13 BFC Georgia Agriculture Finance Bulletin

09/2013

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13 Ge o r g i a Agriculture Finance Bulletin “Georgian Business Climate at Risk,” German Chambers Union Government Mitigates Moratorium on the Sale of Agricultural Land to Foreigners U.s. Government Collaboration To Benefit Idps In Shida Kartli Georgian Tea to be sold in South Africa

All materials are published “as is” and are the property of their respective owners.

Georgian Agriculture Finance Bulletin Issue #13, September 1—30

Contents State Initiatives ........................................................................................................... 3 1) 2) 3) 4) 5) 6) 7) 8) 9) 10) 11) 12) 13) 14) 15) 16)

Preferential Agro-Credits Program in the Samegrelo Region and First Assessments ..................... 3 45 WINE ENTERPRISES SIGNED AGREEMENTS ON STATE SUBSIDIZING OF GRAPE PURCHASES WITH NATIONAL WINE AGENCY ...................................................................................................... 3 New Enterprises Financed by Cheap Agricultural Loans Program .................................................. 3 How will GEL 700 Million be distributed? ....................................................................................... 4 “KAKHETI TRADITIONAL WINERY” RECEIVED A LOAN OF 3.35M LARI FROM “VTB BANK GEORGIA” ......................................................................................................................................................... 4 State not involved in the Process of Purchasing Grapes at this Stage ............................................ 4 LOANS ISSUED TO 49 NEW ENTERPRISES WITHIN THE 3RD COMPONENT OF PREFERENTIAL AGROLENDING PROGRAM .............................................................................................................. 5 Moratorium on Foreign Ownership of Agricultural Land: Xenophobia, Myopia or What? ............ 5 KAKHETI ACCOUNTS FOR 40% OF LOANS, ISSUED WITHIN THE 2ND COMPONENT....................... 5 NOBODY WAS INTERESTED IN LEASING WITHIN AGROLENDING PROGRAM ................................. 6 Law, Suspending Sale of Agriculture Land to Foreigners, Challenged in Constitutional Court ....... 6 “Georgian Business Climate at Risk,” German Chambers Union .................................................... 6 Controversial new Legislation to Protect Local Produce ................................................................. 7 The Success of the Cheap Agricultural Loans Programme .............................................................. 7 Government Mitigates Moratorium on the Sale of Agricultural Land to Foreigners ...................... 7 Prime Minister Accelerates the Process of Leasing Agricultural Land ............................................ 8

Foreign Aid ................................................................................................................. 8 17) IFC HAS ALLOCATED USD 1.5M FOR “WHITE HAT” ......................................................................... 8 18) U.S. GOVERNMENT COLLABORATION TO BENEFIT IDPS IN SHIDA KARTLI ..................................... 9

Private Sector.............................................................................................................. 9 19) “TELIANI VALLEY” WILL EXPORT WINE TO RUSSIA UNTIL THE END OF 2013 .................................. 9 20) “BORJOMI” REGISTRATION IS COMPLETED IN THE US.................................................................... 9 21) Georgian Bay Leaves Enter the Russian Market ............................................................................ 10 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

Phone: +41 44 784 22 22 Fax: +41 44 784 23 23

info@bfconsulting.com www.bfconsulting.com

22) 23) 24) 25) 26)

Rospotrebnadzor Experts Expected to Visit Georgia on September 16 ........................................ 10 REZONANSI: “ARABS AND IRANIANS GAVE UP ON GEORGIAN SHEEP” ........................................ 10 Georgian Tea to be sold in South Africa ........................................................................................ 10 Russian Experts to Prepare a Report on Georgian Agricultural Products in a Month................... 11 Share of Locally Produced Pork on the Georgian Market to Increase .......................................... 11

27) BANKEBI DA FINANSEBI: “IT IS THE BEST TIME FOR INVESTMENT IN GEORGIAN AGRICULTURE SECTOR” ......................................................................................................................................... 11 28) REZONANSI: “EXPORT OF TOMATO AND POTATO HAS BEATEN ALL RECORDS” .......................... 12 29) Agricultural Sector’s Contribution to GDP Growth ....................................................................... 12

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BFC. Georgian Agriculture Finance Bulletin. Issue #13, September 1—30

State Initiatives 1)

