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Journal number 4 ∘ zanda meskhidze
Some Issues of Food Security in Georgia

doi.org/10.52340/eab.2024.16.04.03

Food and economic security are fundamental pillars of sustainable development in the modern world. Against the backdrop of global challenges, including climate change, geopolitical tensions, and the aftermath of the pandemic, ensuring food security and achieving economic stability have become vital tasks for Georgia. In this context, the role of the business sector is crucial.
This article examines the multifaceted role of business in ensuring food security and its impact on Georgia's economic security. It presents the innovative approaches and strategies that the business sector employs to improve food production, distribution, and supply chain management. The article also analyzes the role of state policy in supporting business and strengthening food security. Additionally, it highlights the main challenges and opportunities that exist in this field and presents the author's perspectives on overcoming them.

Keywords: Food security; economic security; business sector; agribusiness; sustainable development; innovative approaches.
JEL Codes: L66, Q01, Q13, Q18

Introduction

Food security, as one of the most important components of national security, is directly linked to the country's economic independence and sustainability. Against the backdrop of modern geopolitical challenges, a country's ability to provide its population with sufficient food and reduce dependence on imports becomes particularly important. In this context, the business sector represents a strategic partner for the state in achieving and maintaining food independence.
In Georgia, where agricultural potential is significant, the role of business in ensuring food security is particularly relevant. This includes both strengthening local production and creating and managing strategic food reserves, as well as diversifying imports to reduce risks.
The main goal of this article is to identify and analyze specific mechanisms and strategies by which business can contribute to improving food security and assess their impact on the country's economic security.
The relevance of this issue is determined by the following factors:
• Global climate change, which significantly affects agriculture and food production;
• Geopolitical tensions that increase the risk of food crises;
• The consequences of the COVID-19 pandemic, which revealed the vulnerability of global supply chains;
• The need for Georgia's economic development and the necessity to reduce dependence on food imports;
• The growing role of the business sector in the global economy and its potential in improving food security;
• The war situation in Ukraine and the Middle East.
The ongoing military actions in Ukraine and the Middle East conflict have had a significant impact on the global food market. Ukraine, as one of the world's largest grain exporters, and the instability of Middle Eastern trade corridors directly affect global prices and supply chains. In this situation, for Georgia, as a country significantly dependent on imports, the issue of food security takes on special importance.
According to the UN Food and Agriculture Organization (FAO), the state of global food security has deteriorated in recent years, partly due to the COVID-19 pandemic. Today, approximately 690 million people worldwide experience chronic hunger. This global trend affects Georgia as well and further increases the importance of the business sector's role in ensuring food security.
The business sector, with its innovative approaches, resources, and adaptability, plays a significant role in strengthening food security. Small farms and agro-industrial corporations create a value chain that ensures food production, processing, distribution, and delivery to consumers.
The share of agriculture, forestry, and fishing in the country's GDP in 2023 was 6.0%. Although this indicator has decreased compared to the 8.4% figure in 2020, it still significantly indicates the sector's role in the country's economy and, consequently, its potential role in ensuring food security.
This study aims to evaluate Georgia's food security status through comprehensive data analysis, examination of successful business practices, and SWOT analysis. The paper explores the concept of food security and its relationship with economic security, while analyzing the business sector's role in ensuring food security, including the implementation of innovative technologies, sustainable production methods, and efficient supply chain management. Furthermore, we assess current challenges and opportunities in Georgia's food security landscape and provide stakeholder-specific recommendations for enhancement.

Main Section

Food security is a state where all people, at all times, have physical and economic access to sufficient and safe food that meets their dietary needs and food nutritional value for an active and healthy life. This definition, developed by the United Nations Food and Agriculture Organization (FAO), emphasizes the complex nature of food security.
Food security is closely linked to economic security. Economic security implies the sustainability of a country's economy and its ability to ensure an adequate standard of living for its population. Food security is one of the fundamental components of this sustainability.
In Georgia, the issue of food security is particularly relevant. The country is significantly dependent on food imports, which increases its vulnerability to global market volatility. In recent years, the share of food products in total imports has not changed significantly. This indicator has been characterized by the following share over the last 6 years:

