What Are the Preventing Causes and What Should Be Done for Georgia`s Agriculture Sector Solid and Hasten Development?

David Kekenadze, Agriculture expert, U.S. College –Station University certificate, 1998, Doctor of Technical Science)

Georgia is basically agriculture products producer country, including manufactory, which is one of the most vital capacity and perspective filed of the economy of Georgia.

Number of employees in agro industry sector includes 1, 5 million, or 54 % of job capacity population of the country and (2218 people) –67 %; Agriculture share includes 12 % in GDP for today. The sector faces important potential for once again strengthening its importance in economy development and social development. Georgia should become hugest international exporter of tined fruits, vegetables, citruses and unique exotic products.
Geography location and peculiarities of nature are most important maintaining factors for the issue realization. Radiation fond of Georgia is 18 -20 % lower then in Middle Europe, according to long –term researches, provided by European scientists. Besides, one of maintaining facts for ecologically fresh products making in Georgia is long time not used fertilization and pesticides for fecundation.
Europeans faced too serious interest concerning agro industry products of Georgia during recent period. It` s proving fact is EU organizations based Fresh Natural Products Producing Coordination Center “CAUCASIAN” and Plants Certification Caucasus Center “CWC”.
In such kind of agro industry potential country, production includes basically water, no matter that is beer, fruit juices or un-alcohol drinks: beer main ingredient raw material is imported barley, when the product is historically traditional culture in our country; juice fruits and in –alcohol drinks are made from non- natural concentrates imported from abroad, when big amounts of Georgian fruit rotting because of treating factories sharp deficit.
The hardest condition is in vegetables production producing area. Tomato products imported from 16 countries to Georgia and county` s share in produced tomatoes includes 1 % of whole market. When produced tomatoes in Marneuli and Gardabani districts may satisfy not just demand of our country on the production, but provide export to other countries.
The same condition is running at fruit and citruses area, when apple vinegar is imported from Turkey and mandarin juice from Cyprus.
Its paradox, but fact, that for today, 63 % ( USD 66, 0 million) of total domestic consumer market of Georgia occupied by Turkey, 8 % — by Azerbaijan, 5 % –by Armenia, 6 % –by different countries, and by Georgia –just 18, 0 %. It happens in the country, having double harvest potential.
Therefore, it should be underlined, that agriculture is the field left inattentively till today comparing with other fields. It` s enough to say, that in 2006 total number of direct investitions delivered to Georgia (1, 196 million dollars) is 2 % less then it was recently and work productivity is 4-5 times less then in 1980th. Routine and hand job created wide spread. Time has come, when according to July 27, 2007 initiative of the President of Georgia, radical and rapid challenges should happen.
What are preventing causes and what should be done for fundamental improving of the condition:
What are the preventing causes?
Preventing causes of agro industry sphere are basically ill professionalism of rural farmers, owners and industrials, week knowledge and un- experience in market relationship issue, un- utilization of new technologies, deficit of technical equipment, unable of competitive capacity production making and other.
Read basic defects below:
1. One of the most important impediments, hindering agrarian sector development is fallacious system of agriculture crediting. Georgia` s banking sector is not oriented on agriculture sector for today. In 2006 banking credit number included just 2 % on this hugely important filed of economy. Actually, agrarian sector bears no priority for the banks of agrarian countries. Term of banking sector in Georgia is in no correspondence with peculiarities of agrarian sector re-producing (short –term crediting –90%, 2- 3 month and high interest rats (16 -18 % and more).
2. There is no extension service in the country. The service should provide maintain of the farmers resolving the issues concerned to products cultivating, realizing and training; providing of systematic training –courses are among the issues.
3. Agriculture products cultivating technologies existed in Georgia for today are outdated and not used any more abroad. Seed selecting and species testing services canceled, what creates serious problems for farmers in agriculture issues providing process.
