Loopholes in the moratorium on agriculture lands
26 December, 2013
Loopholes in the moratorium on agriculture lands
An exemption from the moratorium on agriculture land divesture will be granted soon to Georgian commercial banks and projects with special importance to the state; a bill has already been submitted to the parliament. But skeptics fear loopholes. The last July Georgian authorities put a moratorium on agriculture land sale to foreign firms and citizens until 31 December 2014. Government plans to work out laws regulating land divesture in the meanwhile.
The issue became acute after rural dwellers completely dependent on
agriculture appealed to the new government to return to them pasture and arable land sold by the previous government to foreign investors; they say this has deprived them of livelihood. The restrictions do not apply to farmland already acquired by foreigners, or non-agricultural land previously divested to them.
Nonetheless, some sector pundits disapproved of a moratorium that might set back investment in agriculture; likewise, even some supporters still find the measure belated, since in the past much land was sold without precise regulation and control.
To mitigate the effects of the moratorium, Georgia is permitting a 49-year rental of agriculture land to citizens and companies registered elsewhere. And according to Ditrikh Muller, a co-founder of Georgian Investment Group+, that time is long enough to allow foreign investors to see a profit and remain interested in Georgia.
However, recently government found the moratorium burdensome to local commercial banks. “Bank activity is frequently related to real estate, including the acquisition of agriculture lands into ownership. The moratorium on land sale may hamper this during the process [of the moratorium] and affect the banks’ activities,” a note explaining the bill states.
On the other hand, if a foreign investor or company will appeal to the Georgian government with a plausible argument that a purchase of agricultural land is crucial to their investment and also serves national interests, it may get an exemption from the moratorium if government approves the appeal. Authorities believe the upcoming change will mitigate the dilemma until the moratorium is lifted.
Irakli Lekvinadze, an economic analyst, told Georgian Journal that he approves of the change as investor-friendly, since it “lifts the moratorium that was very discomforting to my mind. Otherwise it is impossible to attract investors to Georgian agriculture. Of course, the 49-year rent opportunity enables investors’ activity but land acquisition is an additional lure.”
But he cannot understand how banks were restricted by the moratorium, nor does Muller. As a matter of fact banks operating in Georgia are local residents and completely allowed to transact sales of agricultural land. Besides, the agricultural land share is too insignificant in loan portfolios of Georgian banks to cause them much concern about how to handle these assets.
“This is a clear loophole to divest lands to foreigners through banks,” Muller elaborated. “Banks can sell lands to locals without restrictions, but very likely they prefer foreign clients who are richer and pay more.” And the suggested exceptions may lead to corruption.
“As soon as there is an exception in the law there is room for corruption immediately,” he said. “It comes out that government will be deciding who is a good guy and deserves preferences - this leads to lobbying and a selective approach toward investors, just like former government did. I cannot understand why investors cannot wait until the moratorium is lifted. The 49-year long rent is sufficient for investors to witness profits. Land divesture is absolutely redundant.”

Other Stories
Everything of comfortable life in one space – Second part of construction of one of the largest apartment complexes finished in Tbilisi
Apartment in ecologically clean environment, thousands of square meters of green yard, swimming pools, places for various sports activities, treks for walking and running, commercial spaces – all these available in one space is not a fantasy.
Batumi awarded Europe's Leading Emerging Tourism Destination 2019
World Travel Awards Europe Gala Ceremony 2019 took place on the 8th of June in Madeira, Portugal.
Coca Cola to open new factory in Georgia, will hire female drivers
Coca Cola is opening new factory in Georgia in December.
World's best party supply company now on the Georgian market
The largest party supply store in Georgia - MyDay is launching as the official distributor of AMSCAN from 2019.
Live as a marketing tool and an unprecedented live stream launched by Livetag
Sharing information has become smoother and more versatile in today’s technological world. Recently, live streaming, an online streaming media has become especially popular.
Theme and program of Caspian Energy Forum Tbilisi – 2019 changed
“The 8th International Caspian Energy Forum Tbilisi – 2019, scheduled for June 21, will focus on the development of the Azerbaijan-Georgia relations in the field of economy and energy”,
Misunderstanding over Poti deep sea ports
There was misunderstanding around deep sea ports in Georgia – in Poti.
High demand for dollars or the investment decline – Why Georgian Lari depreciates
$1 equals GEL 2,7470 in the official rate set by the National Bank of Georgia (NBG).
