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Geography

Strategically located at the crossroads between Europe and Asia, Georgia became independent in 1991, after almost 70 years as a member republic of the Soviet Union. The country’s borders touch the Russian Federation, Azerbaijan, Armenia and Turkey, and the Black Sea on the west. Largely mountainous, it has a land area of 69,700 km2, almost half of which is covered by forest.

The population, estimated at about 4.5 million in 2005, is shrinking at an annual rate of 1 per cent. The rate of urbanization is high, and in 2000 Tblisi, the capital, was home to almost one third of the population.

Agriculture

Georgia has abundant natural resources and good potential for production of a wide range of crops and livestock. Its winemaking tradition dates back many hundreds and perhaps even thousands of years.

While Georgia was part of the Soviet Union, the state controlled agricultural production through cooperative farms. Irrigation systems and livestock production were centralized. Georgia imported wheat, sugar, milk and meat. Tea, citrus fruits, deciduous fruits and vines were its major crops, mainly for export to other Soviet republics. In the post-Soviet period, this type of production declined by as much as 85 per cent.

The agriculture sector now accounts for less than 20 per cent of gross domestic product (GDP) but it provides employment for more than half of the total population. The country continues to rely on imported grain, dairy products and meat to satisfy more than 50 per cent of national demand.

Economy

Under the Soviet Union, there was a radical shift in Georgia’s economy from a traditional agricultural base to a large-scale, artificially developed industrial base that depended on subsidized inputs and imported energy.  Massive state subsidies also supported agricultural production through a system of large collective farms and production targets.

Since independence, Georgia has struggled through a series of national and international financial crises, and it is gradually making the transition towards a fully functioning market economy. GDP currently stands at about US$6.4 billion. Gross national income per capita almost doubled between 2000 and in 2005, rising from US$700 to an estimated US$1,320. Presently the agricultural sector is suffering from a trade embargo imposed by the Russian Federation on wines, spirits and the sale of agricultural exports.

Source: IFAD