Crisis in agriculture

Official statistics state that 50-55% of the Georgian population is employed in agriculture. This means that most of them are self employed. However this sector of the economy produces only 12% of GDP, so we now have a paradoxical situation in which a greater proportion of people is involved in agriculture than the proportion of GDP produced by it.

In 1994 agriculture produced 46% of Georgia’s GDP, in 1998 26% but since 2007 it has become 12%. Furthermore, according to other official statistics more than 300,000 hectares of agricultural land is not cultivated. Unofficial statistics put this figure even higher.

There are different reasons for the decline in Georgian agriculture. The cultivatable land is divided into small segments, thus precluding a profitable scale of crop growth, and the banking sector does not support agriculture very well because of the high risk factor involved. Furthermore, the zero customs tax on cheap agricultural products imported from neighbouring countries seriously threatens the economic viability of local production. In 2008 Georgia imported agricultural products worth around USD 1 billion, whereas it exported only USD 250 million.

From 2005 to 2007 Georgia has decreased its production of wheat, corn, potatoes and other vegetables. Today the state is promising to assist the agricultural sector by introducing new machinery and assisting with marketing as well as processing. It is not yet clear whether this is just a promise forced by the protest rallies or a commitment the authorities will keep.