COMPETITIVENESS OF EXPORT AGRO PRODUCTS AND ECONOMIC POLICY FOR INCREASINGTHE COMPETITIVENESS

Abstract

Agriculture plays a major role in ensuring the country›s food security, improving the balance of payments and strengthening state independence. Increasing the production of agricultural products increases the national income of the country, creates additional jobs and more. Competitive export production should play a major role in boosting agricultural production, as it has to be competitive in the international markets.The article analyzes the competitiveness of Georgian export agro products and the export-import of agro products. It should be noted that imports of primary agricultural products over the years have significantly outstripped exports, mainly due to the low volume of production of these products and the weak competitiveness of the sector relative to foreign producers. Competitiveness should be enhanced not by imposing barriers on imports, but by enhancing the competitiveness of locally produced products. That is why has been studied the main directions of economic policy for increasing the competitiveness by the example of Israel. Israel uses the theory and principles of knowledge-based economics to increase the innovation potential of the economy and enhance its competitiveness in general. In this study export agro products are identified by the following parameters: tendencies in export, stock reserves at the end of the year, resources, local production, average yield and self-provision coefficients. Thus, we assessed the competitiveness of corn/wine, nuts, potatoes, vegetables, wheat. Competitiveness level is calculated for selected Georgian agro products based on the received FAO data. The level of competitiveness of agro-food products was compared with each other on two markets: The European Union market (EU market) and the Commonwealth of Independent States market (CIS market). The product›s competitiveness level is calculated using the following indexes: Relative Export Advantage Index (RXA), Relative Import Penetration Index (RMP) and Relative Trade Advantage Index (RTA).The paper concludes that a high level of competitiveness in the international trade from Georgian agro products has nuts and wine. In addition, it is interesting that on CIS markets Georgian agro-food products have higher competitiveness than on the EU market. Also, on CIS markets competitive are potatoes and vegetables. Data analysis has shown that Georgian wine has far higher competitiveness on the CIS market than on the EU market. In recent years, the volume of Georgian wine exports to Russia has increased, which has been reflected in competitiveness indices. Consequently, the competitiveness of Georgian wine is increasing in the CIS market, while maintaining relative stability in the EU market. Also, Georgian nuts has far higher competitiveness on the EU market than on the CIS market. Conclusions are made according to the identified problems and the recommendations are offered on the directions of economic policies for increasing the competitiveness of agro-food products. It is important to identify agro-food products on the threshold of competitiveness in international trade in order to concentrate further resources and efforts on them, which will increase export volumes in the future. It is advisable to create a stable regulatory environment and increase the awareness of the Georgian agro-food product in international level.