However, it's important to note that dependency on some basic food products is even higher. For example, according to 2023 data, the wheat self-sufficiency coefficient is only 22%, and Georgia consumes 96% of its wheat through imports, with approximately the same situation for sugar and vegetable oil. These indicators show that Georgia's food security is significantly dependent on international markets, which poses a serious risk to the country's economic stability.
Improving food security directly affects the country's economic condition. Strengthening local production reduces import dependence, increases employment in agriculture and food industry sectors, and promotes economic growth. Additionally, ensuring food security significantly contributes to population health and work capacity, which also positively impacts economic development.
According to World Bank experts, improving food security is one of the most effective ways to overcome poverty and stimulate economic growth in developing countries. This view is particularly relevant for Georgia, where agriculture remains a significant sector of the economy and a source of employment for a large portion of the population.
The state's role in ensuring food security is multifaceted. First, this includes creating and regulating the legislative framework, which combines establishing food safety standards, developing mechanisms for protecting agricultural lands, and implementing production quality control systems.
The second important direction is infrastructure development, which includes irrigation system management, rural road rehabilitation, and warehouse development. Financial support is also important in the form of subsidies, preferential loans, and insurance system development. The state also ensures knowledge dissemination and education through farmer qualification improvement, modern technology implementation, and advisory services provision.
To achieve these goals, significant state programs operate in Georgia: "Danerge Momavali (Plant the Future)," "Agro-insurance," "Preferential Agro-credit," "Agro-production Support Program," "Co-financing Program for Berry Culture Storage Refrigerators for Agricultural Cooperatives," Tea Plantation Rehabilitation Program, and others. These programs aim to increase local production, reduce food import dependence, increase agricultural productivity, and increase farmer incomes.
However, the existence of state programs is only one side of ensuring food security, which requires separate analysis and evaluation. The second and equally important aspect is the role of business, as the private sector is the driving force that can ensure real progress in this direction. Companies have a unique opportunity to invest in agriculture and food industry, implement innovative technologies, create efficient supply chains, and establish sustainable production practices. All of this ultimately contributes to improving both food and economic security. The joint improvement of these two concepts is a necessary condition for the country's sustainable development. In this process, the role of business cannot be ignored or undervalued, especially in developing countries like Georgia.
The business sector has a unique opportunity and responsibility to make a significant contribution to improving food security. Private sector involvement in this process is not only a matter of social responsibility but also an economic necessity. Let's examine the role of business in ensuring food security, and we offer several main directions:
Implementation of Innovative Technologies - Modern technologies play a significant role in improving food security. The business sector can make investments and implement innovative technologies in agriculture and food industry. For example:
• Precision agriculture technologies, such as GPS-guided tractors and drones, allow for optimized resource use and increased crop yields.
• The use of artificial intelligence and big data analysis enables better prediction of crop volume and quality.
• Blockchain technology can be used to improve supply chain transparency - in the context of food security, blockchain is used not for cryptocurrency trading, but for secure and transparent storage and sharing of information. For example, a farmer can record information about crops, a distributor can record transportation details, and a store can record storage conditions. This information is stored in the blockchain and is accessible to all participants, which increases trust and reduces the risk of fraud.
Implementation of Sustainable Production Practices - Business can play a leading role in implementing sustainable production practices that will contribute to long-term food security, such as implementing organic farming practices, which reduces environmental impact and increases product quality. Also, implementing efficient water resource management systems, such as drip irrigation systems, and improving waste management and implementing recycling practices in the food industry are important factors that play a significant role for both business and environmental protection.
