Georgia’s agricultural sector is calling for a reduction in the excise tax on diesel, saying the sharp rise in fuel prices is directly hitting local production, increasing production costs and making Georgian farmers less competitive against products from neighboring countries.
Vakhtang Bezhitashvili, Chairman of the Fruit and Vegetable Exporters Association, said that if the current trend continues, higher prices for agricultural products will be inevitable.
“Fuel costs account for between at least 20% and around 50% of production costs, depending on the product. The increase in diesel prices is particularly important, as major agricultural operations — from plowing and sowing to storage, transportation and final sales — depend on diesel. One solution is international practice, where governments supporting local production take measures such as introducing a floating excise rate. This would put less pressure on producers, limit increases in production costs and make competition with imported products more possible,” Bezhitashvili said.
Bezhitashvili said sector representatives met with officials from the Ministry of Environmental Protection and Agriculture last week. The sides agreed to establish a special working group that will address not only the diesel excise tax, but also reducing bureaucratic barriers and improving tax administration.
