The primary aim of the agrarian policy is to ensure the food security of the country and to strengthen the independence of the country by using its agroindustrial potential. For the above purposes, the following objectives should be achieved: · Enlargement of the range of reforms and the processes of restructuring on the base of stable legislative background; · Formation of favourable environment for competition. Promotion of efficient and competitive enterprises; · Increase of demand on domestic market; employment and income growth; · Provision of the country's participation in the competition, by producing profitable products in terms of its economy and social and political importance. · Restoration of country's position in the international markets and intrusion into new markets; · Accumulation of resources according to the spheres of priority; · Considerable development of the country's industry. · Increase the extend of participation of food industry, trade, machinery production and other branches related to agriculture in the structure of the sector; · .Formation and development of market infrastructure, contributing to the production growth; · Effective functioning of state regulation and self-regulation principles of free market economy; · Transformation of mentality and the development of skills, necessary for operation in the new environment. The laws, supporting the process of land reform and having critical importance, were adopted after 1996. These are "The Law on Agricultural Land Ownership", "The Law on Agricultural Land Lease", "The Law on Land Registration", as well as the Decree on Creation of State Land Administration Department for the function of land registration. In 1998 the Parliament adopted the "Law on Privatisation of the Non-agricultural Land"; One of crucial issues of the privatisation of the non-agricultural land is the establishment of the minimum selling price of the land plot offered at auction or by tender. The structure of agricultural area ownership underwent a significant transformation during the first stage of the agrarian reforms, beginning from 1992, when the process of land privatisation began to be undertaken. If, prior to the reform implementation, only 211 thousand ha agricultural area was in private use accounting for 7% of the total agricultural area, after land reform 1,06 million ha of agricultural lands have been granted to 1,2 mln families of Georgia. This constitutes 35% of the total agricultural area, 55 % - of arable lands and 67% of lands under perennials. In addition, 24% of state owned lands were leased to farmers (1998). In the same year, 80% of total agricultural output was produced in households. However, due to small average areas (0,87 ha per household) and lack of access to market, the level of production efficiency is very low. Individual farms on a larger scale will become the leaders in agriculture, particularly in the mountainous regions. However, partial privatisation caused some problems in the agricultural sector, because most private land users do not have formal title to the land they use, and they cannot offer the land as collateral for loans. This works as a disincentive to invest in agricultural development. It is on this stage, the reorganisation processes of agricultural enterprises are carried out. The former collective farms, state farms and other types of state agricultural enterprises, being founded on the private co-operative and other kind of ownership, are being transformed into new legal organisational forms. The main irrigation schemes, which are commonly used, will stay in state property. As to the inter-farm distribution schemes, they will be included in the privatisation program. Tariffs on water use will also be adopted. In the medium term, 110 agricultural enterprises, having the status of treasury enterprises, represented mainly by the breed selection, seedling, seed breeding, experimental/testing and training enterprises will stay in ownership of the state. Besides the treasury enterprises about 1700 enterprises of different form of property act in rural areas with the legal status of agricultural enterprises, of which 630 are companies of limited liability, 100 companies of joint liability, 30 joint-stock companies, 240 co-operative farms and 250 individual farms (1998). Development of the forms of co-operation contributes to the increase of productivity in the sector of agriculture. Physical persons and legal entitles can become members of farmers or credit co-operatives. |
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 Project Supported by TACIS |
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