04 March 2019

The underdevelopment of the land market is a major obstacle behind the development of Georgian agriculture. A significant number of unregistered plots of land prevent land consolidation and increases in agricultural productivity. According to the Ministry of Justice, as of February 2019, in the framework of the land registration reform, since 2016, there are 543,139 citizens who have registered 130,943 ha of land; 1,431 legal entities which have registered 1,793 ha; and 34,131 state entities with 169,241 ha of registered land. Thus far, until 1 August 2016, 1,212,173 ha of land had been registered and an additional 301,976 ha have been registered since then. Therefore, the total area registered is 1,514,149 ha, which accounts for 45% of all agricultural lands, leaving 55% remaining unregistered. As for the regional distribution of lands registered after 1 August 2016, the largest area was recorded in Kakheti, whilst the greatest number of plots was in Imereti (see Figure 1). The average size of a registered plot is 0.5 ha.

As to agricultural prices, on an annual basis for food and non-alcoholic beverages, prices increased by 3.2%, contributing to a 1.0 percent change in the total CPI. In January 2019, the sharpest price changes, on an annual basis, were observed within the following subgroups: fish (+12.3%), bread and cereals (+10%), vegetables (+6.5%).

In January 2019, prices in the vegetable category increased by 15.8% compared to December 2018. On an annual basis, prices in this group increased by 6.5%. According to Geostat data, cabbage prices displayed the largest increase, of 75%, in January 2019, in comparison to the previous year (Figure 2). Considering that the year has just begun, the increase in cabbage prices is quite surprising. While trade statistics reveal that both the import value and quantity of cabbage trade follow increasing trends. In January 2019, the import value amounted to 80,311 USD, 82% higher than the 44,048 USD of January 2018. Within the same period, the quantity of imported cabbage increased dramatically by 132%, from 200.64 tons to 466.38 tons. Typically, an increase in import contributes to a decrease in price, unless domestic production and stocks are extremely low. If domestic production is indeed low, it might have caused a shortage in supply and therefore an increase in price. As statistics on domestic production are not yet available, it is difficult to discern the exact reason for the increased prices.