ISET students present problems & solutions facing Georgian agricultural sector
Thursday, 25 May, 2017

ISET continues its student policy paper seminar series for the institute's second-year students. This time, Ketevan Bochorishvili, Natia Maisuradze, Nami Surguladze, Orkhan Suleymanli, and Nijat Guliyev presented their joint paper on agricultural development.

The students opened by that the slow growth in the agricultural sector of Georgia is a subject of ongoing debate. Their cross-comparison of agricultural indicators showed that while agricultural development in Georgia predictably lags behind that of Germany and the United States, it also falls behind Armenia, Azerbaijan, Belarus, Ukraine, and the Kyrgyz Republic. While 50 percent of employment is in agriculture, agriculture accounts for just 10 percent of the country's GDP, which clearly shows the utter inefficiency of agriculture in Georgia.

Six problems that this sector faces were outlined and explained, but three of the most critical (namely landholdings, lack of skilled human capital, and high levels of uncertainty) were explored in depth. According to the Agricultural Census of 2014, 77% of land users own less than one hectares of land; land fragmentation may prevent development in agriculture in a number of ways, among which the hindering of farm mechanization is the most important. In addition, the lack of skilled human capital and uncertainty leads to the slow adoption of new technology and makes access to finance difficult. Land consolidation and the reduction and taxation of unused land were proposed as the most viable solutions, as well as training programs to resolve the problem of the lack of unskilled human capital.

The main sources of uncertainty in Georgian agriculture are weather and prices. The weather risk can be reduced through irrigation and drainage systems, the use of resistant seeds, and the provision of improved meteorological centers. In terms of price risks, developing agricultural insurance programs or government policies of price stabilization were the most cited solutions found by the students during their research. However, they came to the conclusion that the former is more preferable because the latter leads to distortions in the market. An alternative way to develop Georgian agriculture may be to focus on quality instead of quantity and promote 'priority products' such as Georgian wine, honey, and berry crops.