4. Because of distribution wide network not existence, farmers and agriculture manufactories supplement with assisting materials and production realization problems remain unresolved. Through, rural-agriculture products producer does not know where to take harvest and it` s important number suffers spoiling. To say in the other words– the hugest problem of agriculture for today is capitalization of rural –agricultural production.
5. The main problem of agrarian products making is sharp deficit of tractors, combines and other sort of technical equipment. Job productivity faced 3, 5 times higher levels at the end of 80th comparing with the current period.
6. Rented rural worker` s salary is terribly low. This absolutely excepts his high quality and hard work, what as a result negatively effects on agriculture production.
7. Engineering is in “rudiment” condition, including agriculture projects and building engineering –constructive services providing by commercial structures. This is the cause of providing projecting and construction of the objects on dilettante level, without elementary engineering calculation and technological regalements keeping, by ill- skilled employees, what besides handicraft industries bringing to exploitation, damages lives of people while exploitation of the industry. Low level of engineering makes more expensive creation of new industry, because while foreign mountings purchasing, industrialist is obliged to purchase a project.
8. Country actually has no agriculture products` harvest insuring system, besides, agrarian sector intended to high- risk sphere, producing volume in agricultural sector suffered yearly 8- 10 per cent reduction during recent ten years period. If long –term cultures ` harvest able to be separately insured, insurance on one year cultures remains behind discussing points, what seriously damages rural industrialist.
9. Roads of agrarian importance are in absolutely terrible condition and provides agriculture products big looses.
10. Modern means of communication, special TV –radio network, cellular communication systems (not including personal mobile phones of farmers) are absolutely not used in agriculture sphere.
11. No one protects interest of farmers and agriculture industrialists, they are not able appealing to any society organizations, so basic issues related to business of farmers remain unresolved, as they say farmers are “boiling in their own sauce”.
What Should Be Done?
1. First of all system of farmers and industries crediting should be improved, as on the central, as well as on regional and district level. The issue should be provided with the creation of agro business and limited credits releasing on farmers, in addition with future harvest guarantee. Such sort of credits are wide spread in Europe and U.S. and also in post –Soviet countries: it is basically 9 month credit for farmers, with 3- 6 per cent interest rate, but for 1- 5 years term agricultural industry –9- 12 per cent interest rate per year. Exactly such sort of system foundation is a basic guarantee for agro industry sector fast development.
2. Extension Service should be immediately created in Georgia. The service includes broad specter, started with information services, finished with marketing researches and new technologies inculcation. The service should employee high –skilled specialists. It might be directly said, that without such sort of service foundation and functioering, high technological industries creations is actually unable.
3. We believe expediently, that rural rented individuals ` salary to be no less then officially appointed declared existence minimum. Besides private land area treatment, provided by the owner himself (herself), treatment of relatively big rented land areas and agrarian world providing is impossible just with strength of family members and renting of employees becomes necessary. Though, rented workers should be motivated and well –salaried, first of all because for hard work. Such methods of approach, besides agriculture industry development will importantly maintain rural inhabitants (especially young people) staying in villages.
4. Without agricultural techniques (engines, tractors, combines and ect) and broad material base creation, our agrarian sector is pedestrian for backwardness. We see technique service –centers creating attempt for today in several districts, but that is just drop in the sea and such way of problem resolving is absolutely unavailable in up –coming future.
We believe perspective, attraction of foreign investors suggesting cheap and skilled employees. Basing on foreign essay, our country may provide correspondence production making for our country.
5. For resolving of agriculture production capitalization problem, accentuate should be made on agriculture fast development, to be ensured by foreign investors and serious and long –term taxpaying limits establishing for them. With the conjunction of high system of stimulation creating for farmers and agriculture industries` supplier local and foreign commercial structures and distributors.
6. Unavailable is competitive capacity food production making supplement, without inculcation of high innovative technologies, new elite seed, new recipes, trade marks and “know –how”. International organizations of correspondence profile should be more actively involved in the issue, as for instance Israeli International Cooperation Center “Mashav” and other same services.
