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Survival of the Fittest in Georgian Agriculture

From the ISET Economist news (http://www.iset.ge/news/?s=survival&lang=en)
By Nino Mosiashvili

The conclusion of the Association Agreement (AA) with the European Union was euphorically acclaimed by Georgian media as well as political and economic decision makers. Part of the AA is the Deep and Comprehensive Free Trade Agreement (DCFTA). The DCFTA is intended to liberalize trade between Georgia and the EU by lowering tariffs and reducing non-tariff barriers. For agriculture, the most relevant changes relate to food safety (bacterial contaminants, pesticides, inspection, and labeling) as well as animal and plant health (phytosanitation). For the manufacturing sector, the removal of so-called “technical barriers to trade” is similarly important, with the goal being to prevent the usage of technical standards as a means to protect domestic markets from foreign competition. “If regulations are set arbitrarily, they could be used as an excuse for protectionism”, states the World Trade Organization on its homepage.

             

It is clear that all these agreements require unilateral adjustment of Georgian regulations to European standards. Georgia is economically too small to impose its preferences on Europe. This is stated quite frankly in the AA, when it says that it aims to “support the efforts of Georgia to develop its economic potential via international cooperation, also through the approximation of its legislation to that of the European Union”.

Whether these unilateral adjustments are beneficial for Georgia is not generally clear. European regulations do not necessarily reflect “best international practice”. In democracies, laws and regulations come about through the lobbying efforts of political interest groups much more than through rational planning. In the future, internal political decisions made in the European Union will be relevant for Georgia much more than they were previously, and it will be more difficult to pursue policies tailored to the specific situation of Georgia.

Yet Georgia hopes that the convergence to European standards will make it easier for Georgian firms to access the European market. Most critical in this respect is Georgian agriculture, as it is the sector employing the bulk of the Georgian labor force, while it is at the same time dramatically lagging behind European productivity levels. In 2013, Georgia’s agriculture accounted for only 9.3% of the Georgian gross domestic product but employed about half of the labor force. Thus, one of the benchmarks for evaluating the usefulness of the DCFTA will be its impact on Georgian agriculture.

THROWN INTO THE WATER – WILL IT SWIM?

The impacts of the DCFTA for Georgia were assessed in a report with the lengthy title Trade Sustainability Impact Assessment in support of negotiations of a DCFTA between the EU and Georgia and the Republic of Moldova. It was written by a consortium consisting of the Dutch consulting company Ecorys and the The Center for Social and Economic Research (CASE)a Warsaw-based think tank. On a broad level, the report estimates that due to trade liberalization with the EU the national income of Georgia will increase by 291.9 million euro in the long run, corresponding to a GDP growth of 4.3%. This goes along with an increase in Georgian exports and imports by 12% and 7.5%, respectively, leading to an improvement of the Georgian trade balance. But what about agriculture?

According to the study, the DCFTA will have different effects on different agricultural products, and the overall picture is very ambivalent. The output of some product categories will increase, namely vegetable oils and fats (+6.7%), vegetables, fruits, nuts, and oilseeds(+3.4%), and animal products (+3.1%), while for many other products, the output is expected to shrink, e.g. livestock and meat products (-14.8%), other processed foods (-8.8%),beverages and tobacco (-4.0%), sugar (-2.4%), and other crops (-2.0%). The report attributes the increases to reductions of EU tariffs on Georgian exports and the decreases to the reduction of Georgian tariffs on goods imported from the EU. These numbers, if they say something about the true developments, suggest that parts of Georgia’s agricultural sector will get under severe pressure due to increased competition with European producers.

ECONOMIC DARWINISM

What are the implications for Georgian agricultural policy? Some of the producers will benefit from the integration into the European market, as they can stand the pressure and even expand in this highly competitive environment. Other producers are likely to run into essentially insoluble problems. One particularly beneficial category in this respect is vegetables, fruits, nuts, and oilseeds, because some of the products in that category (e.g. hazelnuts) are labor intensive and serve niche markets. This implies that more people can be employed in the production of these goods, making the transformation to a modern, efficient agriculture less painful, and it means that competition is lower and margins are higher. If policy recognizes these advantages, producers in that category might become “national champions”.