Preferential Agro-Credits Program in the Samegrelo Region and First Assessments

September 1st, 2013, http://www.cce.ge/portal/alias__CCE/newsid__299/callerModID__9032//tabid__4609/default.aspx

On August 30 a discussion on the topic of the Preferential Agro-Credits Program in the Samegrelo Region and First Assessments was held at the Zugdidi Center for Civic Engagement. The discussion aimed at reviewing the Program's strengths and weaknesses and having participants elaborate recommendations in order to increase the Program’s effectiveness. Participants included Irakli Moistsrapishvili, Preferential Credits Project Manager of the Ministry of Agriculture; Davit Churghulia, Head of the InformationConsulting Department of the Ministry of Agriculture’s Samegrelo Region Branch; Mamuka Dzneladze, Head of Procredit Bank’s Zugdidi Branch, and Anatoly Gabelia, a local farmer, along with economists, experts and representatives from the Georgian Farmers’ Association, banks and other financial institutions, media and public and international organizations.

Irakli Moistsrapishvili briefly introduced participants to a report detailing credits granted over a seven month period within the Preferential Agro-Credits Program. He explained that nationwide a total of GEL 85 million has been issued to 5,000 beneficiaries. Read More »

2)

45 WINE ENTERPRISES SIGNED AGREEMENTS ON STATE SUBSIDIZING OF GRAPE PURCHASES WITH NATIONAL WINE AGENCY

September 4th, 2013, http://sarke.com/cgi/search/news.asp?Code=10038847

The National Wine Agency told Sarke that as of today, 45 wine enterprises have already signed agreements regarding grape purchase with the Agency. Among them are Kakheti Traditional Winemaking, Teliani Valley, Askaneli Brothers, Tbilgvino, Tiflis Wine Cellar, etc. Out of those, 15 enterprises have already started purchasing grapes. The Agency expects that the number of signed agreements will be doubled in 2—3 days, as 85 more enterprises submit applications.

As a reminder, the agreement envisages that enterprises will receive direct assistance from the state when purchasing 1 kg of Rkatsiteli, Kakhuri Mtsvane (white varieties) and Saperavi (red variety) for 1 lari or more. Specifically, the wine company will receive 0.40 lari per 1 kg of Rkatsiteli and Kakhuri Mtsvane and 0.25 lari for Saperavi.

3)

New Enterprises Financed by Cheap Agricultural Loans Program

September 5th, 2013, http://en.bpi.ge/index.php?option=com_content&view=article&id=14898:new-enterprises-financed-bycheap-agricultural-loans-program&catid=49:2011-11-06-16-56-03

Which new enterprises have been financed through the Cheap Agricultural Loans program? According to a statement from the Agriculture Ministry’s Project Management Agency, 35 new enterprises have been established across the country, including the Kakheti, Samegrelo, Inner Kartli, Imereti and SamtskheJavakheti regions.

The project manager Irakli Moistsrapishvili has told TV3 that the third component of the program has seen the financing of livestock farming, greenhouse farming and product processing units. According to him, some of these enterprises are still being built, while others are just starting to operate, and talks of their economic activity would be premature. Read More » Page 3

BFC. Georgian Agriculture Finance Bulletin. Issue #13, September 1—30

4)

How will GEL 700 Million be distributed?

September 6th, 2013, http://en.bpi.ge/index.php?option=com_content&view=article&id=14912:how-will-gel-700-million-bedistributed&catid=49:2011-11-06-16-56-03

How will the sum of GEL 700 million that was announced by the Prime Minister for the development of agriculture be distributed? This sum, according to Bidzina Ivanishvili, is to be invested in the agriculture sector before the end of the year. Over 100 new enterprises are to be established.

Irakli Moistsrapishvili, the manager of the Cheap Agricultural Loans program, has stated that over GEL 300 million have already been spent on improving the sector, and more funds will be allocated in this regard in the future, if needed. Read More »

5)

“KAKHETI TRADITIONAL WINERY” RECEIVED A LOAN OF 3.35M LARI FROM “VTB BANK GEORGIA”

September 9th, 2013, http://sarke.com/cgi/search/news.asp?Code=10038891

VTB Bank Georgia reported that within the 5th component of the preferential agrolending program, a loan of 3.35 million lari was issued to Kakheti Traditional Winery.

