Ministry of Agriculture of Georgia Agriculture: The National Priority Create an environment that will increase agricultural competitiveness, promote stable growth of agricultural production, ensure food safety and eliminate rural poverty through the sustainable development 1
Strategy of Agriculture of Georgia Strategy Goals: Enhanced Competitiveness of Rural Entrepreneurs Institutional Development Amelioration and Soil Fertility Regional and Sectorial Development - Value Chain Development Ensuring Food Security Food Safety, Veterinary and Plant Protection Climate Change, Environment and Biodiversity 2
Agriculture in Figures - GDP Other 28.7% Public Administration 10.1% Transport and Communicatio n 10.5% GDP by sectors, 2013 Agriculture 9.4% Trade 17.3% Industry 17.3% Construction 6.7% Agriculture Industry Construction Trade Transport and Communication Public Administration Other Agricultural GDP at Current Prices (mln USD) 847.0 1100.2 1170.8 1319.6 8.4% Hotels & Restaurants - 1.4% Proccesing 10.3% Agricultural Share in total GDP, % Construction 5.1% 8.8% Energy Sector 25.3% 8.6% Georgia, Inward FDI, cumulative 2013 Agriculture Mining and Manufacturing Energy Sector 9.4% 2010 2011 2012 2013 Financial Sector 2010 2011 2012 2013 Source: GeoStat Transport & Communication 14.5% Agriculture 1.3% Financial Sector 17.2% Transport & Communication Other Sectors Proccesing Real Estate 3
Agriculture in Figures - Trade Agro Export-Import (mln USD) Export of Main Agro Products (mln USD) 1000 800 774.3 825.9 citrus 7.7 20.2 600 400 436.7 512.5 Spirits 80 99.9 200 0 2011 2012 2013 2014 Export Trade Balance Mineral water 59.3 106.9 2013 2012-200 -400 Wine 64.9 127.9-600 -800-757 -761.8-517.3-472.8 Nuts 83.6 166.6-1000 Source: GeoStat 0 50 100 150 200 4
EXPORT 2014 Export of Agricultural Products (mln USD) 137.1 Mineral Water 106.9 In 2014 the value of agricultural exports increased by 7% compared to the previous year and amounted to USD 826 mln Of Which: Non-Alcoholic Beverages 17.4 28.7 2014 Wine 41% 2013 Wine 92.2 150.7 Mineral Water 28% Non-Alcoholic Beverages 65% Tea 2.3 2.3 Tea 3% - 50.0 100.0 150.0 200.0 5
Untapped Potential Although the production plummeted dramatically, the vast potential still remains 800 700 Thousand tons 600 500 400 300 200 average (1980-1990) average (2011-2013) 100 0 Wheat Potato Vegetables Fruit Grapes Citruses Tea meat Source: GeoStat During the Soviet period Georgia was one of the major suppliers for fruit and vegetable products to the republics of the Soviet Union, exporting various kinds of fruits, tea, greens, nuts, essential oils, citruses, wine, alcoholic/nonalcoholic drinks, mineral waters, canned fruit and vegetable products. 6
Competitive Advantage of Georgia 49 types of soil and 22 microclimate zones; Climatic zones from subtropical to semi arid and arid; The Black Sea coastline 315km; Abundant renewable water resources 63.3cu km - 860 lakes, 45 reservoirs, appr. 26 000 rivers; Rich Tradition of Winery, Citrus, Grape, Tea, Nuts, Fruits and Vegetables, etc.; Extended growing seasons (both early and late). Diversified high value cash crops: Grapes with up to 500 endemic species; Wide variety of Fruits and vegetable (both early and late); Special tea for high margin markets; Citruses; Greenhouses; Nuts; Greens; Dairy Products. 7
Markets With Preferential Trade Terms DCFTA with EU; FTA with CIS countries; FTA with Turkey; GSP with - USA, Canada, Switzerland, Norway and Japan. Russian Market - As a result of successful negotiations, Georgia has resumed exports of agricultural products to Russia. More than 60 Georgian companies (Wine & Mineral water), have been inspected and got an approval to export to Russia; In 2014 45.9 million liters of wine exported to Russia; Georgia has resumed export of fruits and vegetables to Russia 8
Wine as Georgia s National Treasure The world s oldest wine producing country 8000 years of wine-making tradition More than 500 endemic wine grape varieties Export Trend 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 000 litres 000 USD QVEVRI Georgian Wine making Method Wine export geography - 48 countries Registered 18 appellations of origin 9
Hazelnut Snapshot Favorable climate and soil condition Increasing area under new orchards Proximity to main export destinations Growing exports to EU and CIS markets Fifth hazelnut producer in the World Opportunities Improved post handling and processing Emerging producers in processors associations Exports to EU and South Asian markets Production opportunity for other nuts: walnut, almond, pecan nut Export of Huzelnut (1000 USD) Production Regions: Samegrelo, Imereti and Guria Export of Nuts by Markets, 2013 Germany 166,630 33% 29% Kazakhstan 129,920 Italy 75,109 83,588 17% Czech Republic Ukraine 5% 11% Other Countries 5% 2010 2011 2012 2013 10
Vegetables Snapshot Excellent nutritional characteristics Favorable climate for off-season production Geothermal water sources for off-season production Storability Transportability Increasing share of off-season production in domestic market Awareness and positive attitude to Georgian products in CIS markets Opportunity Export demand higher than supplies for fresh and processed Industrial vegetable production Upgrade of off-season production, post-harvest handling, and value adding infrastructure Value addition Exports to EU markets 13,673 Export- tons Export - 1000 USD 7,131 7,903 3,895 4,498 5,649 10,971 8,398 2010 2011 2012 2013 Import - tons Import - 1000 USD 51,269 55,775 50,216 26,603 36,478 31,721 64,024 2010 2011 2012 2013 9% Structure of Vegetable production 5% 3% 5% 18% 20% 33% 38,587 Tomatoes Cucumbers Cabbages Onions (dry) Eggplants Greens Red beets Garlics Peppers (capsicum, paprika) Carrots 11
