Playing Matchmaker for Farmers and Buyers in Georgia

Georgian farmers struggled to sell crops to large-scale buyers. But a new matchmaking app connects farmers to buyers in the hospitality industry for bountiful results.

Georgian Authenticity

Set on the eastern coast of the Black Sea, at the crossroads of Europe and Asia, Georgia is a country with unique gastronomy that requires authenticity. That faithfulness to tradition is emblematic in the supra — or Georgian feast — conducted by a charismatic toastmaster, over savory dishes. It is also demonstrated in Qvevri winemaking, now considered an Intangible Cultural Heritage by UNESCO. Overall, farmers grow vegetables, nuts, beans, herbs, fruits, and raise a variety of livestock prepared as the main dish for many proper meals. The source of Georgian culinary quality, from these examples and more, originates from its agricultural community.

However, market linkage gaps can make it difficult for farmers to identify and sell to large-scale buyers. To address these challenges, USAID’s Zrda Activity in Georgia developed the AGRONAVTI app in partnership with the Georgian Farmers Association (GFA), which matches farmers with buyers in the hospitality industry through an unprecedented, user-friendly digital platform.

“I think AGRONAVTI is an innovation in the agro-sector that allows farmers to stay on the digital pulse, facilitating more productive and efficient farming activities,” said farmer Irakli Merkvilishvili. He operates a 15-hectare fruit garden in the village of Gori Municipality, near the occupied territory of South Ossetia.

AGRONAVTI has increased the quality and quantity of domestic produce by facilitating market linkages between buyers and sellers. This has significantly increased sales and revenue generation for small-scale farms and streamlined large-scale distribution from farms to the hospitality industry country-wide, ensuring safe and quality goods from farm to table. However, this wasn’t always the case; before the emergence of the app, farmers faced different challenges in establishing those large-scale markets.

Irakli Merkvilishvili is a fruit farmer and owner of an apple orchard in conflict-affected Mejvriskhevi village

Problems in a Bountiful Land

Agriculturally, Georgia is a bountiful country. Unfortunately, this farming distinction has been marred in recent years by armed conflict, outdated technologies, and aging infrastructure. In 2008, Russia supported the self-proclaimed republic of South Ossetia within Georgia, which led to a five-day war resulting in Russia occupying 20 percent of Georgia’s territory. Conflicts have constrained the agri-food supply chain and infrastructure, with rural areas specifically lacking post-harvest operations such as storage, handling, distribution, and markets.

Furthermore, most Georgian farmers have small family holdings, possessing just a little acreage of farmland and laboring mostly for family supply. This makes the country’s hospitality industry dependent on external resources, particularly foreign imports of agricultural products. With low profits, farmers lack the financial freedom to expand their farms and in turn, gain more profit.

Faced with these challenges, the USAID Zrda Activity, implemented by Chemonics, has sought to develop several solutions, one of which is the AGRONAVTI app.

A Match Made in Georgia

Starting in March 2016, the Zrda Activity collaborates with micro-, small-, and medium-sized enterprises (MSMEs) across six regions and 81 communities. The $24.7 million activity assists citizens in strengthening their skills and productivity, in addition to developing ways to create and maintain multiple sources of income per household. This allows MSMEs to contribute to broad-based economic growth and resilience in Georgia.

The Zrda Activity also encourages cooperation between the public and private sectors to foster market linkages. The AGRONAVTI mobile matchmaking platform is one of the ways to achieve these market linkages. Presented in 2017, the app initially focused on aiding Georgian farmers with responding to requests for produce from the hospitality sector. With the app’s “matchmaking function,” farmers, via smartphones, can not only find buyers, but buyers (hotels, restaurants, and cafés) can also contact farmers directly for specific produce.

“I learned about the AGRONAVTI application before I was about to quit farming,” said Kakha Tutberidze, a farmer, and former financial expert, who made his dream a reality and constructed a lettuce greenhouse.

“I had problems with identifying the stable market for my produce,” Kakha said. “The Georgian Farmers Association, Adjara Group and Georgian Farmers Distribution Company helped me to start production of unique varieties of lettuce, bringing new products to the Georgian market. Such an approach contributes to import substitution — a real stimulus for me as a farmer.”

Rows of lettuce grow in Kahka Tutberidze’s greenhouse.

Given the success of the AGRONAVTI app, other donors expressed interest and invested additional funds to help designers expand the app’s functionality and customer base of farmers and buyers. This included additional value chains of goods: for example, livestock and dairy products.

