Georgia Agriculture Sector Bulletin

2012 AGRICULTURE SECTOR

FOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONS MINISTRY OF AGRICULTURE, GOVERNMENT OF GEORGIA

SUPPORTED BY THE EUROPEAN UNION Agriculture Sector Bulletin 2012

Editors and Publishers Food and Agriculture Organization of the United Nations (FAO) in Georgia Ministry of Agriculture, Government of Georgia

Cover Photo FAO Georgia

Photographs Food and Agriculture Organization of the United Nations (FAO) in Georgia World Wide Web

Layout and Content FAO Georgia

This publication has been produced with the assistance of the European Union. The contents of this publication are the sole responsibility of FAO and can in no way be taken to reflect the views of the European Union.

All opinions, data and statements provided by individuals undersigning the texts in the bulletin are exclusively their own and do not reflect in any way the views of FAO and of the Ministry of Agriculture, Government of Georgia.

@ FAO GEORGIA 2012

Food and Agriculture Organization of the United Nations 5, Marshall Gelovani Avenue Tbilisi, 0159, Georgia Phone: (+995 32) 2 453 913

5, Radiani Street Tbilisi, 0179, Georgia Phone: (+995 32) 2 226 776; 2 227 705 Contents

Foreword ...... 3 Agriculture Policies and News ...... 4 Policy ...... 4 Production ...... 4 Trade ...... 5 Investment ...... 6 Training ...... 6 Donor Support and Aid Activities ...... 7 Theme: Food safety ...... 16 Trade, Agriculture and Food ...... 20 Trade ...... 20 Prices ...... 23 Winter 2012

2 Winter 2012

Foreword

Dear Colleagues,

I am honoured to present the winter 2011 Edition of the Georgia Agriculture Sector Bulletin regularly published by the Food and Agriculture Organization of the United Nations in collaboration with the Ministry of Agriculture and the Delega- tion of the European Union to Georgia.

As the previous ones, the present edition features the most recent developments and trends in the field of agriculture. One of the key themes of this bulletin is food safety, which is one of the necessary conditions of the conventionally acknowledged basic human rights – protection of the human health and life.

We, in FAO, often quote an old proverb saying “we are what we eat”, which is true as our nutritional status, health, physical and mental faculties depend on the food we consume. Thus, the main efforts are directed towards protection of the consumers against the risks related to food consumption and the assurance of an equal access to safe and quality food for people. People in developing countries are exposed to a reasonably wider range of potential food safety and quality risks, which in turn have an impact on the food security.

The Government of Georgia is taking further steps in the process of development of agriculture and improvement of food safety in the country. A Comprehensive Strategy and Legislative Approximation Programme in Food Safety has been elaborated, which was followed by the drafting of the Georgian Code on Food Safety, Veterinary and Plant Protection. Through these actions, Georgia demonstrates its commitment to embark on the process of negotiations to conclude the Deep and Comprehensive Free Trade Agreement with the European Union.

I would like to take this opportunity, on behalf of FAO, to thank the Government of Georgia as well as our loyal donors for their constant support and excellent cooperation, which enables us to better serve the needs of the most vulnerable rural households in the country to rebuild their agricultural productive capacity and contribute to strengthening food security in Georgia.

Mamuka Meskhi Assistant Representative The Food and Agriculture Organization of the United Nations

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Agriculture Policies and News

Policy medium tea producers. The tea festival was also focused at promoting high quality, environmentally clean local tea brands and The Ministry of Agriculture plans to import soya and sunflower coverage of internal market. Twelve tea producer companies par- seeds ticipated in the festival, including those from Georgia and other The Ministry of Agriculture of Georgia is starting two new pro- regions of the Caucasus as well as tea importers. The festival grams to import high quality soya and sunflower seeds. Purpose presented unique tea types from all over Caucasus, including of the program is to increase local production and reduce import. black, green and herbal treatment products. The event was orga- There is an increasing demand on crops from poultry and cattle nized by Georgia Tea Producers’ Association with support from farms and it’s necessary to increase production of crops, like the Ministry of Agriculture. sunflowers and soya, that could significantly decrease costs and therefore make local products more accessible for the popula- Over the past year Consumption of local tea on Georgian market tion. (www.moa.gov.ge) has increased from 5% to 20%. During 2010 Georgian tea was exported to Armenia, Kazakhstan, Tajikistan, Mongolia, Moldova, GeoStat conducts agricultural research Ukraine, Belorussia, Czech Republic, Germany, UK, USA, Can- The National Statistics Office of Georgia has started a selective ada and India. It will soon appear on new export markets. (www. field research on agriculture production during the third quarter medianews.ge) of 2011. As a result of this survey, GeoStat will have different in- dicators for agricultural statistics: key livestock production (meat, International seminar to support fish production milk, eggs) and information on numbers of domestic animals Georgia hosted a seminar on sustainable use of water resources (cows, pigs, sheep, goats, and poultry). (www.medianews.ge) for aquaculture development with participation of Georgian and foreign farmers. Purpose of the seminar was to support fishery development by introducing modern technologies and price reg- Production ulation mechanisms for making fish products accessible to the users. The event was organized by the Ministry of Agriculture International tea festival in Tbilisi and supported by the Norwegian Ministry of Foreign Affairs, and Tbilisi hosted the 6th annual international tea festival with the was conducted by Akvaplan-Niva, a Norwegian environmental aim of encouraging economic development of tea production, research and consulting organization. Foreign guests introduced fostering joint economic projects and supporting local small and various principles and regulations regarding the use of water

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and aquatic resources of the European Union to their Georgian As a result of the collaboration between the Ministry of Agricul- counterparts. Akvaplan-Niva will further provide consultancy to ture and TAV Holding, Georgian wine shops featuring a wide as- Georgian farmers and fish producers on introduction and use of sortment of Georgian wine brands have also been opened in duty modern technologies. (www.maf.ge) free areas of Istanbul Ataturk airport as well as Ankara and Izmir international airports. (www.moa.gov.ge)

