Agriculture is one of the most important sectors for Georgia, however not economically, not yet. It is important socially. Agriculture counts around 9 per cent of total GDP while it employees almost 50 per cent of population that what makes it really important and distressed at the same time.
In previous post I was showing how much business is under-developed in Georgian regions. Share of all regional businesses into the total business turnover is circa 30 per cent, 70 per cent of it counts after the capital city - Tbilisi which is extremely disproportionate towards the population and jobs allocation; almost 50 per cent of population (mostly poor) lives in non-urban regional areas. And agriculture is the single largest business field in such places involving households, micro and small enterprises. So to explain why the Georgian regions are in a such desperate economic situation where they are we shall look into the Georgian villages, the source of primary agricultural production. That's the reason I remembered an article I wrote some times ago and still continue adding new paragraphs.
The biggest misfortune of agriculture is that the governments love to play with it, in fact it is the government's favorite playground and it is integral part of the politics. Below is a story about Georgian rulers playing in Geoville, real-time game and how the sims are influenced by gamers' strategies.
The terms "Georgia" and "Georgian" appeared in Western Europe in numerous early medieval archives. At the time, the name was folk etymologized – for instance, by the French chronicler Jacques de Vitry and the compiler John Mandeville – from Georgians' especial reverence of Saint George. Another theory, popularized by the likes of Jean Chardin, semantically linked "Georgia" to Greek and Latin roots, respectively, γεωργός ("tiller of the land") and georgicus ("agricultural"). The supporters of this explanation sometimes referred to classical authors, in particular Pliny and Pomponius Mela, who wrote of "Georgi" tribes, which were named so to distinguish them from their unsettled and pastoral neighbors.
Georgia (Country) - From Wikipedia, the free encyclopedia.
No one really knows which theory is true, maybe it is just a coincidence but agriculture has been an integral part of Georgian national identification for the centuries. Despite long history it is hard to find reliable facts about Georgian agriculture before the sovietization , but since that everything is more or less well documented, at least at the level one can judge.
Cascade of unfortunate events in our agriculture took place from the very beginning of communist era. Ironically, man who had shocking impact on Georgian agriculture was Georgian himself – Joseph Dzhugashvili, known worldwide more by his nickname – Stalin.
His strong obsession with industrialization and communalization has ruined the traditional routs of Georgian villagers and turned them into collective based farming industries through dekulakization.
I don’t want to keep much attention on the past but it is important to know old chronicles because our agriculture nowadays is a mutated product of the soviet legacy.
A few years ago I watched one show at History Channel, one I still remember and a historian was saying Hitler and other great dictators would almost certainly have been influenced by computer war games had they existed, probably for good. In our century these type of pupil usually are low performing, closeted personals. Maybe now we are safer in our epoch thanks to the IT game developers. Maybe even Georgia would have been ended-up with well developed agriculture had Facebook app Farmville been available for Mr. Stalin.
The first President of the second republic Mr. Zviad Gamsakhurdia had little time and desire through his turbulent term to keep a serious attention on agriculture, thus it continued free fall from Kolkhozs to ugly product of Kolkhoz and wild-west marriage.
The dust has started settling down since the former Minister of Foreign Affairs of Soviets became leader and president of Georgia. Unlike the first president, Mr. Edward Shevardnadze has already had experience and deep understanding of Geoville. In his former capacity as a head of soviet Georgia, he had already enjoyed it and now experienced player, he had precise plans how to win his own gamble using Georgian agriculture among other things.
Account of our farm takes its start in 1992. It is time of desperation in Georgia; country is divided between the numerous street gangs and militias with no rule of law in action; complete blackouts and cues to get a bread and lumber to feed and heat the families.
A man, father of two sons and beloved husband has been working within the state bureaucracy throughout the communist rule. Typical homo sovieticus, well educated, without single entrepreneurship skill suddenly became jobless at a day when Soviets collapsed; commanding economy simply stopped working and bank savings surprisingly disappeared or were stolen by some rumors.
Whole generation became jobless and hopeless. Even now, after the years only minority found strength and ways to adjust to ‘bitter’ reality.
A man, farmer as we will call him hereinafter turned to the village (many others did so) in order to feed his family, that’s how our farm Lagofarm was born. Of course hardly a farm in 1992; two cows inherited from old mother and a few hectares of land again hold by the family as a vineyard as it was common and typical in Kakheti, East Georgia.
Together with another half of Georgian population up to 2.5 million people he became first sim in a new game started by the Government in 1993 – Geoville.
