Extended Summary

It is statistically confirmed that throughout last few weeks, suicide rates have significantly increased in Georgia. Especially alarming is the number of suicide among teens. Modern psychological studies have revealed that food security - food sufficiency, accessibility, as well as over-dependence on import and food safety are among the main reasons for growing suicide rates.

Suicide is not just a Georgian problem. According to data from international organizations, there is one suicide every 40 seconds around the World, i.e. about 800 thousand people die per year. The latest scientific findings show that two-thirds of suicides occur in the countries with a low level of average income; it is also known that risks of suicide increase when there is a limited access to healthcare services.

Kommersant’s article ‘Youth Suicide Becomes Epidemic’ indicates that, at the moment, suicide growth has so far been avoided by three countries - Sweden, Finland and Austria. Psychologists explain this success by the introduction of effective government social programs. However, in case of socially stable Japan, reasons for high rates of suicide are related to the historical tradition – ‘Kharakiry’ instead of poor social conditions.

Mental disorders, financial problems, alcohol/drug abuse and chronic diseases are considered to be the common causes of suicides around the World. Modern psychologists believe that economic problems, including food accessibility and sufficiency, are among the main causes of suicide. It should be noted that the terms ‘food security’ and ‘food safety’ are often misused in Georgian economic literature. ‘Food security’ means sufficiency and accessibility of food, as well as dependency on imports, protection of domestic production, while ‘Food safety’ refers to the ecological purity of the product. These issues are more precisely discussed in this blog.

For ensuering of food security of the country developed states established a legal framework for food security. Many countries set up the local food procurement systems, product price regulation mechanisms, local farmers protective schemes, etc. Sometimes the non-tariff barriers have also been widely used: import quotas, licenses, subsidies, subventions, the invasion of foreign markets, social and agricultural programs, etc.

Food import addiction is largely dependent on countrie’s agricultural sector development. All countries in the world pay great attention to the development of agriculture, provision of population with food, protection of domestic agricultural market. Georgia has all this process undeveloped. Such a situation may lead to a greater dependence on imported food, - agricultural production in many fields full of falling. Food commodity prices on global market is generaly tendency of growth forecast and for the importer country's population it poses as an extremely difficult threat.

The local producers does not feel saved from the cheap imported products not with the protectionist tariff and non-tariff barriers / measures nor by the  economic incentives.

One such method is the state food procurement, which regulates the exchange rate, contributing to regional development, rural employment and increase the country's food security by reducing of import dependence. It is therefore necessary of legislative and political support for public food procurement. Public agencies and the state enterprises, the local and the regional authorities of the nation can play significant role in local food production stimulas.

During the presentation of the government program "Produce in Georgia", Government of Georgia emphasized the importance of local food production and procurement. In this regard, the program budget is set at 46 million GEL, of which 30 million GEL will be used for agricultural production and processing.

The procurement of local food - this is not only a favorable price to purchase the foodstufs for public needs. It is necessary to pay attention to the quality of products. The procurement of healthy food is similar as a struggle for survival. Users faces a number of threats: food additives (emulgators, sinthetyc flavors, pesticides, etc.), genetically modified organisms, chemical fertilizers, prevalence of various diseases and defects, expiration period, incorrect transportation and storage conditions caused by injuries, and at the end, mislead the distributor, producer or seller. Preference should be given to locally manufactured products, imported products will have a fresh look, but it would mean number of nutritional supplements in it.

Share of the public procurement in the GDP of Georgia is about 10% in recent years,. If the public procurement contracts in 2012 amounted to 2,771 billion USD; in 2013, the same rate were 2,791 billion, while in 2014 - 2,876 billion GEL. In addition, in July 2014 - April 2015 only 55.7 million GEL worth of food, - 1.92% of GDP was procured.

This data shows that the system of public procurement by the local food is minimal. In particular, by the public authorities were fully purchased local natural honey (32030 kg), eggs (4614822 units), the shield (2732.6 kg), sheep meat (45.5 kg), rabbit meat (262.5 kg), jams and jellies (25069 kg), milk (472850.7 liters), wheat and corn flour (578820 kg), meat products (277332 kg), pork (227000.5 kg), citrus fruits (113672 kg), cheese (129636.03 kg), etc.