Trade Georgian wine awarded in Hong Kong Georgian wine has been successful at the international wine and Wheat supply of Georgia spirits competition China-Eurasia Expo 2011, held in Hong Kong. According to the Wheat Association, Georgia does not have to Georgia won 2 golden, 1 silver and 13 bronze medals. Golden worry about wheat shortages on local market. Wheat supply of medals were awarded to Saperavi aged in oak by Kindzmarauli the country is much higher than during the previous months. Up Cellar, and Chacha of Chateau Mukhrani. Kindzmarauli Cellar to 120 000 tonnes of wheat has been imported from the Ukraine also received a Grand Prize. Such success provided a unique and Kazakhstan, which is sufficient for at least three months. Ne- chance for introducing Georgian wine in the Asian market, since gotiations are being held with European countries as well as the Hong Kong dictates modern trends to China market. The Nation- US and additional volume of wheat could be imported if needed. al Investment Agency of Georgia will ensure that winner wine However, the price of European and American wheat is higher brands are included in a popular iPhone application that is widely than that from Kazakhstan and the Ukraine. Each month the used by wine lovers while ordering drinks at restaurants. population of Georgia consumes approximately 40 000 – 50 000 tonnes of wheat. (www.medianews.ge) Web-site to promote trade The National Investment Agency of Georgia recently introduced the new web-page www.tradewithgeorgia.com. This page pro- Wine shop at Tbilisi International Airport vides an online database of Georgian exporters and catalogue of A new shop called “Georgian Wines” was opened in the duty-free products, and is user-friendly for foreign leaders. The system al- area of the Tbilisi International Airport. It sells wines produced lows the search of products by names as well as H codes. Over- by Badagoni, Georgian Wine Corporation, Khvanchkara Ltd, Kin- all, 401 Georgian products have already been registered on the dzmarauli Cellar, Tbilvino, Sarajishvili, Teliani Valley, Bagrationi web-site, that also allows companies to post information on their 1882, Kakheti Traditional Wine Production Ltd., and other prod- products and upload various photo materials. (www.maf.ge) ucts. This shop of exclusively Georgian wines was initiated by the Ministry of Agriculture of Georgia and support from TAV Hold- Supporting trade opportunities ing. Such display of variety of wines at Tbilisi airport, a transit In Autumn Georgia hosted the exhibition-forum of Georgian alco- place for thousands of travellers each day, will support promotion holic and non-alcoholic drinks “Trade with Georgia 2011 – Trade- of Georgian wines and raise the awareness of the international show and B2B Forum (TWG 2011)” with the purpose of promoting community. Georgian products. The event was conducted with the support

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from the Georgian National Investment Agency and Ministry of relief period. The project also envisages development of skills Economy and Sustainable Development. Up to 60 local compa- for agriculture lending and diversification of the loan portfolio for nies presented their products, while over 80 foreign traders, wine participant financial institutions. Technical assistance will be tar- experts and journalists participated in the exhibition. This event geted towards reliable credit, risk management and specifics of offered representatives of Georgian companies the opportunity agriculture loans. (www.boom.ge) to meet and discuss with foreign traders. It is notable that up to 43 participants came from Asian countries (China, South Korea, Japan investing in Georgian agriculture Singapore, Japan, Taiwan), representing the largest market of According to the agreement between the governments of Georgia the world and thus creating the need for diversification of Geor- and Japan the latter will allocate GEL 7 300 000 from its grant gian wine. (www.maf.ge) foundation in Georgia to support small and medium farmers of regions of Georgia with agriculture technologies. This amount is in addition to the GEL 50 000 000 assistance for mechaniza- Investment tion support provided to Georgia by Japan since 1997 within the framework of grants assistance to farmers. The Government of Tbilvino to receive USD 1 500 000 credit Georgia is working with other donors and governments of other Tbilvino, a Georgian wine production company is to receive USD countries to support the implementation of new agricultural initia- 1 500 000 credit from the International Finance Corporation (IFC) tives. (www.maf.ge) as part of a USD 3 000 000 investment program. The initiative is aimed at expanding the production capacity, enhancing product quality and food safety standards, and increasing competitive- Training ness of the company. IFC investment will also help the company to enhance export sales as well as quality control and manage- Training for agronomists of Georgia ment. As part of the investment, the company will arrange a pri- The Ministry of Agriculture of Georgia has recently trained agron- mary grape processing plant in Kakheti. omists from all parts of Georgia, within the framework of its state In September 2011 Tbilvino was awarded silver and bronze med- program and with the support from DVV International. Trainings als at a wine competition in Hong Kong, China. (www.medianews.ge) were conducted with invited specialists from Germany. Up to 100 agronomists were trained until the end of December 2011 and EBRD allocates credit for agriculture development all of them are to take up positions as deputies of Gamgebelis The European Bank for Reconstruction and Development (EBRD) (appointed heads of the local government units) in their respec- has started implementing an agriculture sector funding project, tive municipalities. Trained agronomists will provide consulting to which allocates EUR 40 000 000 to four Georgian banks. VTB all farmers in agro-technical and agro-economic fields. They will Bank Georgia, The Bank of Georgia, ProCredit Bank and TBC advise on how to properly develop agricultural business focused Bank will use these funds to offer credits to the agriculture sector on modern technologies, and how to organize different types of in the country. The term of the loan is 5 years, with three-year farms. (www.maf.ge)

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Donor support and aid activities

GIZ/AFC: Working on food safety and supporting the private sential aspects of processing technologies and techniques in sector dairy, meet processing and canned food production sectors. The Private Sector Development Program in South Caucasus (PSDP SC) implemented by German Agency for International During the study tour to Lithuania, NFA representatives were able Cooperation (GIZ), under its Quality Infrastructure Component to see examples and cases of developing, refining, implementing has sub-contracted the German consulting organization, AFC and evaluating annual and multi-annual control plans and annual Consultants International, to implement Food Safety activities monitoring plans. They also learned how to apply step-by-step in the region. Assistance is provided through (i) support to the approach to risk management, including preliminary steps, set- National Food Agency by building its capacity in food safety leg- ting targets, identification and selection of management options, islature implementation, inspection and monitoring; and (ii) sup- implementation, monitoring and analysis, based on the desired port to the private sector in upgrading produce to comply with level of protection. Finally they learned how to develop effective international standards. risk communication strategies.