Creating an Efficient Supply Chain - Business can play a significant role in creating efficient and sustainable supply chains, optimizing logistics systems, which reduces food losses during transportation. Integration of local farmers into global supply chains, which increases their income and improves product quality. It is also important to develop so-called "short supply chains," which reduce transportation costs and increase product quality as it reaches the end consumer in a fresher state.
Investments in Research and Development - Business can make significant investments in research and development, which will support the development of new, more productive and sustainable agricultural crops and production methods.
Social Responsibility Programs - Business can implement social responsibility programs aimed at improving food security. We suggest the following programs in this direction:
• Educational programs for farmers about modern agro-technologies. For example, an agrochemical manufacturing company can conduct training for farmers about safe and effective pesticide use.
• Support programs for small farmers, such as technical assistance, consultations, or access to modern technologies. For example, an agricultural equipment manufacturer could offer farmers a free trial period to test new technologies.
• Environmental programs that promote sustainable agriculture. For example, a company can fund forest planting projects or support water resource protection.
• Support for innovative projects in food security. For example, a technology company can fund startups working on reducing food waste or developing alternative food sources.
• Support for food banks and food redistribution programs for vulnerable groups. Food banks are non-profit organizations that collect and distribute food products to vulnerable groups. They act as intermediaries between food producers, stores, restaurants, and people who don't have sufficient access to food. The main functions of food banks are:
• Food collection: They receive food product donations from businesses, individuals, and other organizations.
• Food storage: They have special warehouses where they store products in proper conditions.
• Distribution: They distribute food products to people in need, often through local social services or charitable organizations.
• In Georgia's context, the concept of food banks might not be as developed as in some other countries, but similar initiatives exist:
• Charitable canteens: For example, the "Catharsis" canteen in Tbilisi, which distributes free food to vulnerable groups.
• Social programs: Some municipalities implement programs that provide free meals for socially vulnerable families.
• NGO initiatives: For example, "Caritas Georgia" implements various food aid projects.
Business's role in supporting food banks or similar initiatives can include product donation, where food producers and stores can donate excess or perishable products that would otherwise be discarded, or logistical support, where transport companies can help with food transportation, etc.
It's important to note that these programs should be sustainable and long-term to have a real impact on food security. Also, they should be implemented in close cooperation with local municipalities and authorities to ensure their effectiveness and relevance.
Regarding microcredits and financial support, this is more the domain of financial institutions such as banks and microfinance organizations. However, non-financial businesses can collaborate with financial institutions to facilitate farmers' access to finance. For example, agribusiness can provide guarantees or recommendations for their supplier farmers, which will make it easier for them to access bank loans.
Although business can make a significant contribution to improving food security, there are challenges in this process. For example, small and medium enterprises often don't have sufficient resources to implement innovative technologies. Also, there is sometimes a conflict between short-term profit and long-term sustainability. To overcome these challenges, close cooperation between business, government, and civil society is important. The government can create a favorable environment for business through incentives and regulations, while civil society can provide public control and raise awareness.
In Georgia, the business sector is gradually taking an important position in improving food security. However, this process is not simple and includes both success stories and significant challenges. To better analyze Georgia's food security situation, let's use the SWOT analysis method (Table N1), which will allow us to identify the country's strengths and weaknesses, as well as opportunities and threats in this field