Fruits Snapshot Excellent nutritional characteristics Favorable climate and soil conditions Increasing area under new orchards Proximity to main export destinations Awareness and positive attitude to Georgian products in CIS markets Growing fresh exports to CIS and EU markets Export tons Export 1000 USD 193,251 139,088 92,703 96,986 65,471 42,800 42,675 79,163 2010 2011 2012 2013 Import tons Import 1000 USD 45,955 50,382 47,565 37,644 38,236 36,281 27,840 25,483 Opportunities Development of post-harvest handling infrastructure Upgrade of processing capacity Value addition Export demand for fresh and value added larger than supplies Exports to EU markets 2010 2011 2012 2013 Structure of fruit production 9% Citruses 14% 35% Pome fruit Nuts 16% Tsone fruit 26% Subtropical Fruit 12
Herbs & Greens Snapshot Excellent nutritional characteristics Favorable climate for off-season production Geothermal water resources Low production cost Storability Transportability Export supplies to EU and CIS markets Opportunity Export demand higher than supplies Upgrade off-season production and post-harvest handling infrastructure 2557 4433 4043 5350 5125 6814 6885 2010 2011 2012 2013 Export - 1000 USD Export - tons 7442 Producer Regions: Imereti, Samegrelo (Tskaltubo, Kutaisi, Samtredia, Zugdidi, Senaki) Khobi) Export of Greens by markets - 2013 20% 10% 2% 27% 41% Belarus Ukraine Kazakhstan EU (Latvia, Lithuania, Poland, Romania and Estonia) Other countries 13
Tea Snapshot Quality and competitively priced row materials Growing market share in local market Awareness and positive attitude to Georgian brand in CIS markets Growing supply to export markets in EU and Central Asia Opportunities Upgrade of processing capacity Export demand exceeds supplies High price segment niche export markets Value addition Import substitution Exports to EU, CIS, Middle East 5,364 Export (1000 USD) Import (1000 USD) 5,815 2,445 2,458 2,251 7,039 The main producer: West Georgia Export of Tea by markets 2013 9% Mongolia 6% Germany 31% 7% Kazakhstan 10% Ukraine Turkmenistan 11% 26% Turkey Other countries 2011 2012 2013 14
Meat Snapshot Increasing livestock population Availability of natural pastures Growing export sales of live cattle Total Import of Meat - 1000 USD 121,087 122,431 105,744 73,971 Opportunity Upgrade of processing facilities Import substitution Import substitution of processed products Feed production Live animal exports to CIS market 2010 2011 2012 2013 Import share Beef 14% Pork Self-sufficiency Ratio for Meat (2013) 39 % Self-sufficiency Ratio for Beef (2013) 71 % Self-sufficiency Ratio for Pork (2013) 41 % Self-sufficiency Ratio for Poultry Meat (2013) 18 % 58% 28% Poultry 15
Dairy Products Snapshot Import of Milk Powder (tons) 4508 Seasonality in fresh milk supply Increasing dairy livestock population Georgian consumer preferences for local milk 3765 3885 4068 Opportunity Import substitution Import substitution of processed products Establishment of milk collection centers Breed improvement Improved food safety system infrastructure 2010 2011 2012 2013 Milk Powder Import by Markets, 2013 Ukraine 26% 39% Lithuania USA 14% Belgium 7% 7% 7% Other Countries 16
Sheep Snapshot Two major dual purpose local breeds, Tushetian and Imeretian Characteristic quality traits Used for meat, wool and milk production Accessibility to alpine, sub-alpine and plain pastures Growing supply of live sheep to export markets in the middle-east Opportunity Export demand for live sheep higher than supply Value addition Regions: Imereti, Kvemo Kartli, Kakheti Sheep Export by Markets (2013 year) Export of Sheep (1000 USD) Export of Sheep (heads) 191369 165414 172759 14932 18156 15547 10% 0% 90% Azerbaidjan Jordan Iran 2011 2012 2013 17
Access to Affordable Finance Goal Improve access to financial resources for agricultural activities Total number of loans 27 177 Total Credit Amount 723 mln GEL Key Objectives: Increase competitive agricultural production Support creation of primary and processing enterprises Increase export-oriented production Increase rural employment 18
Produce in Georgia Program starting date: June 1, 2014 Goal: Support and development production oriented industries Program directions & budget GEL 46 mln: Agricultural production & processing GEL 30 mln Industrial production GEL 16 mln Program components: Financial assistance Infrastructural support Technical assistance Financial assistance: Co-financing of collateral - at most 30% of total loan (first 2-4 years, up to USD 600 000) At least 80% of the loan - purchase of fixed assets Grace period 24 months - on fixed assets 18 months - on working capital Program directions in Agriculture: High-tech greenhouses: vegetables, berries, greens High-tech, intensive cattle farming (dairy, meat) Cattle, poultry, fish feed factory High-tech, intensive poultry factory (meat, hatching) Fruit, berries, vegetable, citrus processing Nuts processing Wool, leather processing Laurel, tea, tobacco processing Loan Amount Bank Subsidy USD 600 000-1 000 000 12% 10% USD 1 000 001-2 000 000 11% 10% 19
Thank You Ministry of Agriculture of Georgia www.moa.gov.ge 20