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Georgian Small Farms Thrive with Support from the World Bank

September 10, 2009

  • Georgia's agricultural sector remains well below its potential
  • The World Bank is helping Georgia’s government finance lines of credit so farmers and agricultural producers can grow their businesses
  • Farmers are now able to cater to domestic and international demand

September 10, 2009 — Twice a day trucks from a chicken farm in Kumisi , Georgia , roar off to the capital, delivering 36,000 eggs to neighborhood shops and supermarkets. The farm is harnessing the latest in agriculture technology, using computers regulate the lives of the thousands of hens living and laying here. They control air temperature, feeding times and egg gathering.

These modern henhouses were funded through special credit lines provided by the Georgian government with support from the World Bank. While small and medium sized farms in Georgia are increasing production and profits, the agricultural sector remains well below its potential, so the World Bank is helping Georgia 's government finance lines of credit so farmers and agricultural producers can grow their businesses. Commercial banks disburse the money that helps get businesses like the farm in Kumisi off the ground.

" We used the line of credit from the World Bank to renovate two henhouses as well as the feedlot. "

Tamaz Edisherashvili

General Director, Poultry Raising Factory of Kumisi

Demand for eggs in Georgia exceeds supply. In a few months, the company will almost double the number of eggs it collects daily.

Employee numbers will increase from 100 to 130—a boon for neighboring villages hard hit by the collapse of big agriculture a decade ago.

When demand is lower, they exports eggs to Iraq. Chicks are bought abroad and raised until they are old enough to lay eggs. The owners dream to one day hatch their own chicks, and also to process chicken meat.

“The potential of our factory is big. We plan to become a giant agricultural company, ” added Mr. Edisherashvili.

Elguja Nozadze also has big dreams. His company processes poultry—two thousand five hundred kilos a day. Slaughtering is done by hand. Teams of women dunk chickens in boiling water then pluck them --a tedious, hot process. With the twin crises of the financial meltdown and last summer's conflict with Russia , credit became hard to find. But Elguja's assembly line is ready. As soon as one last crucial piece of equipment arrives, chickens will be processed mechanically.

“The World Bank credit helped us expand our family business. And it came just in time so we wouldn't have to stop production,” said Elguja Nozadze, Director General, Nozadze-Gantiadi Individual Enterprise . His business got a US$ 500,000 TBC Bank loan targeted at increasing chicken meat production.

Tsira Khabelashili, a poultry worker, lives in the neighboring village. She is on the job caring for chicks six days a week. The only breadwinner in her family, she supports five people on her salary. She says mechanization is a good thing, not a threat. “We're not expecting any jobs to be cut. Just because there is new equipment doesn't mean there are fewer workers ,” says Ms. Khabelashili.

In fact, Mr. Nozadze says he'll be able to employ more people soon. Domestic demand for chicken is so high, he has no need to export, but his new equipment is certified for the European Union, so he'll be ready to export abroad when the time comes.