09 BFC Georgia Agriculture Finance Bulletin

05/2013

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9 Geo r g i a Agriculture Finance Bulletin The port Poti to open the new grain terminal Bill Offers to Suspend Selling of Agriculture Land to Foreigners EU, UNDP assist agriculture development in Ajara VTB Bank has issued 4.2 million GEL within the frames of Agricultural Credit Program

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Georgian Agriculture Finance Bulletin Issue #9, May 1—31, 2013

Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4) 5) 6) 7) 8) 9) 10) 11)

David Shervashidze checked the sowing works in Gardabani ......................................................... 2 A modern agricultural complex has been opened in Georgia ......................................................... 2 The port Poti to open the new grain terminal................................................................................. 2 Future Agro-Banks of Georgian agriculture and Agro-Insurance .................................................... 2 Brazilian Businessmen Visiting Georgia ........................................................................................... 3 Briefing from the Acting Minister of Agriculture............................................................................. 3 Georgia Doubled the Area of Cultivated Agricultural Land in 2013 ................................................ 4 Three thousand tons of tea to be produced this year..................................................................... 4 Governent is implementing the spring project ............................................................................... 4 Bill Offers to Suspend Selling of Agriculture Land to Foreigners ..................................................... 4 Allocations within the third component of agricultural funding program amounted to 5.07 mln . 5

Foreign Aid ................................................................................................................. 5 12) EU to finance agricultural development of Adjara with 3.3 million euros ...................................... 5 13) EU, UNDP assist agriculture development in Ajara ......................................................................... 5

Private Sector.............................................................................................................. 6 14) VTB Bank has issued 4.2 million GEL within the frames of Agricultural Credit Program ................ 6 15) More than 100 types of alcoholic beverages and mineral water from Georgia passed state registration in Russia ....................................................................................................................... 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 »

BFC Max-Högger-Strasse 6 CH-8048 Zurich, Switzerland

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BFC. Georgian Agriculture Finance Bulletin. Issue #9, May 1—31, 2013

State Initiatives 1)

David Shervashidze checked the sowing works in Gardabani st

May 1 , 2013, http://bizzone.info/agriculture/2013/1367452786.php

First Deputy Minister of Agriculture of Georgia, David Shervashizhe acquainted with the process of corn sowing in the municipality of Gardabani. Work is carried out as a part of the government project to support smallholder farmers in the spring works. Shervashidze met with the village population and listened to their concerns, about to the spring program. Farmers are thankful for the project. They note that with the help of agricultural cards, they have already processed the land and are sowing crops. Read More »

2)

A modern agricultural complex has been opened in Georgia th

May 10 , 2013, http://bizzone.info/agriculture/2013/1368220159.php

In Georgia, the First Deputy Minister of Agriculture David Shervashizhe attended the opening of the agricultural complex in Badiauri, Sagaredzho. As the Ministry of Agriculture of Georgia reported on Friday, dairy plant is located on the territory of the complex which produces different varieties of cheese. Agroindustrial complex also has a modern refrigeration system that can take 250 tons of fruit and vegetables, also machineries are opened as a part of the agricultural program. Read More »

3)

The port Poti to open the new grain terminal th

May 18 , 2013, http://www.finchannel.com/Main_News/Geo/127615_The_port_Poti_to_open_the_new_grain_terminal/

On May 17 the company “Pace Group” together with the companies “APM Terminals—Poti” and “Agricom” plan to open the terminal for wheat processing in the port Poti (Georgia).

Previously, Georgia did not have similar types of terminals. As APK-Inform Information Agency announced, the facility will allow to the countries-exporters of Central Asia to consider Georgia as the alternative route for the exports of wheat to the countries of the Mediterranean and Black Seas. The terminal capacity is 500 thsd tonnes per year, noted the company “Pace Group”.

4)

Future Agro-Banks of Georgian agriculture and Agro-Insurance th

May 19 , 2013, http://sarke.com/cgi/search/news.asp?Code=10037903

Tamaz Kunchulia, advisor to the Agriculture Minister, says that development of agro-insurance is unreal without participation of the state. “It is good that the government renders aid to victims of natural disasters, but it would be better to invest money in their insurance”, he declares.

The expert recommends to start with insurance of high-risk crops, such as vineyards.

“My advice is to assist farmers in taking loans not only for production, but also for insurance of production”, Kunchulia notes.

At that, he considers that issuing of preferential loans for farmers should not be carried out by the banks, but by the specially created fund.