GFA continuously conducts focus group discussions with users to improve functionality and ensure the app is updated with the latest guidance and resources. Growers can now also access agronomic information (crop production guides, pest management, etc.), weather forecasting, or even government-run land auctions.

Collaborative Design

To develop the AGRONAVTI app, the Zrda Activity partnered with the GFA, which is the largest membership-based organization representing farmers (4,000 participants), and the Adjara Group, which is Georgia’s largest hospitality group. To address the existing distribution and logistics gaps in the market, GFA and the Adjara Group teamed up to create the Georgian Farmers Distribution Company (GFDC). This enabled them to operationalize the collection, storage, and distribution needs of the AGRONAVTI platform, helping growers get their products efficiently to customers in the hospitality industry.

A bonus to the app is that it allows regional growers to become GeoGAP certified. GFA and the Zrda Activity developed a set of farming standards to create GeoGAP, a Good Agricultural Practices (GAP) certification program. GeoGAP helps to ensure safety and quality control for agricultural products and promotes more sustainable farming practices. Buyers are realizing the benefits of GeoGAP certified products, which ensures they are high quality, traceable, and safe — a burgeoning trend as chefs seek ingredients to deliver authentic Georgian cuisine. GeoGAP is a simplified version of the prevailing EuroGap standards used in the European Union (EU), which in turn helps sellers integrate with EuroGAP standards and offers Georgian producers a link to export.

Rave Reviews

Zrda supported the marketing and promotion of AGRONAVTI through multimedia outreach and through training activities in target regions. Since its creation, nearly 4,900 people have used the app, with sales exceeding $280,000. In 2020, Georgia’s Innovation and Technology Agency awarded the platform designers 100,000 Georgian laris ($30,120) to facilitate AI integration into the app. As for clients, nine hotels, 10 restaurants, and five cafés regularly purchase products via the platform.

“My friendship with AGRONAVTI started from the birth of the mobile matchmaking platform in 2017,” Merkvilishvili said. “By downloading the app, I automatically got connected to the big buyers, distribution companies, and the retail chains ready to purchase my produce.”

Additional accolades for the app include being shortlisted for the international 500 Startups program, among 140 companies. Also, the Bank of Georgia, one of the largest financial entities in the country, is buying a 2 percent share of the app and investing in its mode development.

An apple orchard — Irakli Merkvilishvili grows and harvests five different kinds of fruits on 15 hectares of land, though apples are his leading crop. AGRONAVTI helped him sell his produce and created opportunities to access new markets.

Survival and Sustainability

Maintaining AGRONAVTI’s sustainability after USAID support ends has always been the ultimate goal. As such, USAID Zrda contracted a business development consulting firm to work with GFA to establish a viable business model and create a separate for-profit entity that will manage the platform. Furthermore, international expansion is planned through direct investment in new markets and IP licensing agreements with partners in new countries.

In the meantime, the Zrda Activity has had to grapple with the COVID-19 pandemic. Before the outbreak, international tourism in Georgia was growing at an annual rate of 8 percent and contributing up to 12 percent of the country’s GDP. However, due to the virus and the dramatic decrease in tourism, targeted sales for 2020 may not be achieved.

Despite this, according to GFA Chairwoman Nino Zambakhidze, the AGRONAVTI app has been a helpful tool for farmers during the pandemic.

“AGRONAVTI is an innovative and useful product,” Zambakhidze said. “During the first wave of the pandemic, [it helped] when we connected farms and entrepreneurs to supermarkets.”

More broadly, the Zrda Activity has provided targeted support during the pandemic to help MSMEs adapt and expand services to meet existing health regulations and attract domestic tourists. This will help support their businesses and retain employees. The activity’s response to farmers, whether it be COVID-related or in terms of long-term sustainability, demonstrates how important digitalization and the existence of this innovative e-platform has been to helping buyers identify products and to facilitate quick sales and exchanges for farmers. AGRONAVTI and other innovations will be crucial to creating extensive market linkages for small-scale farmers who do not have extensive resources, especially during a pandemic.

Irakli Merkvilishvili confirms this. “Across the globe, the COVID-19 outbreak has led to a major change in agriculture marketing, and Georgia is no exception to this trend,” he said. “I sold 140 tons of apples, plums, pears, and peaches this harvest season, all through AGRONAVTI. In today’s reality, I see digital interaction as more important than traditional sales interactions.”

Banner image photo: Former financial expert and now farmer Kakha Tutberidze made his dream a reality and constructed a lettuce greenhouse and sells his crop using AGRONAVTI.