Gov’t invests $10m GEL in agricultural support program

The Georgian Government has increased the amount of funding allocated to the new Agricultural Insurance project as an attempt to strengthen the country’s agricultural sector.

Georgia’s Minister of Agriculture today announced the Government has increased the state budget for the Agricultural Insurance project from 5 million GEL to 10 million GEL. The additional funds would be secured by insurance.

In September of last year we launched the new Agricultural Insurance project and since then the results have been positive. Because of this we are continuing to update the agro insurance project model for 2015,” Agriculture Minister Otar Danelia announced.

The project, which came into force last September, supported the development of the country’s agricultural sector - a priority area of the country’s growing economy.

Minister Danelia said in the first stage of the programme, the Government planned to insure a selection of farmers who operated in the agriculture sector from all areas of the industry. Currently the project is operating as a pilot scheme that finances part of a farmers’ insurance premium, while the remaining costs are covered by the farmer.

According to the new changes, the Government determined its subsidies by up to 60 percent, whereas before it was 70 percent.

The Agricultural Insurance project will be led by the Agriculture Projects Management Agency, which is part of the Ministry of Agriculture.

Local insurance companies started offering agricultural insurance to Georgian farmers in 1996. The country’s six top insurance companies that specialise in the agricultural sector are participating in the project. Danelia said.

Since 2014, more than 21,000 agricultural aid policies were issued which helped farmers pay for farm-related costs. In addition, in the same time 34 plant cultivations on 19,000 hectares of land were insured for a total value of 150 million GEL.

During the 1990s, agriculture represented 45 percent of the country’s GDP while in 2013, the figure was 9.3 percent. In 2013 the agriculture industry ranked fifth in the Government’s resource allocation after trade, industry, public administration and transport and communication.

Statistics revealed almost 50 percent of the Georgian population were employed in the agricultural industry. Data showed the Georgian farming population was divided into two groups: active farmers and peasants. The latter made up 70 percent of all farmers and owned up to two hectares of land for cultivation.

In recent years industry insiders have said Georgia’s agriculture sector was "poorly developed”.