agriculture: the national priority · • 2013 (january – november) 1670 food business operators...

Create an environment that will increase agricultural competiveness, promote stable growth of agricultural production, ensure food safety and eliminate rural poverty through the sustainable development of agriculture and rural areas

Agriculture: The National Priority

November, 2013

Ministry of Agriculture of Georgia

Agriculture in Figures

8.39%

17.16%

7.29%

16.62% 10.57%

39.96%

Agriculture, huntingand forestry; fishing

Industry

Construction

Trade

Transport andCommunication

20.6% 17.9%

16.7% 12.8% 10.7%

9.4% 9.4% 8.4% 8.8% 8.4%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

0

5000

10000

15000

20000

25000

Agriculture Total GDP % of Agriculture

316 472 349 263436 708 512 546

803 333968 403

1 193 7071 274 301

2009 2010 2011 2012

Export Import

2.8%

23.6%

19.8%

18.0%

17.2%

6.5%

4.3% Agriculture &FishingMining andManufacturingEnergy Sector

Financial Sector

Transport &Communication

Ministry of Agriculture of Georgia November, 2013

Agri-share in total GDP, %, 2003-11 current USD,2012* GDP by sectors, 2012

Georgia, Inward FDI, cumulative 2012* Agro-trade-balance

Source: GeoStat

Thousand USD

Note: 9,7% in 2013 (six months)

Untapped Potential


Although the production plummeted dramatically, the vast potential still remains

0

100

200

300

400

500

600

700

800

Wheat Potato Vegetables Fruits Grapes Citruses Tea Meat

Average (1980-1990)

Average(2011 -2012)

During the Soviet period Georgia was one of the major suppliers for fruit and vegetable products to the republics of the Soviet Union, exporting various kinds of fruits, tea, greens, nuts, essential oils, citruses, wine, alcoholic/nonalcoholic drinks, mineral waters, and canned fruit and vegetable products.

Thousand tons

Source: GeoStat

November, 2013

Diversified high value cash crops:

Competitive Advantage of Georgia


• 49 types of soil and 22 microclimate zones;

• Climatic zones from subtropical to semi arid and arid;

• The Black Sea coastline 315km;

• Abundant renewable water resources 63.3cu km - 860 lakes, 45 reservoirs;

• Rich Tradition of Winery, Citrus, Grape, Tea, Nuts, Fruits and Vegetables, etc.;

• Extended growing seasons (both early and late).

Grapes with up to 500 endemic species; Wide variety of Fruits and vegetable (both early and late); Specialty tea for high margin markets; Citruses;

Greenhouses; Nuts; Greens; Dairy Products.

November, 2013

Strategy of Agriculture of Georgia


Vision

Create an environment that will increase agricultural competiveness, promote stable growth of agricultural production, ensure food safety and eliminate rural poverty through the sustainable development of agriculture and rural areas

Main Policy Directions

• Increase the competitiveness of agricultural production;

• Ensure equitable increases in rural incomes to enable sustainable livelihoods and

food security for all income groups;

• Maintain the safety of food supplies to protect the public and to improve access to

domestic and international markets;

• Promote environmental sustainability to protect natural resources for the future.

November, 2013

Priority of The GoG


Main Areas of Intervention:

1. Irrigation & Drainage Systems;

2. Mechanization and Farm Input Services;

3. Consultation and Information Centers;

4. Access to Finance;

5. Food Safety;

6. Legislative changes.

Since November 2012 the Agriculture has become a true priority for the GoG

• Agricultural Budget was increased by 90 mln GEL;

• Rural and Agricultural Development Fund was established.

November, 2013

Irrigation & Drainage Systems In the recent past around 300,000ha was irrigated and about 100 000ha drained. In 2012 25,000ha was irrigated and 5,600ha drained.


• 64.4 mln GEL is allocated in 2013 budget for irrigation and drainage systems rehabilitation. This

number exceeds last year’s same indicator by 54 mln;

• Currently 10 irrigation channels are being rebuilt/cleaned and additional 50 channels will be

rehabilitated over the coming years;

• A new project has been negotiated with international donors. 50 mln USD from WB and 15 mln

USD from IFAD will be allocated to improve irrigation and drainage systems;

• The GoG applied to the Dutch Government ORIO grant funds 15,5 mln EURO and the project

has already been selected as eligible for a grant.

