ISET

Family Farming is the predominant form of agriculture. It represents the main source of income in rural areas and produces majority of agricultural products in Georgia.

Family Farms produce the food that feeds billions of people. According to Food and Agriculture Organization (FAO), in many developing countries Family Farms represent up to 80 percent of all farm holdings. Local and global food security depends on them. Both in developing and developed countries, Family Farming is the predominant form of agriculture. Family Farming represents the main source of income in rural areas and produces majority of agricultural products in Georgia.

Georgia is a net importer of agricultural products (including primary commodities and processed food products), having run a net agricultural trade deficit in each of the last 10 years. However, many analyses have shown that Georgia has a comparative advantage in agricultural production. This suggests there is a large potential for expanding agricultural exports from Georgia.

The current structure of Georgia’s agricultural exports is highly concentrated:

• Between 2009 and 2014, four product categories (nuts; alcohol, spirits and liqueurs; wine; mineral waters) accounted for 75% of all agricultural exports from Georgia;

This paper provides a summary of findings and policy recommendation based on a series of eight case studies that document foreign direct investment in Georgia’s agriculture and food processing sectors. The investors are in a variety of industries, including grape and wine production, hazelnuts, poultry, cereals and medicinal herbs, pickled fruit and vegetables, and apple concentrate and aroma. Each study includes a detailed discussion of factors concerned with the general policy and business environment, such as protection of property rights, taxation, access to finance, land, labor and other production factors, the range and quality of suppliers and service provider networks, and quality of infrastructure. The analysis focuses on the strategies investors employed, and the effectiveness of those strategies, in dealing with shortcomings in the business enabling environment and other challenges they faced investing in Georgia.

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