World Economy and Comparative Development in Eastern Europe
Monday, 17 October, 2016

In what has been a decidedly international few months for ISET with recent visits to Japan, Norway, and India (as well as a trip to Uzbekistan in late October), yet another member of the institute's faculty has traveled abroad, this time to Germany.

On October 14-15, ISET's Pati Mamardashvili gave a presentation at the “World Economy and Comparative Development in Eastern Europe” workshop in Berlin, which brought together scholars from different countries to present and discuss their work on Eastern European economic research. The topics dealt with various fields in economics such as economic growth, agricultural economics, international economics, political economies, and institutional economics.

Pati Mamardashvili presented her research on Georgia’s Agricultural Subsidy Program Georgia, which was carried out by APRC researchers Rati Kochlamazashvili, Salome Gelashvili, and Ia Katsia.

Agricultural input subsidies are increasingly used by developing countries for increasing crop productivity and overcoming problems in agricultural input markets. Since 2013, Georgia has been implementing the Agricultural Card Program, subsidizing different farm inputs (fertilizers, pesticides, seeds, and plowing machinery) of smallholders. While a substantial part of state resources has been (and are) allocated to this program in recent years, the possible benefits of the subsidies in different contexts (e.g., contributing to increased agricultural productivity, developing value chain linkages, etc.) remain unresearched.

This study uses data from the Sample Survey of Agricultural Holdings in Georgia from 2007 to 2014, obtained by the National Statistics Office of Georgia (GeoStat). First, the production technology of maize farmers in Georgia is estimated, and then parameter estimates calculate the marginal productivity of fertilizer use for each farm. Based on these results, the ideal target groups of farms were defined (25% of the 'best farms’ in terms of fertilizer productivity) and assessed, with targeting performance of this program with its potential to increase crop productivity also being examined. The results show that with applied selection criteria (farmers with up to 1.25 ha of land), around 60% of farms in an ideal target group were potentially reached with this program.

The presentation was followed by a lively discussion, with useful comments from the participants to be considered in the further elaboration of the research program.