Georgian PM unveils $1.09bln budget for four-year agricultural development

Irakli Kobakhidze, the head of the ruling Georgian Dream party's election staff and the Prime Minister of Georgia, on Monday underscored the Government’s “dedication” to boosting the agricultural sector, strengthening rural communities and promoting sustainable economic development throughout the country, while presenting the party’s election programme ahead of the October 26 parliamentary vote.

Kobakhidze announced a total of ₾3 billion ($1.09bln) would be allocated to the agriculture sector over the next four years, in contrast to the ₾172.5 million ($62.85mln) outlined in 2012.

He claimed the promise made by Georgian Dream and its Honorary Chair and Founder Bidzina Ivanishvili back in 2012 to “use a billion” for revitalising the sector had been “fulfilled in excess”.

The agricultural sector in Georgia had been neglected, with [less than] ₾200 million ($72.87mln) per year being allocated to it. This had a significant impact on the living conditions of people in rural areas [...] Supporting agriculture and bolstering rural areas is one of our primary focuses. The Preferential Agrocredit Programme has been successfully running in our country for many years”, Kobakhidze said.

Highlighting the success of the programme, the Prime Minister said preferential loans totalling ₾6.5 billion ($2.37bln) had already been issued, benefiting over 47,000 recipients.

In the coming four years, a total of ₾800 million ($291.46mln) will be allocated for future plans within this programme. This allocation is expected to attract private investments of over ₾5 billion ($1.82bln) in agriculture”, he said.

Kobakhidze noted the Government had supported the creation of over 400 processing enterprises and storage facilities across the country, improving infrastructure for farmers. Furthermore, he said, the Government had facilitated the purchase of 7,500 units of equipment for farmers, demonstrating a commitment to modernising the sector.

Such infrastructure barely existed until 2012, and its development is credited to our Government. The provision of equipment was also a top priority. With the Government's support, farmers purchased 7,500 units of equipment, financed by ₾120 million ($43.72mln) from the state budget”, he said.

The PM also highlighted the Plant the Future state programme, which he said had already seen the planting of 23,600 hectares of new orchards, with an additional ₾100 million ($36.43mln) allocated to create “10,000 hectares” over the next four years.

Moreover, the Prime Minister highlighted “significant progress” made in land reclamation, with plans to invest ₾1 billion ($360mln) in this area in the next four years, including the development of the “first water reservoir in the history of independent Georgia” to serve the eastern Kakheti region and contribute to the development of agriculture.

Kobakhidze also emphasised the growth of vineyard areas by 70 percent across the country, highlighting the Government’s commitment to promoting viticulture and winemaking as a “vital part of the country’s identity”.

Farmers had to replace vineyards with other crops because viticulture was not profitable until 2012. However, today the situation is radically different, with the area of vineyards across the country having increased by 70 percent. As for grape processing, only 52,000 tonnes of grapes were processed, but this figure increased to 300,000 tonnes by 2023”, he said.

The Prime Minister also noted the income of winegrowers saw an increase from ₾70 million ($25.50mln) in 2012 to ₾350 million ($127.52mln) in the latest data. Additionally, wine exports rose from $65 million to $259 million dollars, he said.

An even higher growth rate is predicted for this year. This growth will directly affect the incomes of farmers involved in viticulture and winemaking. It is forecasted the volume of exports will increase to half a billion dollars by 2028. Consequently, the incomes of our winegrowers and winemakers will also increase”, Kobakhidze said, adding the Government aimed to ensure benefits of economic development “reach the pockets” of people.

The output of agribusiness also showed growth, doubling from ₾7.6 billion ($2.77bln) in 2012 to ₾16.6 billion ($6.05bln) in 2023, the Prime Minister said, adding the forecast for 2028 was over ₾24 billion ($8.74bln) while the export volume of agricultural products was expected to reach ₾2.3 billion ($840mln).

Kobakhidze said these figures reflected the “positive impact” on employment in the sector and the “overall social condition of people”.