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Georgia: Court Approves Sales of Farmland to Foreigners

An Austrian citizen on June 24 won a Constitutional-Court case against Georgia’s parliament for a  2013 ban on the sale of agricultural land to foreigners. The reversal could have broad implications for the tiny South Caucasus country as it prepares to take on closer economic ties with the European Union.

Mathias Huter , a rule-of-law activist formerly employed by the anti- corruption watchdog Transparency International Georgia*, said that he sued because the ban discriminated against foreign nationals and could harm Georgia’s struggling agricultural sector, which he argued, “needs . . . foreign expertise and capital.”

“I felt the ban was… rushed and not thought through, [and came] just a few weeks before the [2013] presidential election,” said Huter, who does not own farmland.   TI Georgia filed the suit on Huter’s behalf.

In its ruling, the Court stated that, while the reasons cited for the ban —  “national security, environmental protection and development of the agricultural sector” — were “correct,” and represent “important and valuable public interests,” they could have been realized “without violating foreigners’ property rights.”

Introduced by the ruling Georgian Dream coalition, the ban reversed an earlier government policy of encouraging foreign farmers, such as Punjabi from India and Boers from South Africa, to move to Georgia, a heavily agricultural country with relatively cheap land prices.

Officials had hoped the migrants would bring with them modern farming skills and investment that would upgrade Georgian agriculture from its largely sustenance-based operations to commercial production, and make the country more self-reliant for food.  

But the policy soon backfired. The simplified access to property and citizenship often resulted in grumblings about the newcomers (particularly Punjabis) by local farmers, who thought the government was favoring foreigners at their own expense. The situation was aggravated by the fact that private property is a loose concept in rural Georgia. Local herders griped about what they had regarded as common pasture lands being turned into private farms for Indians.

Some analysts argued that the ban to address these grievances was as ill-advised as encouraging the en-masse migration of foreign landowners. While the ban, which was set to expire at the end of this year, may have pleased many Georgian villagers, it was seen an obstacle to much-needed foreign investment, including among members of Georgia’s expat community who had to have Georgian spouses or business partners buy any desired land.

Whether or not foreign investment will now flow more readily into Georgia’s struggling farming sector remains to be seen, but the Constitutional Court’s decision was timely. On June 27, Georgia will sign a deal with Brussels which will pave the way for closer economic ties with the European Union; including, of course, in agriculture.

*TI Georgia receives funding from the Open Society Foundation Georgia, part of the network of Open Society Foundations. EurasiaNet.org is run under the auspices of the Open Society Foundation-New York City, a separate part of that network.

Georgia: Court Approves Sales of Farmland to Foreigners

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