Vladimir Robakidze, director of corporate business in VTB Bank Georgia, declared that the bank has 3 years of experience of partnership with Kakheti Traditional Winery.

Since VTB Bank Georgia joined the preferential agrolending program, it has issued loans of more than 16 million lari to over 600 entrepreneurs and farmers.

6)

State not involved in the Process of Purchasing Grapes at this Stage

September 10th, 2013, http://commersant.ge/eng/?page=news&id=1425

At this stage only private companies are involved in the process of purchasing grapes without government intervention.

The Head of the National Wine Agency Levan Davitashvili told “Commersant” radio.

According to him, currently wineries have bought 11,000 tons of grapes.

“In 2012, 65% of the grapes were purchased by the state, and now, at least at this stage, the government intervention is not required, as private companies wholly buy grapes. This fact indicates that the demand from the private sector is growing”,—Davitashvili notes. Read More »

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BFC. Georgian Agriculture Finance Bulletin. Issue #13, September 1—30

7)

LOANS ISSUED TO 49 NEW ENTERPRISES WITHIN THE 3RD COMPONENT OF PREFERENTIAL AGROLENDING PROGRAM

September 12th, 2013, http://en.bpi.ge/index.php?option=com_content&view=article&id=14995:loans-issued-to-49-newenterprises-within-the-3rd-component-of-preferential-agrolending-program&catid=49:2011-11-06-16-56-03

Agriculture Minister Shalva Pipia said that 200 beneficiaries were funded in total within the 3rd component of preferential agrolending program, including 49 newly established enterprises. Total allocation within the 3rd component (funding of agricultural enterprises) amounted to USD 25.6 million.

As of September 10, 5,343 loans with total volume of 94.1 million lari are issued within first three components of the program. Read More »

8)

Moratorium on Foreign Ownership of Agricultural Land: Xenophobia, Myopia or What?

September 12th, 2013, http://www.georgiatoday.ge/article_details.php?id=11453&cat=Economy&version=681

On June 28, the Georgian Parliament passed a bill imposing a moratorium on land acquisition by foreigners and foreign-owned legal entities till the end of 2014. The bill effectively reversed an earlier policy that welcomed foreigners to settle and invest in Georgia’s agricultural sector, a policy culminating in the seemingly outlandish program seeking to bring to Georgia—and offer fast-track naturalization to— dozens of expert farmers from South Africa.

Rattled by this policy reversal, AmCham and other groups representing the expat business community in Georgia are trying to coordinate on a strong message to be delivered to the Georgian lawmakers. The law, so the argument goes, will cripple foreign direct investment in, and lending to, the agricultural sector. According to a recent statement by Transparently International-Georgia, the law may also be unconstitutional.

It is difficult to imagine that the Georgian government and/or parliament need to be reminded of the immediate negative implications of the law. It is universally recognized that Georgia’s agriculture is in dire need of investment in physical capital and technology, all of which can only come from outside. By preventing foreigners from investing in the sector, the law will also slow down the efficiency-enhancing process of land consolidation. But are there any benefits associated with the moratorium? And, indeed, what problem does it attempt to solve? Read More »

9)

KAKHETI ACCOUNTS FOR 40% OF LOANS, ISSUED WITHIN THE 2ND COMPONENT

September 12th, 2013, http://en.bpi.ge/index.php?option=com_content&view=article&id=14994:kakheti-accounts-for-40-ofloans-issued-within-the-2nd-component&catid=49:2011-11-06-16-56-03

The Agriculture Ministry reported that 2,439 loans were issued within the 2nd component of the preferential agrolending program (funding of agricultural enterprises’ fixed and current assets), whose volume totaled to 94.1 million lari.

