Strengthened Fresh Herbs Value Chain Leads to Increased Exports

Small-scale farmers in Georgia face numerous challenges. Deficiencies in modern production practices and technologies combined with a lack of access to agricultural credit are among the primary hindrances to the development of the country's fresh herbs industry.

Herbia, Ltd., is a fresh herb consolidator and exporter based in Imereti's Tskaltubo District. ACDI/VOCA began collaborating with Herbia through its USAID-funded AgVANTAGE program in order to strengthen Georgia’s fresh herbs value chain.

In the fall of 2007, Herbia acted as an intermediary for 150 smallholder growers, each owning at least 650 square meters of greenhouse space, to obtain agricultural credit from the Bank of Georgia. Serving as a reputable guarantor, Herbia provided company real estate as collateral to the bank and backed it up with its professional credentials.

Now each farmer has working capital to cover operations and input supply costs. They have 12 months to repay the loan, which is based on annual market interest rates that range from 16 to 18 percent.

“We were already very thankful for Herbia because it provided a steady and fair market for our produce,” said Alexander Janelidze, a local supplier fresh herbs grower from the village of Tkachiri. “Without their support, these financial resources would not have been available to us. This intervention enables us to grow and sell high-demand herbs in a timely manner.”

The effort was also important to create reliable suppliers for Herbia. Seasonally, farmers supply Herbia with 300 tons of herbs, equivalent to a total value of $1.35 million. The company owns a modern consolidation and packing center equipped with a forced air cooling system and is applying the concept of cold chain integrity in its operations. It is anticipated that the exporters’ facilitation will allow growers to increase production capacity by approximately 25 percent.

“We believe that giving farmers access to credit is crucial for industry development,” said Herbia's director, Zurab Janelidze.