Georgian Agriculture

Changing Agri-Business of Georgia

Agricultural traditions are the main part of Georgian cultural heritage and mentality, as long as favorable climate with fertile soil make it one of the most productive economic sectors for the country and support production of a variety of high-value agricultural products including wine, nuts, citrus fruits, peaches, apricots, etc.

After signing a Deep and Comprehensive Free Trade Area (DCFTA) with the European Union in 2014, Georgia can produce agricultural products meeting the required safety and security standards and that makes it even more favorable for new investors of European markets, as longs as they can benefit from rising consumption on the local market, which is complemented by the Duty-free access to 900 million foreign markets under this agreement.

Georgia has emphasis on labor-intensive crops such as tea and grapes. In 2017, after the three-year study conducted by experts from seven countries, Georgia officially acknowledged as the cradle of wine and was invited to be a host of solo exhibition illustrating its oldest traditional viticulture and wine-making in Bordeaux, Paris.

Nowadays, wine export growth gives positive prospects to the sector, for instance after the data published in National Wine Agency of Georgia in January-February (2018) 10,8 mil. bottles of wine have been exported to 38 countries worldwide, that is 23% higher than the similar data of the last year.

There is fierce competition connected to the tea in Georgia, because  strong local manufacturers are not allowing the international players to take over tea entirely but as Euromonitor International reveals, consumers of tea in Georgia stay quite conservative and most brands produce only black or green tea.

According to the Strategy for Agricultural Development in Georgia for 2015-2020, it is estimated that 25% of Georgia’s total land area is classified as permanent pastureland and about 70-80% of pasturing is self-regulated among local and nomadic pasture users, which gives good grounds for stockbreeding, but without having strong supporting policies small farmers which make 95% of all farmers, typically cultivating around one hectare of land with low output aren’t able to compete with imported products, which except dairy food and beverages mostly relies on meat products, as well as grains and egg. Generally, Georgia imports 80% of its packaged food products which has a significant negative impact on its trade balance.

The Georgian government identifies agriculture as a priority for development and has also set up the Agriculture Investment Fund to support the sector by providing credits for farmers. The projects of building new agricultural products processing plants can get grant from the government with a total value of up to 250 000 USD. In addition to this, investor can symbolically buy state owned immovable non-agricultural property only for 1 GEL.

Government of Georgia intends to create a favorable business environment because full use of Georgian agriculture potential is vitally important for country’s economy, for this purpose, in 2015, Parliament passed a bill allowing foreigners to own the land but with certain limitations as long as foreigners now may own agricultural land if they inherit it, co-own the land through marriage to a Georgian citizen or by being a member of a Georgian citizen household or hold a residence permit.

Georgia has 22 micro-climates varying from cool and dry to warm and humid. These diversified micro-climates allow for a longer than normal harvesting season and a range of growing conditions. Soils are of volcanic origin in the river valleys, which tend to be quite fertile and reasonably easy to cultivate.

Country has easy and cheap access to water as well and the prices of other utilities such as energy and gas is low too, but on the other hand, according to the 2017 budget, by GEL 83,000,210 reduced agricultural financing resulted in decreased funding for financing programs like the agricultural development program, food safety, epizootic goodwill and plant protection, viticulture, implementation of scientific research activities and so on.

During the last years, as a result of good international cooperation, the positive tendencies are being observed in regard to expanding the export market, increase of production and attracting the investment in the agricultural sector. But local production is still under strong necessity of boosting as long as even though having rich resources, trade balance between import and export is still unenviable in Georgia.

Author: Tamar Devdariani © BUSINESS GEORGIA

Photo: Tamuna Ubiria © BUSINESS GEORGIA

Perspectives of Economic Relationships Between Georgia and China

Perspectives of Economic Relationships Between Georgia and China

On June 9, Georgia celebrates 25th anniversary of diplomatic relations with China.  BUSINESS GEORGIA offers an exclusive interview with Mr. Ji Yanchi, Ambassador of the People’s Republic of China to Georgia.

“Free Trade Agreement” with China –  What is the significance of this agreement and what positive changes may it bring for both China and Georgia?

In September 2015, then prime minister Garibashvili took part in the World Economic Forum in Dalian, and held a fruitful meeting with Chinese Premier Li Keqiang, they agreed to launch the negotiations on free trade agreement. In December 2015, the negotiations began. In February 2016 the first official delegation from China arrived. The FTA negotiations lasted for 7 months and ended in October through the utmost efforts of both parties. In October 2016, Chinese Minister of Commerce, Gao Hucheng  visited Georgia, during which he met with prime minister Kvirikashvili and made a joint statement on finalizing the FTA. At present the most important thing is to ratify this agreement as early as possible. We hope these legal procedures can be completed by the end of the year thereby make the FTA come into force officially. The FTA will deepen the economic and commercial cooperation and will bring our bilateral relations closer. Through this agreement Georgia will be able to export its products to China – a market of 1.4 billion customers. It is estimated that exports from Georgia to China will increase by 33.6 % while exports from China to Georgia by 6.7 %. It is also noteworthy that there are some special articles in the contract, which were not included in similar treaties before.  For example, there is an annex about trade and transportation service. It is somewhat customized to Georgia’s aspiration to be a corridor connecting Europe and Asia.

