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;
• Over the same period, 65% of Georgia’s agricultural exports were destined to CIS countries, a share which would have been even higher if Russia had not banned imports from Georgia between 2006 and 2012.
While it is positive that Georgia exports many processed agricultural products, the high dependence on a few products and destinations makes Georgian agricultural exports vulnerable to disruption, as has been experienced in the past.
We discuss a series of measures that can contribute to increasing and diversifying Georgia’s agricultural exports. These include:
• Implementing a generic promotions program for Georgian agricultural exports in high-income markets such as the EU;
• Upgrading Georgia’s agricultural education and research capacities;
• Improving the training of workers and managers in agricultural production and food processing; and
• Investing in domestic transport infrastructure.
