The messenger logo

Gov’t presents agriculture anti-crisis plan with budget of GEL300 million

By Natalia Kochiashvili
Wednesday, May 13
The anti-crisis plan for agriculture was presented during the meeting on 12th of May within the framework of the Inter-Agency Coordination Council headed by the Prime Minister. According to the PM, during the crisis, food security, agro-production and domestic production were especially acute and thus, agrarian processes can’t be suspended in the country for even a single day.

The PM presented support programs under ‘Caring of Village and Farmers’, according to which each farmer who has a registered land will receive a subsidy of GEL200 per hectare from the state. According to the Agriculture Minister, Levan Davitashvili, GEL37 million has been mobilized for this purpose, with which farmers will buy fertilizers, plant protection and care products, seeds and planting materials, and will pay for plowing works.

During 2020, 42,000 farmers will be exempt from irrigation service fees. According to the Minister, this means that the state will pay up to GEL75 per hectare, reaching a total of GEL4 million. They will be fully freed from a debt of GEL8 million, which they have accumulated in 2012-2019 due to non-payment of reclamation services.

Farmers who need to purchase equipment, arrange a greenhouse or irrigation system, will be directly funded by the state in the form of a 50 % grant.

All farmers will receive 150 liters of diesel fuel per hectare, which is guaranteed to be GEL1 cheaper than the market price.

During the address, the PM also called on all farmers to register their lands that they have not yet registered as soon as possible, since the assistance is directly related to that. He also noted that funding has already been allocated for systematic land registration, which means that any type of land will be fully registered and registered in the country within 3 years.

According to Davitashvili, support for cooperatives and agricultural cooperatives is an important direction in rural and agricultural development, and state programs will finance agricultural cooperatives to purchase equipment that will allow: manufactured products to be marketed in accordance with market demand; introducing international standards for food safety management and branding of manufactured products; obtaining accounting services.

The anti-crisis plan states that powerful milk cooperatives will be set up in Akhalkalaki, Dmanisi and Dusheti municipalities .

Additional 10% co-financing is provided for agricultural cooperatives in the sectoral programs of the Rural and Agricultural Development Agency.

Changes have been made to the preferential agro-credit project, according to which a new subcomponent will be added to the working capital component of the project - financing of plant turnover. According to the plan, the loans will be issued from GEL5 000 to 100 000, and the state will fully finance the interest rate for 6 months in case of secured loans, and in case of unsecured loans - in the amount of 17 % per annum.

The total estimated volume of loans issued to farmers under the program will be GEL50 million. The annual budget co-financing amount is GEL4.5 million and 5000 potential beneficiaries have the opportunity to use the program.

At the same time, the percentage of co-financing in the component of fixed assets of "preferential agro-credit" is increasing. Instead of the existing 8 %per annum, the state will fund 11 %for the farmer for 48 months. The percentage of co-financing for leasing is also increasing,from 9 to 12 %.

In the component of fixed assets and in all its subcomponents the upper limit for interest rates for banks is rising, instead of 15 it will be 18 %. In addition to the fixed asset component and leasing, financing for the production of grape processing plants and pasta products is added. The total estimated volume of loans to farmers under the program will be GEL25 million. The total budgetary amount of annual interest co-financing is GEL4 million (for 2 years).

In 2020, the budget of the project "Preferential Agrocredit" is GEL74 million and GEL7.5 million was allocated for the project within the framework of anti-crisis measures.

Farmers will be able to apply to the relevant subdivisions of the Ministry of Agriculture from May 20. The total budget for the assistance will be GEL300 million and state aid will affect about 200 000 farmers in the country.