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Process of Formation of Strategic Unions and Food Safety Issues in the Agricultural Sector of Georgia (Part 1)

Process of Formation of Strategic Unions and Food Safety Issues in the Agricultural Sector of Georgia (Part 1)
Георгий Чиладзе, доктор юридических наук, профессор

Университет Грузии, Грузия

Участник первенства: Национальное первенство по научной аналитике - "Грузия";

Открытое Европейско-Азиатское первенство по научной аналитике;

bstract: Agreements signed by Georgia in the field of free trade will increase the number of foreign companies operating in the agricultural sector, and a significant portion of the profit from the agricultural sector will remain foreign enterprises. The Georgian enterprises operating in the agrarian industry are important to use the synergistic strategy to try to gain a competitive advantage in unifying two or more organizations in one management structure.

The trend of development of agricultural cooperatives and cooperative movement should be directed and implemented through their lending and mergers, taking into account the selection and development of strategic unions. In addition, the merging of individuals in agricultural cooperatives has both taxation and other advantages. It should also be noted that a number of international organizations are involved in implementation of agrarian profile projects in Georgia, and various targeted programs exist. The effective system of food safety and quality control is much simpler in large enterprises of agrarian profile, in multi-cooperative cooperatives or cooperative associations.

Keywords: Agricultural Industry, Agricultural Cooperatives, Strategic Unions, Food Safety, Quality Control.

 

In modern conditions, Georgia is trying to establish itself in international agricultural markets, for which it is characterized by a rigid, competitive battle for the purpose of obtaining specific segments of the client's market and the spheres of influence. In the field of free trade, especially recently, the agreements signed by Georgia will increase the number of foreign companies operating in the agricultural sector. On the one hand, this is a positive phenomenon. However, at the same time, it is expected that a significant portion of the profit from the agricultural sector will remain in foreign enterprises.

Based on the existing statistical data, Georgian organizations operating in the agrarian industry suffer from difficulties and need significant support from the state authorities. Considering that they do not have the necessary experience, knowledge, and financial capabilities, they can not effectively confront the international market for long-running companies engaged in agrarian activities.

In my opinion, the predictable undesirable situation can be changed if Georgian enterprises use a synergistic strategy, or they will try to gain a competitive advantage through the unification of two or more organizations in one management structure.

A clear example of this is the approach of the LEPL Agricultural Cooperative Development Agency. In particular, their recommendations are that the tendency of co-operatives and co-operative movement should be directed and implemented through their luggage and union.

If we develop a cooperative issue, we can talk about the fact that at the present stage agricultural cooperatives use a number of tax privileges. In particular:

A) Income taxes (primary production) and grants received from agricultural activities shall not be taxed by profit taxes;

B) In regard to agricultural cooperatives, the profit tax rate is not defined by annual turnover, which is 200,000 GEL in case of LLC;

C) Property shall not be taxed by the cooperative property used for agricultural purposes;

D) Movable property issued by leasing for agricultural activities;

E) No income tax shall be taxed on the part of a cooperative member of a cooperative member;

F) Agricultural cooperatives also enjoy all tax benefits applicable to agriculture.

A number of international organizations are involved in the implementation of agrarian profile projects. In particular, the EU consortium has been selected by ENPARD's Small Farmers Cooperation Component: CARE, Mercy Corps, Oxfam, and PIN, which are participating in the implementation of the program.

The merging of agricultural cooperatives in persons has other advantages, namely:

1) Agricultural cooperative members have more income than their expenses, as expenses and risks are distributed to several subjects;

2) Stable market is more accessible through joint economic activity;

3) Universal procurement: (Low price when purchasing agro or other materials);

4) Individually (separately) - peasants' activities will be conducted only at the low level of technological level. Unification of new technologies can be combined with forces;

5) Agricultural cooperative as a union is considered creditworthy and credit resources are available to him rather than to a separate entity for peasants.

Detailed information on formation of agricultural cooperatives can be obtained at the LEPL - Agricultural Cooperative Development Agency and Regional Information Consulting Services of the Ministry of Agriculture of Georgia will first inform the regional level (http://acda.gov.ge/index.php/geo/faq/34).

There are a number of state support / support activities for cooperatives. They are exempt from a number of taxes that bring significant financial benefits to them.

Agricultural cooperative may be a grant recipient, unlike other entrepreneurial legal entities.

Since 2015, various targeted programs have been implemented to promote institutional development of cooperatives.

