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ECONOMY > GEORGIA

Cooperatives the new way to agriculture While nearly half of the www.enpi-info.eu population in Georgia derives most of its income from agriculture, the sector actually contributes less than 10% to GDP. This is mainly due to the low efficiency of production, caused mainly by the scarcity of owned lands and the limited exposure to modern farming methods. With the support of the European Union, the Georgian government has begun the process of attempting to unblock the most problematic bottlenecks of the agricultural sector. The aim is the establishment of 160 cooperatives, which are business oriented voluntary-based organizations of small farmers, expected to create economies of scale, improve connections to the market and enhance efficiency, all of which would lead to economic growth. An EU Neighbourhood Info Centre journalist visited a women’s cooperative benefitting from an EU project’s grant and wrote this report. Text by Maia Chitaia Pictures by AFP © EU Neighbourhood INFO CENTRE

This publication does not represent the official view of the EC or the EU institutions. The EC accepts no responsibility or liability whatsoever with regard to its content.

Nearly half the population of Georgia earns the majority of its income from agriculture, N Almost 74% of the rural population is established on and most of the rural population is made up of farmers struggling to produce enough plots smaller than one hectare. to feed their family. They produce so little that they can hardly sell substantial amounts to the market. In fact, the sector contributes less than 10 per cent to the country’s Gross Domestic Product. One of the main reasons that efficiency in the sector is so low is the scarcity of owned lands and the minimal exposure to modern farming methods. Almost 74% of the rural population is established on plots EU Neighbourhood Info Centre smaller than one hectare and these small-scale producers have very Feature no. 122 limited power and capacity to be successful players in the market. With the support of the EU, the Georgian government is creating a supportive environment for the creation of farmers’ cooperatives, through the adoption of a new law establishing Farmers’ Cooperatives and the Agency for Agricultural Cooperatives Development. In 2013, the

This is a series of features on projects funded by the EU Regional Programme, prepared by journalists and photographers on the ground or the EU Neighbourhood Info Centre. © 2014 EU Neighbourhood Info Centre


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Cooperatives, the new way to agriculture

EU and Georgia signed a financing Agreement for the Implementation of the European Neighbourhood Programme for Agriculture and Rural Development (ENPARD). EU funding to ENPARD amounts to €40 million, making it the largest donor assisted programme in the agricultural sector in the history of independent Georgia.

Farmers and rural life in Georgia matter to the EU N Local farmers work on their land.

Within the framework of the programme, the European Union recently signed four agreements in support of small farmers. The grants that have been awarded, worth a total €15 million, will be implemented by four consortia: Oxfam Great Britain, Care Austria, People in Need and Mercy Corps Scotland, bringing together 16 national and international organisations, including agriculture associations and academic institutions. The projects will aid the establishment of more than 160 cooperatives with at least 3,000 members, by providing technical assistance, capacity building and direct investments. The initiative covers 45 districts and targets the entirety of the country. “Farmers and rural life in Georgia do matter to the European Union,” says Boris Jaroshevitch, deputy head of the Delegation of the European Union to Georgia. ENPARD is a very ambitious programme, aiming to tackle some of the obstructions present within Georgia’s agricultural sector. Among the programme’s targets are to re-establish advisory services for farmers in all districts of the country, as well as capacity building actions in support of the Ministry of Agriculture via the Food and Agriculture Organisation of the United Nations (FAO). ENPARD provides direct budget support to the government of Georgia for the implementation of its agriculture sector strategy and provides expertise and know-how to the Ministry of Agriculture. Another important component of the programme is its aim to support business-oriented cooperation such as modern and marketoriented service cooperatives among small farmers in Georgia.

“Farmers and rural life in Georgia do matter to the European Union”


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Cooperatives, the new way to agriculture

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Selling rose hips to a juice factory

N Handshake between Georges Chlonti from Care Osterreich and Deputy Head of EU Mission Boris Jaroshevich after signing four grants in support of small Georgian farmers.

Funded cooperatives are business oriented voluntary-based organiszations of small farmers, created to gain economies of scale, enhance efficiency and improve linkages to the market. The farmers will co-finance the investment support will be co-funded by the farmers, to ensure their ownership and commitment. The Internally Displaced People women’s cooperative of Tsinamdzgvriantkari is one of ENPARD’s success stories. Tsinamdzgvriantkari is a small village some 20km west of the capital Tbilisi, and typical of the problems facing many parts of rural Georgia. The village is in poor shape, with semi-ruined roads and buildings, and shabby groceries. Internally displaced people from the Shida Kartli region (South Ossetia) were housed by the government in this city years ago and handed out a small plot of land. “We cultivated mainly vegetables, but this wasn’t enough for a big family with kids,” says Maia Garsidze, the leader of the women’s cooperative. “So we decided to collect the wild rose hips in the nearest forests, and to sell them to a juice factory.” This initiative received the support of Oxfam GB, with the financial assistance coming from the EU. The cooperative has been equipped with the main tools needed to conduct this kind of work efficiently, even installing greenhouses. Now, the cooperative has the capacity to dry the product and in doing so receives twice as much money selling it on. “With the income I get now from my work, I can keep my family afloat,” says Maia.

“We decided to collect the wild rose hips in the nearest forests, and to sell them to a juice factory”

Pooling resources together Until recently, Georgians perceived the concept of agricultural cooperation in a very specific way, probably because of the negative legacy of collective farms, ‘kolkhoz’, during Soviet times. But kolkhoz have nothing to do with the way agricultural cooperatives function in Europe and elsewhere in the world. A cooperative is a commercial company, whose owners are its members, in this case the farmers. They do not share the land, they just decide to pool specific resources for certain purposes. Cooperatives are the basic bricks in the fabric of market-oriented agriculture, and probably the only way to ensure that small farming can be profitable. All agricultural activities implemented within the ENPARD programme will be supported through dedicated cooperatives, from joint production to storage, transport, processing, marketing and sale of products. N The Georgian government is creating a supportive environment for the creation of farmers’ cooperatives.


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Cooperatives, the new way to agriculture

The Association Agreement and the Deep and Comprehensive Free Trade Agreement (DCFTA) that the EU and Georgia have already initiated and are expected to sign in a few months, will bring Georgia closer to Europe, not only in terms of trade and further economic links, but also in terms of sharing important values like paying sufficient attention to the needs of rural areas.

“With the income I get now from my work, I can keep my family afloat”

N Local farmer Bacikadze Izolda offers a taste of her products.

ENPARD European Neighbourhood Programme for Agriculture and Rural Development http://eeas.europa.eu/delegations/georgia/documents/news/annex_enpard_20130313_en.pdf The programme aims at boosting the production of food in Georgia and at reducing rural poverty. Besides the grants component, ENPARD also provides direct budget support to the Government of Georgia for the implementation of the agriculture sector strategy, and brings expertise and know-how to the authorities Budget € 40 million Timeframe March 2013-March 2016 Find out more EU Neighbourhood Info centre news ENPARD EU Neighbourhood Info Centre webpage - Georgia EU Delegation to Georgia website EU cooperation programme in Georgia project fiche EU Neighbourhood Info Centre Feature Let’s meet Europe on the bus

EU Neighbourhood Info Centre An ENPI project The EU Neighbourhood Info Centre is an EU-funded Regional Communication project highlighting the partnership between the EU and Neighbouring countries. The project is implemented by Action Global Communications.

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