December 2021 | Agri Review
28 December 2021

During the last ten years, the Government of Georgia (GoG) has continuously subsidized grape, apple, and tangerine production throughout the country. Under the present tangerine subsidy program budget, 900 thousand GEL will be spent subsidizing ‘non-standard’ tangerines (relatively low-quality fruit). This subsidy program started on 25 November 2021 and will last until 1 February 2022. In which there will be 10 tetri state co-financing per 1 kg of non-standard tangerines. Given that enterprises will also pay 10 tetri, the final price of processing tangerines will be 20 tetri/kg. As the statistics reveal, non-standard tangerines comprise around 16-17% of the total harvest. 

Currently, at least 50% of tangerines produced in Georgia are exported to neighboring countries – mainly Armenia, Russia, and Azerbaijan – though, as the trade data shows, export quantity and value over the last two years has declined significantly, while exports price rose, at least in nominal terms. 

The sector was also subsidized last year, however, declining trends were sustained not only in trade but additionally in production. As for 2021, the current harvest is expected to be significantly larger, reaching 70 thousand tonnes.

In spite of the positive expectations regarding the 2021 harvest, over the 2006-2021 period, the overall trend for production is declining. This is explicable due to unfavorable weather conditions in certain years; a stink bug invasion in 2015 and the long-lasting negative impact on the sector; and a high dependence on post-Soviet markets, where quality standards in some cases are relatively low compared to European markets, amongst other factors. Yet another contributor might be producers’ willingness to switch to higher value-added crops. The subsidies might also negatively affect the sector as they reduce farmers’ willingness to improve quality and thus become more competitive.