RAPID ASSESSMENT OF SHEEP SECTOR IN GEORGIA
DR. ALEKSANDRE MIKELADZE
ECONOMICS AND BUSINESS
Email: Lx.mikeladze@gmail.com
Abstract: The purpose of the article is to identify the status within the sheep sector in Georgia. For this purpose, SWOT analysis is used that identified strengths, weaknesses, opportunities and threats. The paper also studies data provided by the National Statistics Office of Georgia and the Ministry of Environmental Protection and Agriculture of Georgia. Information obtained through in-depth interviews with the sector representatives are also incorporated in the article.
1. INTRODUCTION
Sheep farming was one of the most significant agricultural activities in Georgia, as evidenced by the existence of local breeds: Tushetian and Imeretian sheep (1). During the Soviet Union, 2,193,600 units of sheep were identified (2). Furthermore, it was possible to use winter pastures near the Caspian Sea (3). The total revenue generated via sales also included sales from meat, wool and cheese. Starting from 1990, Georgia has lost access to pastures adjacent to the Caspian Sea that caused a significant damage to the sector. The deterioration of the food base and the maintaining conditions for sheep resulted in pasture degradation (4).
Diagram 1. Number of sheep and goats in 1940-2018
Source: National Statistics Office of Georgia, Database, Agriculture, Statistics 1940-2018 by Years
Based on the statistical data, by the end of 1991, compared to 1940, the number of sheep and goats decreased by 33% and in 2018 – 60.4% respectively.
2. SHEEP SECTOR OVERVIEW IN GEORGIA
For years, sheep farming has been an important agricultural activity in Georgia with the active involvement of some regions, i.e. Kakheti and Kartli regions. Moreover, in Kakheti, there is also a small wool processing facility though it is not characterized with the high profit margins. Some ethnic groups have also demonstrated their active involvement in sheep farming, i.e. in Kvemo Kartli region, most of the sheep are kept by the Azerbaijanis, in which livestock plays an important role in agriculture (5). In Samtskhe-Javakheti region, both Georgians and Armenians are engaged in sheep breeding, while in Mtskheta-Mtianeti and other regions the activity level is low.
Diagram 2. Number of sheep by region, 2006-2018
Source: National Statistics Office of Georgia, Agriculture, Sheep by Regions, given in ths.
2.1. Production in Sheep Sector
As of 2017, the total area of agricultural land amounted to 2,342,280.52 ha, out of which 54.7%, 1,281,483.89 ha are pastures. Up to 14% of these pastures are privately and the remaining 86% state owned (6). After 1990, some state-owned lands were privatized, that somehow triggered unsustainable grazing management.
Diagram 3. Distribution of private and state owned pastures by regions, 2017
Source: Ministry of Environment Protection and Agriculture of Georgia, Land Categories of Georgia
Sheep sector still has a certain role in Georgia’s agriculture and creates additional value for sheep/goat milk production, though the overall contribution to the total production is quite low.
Diagram 4. Share of sheep and goat milk in total milk production in 2006-2018
Source: National Statistics Office of Georgia, Agriculture, Production
In 2018, compared to 2006, the total milk production decreased by 8.38%, while sheep and goat milk production increased by 36.99%. During this period, the average production of sheep and goat milk amounted to 8.2 million liters. It is noteworthy that the production faces some challenges that hinder the growth of value added production, e.g. the lack of formal education, the scarce amount of raw materials cause the limited scale of diversified production.
Diagram 5. Share of sheep/goat meat and milk in production in 2006-2018
Source: National Statistics Office of Georgia, Agriculture and Food Security, Agriculture, Production
The most part of income is generated from lamb sales, e.g. in 2018, the total amount of meat produced decreased by 12.85% compared to 2006, though, the production volume of sheep and goat meat increased by 19.74%. Farmers sell lamb and cheese mainly in summer and autumn, when demand is highly increasing. Farmers are trying to sell wool in the shortest possible time, as there is a limited number of wool warehouses in Georgia. Some part of the generated sales are reserved for financing future costs, e.g. shepherds’ salaries, pasture leases, taxes. Though, it is vital that for wool, the cost of goods sold is higher than revenue generated from its sale, making wool production an unprofitable business. This is the reason, why in Georgia there is a common practice to throw wool away or burn. However, there still is a potential to utilize wool for further processing and in addition to clothing, use in the construction as a thermal insulator. Based on the statistics, starting from 2015, wool production has a tendency to decline.
