Agriculture potential needs to be activated

Tourism and Agriculture are the sectors of Georgia’s economy with the greatest prospects of development. However while tourism is being attended to the same cannot be said about agriculture. This is very sad because around 53% of Georgia’s population lives in rural areas and is involved in agricultural activity. At present Georgia is no longer an industrial country but it is not an agricultural country either.

The situation has become grave because many agricultural goods which used to be produced locally and satisfy domestic demand are now imported. Today, the agricultural retail market, worth USD 66 million, is occupied as follows: 63% of the goods sold come from Turkey, 8% from Azerbaijan, 5% from Armenia and 6% from other countries, with Georgian goods supplying only 18% of the domestic market. Georgia has the climatic potential to make two harvests a year but due to mismanagement and lack of attention this potential is being wasted. Agricultural production in Georgia is now worth only 12% of GDP.

In 2006 FDI in the agricultural sector was a little over USD 1 million, but agricultural production here depends much on hard manual work, no technology has been effectively introduced. There are almost no bank loans available for conducting agricultural activities: in 2006 for instance the agricultural sector received less than 2% of the bank loans made. Furthermore the loans that are granted do not take into account the nature of this sector. Most of them are short term and carry a high interest rate, although agricultural production is dependent on many variable factors such as natural calamities, climate peculiarities and so on.

There is also no system of insurance for agricultural producers, although this is a high risk business. All these details and others lead us to the very sad conclusion that this economic sector of vital importance lacks a serious managerial approach by the State.