2020 February-March Analysis Featured

GeoGAP – moving towards traceable, safer, sustainable produce in Georgia

GeoGAP agricultural standards aim to bring quality, traceability and sustainable agriculture practices to farms across the country. A stepping stone towards the EU’s GlobalGAP standard, GeoGAP will help prepare farmers make their way towards markets abroad.

Georgian Farmers’ Association certification specialist Ilia Kunchulia says you shouldn’t always listen to your Georgian grandmother when it comes to produce and grocery shopping.

Despite what she says, organic foods aren’t widely available in Georiga yet, nor is it easy to find out the origin of the produce you buy, and whether basic agricultural safety and sustainability practices were employed in its production – but all that will soon begin to change, Kunchulia says.

Under a project implemented by Chemonics International, in 2019 the Georgian Farmers’ Association launched what it hopes will change the way farmers farm, shoppers shop and supermarkets sell, with the implementation of GeoGAP: an agricultural produce certification scheme that will ensure the quality, safety and origin of produce that makes its way into stores, with an eye towards eventually helping farmers make their way onto the EU market.

What can GeoGAP offer Georgia?

GeoGAP stands for Georgian Good Agricultural Practices and is based off Global G.A.P. – an internationally recognized, EU retail sector-backed set of farming and agricultural standards, the main aim of which is to ensure safety and quality of agricultural produce and to promote sustainable practices among farmers and retailers.

GeoGAP first serves to prepare and accustom farmers and producers to the idea and importance of certification and the practices this entails.

“Maintaining good agricultural practices is a must if you want to make it onto the European market, though for now that aim is ambitious for Georgian farmers, given the quantities in which we currently produce. But we have other things to focus on: we first have to implement a system that will allow us to control quality, traceability and sustainability.”

GeoGAP, Kunchulia points out, is a stepping stone, an interim standards certification program that offers a version of Global G.A.P. tailored to the Georgian reality.

What issue does GeoGAP AIM to solve?

Head of Star Consulting and food safety expert Ekaterine Burkadze says implementing agricultural standards is of crucial importance given that Georgia is still working to address the heritage of ‘quantity over quality’, left to it by the Soviet Union, and to emerge from the period of de-regulation she says the agriculture sector underwent during the United National Movement government.

“This changed with the signing of the Deep and Comprehensive Free Trade Agreement (DCFTA), which jumpstarted the process of implanting EU legislation, and the National Food Agency was created”, Burkadze says, but points out that though the first few years of this transition period brought about some positive changes, legislation concerning food safety and standards remains lax and unenforced.

Burkadze lists a number of reasons behind this problem:

“For one, the process has slowed down since the initial influx of support from the EU and donor organizations. Now, adopting EU legislation remains an issue of ticking boxes, not implementation.

“Moreover, quality control and monitoring mechanisms in the country are more often used as tool of punishment, not support or promotion. State bodies often work in a reactive way, engaging more often in crisis management activities than in working proactively to address issues. Another issue: there is a lack of laboratories that can properly test for a wide array of pesticides, and farmers looking to get international certification have to send their samples abroad. Moreover, there is no demand from producers for farmers to engage in proper lab testing. The ‘farm to fork’ control system of the EU remains unconsidered and unimplemented”, Burkadze says.

Another issue when it comes to measuring and assessing the implementation of agricultural standards in the country is that certification for Global G.A.P. is prohibitively expensive for local farmers, Kunchulia says.

Consulting services to help a farmer get ready to be certified against GlobalGAP, in addition to the implementation costs, can run as high as $5,000 – $10,000. Then add in the certification itself: farmers are responsible for bringing in certification specialists on their own dime, which when you factor in tickets, hotels, transport and food can easily come to $5,000.

“This is far too much for a Georgian farmer. In Europe, a farmer can get certified in just three to four hours. Dutch farmers, for example, can get certified for as little as 600 euros on average because there are many certification bodies and the competition brings down the price”, Kunchulia says.

Further taking into account that certification has to take place once a year, Global G.A.P. is prohibitively expensive for Georgian farmers.

The lack of certification specialists and bodies is the primary reason that costs are so high, Burkadze says, and notes that this will change over time, as she and other specialists become certified to become authorized auditors.

Just how difficult it is for Georgian farmers to get certified against Global G.A.P. can be gleaned from a look at the numbers, Kunchulia points out.

“The Georgian government says there are 700,000 farmers in the country – and this number is high, given most of them are subsistence farmers or similar – but as of today there are only five or six certified Global G.A.P. agricultural companies in the country.”