PSP Group confirms negotiations regarding purchasing of GEO Hospitals
PSP Group confirms negotiations regarding purchasing of GEO Hospitals.
New life to be given to Dashbashi Canyon
Georgia’s Agency of Protected Areas is planning to give new life to Dashbashi Canyon in Tsalka (southeastern Georgia).
Who is constructing “Khadori 3” Hydropower Plant in Pankisi Gorge?
Clashes broke out in Pankisi Gorge, Georgia’s northeastern region between special forces and residents
Business Positive – Successful radio program from Radio Positive
Starting point of radio program Business Positive is to meet interesting people, communicate with them and deliver information that is interesting for the audience.
A factory of electric vehicles to be built in Kutaisi
Prime Minister Mamuka Bakhtadze stated that a factory of electric vehicles will be built in Kutaisi at the presentation of the Aigroup business group.
Qvevri-shaped hotel complex to be built in Telavi
A Qvevri-shaped hotel complex is scheduled to be built in the village of Shalauri in Telavi, Kakheti (east part of Georgia).
Georgian designers presented at Fashion World Tokyo 2019
The products of 11 Georgian designers are showcased at Fashion World Tokyo 2019,
Silknet raises $200 million in Eurobond issue
27 March 2019 - JSC Silknet (“Silknet”), one of Georgia’s leading telecommunications operators, has successfully priced a debut $200 million 5-year 11% senior unsecured bonds issue (the “Notes”).
Pistachio trees will be planted in Georgia
Dozens of hectares of Pistachio are planned to be planted in Georgia this year.
Toyota Safety Sense and Hybrid Technology
Toyota Caucasus, has presented two new models the 5th generation RAV4 and the 12th generation Corolla at Rustavi International Motorpark, several days ago.
Bidzina Ivanishvili “became number one oppressor of businesses in Georgia” - ICC Georgia chairman Fady Asly
Mr. Ivanishvili promised the business community to protect them from harassment and pressure, unfortunately his words died with the sunset of that day
The best brands of Belarus will be exhibited on a large-scale exposition in Tbilisi
"The Belarusians like to come to Georgia to relax near the sea in Batumi as well as to stay in sunny Kakhetia."
Don’t treat business like a hooker! - Georgian businessman Vasil Soprpmadze addresses politicians
Businessman Vasil Sopromadze, founder of the company "Fresco", addresses politicians
RAV4 No Compromise and Corolla Set to Impress – Two New Cars Presented by Toyota
Toyota Caucasus, the company constantly aspiring to greatness, has presented two new models the 5th generation RAV4 and the 12th generation Corolla.
Mamuka Khazaradze quits TBC bank, does not sell the TBC Bank share
I made a decision to leave TBC bank where I spent 27 years of my life
10 Reasons to buy an apartment in the suburbs
There is a tendency for Tbilisi dwellers to move from central parts of the capital to the suburbs.
Georgian citizens are granted the right to work in France
The French Embassy in Georgia made remarks on granting Georgian citizens the right to work in France
GEL Exchange Rate
Other Stories
Recently Toyota rolled out Global Campaign under this slogan that reflects the Olympic and Paralympic Spirit of Encouragement,
A couple from Switzerland combines Swiss tradition and technology with Georgian products. Their cheese is made in the Georgian mountains and sold in local stores and hotels.
It has been more than five years since the residents of Lilo village, near Tbilisi, cannot open their windows.
63 000 GEL was received by the Georgian Agro Export Group which is just a small part of the European Neighbourhood Programme for Agricultural and Rural development.
Georgian entrepreneur Guka Tavberidze, who runs his own business in the UK and does it quite well, has been invited by BBC
The grand opening of 7-star The Biltmore Hotel Tbilisi took place in Georgia’s capital on July 31.
DUSHETI, Georgia – The Georgian government and the World Bank will allocate USD 5.6 million (12 million GEL) to fund
A new Georgian clothing brand named Person has emerged in Georgian market.
Georgia is in the midst of an economic maelstrom, Euronews reports.
Situation at Georgia’s mineral water market is interesting: over the last year, the volume of export has grown by 56 percent. According to “GeoStat”, over $114 million worth of mineral water was sold
GEL Exchange
June 2019
Mon Tue Wed Thu Fri Sat Sun
1 2
3 4 5 6 7 8 9
10 11 12 13 14 15 16
17 18 19 20 21 22 23
24 25 26 27 28 29 30