7. Projecting, construction and right exploitation of agriculture industries require ground re- creation of engineering services and their effective work approaching in Georgia. Money might be paid for foreign mounting- engines purchasing, but the projects should not be purchased, indeed. They should be created in the county, what requires huge human as well as science –technical resources.
8. Agriculture Production Exporting Programs Center creation bears huge importance. Export volume is one of the basic highlight of the country` s strength. It` s first of all important, because our foreign trade balance facing negative condition, export volume at average 3 times less then import volume, what appoints at our gradually increasing dependence on other countries; food producing sphere is among the issues.
Export Programs Center appointment is preparing of correspondence programs and their practical realization via tight and durable relationship with executive and legislative government representatives.
9. Treatment of special program should be provided by roads of agriculture appointment accomplishing and farmers equipping with modern communication technologies.
10. As Georgia gained some general essay and knowledge in insurance sphere (insurance companies “Aldagi”, “Imedi L” and others) treating of agriculture production and harvest insurance united, diaphanous and simple system should be provided, as for one year agrarian cultures, as well as for farmers, becoming available harvest high risk insurance and their material and social protection maintaining.
11. Farmers Bureau foundation at agro industry sector is advisable for protecting interests of farmers, which should create into one of the most influence and multi –number organization We believe, Framers Bureau Central Office should be located in Tbilisi and have broad regional and local network.
Farmers Bureau founders should be farmers themselves, highest branch of the bureau should be Directorial Council, which will have to provide monthly meetings for farmers related basic issues discussing, and if the necessary to fulfill mediator role while negotiations providing with government.
So, Georgia ` s agro industry sector developing requires simultaneous resolve of all issues and unable to be resolved by only one instance or Ministry of Agriculture.
Problems can not be resolved just with the support of only one exact international organization. But we should also make reference on strong support of international organizations, especially financial support of the U.S. with the maintain of which many small and necessary projects have already been realized in Georgia. All these separately assisted improving of the current condition, but could not resolve the problem yet –strong and hasten development of agro industry sector.
The issue can not be resolved as the non –professionals say –by market economy regulation. I would like require the authors of the opinion, that in the country, like Georgia is, while market infrastructure most low level condition, on the background of Georgian business climate, weak development and Georgian mentality defining, market economy not just unable regulating problems, it will make them more deeper, and the proving of that is recent 18 years experience of newest history of Georgia.
We strongly believe, there is an only way out –agriculture serious support and care as the basic and most important priority of the country from the side of the government and the authority.
Georgia ` s government should try it `s best in supporting of one of the most vital capacity national economy sector –agro industry development, which will obligatory fulfill locomotive function in whole economy system development.
We believe, first of all national state four years program on agriculture development is already prepared, with the participation of every interested in individual and organization, science, field specialists, local and international experts, accredited in Georgia international structures and companies.
Free and public discussion and enforcing of the state nation al program should be provided.
The program should face basic ways of the problem resolve, attraction of correspondence investitions, fulfilling terms and responsible exact executer.
Government of Georgia should take common responsibility on the program realization.
Georgia is a small country, so its demography and economy resources can not give possibility of broad and massive industry production making, so our “visit card” while world economy integration should basically be new brandies of Georgian food products, their high –quality and ecology freshness. All these requires high technologies, invesitions, authority maintains of the export and ambitious commercial structures with modern marketing strategy.
And if “cold” country –Holland took off from “warm” countries flowers market, if classical traditions not having Chile could penetrate into France wine market, if in Israel they grow 300 kg vegetables in one quadrate meter green –houses area, if in France there is no just one square meter free pasture, cattle number excels population number, if Mexico could create “Tequila” into world brandy and ect; Georgia has real chance producing economically fresh, high- quality and broad assortments rural food production having high competitive capacity on world market.