The volume of agriculture credits almost doubled thanks to the government-initiated preferential agro credits program, exceeding the credits launched in April of 2013. In three months the amount of agro credits exceeded GEL 50 million while the figure stood just around GEL 56 million in the total agro credits loan portfolio of Georgian banking sector by April 1st of 2013 when the Program took its start. However, sector pundits still press on cooperatives development to make the national agriculture sector really promoted.
GEL 50 782 197 is disbursed totally to 3796 beneficiaries in frames of the Preferential Agro-Credit Project the latest statistics provided by Agriculture Ministry of Georgia (MOA) informs and accentuates that the program is developing successfully. According to MOA officials, 100 enterprises are expected to be open up instead of previously planned 60, and minimum one processing plant is supposed to be set up in each district throughout the country within a year. The preferential credit project consists of three components as following: free of charge 6-month credits up to GEL 5 thousand targeted to small farmers; 2-year credits within the range of GEL 5 thousand -100 thousand available for middle sized and big farmers; and 7-year credits within the scopes of USD 30 thousnad-600 thousand available to enterprises involved in agriculture product processing. The agro-credit program aims to make the expensive credits available to agriculture sector by co-financing the interest rates through the Agriculture Development Fund of MOA. The co-financing rate [covered by the Fund] ranges within 9% and 12% thus making agriculture credits [charged by at least 15-17% of yield by financial sector] available for 3% and 8% to the second and third component beneficiaries respectively. Sector pundits consider the third component aimed on enterprise development as the most crucial part of the program. Over GEL 12.5 million is disbursed through 104 credits financing cattle breeding, planting, fishing, poultry, green-houses, milk processing as well as storehouse and refrigerators infrastructure development in this enterprise-oriented component. Up to GEL 29 million was disbursed to 1475 farmers and GEL 983 298 to 2216 beneficiaries in frames of the second and the first components respectively.
Economic analysts find the agro credits latest statistics impressive but not sufficient to say the program is really successful. Soso Archvadze, an economic analyst, believes the major part of petty farmers is still beyond the reach of credits and the preferential loans are available to medium and big farms while small household farms make the major part of population living in regions and making their living through agriculture.
“The provided statistics sounds good but not too much if we take into account the number of population involved in agriculture that totals around 600 thousand,” said Archvadze in the interview to Georgian Journal. “So if we divide GEL 50 million on this 600 thousand the result is less than attractive [around GEL 83] that means it comes out that medium and big framings will get the credit that already were focused on marketing and the petty farmers remain beyond reach of the credit.” He finds necessary to boost cooperatives to alleviate situation to the petty fry. “Credits availability, cooperatives and the state subsidies are the three pillars that should insure future of Georgian agriculture,” he said.
Ditrikh Muller, a co-founder of Georgian Investment Group +, also finds cooperatives crucial beside the credit statistics and still believes the state had better to boost enterprises development through investing the state capital in deploying plants across the country and handing to cooperatives without charge first with the opportunities to sell out shares on cooperative members completely.