Policy Briefs

Access to Finance for Agricultural Cooperatives
Wednesday, 30 November, 2016

The Forum took place on 29 November 2016 in the framework of the EU-funded European Neighbourhood Programme for Agriculture and Rural Development (ENPARD) in order to discuss some of the key challenges Georgia’s agricultural cooperatives face with regard to access to finance. Please see the conference programme and presentations (listed below).

This was the fourth in a series of policy dialogues about agriculture and rural development organized by the CARE consortium, which includes the ISET Policy Institute, the Regional Development Association (RDA), and the Georgian Farmers Association (GFA). Other ENPARD-implementer consortia, led by Mercy Corps, Oxfam, and People in Need, also contributed to the Forum. Many other organizations presented and actively participated in the discussion: the Georgian Ministry of Agriculture, the EU Delegation to Georgia, the French Development Agency, the Agricultural Cooperatives Development Agency (ACDA), the Georgian Farmers Association (GFA), agricultural cooperatives, TBC Bank and other financial institutions, leasing companies, business and finance consulting groups, and research centers, among others.

For detailed information, please see the notes from the forum.

Summarizing the Forum, ISET’s President Eric Livny reflected on the commonly expressed view that there is a lack of funding available for Georgian farmers or farmer cooperatives. He suggested that, in fact, there may be too much funding, given that new donors, such as the French Development Agency, now enter the fray and join the EU, USAID, SDC, EBRD, and others in subsidizing commercial lending and otherwise supporting Georgian farmers.

Metaphorically speaking, there is a lot of government and development assistance money sitting on top of a mountain, waiting to be distributed to farmers. And, there are a lot of farmers jumping up and down at the bottom of the mountain, trying to reach some of the money that is potentially up for grabs. Unfortunately for both parties, according to Mr. Livny, potential funders and farmers have a hard time meeting each other because of the farmers’ limited ability to actually climb the mountain. Put simply, there are simply not enough commercially viable projects in Georgia’s fragmented and inefficient agriculture that could be undertaken at the going interest rates and/or could meet the due diligence requirements posed by the Georgian banks.