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BFC. Georgian Agriculture Finance Bulletin. Issue #9, May 1—31, 2013

Kunchulia positively estimates consideration, started in the Parliament on draft bill “On Cooperation”.

You can do nothing on land plot of 1 or 2 ha, “but, competitive production on 10—15 ha is already possible, if the crops will be correctly selected”, he declares.

At the same time, the expert considers inadmissible legal norms regarding land sale. “I have never seen in any country such a liberal law on land ownership as we have”, he says.

5)

Brazilian Businessmen Visiting Georgia th

May 20 , 2013, http://www.prime-news.ge/?p=107154&lang=en

Georgia’s Prime Minister Bidzina Ivanishvili has met with Brazilian businessmen today.

Georgia-Brazil future cooperation was discussed at the meeting. The talks were held at Bidzina Ivanishvili’s business center.

The Brazilian businessmen will also meet representatives of Georgia’s Partnership Fund.

6)

Briefing from the Acting Minister of Agriculture st

May 21 , 2013, http://moa.gov.ge/?p=2845

Briefing summary in English: Temporary Minister of Agriculture Shalva Pipia held the final briefing about the Spring program under the agriculture development fund which, according to Pipia, will help 800 000 landowners.

Highlights: Agricultural cards, with a total value of 184,377,306 GEL, have been received by 670,581 beneficiaries.

As of May 20th, agricultural cards worth 107,994,092 GEL have been cashed.

Today, in terms of the project, a total of 130,993 hectares of land has been plowed.

542 entrepreneurs, who have a total of 884 stores across the country, are exchanging the agricultural cards for rural—agricultural goods and inventory.

1731 tractors are working 24 hours a day. 814 of these tractors—are the property of “Mechanizator”, and other—917 tractors are owned by private companies and communities.

Under the “Preferential agricultural credit” program, from March 29 through May 02 following loans have been issued: I component—“interest-free trade credit (loan) for small farmers” 587 beneficiaries received a total value of 375,442 GEL in goods.

II component—338 beneficiaries got a total of 6,485,415 GEL. Component III—8 beneficiaries got USD 3,241,500 loan. In particular, 2 loans were issued for grain storage and grain drying facilities. 6 Credits were given to winemakers.

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BFC. Georgian Agriculture Finance Bulletin. Issue #9, May 1—31, 2013

On rehabilitation of irrigation and drainage canals: currently, virtually all of the large-scale irrigation systems and the main channels of distribution have been cleaned and for the end of the season rehabilitation works are planned. United Melioration System organization has started working on 70 sites. By the end of the cleaning process of 50 irrigation canals, whole country will have 3 times more agricultural land area (70 thousand hectares) supplied with water. Read More »

7)

Georgia Doubled the Area of Cultivated Agricultural Land in 2013 nd

May 22 , 2013, http://www.iset.ge/blog/?p=1831

According to available data from the ministry of agriculture (MoA), by 1 May, 2013, 400,000 hectares have been cultivated this year in Georgia, which means a 100% increase compared to last year and the highest figure, by far, since 2005. In fact, this is the highest yearly increase in cultivated area Georgia recorded during the last decades.

In total, Georgia has around 800,000 hectares of agricultural land (i.e. land suitable for cultivation).

Read More »

8)

Three thousand tons of tea to be produced this year rd

May 23 , 2013, http://bizzone.info/agriculture/2013/1369363722.php

In the Autonomous Republic of Adjara (Georgia) tea is harvested by hand, and at certain hours—quality and taste of the drink depends on that. Tea growing is the main income for the local people, but every year they make less money. Work on the collection of tea does not stop from six in the morning until noon on the plantations near the town of Kobuleti. Work is done entirely by hand. Read More »

9)

Governent is implementing the spring project th

May 25 , 2013, http://bizzone.info/agriculture/2013/1369178312.php

The Ministry of Agriculture is engaged in several projects in the framework of the spring program. As stated by the temporary Minister of agriculture, Shalva Pipia, different types of packages have been designed for farmers with small plots of land. The Government is also implementing a project of preferential Agricultural loans and rehabilitation of irrigation and drainage canals. At this point, all the big main canals have been cleaned. They will be fully rehabilitated. These activities have not been done during the past 25 years. Read More »

