Identifying Sectoral Priorities in Georgian Agriculture

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Over the course of ten years since 2007, Georgia’s rural population has shrunk in absolute terms (from close to 2.1 to less than 1.6mln) and as a share in the population (from about 47 to less than 43%). Still, Georgia remains a traditional agrarian country. More than a third of the country’s territory consists of agricultural lands, and, according to the National Statistics Office of Georgia (GeoStat), in 2017, almost 43% of the population lived in rural communities.

Agriculture and food processing continue to account for a very significant share (about 25-30%) of Georgia’s total exports, but Georgia’s agriculture clearly underperforms (on average) relative to the rest of the economy. In 2016, about a half of Georgian employed and self-employed, almost 870 thousand people, were working in the sector. Yet, their share in total GDP was a mere 9.3%.

The purpose of the current study was to look into the key sources of inefficiency – and relevant remedies – for Georgian agriculture as a whole and three specific value chains: hazelnuts, mandarins and peaches. Thus, while paying attention to sectoral nuances, we were mostly concerned with the common challenges facing these three sectors and the more general policy responses.

Methodologically, the study included three main components: (i) a review of the literature and data, (ii) field research (visits to farms and food processing enterprises, as well as in-depth interviews with farmers, representatives of farmer associations, company chief executive officers (CEOs), Georgian policy makers, and international experts) and (iii) focus groups with representatives of leading farming enterprises in order to test our ideas and hypotheses.

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