Institute for War and Peace Reporting | Giving Voice, Driving Change

Georgia: Grape Farmers Ailing Despite Subsidies

The authorities have sought to help them since the Russian blockade, yet they continue to face serious problems.
By Manana Vardiashvili

Georgia’s government insists the country has recovered from a crisis caused by Russia banning its wine, but farmers are still struggling to sell their grapes.

Georgia is an ancient wine producer, and 74 per cent of its exports flowed to Russia until 2006 when Moscow, citing health concerns, blocked imports in a move analysts say was an attempt to put pressure on the government in Tbilisi.

Since then the harvest festival, called Rtveli, has become a key political moment and the authorities this year boasted of how they had managed to shift exports to other ex-Soviet countries and elsewhere.

“I am not going to be original, and will repeat the words of our president: thanks Putin,” said Giorgi Gviniashvili, governor of the Kakheti region, in a reference to Russian prime minister Vladimir Putin, whose government blocked Georgian wine.

“After the Russian embargo, Georgian wine makers seriously improved the quality of the wine and our wines are now successfully sold on the American and European markets.”

The reason for his optimism came from export statistics showing that sales of Georgian wine abroad rose by 25 per cent in the first eight months of the year.

The authorities have been subsidising farmers since the blockade started, but that has not halted serious problems for grape farmers.

Despite Gviniashvili’s optimism, the grape harvest in Kakheti has been a record low this year at just 87,000 tonnes. In 2007, some 227,000 tonnes were collected. Last year, the government paid out 21.5 million lari, and this year it will pay just 6.1 million (around 3.4 million US dollars)

“For me the crisis has not ended. There were problems selling grapes before the Russian market was closed, but then grapes at least fetched a high price. I could support my family with the money, and even save some. Now I struggle to cover my costs, let alone put anything by,” Anzor Khutsishvili, a resident of the village of Anaga, said.

“No fruit was as cheap as grapes this year, and grapes need the most labour. I have new vines. I work on them day and night, and I don’t want to chop them down, but how long can I keep working just hoping for the future?”

Farmers say that the government’s subsidies have not managed to stop farmers ripping up their vines.

“Since 2006, farmers have not been able to get what they need. Fuel and pesticides have got more expensive, and the price of grapes has fallen,” Demur Shakarashvili, a resident of the village of Kondoli, said. “Even if we don’t suffer from bad weather, the earnings from our vines do not cover the costs. Farmers are just keeping a few vines to make wine for their family, and the other vines are ripped up to plant peaches or strawberries.”

Gviniashvili denies that farmers have been ripping up their vines en masse. He said only that some 200 hectares of hybrid grape varieties had been replaced in Kakheti in the last few years.

“This has taken place at the wish of the local population and as part of a programme from the agriculture ministry. This programme included the payment of compensation and farmers could plant local varieties instead of hybrids, or else plant other varieties,” he said.

“I cannot say that vines are being cut down en masse in Kakheti. If farmers are taking this decision, that means they are counting on earning more money. In Kakheti this year there was a good peach harvest and the prices are high. We do not interfere in farmers’ decisions.”

Experts say that, despite his bullish assertions, it is clear that the Russian embargo rocked the grape farmers. The government’s subsidies, though well-intended, were preventing farmers from developing their crops in other directions.

Nikoloz Zazashvili, head of the company Agroganvitareba, which processes agricultural products to make medicines and other goods, said the government had taken an ineffective course in subsidising the grape harvest.

“The government has no long-term policy for the development of grape farming and wine-making. Sadly, the wine-makers and farmers don’t have a strategy either. The problem of the grape harvest is not a new one, there have been four years since the Russian embargo. Since then the wine-makers have been unable to find replacement markets, and the farmers have not been able to improve quality,” he said.

“The authorities need to work more closely with them, that farmers would be better off planting not grapes for making wine, but for eating. In Georgia, we do not have enough eating grapes, and we import them from Armenia.”

The subsidies also came in for criticism from Malkhaz Kharbedia, president of the Wine Club, which unites wine lovers in the country.

“The Russian market was very large, but our wine-makers were dependant on a not-very-demanding buyer, which led to the death of quality wine-making and the loss of our good name. We still haven’t got our good name back, but our wine is slowly penetrating difficult markets, like those of America and Britain. The embargo affected farmers badly, but the government also acted ineffectively, since subsidies aren’t the solution to the problem,” Kharbedia said.

He said the money spent on subsidies would have been better spent on enforcing the law so substandard wine was not sold under the packaging of expensive varieties, a practise that damages Georgian wine's reputation.

“It’s good when the state helps farmers, but it’s a tragedy when farmers work all year and can count only on subsidies, which will all the same change nothing,” he said.

Manana Vardiashvili is a freelance journalist.