Characteristics of Management of Agricultural Cooperatives in Georgia

Work provides overview of the situation and trends in agricultural sector of Georgia. It mentions that Georgia is a country with small land area, where, as a result of improper land reform the lads were excessively fractured, with 75% of population holding up to 1 ha arable land. Working of such small parcels is unreasonable and economically ineffective. Taking this issue into consideration, for the purpose of stimulation of creation of the small farmers? associations, the legislative incentive was prepared on creation of the agricultural cooperatives. As a result of joint work of the Ministry of Agriculture and Agrarian Committee of the Parliament, on 12 July 2013, the Parliament of Georgia adopted the Law on Agricultural Cooperatives. On the basis of this law the LEPL Agricultural Cooperatives Development Agency was established to provide state support to the agricultural cooperatives. The main goal of the Agency is promotion of rehabilitation of the rural areas and agriculture through development of agricultural cooperatives.Of key legislative acts dealing with the activities of agricultural cooperatives, Georgian Law on Agricultural Cooperatives prevails over Georgian Law on Entrepreneurs. Therefore, the legal relations of the agricultural cooperatives are regulated by Georgian Law on Agricultural Cooperatives. According to the mentioned Law, the cooperatives provide regulation of the internal production relations by means of the economic participation, obligatory participation contributions, associated members of the cooperatives and other elements. The labor relations are decisive factors.Work provides analysis of the key operation principles of the agricultural cooperative; characteristics of cooperatives management provided for by the Law on Entrepreneurs and Law on Agricultural Cooperatives; rights and obligations of the cooperative shareholders; conflicts arisen in the course of performing of contracts made between the agricultural cooperative and its shareholder; agricultural cooperative monitoring functions. On the basis of analysis of legal regulations of leading European countries dealing with the cooperatives the recommendations are provided for improvement of cooperatives management in Georgia, for development of the entire cycle of production and sale of agricultural goods allowing generation of the increased incomes from sale of the end products by primary goods producers without any middlemen.The conclusion is made that formation of the cooperation systems of European type would be much more beneficial for the farmers, as well as for the country and its final results will be seen in its socioeconomic effects.