Of that amount, 39.96% of loans were issued in the Kakheti region. Following Kakheti, leading regions are: Shida Kartli—19% (461 loans), Kvemo Kartli—16.8% (408 loans), Imereti—11.1% (270 loans), Samtskhe Javakheti—4.5% (109 loans). Read More »

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BFC. Georgian Agriculture Finance Bulletin. Issue #13, September 1—30

10) NOBODY WAS INTERESTED IN LEASING WITHIN AGROLENDING PROGRAM September 20th, 2013, http://en.bpi.ge/index.php?option=com_content&view=article&id=15115:nobody-was-interested-inleasing-within-agrolending-program&catid=49:2011-11-06-16-56-03

The Project Management Agency of the Agriculture Ministry told Sarke that not a single loan was issued until now within the 4th component of the preferential agrolending program. To note, this component (leasing of machinery and equipment) was added to the program by the end of July. Read More »

11) Law, Suspending Sale of Agriculture Land to Foreigners, Challenged in Constitutional Court September 20th, 2013, http://civil.ge/eng/article.php?id=26476

A complaint has been filed with the Constitutional Court, requesting annulment of a provision suspending sale of agriculture land to foreign nationals till the end of 2014. Parliament passed amendments to the law on ownership of agricultural land, imposing moratorium on sale of land to foreign citizens in late June; the legislative amendment went into force on July 17 after President Saakashvili signed it into law.

An applicant, who challenged this provision in the Constitutional Court, is an Austrian citizen, Mathias Huter, a senior analyst and media program manager with Transparency International Georgia, Tbilisibased watchdog group, which said in July that the amendment violates the constitutional right to property. Read More »

12) “Georgian Business Climate at Risk,” German Chambers Union September 23rd, 2013, http://finchannel.com/Main_News/Geo/128527_%E2%80%9CGeorgian_Business_Climate_at_Risk%2C%E2%80%9D_German_C hambers_Union/

The ban on land acquisition for foreigners is a bad signal to investors, Tobias Baumann, Director of the International Department at the German Chambers Union, told The FINANCIAL. The bill that was adopted without general public discussion is creating risks for the development of the investment climate in Georgia.

On 19 July, the President signed and approved amendments to the Law on Ownership of Agricultural Land adopted by Parliament on 28 June, pursuant to which agricultural land cannot be acquired (including a title by inheritance), by a foreigner, a legal entity registered abroad or a legal entity incorporating a foreigner in Georgia. This right has been stripped from these persons until 31 December 2014. The Government of Georgia has been assigned to develop a uniform state policy on the ownership of agricultural land and organize an integrated system of the land cadastre and agronomics by 31 December 2013.

“If you are looking for investors in agriculture then the acquisition of land should be possible. This is the case in most developed and liberal market economies,” Tobias Baumann, Director of the International Department at The German Chambers Union, told The FINANCIAL. “This definitely makes it easier to attract foreign investment,” he said.

“We see a liberal business climate at risk. The fact that land acquisition for foreigners is no longer possible is a bad signal. It is important to keep the achievements in opening markets which Georgia has undoubtedly made since 2008. There is the need to keep the security situation stable and all corruption down,” Baumann said. Read More »

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BFC. Georgian Agriculture Finance Bulletin. Issue #13, September 1—30

13) Controversial new Legislation to Protect Local Produce September 25th, 2013, http://en.bpi.ge/index.php?option=com_content&view=article&id=15172:controversial-new-legislationto-protect-local-produce&catid=49:2011-11-06-16-56-03

A legislation designed to protect local produce, or a mechanism of corruption? The Ministry of the Economy is working on legislative changes to protect the local market, which the members of the parliamentary majority have described as “vital”, the members of opposition as “corrupt”, and the experts as “risky”. The legislation aims to halt the imports of certain products for periods of 200 days to 4 years, taking into account the interests of the local manufacturers. There are also plans to tax subsidies and price dumping. According to Gogi Topadze of the Georgian Dream Coalition, the legislative changes could lead to a price increase in the short term, but talks of corruption and protectionism are absurd. In contrast, Giorgi Vashadze of the Parliamentary Budget Commission states that the legislation would go against the fundamental principles of free market economy. According to him, the legislation would encourage corruption. Read More »

14) The Success of the Cheap Agricultural Loans Programme th

September 25 , 2013, http://en.bpi.ge/index.php?option=com_content&view=article&id=15175:the-success-of-the-cheapagricultural-loans-programme&catid=49:2011-11-06-16-56-03

30 million worth of subsidies, and over 200 satisfied manufacturers—the Agricultural Projects Administration Agency has once again spoken about the success of the Cheap Agricultural Loans programme.