Diagram 6. Wool production in 2015-2018 years (ths.tons)
Source: National Statistics Office of Georgia, Agriculture and Food Security, Agriculture, Production, Wool
The main export markets for wool are Turkey, Ukraine and India, where prices vary according to export markets.
2.2 Rapir SWOT Analysis
In Georgia, there are many challenges that sheep sector is facing significantly hindering the further development.
• Pasture degradation. Winter pastures are degraded, there is a lack of knowledge about sustainable pasture management, overgrazing is observed.
• Veterinary services. During the interviews, it was identified, that access to high quality veterinary services is difficult to obtain and the quality of medicines supplied seems to be of the low quality.
• Financial problems. Taking loans for farmers from financial institutions is complicated because of the high interest rates. Additionally, not diversified production affects the sales that mostly depend on the export market.
Based on the information obtained, the following strength, weaknesses, opportunities and threats are identified.
Strength
• The existence of local sheep breeds;
• Opportunity to create seasonal jobs;
• Years of experience working with wool.
Weaknesses
• Farmers are less familiar with modern farm management practices;
• Overgrazing and degradation of pastures;
• Unfavorable conditions of stations;
• Watering problem;
• Limited diversified production;
• Not efficient access to finance;
• Out of date processing equipment.
Opportunities
• Diversified production;
• Exploring new international markets.
Threats
• High risk of diseases;
• Insufficient amount of food base;
• Sheep farming is losing its popularity.
CONCLUSION
The article briefly analyzed sheep farming in Georgia. Additionally, the rapid SWOT analysis of the sector identified the strengths, weaknesses, opportunities and threats of the sector in order to study and evaluate the status of sheep sector. Additionally, statistical data provided by the National Statistics Office of Georgia and the Ministry of Environmental Protection and Agriculture of Georgia on livestock, value added production is analyzed. Based on the rapid assessment, a number of recommendations have been identified:
• Currently, overgrazing is observed in sheep sector. Overgrazing contributes to the deterioration of pastures. It is recommended to develop and implement individual pasture management plans according to the regions of Georgia in order to prevent overgrazing and degradation;
• To raise awareness of farmers and shepherds on current trends and innovations in the field, constant trainings are recommended. Additionally, it is desirable to arrange demonstration plots, showcasing the advantages of rotational grazing;
• Watering is another challenge for winter pastures. It is recommendable to arrange watering systems;
• Improving export potential and penetrating new markets;
• Participate in various international or local festivals to promote value added production;
• Develop small and medium sized wool processing facilities to contribute to the development of the wool value chain;
• Improve access to finance.
REFERENCES
1. Jgharkava M., Salia M., Jinjikhadze L., “Livestock” B + 1, ISBN 978-9941-8-0873-9, Tbilisi, 2018
2. National Statistical Office of Georgia, Agriculture, Livestock and Cattle in 1940-2018 by All Categories
3. The ISET Economist blog – ISET-PI, Georgian Wool: Will It Become a Golden Fleece?, 2017
4. National Statistical Office Of Georgia, Agriculture, Livestock and Cattle in 1940-2018 by Categories and Years
5. www.azerbaijans.com, Economical Geography, Agriculture, website: https://bit.ly/2k8biq8, Last seen: 9/7/2019
6. Ministry of Environment and Agriculture of Georgia, Land Categories, 2017
7. Company Lomtagora, Article: Sheep Sector Development in Georgia, website: https://bit.ly/2U6jdBT, Last seen: 8/27/2019