The Capacity Building Program is the continuation of the Na- Together with food safety, GIZ/AFC has been actively involved tional Food Agency (NFA) policy with respect to the institutional in private sector development through diversification of products development in the areas of food safety, veterinary and plant with plant export potential as well as quality-related problems of protection. It fulfils the capacity building needs in accordance these products. A workshop was also conducted on food safety with the Governmental Policy, aimed at aligning the Georgian of plant-origin products with export potential, food safety. needs system with the EU requirements. Based on the National Strat- and identification of activities to be implemented by GIZ/AFC. egy paper of Food Safety, the NFA identified a list of topics for the training program for food inspectors and staff, enforcing the Three products – apples, citrus and salad – were selected for basic knowledge and skills for effective implementation of food assistance and activities recommended for improving food safety safety requirements and regulations. of products identified. Selected associations went through pre- audit and seminar to facilitate the improvement of food safety of From June 2010 until the end of 2011, food inspectors and staff selected plant products, covering topics like requirements and members of the NFA attended trainings conducted by interna- procedures, general rules and regulations of different standards tional and local experts. The training was targeted at risk analy- (Global G.A.P. BRC, IFS, ISO 22000:2005, integrated produc- sis and planning for the national food control, EU food hygiene tion). Special focus was made on Global G.A.P., presenting EU regulations and export requirements, enforcement of food regu- buyers potential that require Global G.A.P. or other international lations and food recalls, food safety criteria, quality management standards, issues hampering international trade (such as qual- systems, HACCP, potential hazards, inspection procedures, es- ity of the product, demanded quantity, requested delivery dates

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and prices), assessment of organizational structure of the farm- uals, and (4) promotion of the sustainability of IDP houses being ers’ associations, assessment of current state of operation and rehabilitated with the support of the government of the United their capacity to fulfil requirements of international trading com- States. panies applying/requiring international standards, assessment of the current situation of the associations in the context of compli- USAID/NEO’s approach is to work hand-in-hand with commu- ance/non-compliance with international standards; assessment nities to develop market-based economic planning tools. These of selected farmer’s associations capacity to fulfil international tools will engage a broad stakeholder base and guide USAID/ standards requirements in the future, development of recommen- NEO’s support of community priorities in infrastructure develop- dations on continuing support to farmer’s associations compliant ment, rural economic growth, food security, and livelihoods im- with Global G.A.P certificate and/or other international standards provement. requirements. In close cooperation with other stakeholders, USAID/NEO will Guidelines for farmers’ associations were prepared within the support communities and municipalities to identify and imple- framework of the project, and the action plan was elaborated to ment infrastructure projects with the aim of increasing growth, meet the requirements and procedures for reaching compliance employment and household income. In particular, it will provide and certification of international standards. grants, training, and technical assistance, and will also facilitate attraction of investments in and develop market linkages for USAID/NEO: creating economic opportunities for Georgia community-identified agriculture and non-agriculture initiatives. The USAID-funded Georgia New Economic Opportunities Ini- USAID/NEO will also assist in the sustainable management of tiative (NEO) is a four-year program designed to improve rural IDP housing and it will also provide assistance to areas affected incomes, reduce poverty levels, improve food security, address by natural or man-made disasters. critical, household and agricultural water constraints in targeted communities, enable targeted internally displaced persons (IDP) communities to sustainably maintain their households, and assist USAID/NEO is aiming at reaching at least 70, 000 vulnerable communities distressed by natural or other disasters. The pro- households in 10 selected municipalities to provide sustainable gram is being implemented by a consortium led by Chemonics poverty reduction, improved living standards for vulnerable pop- International Inc. with support from International Relief and De- ulations, and increased government participation in addressing velopment (IRD) and National Opinion Research Center (NORC) local community needs. The program is being implemented in at the University of Chicago. Gori, Khashuri and Kareli municipalities in Shida Kartli region, Dusheti and Stepantsminda (Kazbegi) municipalities in Mtskheta The project consists of four components: (1) local economic de- Mtianeti region, Zugdidi and Tsalenjikha municipalities in Same- velopment planning; (2) rural economic development; (3) assis- grelo-Zemo Svaneti region, and Oni, Tsageri and Lentekhi mu- tance in strengthening highly vulnerable households and individ- nicipalities in Racha-Lechkhumi region.

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SIDA: building capacity and providing technical support to the of laws and regulations in the food-chain, public administration National Food Agency and management, veterinary services, systematic control and inspection in food-chain, civil emergency preparedness. The Government of Georgia invited the Swedish International Development Cooperation Agency (Sida) to support the National With an overall budget of 29 900 000 Swedish Krona and dura- Food Agency (NFA), a newly-restructured unit under the Ministry tion until 2014, the project will be implemented in close coopera- of Agriculture, through twinning cooperation initiatives with rel- tion with the EU supported Comprehensive Institutional Develop- evant Swedish organisations. ment programme that, among other institutions, also targets NFA and other projects in the same sector. The Swedish Board of Agriculture (SBA) and, at a later stage, also the Swedish National Food Administration (SNFA) had been WV: Creating food security for IDPs invited to identify opportunities for implementing a 2 to 3 year World Vision Georgia continues to work closely with IDPs through program with the NFA. The purpose was to assist the NFA to the World Food Program (WFP) funded project, entitled Food reach the required competence to meet the EU standard food Security for IDPs in Shida Kartli. The project targets the IDP safety requirements and enter a Deep and Comprehensive Free farmers residing in the newly constructed settlements of Shida Trade Agreement (DCFTA). As a result, in liaison with the NFA Kartli region and is aimed at providing knowledge and access to the SBA and SNFA jointly elaborated the project entitled “Ca- modern agricultural techniques for increased food security and pacity building and technical support to Georgia National Food productivity of IDP families in Georgia. In particular, the project Agency”. focuses on the creation of a strong and competitive rural production, processing and marketing sector. The project objectives and The overall objective of the project is to create a conducive en- targets have been defined based on the actual needs and inter- vironment for the establishment and sustainability of a solid food ests of the targeted groups, identified through close interactions safety system in Georgia, which is in line with the EU and inter- and discussions with the the IDP communities. national standards. The objective is also to strengthen the NFA’s administrative capacities, thus ensuring a dynamic market de- Some of the more specific outputs of the project include the es- velopment. Safety and security of the food supply is achieved by tablishment of greenhouses for tomato and cucumber cultiva- means of efficient inspection systems, veterinary services and tion in Shavshvebi and Berbuki settlements, vertical farming in methods for responding quickly to food safety/security related Sakasheti settlement, service centres (for hand operated trac- emergencies. tors, seeding machinery, grinding apparatus and other) in Khur- The project is divided into a series of Work Packages (WP), each valeti and Shavshvebi settlements, and provision of training in consisting of actions contributing to a set development objective. harvesting, promising varieties of crops, value chain and busi- More specifically, Work Packages will focus on implementation ness plan writing. The total budget of the project is USD 204 611.

