Research Reports

Competitiveness of Georgian Agriculture: Investment Case Studies
Thursday, 31 July, 2014

This paper provides a summary of findings and policy recommendations based on a series of eight case studies that document foreign direct investment in Georgia’s agriculture and food processing sectors. The investors are in a variety of industries, including grape and wine production, hazelnuts, poultry, cereals and medicinal herbs, pickled fruit and vegetables, and apple concentrate and aroma. Each study includes a detailed discussion of factors concerned with the general policy and business environments, such as protection of property rights, taxation, access to finance, land, labor, and other production factors, the range and quality of suppliers, and service provider networks, and quality of infrastructure. The analysis focuses on the strategies investors employed, and the effectiveness of those strategies, in dealing with shortcomings in the business enabling environment and other challenges they faced investing in Georgia.

The studies also look at the positive impact of these investments on the Georgian economy, examining qualitative benefits like job creation, workforce development, and the introduction of new products or processes (including technology spillovers) that might positively affect suppliers, competing agribusinesses, and smallholder farmers. The studies also look at how these investments affect the range and quality of products available to Georgian consumers, including the substitution of imports. Addressed to both government and investors, the recommendations drawn from the case studies and summarized in this report are focused on addressing deficiencies in the business enabling environment and, for investors, strategies to overcome these deficiencies.