ISET

On 30 August 2019, a public hearing to discuss Georgia’s Rural and Agricultural Development Strategy for 2021-2027 was conducted at the Ministry of Environmental Protection and Agriculture (MEPA). The new strategy document represents a roadmap for Georgia’s rural and agricultural development for the next decade.

The strategy outlines three major goals to be achieved by 2027:

1. Increasing the competitiveness of agricultural and non-agricultural sectors;

2. Sustainable management of natural resources, preservation of ecosystems, and climate change adaptation;

3. Ensuring food/feed safety and the development of efficient veterinary and plant protection systems.

The share of the rural population in the total population decreased slightly, from 42.6% in 2015 to 41.3% in the beginning of 2019. The share of agriculture in total GDP has also declined, from 9.1% in 2015 to 7.7% in 2018. While production figures have gone up, there was a 6.4% increase in agricultural production in 2018 compared to the previous year. Production in the plant-growing sector increased by 10.9%, and animal production experienced an increase of 2.1% compared to 2017. Looking at the self-sufficiency ratio, the highest decrease was for grapes, followed by vegetables, and the highest increase was for meat, followed by maize.

An agro insurance program was started in September 2014. The program is subsidized by the state and eight insurance companies participate in the program. The insurance package covers losses caused by hail, flooding, and storms, as well as by autumn frost (covered only for citrus). Since the beginning of the program, 49.3 thousand farmers (unique beneficiaries) have purchased insurance. The demand was particularly high in 2014 and dropped afterwards due to the reduction of the state subsidy from 90% to 70%, advancements to the program start date in later years, and the introduction of new requirements throughout program implementation.

In 2018, FDI in agriculture constituted 15.9 mln. USD. While the total FDI in 2018 was lower than in 2017, FDI in agriculture has significantly increased (by 28.2%). The highest FDI in agriculture was observed in the second quarter of 2018, while there was divestment (negative FDI) in the first quarter of 2018. The divestment was quite small and was followed by a significant increase in other quarters. Given that demand for food is likely to increase in the future, FDI in agriculture is critical for the expansion of agricultural output.

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