Hunger and desperation was common features of Georgia after the years of internal and external wars, and the President decided to fulfill two missions together necessary for his gamble. Mission one was feeding about 2.5 million Geoville folks and mission two was making them happy through the gifts. A gift decided to be a land, agricultural land previously owned by the state Kolkhozs. Best part of irrigated agricultural land, 30% of all agro-land was distributed among Geoville families, each receiving circa 1.25 hectare.
Well… sims were happy in Lagofarm, and in all Geoville. Now they have a land, something they can harvest and get some food. Also, it is first time they have a real ownership of lands, suddenly all of them became landlords, something no one could imagine recently. Mr. President was joyful as well, people got food or at least means to get one and property which made them happy thus grateful to their government… now he had time to rest…
Immediately after the privatization land market formation started, those in absolute need of cash sold their properties and went to Europe or Russia, others bought it among buyers was Lagofarm too, it was a time when it really turned into tiny farm.
These accounts describe first and only landmark reform has been implemented in Georgian agriculture after the independence. The results were and are obvious; it had positive short-term impact on the hunger and extreme poverty and it must be said, I doubt government had any other choice; second and long-lasting result is a structural failure it created, it still prevents agriculture development nowadays. It simply makes land consolidation too time and money consuming.
Fundamental reform was followed by other smaller scale reforms. After some time government turned off the taxation on the lands they’ve distributed, now slowing down operations on land market since cost of keeping land disappeared, also was never such important. Because of consecutive budget cuts agricultural infrastructure fully degraded; tractors were stolen or captured by Tractorist sims, however unable to keep them into normal conditions; irrigation channels became dry; processing factories were cut in pieces and sold to Turkey as a scrap metal.
Later when the government institutions performance improved, it turned an attention back to agriculture. Number of programs was initiated tackling two critical issues: irrigation and lack of capital. Irrigation was more successful; finances were too short to make a difference. Those programs were financed by different donors.
Lagofarm was one who benefited especially from consulting, something important especially those times. State assistance was ruined; folks had no clue how to run agriculture because in the past they were simply ordered to not to think, especially they knew nothing about modern agriculture. Americans were helpful; they provided great assistance through distribution of fertilizers and fertile seeds. Small grants and loans became available to improve farm machinery and infrastructure. People were taught how to use the biomasses.
As a result small scale farms mushroomed, with existing but no real on the ground regulation most of them sustained and became profitable; well, maybe quality wasn’t there but first Geoville made products were reborn.
On St. George’s day, 2003 23 years rule of Mr. Shevardnadze was over. Modern days the famous Georgian after Stalin was forced to leave an office and went home. It was time to judge his inheritance. Definitely he left united Germany and not so much united Georgia, but still a country, yes with rampant criminal and corruption however without civil war and militias.
As for Lagofarm, at the end of Shevardnadze’s era it became a small farm, up to 35 ha land, 25 pigs, same number of cows; own electricity out from small generator on a river inside farm; again own artesian water and biomass gas producing system. Now it had some land for grain and enough hay for winter. 1 tractor emerged as well as a few support buildings. Future was uncertain but optimistic.
2004 was a turning point in Georgia’s government policies. Quasi industrial policy was over, donors’ advices as well as many projects were thrown away and state started ambitious reforms. Rule of law was established, core infrastructure improved. Means of corruption – state regulations were wiped out especially in agro- related sectors, taxes were lowered but administration strengthened.
New government had no or small desire to play in Geoville so admired game of former rulers, well, there were still some gifts given to the folk, after all it was necessary to make them happy, sometimes diesel was distributed, sometimes fertilizers miraculously coincided with the elections but overall sims were happy. They’ve got electricity, roads, easy governmental services, what else was needed?
It is not a subject of this story to tell about different political failures the government experienced but some became important and damaging for Geoville sims’ morale and some materially affected too the farms similar to Lagofarm.
Constant drive for increasing rule of law and perfectionalism led to stricter business administration. Despite of large abolishment of regulations it still made difficult for local producers to survive, mainly to get to the market, while making much easier and profitable for some traders to enjoy the local market. Infrastructural improvements too made easy to import more than easy to produce, little was done to improve agro infrastructure, connection roads, no support systems were established.
Over time, despite the fertilizers and diesel distribution moral started decreasing in Geoville, it was obvious the folk needed something else in addition to material support, but player didn’t understand or didn’t want to understand.
What happened to Lagofarm? It survived, even more it expanded, a few hectares were added and cattle size increased, but it struggled to turn into profitable enterprise.
