Georgia – AgVANTAGE

Strengthening Market Value Chains to Increase Economic Opportunities

Situated at a strategically important crossroads between Europe and Asia, the former Soviet Republic of Georgia suffered severe political and economic turbulence in the years following its independence in 1991. The Georgian economy was intricately linked to the former Soviet Union’s and during the years following Georgia’s independence, civil conflict and corruption left the economy in ruins, resulting in poverty that has affected many Georgians’ lives.

In 2002 ACDI/VOCA began creating economic opportunities and helping to rejuvenate the Georgian economy through the $23 million, USAID-funded Support Added Value Enterprise Activity, now called AgVANTAGE. The project strengthens the capacity of Georgia’s agricultural sector to capitalize on export opportunities and compete in global markets. AgVANTAGE helps build fully functioning market value chains, improves access to long-term credit, and promotes a policy, legal and regulatory environment conducive to growth and development in Georgia.

To increase export sales of Georgian products, AgVANTAGE identifies new markets for specific products and then works with stakeholders to strengthen their capacity to compete in them. Working through the market value chains, the project strengthens weak market linkages and improves the production, processing and marketing capacities of Georgian agribusinesses to help the agricultural sector compete in the international arena. Since the beginning of the project, new export markets for Georgian agricultural products have been developed in Ukraine, Russia, the U.K., Poland, Germany, Italy and the Baltic states. Through the development of competitive market value chains, the project has facilitated over $23 million in increased export sales of Georgian mandarins, greens, apples, hazelnuts and other products, which is $5 million higher than the anticipated target sales for the life of the project. AgVANTAGE expects that by the project’s end Georgia’s reputation as a reliable supplier of high-quality agricultural exports will be firmly established.

In addition, AgVANTAGE helped to develop a "Taste of Georgia" brand providing information about the country, its history and culture to better publicize Georgian food and wines for export opportunities. “Taste of Georgia” was launched at the Fancy Foods Show in New York City in July 2007 and encompasses Georgian wine, water, hazelnuts, bay laurel oil, jams, sauces, spices and other products. Georgia has a rich culinary tradition, including a winemaking industry that may go back as far as 7,000 years, with many local grape varieties that are unique to Georgia.

In October 2007 ACDI/VOCA helped organize a media tour for a group of food, wine and travel writers in conjunction with the country's first wine festival. The festival, which was held in Sighnaghi in the Kakheti wine region, was organized by the Department of Tourism under the Georgian Ministry of Economic Development. The writers on the tour have had their work appear in such important publications as Gourmet, Saveur, Wine Enthusiast, Food and Wine, Bon Appetit, and the Washington Post. The tour was cofinanced by AgVANTAGE and an employment and infrastructure development project being implemented by CHF International.

Covering 10 out of 11 regions of Georgia the project activities have helped about 6,100 direct and over 17,000 indirect beneficiaries. The project has assisted 39 associations with 5,810 members, helped establish 4 associations and 3 cooperatives, and provided 103 trainings, trade shows and study tours for over 2,330 participants. Through its market chain interventions, 10 new products and 123 crop varieties have been introduced in Georgia. Many farmers and processors have attended demonstration sites and gained knowledge about new varieties and improved growing practices in the production of crops such as table grapes, onions, greens, berries and apples. Georgian processors adopted 4 new packaging techniques and 13 new processing technologies. In main production areas, ACDI/VOCA established consolidation centers for greens, bay leaf and mandarins, which range from simple consolidation centers for collecting, grading and sorting of products to complex pack-houses with cold storage capabilities. During a recent opening of one of the greens consolidation centers, Georgian President Saakashvili said, “We have found a new market for Georgian greens in Europe. Lots of greens are grown in the world, but the greens grown in the Imereti region have no competitors. Improved greens packaging is our business card to Europe.”

AgVANTAGE also provides Georgian producers and exporters with access to market information and links Georgian suppliers with potential domestic and international buyers through information and communication technology (ICT). One of its latest innovations is a market information system with five new marketing efforts including weekly electronic bulletins in Russian and Georgian, the monthly publication of Agroinfo magazine, and a web portal. These ICT initiatives offer information on best practices in production and processing, daily updates on prices in key markets, access to online catalogues of companies, and information on products from domestic and international markets.

To address the problem of poor access to long-term financing in Georgia, AgVANTAGE introduced leasing as a means to promote access to agricultural equipment. This initiative enables processors and producers to gain access to affordable credit to purchase modern equipment and processing lines to better run their agribusinesses and make them more productive. The project also provides technical assistance to Georgian leasing companies to implement limited lease portfolio and credit enhancement programs.

AgVANTAGE provides policy support to the Georgian Ministry of Agriculture on the development of a long-term national strategy for the food and agricultural sectors and advisory support for the implementation of policies and regulations. For example, Georgia adopted the Law on Food Safety and Quality, which established a legal framework in compliance with European Union and World Trade Organization requirements. It also established the National Food Safety, Veterinary and Plant Protection Service for the enforcement of food regulations and food safety and quality control.

AgVANTAGE has also been instrumental in combating the threat of the highly pathogenic avian influenza (AI) virus spreading to Georgia from surrounding countries. AgVANTAGE has begun public outreach activities and educational trainings for veterinarians, farmers and the general population. Along with the Georgian government, ACDI/VOCA is developing the National HPAI Preparedness and Response Plan, to ensure that it addresses the logistical issues involved with preventing, detecting and responding to an outbreak of HPAI in poultry in Georgia. AgVANTAGE also facilitates the procurement and distribution of safety equipment for animal surveillance and animal response activities related to AI.

For more information, contact Tamara Ljubinkovic at tljubinkovic@acdivoca.org.

Updated: 11/07

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