With USAID support new enterprises opened in Georgia

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The FINANCIAL — A new hazelnut collection, processing, and storage farm will serve about 300 farmers in the Kakheti region and employ 16 local residents. The enterprise was built with support from the Ministry of Environmental Protection and Agriculture, the Agricultural and Rural Development Agency, Ferrero, and the Georgian Hazelnut Improvement Project. It is a joint project by AgriGeorgia/Ferrero, USAID, and CNFA. With state and USAID financial support a new sapling farm established in Marneuli. Moreover, the fruit and vegetable processing enterprise of Georgian Agro Product Ltd. has begun to operate in the village of Chumlaki, Gurjaani Municipality, with the financial support of the state.

When USAID first started supporting hazelnut production in Georgia in 2011, the sector was known for disorganization and inefficiency.  Despite Georgia being the world’s sixth-largest producer of in-shell hazelnuts, its farmers and processors lacked commercial viability.  Most production came from small-scale farmers producing less than one ton of hazelnuts annually.  Demand was unstable, with most of the product being sold to market speculators at low prices.  Quality varied tremendously and uncertainty was the norm.  As one farmer put it, “the only thing you can trust is the price.”  Inadequate transportation and storage were significant barriers to the sector’s development.

In many cases, by the time the nuts reached processors, they had already been damaged and lost a lot of their value. Despite these problems, USAID recognized a sector with untapped potential – with greater efficiency and higher-quality yields, hazelnuts could drive economic growth and generate exports.  Given that hazelnut production sustains more than 50,000 smallholders and microenterprises, most of whom are located near the Administrative Boundary Line with Abkhazia, developing the sector could also help build resilience in vulnerable communities. Since 2011, USAID has partnered with AgriGeorgia/Ferrero and the Government of Georgia. USAID support has led to larger, higher-quality harvests, a modern network of processing facilities, and a grading system that ensures that hazelnut prices reflect their quality.

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The operation of hazelnut drying and storage centers in the Kakheti region is vital for keeping up the product’s quality standard. These services enable small entrepreneurs to mitigate post-harvest losses and produce high-quality goods. So far, the state, through the Unified Agricultural Project, has supported the launch of 225 new and the expansion of 986 enterprises.

Khatia Tsilosani, Deputy Minister of Environment Protection and Agriculture, together with Peter Wiebler, Mission Director of USAID/Georgia has opened a new enterprise of hazelnut drying and warehouse in the village of Eniseli, Kvareli district. According to the Ministry of Environment Protection and Agriculture, the enterprise employs 16 locals and will serve about 300 farmers in the Kakheti region every year. The new enterprise was established with the co-financing of the Georgian Nut Production Association of Georgia (G-HIP) and the Agrigeorgia-Ferrero, according to Georgian Public Broadcasting.

Peter Wiebler said that private sector involvement in the creation of the enterprise was especially important, The enterprise will produce quality hazelnuts and, consequently, will increase revenues and that USAID is always ready, with the Ministry of Agriculture and the private sector, to provide technical support to such initiatives.

Also, with financial support from the Georgian Government and USAID, a new sapling farm, Mza Chitili, kicks off is Marneuli. Under the Unified Agricultural Project, more than 2.8 million GEL has been invested in the sapling farm, of which 365,000 GEL is a grant, and over 1 million GEL is an affordable agricultural loan. Saplings will be sold at both local and international markets.

USAID support has also helped farmers build resilience against pests.  Over the past three years, USAID has partnered with the Ministry of Environmental Protection and Agriculture, the National Food Agency, and local government bodies to effectively combat the brown marmorated stink bug, a pest that has caused approximately $200 million in damage to the hazelnut sector since 2015.  This assistance has helped the Government of Georgia and local farmers to mitigate the damage posed by pests in the future, putting the hazelnut sector on stronger footing. Over the next five years, USAID will support the hazelnut sector to become self-sustaining, and no longer require foreign assistance.  To reach this goal, USAID will: assist the two hazelnut industry associations — GHGA and HEPA — to become financially independent and effectively serve the needs of their members; catalyze investments in hazelnut processing infrastructure and related technical expertise; establish a hazelnut traceability system; and pilot a warehouse receipts system that will expand smallholders’ access to finance.

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With this help and support, Georgia’s hazelnut sector will deliver high-quality products to the world market, drive economic growth and rural development, generate higher incomes for Georgia’s smallholders and microenterprises, and serve as a model for other high-potential agricultural sectors in the country.

It should be noted that the fruit and vegetable processing enterprise of Georgian Agro Product Ltd. has begun to operate in the village of Chumlaki, Gurjaani Municipality, with the financial support of the state. The enterprise was created within the framework of the United Agro Project. More than 4 million GEL was invested in the enterprise in total, including a grant of 600,000 GEL and 1.5 million GEL in preferential agro credit. As of today, 225 new enterprises have been launched and 986 enterprises have been expanded within the framework of the United Agro Project and with the support of the state.

Georgian Government’s agency Enterprise Georgia is praised at the WTPO Awards 2020 for global excellence in promoting and supporting export. Georgia is among the six finalist countries. In the finals are organizations that encourage innovative and effective export development initiatives. The International Trade Centre (ITC) is conducting the competition. The WTPO Awards 2020 received the highest number of applications, since the awards were created in 2004. Read more

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