New Subsidiary Company, Kartlos Group

In December 2015, we established a new Joint Venture company with American real estate entrepreneur Andrew Earl, Kartlos Group.

Kartlos Group Georgia

Our primary focus is agritourism and mountain tourism resort development in the South Caucasus region. We have a number of investment projects and advisory mandates underway, and will be establishing an independent social media presence for the company soon. Further information can be seen at our website

Hazelnut Industry Review from Galt and Taggart

A concise summary of Georgia’s hazelnut sector, from local investment bank Galt and Taggart.

Worth reading in its entirety, the government estimate for establishment cost of hazelnut orchard is in our opinion underestimated. Clearing and elimination of woody weeds can cost almost half the budget provided. Also, tissue-cultured seedlings are significantly more expensive than conventionally produced seedlings budgeted for, but have the advantage of great consistency, longevity and freedom from infections.

Hazelnut production in Georgia increased at a compound annual growth rate (CAGR) of 6% over 2006 – 2014, from 24,000 to 37,000 tons. If Georgia is able to integrate efficient farming practices in order to increase quality and productivity and expand the planted area, the country has an opportunity to land a place among the top 3 hazelnut suppliers in the world, after Turkey and Italy. The American hazelnut industry, even though technology-intensive, is facing difficulties at growing and harvesting the hazelnut, as the hazelnut type most demanded on the world commodity market is being affected by a region-specific disease. USA has only 1.4% of total hazelnut planting area (~12,200 ha), but its yield is much higher than in Georgia, as American hazelnut growers integrate innovative farming and best practices.

Turkey is a price setter on the hazelnut market. In 2014 when the hazelnut harvest suffered from a severe frost in Turkey and output almost halved, hazelnut prices on the world market doubled from US$ 5.5 to US$ 11.5. This was rather beneficial for other nut exporting countries, including Georgia. In August 2015, prices were back to $4.5-5.0, and dipped further in September as the harvest outperformed forecasts. In 2015, according to the Istanbul Exporters Union, Turkey has already earned US$ 2.67bn in 7M15 and exported 208,000 tons of hazelnut. Georgian hazelnut exports in 1H15 increased 163% y/y in dollar terms and generated US$73.4mn in export revenues, up from US$ 28mn last year. Roughly ¾ of Georgian hazelnut exports went to the EU, where prices were 43% higher on average than in the CIS countries (2014 World Bank estimates). Italy, Germany, and Spain jointly imported 46% of hazelnuts exported from Georgia. The largest importer from the CIS countries was Kazakhstan, accounting for 8% of Georgian hazelnut exports.

From “Hazelnut – Georgia’s Precious Commodity“. Georgia Today

Precision Agriculture and the Caucasus

The article below from Foreign Affairs is a very neat layman’s summary of the Precision Agriculture methodology which YFN Georgia uses. It covers the basics of the evolution of GPS use, property and soil mapping, Variable Rate methodology for use of fertilisers and pesticides, tractor and harvester guidance systems, auto-pilot and remote control for tractors, remote sensing with drones and satellite imagery. From Foreign Affairs:

” Today, however, the trend toward ever more uniform practices is starting to reverse, thanks to what is known as “precision agriculture.” Taking advantage of information technology, farmers can now collect precise data about their fields and use that knowledge to customize how they cultivate each square foot.

One effect is on yields: precision agriculture allows farmers to extract as much value as possible from every seed. That should help feed a global population that the UN projects will reach 9.6 billion by 2050. Precision agriculture also holds the promise of minimizing the environmental impact of farming, since it reduces waste and uses less energy. And its effects extend well beyond the production of annual crops such as wheat and corn, with the potential to revolutionize the way humans monitor and manage vineyards, orchards, livestock, and forests. Someday, it could even allow farmers to depend on robots to evaluate, fertilize, and water each individual plant—thus eliminating the drudgery that has characterized agriculture since its invention.”

Some of the basic technologies involved are visualised below. All of them are available to farmers in the Caucasus through our company.

Our tractor and harvester guidance systems start with very simple GPS-powered Farmnavigator systems from Australian firm FarmAgScan, which provide Parallel Guidance, Contour Guidance, Round & Round Guidance, Lightbar navigation, a Virtual Sprayboom, Field perimeter & area measurement, an external GPS, and export to Google Maps™ or Google Earth™. A good basic, robust unit for those starting out in Precision Agriculture.

A more comprehensive Variable Rate controller and Guidance System is the FarmScanAg AgGuide V4,.