Currently, vegetables, fruits and nuts are in Georgia primarily produced by small and medium sized farmers. Due to lack of greenhouses the production is seasonal. Yet farms can be consolidated and technical equipment can be upgraded. In the end, it will be relevant that Georgia has fundamental advantages in the production of goods in that category, namely clean soils, little usage of chemicals, a relatively large amount of available land for cultivation, and a long tradition in vegetable and fruit production.

Moreover, about half of Georgia’s current export of vegetables, fruits, and nuts already goes to the EU, which means that Georgian producers already have “a foot in the door”. Currently, the exports almost entirely consist of hazelnuts (there are no tariffs, as hazelnuts are already covered by the GSP+ regime, and hazelnuts easily satisfy sanitary and phyto-sanitary standards). Thus, while the DCFTA may not change Georgia’s hazelnuts export to the EU significantly, there may be other niche products in this category, like berries and other kinds of nuts, which may benefit from the DCFTA, for example through adjustments of Georgian regulations regarding product packaging.

It will be important that policy will subscribe to what one might call “Economic Darwinism” – do not try to keep those producers alive that are incapable of surviving, but instead create good circumstances for those that have a future in Georgia.

OTHER NEWS
17/11/2020
Georgian Milk Mark in Ministry Magazine

Our Village, the Ministry of Environmental Protection and Agriculture of Georgia (MEPA) magazine with a circulation of 10,000 copies a month is publishing an article about the Georgian Milk Mark (GMM) in its October issue. The article provides comprehensive information about the GMM, a list of the GMM dairies and their products. Rural farmers across Georgia will receive the magazine through fifty-four MEPA Information Consultation Centers (ICCs) for free.

Currently, sixty-seven types of GMM dairy products from eighteen GMM  dairy companies are being sold  in Madagoni, Spar, Ori Nabiji, Nikora, Zgapari, Fresco, Foodmart, Carrefour, Goodwill, Willmart, Libre, Deili, Bilion supermarket chains. Details on www.georgianmilk.ge.


15/07/2020
Georgian Beekeeping Highlighted in German Magazine

A German beekeeping magazine Deutsches Bienen-Journal with circulation of 52,000 copies a month published a comprehensive article on beekeeping in Georgia and its history, local bee breed Mountain Grey Caucasian Honey Bee (Apis mellifera caucasica) and Jara honey a special mention of the project’s work.


29/10/2020
Improvements in Sheep Shearing


In 2018, while thinking about improving the quality of supplied wool, the Georgian Wool Company purchased twelve sheep shearing machines and trained a group of twelve shepherds, to provide a shearing service to sheep farmers. The service is available on the pastures at the beginning of spring and at the end of summer, when sheep are usually sheared in Georgia. This year, up to five-hundred farmers were served, with hundred thousand sheep sheared.

 

Before, the wool suppliers of the company sheared sheep by hand, which damaged wool fiber and the quality of wool was poor. It took time with only up to thirty sheep sheared a day. The sheep farmers had to ensure the workforce for shearing by hand, they also had to arrange wool storage space in pastures and transportation of wool from pastures to wool collection centers. Incompliant shearing and storage was decreasing the quality of wool and causing about a ten percent loss (up to thirty kilos), which was usually left on pastures polluting the local environment.

 

Now, the sheep shearing machines prevent damaging of wool fiber and respectively, the quality of wool has been improved. The company’s sheep shearing machine service includes storage and transportation of wool from pastures to the company`s warehouse in Tbilisi. Sheep shearing is now time-efficient with up to hundred sheep/day sheared by one trained shepherd. While shearing of thousand sheep by hand took at least three days, now the same is done just in one day. For the company it means a stable supply of wool in better, cleaner quality; For farmers it translates into reduced transaction costs, time and about 0.7 Gel saved per sheep.

The Georgian Wool Company first exported wool to the United Kingdom back in 2016. Ukraine, Kazakhstan, India, Afghanistan are now among top wool export destinations. Along with growing demand, improving quality has become a particular interest of the company.

