Safety and Quality Investment in Livestock: Georgian Dairy Market System Analysis and Mapping May 2019 Georgian Dairy Market System Analysis and Mapping SQIL-2019-PROC-0001 Georgian Safety and Quality Investment in Livestock (SQIL) Project USDA Food for Progress 2018 www.landolakes.org Prepared by ISET Policy Institute www.iset-pi.ge This report is made possible by the support of the American people through the United States Department of Agriculture (USDA). The contents do not necessarily reflect the views of USDA or the United States Government. 2 Contents TABLE OF FIGURES ................................................................................................................................................. 4 LIST OF ABBREVIATIONS / ACRONYMS .................................................................................................................. 5 1 INTRODUCTION ................................................................................................................................................... 7 1.1 PROJECT DESCRIPTION ............................................................................................................................................... 7 1.2 OBJECTIVE OF THE STUDY ........................................................................................................................................... 7 1.3 RESEARCH METHODOLOGY ......................................................................................................................................... 7 2 GENERAL OVERVIEW OF THE SECTOR ................................................................................................................. 8 2.1 DAIRY MARKET SYSTEM MAPPING ............................................................................................................................... 9 2.2 CORE MARKET SYSTEM ACTORS ................................................................................................................................ 10 2.3 DEMAND SIDE OF THE DAIRY VALUE CHAIN ................................................................................................................. 10 2.3.1 Consumption of Milk and Dairy Products ................................................................................................... 11 2.4 SUPPLY SIDE OF THE DAIRY SECTOR IN GEORGIA ........................................................................................................... 12 2.5 MILK AND DAIRY PRODUCT PRICES ............................................................................................................................ 13 2.6 IMPORT OF DAIRY PRODUCTS ................................................................................................................................... 15 2.6.1 Milk Powder Imports .................................................................................................................................. 15 2.6.2 Milk Product Imports.................................................................................................................................. 15 3 THE KEY ACTORS ............................................................................................................................................... 17 3.1 TYPES OF DAIRY FARM............................................................................................................................................. 17 3.2 MILK COLLECTORS .................................................................................................................................................. 18 3.3 MILK PROCESSORS .................................................................................................................................................. 18 3.3.1 Home Based Processors ............................................................................................................................. 18 3.3.2 Mid-scale Processors .................................................................................................................................. 19 3.3.3 Industrialized Processors ............................................................................................................................ 19 3.4 DISTRIBUTION COMPANIES ....................................................................................................................................... 19 3.5 SUMMARY OF LINKAGES AMONG CORE MARKET CHAIN ACTORS ..................................................................................... 20 4 DAIRY MARKET SUPPORT FUNCTIONS .............................................................................................................. 20 4.1 INPUT SUPPLIERS .................................................................................................................................................... 20 4.2 VET SERVICES ........................................................................................................................................................ 21 4.3 LABORATORIES ....................................................................................................................................................... 22 4.4 ASSOCIATIONS ....................................................................................................................................................... 22 4.5 EXTENSION SERVICES ............................................................................................................................................... 23 4.6 RESEARCH CENTERS ................................................................................................................................................ 23 4.7 CIVIL SOCIETY ORGANIZATIONS (CSOS) ...................................................................................................................... 24 4.8 EDUCATION ........................................................................................................................................................... 24 4.9 FINANCIAL SERVICES ............................................................................................................................................... 24 4.10 SUPPORT PROJECTS .............................................................................................................................................. 25 4.11 INFORMATION AND AWARENESS ............................................................................................................................. 26 4.12 INFRASTRUCTURE ................................................................................................................................................. 26 5 DAIRY MARKET RULES ....................................................................................................................................... 26 5.1 LEGAL AND REGULATORY REFORMS (AA/DCFTA) ........................................................................................................ 26 5.2 STANDARDS AND ACCREDITATION .............................................................................................................................. 28 5.3 TAXES AND BUSINESS REGULATIONS ........................................................................................................................... 30 3 5.4 TRADE POLICY ........................................................................................................................................................ 31 5.5 TRADITIONS AND NORMS ......................................................................................................................................... 31 6 SECTORAL CONSTRAINTS & RECOMMENDATIONS ............................................................................................ 32 6.1 SECTORAL CONSTRAINTS & RECOMMENDATIONS AT FIRM LEVEL ..................................................................................... 36 6.2 RECOMMENDATIONS FOR KEY INTERVENTIONS ............................................................................................................. 37 6.3 RECOMMENDATIONS FOR PRODUCT INNOVATIONS ....................................................................................................... 38 6.4 RECOMMENDATIONS FOR STRENGTHENING ASSOCIATIONS ............................................................................................. 39 BIBLIOGRAPHY ..................................................................................................................................................... 40 APPENDICES......................................................................................................................................................... 41 ANNEX 1. LIST OF INTERVIEWED STAKEHOLDERS ................................................................................................................ 41 ANNEX 2. BUFFALOES, SHEEP, AND GOATS ....................................................................................................................... 42 ANNEX 3. PROFILES OF MAJOR MARKET ACTORS (ATTACHED) .............................................................................................. 44 ANNEX 4. DAIRY MARKET SYSTEM MAPPING (ATTACHED) ................................................................................................... 56 ANNEX 5. GRAPHS AND STATISTICS (ATTACHED) ................................................................................................................. 74 Table of