According to the agency spokesman Irakli Moistsrapishvili, all three phases of the programme are proceeding without any faults. The third phase will see both mid-scale and large farmers being issued with loans. The State’s involvement is at its highest in this particular component, with 12% of the interest rates subsidised by the government, Mr. Moistsrapishvili has explained. Read More »

15) Government Mitigates Moratorium on the Sale of Agricultural Land to Foreigners September 26th, 2013, http://commersant.ge/eng/?page=news&id=1551

The Government plans to makes certain changes to the moratorium on the sale of agricultural land to foreigners.

Prime Minister Bidzina Ivanishvili said at yesterday’s meeting with experts that he had a meeting with his economic team on this issue.

“There are many reasons for a moratorium. In order for the moratorium not to be extended, we made a decision and you will know it in the near future that we should immediately start issuing lands on lease ... The more restrictions and moratoriums there will be in the economy, the less free the market will be, as well as the investment flow. Any restrictions prevent market development, but the state needs various types of defense and in this case it was justified,”—said the Prime Minister. Read More »

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BFC. Georgian Agriculture Finance Bulletin. Issue #13, September 1—30

16) Prime Minister Accelerates the Process of Leasing Agricultural Land September 27th, 2013, http://commersant.ge/eng/?page=news&id=1564

What changes will be included on Moratorium on the Sale of Agricultural Lands to Foreigners? The Chairman of the Agricultural Committee makes explanations in a conversation with “Commersant”.

Recall that Prime Minister Bidzina Ivanishvili said at yesterday’s meeting with experts that he had a meeting with the economic team in this regard.

Chairman of Parliament's Agriculture Committee Gigla Agulashvili explained to сommersant.ge that the Prime Minister was referring to a different legal issue—the leasing procedure for agricultural land— enactment of which requires a government decree. Agulashvili explained that the Prime Minister was referring to the acceleration of the preparation of this resolution.

In particular, Agulashvili says the lease will be valid for 10, 20 and 30 year terms, and the terms of the land use will depend, for example, on what kind of agricultural crop an investor will develop.

Read More »

Foreign Aid 17) IFC HAS ALLOCATED USD 1.5M FOR “WHITE HAT” September 4th, 2013, http://sarke.com/cgi/search/news.asp?Code=10038848

The International Finance Corporation (IFC) has allocated a long-term loan of USD 1.5 million for Georgian mushroom producer White Hat. As IFC regional manager for the South Caucasus Thomas Lubeck declared at the credit agreement signing ceremony today, this is the IFC’s first investment in the mushroom industry and the corporation will continue to support Georgian agribusiness in the future.

Lubeck said that 5 years ago, 90% of the Georgian mushroom market was occupied by imported products, while now 80% comes from local production, and added that White Hat has made a great contribution. At that, IFC regional manager said that the mushroom’s price has significantly reduced and White Hat meets the necessary environmental standards.

In his turn, White Hat’s Director General Ivane Ioseliani said that the loan will be used for modernization of equipment and expanding of production.

According to Ioseliani, by the end of 2012 White Hat achieved a production volume of 1,350 tons, and the forecast for 2013 is for 1,500tons.

White Hat was established 2 years ago by Armenian investment, and 45% belongs to Armenian LLC Aroghj Sunk.

Georgia became a member of IFC in 1995, and since then the corporation has issued loans of USD 656 million for 51 projects in different sectors of the country.

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BFC. Georgian Agriculture Finance Bulletin. Issue #13, September 1—30

18) U.S. GOVERNMENT COLLABORATION TO BENEFIT IDPS IN SHIDA KARTLI September 25th, 2013, http://www.georgianeo.ge/index.php?news_id=163

On Wednesday, September 25, 2013, U.S. Ambassador to Georgia Richard Norland joined Ambassador of Israel to Georgia Mr. Yuval Fuchs, Minister of Internally Displaced Persons David Darakhvelidze, and Governor of Shida Kartli Zurab Chkheidze to deliver modern irrigation systems and vegetable seedlings to IDPs from the Khurvaleti, Berbuki and Shavshvebi IDP settlements. By gaining access to the latest techniques and technology in vegetable production, IDPs will have the opportunity to improve their livelihoods by generating income from the sale of harvested vegetables. Read More »

Private Sector 19) “TELIANI VALLEY” WILL EXPORT WINE TO RUSSIA UNTIL THE END OF 2013 September 7th, 2013, http://sarke.com/cgi/search/news.asp?Code=10038863

JSC Teliani Valley told Sarke that it is going to export its own wine to Russia until the end of the current year. Currently, the company exports its products to about 25 countries. For the first half of the current year, the company reported net profit of 509,000 lari.

