Hospitality, Friendship and Results

Posted on April 8, 2011 by Patrick Fine, Vice President of Compact Operations

During the last week of March, MCC Board member Alan Patricof and I visited Georgia to mark the completion of the 5-year Georgia Compact, which officially completes on April 7th.

After three days of travelling throughout Georgia to see the work financed by MCC and meet with farmers, entrepreneurs, NGOs and religious leaders, and our government counterparts, I have no doubt that the Georgia compact will be remembered for its remarkable achievements, and for how it has demonstrated that the United States and Georgia are not only strong allies, but good business partners.

On our first day in country we drove for several hours down the newly rehabilitated Samtskhe-Javakheti road that links the previously isolated southern part of the country to the rest of Georgia.  This investment opens up trade with Armenia and Turkey, and offers the prospect of revitalizing an area that was ignored during the Soviet era.  We stopped at a new grocery shop that recently opened along the road. I hope it is a portent of the business development that will spring up along this strategic route.

We also visited the ancient Jvari monastery and the cathedral at Mtskheta, marvelous legacies of Western civilization from Georgia’s medieval past.  As we travelled the road, crumbling fortresses crowned the peaks of mountains – harkening back to the time when the famed Silk Road passed through Georgia.  I thought of President Saakashvili’s comment that “Georgia is not just a European country, but one of the most ancient European countries,” and of the country’s development strategy to revive its role as a crossroads between Asia and Europe.

Our second day was spent in the Kakheti region, where MCC financed dozens of small projects as part of an activity designed to develop the country’s huge agricultural and agribusiness potential.  It is a point of great satisfaction that MCC financing helped 280 agribusinesses expand, resulting in the creation of over 2,800 jobs.  At the 6th-century Alaverdi monastery, nestled on a rich plain at the foot of the soaring Caucasus Mountains, we saw a modern wine-making operation using traditional methods, and sampled the fruits of their honey-making and horticulture enterprises.  It was impossible not to think of the tremendous potential for tourism in this scenic and historic setting.  Before long I bet we’ll hear about people traveling to Georgia for tours of its historic wine country.  When they do, they will have the pleasure of discovering the warmth and hospitality of the Georgian people.

We concluded a very productive visit with a well-attended public ceremony in Tbilisi to officially close the compact.  With a great sense of satisfaction, we were able to toast a U.S.-Georgian partnership that has built essential infrastructure and created new opportunities that are generating jobs and raising incomes. 

A Model That Works

Posted on April 8, 2011 by Alan Patricof, Board Member

I met a farmer who sells cucumbers and tomatoes and is benefiting from the Agribusiness Development Activity.  A total of 280 agribusiness and farm production projects have been funded, resulting in over 2,800 jobs.

Agri-Food Expo Highlights How MCC Investments Are Creating Jobs in Georgia

Posted on December 17, 2010 by Jim McNicholas, Resident Country Director, Georgia

 

On November 29, 2010, Millennium Challenge Georgia (MCG) hosted a closing ceremony and exhibition for its agribusiness development program.  To celebrate this milestone, 60 of the program’s 283 agribusiness projects showcased their products at an Agri-Food Expo, with Georgian government officials as well as bankers and supermarket chains in attendance.

Since 2006, MCG and its implementing partner, CNFA, a U.S. non-profit, have co-financed 182 primary producers, 43 businesses projects that provide services to farmers, and 58 businesses that enable value-added and value-chain production.  MCG has invested $15.9 million in this program and, according to CNFA, Georgian citizens have invested $20 million more.  As of early autumn 2010, MCG reported that 2,613 jobs had been created as a result of agribusiness development program activities. 

At the Agri-Food Expo, Mamuka Tskioridze and Malkhaz Gabunia displayed their orange persimmons neatly packed in wooden boxes, alongside fresh salad greens and herbs.  With their company’s 1:1 matching investment and MCG’s $149,000 co-financing, these entrepreneurs have expanded their greens export business both in terms of volume and the types of products being offered to Belarus, Moldova and Ukraine.  “In the past, every product we bought from farmers we had to pack and ship that day because if not we would lose the product,” said Mr. Tskioridze.  “With the cold storage warehouse [which was also co-financed by MCG] we now have time to collect more products from our farmers and export using fewer trips.” 

One of the most successful projects to emerge from MCG’s agribusiness program was the establishment of 33 for-profit, privately owned, Farm Service Centers throughout Georgia.  Before the centers were opened, farmers had to get their supplies from stalls in various local markets.  These decentralized transactions made it difficult for farmers and their suppliers to build relationships and communicate with each other.  Now, one-stop Farm Service Centers have been established in every region in Georgia and have generated 100,000 transactions.  In addition to serving as a commercial exchange, the centers also provide opportunities for the exchange of information — knowledge warehouses where the Ministry of Agriculture, various Community Based Organizations, and individual farmers can showcase new farming techniques and relay important announcements.