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ACF: Demonstration and veterinary assistance to IDPs technology testing in order to help farmers manage the risk of With the support of the United Nations High Commissioner for utilizing new technologies and breeds. Refugees (UNHCR) and in cooperation with United States De- partment of Agriculture (USDA)/Georgian Institute of Public Af- A number of different demo plots have been established by ACF: fairs (GIPA) Rural Development Program, in 2011 ACF (Action for Brama chicken breeding; Flemish and French giant rab- Contre la Faim) facilitated the creation of the “Veterinarian As- bit breeding; fodder improvement for cattle breeding; and new sociation of Samegrelo Region”. The overall mission of the as- cabbage types for kitchen gardening. In e kitchen garden demo sociation is to improve both animal and human health, as well as plots, volunteer farmers are currently cultivating five breeds of the veterinary medical profession. The Association aims to help cabbage (cauliflower, broccoli, Brussels sprouts, Chinese and farmers to reduce the economic losses of livestock and poultry, red cabbage). These cabbages are planted in corn fields after as well as to protect the rural agricultural community from infec- the corn harvest, thus allowing two harvests from the same plot. tions and diseases. ACF is further organizing exchange visits to demo plots for farmers in the regions, providing in depth training on new breeds and ACF assisted in the establishment of the Veterinary Clinic technologies, and encouraging the establishment of linkages be- through the renovation of their building as well as the provision tween suppliers and farmers. of equipment for their laboratory and operating room, and also provided surgical instruments for field operations. Furthermore, UNHCR: Support and employment for IDPs ACF requested the inclusion of IDP farmers into the association, The United Nations High Commissioner for Refugees has been in order to ensure their access to cheaper services. implementing the project entitled New Employment Opportuni- ties in Shida Kartli with the support of the USD Department of The association has the capacity to provide a full range of servic- State and in collaboration with the Institute for Regional Devel- es for farmers and operates a the veterinary clinic. Members of opment-Shida Kartli (IRD-SK). the associations aim to promote a technological map of vaccina- tion in rural communities in order to monitor and control diseases Through the project, a chicken farm has been constructed in a outbreak. In addition, the association has started cooperating remote building located near the Berbuki IDP settlement in Shida with the Bank of Georgia as promoters of agro loans. Kartli. The community-based organization “Association Kheltu- bani 2010” composed by 20 IDP families was established with ACF is also establishing demo plots to improve the adoption the purpose of running the farm. The Kheltubani Chicken farm of appropriate technology for a sustainable agriculture. This in- started operating in January 2011 and now counts 3,000 chick- volves the collaboration among extension agents and farmers to ens, with the capacity to expand to 6,500 heads. The first round develop locally acceptable farming practices and accelerate their of chickens was sold out in February 2011 at 6 GEL per kilo, adoption. The organisation supports small scale research and generating an overall income of GEL 29 480.

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The farm employs 15 people and a professional veterinarian who market price of GEL 1-2 per kilo, the greenhouse Agro Vita will ensures the application of correct standards and procedures. generate an overall income of GEL 43 200 per season (i.e. every Chicken feed is purchased from the neighbouring Berbuki IDP three months). settlement, thus supporting the income generation of about 22 IDP families residing in that settlement. Furthermore, within the framework of the project, 225 000 tomato seedlings will be distributed free of charge to 1 500 families living For sustainability purposes, the members of the “Association in Mereti, Khurvaleti and Pkhvenisi villages. Kheltubani 2010” have been trained in effective management techniques, including financial management, marketing, organi- Under the UNHCR initiative and success of the greenhouse zational development, fundraising, and other business-related project, the new project component of “Support of confidence topics. This enables the members of the association to run the building measures through livelihood assistance” was added to farm successfully on a long-term basis, generate income and re- the current project implemented by IRD-SK. Through this new invest into the farm. project intervention, 500 000 tomato seedlings will be distributed to 2 450 families in Mejvriskhevi and Zerti villages and Sakasheti Within the framework of the same project, a brand new 3,000 settlement in the area adjacent to the South Ossetia Administra- m2 greenhouse has started operating in Mejvriskhevi village, tive Border Line. with a growing capacity of 7,200 seedlings simultaneously, and equipped with modern heating and drip irrigation systems as well CARE: Supporting agriculture to fight poverty as ventilation. Project implementation started in October 2010, Agriculture remains at the heart of CARE’s work in Georgia as it the seeds were sown for the first time in the newly built green- provides a critical source of livelihood to rural population and an house in February, 2011 and the first cucumber crop was har- opportunity to hundreds of thousands of rural poor to move out vested in April 2011. of poverty. Increasing access to machinery, consultation, farmer- to-farmer learning initiatives, building and repairing related infra- The greenhouse employs 15 residents of the nearby Mejvriskhevi structure have been highlights of CARE’s initiatives in 2011. and Zerti villages, ensuring a monthly income of GEL 200 (around USD 120) per person, and a professional agronomist. CARE matches business trainings with provision of agricultural machinery to improve agricultural produce of economically vul- The project helped to establish the community-based organiza- nerable communities and increase farmers’ incomes. CARE has tion “Agro Vita”, composed by 45 IDP families. The organization delivered tractors and associated agricultural appliances to joint members were trained in growing and marketing healthy and farmer groups composed of farmers from the settlements of dis- quality products. It is envisaged that each of the 7 200 plants will placed population and their host communities in Shida Kartli and produce 3 to 4 kilograms of cucumbers. Considering the average Kvemo Kartli. Presently, there are eight active agricultural ser-