This SWOT analysis shows that despite significant challenges, Georgia has considerable potential for improving food security. The business sector can play a decisive role in realizing this potential, particularly in terms of implementing innovations, increasing productivity, and developing new markets.
One successful business example is the company "Nikora," which has been actively working on strengthening local production for years. The company has created an integrated system that includes both primary production (livestock) and processing and retail trade. This approach allows "Nikora" to better control product quality and ensure stable supply.
Let's consider the company "Marneuli Agro," which has implemented modern greenhouses, produces during off-season periods, and has created new production capacities. It actively collaborates with its partner company "Marneuli Food Factory," one of whose significant characteristics is being "fully Georgian," meaning that all raw materials used are from Georgia, with the company receiving and processing more than 30,000 tons of raw materials.
The production of poultry meat and eggs is particularly interesting. In recent food balances, the self-sufficiency coefficient for poultry meat has been 30-35% in recent years, while for eggs it exceeds 90%, which is definitely a positive trend and is precisely due to private business efforts. For example, company Chirina has a complete production cycle, has created new capacities, and has replaced imports. Today, LLC "Chirina" represents a multi-profile enterprise, whose assets include both a complete poultry cycle (from incubator to meat processing) as well as agricultural and processing directions.
The facilities owned by the company create a unified, self-sufficient system:
• Poultry complex (breeding and broiler farms, incubator)
• Feed production plants (combined and protein feed)
• Processing plants (meat processing, raw material drying)
• Fruit growing direction (apple and pear orchards, refrigeration complex)
• Supporting infrastructure (water treatment, laboratory "Sana")
Chirina's uniqueness lies in the fact that the company itself produces part of the raw materials needed for its own production - high-quality corn and wheat. Additionally, it actively collaborates with local farmers to purchase raw materials. In terms of innovative approaches, "Chirina" has established a specialized network of fresh chicken kiosks in Georgia, where the brand "Bio-Bio" delivers fresh products to consumers daily.
Besides the main products (chicken meat products), the company's portfolio includes - hatching eggs, fruit (apples and pears), grain drying and storage, laboratory research, fruit refrigeration storage.
It's particularly noteworthy that all of Chirina's products are manufactured in Georgia, and all production stages are certified according to ISO 22000 standards. The company uses innovative, modern production equipment and collaborates with leading companies in the agro sphere such as Agrotop, Rosal, Chief Industries, Meyn, Nijhuis, Hatchtech, Haarslev, CMC Industries.
Using Chirina's example, we can discuss how the private sector plays a major role in food security self-sufficiency, as such successful practices create the value that is important for the country's economic security.
The wine industry also represents a sector where Georgia has achieved significant success in terms of exports. Companies such as "Teliani Valley" and "Schuchmann Wines Georgia" actively work with local winemakers to improve grape quality and create high-quality products for international markets. This not only increases exports but also promotes agricultural development and increases farmers' incomes.
Zero-waste production principles also play an important role in ensuring food security, as demonstrated by the business case discussed in this study. LLC "Okrovalley" produces a low-alcohol beverage using bilberry (Vaccinium myrtillus) juice, which is obtained during the primary processing of raw materials. Analysis of the production process demonstrates the effectiveness of vertical integration: LLC "Noma", as a partner enterprise, provides primary processing (dehydration) of bilberries and other medicinal plant materials for medical-pharmaceutical export purposes. The juice obtained at the primary processing stage, which is a by-product of production, is subsequently used for the production of an innovative product - low-alcohol wine. Batumi Shota Rustaveli State University laboratory is integrated into the product quality assurance process, whose scientific-research potential was used for the formulation and standardization of the innovative product. This innovative approach represents the practical implementation of circular economy principles and contributes to both increasing production efficiency and improving food security through optimal resource utilization.
Along with various success stories, there are significant challenges. For example, in grain production, Georgia remains significantly dependent on imports. Despite the existence of several large manufacturing companies, the country cannot meet its own demand. This is partly due to the low level of technological development and the dominance of small farms that struggle to organize large-scale production. Today, the wheat self-sufficiency coefficient is only 22%. Clearly, this direction needs more analysis to increase this indicator, especially considering that the first two positions in the food basket are occupied by wheat bread and wheat flour.
When discussing production creation and farmer support, it's necessary to consider innovative approaches and several interesting initiatives and startups. For example, the innovative startup Traktor, which created a digital platform for agricultural machinery rental, this idea addressed a real need - small farmers often don't have sufficient resources to purchase expensive equipment - however, this company is currently not operating or its service is temporarily unavailable.
A similar story applies to the project "Agro Friend," which was a mobile application existing in 2017-2019, offering farmers advice on pest control and weather forecasts. The project ceased operations due to a lack of users. We can recall "Ferma" - an online platform created in 2016, which aimed to connect farmers directly with consumers. The project was suspended after several years because farmers struggled with uploading product photos and descriptions, there were logistics problems and payment system difficulties. Despite the good idea, the project failed to achieve sustainable operation and active use due to the following reasons:
