Issue 2, 2019. April-May



Georgian agriculture exports are steadily increasing: in 2018 the country exported $959.2 million worth of agricultural products, up 23.2 percent compared to 2017. Exports to the EU are still dwarfed by the demand from other countries, but two products - hazelnuts and honey - underscore the potential for growth.

Sally White

Georgian food continues to grab the international headlines.

Two exports - hazelnuts and honey - have illustrated the country's potential at two very different, but important, European gatherings - the former on the sidelines at the World Economic Forum in Davos and the latter at a much smaller event, the International Green Week in Berlin.

The reason this is such good news? These two sectors are major sources of income for tens of thousands of the country's small farmers.

The vote of confidence in Georgia's hazelnut sector was extremely welcome for the prime minister of the country, Mamuka Bakhtadze, given that the country's crops have been dealing with stink bugs the past few years.

At Davos it was his discussions with Swiss chocolate manufacturer Camille Bloch that led to the announcement by its CEO, Daniel Bloch, that Georgia would be the destination of its first foreign investment.

No location has yet been announced by Camille Bloch for the land it wants to secure to grow hazelnuts for its famous trademark Ragusa chocolate. Daniel Bloch has just said he was "confident in the success of the project and hopes that its implementation will commence in the nearest future."

That was a welcome vote of confidence for Georgia's hazelnut production, where stink bugs have been damaging crops over the past few years. Last year was particularly bad, with a fall in production value of 50 percent, according to the latest figures from GeoStat. What was Georgia's number two export now ranks 10th after a drop in exports of around 30 percent last year and 50 percent in 2017.

Countries as far afield as the US (where they have been invading homes since 1998), parts of Europe, the Mediterranean, Turkey and the Black Sea are also fighting plagues of the insect with more or less success.

In Georgia there are a number of campaigns to do away with the pest. Last year, the US Agency for International Development (USAID) offered $3.5 million and gifted 17 tractors to help the country combat the bug. In February, the Ministry of Agriculture announced it was donating 2,000 modern spraying machines to the Georgian Hazelnut Production Association for distribution to destroy the bugs and associated fungal infections.

"The association will organize meetings with groups of farmers to inform them about the planned works and government goals," the ministry said at the time.

The Ministry of Agriculture referred to the fungal problems in the hazelnut plantations and has been organizing widespread education campaigns. At Georgia's prime "green" NGO, Elkana, its director Mariam Jorjadze has said more bluntly that she believes "only 15 percent of losses in hazelnuts are directly linked" to the stink bug.

"There is high humidity in Western Georgia. Thus we think the main losses are caused by fungal diseases," she told the Georgian Journal last December.

For organic farmers, in particular, who cannot use chemical sprays, "it is important that they do not only trap and kill the stick bugs, but also invest much more time and work in the maintenance of their hazelnut orchards. They must prune the shrubs properly in order to make sure there is enough light in the orchards and as a consequence less humidity and ergo less fungi," she explained.

Georgia's hazelnut production is a relatively strongly organized sector, with exports from the prime growing areas - in Western Georgia's regions of Samegrelo, Adjara and Guria - going to Italy, Germany and Russia. (The EU imports at least 25 percent of its consumption.) Support for further development has come from a multi-million-euro, five-year program to boost Georgian production and exports and raise productivity and quality from the Global Development Alliance. This comprises USAID, the US agency Cultivating New Frontiers in Agriculture (CNFA) and long-term customer, Italian chocolate manufacturer Ferrero, which is the world's largest hazelnut buyer.

As a Global Development Alliance report points out, the industry is important to Georgia as it "supports the livelihoods of more than 50,000 growers and 30 processors."

However, its adds that: "...due to the inconsistent quality and lack of market distinction, Georgian hazelnuts often sell at a discount to neighboring Turkish hazelnuts (the world's largest source) resulting in lower prices and reduced profitability."

The European Bank for Reconstruction and Development (EBRD) and the European Union's EU4Business initiative has been providing credit lines and grants to the larger producers and processors.

