The farm of the dairy company "Shiraki" is closing. The information was initially spread by Rusudan Gigashvili, the head of the non-governmental organization "Farmer of the Future." According to her, other farms, along with "Shiraki" are also closing.
Bm.ge contacted Nikoloz Benianidze, the founder of "Shiraki," to verify the information. He confirms that the farm is closing. "I had 400 livestock, and I am selling them. I will probably keep only 30. Then, if there is interest in the country, I will revive the business, but at this stage, I can not keep the business. It is unprofitable, "said Beniaidze, according to whom he has invested up to 8 million GEL in 9 years.
Reasons
The depreciation of the lari and, as a result, the rise in prices of imported products - these are the main reasons why the businessman decided to close the farm.
"Ready-to-eat feed for dairy cows contains imported whey. This is the main problem. If last year we paid 1.65 GEL for 1 kg of whey, now we pay 2.50 GEL. The main issue was the GEL exchange rate and, as a result, the rise in food prices. In total, if nine years ago, keeping one cow cost 6 GEL per day, now it exceeds 20 GEL," Nikoloz Beniaidze explained, adding that "despite this, the price of milk has not increased."
Another challenge that the dairy industry is discussing is imported milk, which is sold cheaper than local products.
Solutions
As for the way out of the situation, Nikoloz Beniaidze says that the Ministry of Agriculture has been informed about the problems of dairies, they have also heard offers from businesses, but to no avail.
"Of course, there are solutions. We have informed the Ministry about our problems many times, but we are tired of complaints and requests. We talked about subsidizing whey, but we were refused. We asked for VAT exemption - we were refused. We asked for a subsidy for 1 liter of milk, but this issue got left unattended. In Europe, 1 hectare of land is subsidized from 200 to 300 euros. Products imported to Georgia are already competing with the price of Georgian products because it is much cheaper for farmers to produce there. We have the opportunity to meet the consumption of milk in the country. We have the technologies. We also have the resources. The sector should be paid attention to. Subsidizing will be the solution," Benianidze said, adding that the dairy industry needs quick help.
"I am not upset and angry, but the field needs to be helped urgently. There are only a handful of farms in the country, and others will share my fate. We know how to get this out of this situation, but they do not care," he said.
What's the Ministry's Answer?
In a conversation with Bm.ge, the First Deputy Minister of Environmental Protection and Agriculture responded to the industry's complaints. According to Gela Khanishvili, the field of milk production is developing very well in the country, and the number of newly opened enterprises speaks for itself.
"It's sad if some farmer can't compete. Maybe it's a management problem or some other reason. There are a lot of support projects in Georgia that help develop agriculture, including the dairy industry. There is nothing special about farmers looking for different ways, different solutions. Overall, we have good statistics. Nothing alarming is happening in this area. Saying that farms are closing is incorrect," - said Gela Khanishvili.
As for the specific farms and their problems, the Deputy Minister says that he is informed about the problems of all three farms (Shiraki, Shtori, Green Ranch), and has talked with the management of all three farms and "in fact, their problems are completely different. "Among them, they have management problems."
"I know all three, I know the problems, I have visited their farms, I have talked to all three of them. I have talked about many topics including management, proper calculation of finances ..." - says Gela Khanishvili and adds that the enterprises have benefited from state support, including "preferential agro-credit."
The Deputy Minister insists that there is an equally competitive environment for all businesses in the country.
"Any business can go bankrupt due to various circumstances, but there are all conditions in the state for this not to happen. The state has created an equal competitive environment for all businesses, created free market conditions, does not lobby anyone in the market, subsidizes anyone additionally, etc. Thus, 3 farms may be closed, but 5 farms were opened last year," said Gela Khanishvili.