Why Georgia became one of the priority country for China?

Georgia is an important country along the “Silk Road Economic Belt” for the fact that it is a transit corridor connecting Europe and Asia as well as a transit country in trade. This is why we added annex about trade service into the FTA. Georgia has the potential to use all the resources to the full and China is ready to help at any time.

How China and Georgia cooperate in the financial sphere, is it intended to open new commercial banks in Georgia?

The Free Trade Agreement promotes cooperation between the two countries in the sphere of finance, Nowadays Chinese company “Hualing Group” has bought Basisbank, which operates successfully. It is also known that a Chinese company signed cooperation memorandums with Georgia on establishing the Georgian Development Bank and Georgian construction fund. I believe this will be a great stimulus for the development of Georgia’s economy, for investment growth and for projects implementation. The Chinese government supports Chinese companies to invest in Georgia.

Is it planned to establish partnership in energy sector?

In fact, the energy cooperation between our countries has a long history. Back in 2000, a Chinese energy company built a hydropower plant in the Pankisi Gorge, which is the first foreign invested power plant after the independence of Georgia. This plant contributed a lot to the economic development of the region, and it still operates well. Currently Chinese companies actively participate in Georgian energy sector. Our cooperation in the sphere of energy is constantly growing, Chinese companies have a desire to make more investments, especially in the construction of hydro power plants, since China is leading in this area, with the most medium and small size hydro plants in the world. China also has the largest electrical grid in the world. In this regard, our cooperation can bring great benefits to Georgia.

Which other spheres and fields will be attractive to Chinese investors in Georgia?

It is interesting to promote the trade-related service sector. Recently many Chinese companies are interested in the Georgian market. We see increasing number of representatives coming to study the market. Besides wine, mineral water and mines, agriculture and energy sector are of great potential. Particularly, cooperation in renewable energy vehicle sector. Another important field is tourism, as you know, Georgia has rich resources in this regard. After signing the FTA, Ministry of Commerce of China issued a permit to open China-Georgia bilateral tourism companies in Beijing , Shanghai and Tianjin. In my opinion, the society is stable in Georgia, and the investment and tax policies are really favourable. If the central and local government of Georgia could implement these policies into practice, it is promising that more Chinese investments and tourists will be attracted to Georgia.

Is there any plan for high level visit from China to Georgie in the nearest future?

Organizing exchange visits is absolutely important, but it needs preliminary preparation in advance. High level visits are more meaningful only when you have big cooperation projects in hands. Currently the Chinese government is implementing greenhouse project, which completely works on solar energy, we want to make it an exemplary project and we hope similar greenhouse farming could be implemented in Georgia in the near future. This will bring great benefits to the country, helping change it from  fruit and vegetable importer to exporter. In Western Georgia, Chinese companies are working hard for the revival of Georgian tea-growing industry. The first batch of tea was harvested this year. If the tea industry in Georgia could regain its past glory, tea will become a main agriculture exporting product of Georgia. The potential in the tea industry is huge. I think if the aforementioned projects could be successfully implemented, this will become a good example of the “Silk road Economic Belt” and will contribute not only to deepen agriculture cooperation but also to develop relations in the field of culture. As you may know, Mr. Liu Junzhou – a Chinese tea expert brought tea seedlings to Georgia in the late nineteenth century, thus, tea has a historical and cultural significance to our countries. Mr. Liu is the envoy of China-Georgia friendship. Hopefully, with the support of tea farming, we can write a new chapter for our historical and cultural connections.


Batumi Tower – coming up from 2017

Starwood Hotels & Resorts Worldwide, in partnership with Red-Co Ltd., has announced that its Paris-born Le Méridien brand will open in Batumi.

Scheduled to open in 2017, the 110-room newly constructed hotel will showcase modern architecture and design within the Batumi Tower, a mixed-use development project that also includes a casino and unbranded residences. Designed by Hausart Project, the landmark Batumi Tower is the tallest structure in the city and features an eight-cabin carousel wheel on the 27th floor.

The brand’s signature amenities, including Le Méridien Hub – the brand’s transformation of the traditional hotel lobby into an experiential space for guests to converse, socialise and exchange – will feature in the new project. In terms of F&B offerings, the trademark Latitude Bar will serve coffee specialties and light bites from the brand’s long-term partner, Illy, alongside two additional restaurants. The guestrooms and suites will boast Black Sea views and feature the hallmark Le Méridien Bed, a spacious work area, with interiors by Tbilisi-based design firm, Rooms. The hotel itself will also include an Explore Spa, swimming pool, and fitness centre.



“France 5” will make a movie about Georgia!

France’s one of the most popular TV channel France 5 will make a   documentary film about Georgia. Economy and Sustainable Development, organized by the National Tourism Administration and the Ministry of Culture with the support of the documentary series “A Ciel Ouvert” ( “open air”), the crew members have arrived in Georgia. The fifth channel (France 5) will take 52-minute film about the tourism potential of cultural and historical focus. Documentary Film Series will be taken in  Javakheti, Imereti, Adjara, Samegrelo, Svaneti, Shida Kartli and Kakheti  TV channel (France 5) employees met with the governor of the National Tourism Administration and made plans about casting.