It can be argued that the agrarian industry is a combination of economic entities and the process of searching for them and their new, progressive forms. In addition to Georgia's example, it can be said that the tendency for our country is the fact that independently, even the most effective structures can not afford independence and recognize that their activity in the appropriate form is doomed to failure and inevitably lead to financial crash.

Private proprietary tendencies are particularly characteristic for agricultural cooperatives operating in Georgia. At the same time, they can establish several phases in their establishment and development.

At the initial stage (2013-2015), the process of creating cooperatives was massively implemented throughout Georgia. This enabled several factors, including the possibility of receiving bank credit with preferential terms, a relatively simplified system of registration and the possibility of extensive consultations from the LEPL Agricultural Cooperative Development Agency; As a result of the amendments to the Law on "Grants", agricultural cooperatives have a chance to be involved in the list of grant organizations. Tax Code of Georgia envisaged tax pay package, etc.

In the first phase of formation and development of agricultural cooperatives, the reforms can generally be called as successful, since taking into consideration the bonuses and advantages offered by the state, by the active efforts of the Agency for Agricultural Cooperatives of the LEPL, more than 1400 cooperatives have been created.

Obviously, in a country with limited and limited financial resources like Georgia, the number of cooperatives could not continue forever. In addition, there have been many problems related to cooperative management, reporting and counseling. It should be noted that the increase in the number of cooperatives by geometric progress has virtually failed to substantially affect the number of staff members assigned to the agency and since the establishment of the Agency it remains virtually unchanged.

Obviously, such an abnormal situation significantly affects the quality of cooperatives. The Agency's website contains a list of typical questions, as well as the typical charter of cooperative, but it is not enough and can not explain all the problems.

According to the Law on Agricultural Cooperatives, the Co-operative members elect the Directors (at least two members) at the General Meeting. The cooperative is obliged to carry out protocols of the General Meeting and Board meetings, make a balance, fill out the forms set out in the report (the number of which is the number of answers and the number of answering questions increases and becomes difficult).

Obviously, it directly pushes cooperatives to strengthen the team of persons employed in management and reporting issues, either in the state or to temporarily employ professionals, in either case with low or low pay. In addition, if the cooperative is using a bank credit, there is a grant owner and / or having a large turnover with creditors and debaters, accounting documents can usually only be limited to individuals with special economic education / accountants who are gradually growing.

The effective system of food safety and quality control is much simpler in large enterprises of agrarian profile, in multi-cooperative cooperatives or cooperative associations. This can be explained by the following reasons:

1) Reduce risks and expenses related to a new market;

2) To speed up the development of new products and start production; 3) the desire to economize the scale of production;

4) Necessity of overcoming legislative and trade barriers; 5) Operation range increases;

6) With the necessity of minimizing expenses during the reduction of operations.

In general, the theoretical aspects of agricultural firms / cooperatives and their strategic partnerships, in the field of agriculture and food safety, are not yet perfectly developed in our country. One of the main reasons for this is the factor of time - unions, taking into consideration the specificity of Georgia, as a rule, there is a short period of time. It should be taken into consideration that, in many cases, the final results of the union are contradictory and unjustified, which, in general, complicate the analysis.

The essence of strategic associations is defined by such concepts as "friendly connections", "forms of joint entrepreneurship with legal formalities of the contract", "partners' coordination actions", etc.

The legal basis that regulates the implementation of joint activities between the firms in strategic associations, which can be actively used in the agro business, in my opinion, can be attributed to:

1) Agreement on Franchising;

2) Contracts on joint management;

3) Contracts in marketing field;

4) Contracts on creation of joint ventures and so forth.

A Selecting type of cooperation between the agrarian profile firms in Georgia, in case of strategic associations, is usually conditioned by the following factors:

1) Providing the quality of the desired flexibility with the partners;

2) The amount of risks related to risk (which is directly related to the relations with the partner organization);

3) The need for quick results;

4) Partners' strategic goals, etc.

As a rule, law enforcement agencies are often rarely in the "clean form" of conducting joint activities among firms employed in the field of agriculture. Most often, they are different combinations, complement and condition each other.

In my opinion, in the field of agriculture and food safety, in our country, we can talk about the development of strategic associations:

1) The diversity of agrarian enterprise programs and their further development will logically cause the concentration of organizational structures, merger, cross-participation or regrouping ownership of subjects in the strategic union. In this case, the union of companies employed in the agrarian field can only be seen as a transitional stage on the road to concentration;

2) Co-operation, despite the results of co-operation, will be episodic character and will be terminated so as not to deal with the strategic interests of the participants. After the agrarian project, each participant will become independent. A however, the Union will principally change the terms of competition between partners;

3) The development of strategic societies will undoubtedly lead to the scope of the initial goals.

