Bill of Cooperatives Falls below Par
16 May, 2013
Bill of Cooperatives Falls below Par
A draft law on agricultural cooperatives, initiated by the Agriculture Committee of Georgian Parliament, reminds more a charter than a law because it falls out of the best world practice.
A package of bills including the draft on “Agriculture Cooperatives” put under parliamentary discussions by end-April of 2013 aims at pooling the heavily dissected agriculture land resources of Georgia through boosting cooperatives’ activity throughout the country. As the Soviet system collapsed in 1990s and the country plunged in economic and
political crisis, Georgian government carried out socially-oriented land reform by dissecting the integrated agricultural lands in small parcels and redistributing them among almost entire population - rural and urban alike - to save them from famine. The reforms did really work as short-term remedy but devastated agriculture in a long-term prospect. By today around 78% of framers own 1 hectare (ha) land spot that makes agriculture activity non-profitable. People gave up land cultivation and flooded Georgian capital in quest of jobs. The underway draft law on cooperatives is expected to make agriculture profitable and one of the leading sectors of Georgian economy.
As a matter of fact, the submitted package of bills includes taxation preferences and incentives to cooperatives but the draft law on Agriculture Cooperatives itself falls below the par: it lacks the core point of cooperatives’ operation such as the detailed regulation of inter-cooperative-partnership relationships. There are two models of legislation that regulate cooperatives globe over: one of them is when the law contains comprehensive regulations [including creation of share fund and redistribution income/loss among cooperative members] of cooperatives within itself; the other model puts out the law like a charter and the detailed regulation of inter-partnership relationships is shaped out by ministry of agriculture in the normative act. Georgian version follows neither of them. It puts out the law as a bunch of guidelines and elaboration of the inter-cooperative-partnership is left at the discretion of cooperative members after cooperatives will be set up.
Meantime Georgian experts worked out the law on amalgamation of agriculture landowners in 1998, in cooperation with the EU peers that was in line with the EU regulation, which was approved in Brussels. “I gave these documents to initiators of the underway bill but they ignored this ready-made work and pruned the law to a charter,” Paata Koghuashvili, an agriculture experts, said. The explanation is “to make things simpler”. Davit Mamukelahsvili, an economic analyst, presumes things will be getting only complicated in fact: piles of amendments will be necessary to be made gradually; the law-making process will be unreasonably protracted in time thus hindering the entire agriculture development as the law on cooperatives is the basement of the entire sector’s development and all other agriculture supportive programs are destined to fall flat without relevant back-up of law on cooperatives.
“I am far from the idea that a law should be consummate at the very outset but this here bill on cooperatives had really better to share any of the models adopted worldwide to be effective this year. Now it is pretty shallow and hardly supposed to have any effect this year. To me Ministry of Agriculture of Georgia should elaborate the inter-partnership regulations and issue a normative act as soon as the law on cooperatives will be approved,” Mamukealshvili told Georgian Journal. However, he finds positive that the issue started from the dead point at any rate.
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