Cooperative Agency is set up
26 November, 2013
Cooperative Agency is set up
On November 11, 2013 a Cooperative Agency expected to regulate all cooperative-related issues was established as an independent regulatory body. The Agency will start the process of giving status to cooperatives in December. Before then representatives of the Agency will hold meetings throughout Georgia to raise awareness of potential cooperative members.
“Georgia is a land-deficient country and implemented unreasonable land reform [in the early 1990s of the past century] that resulted in extreme divisions of agriculture lands,” ShalvaPipia, Minister of
Agriculture of Georgia, admitted during the Agency presentation event. “As a result more than 90% of the population has less than 2 hectares (ha) of agriculture lands as property. Cultivation of small lands is non-profitable and ineffective.”
To solve the problem and pool agriculture land again, the new government sought to create a new law on cooperatives; it succeeded in July of this year, when Parliament approved the law.
However, sector pundits are not very happy about the law; they claim it fails to address core problems of the operation of cooperatives, such as a detailed regulation of inter-cooperative-partnership relationships.
In fact, Davit Mamukelahsvili, an economic analyst, expects that things will only get more complicated: over time piles of amendments will be necessary; andthe law-making process will be unreasonably protracted, thus hindering agriculture development in its entirety, since the sector’s development is based upon cooperative law … if not backed up by relevant laws on cooperatives, it is destined to fall flat.
However, he believes that it is better to have a law at last and make it perfect step-by-step, to encourage cooperatives, rather than to have none and flounder. And rules governingthe Cooperative Agency are part of the law on cooperatives. The Agency is mandated to regulate the formation of cooperatives, membership, functioning, and closure procedures. The Agency will also monitor cooperative activity and implement state programs for cooperative support.
According to Pipia, the main goal of the Agency is to work out special mechanisms and offer them to farmers in order to boost long-term development of cooperatives. First a publicity campaign will start next month, throughout the country, to raise theawareness of small farmers of how cooperatives can be set up and what benefits they offer.
According to GiorgiMisheladze, Head of the Agriculture Cooperatives Development Agency at the Ministry of Agriculture, cooperative members will have access to state programs and grants, as well as to free education programs. Members will also enjoy taxation preferences: they will be exempted from property and profit taxes. An information base will be created that will enable government to define priorities according to regions. Authorities believe cooperatives will boost consolidation of lands, job creation, the adoption of new technologies in agriculture, and increase the export of agriculture products.
Development of farming and cooperatives in Georgia is one of the EU’s recommendations. It allocated EUR 40 million for 2013-2016 to Georgia as part of the European Neighborhood Partnership Program.
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