Georgia’s Prime Minister, Nika Gilauri, closed the Agri-Food Expo by noting several program results, “More than 2,600 jobs have been created and these jobs are not just short-term jobs; they have long-term perspectives and provide long term opportunities…  Millennium Challenge Georgia proved that investments can be made in this sector and be successful.”

MCC and USAID Bring Mechanization to Georgian Farmers

Posted on January 11, 2010 by Chelsea Coakley, Program Analyst, Department of Compact Implementation

Investments in agricultural development are integral to MCC’s commitment to sustainable poverty reduction in rural Georgia. The Millennium Challenge Georgia Fund (MCG), implementing Georgia’s $395 million MCC compact, is nearing completion of the Agribusiness Development Activity (ADA), a $20 million program designed to strengthen commercial linkages among agricultural service providers, producers, processors, wholesalers/distributors, and markets. The 287 targeted matching grants already awarded to Georgian agribusinesses and farmers are supporting sustainable, long-term growth.

In addition to providing grants focused on enterprise and value chain development, MCG responded to a request from the Georgian Ministry of Agriculture to support the introduction of new agricultural machinery into the country by developing a new ADA component. The inability of small farmers to access machinery has been cited as a major constraint to agricultural development in Georgia. To meet the needs of Georgian farmers for increased mechanization of their agricultural techniques, MCG is providing grants up to $150,000 to a number of farm service centers. Over the past 4.5 years, ADA has focused, in part, on the creation of a privately-owned retail network of farm service centers to provide a complete range of agricultural goods and services for Georgian farmers.

USAID has also responded to the need for new agricultural machinery in Georgia. In early December 2009, USAID launched the Access to Mechanization Program, a $5.1 million program that will provide similar grants, in combination with a number of other funding mechanisms, to establish 25 to 30 machinery service centers throughout the country. The MCC and USAID programs complement each other and maximize impact by promoting a commercially-sustainable model of agribusiness that benefits farmers as well as the owners and employees of farm service centers and machinery service centers throughout Georgia.

As a result of MCC-funded farm machinery grants and USAID’s newly-launched Access to Mechanization Program, beneficiary farmers will now be able to plant, cultivate, and harvest their crops far more efficiently. Georgian farmers are motivated to move toward greater mechanization, as they expect the effect to be transformative. By increasing productivity and improving the quality of their existing crops, farmers will be able to generate greater income and secure necessary capital for upcoming seasons.

Eyewitness to Change in Georgia: Lessons of a Greenhouse and a Pipeline

Posted on August 25, 2009 by Chelsea Coakley, Program Analyst, Department of Compact Implementation

Upon landing in Tbilisi, Georgia, I had over an hour to prepare for our teams departure for the opening of a new greenhouse complex, so far the largest grantee of MCC’s Agribusiness Development Activity (ADA) in Georgia, which provides grants for small- to medium-sized farmers to access modern farming supplies and increase agricultural productivity. We drove four hours into west-central Georgia to participate in the opening ceremony with Georgian government representatives, municipal authorities, and staff from Millennium Challenge Georgia Fund (MCG). The event was as welcoming as the project was innovative, and I felt honored to be part of this much-anticipated day.

Mr. Zurab Janelidze, who invested more than $450,000 to match $299,736 in MCG grant funding, developed his vision for Herbia LLC, a comprehensive system for greenhouse production and distribution of fresh herbs and vegetables. Herbia was established on two hectares of land in the rural Georgian town of Tskaltubo and is linked to an existing cold storage facility one of the few in rural Georgia - that also has the capacity to pack, store, export, and cater to local demand. Mr. Janelidzes strategy will serve as an example for high-value agricultural production in Georgia, while earning substantial revenues from the export of fresh culinary herbs and greenhouse tomato production, which will be sold domestically. The enterprise will also purchase fresh herbs from small farmers in the area to augment its own production, packing, and exporting. Upon touring Herbia LLC, its potential to make a positive impact in the Imereti region was evident as I walked through several greenhouses and saw many local workers picking produce.

I also visited multiple phases of the MCC-funded Energy Infrastructure Rehabilitation Project in the Mtskheta Tianeti region. This project is rehabilitating an essential source of energy for the people of Georgia, which, at over 2,200 meters at times, is one of the worlds top three highest-elevation pipelines, making rehabilitation efforts not only challenging but also absolutely critical due to the remote nature of these repairs.

The Energy Infrastructure Rehabilitation Project is an exemplary case of true country-led development, as all phases of this project have been implemented by a Georgian company. The Georgian Oil and Gas Company currently operates the pipeline on the governments behalf and has been responsible for the design and supervision of the entire project. Improved management of the pipeline, together with MCC investments for repairs, have already resulted in a decline in gas leakage, which means increasingly reliable access to natural gas for Georgian citizens and their enterprises.

Distance creates a clearer perspective on experiences. Now back in Washington, I am able to reflect on my recent trip to the field and can say I feel privileged to have observed these transformative projects in person. It was truly exciting to witness the focused energy and enthusiasm of the Georgians at work on a daily basis. It is clear that MCCs partnership with the Government of Georgia is highly valued and will continue generating positive results.