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The “Achilles’ Heel” of Georgia’s Agriculture – Incomplete Land Registration

“We often preoccupy ourselves with the symptoms, whereas if we went to the root cause of the problems, we would be able to overcome the problems once and for all” – Wangari Muta Maathai, Nobel Peace Prize Winner in 2004.


LAND FRAGMENTATION – THE ROOT CAUSE

“Commercialization of farmers can happen only if land consolidation occurs and farmers benefit from economies of scale” – Minister of Economy and Sustainable Development of Georgia, Giorgi Kobulia stated at the Rural Conference 2019 held in Tbilisi last week.

According to the latest agriculture census (2014), there are 574,000 holdings with land in Georgia. Of these, 77% have less than one hectare under usage, which is usually divided into several parcels. Many of those land parcels are uncultivated or cultivated using outdated methods. In addition, with such a small amount of land, rural households cannot earn enough income for their families and their “farming” is subsistence, not commercial. Additionally, many of these landholders are not interested in either upgrading their farming practices or selling their land to more efficient farmers. As a result, Georgian agriculture is characterized by very low productivity and its contribution to the country’s overall GDP is 7.7% even though it “employs” about 40% of the labor force.

To improve this situation, the agricultural sector has been a priority for the Georgian government since 2012. Many programs have been developed and implemented to transform the sector, but the results are not yet promising – real growth in agriculture was modest in 2018 (+0.7%) after a sharp decline in 2017 (-3.8%). While such numbers might destroy optimism about this sector, other countries have also had similar experiences. For example, the Indian government subsidizes farmers by various means, but nevertheless experts are talking about the deepening crisis in agriculture in India. According to an article in The Economist, the main reason for this crisis is the fragmentation of land, wherein average land size per holding has been shrinking since the 1960’s and today amounts to 1.1 hectare.

Not surprisingly, one of the fundamental problems (“root causes”) holding back the development of agriculture in Georgia is the fragmentation of land parcels.


LAND REGISTRATION – A PROPER START AT FIXING THE ROOT CAUSE
Completing the registration of land and developing modern land systems can support not only the land consolidation process, but can be beneficial for various means: security of tenure, certainty of ownership, facilitated land reform, improved land resource management, reduction of land disputes, stimulation of the land market, increased land taxation, credit security, improved land market monitoring, improved management of state lands, improved spatial land-use planning, improved agro statistics, and usage of agricultural potential (International Land Systems, 2009).

There are various factors hindering Georgia’s land consolidation, but first and foremost is the incompleteness of land registration. According to recent data from the Public Registry, only 45% of land in Georgia is registered, although many attempts have been made over the last three decades.


WHAT HOLDS BACK LAND REGISTRATION IN GEORGIA?

Past  Land Reforms in Georgia

After the dissolution of the Soviet Union and the restoration of independence, Georgia faced many social, political, and economic problems. The political leaders of that time decided that the best way to fight against the deep crisis was to distribute land among the rural population of Georgia. As a result, hundreds of thousands of subsistence farmers were created with an average landholding of slightly over 1 hectare (this land was often divided into 3-4 parcels). The remaining state-owned land was leased out. Therefore, the total number of land parcels amounted to about 2,500,000(!), even excluding Adjara and the mountainous regions, where land reform was not implemented at that time. It may be true that many families survived hunger at that time because of subsistence farming, but today land fragmentation is one of the most severe challenges to agriculture in Georgia.

At the end of the 90s, the land registration process started, which continued until 2004. This process was lacking an entire cadaster system and legal documents were based on the maps existing in the villages and municipalities. The formal registration of land with cadaster started in 2008; until 2016, about 35% of land was registered.

Present – Current Land Registration

The current land registration reform started in August 2016 and after 2.5 years, the results show that only 9% of land out of the entire land fund (excluding the occupied territories and forest) was registered. Interestingly enough, more than half of the land registered by the reform was under state ownership. The current reform uses sporadic as well as systematic registration approaches, but the major focus is on sporadic registration. The major difference between these two approaches is that while sporadic registration depends on the goodwill of the landowners to register their land, in the case of systematic registration, the government approaches the landowners and registers their land. Systematic registration has only been piloted in a few settlements across Georgia.

According to the findings of ISET’s Research on Land Registration conducted in 2018, although some incentives are provided by the current land registration reform, many private landholders are not interested in registering their land. The main reasons for this include: fear of losing social allowance, fear of losing (registered) land to credit authorities, fear of land taxation, disputes about demarcation of land, traditional view that land belongs to the household and does not need to be registered, absence of landholders in the country or in the region (migration), lack of finances, and lack of information about the land registration reform.


THE WAY FORWARD

As has already been mentioned above, a sound land consolidation policy cannot really be started unless a comprehensive land registration process is pushed through and the country has its entire land fund registered properly. Complete land registration can be achieved only with the systematic approach to land registration, which has proven to be the most effective means of land registration around the world.

After celebrating 28 years of the restoration of Georgian independence, we, the stakeholders in Georgia’s agriculture and rural development, need to wake up and speak out that fighting against “symptoms” is not effective and first we have to fix the “root causes”… This, first of all, requires a strong commitment from the government!

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This blog is produced based on ISET PI’s Policy Paper on Land Registration Reform (2018).


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Tuesday, 22 October 2019

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