However, we can assume that this will not lead to integration at vertical level. Each partner can at this time maintain independence in decision making. The existence of such "endless" connections will contribute to the desire of partner firms employed in the field of agriculture in order to enhance the effectiveness of cooperative work;

4) Structures, which will be created for the purpose of implementing joint operations or cooperative programs of agrarian companies, will gradually emerge from the sphere of partners control and act as independent enterprises. The logic of their development will come to a permanent conflict with the interests of the partners;

5) Strengthening strategic positions of one of the partners will be implemented at the expense of others, as a result of participation in strategic ties;

6) Slender partners use links to overcome their own technological backwardness and stronger ones to prevent the weakening of weaknesses that will prevent them from being a competitor.

It can be concluded that strategic associations in the agricultural field of Georgia have a number of advantages over global associations. Namely: 1) Do not require significant capital investments for the purpose of development; 2) Enable them to overcome the barriers of anti-monopoly legislation in Georgia; 3) The purpose of coordinating international activities is to use relatively easily managed organizational structures.

 

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Комментарии: 22

Мороз Людмила Ивановна

В современных условиях каждая страна стремится к повышению своего благосостояния, одной из составляющей которого является повышение сельскохозяйственного производства и безопасности его продуктов. Поэтому вопросы, рассмотренные в статье, представляют интерес и имеют существенное значение не только для Грузии, но и для других стран. С уважением, Л.И. Мороз.

Чиладзе Георгий Бидзинович

Уважаемая Людмила Ивановна, спасибо за проявленный высокий интерес, ценные научные комментарии, а также добрые пожелания. С уважением, Георгий Чиладзе.

Королев Евгений Сергеевич

Замечательная доктринально проработанная высоконаучная работа, которую с нетерпением хочет изучить в дальнейших ипостасях.

Чиладзе Георгий Бидзинович

Уважаемый Коллега, спасибо за проявленный научный интерес и комментарии. С уважением, проф. Г. Б. Чиладзе.

Петрухина Елена Владимировна

Статья весьма интересна именно с практической точки зрения. Для этой сферы часто характерно противоречие между количеством и качеством, разрешаемое на межгосударственном уровне. Удачи в дальнейших исследованиях!

Чиладзе Георгий Бидзинович

Уважаемая Елена Владимировна, спасибо за проявленный интерес, ценные научные комментарии и добрые пожелания. С уважением, Георгий Чиладзе

Казбеков Бекет

Уважаемый профессор Георгий Бидзинович! Соглашения , подписанные Грузией в области свободной торговли увеличат количество иностранных компаний , работающих в сельскохозяйственном секторе, а значительная часть прибыли достанется иностранным предприятиям. Поэтому Ваши рекомендации грузинским предприятиям , работающим в аграрной отрасли использовать синергетическую стратегию и другие современные механизмы, для получения конкурентных преимуществ путем объединения двух или более организаций в одной структуре управления представляют высокую научную и практическую ценность и для других стран СНГ. Ваши доклады всегда отличаются глубоким знанием контента и высоким профессионализмом. Желаю Вам дальнейших успехов! beket

Чиладзе Георгий Бидзинович

Уважаемый профессор Бекет Кабдуович! Большое спасибо за глубокий анализ, проведенный Вами во время оценки моего труда, ценные и обширные научные комментарии, а также добрые пожелания. Надеюсь на плодотворное совместное научное сотрудничество. С глубоким уважением, искренно, Георгий Чиладзе.

Гудадзе Мэги

Данная работа, как и другие труды доктора, профессора Г.Б.ЧИЛАДЗЕ касаются актуальных тем и имеют большое практическое значение. Уважаемый Георгий Бидзинович, желаю Вам дальнейших творческих успехов!

Чиладзе Георгий Бидзинович

Dear Colleague, thank you for the valuable comments of my work.

Чиладзе Георгий Бидзинович

Уважаемая Коллега, спасибо за ценные комментарий моего труда.

Гудадзе Мэги

This work, as well as other works of the Doctor, Professor G.Chiladze concern actual topics and are of great practical importance. Dear George Bidzinovich, I wish you further creative success!

