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4 thoughts on “TBLPOD25april2013

  1. The concerns of Georgian rural residents regarding foreign ownership of farmland are common in most countries, including western countries. It is usually argued that the benefits outweigh the risks and downfalls substantially.

    I commenced my professional career in agribusiness in the country of my birth, working for a large Japanese-Australian JV company. At that time, there was great nervousness about a Japanese “invasion” of rural Australia (it was almost half a century after Emperor Hirohito’s surrender speech but word can travel slowly in the bush). Our company and the rest of our industry examined the benefits and threats of foreign investment in Australian farmland (a Senate enquiry followed) and the balance was found to be overwhelmingly positive for the country. Our firm purchased over $150 million worth of goods and services from the local district each year, mostly from neighbouring farms. Foreign-invested firms offered salary packages in the top quartile of the industry, and invested more than three times as much in staff training per employee as domestic companies did. I was lucky to be a beneficiary of that rigourous training and it set me up effectively for my career as an entrepreneur.

    My many years working in agribusiness in Asia reinforced that observed trend; foreign invested companies tended to pay more, adhere to the labour codes and safety regimens more strictly, and invest more heavily in staff training than domestic companies.

    A large proportion of successful rural entrepreneurs in Asia have done their time in foreign-invested firms and after developing professionally in that environment, raised their own capital to set up efficient enterprises that are internationally competitive, often giving their former employers a run for their money.

    I see no reason why the same trend should not be true in Georgia. The ability of foreign firms to secure freehold title to farmland is one of the few competitive advantages that Georgia has over neighbouring Black Sea countries with giant economies of scale. Excluding foreign entities from land purchase will discourage the investment needed to rejuvenate the skills base in rural Georgia, damage Georgia’s balance of trade and put upward pressure on food prices for the urban poor. It will also remove the “floor” in rural land prices that has been established over the past half-decade or so; many landowners with mortgages may find themselves in negative equity as the pool of eligible buyers of their plots shrinks from 7 billion people to 4 million.

    It should also be considered that by far the largest community of foreign farmland owners in Georgia are citizens of the Russian Federation, even if their surnames end with -shvili or -dze. It would not be prudent to cut the Georgian diaspora off from rejuvenating their own homeland. Oddly enough, the Prime Minister as a French citizen would be in the position of being unable to acquire more than 2.5 Ha of land in his own name, which could be problematic if the penguins or zebras start breeding and need more room to move.

    To be fair, foreign investors in farmland could do a much better job of educating their neighbours and local MP’s of their usefulness and sharing expertise with neighbouring smallholders. Hopefully a sensible solution to the land ownership issue can be found that allays people’s fears while maintaining strong growth in employment and economic output in the countryside.

  2. Tamar Chergoleishvili’s statement at that unnecessary and idiotic gathering, was an insult to the gentleman who initially penned it, as it was stated completely out of context of what it was intended to describe. Despite what that excitable boy may think, there are many other adjectives that could be used to describe Ms Chergoleishvili, however “cool” is certainly not one of them.

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