10) Bill Offers to Suspend Selling of Agriculture Land to Foreigners th

May 30 , 2013, http://www.civil.ge/eng/article.php?id=26126

Two Georgian Dream lawmakers have initiated a bill proposing to suspend selling of agricultural land to foreign citizens till January 1, 2017. The bill is sponsored by chairman of parliamentary committee for agricultural issues Gigla Agulashvili of the Republican Party and MP Zurab Tkemaladze of the Industrialist Party. The draft amendment to the law on ownership of agricultural land offers to suspend till 2017 a clause, which allows ownership of the agricultural land by foreign citizens. According to the bill the suspension should not apply to those agricultural land plots, which are already under the ownership of foreign citizens. Read More »

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BFC. Georgian Agriculture Finance Bulletin. Issue #9, May 1—31, 2013

11) Allocations within the third component of agricultural funding program amounted to 5.07 million rd

June 3 , 2013, http://bpi.ge/en/index.php?option=com_content&view=article&id=13351:allocations-within-the-3rdcomponent-of-agricultural-funding-program-amounted-to-507m&catid=49:2011-11-06-16-56-03

Agriculture Ministry reported that loans totaling to USD 5.07 million are issued to 25 beneficiaries within the 3rd component of preferential agriculture loan program (establishment of agricultural enterprise).

Among funded projects are winemaking, cattle breeding, construction of grain dryers and storages, etc.

A few days ago, the Minister Shalva Pipia has visited Tsnori of Kakheti region and familiarized himself with construction of grain dryer there. The facility, being funding within frameworks of the program, will be ready in a month.

Under consideration are more 35 applications with total cost of USD 12.74 million GEL. Read More »

Foreign Aid 12) EU to finance agricultural development of Adjara with 3.3 million euros st

May 21 , 2013, http://bizzone.info/agriculture/2013/1369174244.php

In 2013—2016 Agriculture Development Program will be implemented in Adjara, which will provide assistance to small farmers. Project funded by the EU in the amount of 3.3 million euros, will be led by the United Nations Development Program. The project partners are the Government of Adjara and agricultural service of Adjara, and its objective is to improve the efficiency of agriculture in the region, to strengthen small farmers and to institutionally develop the Ministry of Agriculture of Adjara.

Read More »

13) EU, UNDP assist agriculture development in Ajara st

May 21 , 2013, http://www.undp.org.ge/index.php?lang_id=ENG&sec_id=22&info_id=11807

The assistance to small farmers in Ajara will be in focus of a € 3.3 million programme jointly funded by the European Union and the Ajara Autonomous Republic Government, and implemented by the UNDP in Georgia.

The three-year initiative will closely work with the Government of Ajara Autonomous Republic and the Ajara Agroservice Centre to increase efficiency of farming, establish and strengthen small farmers which may become a backbone of the agriculture sector, and to enhance institutional development of the Ajara Ministry of Agriculture. Read More »

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BFC. Georgian Agriculture Finance Bulletin. Issue #9, May 1—31, 2013

Private Sector 14) VTB Bank has issued 4.2 million GEL within the frames of Agricultural Credit Program st

May 1 , 2013, http://sarke.com/cgi/search/news.asp?Code=10037981

Within frames of preferential agro-crediting program (started on April 29), VTB Bank Georgia has allocated 4.2 million GEL, funding 11 start-ups with 1.3 million GEL. 45% has been allocated for cattle-breeding/bee-keeping/poultry-raising, 25% for gardening and marketgardening, 17% for hot-housing and 13% for grain crops.

According to Valerian Gabunia, director of VTB Bank Georgia’s retail sector, majority of loans have been issued within the frames of the 2nd component (credit for current and fixed assets), while USD 800,000 was allocated in the 3rd component (funding of agro-enterprises).

15) More than 100 types of alcoholic beverages and mineral water from Georgia passed state registration in Russia th

May 28 , 2013, http://newsgeorgia.ru/economy/20130528/215705919.html

CPS has issued more than 100 certificates of registration of alcoholic beverages and mineral waters of Georgian producers, according to RIA Novosti on Tuesday, May 28.

From mid-March 245 applications from 19 Georgian producers of alcoholic beverages and two manufacturers of drinking water were directed to the Federal Service for registration. It is now 65 Georgian wine companies and 4 companies have been allowed to submit documents for the state registration of products.

“Based on the results of laboratory tests, Rospotrebnadzor issued 104 certificates of state registration of products of seven Georgian producers of alcoholic beverages and two manufacturers of mineral water,”—says the site of the Federal Service Read More »

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Prepared by Business & Finance Consulting (BFC) www.bfconsulting.com In this bulletin, BFC provides extracts from articles that have been published by others and as a result cannot be held responsible for such content.

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