Poultry farming in Georgia is on the edge of extinction

“Soon, Georgia will not have any local poultry farming,” Mamuka Nozadze, head of local poultry producer Nozadze Poultry, told the local news outlet Business Georgia. Skyrocketing production costs push poultry producers to “revise their pricing policy”, but the rise in farmgate prices doesn’t help farmers to stop suffering losses, he added.

“We may have to curtail operation…”

“We may have to curtail operation. The state does not take any steps to support [the industry],” Nozadze said, citing, in particular, an appeal from the farmers to abolish VAT in the poultry industry. Over the past few years, Georgian broiler meat and egg companies have repeatedly asked the authorities to bring the taxation in the industry in line with the government policy on the food market.

“Agriculture is exempt from VAT, but for some reason, this does not apply to poultry farming,” Nozadze said, stressing that there is no clear explanation to insist on charging VAT from poultry farmers.

In previous years, state aid would come in handy for the poultry industry to expand capacities and ramp up production. Currently, poultry farmers say they need it to stay afloat.

“All components needed for production have risen in price, for example, chicken meat production depends on imported corn. Producers pay high taxes, while gas and electricity tariffs have risen to unrealistic levels,” Nozadze said.

He estimated that prices for some raw materials have doubled since the beginning of the year. The price of corn on the Georgian market jumped by 60%. Nozadze warned that despite strong food inflation in the country, Georgian farmers could not raise prices to the same extent.

“We had a meeting with industry representatives, and most of them are discussing the possibility of suspending operations,” he said.

“If prices are raised as we should raise them, the chicken will become more expensive than beef, and no one will buy it. Therefore, we have to constrain the price rise, and as a result, we sustain losses. Consequently, at the end of the year, a shortage of local production is expected, and over time, the country will switch to imports. We will no longer have local production,” Nozadze said.

In May 2022, the Georgia government estimated that the country had 10.2 million heads of poultry, 9.2% less than in May 2021.