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vice groups operating within Skra, Akhalsopheli, Berbuki, Khur- jority of demonstration farmers are now reporting an average 25 valeti, Sakasheti, Shavshvebi, Shaumiani and Koda IDP settle- percent increase in revenues and net assets. An additional 1 000 ments and adjacent villages. Since their inception, the groups farmers have visited these demonstration plots in 2011, helping have generated up to USD 75 000 revenue in total, benefitting them exchange knowledge. 4,000 IDPs and other local farmers who used the machinery services. The previous year CARE granted agricultural machinery On-the-field consultations, various trainings and cross-visits were worth GEL 1 070 000 to 27 famer groups with funding from vari- an opportunity for an additional 1 000 farmers to learn about in- ous donors. novations in fruit and vegetable farming, artificial insemination to encourage the uptake of new technologies and increase agricul- CARE is working to increase the access of farmers to market tural produce. by strengthening agriculture value chains. This is achieved by forming agricultural consolidation centres together with private In terms of knowledge and expertise, CARE provides advice on business sector, staging regional agriculture trade shows to link how to treat diseased crops or sick animals. CARE is co-funding farmers with stable customers, organizing cross-border study pharmacies, agriculture input shops, advisory centres and indi- tours in the South Caucasus region to help farmers find new mar- vidual consultations. Two new vet points have been established kets, providing trainings and technical assistance for farmers to in Likheti and Nikortsminda communities in the Racha-Lechkhu- develop their marketing skills etc. mi region on top of the six previously established in the region, which have provided assistance to over 4,500 farmers and de- Five consolidation centres set up in Kvemo Kartli and Samtskhe livered on-the-field services to more than 1 500 farmers locally. Javakheti in the previous years continue functioning, directly benefitting over 800 farmers in 2011. Around 90 percent of the A community resource centre continues functioning in Tsageri affected farmers have reported an average 20 percent rise in which accommodates an agricultural input shop and also serves their incomes and 85 percent of farmers report increase in their as a local hub for assistance on new agricultural technologies. livelihood security as a result of cooperation with the consolida- The shop aims to increase in this remote region farmers’ access tion centres. to fertilizers and other resources needed for healthy and abun- dant harvests and ensure the sustainability of the resource cen- CARE continues arranging demonstration plots which show best tre after project lifetime. Over 600 people have benefitted from practices of productive farming with a trickledown effect for com- the consultancy services of the resource centre so far. munities. Over 30 new on-farm demonstration plots have been set up in Racha-Lechkhumi and Kvemo Svaneti region to show- The majority of Georgian farmers rely on rain-fed agriculture, case new technologies, seed varieties, and animal and poultry which limits productivity and increases the risk of crop failure. breeds, while agricultural extension workers provided support to Only 46 percent of land in Georgia is irrigated. CARE is working over 400 demonstration farms established in recent years. A ma- to repair irrigation channels to address poor agricultural perfor-

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mance caused by water shortage and improve farming yields. presentation was developed around Integrated Pest Manage- Six more irrigation channels have been built or restored in 2011. ment (IPM) for greenhouse vegetable production, as outlined in Three irrigation channels are aimed at benefitting the displaced the Scope of Work of the host company, Zana Eco LLC. During population in Shida Kartli region, in particular in Skra, Karal- the workshop, visits were made to three commercial greenhouse eti and Berbuki villages and three more will support the farm- vegetable producers, agricultural crop suppliers and greenhouse ers in Kvemo Kartli and Samtskhe-Javakheti regions, in Arali, crop consultants, and the work was conducted with the host Karataghla, Jinisi villages. A total of 4 000 households will benefit company to determine and understand their problems and cur- from the new irrigation projects implemented this year. rent needs. All growers appeared to have similar problems so, the presentation was developed to further describe the problems In all regions, with rising land and water scarcity, the future of and offer suggestions relative to their causes and corrections. agriculture is fundamentally dependent on better management Instead of offering mere recipes, the focus was made that the of natural resources. Last year CARE joined a consortium of growers understand causes behind the problems and be ready partners to improve the lives of people in Georgia by using and to make corrections. Topics such as growing media, nutrition, managing natural resources more sustainably in the Rioni and drainage, irrigation systems, climate control, insect and disease Alazani-lori river basins. The program provides technical assis- identification as well as chemical/biological control were included tance to local and national governments and also establishes in the training. The primary message was the introduction of inte- EcoClubs designed to sensitize the youth to care for the planet grated approaches to production techniques and systems while and to empower the younger generations - by developing their at the same time improving crop yield and quality. team-building and networking skills – to protect Georgia’s natural environment. The higher than expected attendance at the workshop indicated that growers were very interested in understanding and conduct- CARE’s work in South Caucasus has been supported by the ing modern production approaches. The host company, Zana Austrian Development Cooperation, BP and its co-venturers in Eco LLC indicated that they will make changes in their drain- Baku-Tbilisi-Ceyhan (BTC) - South Caucasian Pipeline (SCP) age, cooling, heating, and climate control systems as well as and Georgian Pipeline Companies (GPC), the European Union, begin production of both cucumber and tomatoes in artificial me- the Norwegian Ministry of Foreign Affairs, the Swiss Agency for dia filled bags. Another company, Hora LLC, currently produc- Development and Cooperation (SDC) and the United States ing tomatoes and ornamental plants, has committed to improve Agency for International Development (USAID). their heating/cooling and total climate control system. They now understand the importance of adequate ventilation and proper CNFA: Working step-by-step with farmers on greenhouse temperature range for maximum production since this has been development a major problem for them. Growers now also understand the ad- CNFA Farmer-to-Farmer (FTF) Program conducted a workshop vantages of an open hydroponics system particularly as it relates on pest management for greenhouse vegetable growers. The to disease management, and are planning to make several major

