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MARCH 2019 | AGRI REVIEW
29 March 2019

According to GeoStat’s preliminary data for 2018, Georgia’s economy grew by 4.7%- the same rate as in 2017. As 2017 was a challenging year for Georgian agriculture, the sector experienced -3.8% negative growth. Unlike 2017, agriculture in 2018 had a positive and rather modest growth rate of 0.7%. As expected, agriculture keeps proportionally shrinking within the country’s overall GDP- it stood at 7.7% in 2018 compared to 8.0% in 2017.

The weak stake of agriculture in the overall GDP is not necessarily an issue, given that the world average was 6.4% in 2017 (CIA estimate). The figure is even lower in developed countries, which vary between 1% and 3%. Thus, the decline would not be harmful to the Georgian economy, if not for the fact that around 40% of the labor force is still employed in agriculture. According to the World Bank estimate (2018), the world average employment in agriculture is 26%, though it does not exceed 5% in the developed world (OECD countries).

With such significant employment in agriculture (nearly 40%), Georgia is comparable to countries like Gabon, Ghana, Haiti, India, Kenya, Morocco, Nigeria, Pakistan, Vietnam, etc. Drawing a comparison from the 2018 World Bank estimate, Georgia’s four neighboring countries each have lower employment in agriculture: Azerbaijan (37%), Armenia (33%), Turkey (19%), and Russia (7%).

Considering that most Georgian farmers are so-called “farmers by default” rather than “farmers by vocation”, the high employment rate in agriculture is exacerbated by a lack of employment opportunities in other sectors. Additionally, most “farmers by default” cannot meet the labor market’s requirements, in terms of skills or education, even for the existent jobs. Thus, high employment figures in agriculture, paired with the declining share of agriculture in GDP, signal a need for better vocational education and subsequent structural changes.

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