NATURAL RESOURCES INSTITUTE
NRI Report No: 2733
Rural Non-Farm Economy Project
THE NON-FARM ECONOMY IN POST-SOVIET GEORGIA: A STUDY OF THREE RURAL COMMUNITIES
By Nana Sumbadze
Based on data gathered by Nana Sumbadze, Ketevan Kobaladze and Pawel Dolidze
Edited by Babken Babajunian and Monica Janowski
March 2003
This document is an output from a project funded by the UK Department for nternational Development (DFID) and the Worldbank for the benefit of developing countries. The views expressed are not necessarily those of the DFID for the Worldbank.
World Bank TABLE OF CONTENTS
EXECUTIVE SUMMARY 3 INTRODUCTION 1 PART 1: GANATLEBIS KARI (GANKARI), ABASHA RAYON, SAMEGRELO- ZEDA SVANETI REGION 4 1.1 General Situation 4 1.2 Changes since independence 4 1.3 Farming and livelihoods 6 1.4 The Non-Farm Sector in Gankari 7 PART 2: GURKELI, AKHALTSIKHE RAYON, SAMTSKHE-JABAKHETI REGION 10 2.1 General Situation 10 2.2 Changes since independence 10 2.3 Farming and livelihoods 11 2.4 The Non-Farm Sector in Gurkeli 12 PART 3: NASAMKHRALI, TELAVI RAYON, KAKHETI REGION 15 3.1 General Information 15 3.2 Changes since independence 15 3.3 Farming and livelihoods 15 3.4 The Non-Farm Economy in Nasamkhrali 16 PART 4: QUANTIFIED ANALYSIS OF THE SAMPLED COMMUNITIES 20 4.1 Social and Economic Situation 20 4.2 Non-Farm Activities 22 CONCLUSIONS 24 RECOMMENDATIONS 27 BIBLIOGRAPHY 29
List of Graphs and Tables
Graph 1: Perceptions of respondents about their economic status 23 Graph 2: Income sources of respondents’ households 24 Graph 3: Structure of household expenditures 24 Graph 4: Structure of expenditures by regions 25
Table 1: Types of non-farm activities 25
List of Appendices Appendix 1: Agricultural Activities (2000) 34 Appendix 2: List of persons interviewed 36
EXECUTIVE SUMMARY
♦ The centralised, state-run non-farm economy in Georgia collapsed with the collapse of the Soviet system. A significant private non-farm economy has so far failed to materialise in most parts of the country.
♦ Most households in most areas now rely largely on subsistence agricultural production for their survival. There is almost no cash in circulation. However households are desperate for some cash because they need it to buy foodstuffs which they cannot produce, trade goods and services. They are interested in engaging in any activity which will bring some cash into the household.
♦ Households obtain cash a) from sale at local markets of produce in excess of what is required for home consumption b) from remittances from members who have left, mainly for Russia c) from social security payments d) from running small-scale non- farm activities or being employed in them. The cash generated by all four of these sources is small, but very significant for households.
♦ The basis upon which businesses have been set up in the villages studied so far are: