“We are not going to produce big volumes; we are going to produce quality bio-products” -Minister of Agriculture
11 December, 2014
“We are not going to produce big volumes; we are going to produce quality bio-products” -Minister of Agriculture
The year is coming to the end and ministers are summing up the results of two-years of activity of the current government. Agriculture, one of the most prioritized sectors of this government, captured the attention of Georgian Journal. The sector creates jobs for almost half of the Georgian population, but has been pretty much neglected up to 2012 power shift. Banks were financing the sector by less than one percent, agro-insurance was a luxury, vintage of grapes as well as
high fruit harvest were rather a problem than a pleasure to farmers who could not sell the product.

“Winegrowers enjoyed a 174 million GEL income this year alone and wine exports tripled”

According to the two-year results the Agriculture Ministry reported on December 1st, winegrowers enjoyed 174 million GEL income this year alone and wine export tripled. The small farmers support project aided more than 710 thousand and 757 thousand beneficiaries with 195 million GEL and more than 82.5 million GEL in 2013 and 2014 respectively. Thanks to the state-supported cheap credit project, banks increased financing by roughly six percent to 651 million GEL and a pilot agro-insurance project began this September. Eighty-nine new agriculture-processing enterprises were financed and 580 old plants re-equipped. To gain a better insight into Georgian agriculture problems and achievements, GJ interviewed Otar Danelia, Minister of Agriculture of Georgia.

– Mr. Danelia, could you sum up the key achievements in your field?

– The biggest achievement of all the reforms, projects and changes that were introduced to prioritize agriculture is that the trust between the state and the farmers is restored. Each family felt the state’s support and each project served to stabilize development of the sector. The farmers aid program will continue next year. The vintage was the best ever organized and very successful, and the wine sector developed a lot as a result of the state policy. Wine export and quality increased significantly.
To combat wine falsification at local markets we started controlling usage of grape pomace, which is often used to falsify wine. We prevented re-usage of pomace at wineries If any of wineries take chacha outside its plant territory they will not get state subsidies. Besides, starting the New Year the Food Agency will be testing the locally distributed wines on the safety and falsification side. Therefore, not only the exported wines will pass through the strong quality control, but also the locally consumed wines will be safe. Once falsification is reduced, demand for local consumption will be boosted.
This year apple concentrate prices dropped significantly at the international market. To spare farmers from imminent losses and enterprises from closing, the state subsidized the industry and it delivered a profit.
The agriculture insurance pilot project involving state co-financing was an absolute breakthrough. This was a new product and in three months we got a result that we planned to achieve within a year: in three months we insured risks by up to 150 million GEL and 18 thousand insurance policies were issued.

“We cannot be massive producers like Turkey and China. Our goal is to have qualified safe production and supplant imports as much as possible and export the surplus”

– The share of agriculture in GDP still stands at around nine percent while the sector employs over 50 percent of population. Does agriculture have real prospects in Georgia? Some critics say Georgia can never have a good export position because its production is too small.

– This is not correct. More than 50 percent of population is self-employed in agriculture. Urbanization is a global process and not a challenge to Georgia alone. But we should take care of people who live in rural area lest they leave villages and settle in urban areas. Of course 50 percent of population all cannot be big farmers but they will amalgamate into cooperatives and cooperatives will be one of the key stimulators for export: They will insure critical volumes and be stable providers. We are not going to produce big volumes; we are going to produce quality bio-products. We cannot be massive producers like Turkey and China. Our goal is to have qualified safe production, supplant imports as much as possible and export the surplus. And co-operatives are crucial to this end. They will shape Georgian agriculture into business. The state will do everything to give impetus to cooperatives.

– You have mentioned that banks appear reluctant to participate in the cheap credit project. Some say their competence is low. Do you agree?

– We do not rule out anything, but with or without Georgian banks’ support we will find finance for agriculture. There are other financial institutions foreign or Georgian and we will attract them to achieve our goal.

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