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changes in their production. Many growers now have connec- significant part of the marine resource is caught by Turkish ves- tions with local suppliers of agricultural products. Products such sels hired by the Georgian companies holding licenses to fish as peat, perlite, zeolite as well as many pieces of equipment and anchovy. Most of the fresh anchovy and processed fish meal is tool are now easily and locally available to the industry. then exported to Turkey, which has better marketing opportunities, in particular to the EU. On top of the workshops, FTF project brings volunteers to work with individual greenhouse owners. For example, a seasoned In order to build capacity of agriculture professionals, FAO sup- farmer from the US visited Menji Ltd., greenhouse vegetable ports three staff members of the Ministry of Agriculture of Geor- producer that was recently granted sole access to the local hot gia as well as one graduate student from the Agrarian University spring for the purposes of irrigating and heating its greenhouses. of Georgia in participating to a fully accredited, online course on During his three-week stay in Georgia Mr David Dumaresq, the food security assessment and action. The course is an exten- volunteer farmer, worked with Menji Ltd. farmers and helped to sion of the FAO’s Distance Learning Courses developed under create a new water management plan and a business develop- the Food Security Information for Decision-Making Programme, ment strategy. He also participated in a roundtable discussion or- funded by the European Commission. It is offered by the Univer- ganized by CNFA’s USAID-funded Economic Prosperity Initiative sitat Oberta de Catalunya (UOC) Department of Food Systems, (EPI), sharing his expertise with a large group of Georgian green- Culture and Society. It is taught in the UOC’s Virtual Campus house producers. He also conducted a seminar for students on by an international team of experts with extensive field experi- topics like greenhouse management, crop production, produc- ence. The course is aimed at building skills and competencies of tion planning and marketing strategies. nationals from the transition countries as part of FAO’s mandate in capacity development, and provides students with not only a FAO: Training professionals and surveying Georgia’s poten- strong and holistic understanding of food security but also the tial for agriculture skills to assess and analyze food security projects and the tools The Food and Agriculture Organization of the United Nations to put those skills into action. The course reviews the concepts (FAO) in Georgia continues to work on different aspects of Geor- and tools used in food security analysis and consider food se- gian agriculture and to provide technical assistance at different curity in its relationship to vulnerability, hunger, malnutrition and levels. poverty.

Recently, FAO conducted a study to analyze possible investment In December 2011, within the framework of Emergency assis- potential and associated risks in the marine fishery sector and to tance for the control of African swine fever project, laboratory raise awareness about this sector among banks. It revealed that training was conducted in the Agrarian University of Georgia on Georgia has an extraordinary valuable resource of high quality laboratory diagnostics of African Swine Fever (ASF) via ELISA Anchovy close to landings in Poti. However, the quota for ancho- (enzyme-linked immunosorbent assay) and Immunofluores- vy catching is not yet fully used, partly due to the situation that cence Methods.Trainers were invited from Bologna and Perugia the major part of the Georgian fishing fleet is not modernized. A Veterinary Medicine Institutes (V. Guberti, D. Rutili), while partici-

14 2012

pants were teachers from the research laboratory, veterinarians ciated with products of the modern agricultural biotechnologies and students of the Veterinary Faculty of the Agrarian University and recombinant DNA plants; strengthen informal networking of of Georgia. the Georgian agricultural stakeholders and authorities involved in developing and implementing national biotechnology and bi- FAO also conducted series of trainings on agricultural biotech- osafety policies. nologies and biosafety, basic principles and concepts within the framework of Capacity Building in Agricultural Biotechnologies On top of its regular activities FAO now chairs donor coordina- and Biosafety Republic of Armenia, Georgia and Republic of Mol- tion meeting on agriculture together with the EU and Embassy dova project. These trainings were conducted for parties directly of France as co-chairs. Donor coordination process in Georgia involved in agricultural biotechnologies and biosafety (regula- has evolved into a complex structure where analysis, information tions, risk assessment, communication) –universities, extension sharing and technical evaluation are carried out at sub-secto- research institutes, customs inspectorates, plant protection in- ral levels. The sub-groups of the donor coordination have been spectorates, veterinarian institutions, governmental officials from determined in accordance with the agricultural strategy drafted the MoA, MoE and NFA as well as farmers, farmer organizations, by the Ministry of Agriculture of Georgia. EC chairs competitive- agro-industry, input suppliers, relevant donors. The purpose of ness improvement through private sector development, UNDP the trainings were to acquire knowledge and share experiences leads capacity improvement of the institutions and stakeholders on issues related to the development and application of agri- involved in agriculture, USAID/Economic Prosperity Initiative cultural biotechnologies worldwide and in Georgia; understand chairs development of food production chains, the World Bank development and implementation of regulatory frameworks in heads development of rural infrastructure, while FAO takes a biosafety worldwide; develop capabilities to evaluate risks asso- lead on food security efforts.

15 2012

Theme: Food safety

Food safety has become one of the major issues of interest of cious products. This, in its turn, pushed towards regress instead the government and international organizations over the past few of progress. months. Even though, at a glance, it may seem that Georgian consumers do not question origin and validity of food available in The law of Georgia on Food Safety and Quality adopted in 2005 stores and markets, limited body of research suggested that con- has introduced a completely different approach. It is focused not sumers are aware of the vitality of the issue. However, consum- only on inspection of the final product, but also on the production ers may not always be able to make safe choices due to financial process and early identification and prevention. Integrated term considerations or lack of available information. “from the farm to the table” has been introduced which empha- sises the control of the whole process and not just the certifi- Georgia inherited from the Soviet Union GOST, a food safety cation of the final product. It is based on Hazard Analysis and system. Although providing some level of safety, this system was Critical Control Points (HACCP) system, which creates control extremely bureaucratic, expensive, and prone to corruption. Ac- mechanisms for every stage of food processing and production, cording to the World Bank, GOST was an inflexible system hin- including on its distribution stage. The law had been amended dering innovation and adaptation to the new needs of the new several times, and experts believe, it was very much aligned with market economy. requirements of EU food regulations.

As Georgia gained its independence, all systems of food safety In 2009 the Government of Georgia received the European Com- disappeared. With this, the share of falsified, low quality products mission’s assessment of Georgia’s preparedness for a Deep and has increased. Producers often violated rules of safe production, Comprehensive Free Trade Agreement (DCFTA). The Assess- storage and sales. Cases of food-borne diseases have also in- ment identified food safety as one of the key areas that Georgia creased, although lack of proper reporting mechanisms do not needs to address to be eligible to conclude a DCFTA. Based on allow for more specific data. the recommendations provided by the Assessment, the Govern- ment, in close cooperation with the European Commission and Such situation violated the rights of consumers and most impor- with the assistance of Estonian and Finnish experts, prepared tantly, it brought irrevocable damage to the consumer market of and finalised a Comprehensive Strategy and Legislative Approxi- Georgia. Introduction of inadequate forms of competition com- mation Programme in Food Safety (2010). Through this strat- pletely neglecting the quality and safety aspects and focusing egy Georgia declares sincere commitment to establishing a solid on low price only resulted in production of low quality and suspi- food safety system and to bring its legislation and institutional

16 2012

framework in line with relevant EU legislation and international to the pre-established scheme implemented by the state or ac- standards. credited group.

