Leverage migration for development in the agricultural sector

Despite agriculture's lessening share in Georgia's GDP, over 50% of the population worked in the sector in 2011, continuing to depend on it for their livelihoods and to climb out of poverty. The sector is affected by migration in several ways. Emigration reduces farming labour, though it can lead to more external labour being hired in. Although agricultural households tend to be more likely to receive remittances than non-agricultural households, remittances are generally not channelled towards investment in the sector. On the other hand, return migration seems to be a boon for the country. Households with return migrants were more likely to buy agricultural assets as well as diversifying into non-agricultural investment. In terms of policies in the sector, agricultural policies are rather widespread and often used in Georgia, with the agricultural voucher programme being the most common. Households that benefited from the voucher programme are more likely to have an emigrant - the vouchers could be helping households afford to send a member overseas.

  • • Ensure that agricultural households can access agriculture labour when needed. Better coverage by labour market institutions in rural areas can help agricultural households replace labour lost to emigration. Without such institutions the agricultural sector, food security and poverty could all deteriorate further in areas where emigration rates are high.
  • • Make it easier for remittances to be channelled towards productive investment, such as ensuring money transfer operators are present and affordable in rural areas, households are sufficiently trained in investment and financial skills and adequate infrastructure is already in place. Bottlenecks that limit investments in specific sectors, particularly declining ones like agriculture, are a lost opportunity to harness the potential of remittances and return migration for revitalising these sectors. In addition, economic and administrative hurdles, such as the cost of remitting and the lack of programmes to reintegrate return migrants, can also limit the potential of these assets.
  • • Tie agricultural aid to ex post output rather than providing it ex ante. The analysis of Georgia's voucher programme suggests that agricultural subsidy programmes that are not contingent on some level of output or outcome or do not provide a non-transferable asset, such as land, may help spur more emigration. This may run counter to the objectives of the programme if its aims are to keep farmers in the country and in the sector.
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