Georgia’s glory days, as far as fishing is concerned, are long gone. It was fishing, as Neal Ascherson wrote in The Black Sea, from Pericles to Putin, that brought the Black Sea onto the map back at the end of the Bronze Age. Until 100 years or so ago, it was “a place of almost monstrous abundance,” including the migration of around a million tons of anchovies a day on a circular route that took them past Batumi. The search for fishing (for food, and the anchovies for fertilisers) and trading opportunities first led the Greeks, then Romans and Phoenicians, to establish routes to and across the region. But, by the 1900s, overfishing and massive pollution were decimating the Black Sea shoals.
Small fish in a growing pond
Now, Georgia is a minnow in the still sizable Black Sea fishing industry, which numbers 11,600 fishing vessels, according to the FAO’s last count, and lands around 400,000 tons of fish a year. However, that is no deterrent to the MEPA; demand for fish, both farmed and captured, is growing internationally, rising numbers of tourists are increasing demand locally, and the industry is a source of badly needed rural jobs. Georgia should also be able to benefit from significant advances being orchestrated by the FAO in managing the growth of the Black Sea fisheries’ resources.
Aiming to encourage the Georgian fish sector’s development, both at sea and on farms, and providing badly needed information to back FAO and EU programs, two new reports have come out of the EU in recent months. The first, Freshwater Aquaculture Value Chain Analysis in Georgia, was produced for the European Commission (EC) and gives some detail on what is being produced, and by whom. The second, Aquaculture in Georgia, financed by the EU and French government agency Agence Française de Developpement (AFD), covers both sea and land-based fish production.
What has not changed over the centuries is the Black Sea fishermen’s main quarry. 95% of the catch is anchovies, followed by horse mackerel, most of which is destined not for the table but to be processed as fish meal and oil
“The support to the aquaculture sector … may create unprecedented international trading opportunities, as well as enriching the country’s domestic market,” stated Javier Sanz-Alvarez, FAO-EU Program Coordinator last October at a workshop held at ExpoGeorgia to prepare the National Aquaculture Development Strategy of Georgia.
Figures for Georgian fish consumption have been showing imports of around $30-40 million in recent years, although they dipped, along with tourist numbers, during Covid-19. Supplies come from as far afield as Norway, Iceland, Estonia, Canada, the US, Asia, and Spain, but also from neighboring Armenia and Turkey. The EC has grumbled that there are not a lot of up-to-date statistics on the Georgian fish sector, which, apart from the difficulty in making money, may owe something to its relative lack of local popularity. The FAO, in its last assessment, put Georgian annual consumption per capita at 7.83kg in 2017 against the world average of 20.5kg and 42 kg in top consumer China. Yet, historically, FAO figures show Georgian consumption was stable at around 19 kg a year in the 1980s.
However, both entrepreneurs and the government are aware of the opportunities in Georgia’s much diminished fishing sector – a dynamic and well-established industry in Soviet times that produced 203,000 tons (about twice current levels) a year, according to the FAO. What has to be overcome, following the long-term impact of the dire economic conditions of the 1990s, is a lack of knowledge and money.
For marine fishermen, there is strong competition from Turkish and Ukrainian ships. Much of the marine fishing, even in Georgia’s own waters, is being done by Turkish fishermen, with the MEPA noting the registration of 20 Turkish boats with circular nets (seiners) for anchovies. A research report on the Marine Fishing Sector in Georgia published last year by the Georgian office of international consultants PMCG, found that the main factor hindering expansion was the need for “renewal of the Georgian vessel fleet.” It stated that “enterprises mainly deploy outdated, Soviet-era vessels.” The superior capacity and technology of Turkish vessels enable them “to catch in 16 days the same amount captured by the Georgian seiners for the entire season.”
However, the government is keen to build on and modernize its albeit tiny Black Sea shipping fleet. The last numbers issued showed the granting of nine fishing licences and the registration of 34 small fishery vessels and 250 artisan fishing boats. Enterprise Georgia (EG) is now tackling the problem of the antiquated fleet, providing access not only to preferential loans for new ships from an EC program, but also the hard-to-find collateral to access them. Millions of GEL have been provided, new ships are being bought, and increases in catches have already, EG says, helped create hundreds of new jobs both at sea and in land-based processing.
While Georgians are not big fish eaters, tourists are, and their numbers are recovering fast
What has not changed over the centuries is the Black Sea fishermen’s main quarry – it remains anchovies (95% of the catch, followed by horse mackerel), most of which is destined not for the table but to be processed as fish meal and oil, according to PMCG. While the trade fluctuates, the underlying trend shows an increase, the 2021 export figures being $17 million for fish meal and $10 million for fish oil. Most of this is sold to Turkey (over 60%, predominantly for feed for Turkish fish farming), with Armenia the number two market for fish meal (14%) and Peru (28%) for fish oil. Only a miniscule amount goes to the EU, although this market has been open to marine fish from Georgia for the last five years.