In 2011 the Government of Georgia abolished the old food safety The ultimate agency to carry out supervision, monitoring and law and adopted a new Code on Food/Animal Feed Safety, Vet- state control in the food sector is the National Food Agency, a erinary and Plant Protection. It reflects the goals, key principles legal entity of public law operating under the Ministry of Agricul- and procedures of European food safety legislation and focuses ture of Georgia. It is responsible for ensuring protection of hy- on protection of life and health of people, safety of plants and ani- gienic, veterinary-sanitary and phyto-sanitary requirements and mals, meeting needs of consumers and respect for international regulations, risk management and communication. It registers standards. It also ensures effective functioning of state control agricultural inputs, assigns categories to products, leads activi- mechanisms as well as support to free trade with food and ani- ties to prevent and eliminate animal diseases, issues appropri- mal feed. ate licenses and permits, amongst other duties. The Agency has gone through important restructuring over the past year, and the However, at present there are number of gaps in the new Code plan for the nearest future is to further refine organisational and and the Government has one year to adopt appropriate by-laws institutional structure, staff skills, district officer, risk-analysis, co- to regulate such fields. Zurab Tskitishvili, the author of 2005 food ordination and cooperation with other institutions in the area and safety law, believes that such by-laws should be adopted after physical infrastructure. extensive involvement of public. Tskitishvili says that while the new law was very much based on the old one, the law-makers The Food department of the NFA consists of departments for have removed certain definitions of terms. For example, the law food of animal origin, foods of plant origin, and department for does not require for the risk assessment procedures to be based risk analysis. Together with food/animal feed inspection depart- on scientific evidence, it does not make adherence to HACCP mandatory, and definitions of quality and fraud are removed ment it implements planned and non-planned state inspection along with corresponding regulative procedures. Tskitishvili also according to the risk assessment and criteria formulate by the believes that creation and adoption of by-laws should take place agency. They identify the critical and non-critical incompliance as a result of public debate. However, unlike the old law, the criteria and inspect agencies registered under the entrepreneur- new Code introduces two procedures of inspection: inspection ial registrar and pay special attention to high risk food producers, conducted by the state unexpectedly and inspection according like diary and meet or baby feed producers.

17 2012

However, Lampi believes there is a different situation in terms of animal products, as the key in this case is healthy animals. It is necessary to know where they are, they need to be vaccinated in cases of evident diseases, have to be treated for any diseases that could go into milk, and each territorial unit should have a veterinarian that knows about the condition of these animals. “It will be difficult to build food safety unless these basic requirements are met. The EU is very strict in this regard and will not allow any imports on its market unless these basic things are in order” – says Lampi. According to experts, another issue is that people in Georgia do not always use best practices in animal product processing.

In spite of the challenges described above, experts believe that products of animal origin are not as hazardous for Georgian consumers at the moment. The reason is that the current food chain During 2011, NFA teams inspected around 400 enterprises, is very short – animals are eaten in the same area where they mostly focusing on companies that export their products to the are killed, and if there is an animal disease, it is obvious on spot. EU and other countries. “I have personally participated in inspec- “However, this value chain is getting longer, and it will be difficult tion of several enterprises,” – says Kakha Sokhadze, Head of to trace what is happening where. Georgia has to be ready for Unit for Foods of Plant Origin and Drinking Water of NFA. “Un- this. That’s why it is necessary to adopt regulations that respond less the incompliance is critical, enterprises are given reason- to such developments” – says Lampi. able time to correct identified violations. I am happy to say that over 80% of the enterprises inspected have taken into account Some of the first steps the government has made to respond the advice we gave.”. However, there have been cases of critical to the growing need for improvement of animal products is the incompliance and the enterprise operations have been stopped. establishment of over 40 slaughterhouses all over Georgia. NFA “Georgia is in a good position in terms of products of plant ori- has also inspected these institutions and provided recommenda- gin,” – says Matti Lampi, Food Safety Expert. “Thanks to the cur- tions for improvement. rent seed practices in Georgia, they don’t create hazard to human health. Although plant products could have some pests that NFA is extensively consulting entrepreneurs on how to best orga- could be harmful, Georgia uses the same pests as Europe does.” nize their enterprises. These services are paid as representatives

18 2012

of NFA conduct on-spot evaluations and give advice. “Business- paigns. Such communication will be targeted to let the public es are happy with our work. Our relationship is based on pro- know what’s needed and avoid frightening people. NFA currently fessionalism and provision of useful advice,” – says Sokhadze. operates a hotline where the public is able to report food-related “Almost everyone understands the benefit of our mutual collabo- issues and the Agency can respond as necessary. ration.” To ensure compliance, NFA issues hygienic compliance certification for products both for domestic and international mar- The Agency recognizes that it is difficult to get back into borders kets. The certification is issued by the accredited laboratory. after 10-15 years with no legal regulations. However, now that there are more resources, including competent human resourc- “I can say with confidence that we have very good relations with es, and technical assistance available from multiple donors, NFA entrepreneurs in Georgia. It’s based on professionalism and un- is planning to expand its activities within the framework of the derstanding that this is for mutual benefit.” – Says Sokhadze. existing legislation. “This way we can achieve new levels of excellence.” “Everything is comparative. If we compare existing situation to Within the framework of assistance projects implemented by do- what was in place before 2005, then we have certainly achieved nors, NFA will expand its public relations and awareness cam- significant changes.” – says Kakha Sokhadze proudly.

19 2012

Trade, agriculture and food

Trade

Exports Imports Export of products representing (a) live animals, (b) cereals (c) edible Import of products representing (a) meat & edible meat offal, (b) ani- fruits and nuts, peel of citrus/melon (d) residues from food industries, mal or vegetable fats, (c) cereals, (d) sugar and sugar confectionary, animal feed, and (e) beverages, spirits and vinegar accounted for and (e) tobacco and manuf. tobacco substitutes amounted for 63% 94% of total exports, and their shares were 15%, 3%, 32%, 2%, and of total imports, and their shares were 11%, 7%, 21%, 15%, and 10 42%, respectively. %, respectively.

