The President of Georgia Mikheil Saakashvili Held a Meeting Related to the Diversification of the Wheat Market


The President of Georgia Mikheil Saakashvili met the Prime Minister of Georgia Nick Gilauri and the Minister of Agriculture Bakur Kvezereli. A week ago, when the wheat price increased on the world market the President of Georgia tasked the Government to work out a special plan. Mikheil Saakashvili tasked them to present the above-mentioned plan regarding the results of monitoring prices on key product staples and asked them to develop perspectives. As Nick Gilauri stated during last several days the increase in the tempo on key product staples, especially on wheat and flour decreased. As the PM noted it's already possible to diversify the import of wheat and flour. The President got interested what impact the increase of price on wheat had on the other products. Bakur Kvezereli pointed out that wheat is the indicator for wheat-containing products correspondingly it had an impact on the poultry and meat sectors and the prices increased by 30 percent.

The President stated that the increase on prices on definite products was observed, but it is possible to stop non-controlled in prices and stabilize prices.

Nick Gilauri noted that increase in price on wheat in the region greatly depends on the Ukrainian market, in case it opens.

President received information from the Governor of Kakheti on what is expected in region. Giorgi Gviniashvili said that a sack of flour in Kakheti at the present moment is 50-51 GEL. As for this year's harvest is 38 000 of wheat on 36 000 hectares. This is a better indicator compared with the last years period, but it's not enough. The population is satisfied with the fact that the Ministry of Agriculture is going to import such seeds for one-year loan, which has already been probed and in 2001 gave the best harvest. Giorgia Gviniashvili added that the local farmers do not very often know which soil suits a definite harvest. In the Ministry of Agriculture the process of agronomists' selection is going on. Their knowledge and experience will help to improve results. Mikheil Saakashvili received information from the Governor of Kvemo Kartli on the fact whether the seeds of American wheat where implemented in Kvemo Kartli region. David Kirkitadze said that they received 10 000 tones of wheat from the wheat seeded on 6 000 hectares annually. Mikheil Saakashvili pointed out that there is a lot of land, which is not used and in case we use American wheat we might receive ten times more harvest and this is the recourse for three months for Georgia. "In reality Georgia can produce wheat enough for the country the way years ago we had provided energy security with our own resources. The same can be done on the wheat".

Mikheil Saakashvili tasked the Governors to present programs and proposals. "The real situation is as follows: it is true we cannot cover the whole need, but we can produce a big part by the intensification of technology. On the one side it will give us the rise on GDP and on the other side it will increase the number of the local employees", the President of Georgia stated. Bakur Kvezereli noted: "Our aim is to produce wheat up to 45 percent according to the general demand". The President of Georgia got interested in the existing situation in Ajara. Levan Varshalomidze said that a sack of wheat flour is sold for 47-48 GEL, which is in fact 10-12 GEL more if compared with the recent period. And the price on bread increased by 10-12 Tetri. As for the other products the price increased by 15-20 percents. The number of tourists caused the increase of demands.

"Today certain part of products is imported from Turkey. Mountainous Ajara has little land and the population has practically sold the whole products. If there doesn't happen intensification the trade balance will break. Every sphere needs great attention and we must help all enterprises as we have done in Samtskhe-Javakheti. Mountainous Ajara needs it more. The roads and communication are good there. Simply we have to produce more. People save the money that the tourists brought. The prices are going up and it will continue till this money is distributed in every region of Georgia. Now it is very important to distribute money on the Georgian economy and for this the Government must create specific conditions", Mikheil Saakashvili stated.

Levan varshalomidze promised the President that everything will be done in Adjara to make this region successful by means of agricultural projects. The PM said that with the aim of diversification the Georgian Government had a contact with Kazakhstan, Ukraine and USA. As Bakur Kvezereli stated two action plans were worked out. One short term plan, which will help to reduce the impact of price rise and the other long-term plan, which will aim at the production of wheat containing products, both wheat and corn.

The shortest way to import wheat in Georgia is from Ukraine. Accordingly, Mikheil Saakashvili got corresponding information from Grigol Katamadze, the Ambassador of Georgia in Ukraine. "Unfortunately Ukraine has got 5 million less tones of harvest this year. I met the representatives of the Ukrainian Government, who told them that they have given special tasks to import 150 000 tones of wheat in Georgia. The price on wheat in Ukraine increased by 50 percent compared with the last year's indicator. On September 15 the Government will make decision to limit export, but this will not touch us", Grigol Katamdze noted.

"We cannot permanently depend on the existing situation in Ukraine, Russia or Kazakhstan - on how these countries would regulate the existing prices in case embargo is declared. So we will always face this problem if we will not import production from other markets. In Soviet times provider countries were USA and Argentina, so we have to see prices from this countries. The problem on import from USA is the transportation. We need this as an additional warranty to solve the problem so that our entrepreneurs will have no deficiency in providing wheat. As Nick Gilauri stated the Government has already worked on the diversification of market and has positive results with Ukraine. he said that the negotiations are going on with US as well to sign long-term agreement on wheat import. Batu Kutelia stated: "Right now we are working with individual providers and good stocks. Every State that grows wheat has its associations and we work with them. I will have a meeting with the Governor of Arkansas, where we will discuss long-term perspectives in order to guarantee these procurements. Besides this we have already procured wheat seeds that will become the part of diversification as well. This will increase the wheat harvest twice in Georgia".

Mikheil Saakashvili believes that this is not less important issue and that wheat seeds will come to Georgia from US this fall.

"US wheat seeds helped us a lot in Shida Kartli and we hope that in Kvemo Kartli and in other regions it will become possible to use American wheat seeds, that are easy to take care of and at the same time it brings more harvest", Mikheil Saakashvili stated.

The Minister of Agriculture noted that American wheat will start to come to Georgia from September 9.

"We must always be ready to have a provider, who will provide wheat as soon as it is possible in case of some emergency. The security of each Georgian depends on the good work of the Government. Our aim is to do daily monitoring to make sure that these type of problems will not impact our population. We must think of some ways of providing flour to unsecured layers of our society. We have so much expenditures, but we must believe that there are people, who have problems of feeding their families. We have no other important missions than helping these people. This is why we have to put this into our budget and we must use our economic power as much as we can in order to minimize big hits and what's most important - to give people chances to increase their income together with the development of economy", Mikheil Saakashvili stated.