Georgia's agricultural sector: A small country with big potential for growth and already top-quality products

Georgia's potential in agro-food production offers attractive trade and investment opportunities for the UAE.

Georgia's agricultural sector: A small country with big potential for growth and already top-quality products

Georgia's potential in agro-food production offers attractive trade and investment opportunities for the UAE.

29th of May 2023
Nino Kvintradze

With its fertile soils, ample water resources, and 12 climate zones, Georgia boasts a highly favorable natural landscape for agriculture. Indeed, cultivating an array of agro-food products has been a longstanding tradition in this land, with a history stretching back centuries. Notably, agriculture is a primary source of income for many of the country's rural residents, with a significant 47% of the population employed in this vital sector.

Georgia's thriving agricultural industry's growth and success hinge partly on its economic relationship with the United Arab Emirates. As such, the recently signed CEPA between the two countries holds significant promise for bolstering the export of agro-food products. Notably, Georgian goods are increasingly in demand in the UAE, which bodes well for agricultural producers. To further advance the sector's growth, the Georgian government has been actively promoting modern technologies and techniques, and training local farmers to meet international market demands.

Otar Shamugia - Minister of Environmental Protection and Agriculture of Georgia

Encouragingly, recent years have seen remarkable progress in the rate of agribusiness production, the industry's added value, and a reduction in rural unemployment. Specifically, agribusiness production has surged by an impressive 112% over the past decade, with a further 14% increase recorded in 2022 alone. The industry's added value has similarly experienced a significant uptick, amounting to $1.75 billion, marking a 13% rise from 2021.

Investments in Georgia's agricultural industry reached a substantial $6.2 billion in 2022, with the state providing $1.2 billion in co-financing. Impressively, the country achieved a record-breaking level of agro-food product exports in 2022, amounting to $1.3 billion and spanning 96 countries. The government is investing $6 million in promoting Georgian products in key foreign markets in 2023, focusing on strategic regions such as the United States, Europe, and the UAE to expand the industry's reach further. In 2021, Georgia's agricultural exports to the UAE totaled $1.1 million, indicating significant potential for future growth.

Given that increasing agro-food exports is one of Georgia's top priorities, the country's Minister of Environmental Protection and Agriculture believes that free trade with the United Arab Emirates opens a new door of opportunities for the country. In GCC countries, Otar Shamugia conveys that Georgia mainly exports lamb meat, natural juices, non-alcoholic beverages, nuts, and fruits. The volumes increase annually, proving the concluded agreement (CEPA) will be favorable and valuable for both parties. "We have the resources to increase our export potential further. Government-supported projects work in this direction, and we will continue to invest in this field in the coming years. Our resources in terms of mineral waters and non-alcoholic beverages are quite large because we have enterprises in the country that meet modern standards", says the minister, adding that the agricultural sector of Georgia is one of the attractive ones for foreign investors. "The government creates all the conditions for investors to make investments in agriculture easy and profitable for them. For instance, the government offers preferential agro-credit projects for local and foreign investors. In Georgia, conditions are quite good regarding this aspect, and our tax system also proves this", says the minister. Moreover, the Ministry of Environment Protection and Agriculture of Georgia is launching a $150 million project with the Government and the World Bank to renovate and modernize infrastructure in prime locations of the country. Irrigated agricultural land area will increase while capacity for land management will be enhanced at the national level.

Nino Zambakhidze, the founder of the Georgian Farmers' Association (GFA), the largest union of local farmers boasting over 6,000 members, notes that the UAE market is particularly drawn to Georgian natural organic products for several compelling reasons. "Those who have tasted Georgia's local products note that it possesses an authentic flavor, with tomatoes tasting like tomatoes and cucumbers like cucumbers," explains Nino Zambakhidze, citing the high quality and eco-friendliness of Georgia's small-scale, high-standard production as a significant factor.

Nino Zambakhidze further highlights the ample opportunities for growth and development in Georgia's agricultural sector, which remains at an early stage of development. The GFA offers numerous resources for local and foreign farmers, including retraining programs, access to new technologies, and assistance with sales via foreign donor organizations. Additionally, the association prioritizes the digitization of sales processes and provides farmers access to cutting-edge agricultural practices and technologies. Overall, the GFA is crucial in empowering farmers and enhancing the quality of Georgian agricultural products, making them attractive to buyers in the UAE and beyond.