09/10/2020
VET Colleges to Teach Jara Wild Honey Production

On October 8th, the Georgian Beekeepers Union (GBU) hosted representatives of thirteen VET colleges from across Georgia and sectoral skills organization Agro Duo in Tbilisi. The meeting occasioned the integration of Jara honey production as a topic in VET college beekeeping programmes, something that the Georgian Beekeepers Union have been facilitating over the last year.

The participants received the Jara Honey Production Handbook and Bio Certification Guidelines for Beekeepers; and were introduced to two new websites www.honeyofgeorgia.com and www.jarahoney.com and a honey promotion video Discover Georgia: The Land of the Oldest Honey.

This year Akhali Talga VET College in Kobuleti and Khulo integrated the Jara materials into their one-year beekeeping programme in which twenty-eight beekeeper students are attending. At the meeting, Akhali Talga VET College shared their experience of successfully integrating the Jara materials into their beekeeping programme.

‘I had many calls before and after the meeting and I can say that the interest from the colleges is very high. We will provide support required and I am sure from the next year there will be more programmes with the Jara materials and improved content.’ – Aleko Papava, the Head of the GBU.

At the beginning of the meeting, the GBU and sectoral skills organization Agro Duo signed a Memorandum of Understanding pledging to work together to integrate Jara materials into the beekeeping programmes in all VET colleges in Georgia.

Jara is traditional wild beekeeping producing unique and pure honey rarely practiced nowadays, except for remote dwellings located in the subtropical and alpine zone of Georgia. However, for the first time in decades Jara production is being practiced again by new beekeepers or taken up again by those who had stopped. In 2018 the Jara Beekeepers Association was formed to represent producer interest and in the country first, twenty-three Jara beekeepers in Ajara have received Bio certification. Jara honey was commercially harvested and branded for the first time in 2018 and since then the market for Jara honey has grown in strength which is why the producers decided to become Bio Certified to further increase the value of their product. The Jara honey mark was registered this year to further protect this culturally important product.  

06/10/2020
Jara Beekeeping Brings Hope: Vazha’s Story

  

Fifty-seven years old Vazha Kedelidze from Kedlebi Village, Khulo is one of ten students who enrolled in the beekeeping programme at Akhali Talgha vocational college in August.

Vazha retired from his position as a fireman five years ago. Soon after, his wife had a severe injury that left her unable to take care of their farm. As Vazha says, beekeeping is now the mainstay of his family. His beekeeper friend helped him to arrange an apiary of twenty hives.

I discovered that beekeeping is a philosophy on its own. Sometimes I sit for hours and observe bees working. I am trying to understand the process.’- Vazha says.

As a beginner beekeeper, Vazha is striving for knowledge and struggling to gain comprehensive information, as internet sources are not targeted to beginner beekeepers and he needed something hands on. He then heard about the beekeeping course at the Akhali Talgha VET collegein Khulo.

‘I do not know curriculum details yet, but I am sure I will get answers to my questions and I am looking forward to starting the learning process.’ – Says Vazha.

Vazha was even more surprised when he found out a Jara beekeeping module:

‘I had heard about Jara from villagers and television. It is a fascinating and very unique tradition. Last year, I even made six Jara hives and could not proceed further due to a lack of knowledge. So, I am glad that I will learn more about this traditional beekeeping.’ – Says Vazha.

Akhali Talga VET college in Ajara is the first college in Georgia to have integrated Jara teaching in their beekeeping programme. They will teach the integrated programme from this semester to twenty-eight students.

In total, there are ten VET colleges in Georgia with either a two month or one-year beekeeping course. The Georgian Beekeepers Union (GBU), along with the Jara Beekeepers Association (JBA),  is now facilitating the integration of Jara module into beekeeping programmes of these ten colleges in cooperation with the sectoral skills organization Agro Duo and the Ministry of Education, Science, Culture and Sport of Georgia. The JBA developed the Jara Honey Production Handbook: for Beekeeping Programmes at VET Colleges.

