Value Chain Analysis of Mandarin In Adjara The project „Regional Civil Society Organizations Supporting Free Trade with Europe” is funded by European Union and implemented by People in Need This publication has been produced with the assistance of the European Union. Its contents are the sole responsibility of People in Need and PMC Research Centre and do not necessarily reflect the views of the European Union. Tbilisi, 2018 Research Coordinator: Nino Khatisashvili Senior Researcher: Irakli (Rati) Kochlamazashvili Junior Researcher: Mariam Saghareishvili The following civil society organizations actively participated in the research process: - Khulo Local Action Group; - Keda Local Action Group; - „Black Sea Eco-Academy”; - „Union of Georgian Muslims”. Table of Contents 1. Executive Summary ............................................................................................................................. 7 2. The Aim of the Study ........................................................................................................................... 9 3. Methodology of Research ................................................................................................................. 10 3.1. Product Selection ....................................................................................................................... 10 3.2. Deskwork.................................................................................................................................... 10 3.3. Fieldwork .................................................................................................................................... 10 4. Research Limitations ......................................................................................................................... 12 5. Brief Overview of the Mandarin Sector ............................................................................................ 13 5.1. Global Production of Mandarins ................................................................................................ 13 5.2. Global Mandarin Trade .............................................................................................................. 15 5.3. Mandarin Production in Georgia ............................................................................................... 16 6. The Scope of Research: AR Adjara .................................................................................................... 19 6.1. General Characteristics .............................................................................................................. 19 6.2. Mandarin Types and Cultivars ................................................................................................... 21 7. Mandarin Export and Import ............................................................................................................ 23 7.1. Mandarin Export from Georgia .................................................................................................. 23 7.2. Mandarin Imports in Georgia ..................................................................................................... 26 8. Mandarin Value Chain in Adjara ....................................................................................................... 28 8.1. Description of the Mandarin Value Chain in Adjara .................................................................. 28 8.2. Illustration of the Adjarian Mandarin Value Chain .................................................................... 29 8.2.1. Mandarin Value Chain Participants in Adjara ..................................................................... 30 8.2.2. External Factors Affecting the Mandarin Value Chain ........................................................ 33 9. Cost and Revenue Analysis ............................................................................................................... 37 9.1. Producer Expenses and Revenues ............................................................................................. 37 9.2. Added Value Analysis ................................................................................................................. 38 10. Mandarin Market in the European Union....................................................................................... 42 10.1. Georgia and the European Union ............................................................................................ 43 11. Main Players and Relationships between Them ............................................................................. 46 11.1. Horizontal Relationships in the Value Chain ............................................................................ 46 11.2. Vertical Relationships in the Value Chain ................................................................................ 48 12. SWOT Analysis of the Mandarin Sector in Adjara ........................................................................... 49 13. Employment and Revenue Generation Potential in the Mandarin Sector ..................................... 50 13.1. Employment Prospects ............................................................................................................ 50 13.2. Revenue Generation ................................................................................................................ 50 14. Discussion and Recommendations ................................................................................................. 51 14.1. Main Obstacles Facing the Mandarin Sector ........................................................................... 51 14.1.1. Obstacles to Production .................................................................................................... 51 14.1.2. Obstacles to Post-Harvest Activities ................................................................................. 51 14.1.3. Obstacles to Sales ............................................................................................................. 52 14.2. Recommendations ................................................................................................................... 52 Bibliography .......................................................................................................................................... 55 Appendices ............................................................................................................................................ 56 Appendix 1. Product Selection .......................................................................................................... 56 Appendix 2. Focus Groups ................................................................................................................ 58 Appendix 3. Interviews ..................................................................................................................... 59 Appendix 4. List of Export Documents .............................................................................................. 60 Appendix 5. Economic Calculations by Farm Type ........................................................................... 61 Appendix 6. Economic Calculations for New Semi-Intensive Plantations ........................................ 64 Appendix 7. European Union Requirements for Mandarin Imports ................................................ 65 Figures Figure 1: Top 10 mandarin producing countries (2010-2016 average). .............................................. 13 Figure 2: Volume of global mandarin production (1961-2016) ............................................................ 14 Figure 3: Average global yield of mandarins per hectare (1961-2016) ................................................ 15 Figure 4: Mandarin producing countries with the highest yield per hectare (2016). .......................... 15 Figure 5: Mandarin production in Georgia (1992-2016) ....................................................................... 16 Figure 6: Citrus fruit production by region ........................................................................................... 17 Figure 7: Mandarin exports from Georgia (2001-2017) ....................................................................... 23 Figure 8: Export destinations for Georgian mandarin .......................................................................... 24 Figure 9: Export of mandarin concentrate from Georgia ..................................................................... 25 Figure 10: Export destinations of mandarin concentrate from Georgia .............................................. 25 Figure 11: Mandarin imports in Georgia (2001-2017) .......................................................................... 27 Figure 12: Mandarin importers in Georgia ........................................................................................... 27 Figure 13: Retail prices of mandarins in Georgia .................................................................................. 39 Figure 14: Retail and wholesale prices of Georgian mandarin in AR Adjara ........................................ 39 Figure 15: Added value for each link (in case of export) ...................................................................... 41 Figure 16: Mandarin producer prices ................................................................................................... 43 Tables Table 1: Main exporters and importers of mandarins by total value (2016) ......................................