The agricultural sector in Georgia is facing increasing costs this year, primarily due to the rising prices of diesel and other essential resources for spring agricultural work. According to Rati Kochlamazashvili, Deputy Chairman of the Farmers’ Association, the cost of production for farmers is set to rise sharply as a result of these price increases.
The price of diesel, which before the Middle Eastern conflict was around $700, has now doubled, significantly raising operational costs for farmers. This is especially challenging during the spring season when fuel consumption is at its highest due to plowing and planting activities.
Kochlamazashvili explains, “As you know, it’s spring – the time for sowing and planting. This requires a lot of diesel, which is mainly used by agricultural machinery. The recent rise in diesel prices means that the cost of production will inevitably go up. When the sowing period is here, the industry is highly mechanized, which means fuel is a crucial component in determining the overall cost. With the current high prices and no immediate positive outlook, this will lead to higher production costs.”
In addition to the rise in fuel prices, fertilizer prices have also surged, with Arab countries being major suppliers of fertilizers. According to Kochlamazashvili, the cost of fertilizers has increased globally due to price hikes in the international markets. This increase is compounded by higher transportation costs, as fuel price hikes affect all modes of transport. Furthermore, disruptions in transport logistics and the rising cost of insurance have contributed to the overall increase in fertilizer prices.
“There are increased logistics costs due to the higher cost of fuel, and when transport is delayed, insurance premiums go up as well. As a result, fertilizer costs have increased both logistically and in terms of purchase prices,” says Kochlamazashvili.
