ATG -- Armenia and Georgia: Macroeconomic Reforms and Privatized Agriculture

TV Report
Profiles ATG
DONATE NOW
Saroyan Album
Farmer Feature
Bike for Hope
Annual Report
News
Testimonials
Links
Photo Gallery
Newsletters
Subscribe
Contact ATG
Site Map

print page

Armenia and Georgia: Macroeconomic Reforms and Privatized Agriculture


	(excerpted from International Agriculture and Trade [Newly Independent States & the Baltics], May 28, 1997. Published by the Economic Research Service of the U.S. Department of Agriculture.) Armenia and Georgia stand out as the countries with the most reformed agriculture in this study. These are the only countries that have introduced both macroeconomic reforms (price deregulation and liberalization of domestic and foreign trade) and have effectively privatized agriculture. The combination of price liberalization and privatization of agriculture is responsible for the best record of growth in NIS/B agriculture. Armenian agricultural production has grown for 4 consecutive years, while Georgia's agricultural production has risen for 2 years. The livestock sectors in Armenia and Georgia turned around in 1994 and 1995, and have been expanding since. This growth is remarkable given the continued decline of the sector in most of the other NIS/B countries, and suggests that, despite great difficulties (such as absence of financing and poor land quality), private farms can be financially viable, even when former state and collective farms perform poorly. In Armenia, agricultural and consumer prices were deregulated in 1992. State commodity procurement was ended in 1995. Subsidies to agriculture, except for irrigation, have been substantially discontinued. In Georgia, state orders were eliminated in 1995, and agricultural prices are market-determined, though some retail price controls exist for bread and milk. External trade liberalization of agricultural markets has lagged behind liberalization of domestic markets. In Armenia, the export of grain and grain products is prohibited, and there are minimum export prices. Moreover, imports of food products from outside the NIS region cannot exceed 50 percent of total consumption. In Georgia, the export of meat, meat products, dairy products, grain and grain products, sugar, and mixed feed is prohibited. There is a 12-percent uniform duty on extra-NIS imports. The two Caucasus countries have seen the most thorough, rapid, and comprehensive land privatizations in the NIS/B area. Armenian agriculture was decollectivized in 1991, and now all but 20 percent of arable land has been distributed to private farms. In Georgia, private farms hold only 49 percent of cultivated land. However, the rest of land held by collective and state farms lies virtually unused, because those farms have essentially ceased production. The typical farm size in Armenia and Georgia is about 1.5 and 0.75 hectares, respectively. These are essentially enlarged private plots. They are predominantly mixed farms, producing corn, vegetables, fruits, and grapes, as well as milk, meat, and eggs. Crop yields on private farms in Armenia and Georgia have been, on the whole, comparable to historical yields on former state and collective farms. Livestock productivity indicators on private plots have always been better than those on state and collective farms, and, despite their small size, farms in Armenia and Georgia are not aimed at self-sufficiency. These farms tend to market 30 to 40 percent of their main products, mostly directly to consumers.


Armenian Technology Group, Inc. 1300 East Shaw Avenue, suite 131 P.O. Box 5969 Fresno, CA 93755-5969
tel: 559-224-1000	fax: 559-224-1002	e-mail: info@atgusa.org
© Armenian Technology Group, Inc. 2010 Web Site by Web Crafter