Jara is traditional wild beekeeping, rarely practiced nowadays, except for remote dwellings located in the subtropical and alpine zones of Western Georgia, namely, Ajara, emphasizing the importance of co-existence between humans and wild nature. It is a family activity led by a family head, with strong roots in traditional agriculture practice, culture and a way of living as a whole. That makes Jara unique. However, due to a limited market, it was nearly fading outback in 2014 when the ALCP found out about it, and this is when the Jara journey began. It is now growing in 2018 the first commercial Jara harvest was 500kg it is now over 3 tonnes. Twenty-three Jara beekeepers are now Bio Certified and many people such as Vazha are anxious to start. Jara is a high value product with very strong demand it retails for 90 Gel/kg.

24/09/2020
Third Georgian Dairy Exports to USA

In mid September, dairy enterprise Tsintskaro+ Ltd in Kvemo Kartli sent 280 kg of different types of cheese (Sulguni, Smoked Sulguni, Georgian Cheese) and clarified butter produced by Milkeni Ltd through distribution company Geoproduct Ltd,  for sale in New York, USA after positive feedback received on product samples sent earlier in August. Both dairies are members of the Georgian Milk Mark the quality assurance label for Georgian natural milk and their products bare the GMM. The company expects a repeat order for at least 250 kg in the near future.

LATEST NEWS
Georgian Milk Mark in Ministry Magazine
17/11/2020
Our Village, the Ministry of Environmental Protection and Agriculture of Georgia (MEPA) magazine with a circulation of 10,000 copies a month is publishing an article about the Georgian Milk Mark (GMM) in its October issue. The article provides comprehensive information about the GMM, a list of the GMM dairies and their products. Rural farmers across Georgia will receive the magazine through fifty-four MEPA Information Consultation Centers (ICCs) for free. Currently, sixty-seven types of GMM dairy products from eighteen GMM  dairy companies are being sold  in Madagoni, Spar, Ori Nabiji, Nikora, Zgapari, Fresco, Foodmart, Carrefour, Goodwill, Willmart, Libre, Deili, Bilion supermarket chains. Details on www.georgianmilk.ge.
Georgian Beekeeping Highlighted in German Magazine
15/07/2020
A German beekeeping magazine Deutsches Bienen-Journal with circulation of 52,000 copies a month published a comprehensive article on beekeeping in Georgia and its history, local bee breed Mountain Grey Caucasian Honey Bee (Apis mellifera caucasica) and Jara honey a special mention of the project’s work.
Improvements in Sheep Shearing
29/10/2020
In 2018, while thinking about improving the quality of supplied wool, the Georgian Wool Company purchased twelve sheep shearing machines and trained a group of twelve shepherds, to provide a shearing service to sheep farmers. The service is available on the pastures at the beginning of spring and at the end of summer, when sheep are usually sheared in Georgia. This year, up to five-hundred farmers were served, with hundred thousand sheep sheared.   Before, the wool suppliers of the company sheared sheep by hand, which damaged wool fiber and the quality of wool was poor. It took time with only up to thirty sheep sheared a day. The sheep farmers had to ensure the workforce for shearing by hand, they also had to arrange wool storage space in pastures and transportation of wool from pastures to wool collection centers. Incompliant shearing and storage was decreasing the quality of wool and causing about a ten percent loss (up to thirty kilos), which was usually left on pastures polluting the local environment.   Now, the sheep shearing machines prevent damaging of wool fiber and respectively, the quality of wool has been improved. The company’s sheep shearing machine service includes storage and transportation of wool from pastures to the company`s warehouse in Tbilisi. Sheep shearing is now time-efficient with up to hundred sheep/day sheared by one trained shepherd. While shearing of thousand sheep by hand took at least three days, now the same is done just in one day. For the company it means a stable supply of wool in better, cleaner quality; For farmers it translates into reduced transaction costs, time and about 0.7 Gel saved per sheep. The Georgian Wool Company first exported wool to the United Kingdom back in 2016. Ukraine, Kazakhstan, India, Afghanistan are now among top wool export destinations. Along with growing demand, improving quality has become a particular interest of the company.
LATEST PUBLICATIONS
Measuring Urban Consumers Awareness of the GMM
A National Qualitative Review of the Municipal Women's Rooms
Deutsches Bienenjournal about Georgian Beekeeping