2. AGRICULTURE
OVERVIEW:
IN
• Over 21 micro-climates - a wide range of grain, vegetables, hard and
soft fruits, meat and dairy could be farmed
• Agriculture accounts for 9% of GDP. It contributes ~53% of
employment mostly in subsistence farming (average farm size of 1.22 ha)
• Traditionally Georgia has strengths in wine, nuts, fruits which account
for more than 60% of agriculture exports
• The average gross monthly salary in the agricultural sector in Georgia
is USD 220
OPPORTUNITIES:
potatoes etc
IN GEO
• Import substitution opportunities - meat, dairy products, onions,
• Export opportunities - traditional strong sub-sectors, like wine,
walnuts, hazelnuts, sheep meat, etc
• Productivity gain opportunities – tomatoes, apples, cucumbers, stone
fruits, citrus etc
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OVERVIEW OF GEORGIA’S AGRICULTURE SECTOR
MAJOR EMPLOYMENT YET MODEST GDP,
INVESTMENT AND TRADE SHARE
• Agriculture and agribusiness accounts for 9% of GDP, 53% of
VEST
employment, 1.3% of FDI and 16% of trade volume
– Employment driver is subsistence farming in rural areas
– Georgia is reliant on processed food imports (12.1% of total
imports) while export is balanced between fresh and processed
(9.4% and 10.5% respectively)
– Consumer food accounts for 30% and 24% of total agriculture
commodities/processed food imports and exports respectively
• Sector trade balance was -762 million in 2012 and deficit
is widening
VALUE ADD AND PRODUCTIVITY
ORGIA
• Low value add per hectare (only $1,220/ha of arable land)
• Productivity level lags most regional and more developed
economies in all crops
• Four major hurdles are root-causes for underperformance
and lie in fragmented industry structure, lack of investment,
obsolete production and lack of market access
LATENT POTENTIALS TO CAPTURE GROWING
DOMESTIC DEMAND AND EXPORTS
• Given relative low starting points, productivity gain potentials
are significant across a broad range of crops/livestock
• Based on competitiveness and productivity gain potentials,
Georgia can select priority crops/livestock to exploit exports
and import substitution potentials
4. TRADE IS MAINLY REGIONAL AND DEFICIT HAS BEEN WIDENING
Agriculture trade Net trade Import Export
USD mln
437 513
IN
235 299 250 316 349
2005 2006 2007 2010 2009 2011 2012
Share of top exports Exports by country
2011, USD mn, percent 2010, percent
Nuts 30 Others
IN GEO
Alcoholic bev. 16
Turkey 16
5 Ukraine
Wine 12 36
Kazakhstan 7
Water 11 7
Armenia 9 20
Live animals 6 Germany
Azerbaijan
Sugar water 3
Share of top exports Exports by country
2011, USD mn, percent 2010, percent
Nuts 15 Others
Azerbaijan
Alcoholic bev. 9 7
USA 5
Wine 9 5 Ukraine
Kazakhstan 10 32
Water 8
11
Live animals 8 Brazil 19
11
Sugar water 4 Turkey Russia
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THE SECTOR IS WELL DIVERSIFIED WITH EXPORT
STRENGTHS IN NUTS, FRUITS, WINE AND LIVE ANIMALS
Processed Fresh
VEST
ORGIA
Share of fresh
Share of processed
1
Including meat (14%), oil and fat (8%), dairy products (5%) and other food products (24%); 2 Import-export data for 2010
6. WATER AND LAND RESOURCES
WATER RESOURCES
Renewable internal fresh water resources per capita
Cubic meter, 2010
IN
30, 393
28,037
13,179
8504
3160
2223 2113
1157 1153 917
IN GEO
N GE LAND RESOURCES
Breakdown of agricultural land
Thousand ha, 2010
6700
3694
Arable land ratio
Arable/Total land (%)
3006
Sources: World Bank, Georgia 1797
Ministry of Economy and Sustainable 264 802
143
Development
Total land Non-agri- Total agri- Pasture Land under Mowed Arable land
culture cultural land and per-manent lands
land meadows crops for hay
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AGRICULTURE LANDS AND FARMS
2010, percent
VEST Subsistence
Semi-
Average farm size
2010, Ha
182.0
ORGIA
commercial 68.0
Commercial 54.0
farms 52.0
Number Agricultural 46.0
of farms land use 24.0
13.0
6.5
1.7
1.6
1.6
0.7
Sources: FAOSTAT, USDA Foreign Agricultural
Service, European Commission, USAID
8. PRODUCTION MODE IS ON PAR WITH REGIONAL
BENCHMARKS YET TRAILS ADVANCED AGRICULTURE
IN
Fertilizer use Machinery, tractors use
2010, kg/ha 2010, per 100 sq. km of arable land
IN GEO
Other hurdles in production mode
Source: World Bank
• Intermittent (and counterfeit) supply of high quality seeds/saplings
• Deterioration of obsolete irrigation now covers ~15% of arable land
• Lack of post-harvest handling facilities (e.g., cold storage, packing, sorting) and
distribution infrastructure
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GEORGIA CAN PRIORITIZE DEVELOPMENT OF CROPS/LIVESTOCK
WITH HIGH PRODUCTIVITY GAIN POTENTIAL AND SIZABLE VOLUME
VEST
Productivity gain potentials Potential priority crops Gross production Import substitution Import reliant
To-be to current ratio value (2010, USD mn)
Export-led Neutral
Import substitution Productivity gain
opportunities opportunities
High
productivity
Export potential
opportunities
ORGIA Trade balance, 2011, USD mn
Medium
productivity
potential
Average
productivity
potential
Import-oriented Trade neutral Export-led
10. 14 POTENTIAL PRIORITIES CROPS/LIVESTOCK
TO FOCUS DEVELOPMENT EFFORTS
HIGH POTENTIAL PROJECTS GEORGIA’S COMPETITIVENESS
IN
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IN GEO
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REGIONAL COMPETITIVENESS AND POTENTIALS MAP
VEST
C O O
CROP POTENTIALS BY REGION
S GO
ORGIA
BASED ON REGIONAL SPECIALIZATION (NATURAL ENDOWMENTS,
CULTIVATION HISTORY), PRODUCTIVITY AND SEASONALITY
12. INVEST
IN GEORGIA
GEORGIAN NATIONAL
INVESTMENT AGENCY
www.investingeorgia.org
E-mail: enquiry@investingeorgia.org
Portfolio Manager: Kristine Meparishvili
E-mail: kristinem@investingeorgia.org
Portfolio Manager: Nino Tsetskhladze
E-mail: ninot@investingeorgia.org
