ISET

Since the Uruguay Round of the World Trade Organization (WTO), which introduced agriculture to the GATT (General Agreement on Tariffs and Trade) negotiation table, there has been increasing policy interest and academic debate on food safety regulations and their effect on the agri-food trade. During the Uruguay Round, WTO members negotiated the Sanitary and Phytosanitary Standards (SPSs) in the “SPS Agreement” and the Technical Barriers to Trade (TBT) agreements, which share common principles and rules with all member countries (Mayeda, 2004). The SPS agreement is a collection of standards, guidelines, and codes of practice, and builds on the Codex Alimentarius, or “Food Code”, to ensure that food is safe and can be traded (Joint FAO/WHO Codex Alimentarius Commission, 2007). Food safety standards are perceived as non-tariff measures (NFM) as alternatives to tariffs, and they serve as a policy instrument that can affect trade flows (Santeramo & Lamonaca, 2018).

The livestock sector plays a significant role in Georgian agriculture, accounting for more than half of total output. Although livestock farming is spread throughout the country, agriculture is dominated by livestock in the mountains, which cover over 50% of Georgian territory. The livestock sector contributed to around 4% of the country’s overall GDP in 2018, and dairy production remains one of the most traditional Georgian agricultural sub-sectors.

Though the demand for milk and dairy products has maintained an increasing trend in Georgia, compared to the domestic production of milk, which has been decreasing over the last decade, the increasing shortage is often satisfied by imported milk powder, milk cream (e.g. butter), and other dairy products. As a result, the milk and dairy self-sufficiency ratio has been constantly decreasing over the past decade; it amounted to 81% in 2018 compared to 92% in 2009. Moreover, an increased demand for live animals on export markets has stimulated a decrease in the number of cows and has, thus, reduced the country’s milk production.

According to the Georgian socio-economic development strategy, “Georgia 2020”, the economic politics of the Georgian government is based on the following principles:

• Ensuring fast and efficient economic growth that is oriented towards the real (production) sector development;

• Implementing the economic policy that stimulates inclusive economic growth;

• Exploiting natural resources rationally in the economic development process;

• Ensuring environmental safety and sustainability and avoiding the risks of natural disasters.

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