Georgian Dairy Industry on the Upswing

Growth in Georgia’s dairy industry is on the upswing, owing to an improving investment climate, good dairy farming conditions and strong demand for milk, cheese and other dairy products.

Still, some obstacles remain. Many of the country’s dairy farmers lack specific technical know-how to produce safe and high-quality milk.

For the last several years, the European Bank for Reconstruction and Development (EBRD) and the Food and Agriculture Organization of the United Nations (FAO) have been supporting Georgia’s leading dairy farmers to modernize their facilities and boost milk productivity and quality.

“We’ve reached a lot of dairy stakeholders in Georgia through a combination of training, study tours, a portal with updated technological and market information, as well as knowledge-sharing events on everything from the latest dairy trends, technologies and food safety standards to investment opportunities,” said Andriy Yarmak, an FAO economist.

“This type of knowledge transfer can help make the country’s dairy supply chain more efficient and inclusive.”

Modernizing operations

An EBRD/FAO study found that by making simple improvements, Georgian commercial dairy farmers could increase productivity by up to 35%. What’s more, most of the changes do not require major investments.

Inspired by the example in Ukraine, a group of farmers set up the Association of Professional Milk Producers of Georgia. With support from the FAO and EBRD, the group visited commercial dairy farms in Georgia and Ukraine to learn more about modern dairy farming, including how producers organize themselves.

Many farmers have also begun upgrading their facilities and buying new livestock breeds and technology to increase productivity and profits. Several high-efficiency dairy farms have since emerged in the country. Owing to changes implemented since visiting and learning from Ukrainian milk producers, one Georgian farmer, Kvareli Baga, noted how the mortality rate of his calves has dropped from 20 to 2.3% in just one year, as one of many tangible improvements.

Greater efficiency and prospects

The EBRD and FAO launched a modular training program in 2016 to introduce dairy farmers across the country to new production methods.

“The country’s dairy farmers have made a lot of progress in a short time, increasing their efficiency and improving safety standards and animal health and welfare,” said Victoria Zinchuk, Head of Agribusiness Advisory from the EBRD.

“Prospects for the sector continue to look good, especially as demand for high-quality milk and dairy products grows. We’re seeing new investments in milk production and processing, which is exciting because it’s this type of momentum that can transform the industry to the benefit of all, including consumers.”

Going forward

One way to maintain this momentum is to continue strengthening the capacity of the country’s Association of Professional Milk Producers.

According to Mamuka Meskhi, Assistant FAO Representative in Georgia, “Such organization among producers is incredibly beneficial in better integrating the value chain. On top of that, greater cooperation will increase knowledge-sharing and ultimately make production practices more efficient.”

The Association has set up a consultancy center where trained specialists can provide members with professional advice, and where opportunities for buying inputs and processing milk can be explored.

Formal public-private dialogue, as promoted by the EBRD and FAO in neighboring countries, would also benefit Georgia’s dairy industry.

As part of a separate project, the FAO and EBRD are currently supporting the emergence of origin-based labels for Georgia’s famous traditional cheeses, with a view to creating extra value in specific market niches.

In addition, a forthcoming FAO and EBRD project will look to strengthen the policy and business strategy in the Georgian dairy sector by facilitating constructive dialogue between private dairy sector representatives and the government, while also providing support to local stakeholders in the shape of training and knowledge sharing.

Mariam Saldadze, georgiandairy.org