Financial sustainability of Georgian agribusiness: An empirical and policy analysis

Abstract

The agricultural sector remains a vital component of Georgia's economy, with agribusiness playing a key role in rural employment, food security and export potential. However, the financial sustainability of agribusiness faces significant challenges due to market volatility, limited access to finance, infrastructure constraints and climate-related risks. This study evaluates the financial sustainability of Georgian agriculture by analysing sector-specific financial indicators, institutional support mechanisms and structural bottlenecks. Using a combination of qualitative and quantitative methods, including financial ratio analysis and strengths, weaknesses, opportunities and threats (SWOT) assessment, the study identifies critical risk factors and highlights untapped opportunities for growth and resilience. The regression results indicate that liquidity has a statistically significant positive effect on profitability, while leverage and climate-related risks negatively affect financial performance. Findings suggest that while the sector has considerable development potential, particularly through modernisation, improved access to finance and integration into the European Union (EU) market, systemic weaknesses must be addressed through targeted government policies, strategic investment and capacity-building initiatives. Overall, the study contributes to a better understanding of the financial viability of Georgia's agribusiness sector and offers policy-oriented recommendations to support long-term sustainable development.