Abstract—The article presents the development trends of farms, estimates on the optimal scope of farming, as well as the experience of local and foreign countries in this area. As well, the advantages of small and large farms are discussed; herewith, the scales of farms are compared to the local reality. The study analyzes the results of farm operations and the possibilities of diversification of farms. The indicators of an effective use of land resources and land fragmentation are measured; also, a comparative analysis with other countries is presented, in particular, the measurements of agricultural lands for farming, as well as the indicators of population ensuring. The conducted research shows that most of the farms in Georgia are small and their development is at the initial stage, which outlines that the country has a high resource potential to increase the scale of the farming industry and its full integration into market relations. On the basis of the obtained results, according to the research on the scale of farming in Georgia and the identification of hampering factors of farming development, the conclusions are presented and the relevant recommendations are suggested. Keywords—Farm cooperatives, farms, farm scale, land fragmentation, small and large farms. I. INTRODUCTION FFECTIVE functioning of farms is very important for the successful development of agriculture. Georgia is a country with a small land area; its geographical location, mountainous landscape, and fragmentation of land areas creates some difficulties for the development of agriculture. Therefore, development of farms in different regions requires differentiated approaches. Accordingly, the scale of farms is different. Global development provides the necessity to focus on intensive fields in rural areas. Effective functioning of the agricultural sector requires investments, financial support from the government, and improvement of infrastructure, etc. Agriculture is becoming less accessible in the country, where land is divided into unprofitable, small land parcels (farms). Small farmers are threatened by rising security standards of the market and it is difficult for them to enter markets. However, many scholars or experts believe that development of agriculture depends on the successful development of small farmers. M. Chavleishvili is with the Department of Microeconomics, Faculty of Economics and Business, Iv. Javakhishvili Tbilisi State University, Tbilisi, Georgia (phone: +995-593619746; e-mail: marina.chavleishvili@tsu.ge). E. Kharaisvili is with the Department of Microeconomics, with the Faculty of Economics and Business, Iv. Javakhishvili Tbilisi State University, Tbilisi, Georgia (phone: +995-577424294; e-mail: eteri.kharaishvili@tsu.ge). G. Erkomaishviliis with the Department of Economic policy, Faculty of Economics and Business, Iv. Javakhishvili Tbilisi State University, Tbilisi, Georgia (phone: +995-577295087; e-mail: gulnazi.erkomaishvili@tsu.ge). Assessment of the scale of farm production is important from the point of cost-benefit analysis. Naturally, application of technical and technological means increases the possibility of expanding the scale of production and reduces the cost per product unit; on the other hand, this fact makes the efficiency of functioning of small farms doubtable. However, in contrast to this view, an opposite tendency is observed in small land countries in order to avoid ownership of large areas of land by individual farmers [13]. Liberalization and globalization of trade poses serious problems to farmers. It casts doubt on the concentration, integration, transformation and international competition of small farmers. In these terms, the interests of investors are related to risks; thus, the farmers, who face problems with selling their products and have low level of infrastructure, and have fewer perspectives. Therefore, the opinion that investments should be made in large, market-oriented farms is not groundless. Many researchers the share above-mentioned opinion, namely, they think that the country should not build up its agrarian policy just for "saving small-sized farms", although it is also necessary to think about increasing farm’s sizes [14]. The scholars who advocate small farms provide such arguments as flexibility of small farms with respect to transaction costs. They argue that the efficiency of small farms is not lower than the efficiency of large farms, which is due to low cost of workforce and externalities [11]. Production of small farms is more effective, but food safety and quality problems, which are very painful for the market, significantly affect the development of small farms [15]. Nowadays, researchers often discuss the advantages of small and large farms. If we do not analyze the opinions of individual experts, most of the researchers will not be able to substantiate the strategic importance of large farms in Georgia. However, it cannot be argued that development of small farms can be a panacea for the development of agriculture without integration of farms and consolidation of value in a single chain [11]. Development of agriculture is possible only in the case of development of other related fields. Historically, the workforce from agriculture has been moving to industry, which is a producer of food products and one of the major areas of employment. It reduces the dependence of the country on imports; in addition, it depends on the development of large farms, as well as on the efficiency of small entrepreneurs. Formation of farms in Georgia has already begun, and taking the local reality into consideration, the country should use the experience of the world's leading countries in this direction. The objective of the research is to determine the The Scale of Farms and Development Perspectives in Georgia M. Chavleishvili, E. Kharaishvili, G. Erkomaishvili E World Academy of Science, Engineering and Technology International Journal of Economics and Management Engineering Vol:12, No:4, 2018 497 International Scholarly and Scientific Research & Innovation 12(4) 2018 scholar.waset.org/1307-6892/10008764 International Science Index, Economics and Management Engineering Vol:12, No:4, 2018 waset.org/Publication/10008764