Changes may soon be introduced to Georgia’s Agro Co-Financing State Program, launched on July 1, potentially affecting beneficiary financing terms and cooperation with banks. One model under consideration would place the state’s future co-financing contribution in an escrow account after the Rural Development Agency approves a business plan and signs an agreement, providing banks with additional security.
The Agriculture Ministry said the escrow mechanism was considered when designing the program but was ultimately not included. “Depending on the implementation process and identified needs, the issue may be reviewed again in the future,” the ministry told BMG. Currently, six banks participate in the program.
The new model differs from the previous system, under which the state subsidized bank-approved loans for nearly 13 years. Now, the Rural Development Agency first evaluates and approves projects, while state funding is provided only after the investment has been completed and verified.
The Farmers’ Association says the post-financing model is the program’s main weakness, as farmers lack certainty that their projects will ultimately be approved and funded. Banks are also demanding higher collateral, making the program difficult to access for medium-sized family farms. The ministry said that two months after launch, only eight projects had been approved, without disclosing how many applications were submitted.