As of June 30, retained earnings amounted to 615,000 lari. At the end of June 2012, the company had accumulated losses of 805,000 lari.

In the reporting period, income of Teliani Valley from production’s realization amounted to 15.02 million lari (year-on-year growth—23.85%), while primary cost of sold production made up 7.7 million lari (growth—20.19%).

As of June 30, total assets made up 33.03 million lari (growth—23.7%), while total liabilities—16.09 million lari (growth—34.2%).

Chartered capital of the company has increased by 1.71% year-on-year, amounting by the end of the reporting period to 771,000 lari.

20) “BORJOMI” REGISTRATION IS COMPLETED IN THE US September 7th, 2013, http://sarke.com/cgi/search/news.asp?Code=10038873

Sakpatent, Georgian Center for Intellectual Property, reported that process of origin name registration of Georgian mineral water Borjomi in the US was completed in late August, being confirmed by issuing of appropriate certificate.

The registration gives Georgian state an exclusive right to determine persons, entitled to use the origin name of mineral water on the US territory, and prohibit its illegal use, Sakpatent said.

As the bottler of Borjomi, IDS Borjomi Georgia, told Sarke, it has been present on the US market for around 10 years. The company refrained to specify volume of export in this country and other details.

The US Patent and Trademark Office has already issued registration certificates to Georgia, which refer to origin names of 12 Georgian wines, including Khvanchkara, Kindzmarauli, Tsinandali, Akhasheni, etc.

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BFC. Georgian Agriculture Finance Bulletin. Issue #13, September 1—30

21) Georgian Bay Leaves Enter the Russian Market September 9th, 2013, http://commersant.ge/eng/?page=news&id=1405

Following Georgian wine and mineral water, Georgian agricultural products have already entered the Russian market. “Commersant” radio reports that the first batch of Georgian bay leaves have been delivered to Russia by the transport company “MinTrans”, but the producer refrains from commenting at this stage.

22) Rospotrebnadzor Experts Expected to Visit Georgia on September 16 September 10th, 2013, http://commersant.ge/eng/?page=news&id=1420

Rospotrebnadzor experts will visit Georgia in the second half of September. According to the official information posted to the Ministry’s web page, during the third trip in Georgia the experts will inspect Georgian enterprises which are planned to enter the Russian market.

“At this stage, they will inspect 39 companies. Their third visit to Georgia is planned to take place in the second half of September after issuing the permission on admission Georgian products to the Russian market”,—reads the statement. Read More »

23) REZONANSI: “ARABS AND IRANIANS GAVE UP ON GEORGIAN SHEEP” September 10th, 2013, http://sarke.com/cgi/search/news.asp?Code=10038893

The Georgian Agriculture Ministry reported that about 46,130 sheep have been exported this year (as of August), resulting in revenues of USD 1.3 million. However, unlike to the previous years, Georgian sheep were bought merely by Azeris. According to Beka Goniashvili, head of Sheep Breeders’ Association, overall export is halved in fact, as Asians and Arabians purchased more than 80,000 sheep in the same period of 2012.

Goniashvili said that traders have moved to Moldova and Romania, where sheep are cheaper. Georgian sheep cost about USD 110—129 for foreigners now, while the price was USD 50—60 in 2010 when the demand was high. Goniashvili also pointed out that Georgian sheep are very small and the breed needs improvement.

As the article notes, 80-85% of the sheep stock in Georgia are the Tusheti breed, which is characterized by rough wool and delicious meat.

24) Georgian Tea to be sold in South Africa September 12th, 2013, http://en.bpi.ge/index.php?option=com_content&view=article&id=14998:georgian-tea-to-be-sold-insouth-africa&catid=939:2011-11-06-17-42-27

Georgian tea will soon be sold in the Republic of South Africa. A memorandum between the companies Geoplant and WildFig Holdings regarding the export of the Gurieli tea brand has been signed at the TBC Bank headquarters.