Freshwater fish farming
Freshwater fish farming looks more promising in scale terms. While Georgian freshwater aquaculture started early in the last century, the EC study says that only 30 to 40% of existing farming ponds and basins are now being used, and only 20% of Georgia’s available water resources. Production is mainly carp, catfish, rainbow trout, salmon and sturgeon, and around 5,000 tons of these were sold in 2019.
Seeking investors, MEPA has listed the “opportunities:” 26,000 rivers; 860 lakes; 12 reservoirs; numerous fish-breeding ponds; 80 species of fish; over 100 species of crustaceans; and 58 types of shellfish. On the demand side, while Georgians are not big fish eaters, tourists are, and their numbers are recovering fast.
Most of the fish from farms on Georgian tables is imported, with only 10 to 15% coming from local production, according to Georgia’s National Statistics, and most is supplied frozen. Exports are “insignificant… and unstable,” it says. The risks in aquaculture are shown by the survival rate of only 16% among start-ups between 2014 and 2018.
While a small player compared to the local regional fish production giants of Turkey, Russia, and Iran, Georgia is seen as having plenty of untapped potential, with Armenia held up as an example. According to the AFD study, Armenia’s aquaculture has boomed. Foreign investors have brought in money, technical innovation, experience, and access to markets as widely spread as the US, the Middle East, Russia, and Georgia. This has driven production in this small and land-locked country to a size around ten times that of Georgia. Emulating that would bring Georgia not only revenue-saving import substitution, but new export markets, with the EC potentially open to sales when international standards are met, and more income for small family farms.
Among the lessons from Armenia that the EC is passing on to Georgia is the importance of operating at the high value-end in terms of species. “While Georgia still produces a relatively large share of lower value carp fish, fast growing countries such as Armenia have shifted their production for a large share to high value species such as trout and sturgeon and its caviar,” states AFD in its Georgia Market Profile.
Georgia does have success stories already. One has been Malkhaz Shubalidze, who over ten years has built Georgian Fish & Caviar, located on four hectares in his native Kobuleti, producing red and black caviar. Situated on the Kintrishi River, it is surrounded by a 105-meter monolithic dam that protects agriculture. Years of hard work, the employment of international professional management, and plenty of staff training have enabled him to meet “all European standards of safety and groundwater system.”
Now his plan, he told Forbes, is to “expand the existing farm, build a certified caviar workshop, and create a Colchis sturgeon farm.” The farm has successfully bred 1,000 Colchian sturgeon specimens, working with the Batumi Aquarium.
Wide profit differences are shown in the EC value chain analysis of Georgian fish farming’s financial returns, the highest being 47% in farms producing both trout and sturgeon, and the lowest just trout and its caviar at 18%. Carp returns are around 40%, although costs are lower because their feed is less expensive than imported trout feed. Researchers found 80 family farms producing trout and sturgeon, but only two large farms; for carp and catfish, 100 family farms and 15 large integrated farms were found to be operating in the country. Around 150 medium-sized farms were operating in all. Most of the production, it found, is bought in local markets or by restaurants. There is a growing business in live trout for restaurant menus. But some fresh, chilled, and frozen trout is exported to Azerbaijan and Armenia.
Georgia boasts 26,000 rivers; 860 lakes; 12 reservoirs; numerous fish-breeding ponds; 80 species of fish; over 100 species of crustaceans; and 58 types of shellfish
A major barrier to aquaculture expansion is “the knowledge deficit,” states an earlier EU study on Georgian Aquaculture done within a Ministry of Foreign Affairs of Lithuania development program. “Most farmers still use the traditional methods, and they have limited (or zero) access to modern technology,” it states. Thus they are unaware that these methods are wrong, “and they mainly focus on short-term results.” In fact, “their activity is mostly an experiment and results depend mainly on luck.”
Other problems named were a lack of laboratories, specialists to help the producers, knowledge and technical facilities to combat disease, and help with fish breeding, as well as a dearth of equipment. But top of the problems raised by the farmers themselves was “usually the cost of feed, since most has to be imported.”
In fact, as the AFD study suggested, Georgia might find it easier and show better returns by giving more attention to marine aquaculture and the production of seabass, sea bream, oysters, mussels, flatfish, and mullet, all in demand in the EU and commanding good prices. Marine aquaculture of mussels, oysters, seabass, and seabream started ten years ago in Georgia, and the FAO estimates that production volumes reached 100 tons a couple of years ago. In Batumi, studies say, there is enthusiasm for these ideas.
Georgian fishermen, however, believe that the key is keeping a close eye on what tourists in Tbilisi like.
The view is that while restaurants may be offering for 2023 such exotics as local snail khinkali, there should be more takers for more familiar new Georgian products such as local sturgeon steaks, smoked sturgeon, and seabass.
By Sally White for Investor.ge