Этот пост доступен на языках: Русский
Lorry drivers in Georgia have continued to protest a new ban on importing wheat, multigrain, and corn overland after negotiations with the authorities reached a deadlock on Wednesday. The drivers have been blocking the entrance to the Revenue Service’s customs clearance zone in Tbilisi since Monday and have vowed further action if an agreement is not reached.
Wednesday’s meeting between protesters and Georgian Finance Minister Ivane Machavariani ended without an agreement. The minister refused to annul or indefinitely postpone the ban, which also includes wheat, multigrain, and corn flour. Instead, he offered to postpone its implementation until the new year, and seek a solution in the meantime.
Protesters claim that at least 2,500 people transport wheat in Georgia, and that the ban would leave around 3,000 people without a job.
Tengo Mushkudiani, one of leaders of the protest, told OC Media that ‘90% of the people gathered at the Customs Clearance Zone are drivers who also happen to be importers owning and driving lorries bought with bank loans, and they have mortgaged flats they have to pay for’.
Mushkudiani said the unions supported them and that the Public Defender also reached out. ‘The TV says that we have demands. We actually have only one demand: the order must be cancelled’, said Mushkudiani.
The Finance Ministry claimed that they offered to meet protesters on the first day of the protest, but that drivers refused to form ‘an initiative group’ to make it happen. Mushkudiani responded to this saying ‘we were offered talks with people who were not decision makers’.
Drivers vowed that if the ban was not reversed, they would block the central motorway with their lorries. The motorway leads to Russia’s North Ossetia through the Zemo Larsi border checkpoint, which importers regularly use.
The finance minister announced the ban on 21 August to come into force on 15 September. It left railroad and maritime transport as only available options for importing and exporting the products from Georgia.
The following day, the minister postponed the ban on corn until 1 November, and on 14 September, the day before it would come into force, postponed the ban on wheat and multigrain until 1 October.
Nevertheless, on 28 August, the minister called his decision ‘well-calculated’.
‘Less free market’ and fears about price rise
By the end of August, the finance minister attributed his decision to a ‘crisis situation’ at the Zemo Larsi checkpoint, claiming that lorries carrying grain from Russia hindered the flow of tourists. Machavariani claimed it caused ‘serious damage’ to Georgian tourism, also citing the Russian Federal Tourism Agency’s 12 August warning to Russian tour operators about up to twelve-hour-long queues at the border.
‘There are other civilised and effective ways [to import], like maritime transportation and railway. They won’t disrupt the economy and there will be no rise in prices’, Machavariani stated on 24 August.
The Zemo Larsi checkpoint has separate lanes for people and cargo.
On 1 September, Georgian Railway and South Caucasus Railway, a subsidiary of Russian Railways operating the railway system in Armenia, agreed on a 52% preferential tariff on grain transportation from Poti, a Black Sea port in western Georgia, to Armenia, to make the shipping route more attractive. However, the Russia–Georgia motorway via the Zemo Larsi checkpoint remains the shortest and cheapest means of import, which also doesn’t require additional logistics to transport the grain from the railway endpoint to mills and other factories.
Paata Tsagareishvili, director of the Tbilisi-based Transport Corridor Research Centre, predicted a 30–40% increase in the cost of transporting wheat as a result of the ban, which would also trigger an increase in prices of wheat products in Georgia.
Both the finance minister and representatives of large local business operators like Agrikom and the Flour Producers’ Association described the government’s decision as ‘civil’ and ‘modern’, saying that using lorries for grain transportation was inadequate.
Bread producers had already been struggling with a reported 30–35% rise of wheat prices.
According to official statistics, while 90% of wheat in Georgia is imported, less than 16,000 tonnes of the 276,000 tonnes of total imports were transported by land.
Land freight providers usually transport wheat at a cheaper price, supplying smaller mills which allow cheaper bread and pastry products to be produced, challenging bigger companies.
‘Creating a monopoly’
On 14 September, the opposition European Georgia Party summoned the finance minister before parliament to answer questions regarding the ban.
‘About five thousand families in Georgia are going to be left without an income and face bank loans so that three families can create a monopoly. This situation was created with the direct involvement of the state and the order issued by the finance minister. It is unacceptable that the state creates a monopoly for the sake of private interests and corruption’, the party’s leader Davit Bakradze stated.
As protesters blocked the Custom Clearance Zone, members of European Georgia visited them to give support, but some drivers protested their involvement. One of the leaders of the protest, Tengo Mushkudiani told OC Media that they rejected the involvement of opposition parties as they ‘preferred to fight by themselves’.
The ban formally leaves space for ‘exceptions’ for transporting wheat and multigrain by land with the permission of the Revenue Service, which according to business lawyer Akaki Chargeishvili, creates risks of corruption as the conditions for exceptional cases remains unclear.
Importers and drivers have complained that the government created problems for them long before the formal ban. In spring, Georgian authorities amended sanitary regulations on food imports, which introduced fees for testing for the presence of genetically modified crops, some of which are banned in Georgia.
Drivers say that on top of the fee, at least ₾250 ($95), waiting times at the border also increased. The Customs Service said the change was a part of harmonising Georgian legislation with the European Union.
Vaso Urushadze, head of transport advocacy group Hub Georgia, told OC Media they would challenge the ban in court, claiming it contradicted the 2014 Georgian Law on Competition.
‘By the finance minister’s order, competition in the area of wheat imports has been curtailed, banning thousands of small entrepreneurs from continuing their operations. The government is artificially establishing a monopoly for the benefit of certain companies and the individuals behind them’, said Urushadze.