To make it clear once more, government haven’t been playing in Geoville, it wasn’t a deliberately wrong policy which affected agriculture, however it was a side effect of some other policies damaging status quo between producers and traders, producers and producers, producers and importers, agriculture and other sectors. After all lower preferences were given to farming business compare to others.
Some may say there was no industrial policy and government had general reforms but fact is government directed its financial and institutional resources to the chosen sectors e.g. electrical energy but agriculture. There was something else, something the player failed to understand entirely, this something was shattering sims morale thus lowering their productivity.
Situation started changing later once government’s criticism in lacking agro policy has reached its highs. Because of political and social problems finally government has decided to log in and continue playing in Geoville.
First attempts were distribution of vouchers to cheer up Geoville folks, rather than that it had no impact. A positive side was the donors rushed again to enter resumed game; Americans were helpful as always.
Different programs started or continued. Much needed consulting was provided, fertilizer distribution centers emerged. Life became easier for Lagofarm; it became possible to enlarge running a proper management and human resources. First time new tractors were purchased, cultivation and fertilizing improved. However success was not obvious, new gamer, the government was not satisfied. It started looking for the reasons behind and shortly discovered, Geoville folks were lacking education. It started educating the sims. After some time it discovered hardly all folks were learning from slick government pilots and turned to dictating. Dictate what to harvest and not, some programs were created to ‘motivate’ farmers to get rid of ineffective cultures and switch to desirable ones.
Some of them succeeded, some less but folks became even more demandable. Why? Because now they were planting according to government rule and respectively were blaming government in failures, plus asking for more support. Results were remarkable. At the same time government rediscovered importance of irrigation and machinery. At the end government was in full action.
Finally mood started improving in Geoville, cues for tractors were shortened, optimism took place. But time was off and new admin kicked out a player from the game.
New admin had big plans for Geoville, the law was enacted forbidding foreigners ownership of the rural lands, something folks became cheerful about from the beginning, no one will take away their lands anymore, but soon some realized no one would pay for the lands anymore too that high as foreigners were paying before. The new gamer continued well practiced money wasting gift giving practice, vouchers, sims appreciated however as before it had little or no real impact.
For good, new player soon realized it was a way proven to no-way, and changed its style quite abruptly, he started realizing for himself the most important basics of agriculture, and started directing funds into: the rehabilitation of irrigation system, financing the consolidation - consolidated efforts through cooperatives, assisting the access to the market, popularizing the new technologies in order to limit the natural impacts over production, setting up the agricultural insurance and etc, quite many things Geoville has been lacking all over the past period.
However, the current player is still missing some more basics yet. Development, especially the development of new technologies is very slow, extremely slow; with all these ups and downs, nowadays Lagofarm is 60 ha farm with up to 100 cows, cultivating different crops, with modern machinery. It is a clear achievement from two cows and a few hectares however it took 20 years. 20 years, some may call years of development, some – wasted years. Probably both. Certainly too long.
What else could have been done? or has to be done? Access to finance remains the critical aspect of agricultural development and it is not about having a good project, agriculture generated incomes are still too small to motivate banks enough. Yes we have the market economy but there are some other ways to open up the money flow channels other than banks into the agri-sector. Contrary to opening with the removal of foreign ownership the sector is left entirely without FDI in primary agriculture. Other supportive systems are not in place either, still country does not have full land cadastre to make it easier for local investors to look after the lands, agronomists are nod widely available to advice to the investors and etc.
With all the ongoing state push for the new technological solutions it moves with turtle speed. Why? Who should adopt them? The farmers right? Yes indeed, however they lack the skills, remember where they are coming from. In fact the gamer did realize it and funded some gifts - free farmers trainings, but it is not enough. Geoville needs streamlined access to the skills, wide network of vocational education and training centers, almost one per municipality, not consolidated into other VET centers. It needs VET centers well integrated into the local business communities with their own participation into their management.
Would it be enough: finance and skills? In fact Lagofarm would be producing more dairy products, however in order to generate more income it still needs to sell some special cheese abroad, or at least within the established corporate networks within the own country because the regular people's purchasing power is still too small to support the production of high-end quality products. However, there is still a big 'but' Lagofarm is a tiny business compare to other sectoral businesses, it barely finances itself from year to year, how would it support the creation of intermediary channel from farm to the international or advanced local markets? That's where the gamer's effort is needed. Creation of such platform - access to market - would be a real useful gift to Lagofarm and all other folks in Geoville.
Luckily for the gamer his time is not over yet, he can still make Geoville sims happy.