1. Low digital literacy among farmers
2. Internet accessibility problems in rural areas
3. Lack of trust in digital platforms
4. Failure to gather a critical mass of users
These examples suggest that when implementing agro-technological projects in Georgia, it is necessary to:
• Teach basic digital skills
• Provide on-site consultations and support
• Involve community leaders to increase trust
• Create simple and intuitive interfaces
Analysis of these projects' failure reveals several important factors. First, Market Readiness - Georgia's agricultural sector, especially small farmers, are often not ready for rapid adoption of digital technologies. Stable internet access and lack of digital skills remain a problem in many regions. Second, Financial Sustainability - startups often struggle to ensure long-term financial sustainability. Attracting investors and creating a profitable business model is difficult in a sector where profit margins are often low. Notable are the Infrastructure Challenges - for example, in Traktor's case, transportation and servicing of agricultural machinery could have been a significant challenge due to poor road infrastructure in some regions. The Trust Factor is important - low levels of trust in online platforms, especially regarding financial transactions, can be a significant barrier. Finally, we should highlight Competition with Traditional Methods - many farmers already have established relationships with local markets and intermediaries, which complicates the implementation of new systems.
Despite these challenges, it's important to note that such innovative ideas are still very much needed for Georgia's agricultural sector. Their failure doesn't mean the ideas were bad, but rather indicates that a more complex approach is needed, closer cooperation with state structures to create a favorable regulatory environment for innovations, as well as a gradual implementation approach, even with pilot projects in specific regions. It's important to focus on farmers' education and digital skills development. Ensuring long-term financial support through both private investors and state programs is essential.
The implementation of innovative and digital technologies allows farmers to make more precise decisions, improve resource utilization, and increase productivity. In modern agriculture, digital technologies enable precise monitoring - from soil conditions to harvesting and storage processes. GPS systems, sensors, and drones provide detailed information about field conditions, helping farmers make correct decisions about irrigation, fertilization, or plant protection measures.
Digitalization also significantly improves supply chain management. Digital platforms enable better planning of product storage, transportation, and sales. This reduces losses and increases farmers' incomes. The ability to collect and analyze data is particularly important. Modern systems allow for creating detailed forecasts about weather, yields, and market demand, which helps farmers better plan their activities.
Agricultural digitalization also promotes environmental protection - implementing precision farming principles allows for reduced use of water, fertilizers, and pesticides, which positively affects both the environment and product quality. The digitalization process is also important for attracting young people to agriculture. The use of modern technologies makes the sector more attractive to the new generation, which promotes sustainable agricultural development.
For a clear example of digitalization, let's consider one foreign company, Netafim, which has brought revolutionary changes to agricultural irrigation systems. The company's innovative approach is based on a drip irrigation system integrated with modern digital technologies. The system's operating principle is quite simple and effective: sensors placed in the soil continuously collect data about moisture, temperature, and other important parameters. This information is transmitted in real-time to a central system, which analyzes the data using artificial intelligence and makes decisions about irrigation needs. The farmer, in turn, has access to a simple mobile application from which they can monitor all processes and, if necessary, control the system remotely. The application sends notifications and recommendations - for example, when fertilizer needs to be added or how to prepare for expected weather changes.
System implementation begins with detailed consultation, where the farmer's needs are studied and specific plot conditions are analyzed. After this, the irrigation system is planned and installed, staff training is conducted, and active technical support begins. Using Netafim's system, farmers can significantly (30-50%) reduce water consumption while increasing yields. The system is particularly effective for large farming enterprises, though the company offers solutions for small farmers as well.
We need similar digitalization examples in Georgia. Today there are various startups, such as agronavti.ge, though their services mainly include training, consultations, and agronomist assistance. We think Georgia would benefit from a digital platform that provides farmers with information such as accurate weather forecasts and notifications about expected bad weather, shows fertilizer application amounts according to standards, connects them with buyers based on produced products, and like Netafim, adapts to the farmer's real needs.
Today, along with state programs, innovative projects are supported by - GITA's Startup Georgia, which finances agro-technological startups and provides grants for innovative projects. Also, USAID's agricultural program helps farmers implement technologies and finances pilot projects.
Georgia faces significant challenges in ensuring food security, however, public awareness about the complexity of this issue is growing. Improving food security requires multi-sectoral cooperation, integrating the efforts of state institutions, citizens, international donors, the private sector, and academic circles. The implementation of innovative approaches, deployment of modern technological solutions, and practical realization of sustainable development principles represent the fundamental basis upon which Georgia can not only improve food security indicators but also establish best practice examples at the regional level.

