11 July, 2013
Georgian agriculture cooperatives do not welcome foreign citizens as its members; however, it allows them to set up cooperatives on their own and take benefits but they will not enjoy the state preferences.
A package of bills including the draft on “Agriculture Cooperatives” put under parliamentary discussions by end-April of 2013 does not allow foreign citizens to become a member of Georgian cooperatives. Levan Kalandzde, an economic analyst, believes this kind of regulation is discrimination of businesses for agriculture is
nothing than a business in sooth and business as well as investors cannot be divided in nationalities for the investment capital has no ethnicity. He believes the investment deficient Georgia should be oriented on attraction of as much foreign investments as possible otherwise the progressive business sector will not be developed.
Georgian authorities find no discrimination with the disputed cooperative membership rules. The governmental explanation is that only Georgian citizens are admitted as agriculture cooperative members because number of state programs supporting cooperatives are upcoming in the country [including delivery of agriculture techniques] and the state finds apt to aid its citizens first of all at this phase while foreign citizens have a full chance to set up their own cooperatives in Georgia and enjoy benefits.
Demur Giorkhelidze, an economic analyst, links the issue with the land privatization as far as cooperative members are supposed to have lands in their propriety while the state put a moratorium on divesture of the state owned agriculture lands.
“There is no discrimination at all,” he said in the interview to Georgian Journal. “No state divests the agriculture lands to foreigners freely; it is very strongly regulated globe over. The USA for instance keeps around 62% of its agriculture lands in the state ownership but it never hampers to its agriculture development. Of course the upcoming law on cooperatives is not consummate but this is the first attempt to have this kind of regulation in the country and the flaws will be streamlined gradually after it enters into effect.”
Giorkhelidze finds apt to allow certain category of foreigners [who lived in Georgia for 10 years for instance and have agriculture backgrounds] to become members of cooperatives in future but only within strictly outlined terms.
Ditrikh Muller, a co-founder of Georgian Investment Group, believes foreigners better invest in enterprises rather than in cooperatives.
“Cooperatives will be an amalgamation of petty Georgian farmers with small plots of lands, what the foreign investors are supposed to do there?” Muller asks. “Let them focus on creation of enterprises instead, on reprocessing plants and industry, create joint stock companies and Ltds.”