Agriculture
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Agriculture Agriculture Presentation Transcript

  • www.investingeorgia.org 1 AGRICULTURE A GRICULTUREGeorgian National Investment Agency 2013
  • AGRICULTUREOVERVIEW: 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 220OPPORTUNITIES: 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 etcwww.investingeorgia.org 2
  • www.investingeorgia.org 3 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 PRODUCTIVITYORGIA • 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 View slide
  • 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 2012Share of top exports Exports by country2011, USD mn, percent 2010, percentNuts 30 Others IN GEOAlcoholic bev. 16 Turkey 16 5 UkraineWine 12 36 Kazakhstan 7Water 11 7 Armenia 9 20Live animals 6 Germany AzerbaijanSugar water 3Share of top exports Exports by country2011, USD mn, percent 2010, percentNuts 15 Others AzerbaijanAlcoholic bev. 9 7 USA 5Wine 9 5 Ukraine Kazakhstan 10 32Water 8 11Live animals 8 Brazil 19 11Sugar water 4 Turkey Russiawww.investingeorgia.org 4 View slide
  • www.investingeorgia.org 5 THE SECTOR IS WELL DIVERSIFIED WITH EXPORT STRENGTHS IN NUTS, FRUITS, WINE AND LIVE ANIMALS Processed Fresh VESTORGIA 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
  • 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 (%) 3006Sources: World Bank, Georgia 1797Ministry of Economy and Sustainable 264 802 143Development Total land Non-agri- Total agri- Pasture Land under Mowed Arable land culture cultural land and per-manent lands land meadows crops for hay www.investingeorgia.org 6
  • www.investingeorgia.org 7 AGRICULTURE LANDS AND FARMS 2010, percent VEST Subsistence Semi- Average farm size 2010, Ha 182.0ORGIA 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
  • PRODUCTION MODE IS ON PAR WITH REGIONALBENCHMARKS 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 infrastructurewww.investingeorgia.org 8
  • www.investingeorgia.org 9 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 opportunitiesORGIA Trade balance, 2011, USD mn Medium productivity potential Average productivity potential Import-oriented Trade neutral Export-led
  • 14 POTENTIAL PRIORITIES CROPS/LIVESTOCKTO FOCUS DEVELOPMENT EFFORTSHIGH POTENTIAL PROJECTS GEORGIA’S COMPETITIVENESS IN ▪  ▪  ▪  ▪  ▪  ▪  IN GEO ▪  ▪  ▪  ▪  ▪  ▪  ▪  ▪ www.investingeorgia.org 10
  • www.investingeorgia.org 11 REGIONAL COMPETITIVENESS AND POTENTIALS MAP VEST C O O CROP POTENTIALS BY REGION S GOORGIA BASED ON REGIONAL SPECIALIZATION (NATURAL ENDOWMENTS, CULTIVATION HISTORY), PRODUCTIVITY AND SEASONALITY
  • INVESTIN 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