This provides:

Comprehensive mapping, for recording, storage, analysis, printing and record keeping for a virtually unlimited  number of farms, fields, jobs, field perimeters, runlines, marked points, spray and weather data, coverage and elevation maps. On-screen and audible notification of important upcoming obstacles (e.g trees, rocks, poles, perimeters) reduces the risk of in-field collisions.

Guidance, including on-screen visual guidance, as well as steering-wheel- motor and full CANBUS and cm accuracy hydraulic auto-steer guidance are expertly implemented, allowing for broadacre, inter-row-sowing and controlled traffic row-crop operations. Racetrack, contour, parallel, and pivot guidance are all included.

Automatic Boom Section Spray and Rate Control (SprayGuide) reducing chemical usage and overlap or underlap. Rate control provides fingertip regulation of application rates.

Record keeping All mapping data is retained indefinitely allowing for full record keeping of all in-field, sowing, spreading, fertilizing, spraying and harvesting operations, as well as printing, area and product cost analysis. This interacts seamlessly with our Fairport PAM Farm Management Software, documenting all operations, seeding, harvesting and chemical applications, via the PAM PDP module.

Implement guidance (RigGuide), controlling tractor-drawn implements track, depth and other activities.

Variable Rate Control (VRC) allowing rate control of up to 4 products including on-screen fingertip control. Different fertiliser blends or pesticide blends can be mixed on-tractor in real time and documented meticulously, and differential seeding rates applied.

‘Laser’-levelling (LevelGuide) controls a grader blade/bucket to replicate and improve upon standard laser levelling tasks – at a fraction of the standard cost and hassle. Single planes can be easily marked with three points, or a combination of points and defined slopes. With the use of companion software or design services, full-multi-plane cut-fill maps can be used with powerful coloured on-screen mapping including contour profiling. Contour banks are also easy to make.

Multi-camera display allows Images from up to 4 cameras can be simultaneously displayed on-screen, with any enlarged to full screen with a simple touch of the finger.

We now, in partnership with a UK firm, are capable of Electromagnetic Induction Scanning (EMI Scanning) of soils to develop comprehensive soil maps accurate to within 5 cm, allowing management zones based on soil types and drainage characteristics to be developed, improving yields and reducing operating costs. Precision irrigation design, where zones are irrigated according to soil type and plant requirement, dramatically improves product quality and reduces water pumping costs.

Soil Map

Once the enterprise is operational, aerial scanning with light aircraft or drones with MultiSpectral Digital cameras yields tremendous data on plant vigour for every square metre of the property and can be used to estimate eventual yield and schedule harvest time. Remote sensing now is becoming so advanced that our British partners are now providing pre-harvest estimates not only of tonnage of apples per hectare but the number of apples per tree!

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While there are environmental benefits to the use of Precision Agriculture methodologies, reducing overuse of fertiliser and pesticides and intelligently planning property development to reduce soil erosion, the key benefit is economic. Typical benefits seen are:

* Higher yields as plants’ nutritional needs are more accurately met.

* Reduced fertiliser, pesticide and seed cost per tonne of commodity harvested.

*Reduced fuel consumption as tractors and harvesters operate as efficiently as possible under guidance.

*Better use of irrigation water and reduced water pumping costs as irrigation water is applied only as and where needed on management zones.

*Higher prices for cereal commodities; correct management of nitrogen and soil moisture results in more wheat growers capturing bread-baking wheat contracts, replacing imports.

*Higher prices for horticultural products like grapes, apples and peaches; careful control over nutrition, irrigation and harvesting time results in higher quality commodity produced at lower cost. Vertically integrated wineries using remote sensing and differential harvesting report increased margins of USD$20,000 per hectare.

The cost of technology is dropping fast; this robust mini-drone, possibly suitable for crop scouting and likely to be able to accept MSDP cameras in the future, may sell for less than $500.

For more details, contact Simon on simon@yfn.com.ge

Irrigation Water Discussion: Inclusive Growth Dialogue at ISET Policy Institute

ISET Policy Institute on October 23 invited Simon to address representatives of government, NGO’s, industry and academia about issues related to irrigation water access in Georgia.

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The video of the dialogue is presented below. Simon’s commentary can be seen at 1.20 and 20.30

Potato Picking

Having used the lifter, we have begun picking up potatoes from the disturbed soil and loading into pallet boxes for consignment to cold storage.

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Potato Lifting

We have manufactured a very basic potato lifter from a single tine ripper, which functions quite effectively in our heavy clay-based soils.

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Potato Harvest at Sartichala

We commenced some test harvesting on our 9.4 Ha field in Sartichala last week, using a combine harvester.

While  the equipment is of a very high standard, recent heavy rains have made soil conditions too wet for the correct operation of this gear, and we will change to hand harvesting instead.