Dairy farming in Georgia becomes more productive – and profitable

Georgia has all of the ideal conditions for dairy farming. And demand for milk, cheese and other dairy products – many of which are produced only here – continues to grow.

Recognizing that potential, FAO and the European Bank for Reconstruction and Development (EBRD) have been supporting Georgian commercial dairy farmers to modernize their operations and produce more high-quality, safe milk.

The two organizations, with support from Georgia’s Ministry of Agriculture, hosted the First Caucasus Dairy Congress in Tbilisi in March, drawing around 250 dairy farmers, processors, government officials and other industry players from across the Caucasus and Eastern Europe.

The Congress, organized in conjunction with the East European Dairy Forum, gave participants a chance to share knowledge and explore investment options.

“This event was a brilliant opportunity for farmers and milk processors to meet and discuss sector issues with international experts,” said Ana Mikadze, a cheese producer and chairperson of the Georgian Cheese Guild. “I also found business partners who can supply high-quality raw milk for processing, which will help me expand my business.”

The Congress concluded with a visit to two commercial dairy farms. One, Kvareli Baga, is an EBRD client and Georgia’s largest milk producer, with over 350 milking cows. The other, Shtori Ltd., has invested more than US$ 700,000 in modernizing its facilities to improve milk safety and hygiene.

Modernizing production
Since the project began, commercial farmers trained by FAO and the EBRD have invested upwards of US$D 2.5 million in upgrading their operations: building new barns, buying more productive livestock and improving milk production technologies – all resulting in higher yields and profits.

FAO and the EBRD arranged for 20 commercial farmers to visit dairy farms in Ukraine and attend workshops led by top Ukrainian dairy experts.

“The study tour to Ukraine was particularly valuable, as we saw the path we still have to go through,” said Enri Kobakhidze, co-owner of Shtori Ltd. farm, with 80 milking cows. “With the help of project experts, we have not only increased productivity with balanced feeding, but also improved animal health and reduced calf mortality.”

Shtori Ltd. delivers its milk to processing companies on a contract basis, securing a stable price throughout the year, which is still rare in Georgia.

“Commercial dairy farmers in Georgia have made considerable strides in a short time, with some producers improving production by 20 percent in less than a year,” said Victoria Zinchuk, Head of Agribusiness Advisory at the EBRD. “Further significant investments are needed along the value chain to transform the industry.”

Greater access to information and knowledge
Using their own resources, a group of farmers set up the Association of Commercial Milk Producers of Georgia, modelled after a similar association in Ukraine.

“We have hired international experts to help change our business model,” said Nikoloz Beniaidze, co-founder of the Association. “We aim to become a knowledge centre for other commercial farmers in Georgia, and actively cooperate with the European milk associations we met at the Congress.”

The EBRD and FAO have reached around 2,000 people along the dairy value chain through the training, study tour, events, direct consultations and the “Georgian Dairy” web portal. The portal features educational videos, presentations, publications and a question-and-answer space.

Finally, a modern dairy production manual in Georgian language will be available soon.

12 April 2017, Tbilisi, Georgia