This has helped SRT and NUTSGE in Samegrelo, for example, to improve standards and gain the ISO certificates necessary to trade with Europe. The initiative has launched other schemes to raise the level of growing and management skills.

Untapped Potential of Honey

Honey's debut on the EU market was a success as well, in part due to the help of German technical assistance, the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) and Georgia's Ministry of Environmental Protection and Agriculture.

TAPLI is a premium brand for export to foreign markets, meeting all quality controls and standards. While the EU - the world's largest honey importer, buying $1 billion worth in 2017 - recognized Georgian testing laboratories back in 2016, only now have a few beekeepers been able to reach the phyto standards. Two beekeepers, one from Racha and the other from Guria, were among the 1,700 exhibitors at Green Week.

For many rural households it is the only source of cash, and is therefore a focus of development projects by several foreign aid programs as well as the Georgian government. No one is currently sure of beekeeping numbers or of their output (though some figures put it at 4,000 tons annually but rising rapidly) as so much of the honey produced is used in village barter systems or sold for cash and is a popular "informal" export.

The big hope is for organic honey. It commands premium prices and is found in the very poorest areas of Georgia, up in the mountains. In the EU and Japan especially, consumers are ready to pay high prices for certified organic products. Currently, Mexico, Guatemala, Argentina, Uruguay and Chile are the dominant suppliers of organic honey. The world trade in honey as a whole is worth $2.5 billion. Many countries have tough barriers to entry to protect their bee populations, though. A notable exception- and a significant new market for Georgia - is the Middle East (with trade being mainly "informal").

As farming families possess a very limited resource base - on average only one hectare of arable land, according to a report on Georgia's Honey Market System from Czech Republic Development (CRD) program, People in Need - the crop is vital, and considered one of the most profitable.

There is not only the honey, which in 2016 had a 150 percent profit margin, but other, though slightly less lucrative, products such as pollen, propolis, beeswax, bee venom, royal jelly and queens. There is also trade in bee colonies.

The numbers that do exist (a fraction of the whole), while not up-to-date, give an indication of the scale of honey's importance - in 2016 there were 270,000 colonies, 3,688 large-scale apiarists and 174 co-operatives. (Numbers have since expanded considerably, according to anecdotal accounts.) In a good year, hives can deliver three harvests.

Georgia has floral diversity, abundant bee-friendly alpine meadows and a millennia-long tradition of beekeeping. (Back in 2012, archaeologists discovered what they believed to be a 5,500 year-old jar of honey in a noble woman's tomb near Borjomi.)

Honey types include the rare and highly valued Alpine Honey, Chestnut, Blossom, Lime, Acacia and Linden honeys. The latter is popular with Azerbaijani traders for use in sweets and sherbets, while Chestnut is preferred in Turkey. More than half of the small-producers' honey never reaches foreign markets.

Alpine beekeepers are a familiar site to those driving through Gudauri to reach Kazbegi, as they follow the ancient traditions, taking their hives up to the alpine regions for summer. They are also to be found in summer on the country's main east-west route at the Rikoti Pass.

However, even in Georgia the bee has its problems, having to cope with pesticides, fertilizers, excessive antibiotics and heavy metal (all found in some honey tests), and the population of rare Caucasian honey bees has been shrinking. This bee - Apis Mellifera Caucasica - is prized for its long stinger (which collects more honey and pollinates more flowers), moderate swarms and resistance to low temperatures.

Samegrelo-Zemo Svaneti is the main producing region (around 25 percent), followed by Kakheti (15 percent) and Adjara (11 per cent) according to the CRD report. Each region has, as with wine, differing traditions in their cultivation and production - for example, Adjara beekeepers like to attract swarms of healthy wild bees and use hand-crafted wooden hives.

Government programs and foreign aid have in recent years sought to educate beekeepers, expand their numbers, raise quality, introduce tougher registration, safety standards and monitoring and restore the population of Caucasian bees. To cut processing costs many beekeepers form co-operatives, and these have been given hives, extractors and tanks and loans have been made available.

It is noticeable how much more frequently in the last couple of years jars of Georgian honey can be found in supermarkets, markets and small wineries as well as on the roads all over the country.