Conclusions and Recommendations

Food security is one of the most important challenges in the modern world. For Georgia, as a country with a developing economy, this issue is particularly relevant. Our research shows that the business sector has a unique opportunity and responsibility in overcoming this challenge. It's especially noteworthy that successful business practices, such as vertical integration and implementation of innovative technologies, significantly improve food security indicators. A clear example of this is the experience of Georgian companies in the poultry sector, where the self-sufficiency coefficient increases and improves year by year.
The unsuccessful attempts of innovative startups show that implementing technological solutions requires a complex approach. A technological solution alone is not enough - farmer education, trust-building, and long-term support are needed. In this context, cooperation between the state and business is particularly important. State programs such as "Plant the Future" and "Preferential Agro-credit" create a foundation for business development, however, their effectiveness significantly depends on active private sector involvement.
The digitalization process, which is a global trend today, should also become a priority in Georgia. However, this process should be conducted gradually and with consideration of the local context. The experience of failed technological projects teaches us that innovation implementation should start with small, pilot projects and gradually expand in case of success. Special attention should be paid to integrating small farmers into modern food systems. This is not just a matter of social responsibility - it's an economic necessity for a country where a large portion of agricultural land is owned by small farmers.
In our opinion, to ensure food security, the following measures should be implemented:
• Business should strengthen investments in vertical integration - successful examples ("Chirina", "Marneuli Agro") show that controlling the complete production cycle significantly increases production efficiency and product quality.
• Large businesses should create collaboration platforms with small farmers - developing contractor farmer systems, supporting their technical re-equipment, and knowledge sharing will increase both production volume and quality.
• Gradual implementation of innovative technologies is essential - but with the right steps, starting with small pilot projects to avoid repeating past unsuccessful attempts (Traktor, "Agro Friend") and gradually expanding successful practices.
• Agribusiness should develop its own research and educational centers - this will help improve both their production and partner farmers' qualifications.
• Creating modern storage and logistics infrastructure is essential - this will reduce product losses and improve supply chain efficiency.
• Distribution networks in regions need to be strengthened - developing specialized store networks (e.g., "Bio-Bio" example) ensures stable supply of local products to consumers.
• Companies should implement modern product quality control systems (as we saw with Chirina's ISO 22000 standard) - this will increase trust in local products and improve export potential.
• The private sector should develop sustainable agricultural practices - efficient resource use, zero-waste production and/or environmental standards compliance will ensure long-term sustainability.
• International cooperation should be strengthened - sharing foreign experience and technology transfer (as in Chirina's case with Agrotop, Meyn, and other companies) will accelerate sector modernization.
• The state should create a special tax regime for businesses operating in the agricultural sector - especially for companies investing in innovative technologies.
• It's important to improve agricultural infrastructure (irrigation systems, roads) - this will support business development in regions.
• The state should strengthen the agro-education system - both at vocational and higher education levels, to provide business with qualified personnel.
• Procedures need to be simplified and financial support increased for innovative agro-startups.
• It's essential to interest and attract young people to the agricultural sector - especially in technology and innovation directions.
• Developing farmers' digital skills is important - this will help them adopt modern technologies.
• Raising public awareness about the importance of local products is important - this will increase demand for Georgian products.
The complex implementation of these recommendations will create a synergistic effect, where the coordinated efforts of business, government, and society will significantly improve the country's food security status.
In today's world, where climate change and geopolitical tensions constantly create new challenges for food security, Georgia must strengthen its capabilities in local production. This doesn't mean transitioning to complete self-sufficiency - it means finding a reasonable balance between imports and local production, where business will have a significant role in implementing innovations and increasing productivity.
Improving food security is not only an economic but also a strategic task for Georgia. Successfully solving this task requires coordinated work from all stakeholders - government, business, scientific circles, and farmers. Only through joint efforts can we create a sustainable food system that will ensure the country's long-term development and population welfare.

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• Kharaishvili E. (2017). Challenges For Sustainable Food Security In Georgia. DOI:10.13140/RG.2.2.27821.79848
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