Гегешидзе Екатерина Бесиковна

СТАТЬЯ ПРОФЕССОРА Г.Б. ЧИЛАДЗЕ ОТНОСИТСЯ ВОПРОСАМ ПРОЦЕССА ФОРМИРОВАНИЯ СТРАТЕГИЧЕСКИХ СОЮЗОВ И ПРОБЛЕММ ПРОДОВОЛЬСТВЕННОЙ БЕЗОПАСНОСТИ В СЕЛЬСКОХОЗЯЙСТВЕННОГО СЕКТОРА ГРУЗИИ. РАБОТА АКТУАЛЬНА И ОНА НАПИСАНА СО ЗНАНИЕМ ВОПРОСА И НА ВЫСОКОМ НАУЧНОМ УРОВНЕ. ЖЕЛАЮ ДАЛЬНЕЙШИХ УСПЕХОВ УВАЖАЕМОМУ ПРОФЕССОРУ!

Чиладзе Георгий Бидзинович

Dear doctor E.Gegeshidze, thank you for the valuable comments of my work.

Чиладзе Георгий Бидзинович

Уважаемый доктор Е.Гегешидзе, спасибо за ценные комментарий моего труда.

Гегешидзе Екатерина Бесиковна

THE ARTICLE PROFESSOR G.B. CHILADZE CONSIDERS THE PROCESS OF FORMING STRATEGIC UNIONS AND THE PROBLEMS OF FOOD SECURITY IN THE AGRICULTURAL SECTOR OF GEORGIA. The work is actual and it is written with knowledge of the problem and at a high scientific level. I WISH FURTHER SUCCESSES TO THE RESPECTED PROFESSOR!

Ляпина Иннара Рафаильевна

Статья заинтересовала. Успехов в исследованиях!!!

Чиладзе Георгий Бидзинович

Уважаемая Иннара Рафаильевна, спасибо за заинтересованность научным трудом, а также добрые пожелания. С уважением, проф. Г.Б. Чиладзе.

Короткова Татьяна Леонидовна

Уважаемый Professor George Chiladze! Ваша статья обнадеживает в том, что знания и опыт в сельском хозяйстве создадут синергию и поднимут производство и потребление продукции в Грузии на более высокий уровень! Успехов, Короткова Татьяна.

Чиладзе Георгий Бидзинович

Уважаемая Татьяна Леонидовна, спасибо за заинтересованность научным трудом и ценные комментарий. Думаю, что широкое обсуждение вышеуказанной тематики, сотрудничество научных и государственных структур, частного бизнеса приведет к нужному результату. С уважением, проф. Г.Б.Чиладзе

Тойво Таннинг

Honourable professor George Chiladze! The theme – Process of Formation of Strategic Unions and Food Safety Issues in the Agricultural Sector of Georgia - is also relevant in other countries, especially in the countries of Eastern-Europe and in all sectors of the economy. The quality of the article is very high, as always. With best regards and wishes success Toivo Tanning

Чиладзе Георгий Бидзинович

Dear Colleague, Thank you for your appreciation of the scientific article and comment. I wish you continued success and fruitful cooperation. Sincerely, prof. G. Chiladze.
Комментарии: 22

Мороз Людмила Ивановна

В современных условиях каждая страна стремится к повышению своего благосостояния, одной из составляющей которого является повышение сельскохозяйственного производства и безопасности его продуктов. Поэтому вопросы, рассмотренные в статье, представляют интерес и имеют существенное значение не только для Грузии, но и для других стран. С уважением, Л.И. Мороз.

Чиладзе Георгий Бидзинович

Уважаемая Людмила Ивановна, спасибо за проявленный высокий интерес, ценные научные комментарии, а также добрые пожелания. С уважением, Георгий Чиладзе.

Королев Евгений Сергеевич

Замечательная доктринально проработанная высоконаучная работа, которую с нетерпением хочет изучить в дальнейших ипостасях.

Чиладзе Георгий Бидзинович

Уважаемый Коллега, спасибо за проявленный научный интерес и комментарии. С уважением, проф. Г. Б. Чиладзе.

Петрухина Елена Владимировна

Статья весьма интересна именно с практической точки зрения. Для этой сферы часто характерно противоречие между количеством и качеством, разрешаемое на межгосударственном уровне. Удачи в дальнейших исследованиях!