However, GeoGAP offers a cost friendly alternative, running farmers just 300-1000 GEL for both consulting and certification services.

What do farmers stand to gain from GeoGAP?

Should GeoGAP become entrenched as an in-demand certification in the country, farmers will gain much, Kunchulia says.

One thing GeoGAP certification can offer farmers is a proactive, organized and disciplined approach to farming.

“Such certifications require farmers to keep documentation, to update it, to interact with their records. Without documents, you can’t grow as a farmer – you can’t know for sure what’s working, what’s not. Without documents, you remain poor, as do your children. Documentation makes you pay attention to the critical aspects of your business and helps you grow”, Kunchulia notes.

But there are financial benefits in it as well.

The Georgian Farmers’ Association says there is growing demand from consumers for more stringent food safety standards to be established.

Currently, the biggest driver on the market pushing for such changes is the HORECA sector (hotels, restaurant and cafes), or the catering and hospitality industry.

“Hotels want to be able to supply local food stuffs – not Turkish tomatoes, but Georgian ones – to their guests who are eager to sample local produce and cuisine, but they also want to ensure the quality of what they put on the plate. That’s why for them such certifications are important, and can be leveraged to drive change”, Kunchulia notes.

To ensure safety and quality, hotels and certain emerging consumer segments are willing to pay a premium for safe and certified food products. This premium in turn can be given to farmers whose produce fits the bill.

This is because when relying on the traditional value chain, farmers lose much of the value of their product to numerous intermediaries between themselves and the consumer, but with the help of the Georgian Farmers Distribution Company (GFDC) – currently the largest buyer of GeoGAP certified goods, and which delivers straight to the kitchens of the HORECA sector – farmers can cut out the middleman and receive a premium for their GeoGAP certified produce.

Because there’s an app for that.

“Our application Agronavti allows farmers to upload information about their produce, and it immediately makes its way into our system where we can act on it.

“Cooperating with us, farmers gain access to a stable market that is growing on a monthly basis. Moreover, we pay for their produce via financial institutions, and not by cash.

“This in turn means they create a paper trail, and thus open up the possibility of receiving low-interest loans to further their business”, GFDC Deputy Director Shako Japaridze told Investor.ge.

The GFDC supplies 20 high-end hotels and restaurants with produce and plans to expand in both Tbilisi and other regions, in addition to cooperating with the online platform soplidan.ge, which offers front door delivery service of agricultural produce.

Getting Georgian farmers on board

Uptake of GeoGAP standards has been slow, but the Georgian Farmers’ Association has identified some of the main issues, and says that with time it hopes the importance of such certifications will make an impression upon farmers.

One issue GeoGAP faces is that the premium farmers receive for certification is still not quite high enough to perk up ears:

“This is partially because despite a GeoGAP certified farmer’s extra work, their competitors can drastically undercut them as they face no problem in selling their produce because of lax regulatory enforcement.

“Meanwhile, GeoGAP certified farmers, for the time being, can only find an outlet with the GFDC, with a few exceptions”, GFA certification specialist Kunchulia says.

Kunchulia says that one solution to this issue could consist of agreements with larger retail supermarket chains to start highlighting the goods of GeoGAP farmers and start offering them to their customers, and in doing so advertise the availability of such products and thus stimulate demand for such goods.

A quick look at the Georgian herb and salad market does indeed reveal that there is demand for higher quality products – the largest and arguably the most popular brand in the field, Herbia, is both Global G.A.P. and GeoGAP certified, despite the fact that the company is largely focussed on the domestic market.

“The demand for high-quality products is there, but there aren’t many other companies able to meet the need. There are smaller companies that have started to follow in our footsteps, and we hope these companies will continue to grow. We welcome healthy competition: it’s necessary for the growth of the industry”, Herbia Manager Davit Janelidze says.

The gradual rise in demand for such products, Kunchulia says, will hopefully spread to other agricultural products with time.

The GFDC’s Japaridze agrees: “Demand for quality products has been rising steadily over the past few years – likely due to both increased consumer awareness and increased tourism and thus higher demands on quality.”

However, this matter is one that goes beyond demand – it’s a matter of corporate responsibility as well:

“In the EU, Global G.A.P. standards came about when supermarkets banded together demanding higher quality produce from their farmers across the board, as they agreed not to compete on certain baseline safety and quality requirements. The same has to happen in Georgia before we start seeing results”, Kunchulia notes.