March 2021 | Agri Review
31 March 2021

On 29 December 2020, the parliament of Georgia approved the state budget for 2021, which includes allocations of around 18.3 billion GEL. From which the Ministry of Environmental Protection and Agriculture (MEPA) will receive 451.6 million (2.5% of the total budget allocation). MEPA will direct 10 mln. GEL towards the Environmental Protection and Agriculture Development Program (2.2% of MEPA’s total budget), with around 389.6 mln. (86.3% of MEPA’s total budget) to be allocated to agricultural development, and approximately 51.9 mln. GEL (11.5%) to be spent on environmental protection.

Compared to 2020, the budget for agricultural development will decrease by around 6.3%. Though, additional state funds will be allocated to the newly established agency for sustainable land management and land use monitoring, by 85.8% and by 19.8% for Georgian Amelioration (GA). The budget for the National Wine Agency (NWA) and the National Food Agency (NFA) will decline by 37.7% and 15.2%, respectively. While the Scientific-Research Center of Agriculture (SRCA) budget will decrease by 11%, and the Rural Development Agency (RDA) will lose 2.4%. MEPA will also be directing less spending towards the joint Environmental Protection and Agriculture Development Program than in 2020 (-9.9%) (Figure 1).

Although the redistribution of funds has changed slightly, as in previous years, the biggest share of MEPA’s funds will further support the RDA (53%), GA (23.3%), and the NWA (12.8%). The RDA will continue financing around 16 programs; including their “Preferential Agrocredit project”, with the highest budget of 115 mln. (55% of their total budget), and 18 mln. (8.7%) and 12 mln. GEL (5.8%) will be directed towards “Plant the Future” and “Co-financing Processing and Storage Enterprises”, respectively.

The State Budget for 2021 identifies the main priorities for Georgian agricultural development as:

• Supporting domestic production and improving the quality of locally produced agricultural goods;

• Improving access to financial resources for farmers and agricultural enterprises;

• Supporting the development of climate-smart agriculture.