Чиладзе Георгий Бидзинович

Уважаемая Елена Владимировна, спасибо за проявленный интерес, ценные научные комментарии и добрые пожелания. С уважением, Георгий Чиладзе

Казбеков Бекет

Уважаемый профессор Георгий Бидзинович! Соглашения , подписанные Грузией в области свободной торговли увеличат количество иностранных компаний , работающих в сельскохозяйственном секторе, а значительная часть прибыли достанется иностранным предприятиям. Поэтому Ваши рекомендации грузинским предприятиям , работающим в аграрной отрасли использовать синергетическую стратегию и другие современные механизмы, для получения конкурентных преимуществ путем объединения двух или более организаций в одной структуре управления представляют высокую научную и практическую ценность и для других стран СНГ. Ваши доклады всегда отличаются глубоким знанием контента и высоким профессионализмом. Желаю Вам дальнейших успехов! beket

Чиладзе Георгий Бидзинович

Уважаемый профессор Бекет Кабдуович! Большое спасибо за глубокий анализ, проведенный Вами во время оценки моего труда, ценные и обширные научные комментарии, а также добрые пожелания. Надеюсь на плодотворное совместное научное сотрудничество. С глубоким уважением, искренно, Георгий Чиладзе.

Гудадзе Мэги

Данная работа, как и другие труды доктора, профессора Г.Б.ЧИЛАДЗЕ касаются актуальных тем и имеют большое практическое значение. Уважаемый Георгий Бидзинович, желаю Вам дальнейших творческих успехов!

Чиладзе Георгий Бидзинович

Dear Colleague, thank you for the valuable comments of my work.

Чиладзе Георгий Бидзинович

Уважаемая Коллега, спасибо за ценные комментарий моего труда.

Гудадзе Мэги

This work, as well as other works of the Doctor, Professor G.Chiladze concern actual topics and are of great practical importance. Dear George Bidzinovich, I wish you further creative success!

Гегешидзе Екатерина Бесиковна

СТАТЬЯ ПРОФЕССОРА Г.Б. ЧИЛАДЗЕ ОТНОСИТСЯ ВОПРОСАМ ПРОЦЕССА ФОРМИРОВАНИЯ СТРАТЕГИЧЕСКИХ СОЮЗОВ И ПРОБЛЕММ ПРОДОВОЛЬСТВЕННОЙ БЕЗОПАСНОСТИ В СЕЛЬСКОХОЗЯЙСТВЕННОГО СЕКТОРА ГРУЗИИ. РАБОТА АКТУАЛЬНА И ОНА НАПИСАНА СО ЗНАНИЕМ ВОПРОСА И НА ВЫСОКОМ НАУЧНОМ УРОВНЕ. ЖЕЛАЮ ДАЛЬНЕЙШИХ УСПЕХОВ УВАЖАЕМОМУ ПРОФЕССОРУ!

Чиладзе Георгий Бидзинович

Dear doctor E.Gegeshidze, thank you for the valuable comments of my work.

Чиладзе Георгий Бидзинович

Уважаемый доктор Е.Гегешидзе, спасибо за ценные комментарий моего труда.

Гегешидзе Екатерина Бесиковна

THE ARTICLE PROFESSOR G.B. CHILADZE CONSIDERS THE PROCESS OF FORMING STRATEGIC UNIONS AND THE PROBLEMS OF FOOD SECURITY IN THE AGRICULTURAL SECTOR OF GEORGIA. The work is actual and it is written with knowledge of the problem and at a high scientific level. I WISH FURTHER SUCCESSES TO THE RESPECTED PROFESSOR!

Ляпина Иннара Рафаильевна

Статья заинтересовала. Успехов в исследованиях!!!

Чиладзе Георгий Бидзинович

Уважаемая Иннара Рафаильевна, спасибо за заинтересованность научным трудом, а также добрые пожелания. С уважением, проф. Г.Б. Чиладзе.

Короткова Татьяна Леонидовна

Уважаемый Professor George Chiladze! Ваша статья обнадеживает в том, что знания и опыт в сельском хозяйстве создадут синергию и поднимут производство и потребление продукции в Грузии на более высокий уровень! Успехов, Короткова Татьяна.

Чиладзе Георгий Бидзинович

Уважаемая Татьяна Леонидовна, спасибо за заинтересованность научным трудом и ценные комментарий. Думаю, что широкое обсуждение вышеуказанной тематики, сотрудничество научных и государственных структур, частного бизнеса приведет к нужному результату. С уважением, проф. Г.Б.Чиладзе

Тойво Таннинг

Honourable professor George Chiladze! The theme – Process of Formation of Strategic Unions and Food Safety Issues in the Agricultural Sector of Georgia - is also relevant in other countries, especially in the countries of Eastern-Europe and in all sectors of the economy. The quality of the article is very high, as always. With best regards and wishes success Toivo Tanning

Чиладзе Георгий Бидзинович

Dear Colleague, Thank you for your appreciation of the scientific article and comment. I wish you continued success and fruitful cooperation. Sincerely, prof. G. Chiladze.
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