In terms of organic products, it is especially noteworthy to mention blueberries. Georgia has a real potential to become a new significant global player with almost 1,000 hectares planted, generating a minimum of 2,500 tons of fresh blueberries each year. Honey, hazelnuts, and almonds are other top export products from Georgia. The country produced 33,200 tons of hazelnuts in 2022 and became the fifth player worldwide. Georgian sheep meat and dry fruits are already found in the UAE market.

The director of the Georgia Franchise Office at Gateway & Partners and board member of the Export Development Association, Gvantsa Meladze, considers that a comprehensive economic partnership agreement with the UAE will boost export potential and give the farmers the possibility to diversify markets. She adds that the main challenge for Georgia nowadays is its awareness in the global markets and logistics to deliver fresh products. "The Gulf countries have been interested in this region for a long time. We have a free trade agreement with one-third of the world. Georgia is a great gateway to the European market. When the free trade agreement with the UAE will come into force, it will attract investments not only in agriculture but in various directions, as Georgia is among the shortest routes to reach the European market", she adds. 

Some Georgian companies already have experience in cooperation with the UAE. Among them is the company Kula, one of the largest producers in the country that exports products to 26 countries worldwide. The director of Kula, Vano Goglidze, states that at this stage, the enterprise is in the process of finding new partners in UAE, and the main focus is on organic, natural, sugar-free products. "Kula produces fresh products, 99% of them are bought from farmers. We processed 70,000 tons of fruits and vegetables last year and cooperated with more than 4,000 farmers."

Another example of success is Margebeli Holding. The company produces more than 200 products. Its main asset is the production of mineral sparkling water. The company's director, Mikheil Svimonishvili, declares that one of their famous brands - "Nabeglavi" - mineral water is already sold in the UAE. The company cooperates with the supermarket chain LuLu and has even rebranded its water's name to "Goodness" specifically for this market. He specifies that the "UAE demands high-quality products. We have taken the first steps and plan to make improvements, especially after the free trade regime is activated".

The recently held Gulfood exhibition in Dubai showcased 25 Georgian companies looking to establish trade partnerships in the UAE. Some already reached export agreements, such as Gorge apple producer or Agritouch, a fruits and blueberry producer. Strengthening economic relations between Georgia and the United Arab Emirates will be a crucial factor in the future development of the rapidly growing agricultural sector. The increasing demand for Georgian agricultural products in the UAE presents significant opportunities for Georgian farmers and exporters to expand their operations and increase their revenue. The business communities of both countries have already established cooperative ties, and government officials and private sector representatives anticipate a significant increase in trade volume between the two nations. Although Georgia is a small country, it has yet to fully realize its agricultural potential, which offers potential investors and trade partners a range of opportunities in agro-food production, livestock breeding, and related fields. This potential is evidenced by the growing interest in agriculture, mainly because many government assistance programs are directed toward agricultural development.

Companies in

Agriculture & Agro-Industry

Gateway & Parnters
Gateway & Parnters

Gateway & Partners, was established in 2004 and is specialised in developing local exporters internationally.

https://gatewaypartners.eu/
Geofarms
Geofarms

Geofarms is the biggest Imeruli and Tushuri sheep breeding farm in Georgia.

geofarmsgf.com
Georgian Distributors Association (GDBA)
Georgian Distributors Association (GDBA)

GDBA aims to analyze experience and best practices of foreign countries, in order to prepare specific proposals and recommendations for executive authorities.

gdba.ge
Georgian Farmers' Association (GFA)
Georgian Farmers' Association (GFA)

GFA was founded in 2012, the organization unites about 4,000 farmers across Georgia. The Association acts as a facilitator between the government and farmers.

gfa.org.ge
Kula
Kula

Kula was established in 2009 and is one of the biggest players in the agro-industrial sector in Georgia.

http://kula.ge/
Margebeli Holding
Margebeli Holding

Margabeli Holding is active in agro production, food processing and food distribution

nabeghlavi.ge
Meama
Meama

Meama is a Georgian capsules producer introducing new innovative approaches.

meama.ge
Nikora Holding
Nikora Holding

Nikora Holding has held the leading position in the local food products market for 25 years.

nikoraholding.ge