Debates with mayoral candidates Dimitri Lortkipanidze, Davit Narmania, Nika Melia and Kakha Kukava were held on 29 May 2014 on TV3. Davit Narmania, mayoral candidate from the Georgian Dream coalition, stated during the debates that new enterprises have been created under the agricultural programme. Kakha Kukava denied this statement and added that no new enterprises have been created under the agricultural programme.”FactCheck
verified the accuracy of Kakha Kukava’s statement.
The Rural and Agricultural Development Fund, a non-profit non-commercial legal entity, was established on 22 June 2013 in order to implement the Rural Assistance Programme. Two legal entities of private law are the donors of the Rural and Agricultural Development Fund: the Rural and Agricultural Development International Charity Fund and the International Charity Fund Kartu.
According to the information from the Ministry of Agriculture, the Preferential Agro-Credit project was approved at the meeting on 26 February 2013 by the board of the Rural and Agricultural Development Fund. The project intends to acquire preferential credits from financial institutions in order to create new agricultural enterprises and re-equip existing enterprises with required technology. The Agricultural Project Management Agency, which started up in March 2013, is implementing the Preferential Agro-Credit project adopted by the Ministry of Agriculture. Altogether, 13 banks, two microfinance organizations and two leasing companies are involved in the project.
The preferential Agro-Credit project consisted of three components initially: 1)interest-free commodity credit (instalment) for small farmers, 2) preferential agro-credit for medium and large farmers and 3) preferential agro-credit for agricultural enterprises.
Within a year of the project’s start, it was improved and new components were added according to the needs and demands of farmers and entrepreneurs; namely, 4) preferential agro-leasing, 5) preferential agro-credit for grape-processing companies, 6) preferential agro-credit for citrus exporting and processing companies and 7) preferential agro-credit for agricultural products processing companies funded by matching grants.
A summary report on the activities of the Preferential Agro-Credit project is published on the web-site of the Ministry of Agriculture. According to the report, 14,100 preferential agro-credits worth GEL 318,000,000 were given to every region in Georgia in different fields of agriculture of 4 April 2014. The expansion and re-equipment of 70 new and more than 400 existing enterprises were financed during one year.
Within the scope of the project’s third component, 482 agro-credits were given in total. Of this number, there were 215 in Kakheti, 96 in Kvemo-Kartli, 24 in Tbilisi, 27 in Samegrelo, 40 in Shida Kartli, 39 in Imereti, 20 in Samtskhe-Javakheti, five in Guria, seven in Mtskheta-Mtianeti, six in Adjara and three in Racha-Lechkhumi.Source: Ministry of Agriculture of Georgia
Also according to the report, 70 new enterprises were financed under the scope of the the component. On average, GEL 300,000 worth of preferential agro-credit was given to an individual enterprise. In terms of the regional distribution, new enterprises were opened in Kakheti-26, Kvemo-Kartli-17, Shida-Kartli-10, Samegrelo-2, Samtskhe-Javakheti-2, Guria-3, Adjara-3, Mtskheta-Mtianeti-2 and Imereti-5.Source: Ministry of Agriculture of Georgia
Businesses created within the scope of the third component are distributed according to sectors as follows: storage refrigerators-13, pig breeding-2, greenhouses -5, viticulture-3; nuts processing-2; livestock-5, fisheries-2, packaging materials-1, mixed breeding-1 and tobacco industry-1.It should be noted that FactCheck
has already published two articles on the Preferential Agro-Credit project. We published the first article on 30 January 2014. According to the data in this article, 49 new and 155 already existing enterprises (for the purpose of re-equipment) had been funded under the Preferential Agro-Credit project by the end of 2013.At that time FactCheck tried to contact the owners of the newly-funded 49 enterprises to inquire about the process of the construction of their enterprises. We were able to contact some of the beneficiary entrepreneurs. Of the eight enterprises we researched, six of them were established in 2013 after the Georgian Dream coalition came to power. In order to take a look at the activities and the number of employees in the abovementioned enterprises, see the link. FactCheck
also checked the registration dates of those 49 enterprises registered at the Public Registery. We found out that 17 enterprises were registered in the period of 2012-2013 and the remaining 32 in previous years.FactCheck
published a second article on the enterprises created under the Preferential Agro-Credit project on 27 May 2014. In addition, we analysed the information about the activities of several of the enterprises funded under the Preferential Agro-Credit project published on the official Facebook page of the Agricultural Project Management Agency. We found out that eight enterprises were registered in the period of 2012-2013 at the Public Registery and 14 of them were registered in previous years.
Kakha Kukava focused on the Samegrelo region during the debates where he indicated that no new enterprises were created. We found out the following information on the official Facebook page of the Agricultural Project Management Agency: Abasheli Farmer Ltd was created in Samegrelo; specifically, in Abasha, under the Preferential Agro-Credit project which received a credit for the development of livestock and employs ten people. It was registered at the Public Registery on 12 October 2012. Additionally, Unifarm Ltd was registered at the Public Registery on 17 October 2013. The enterprise is located in Senaki. The enterprise works in livestock and employs 37 people.Conclusion
According to the annual summary report on the activities of the Preferential Agro-Credit project, 14,100 preferential Agro-credits worth GEL 318,000,000 were given to every region in Georgia in different field of agriculture as of 4 April 2014. The expansion and re-equipment of 70 new and more than 400 existing enterprises were financed during one year.Last year in October FactCheck
checked the registration dates of almost every enterprise funded under the Preferential Agro-Credit project by that time. As of October 2013 49 new enterprises had been funded under this project. Of these enterprises, 17 were registered in the period of 2012-2013 and the remaining 32 in previous years. Further, 17 enterprises started their activities after they received a preferential agro-credit which means that 17 new enterprises were created.
We also analyzed the official data of the Agricultural Project Management Agency about the newly- established enterprises. According to that data, we found out that several enterprises were established after the Georgian Dream coalition came to power.
Besides that, despite the fact that every new enterprise was not created after the Preferential Agro-Credit project came into force (not in 2013), this does not mean that the activities implemented by these enterprises cannot be considered as a start-up since the start-up does not necessarily imply that it is a newly-registered enterprise. The enterprise might have previously existed but started its new activity with the help of the acquired agro-credit. Therefore, the enterprise might have been registered several years ago but its activity is new. All of these enterprises have received funding under the Preferential Agro-Credit project and started or resumed their activities.We conclude that the statement by Kakha Kukava, “No new enterprises have been created under the agricultural program,” is LIE.