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ISET Economist Blog

A blog about economics in the South Caucasus.
Jul
17

Tea: a Potential Gold Mine of Georgian Agriculture?

The first tea bushes appeared in Western Georgia in 1847, and since then tea production has played a significant, yet widely unknown, role in Georgia’s history. The humid and subtropical climate of Western Georgia in the regions of Guria, Samegrelo, Adjara, Imereti and Abkhazia are ideal for harvesting tea, and this was a fact eventually recognized by businessmen outside Georgia. With a commission to produce tea in the country, Lao Jin Jao, an experienced tea farmer, arrived from China in 1893. By 1900, the tea he was producing was world-class in quality...
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Guest — Lasha Lanchava
Amazing piece! It is indeed sad that so much cultural, social and economic potential tea sector has is being wasted. Looks like a ... Read More
Friday, 17 July 2015 5:05 PM
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Jul
13

Where Is the Free Lunch?

 DOES GEORGIA BENEFIT (OR NOT) FROM THE DROP IN INTERNATIONAL FOOD PRICES? An average Georgian household spends more than 40% of its budget on food. It therefore stands to reason that Georgian consumers are quite sensitive to food prices, which may be very good news considering recent developments in global commodity markets. According to the latest World Bank’s Food Price Watch, “international food prices declined by 14% between August 2014 and May 2015, sliding into a five-year low.” For lower-middle income households this could result in a 6% inc...
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Jun
01

Is Small (And Medium) All That Beautiful?

  Most development practitioners subscribe to the view that vibrant small-and-medium enterprises (SMEs) are crucial for the health of a country’s economy. The SME sector is crucial, the argument goes, because it creates employment and serves as a hotbed of entrepreneurial talent. Additionally, SMEs are often seen as a source of new, fast growing industries, contributing to a price-reducing and quality-improving competition with large and old firms that tend to dominate markets in small countries such as Georgia. For example, a 2011 report prepa...
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Recent Comments
Guest — Simon Appleby
Rezo Vashakidze's statement about 50% of the population being smallholder farmers is out of date. According to the last census, on... Read More
Monday, 01 June 2015 9:09 AM
Guest — Eric Livny
The point I was trying to make in this article – but perhaps failed – is NOT that Georgia does not need SMEs. My point is that the... Read More
Monday, 01 June 2015 12:12 PM
Guest — Angela Prigozhina
1. I do agree that distribution of subsidies to agriculture subsistence farmers has nothing to do with productivity growth and job... Read More
Monday, 01 June 2015 2:02 PM
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May
04

How the Age Structure Impairs “Inclusive Growth” in Rural Georgia

Currently, farming in Georgia is a “by default activity” – the vast majority of Georgian “farmers” are not really farmers in a professional sense but rather people who try to survive by growing agricultural products. When traveling through Georgia’s countryside, one sees immediately that it is mainly the older generation which has to resort to this default activity. Those who have more profitable opportunities leave for the cities, and these are almost exclusively young people. How much flexibility and motivation can we expect from those elderly who rema...
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Guest — Simon Appleby
Another reason for apparent aversion to taking risks in rural Georgia is that, being middle aged or elderly, many farmers don't ha... Read More
Tuesday, 05 May 2015 5:05 PM
Guest — William Berry
How can this be overcome? Or isn't that necessary? Mr. Bill....
Wednesday, 06 May 2015 5:05 AM
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Apr
06

Georgian Tangerines

The Estonian-Georgian film, Tangerines, was nominated for the Academy Award for Best Foreign Language Film in 2014. While the film was shot in Guria, the story takes place in Georgia’s breakaway region of Abkhazia during the war in the early 1990s. In the film, two of the main characters are peasants from Estonia who are living and working in Abkhazia, one as a tangerine grower and the other as a manufacturer of wooden crates for transporting tangerines to markets (much like the one in the photo above). Unlike their families and neighbors, these two men ...
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Guest — Eric Livny
There is an interesting analogy between Israel-Palestine and Georgia-Abkhazia economic relations. An Israeli company (Agrexco) is ... Read More
Monday, 06 April 2015 2:02 PM
Guest — Fady Asly
I doubt it a lot! Georgia is at the extreme limit of sub-tropical fruits production zone! The yields will always be inferior to pr... Read More
Tuesday, 07 April 2015 12:12 AM
Guest — Rati
Dear Fady, thanks for your comment! Area of Georgia is a really limit of not only sub-tropical fruits, but also for many agricult... Read More
Tuesday, 07 April 2015 11:11 AM
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Mar
30

Does it Make Sense to Subsidize Smallholder Georgian Agriculture, and if so How?

While Georgia never faced anything like a wartime food crisis, the agricultural policies implemented by the Georgian Dream coalition government in 2013-2015 did not lack in ambition, seeking to make up for more than a decade of “active neglect” of Georgia’s smallholder agriculture by the Saakashvili administration. In this piece, we take a critical look at one of the first government initiatives, the Agricultural Card Program, introduced in February 2013.  According to the then Minister of Agriculture David Kirvalidze, the program aimed to “revive G...
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Recent Comments
Guest — Humph Abbott
Hi Eric and team. What evidence do you have to justify the assumption implicit in your first and second charts and supporting text... Read More
Monday, 30 March 2015 7:07 PM
Guest — Eric Livny
Thanks for the question, Humph! We don't have any evidence and, in fact, are not claiming that "the growth in cultivated areas and... Read More
Tuesday, 31 March 2015 1:01 PM
Guest — Salome
Thank you for your question. Majority of respondents claimed increase in output and sown areas, but you would probably agree, that... Read More
Tuesday, 31 March 2015 2:02 PM
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