The investment company WildFig’s arrival in Georgia followed an invitation by TBC. Works are currently on foot on projects within the agriculture, infrastructure and energy sectors. The memorandum has also set a marketing budget which will be financed by both companies.

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BFC. Georgian Agriculture Finance Bulletin. Issue #13, September 1—30

25) Russian Experts to Prepare a Report on Georgian Agricultural Products in a Month September 12th, 2013, http://commersant.ge/eng/index.php?page=news&id=1440

The Ministry of Agriculture of Georgia will receive the Russian experts’ report within a month.

Note: A 6-member commission of the Russian Federal Service for Veterinary and Phytosanitary Surveillance (VPSS) (Rosselkhoznadzor) arrived in Georgia last month and visited the labs located both in the eastern and western Georgia as well as introduced the mechanisms for food safety control and the issuance of certificates. Read More »

26) Share of Locally Produced Pork on the Georgian Market to Increase September 13th, 2013, http://en.bpi.ge/index.php?option=com_content&view=article&id=15016:share-of-locally-producedpork-on-the-georgian-market-to-increase&catid=936:2011-11-06-17-06-59

The share of locally produced pork on the Georgian market is about to increase—the Partnership Fund, in cooperation with the Bank of Georgia and the meat company Kalanda, has just completed its first large scale project in the agriculture sector. According to the Director of the fund Irakli Kovzanadze, the share of locally produced pork meat on the Georgian market will increase from 10% to 20% thanks to their active involvement. He adds that the Partnership Fund will continue to support agricultural projects in the future. Read More »

27) BANKEBI DA FINANSEBI: “IT IS THE BEST TIME FOR INVESTMENT IN GEORGIAN AGRICULTURE SECTOR” September 19th, 2013, http://sarke.com/cgi/search/news.asp?Code=10038997

Irakli Lekvinadze, partner of Sales Management Company, believes that “it is the best time for investment in the Georgian agriculture sector.” “Costs related to land use are low, industrial factors are not mastered, the labor force is cheap, and the business environment and tax system are liberal,” he explains.

Lekvinadze considers that with effective management, agriculture business will be quite cost-effective, especially winemaking, production of organic and natural food, fruit growing and processing, and utilization of water resources.

Farmers from India, Armenia, China, Russia, Czech Republic, the US and Arabia have already appeared in Georgia. They made this decision due to good climate conditions and inexpensive business costs, Lekvinadze notes.

According to the latest data, the share of agriculture in GDP is 8%, despite engagement of a significant part of population in this sphere. Local production of food merely satisfies 8-12% of the domestic demand.

Georgia has the capacity to increase production in agriculture 4—5 times, Lekvinadze declares and adds: it requires technology, education and accessibility to markets.

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BFC. Georgian Agriculture Finance Bulletin. Issue #13, September 1—30

28) REZONANSI: “EXPORT OF TOMATO AND POTATO HAS BEATEN ALL RECORDS” September 24th, 2013, http://sarke.com/cgi/search/news.asp?Code=10039039

Sakstat reports that in the second quarter export of tomatoes amounted to USD 601,500 (USD 175,800 last year), while potatoes worth USD 311,400 were also exported (USD 96,800 last year).

Nino Zambakhidze, the head of Farmers’ Association says that the vegetables were exported to Turkey, Azerbaijan and Armenia.

The newspaper points out that Georgian vegetables cannot freely enter the Russian market.

The Georgian side is expecting an answer from the Russian agricultural supervision service. So far, Georgian vegetables are exported to Russia through bypass roads via Azerbaijan, Belarus and Kazakhstan.

In his turn, expert Aleksandre Lomouri says that “Georgian vegetables have a great exporting potential, but they can't even meet local demand”.

29) Agricultural Sector’s Contribution to GDP Growth September 29th, 2013, http://en.bpi.ge/index.php?option=com_content&view=article&id=15226:agricultural-sectorscontribution-to-gdp-growth&catid=49:2011-11-06-16-56-03

How did the investment into the agricultural sector reflect upon the country’s economic growth? The Minister of Agriculture Shalva Pipia has told TV3 that the investments have led to a substantial increase in the gross domestic product. The minister singled out the Cheap Agricultural Loans programme, which, according to him, has been a great success. Read More »

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