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Instable Quality Makes Georgian Hazelnut Cheaper Compared to Competitor Countries

Conversations with representatives of primary chain of Hazelnut production, Hazelnut processing plants and exporter companies prove that Hazelnut quality is a major problem in Georgia’s Hazelnut sector.

All chains involved in Hazelnut business agree that in 2016 farmers picked low-quality Hazelnut  because of incorrect care, improper picking and storing. Moreover, a major part of farmers  complains about spread diseases and pests. It is also said that  farmers frequently make focus on a volume of harvest, not on quality.

According to the 2016 FAO indicators, Georgia ranks fourth among Hazelnut producer countries worldwide. Moreover, Hazelnut exports occupies growing ratio in Georgia’s agriculture products exports over the past years. Samegrelo-Zemo Svaneti, Guria and Imereti are leading regions in terms of Hazelnut production with more than 80% ratio in Georgia’s total Hazelnut production.

Eugeorgia.info has inquired activities and problems of Hazelnut manufacturers as part of trainings organized in Zugdidi with the financial support of Dutch Embassy.

Zaira Shelia, director of Sachino cooperative, complains about spread diseases and says that Hazelnut harvest was very bad in 2016, despite she had analyzed and fertilized soil.

Jemal Chakhaia, agronomist for AgroHouse farmers service center in Zugdidi, said that high humidity has mainly provoked various diseases. This factor could have been prevented by correct cutting and keeping due distance between Hazelnut trees, he said.

Gela Abuladze, farmer and owner of Hazelnut processing plant, talks about correct care for Hazelnut and harvest spoilage: “To pick high-quality Hazelnut, we should carry out due procedures in spring, starting from Hazelnut roots, including; treatment-cleaning, making channels in case of marshlands, fertilizing soil, cleaning the soil from grass. I pick harvest three times. Some farmers wait for harvest for a month and then pick Hazelnut at once, but this practice worsens quality of Hazelnut and grows humidity in the crop. Because of improper storage practices, population has worsened Hazelnut  themselves. Previously, pests were less spread in Tsalenjikha, but they multiplied after picking harvest. In 2016 high humidity in environment increased Hazelnut  humidity too; In previous years Hazelnut humidity was 12%, in 2016- 42%. Consequently, less job was required in previous years. Such high humidity hindered Hazelnut drying process at rooms. That’s why their harvest spoiled”.

Abuladze owns Hazelnut plantation on 40 hectares. His processing plant buy Hazelnut from local population too. He breaks Hazelnut and sells it to SRT processing exporter company.

“For the purpose of improving the storage practice and concentrating farmer’s focus on quality, the plant introduced new rules in 2016. Previously, the company used to buy all sorts of Hazelnut for the same price, while in 2016 the price was determined due to recovery yield, i.e. ratio of valuable Hazelnut in delivered Hazelnut”.

Shalva Abumava, head of Darcheli Hazelnut cooperative board, noted that in 2016 he failed to sign an agreement with Italian partners because of low-quality harvest. He has built Hazelnut drying facilities and storehouse by state financial component. The built infrastructure was handed over to the cooperative in leasing and in 2016 we transformed it into processing enterprise. We added production machineries and offered farmers to process it. Moreover, we conducted trainings for cooperative members in Hazelnut growing and picking issues. Currently, cooperative activities include Hazelnut drying-storing, processing and sales.

Darcheli Hazelnut plans to export product to foreign markets too, Abumava said and stressed: “ To this end, we should receive top quality Hazelnut, first of all, while quality control cannot be carried out at processing plants if farmers deliver low-quality polluted Hazelnut. We plan to introduce Global Gap to control the level of pesticides or fertilizers, as well as their implementation in agricultural terms. Small farmers also realize the importance of all these aspects – their Hazelnut could be sold for 6 GEL in case of due quality, but they have sold one kilogram for 3 GEL. This happens because they cannot care for garden in due manner.

The cooperative receives Hazelnut from about 46 hectare land plot. Our average harvest capacity is 1.5 tons on a hectare, but in my personal plantation I pick 3 tons on a hectare. Analysis of Hazelnut price chain conducted by USAID also proves low indicators of Hazelnut harvest and consequently, low revenues.

We know that we had low-quality Hazelnut harvest in 2016. That’s why we have faced problems with reaching big scales, Inga Archbaia, director of GEO Food Europe company, noted.

“The enterprise launched operation in 2016 and processed about 70 tons of Hazelnut in the first year (bought Hazelnut from about 250 farmers).

The enterprise was founded by a Latvian investor. They make focus on quality aspects and they plan to introduce ISO standards in production.

Eugeorgia.info was interested in requirements that processing enterprises pose to farmers, as well as in criteria for accepting Hazelnut.

GEONUTS director Shalva Dvali noted that the main criterion is Hazelnut recovery yield and humidity level, however there are some processing enterprises that accept low-quality Hazelnut too. Consequently, farmers find place, where they can sell even low-quality Hazelnut. Improving Georgian Hazelnut quality is also very important, otherwise we will not be able to compete with our competitors in Azerbaijan, Turkey and Italy», Dvali noted.

Leading companies control quality themselves and introduce international standards in their production. For example, Nutex founder and executive director Mamuka Beriashvili says:

“We buy Hazelnut from small farmers and processing enterprises. We control microbiological and chemical pollution at laboratories and only unspoiled product is used in our production. We do not buy Hazelnut chaotically. Entrepreneurs from which we buy Hazelnut are kept under monitoring, and after the product are stored at our warehouses, we control  chemical and microbiological parameters in continuous regime, as well as temperature regime in production and warehouses, comparative humidity. We also care for pest control and fumigation system. We also provide tracking system. Each pack or sack has its own unique code. Suppliers are also classified. If supplier, that is primary level chain of production, does not satisfy due standards, then these standards turn useless. Moreover, if we want to adjust Georgian production to European level, existence of Georgian brand is also very important.

 Nutex currently is passing BRC FS certification process.

Beriashvili makes accent on Georgian Hazelnut’s lower prices as compared to foreign competitor products. «Georgian Hazelnut is the cheapest product among other competitors, because quality standards are not protected in our country. Azerbaijani and Turkish Hazelnuts are more expensive due to their quality. Two years have passed after processing enterprises started thinking of quality improvement.

It is necessary to improve quality to compete with others. According to recent forecasts Hazelnut production may increase considerably on global level and this factor may become of vital importance for Georgian Hazelnut if the quality is not improved», Beriashvili said.

Statistics of Hazelnut prices of Georgian and competitor countries is given in the charter due to FAO indicators. Hazelnut prices in Georgia are lower compared to prices in Italy, Turkey and USA, while in 2014-2015 Georgian Hazelnut  was more expensive compared to Azerbaijani Hazelnut, according to official indicators.

Mariam Lukashvili/SET MA degree student