However, part of the foods purchased by the public authorities have produced abroad. In particular, beef and veal imported from Brazil 13.87%; 15.88% grain from Ukraine; Dairy products from Russia and Ukraine - respectively 8.96%, 13.43%; Vegetable oil from Azerbaijan, Russia and Ukraine - in respectively 9.72%, 7.89%, 15.36%; Chicken meat form the United States, Brazil - respectively - 33.77% and 7%; Butter and margarine form Ukraine 51.88%; Groats from Ukraine 60.88%; Tomato paste from Russia and Turkey - respectively 48.38%, 23.08%; Canned mushrooms form China and Russia - respectively 61.78%, 18.53%; Oat flakes form Ukraine, Germany and Russia - respectively 57.00%, 21.94%, 6.97%; Milk powder from Ukraine and Lithuania - respectively 53.43%, 30.76%; Fish and fish products from the United States, Canada, Spain and Norway - respectively 26.46%, 7.11%, 5.32%, 10.7%; Rice from India, Pakistan, Thailand and China - respectively 32.50%, 27.50%, 9.02%, 5.73%.

Analyzed indicators show that there is a significant local procurement of food reserves. The reason is that according to the current procurement practices in Georgia much more rights have public purchaser than the supplier.

At the same time, the modern industrial countries are supporting local food producers in public procurement regulations. There are two "groups of countries", which have stimulas for local food suppliers, especially small and medium ones:

- One of the "group" (for example, the US North East region, New England 6 states) sets privilegies for local farmers when purchase local food. Those states established a preferencial act for food suppliers to the US federal, state and municipal (county) organizations. In particular, this law requires the state agencies, organizations and institutions to purchase from the local (the state) providers of food products, even if their cost is 10% more than of outside food prices.

- Second "group" of food procurement regulations establish "target" food parties/sets, which will be purchased only from local suppliers. For example, the State may, in a few years oblige state agencies purchase concrete specie of food by 2020, say 20%, only form the local farms.

For example, in 2006, Massachusetts enacted one such law, codified in the General Laws of Massachusetts at Chapter 7, Section 23B (Section 23B). Section 23B requires state agencies, as well as state colleges and universities, to prefer food products grown or produced in Massachusetts over foods grown or produced in other states. In order to effectuate this broad preference for Massachusetts-grown food products, the law requires state agencies—but not state colleges or universities—to purchase food products grown in Massachusetts, unless the price is more than 10% higher than the price of comparable out-of-state food products. While Section 23B reflects the state legislature’s desire to increase the amount of Massachusetts-grown foods, not much local food is being purchased by Massachusetts state agencies. Many state agencies have yet to achieve full implementation of the 10% price preference as required by Section 23B. Discussions with agency officials and purchasers revealed that little progress has been made since Section 23B’s enactment in establishing contracts with vendors who source agricultural products from Massachusetts farms. Under Massachusetts’ procurement law, state agencies are required to form Procurement Management Teams to oversee the creation of a Request for Response (RFR) that seeks bidders to satisfy a procurement solicitation.

Although Section 23B provides a price preference for locally grown food purchased by agencies, it does not provide much incentive to purchase local food. Other states have used a benchmark to give agencies an indicator to work toward; a benchmark requires an agency to purchase a set amount of food or spend a certain amount of money on local food. Massachusetts does not have any kind of benchmark to push agencies to purchase local food. There are existing programs that provide procurement support to certain types of businesses – small business and minority-owned and women-owned business enterprises – that farmers could use to connect to agency purchasers, but have not done so. Farmer enrollment in the Small Business Purchasing Program and the Supplier Diversity Program is almost nonexistent. Finally, the prime grocer contract requires bidders to be able to provide food that can be locally grown as well as food that cannot be locally grown. This could preclude local farmers from bidding on the prime grocer contract as vendor or subvendor.

By the way, in response to the anti-Russian sanctions, the Russian Federation's Ministry of Agriculture initiated food import restrictions from western countries and the preferences was given to the Customs Union (CU) producers (Минсельхоз предложил запретить госзакупки импортных продуктов. 23 октября 2014. http : //lenta.ru/netss/2014/10/23/embargo/).

Based on the foregoing, it is desirable to start work on legislative and political initiatives to:

- Set up a regulatory framework, which will be determined by local and "target" food procurement preferences;

- An act to establish the "target" of food parties (species), which by 2020, will be purchased only from local suppliers;

- Government to start work on creating a Web Directory, where farmers and distributors contact information is provided to state agencies about the local food;

- Local food providers should be targeted to open credit accounts, which will speed up the supplier of small and medium farmers;

- Establishment so-called aggregats, or of food - "hubs“. They will centralize efforts of the small and the medium farmers. Those aggregats will play the role of distributors for collecting food from the local suppliers.

In addition to these overall recommendations, several opportunities to modify the purchasing practices of Georgian particular agencies to increase local purchasing should be identified. These opportunities must be discussed in more detail in the country.