In Georgian Agriculture, Innovation will Drive Success

Monday, April 27, 2020
Gemuani employs 22 full-time staff and provides a stable market for fruit growers in West Georgia.

In February, the USAID Agriculture Program announced a new round of innovation grants to support local food producers, processors, and distributors. These grants are designed to catalyze innovation in Georgia’s agriculture sector to increase revenues, create jobs, and drive economic growth in rural areas.

The dissolution of the Soviet Union brought Georgia long-sought independence and the opportunity to build a viable market economy.  The transition was difficult, however, especially in the agriculture sector.  After achieving independence, the amount of land in agricultural use dropped by almost half.  Georgia became a net importer of agricultural products for the first time in modern history.   By 2010, the sector had reached a historic low point.  Due to years of underinvestment and inefficiency made worse by a Russia-imposed embargo, exports had collapsed, yields were in decline, and food prices were climbing due to limited supply. 

Since 2010, the agriculture sector has been on the upswing.  Increased attention from the Government of Georgia, concerted support from the donor community, and private investment have helped farmers increase productivity, build productive capacity, and improve living standards in rural areas.  Significant progress has been made.  However, agriculture still lags behind other sectors of the economy in terms of productivity.  For Georgian agribusinesses to produce more competitive products, reach more lucrative markets, and provide higher-paying jobs in rural communities, productivity enhancing innovation is needed. 

Today, USAID is supporting innovation through target investments.  In partnership with the Government of Georgia and the private sector, the USAID Agriculture Program recently launched a new innovation grant program to stimulate rapid development in high-potential areas of the agriculture sector.  Through these grants, which will be available until the end of 2020, the USAID Agriculture Program will partner with agribusinesses to co-design and co-finance innovations in areas like production, processing, management, and distribution.  These investments will support Georgia to produce higher-value products, supply more lucrative markets both domestic and international, and reduce the country’s reliance on the Russian market, both for imports and exports.

The newly-launched innovation grants are designed to encourage risk-taking and new thinking – the kinds of breakthroughs that can significantly change the agriculture sector in Georgia.  They are also designed to be flexible – available to innovators with new, practical, and impactful ideas to improve how food is produced, processed, and distributed.  Rapid advances in these areas can position the private sector to spur economic growth in rural Georgia, where it’s needed most.

This approach is built upon USAID’s proven track record of supporting targeted investments in innovation.  The following examples demonstrate how previous USAID-supported innovations have helped Georgia’s agriculture sector reach new heights, benefitting local farmers and rural communities.

Gemuani: Raising the Bar in Dried Fruit Production

Gemuani Ltd., a woman-owned dried fruit producer based in Zugdidi, leveraged co-investments from USAID and Georgia’s Ministry of Environmental Protection and Agriculture to establish a cutting-edge freeze-drying facility.  The new facility has enabled Gemuani to create new jobs, reach new markets, and set a new, higher standard for producing dried fruit in Georgia. 

Since opening the free-drying facility with USAID support in 2017, Gemuani has doubled its sales and now provides more than 20 different products to the Georgian market.  It now employs 22 full-time staff, mostly from the surrounding community in Zugdidi. 

In addition to employing local workers, it has created a steady market for fresh fruit producers.  In 2019, Gemuani purchased about GEL 500,000 ($165,000) of produce from local farmers.  Gemuani has continued to grow, raising its production standards and building connections with international buyers.  The company recently announced an agreement to supply dried fruit to Nestle.  

Agronavti: A Mobile Network for Producers and Buyers

Innovation extends beyond production.  USAID is also helping farmers find innovative ways to bring their products to market.  In partnership with the Georgian Farmers Association (GFA), the Georgian Farmers' Distribution Company (GFDC), and the Adjara Hospitality Group, the USAID Zrda Activity in Georgia helped develop Agronavti, a mobile business-to-business app that enables GFA members to fulfill local produce orders for leading hotels and restaurants. 

The first such mobile app in Georgia, Agronavti is a win-win for Georgia’s economy, helping farmers access a consistent customer base and allowing tourism operators to replace costly imports with locally-sourced produce.  Launched in 2018, the app now has 4,180 registered users.  The GFDC, a distributor that sources food from 186 farmers, has used the app to purchase and distribute GEL 3.7 million ($1.2 million) worth of vegetables, dairy products, honey, and other produce.  This has created a steady stream of income for local farmers, many of whom are located near the Administrative Boundary Lines with Abkhazia and South Ossetia. 

The Next Generation of Agriculture Innovators

The USAID Agriculture Program invites any private, legally-registered, for-profit micro, small, or medium-sized enterprise (defined by GeoStat as having up to 100 employees and annual turnover of up to GEL 60 million) to apply for an innovation grant.  The grants are awarded based on the capacity and promise to implement impactful agriculture investments that can drive long-term growth in the sector. 

To apply, an entrepreneur or enterprise should submit a grant concept note, past and current financial statements, and pro-forma financial projections before December 31, 2020.  For more details, interested enterprises can visit jobs.ge, the USAID Agriculture Program’s Facebook Page (@apgeorgia.org), or send an email to grants@apgeorgia.org

Last updated: April 27, 2020

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