journal N1 2025

Expanded Summary

Factors affecting Georgian tobacco production are analyzed in the article.  The challenges faced by the Georgian tobacco industry, the main limitations and prospects for the development of the industry have been evaluated. The importance of Georgian tobacco production in the development of Georgian economy is substantiated. The role of the tobacco industry in the neighboring and post-Soviet countries in improving the economy and the well-being of the population is studied.

Modern Georgian tobacco production is in a rather difficult and deplorable state. Tobacco cultivation, as well as production, is gradually declining and experiencing degradation instead of development. Accordingly, the article argues the need to implement reforms in the field of tobacco.  Today, the Georgian tobacco industry is in a rather bad and miserable state. It is mainly characterized by: outdated machinery and inefficient cultivation and processing technologies; lack of research and training centers; Involvement of the government in the field only at the regulatory and controlling level and new restrictive barriers; Due to the lack of interest and involvement in the sector from the population and businesses. In order to determine the potential and development prospects of Georgian tobacco production, it is necessary to identify the challenges and limitations that the field is facing.

 The world's population continues to grow, with the United Nations (UN) predicting that the world's population will reach 10 billion by 2050. This population growth creates more demand for food and agricultural products. Accordingly, as in other markets, subjects operating in the tobacco market predict an increase in demand for their products. Considering the growth of the world's population and other factors such as: consumer habits and attitudes, dominance of the tobacco industry, cultural and social traditions, effective marketing and branding strategies and others, the tobacco market volume is predicted to increase. On the other hand, the global pandemic, regional conflicts and large-scale wars, global warming and climate change and other factors have led to the expectation of unprecedented shortages in the global tobacco industry, with the drastic reduction in the availability of tobacco in the world. This applies not only to countries in conflict zones, but also to major tobacco producing countries such as Brazil, India, Tanzania, Zambia and China. 

The main challenges and limitations facing Georgian tobacco production have been identified, among the post-Soviet and neighboring countries of Georgia, countries have been identified, Countries where the tobacco sector contributes to economic growth, development stimulation and increase of such indicators in the country as employment level, poverty rate, GDP, export indicators and others. Also, the positions and role of the entities operating in Georgian tobacco production in the implementation of economic and public policy are evaluated. It is concluded that tobacco production and the tobacco sector, under the conditions of relevant development, not only is it an important component of the national economy, but in some cases tobacco producers have the potential to become an important part of the world's economic structure.

In order to identify the existing limitations and challenges and find ways to solve them, the main indicators of the activities of the subjects participating in the tobacco field were analyzed, interviews were conducted with subjects of all directions participating in the field. Based on the analysis of indicators and interviews, several main problems are highlighted: tobacco farmers use very outdated tools and techniques due to low financial resources; There is a lack of knowledge among tobacco farmers about the use of modern raw material cultivation technologies and approaches;Tobacco manufacturers use outdated means of production for processing and production of raw materials; Tobacco producers have limited access to finance; The legislation on advertising, placement and sale of tobacco products is strict; The tax policy towards tobacco producers is quite strict, which does not include any differentiation for local entrepreneurs; Georgian tobacco production is not considered as one of the important and high-income sectors of agriculture and economy; Demands on local tobacco producers are becoming stricter and new barriers and restrictions are emerging, among others.

According to the identified problems, recommendations have been developed regarding the priority areas of Georgian tobacco production.