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Georgia/Armenia Cross Border Value Chain Analysis (CARE Austria, 2013)

Project Description

The project investigated six agricultural communities in Georgia and six agricultural communities in Armenia, all of which are fairly close to the border of the two countries. They looked at agricultural products important to each community, particularly meat, cheese, milk and potatoes. This included focus groups, municipal and business interviews in all 12 regions, interviews at the border as well as macro-analysis of trade flows and both legislative context. The purpose of all this was to answer the following three questions:

1/ What forms of relevant trade and cooperation exists between the communities and countries?
2/ What currently under-utilised opportunities exist for trade and cooperation?
3/ What are the key hurdles to trade and cooperation?

The broad context for this analysis was that Armenia and Georgia seem as though they should be natural trading partners. People from Armenia and Georgia are extremely familiar with one another, share many cultural characteristics and often continue to be able to communicate in the lingua-franca of Russian. In addition, farmers and business people in both countries are familiar with the business hurdles presented by the local context and are experienced in identifying ways to overcome them. All of these similarities are doubly true when one is dealing with ethnic-Armenian communities based in Georgia who speak Armenian, have strong networks in Armenia and who often send their children to university in Armenia.

This is reflected in the current pattern of trade. Around 11% of Georgia’s exports go to Armenia, though only 1% of their imports come from there. Seen from the other side, this represents 6% of Armenia’s exports and 5% of their imports.

However, there seems to be very little trade between the communities and in the value chains identified by this project. While Georgia does export animal feed, maize and fertilizer there is no evidence that this comes from our target regions. The only clear imports/exports that connect to our region are that Georgians export live animals (probably sheep) and Armenia export live animals (probably cattle) and potatoes. Therefore, rather than identifying existing trade, the project focused on looking at overall patterns of production and distribution in our target sectors and geographies, the structure of supply chains and comparative advantages, to try and identify under-utilised opportunities.

Final report was an internal document used by CARE Austria for program development and is not public.

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