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.

In March 2014, Heifer Georgia launched its “Comprehensive study on the Georgian sheep value chain” project. Heifer Project International, the umbrella organization of Heifer Georgia, intends to support the development of the Georgian sheep sector for the next decade, starting with sheep wool processing. In order to ensure a sound basis for implementing further projects, this study presents an analysis of the current situation and future challenges in the Georgian sheep value chain. The objectives of this study are to document current sheep and sheep product value chains (focusing on wool), show its structure and the interrelations between the different links of the value chain, identify strengths and weaknesses, and give recommendations for further development. The study was undertaken by the five members of the team from April to June 2014.

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