities engaged in markets and fairs in 2018. In 2018, there were 206 economic entities engaged in organizing markets and fairs in Georgia. The most common organizational legal form for economic entities engaged in fairs was the limited liability company, which accounted for 78.1% of the total number of fairs in 2018, followed by individual entrepreneurs at 19.4%. The remainder was made up of cooperatives and joint stock companies. 35.9% of markets and fairs took place indoors; 34% took place outdoors; and 30.1% took place both indoors and outdoors. The number of persons employed at markets and fairs was 3,100, 33.6% of whom w7ere women. Revenue from markets, fairs and market-type enterprises totaled GEL 158.6 million in 2018.

12) Georgia to face challenging grape harvest August 15th, 2019, https://agenda.ge/en/news/2019/2186

Georgia may face a challenging grape harvest this year due to anticipated Russian sanctions on the import of Georgian wine. The sanctions, if they come, will mean that wine producers will buy less grapes as they will have more trouble selling what volume they have. In response, the National Wine Agency has mobilized its resources to help farmers resolve all possible problems related to selling their grapes.

Wine exports to Russia have been steadily decreasing since May. At the same time, Georgia is expected to enjoy a record grape harvest of 250,000 tons.

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BFC Agriculture Bulletin

13) Milk and meat production up August 19th, 2019, https://commersant.ge/en/post/geo-sees-a-rise-in-milk-and-meat-production

Milk and meat production in Georgia are on the rise. According to preliminary data from the National Statistical Office, 193 million liters of milk were produced in the second quarter of 2019, a 1.8% year-onyear increase. At the same time, 15,900 tons of meat were produced, a 4.6% year-on-year increase. Egg production fell to 151.1 million eggs, a 5.4% year-on-year decrease.

14) Livestock numbers on the decline August 20th, 2019, https://agroface.ge/news/50b4bf5d-7628-4857-92c8-dd86a9959732

As of the end of the second quarter of 2019, the number of cattle in Georgia amounted to 965,300, a 1.4% year-on-year decline. Numbers for other livestock have also decreased. The number of poultry amounted to 10.4 million, a 4.6% year-on-year decrease. The number of sheep and goats amounted to 1 million, a 2.9% year-on-year decrease. The number of pigs amounted to 194,700, a 13.4% year-on-year decrease.

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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.

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