Overall, government plans to increase irrigation area up to 200,000ha and drainage area up to 100,000ha in the next following years.

Current Activities

November, 2013

Extension & Information Services

59 district extension/information centers have been established in spring 2013 and 270 new employees have been hired to provide farmers with advisory and extension services.


Main Objectives of Extension and Information Service Centers are to: • Train and educate farmers to increase agricultural

productivity by adopting contemporary agricultural practices;

• Assist farmers in farm management, use of credit, procurement of inputs and marketing of produce;

• Collect information to create a comprehensive database that can be used to tailor new projects.

Spreading the knowledge will make it possible to enhance the Competitiveness of Farmer and Rural Entrepreneurs/Organisations.

November, 2013

Access to Agricultural Machinery

• More than 130 service provider companies in Georgia offer necessary services to farmers;

• The largest service provider company is Ltd “Mechanizatori” owned by Agriculture Projects

Management Agency (APMA, non profit, con commercial organization founded by

Georgian Government);

• More than GEL 220 million is invested in all kind of tractors, combines and different

implements in Ltd “ Mechanizatori”;

Any kind of mechanization service is available in the country

Access to Affordable Finance

Cheap Agro Credit Program has been recently initiated by the Ministry of Agriculture. 11 major banks are involved in this program, where loan interest payments are subsidized by APMA

Since the launch of the program – 7,252 farmers/producers have benefited from the Cheap Agro Credit. The sum of the cheap agro credit amounts 200 mln GEL.

• Up to 5,000 GEL with 0% interest rate for commodity loan;

• Up to 100,000 GEL with 6-8% interest rate for working capital;

• Up to 1,000,000 GEL with 1-3% interest rate for long term investments;

• Up to 1,000,000 GEL with 1-3% interest rate for agro leasing;

• Up to 10,000,000 GEL with 4-6% interest rate for grape processing companies;

• Up to 10,000,000 GEL with 4-6% interest rate for citrus procuring companies.


Cheap Agro Credit components:

November, 2013

Food Safety


Monitoring and inspection of Food Safety have been strengthened:

• 2013 (January – November) 1670 Food Business Operators have been inspected.

Unprecedented Animal Vaccination Campaign has been Started:

• Vaccination on foot and mouth disease was carried out appr. 1 681 180 animals, from which 995 159 cattle and 686 021 small-ruminants cattle.

• Vaccination on anthrax was carried out appr. 284 305 animals, from which 188 520 cattle, 94 367 small-ruminants cattle and 1418 horses.

Cross-border control has been enhanced to: • Prevent the spread of transboundary diseases; • Ensure food safety and quality of imported products.

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2

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November, 2013

Legislative Changes

Several fundamental changes in legislation are implemented in order to remove unnecessary burdens and stimulate development of Georgia’s Agri-sector


Georgian law on agriculture cooperative has passed by Parliament of Georgia; In December, 2012 Georgian Code on Food/Feed Safety, Veterinary and Plant Protection has been prepared; New Georgian law on vine and wine has been prepared by the Ministry of Agriculture of Georgia along with Georgian National Wine Agency; To stimulate Bio Production The work on decree of Government of Georgia on Bio Production has been completed and the law coming into force from 1 January, 2014.

November, 2013

Markets With Preferential Trade Terms


DCFTA with Europe - After 12 bilateral rounds of DCFTA, negotiations are closed and agreement will be signed over the coming months.

Russian Market - As a result of successful negotiations, Georgia has resumed exports of agricultural products to Russia.

FTA with CIS countries - Favorable trade regimes with 11 CIS countries; FTA with Turkey; GSP+ with the EU; GSP with - USA, Canada, Switzerland, Norway, and Japan.

• More than 60 Georgian companies (Wine & Mineral water), have been inspected and got an approval to export to Russia;

• First shipments of Georgian wine and mineral water have reached the shelves of Moscow's supermarkets and shortly will be available throughout Russia;

• In recent months, appr. 16.2 million bottles of wine exported to Russia by the 30 wine companies; • Georgia has resumed export of fruits and vegetables to Russia from 14 October.

November, 2013

Thank You

Ministry of Agriculture of Georgia www.moa.gov.ge

agriculture: the national priority · • 2013 (january – november) 1670 food business operators...

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