20 2012

HC CC definition value ($us) rank share (%) 1 live animals 628,959 21 2 meat & edible meat offal 30,476,406 3 11% 3 fish & crustaceans 6,702,248 12 4 dairy, eggs, honey, & ed. products 9,034,874 10 5 products of animal origin 339,587 22 6 live trees & other plants 1,714,219 19 7 edible vegetables 3,358,976 17 1% 8 ed. fruits & nuts, peel of citrus/melons 5,014,317 15 9 coffee, tea, mate & spices 5,010,655 16 10 cereals 59,756,903 1 21% 11 milling industry products 3,334,444 18 12 oil seeds/misc. grains/med. plants/straw 665,407 20 13 lac, gums, resins, etc. 58,565 23 14 vegetable plaiting materials 2,233 24 15 animal or vegetable fats, oils & waxes 20,512,191 5 16 ed. prep. of meat, fish, crustaceans, etc 6,025,048 14 17 sugars & sugar confectionery 42,399,998 2 15% 18 cocoa & cocoa preparations 10,881,882 9 19 preps. of cereals, flour, starch or milk 12,788,941 7 20 preps of vegs, fruits, nuts, etc. 6,212,432 13 21 misc. edible preparations 15,224,075 6 22 beverages, spirits & vinegar 12,197,311 8 23 residues from food industries, animal feed 6,724,682 11 24 tobacco & manuf. tobacco substitutes 28,763,192 4 10% total 287,827,545 57% ROCG 43%

Major Import Commodity HS CC Share (%) Group HS CC 02 11% HS CC 07 HS CC 07 1% 1% HS CC HS CC 10 21% 02 10% HS CC 17 15% RoCG HS CC 10 HS CC 24 10% 43% 21% RoCG 43%

HS CC 17 HS CC 15% 24 10%

21 2012

Exports by HS CC

HS CC definition value ($us) rank share (%)

1 live animals 14,142,920 3 15% 3 fish & crustaceans 47,013 17 4 dairy, eggs, honey, & ed. products 170,662 13 6 live trees & other plants 282,967 12 7 edible vegetables 108,047 15 0.1% 8 ed. fruits & nuts, peel of citrus/melons 31,381,107 2 32% 9 coffee, tea, mate & spices 1,422,774 6 10 cereals 3,151,412 4 11 milling industry products 510,115 8 12 oil seeds/misc. grains/med. plants/straw 489,365 9 13 lac, gums, resins, etc. 0 22 14 vegetable plaiting materials 2,053 21 15 animal or vegetable fats, oils & waxes 346,597 11 16 ed. prep. of meat, fish, crustaceans, etc 5,450 18 17 sugars & sugar confectionery 111,692 14 18 cocoa & cocoa preparations 102,367 16 19 preps. of cereals, flour, starch or milk 4,714 19 20 preps of vegs, fruits, nuts, etc. 1,291,868 7 21 misc. edible preparations 450,949 10 0.5% 22 beverages, spirits & vinegar 40,668,762 1 42% 23 residues from food industries, animal feed 2,004,850 5 24 tobacco & manuf. tobacco substitutes 2,258 20 total 96,697,942 90% ROCG 10%

Major Export Commodity Group

HS CC Share (%) HS CC 07 HS CC 01 15% HS CC 01 0% RoCG 15% HS CC 07 0.1% 10% HS CC 08 32% HS CC 21 0.5% HS CC 08 HS CC 22 42% 32% HS CC 22 RoCG 10% 42%

HS CC 21 1%

22 2012

Agriculture Trade July-September 2011 ($US)

July August August Total

Imports 17,309,352 106,377,824 102,056,981 225,744,157

Exports 20,227,459 23,905,826 52,564,660 96,697,945

Prices

July 2011 prices were lower to June 2011 prices With the exception of flour, pork and meat, prices have increased from June 2011 to July 2011

Retail Monthly Prices

2011 2011 July 11 vs Product June 11 June July Aug Sep

Bread 1.57 1.57 1.55 1.53 0%

Flour 1.58 1.75 1.70 1.71 10%

Beef 11.47 11.51 11.57 11.64 0%

Pork 9.08 11.60 12.32 12.47 28%

Poultry 6.85 6.85 7.35 7.48 0%

Milk 1.69 2.02 2.15 2.22 20%

Cheese 7.81 5.67 6.74 7.21 -27%

Eggs 3.17 3.06 3.07 3.06 -3%

Butter 7.55 7.85 7.82 7.88 4%

Sunflower Oil 4.16 4.12 4.18 4.21 -1%

Potato 1.30 0.85 0.91 0.94 -35%

2011 Product Jan Feb Mar Apr May June July Aug Sep Oct Nov Bread 1.49 1.61 1.63 1.63 1.62 1.57 1.57 1.55 1.53 1.51 1.49 Flour 1.60 1.73 1.76 1.82 1.83 1.81 1.75 1.70 1.71 1.73 1.72 Beef 8.71 9.81 10.33 10.93 11.33 11.47 11.51 11.57 11.64 11.43 11.36 Pork 9.15 9.13 9.66 10.26 10.85 11.02 11.60 12.32 12.47 12.40 12.44 Poultry 6.40 7.11 7.46 7.39 7.76 7.06 6.85 7.35 7.48 7.54 6.88 Milk 1.71 1.77 1.62 2.04 2.05 2.06 2.02 2.15 2.22 2.25 2.32 Cheese 8.26 7.75 7.29 6.79 5.97 5.52 5.67 6.74 7.21 7.26 7.72 Eggs 3.07 3.08 3.09 3.14 3.07 3.08 3.06 3.07 3.06 3.13 3.14 Butter 7.46 7.83 8.11 8.21 8.30 8.11 7.85 7.82 7.88 7.96 7.93 Sunflower Oil 4.20 4.25 4.19 4.24 4.26 4.18 4.12 4.18 4.21 4.16 4.15 Potato 1.46 1.52 1.49 1.47 1.71 1.30 0.85 0.91 0.94 0.96 0.99 23 Winter 2012

24 Agriculture Sector Bulletin 2012