EPI Economic Impact Assessment: Developing an Internationally Accredited Private Laboratory and its Effects on the Georgian Hazelnut Industry

Currently, Georgia lacks an internationally accredited laboratory to evaluate and test local produce prior to export. Tests conducted by existing local laboratories are not recognized outside of Georgia. As a result, Georgian hazelnut processors are unable to provide credible validation of their products’ quality to international buyers. The result is international skepticism regarding Georgian quality. Only a small cadre of international buyers has the knowledge and risk tolerance to operate in such an environment. As part of EPI’s mandate to serve as a catalyst to increase productivity and employment in export driven agricultural sectors, it is considering working with a local laboratory to assist it to obtain international accreditation.

To assess the potential benefit of such an endeavor, EPI contracted with Coldbrook Ventures LLC, a US based international consulting agency. Coldbrook Ventures LLC was tasked with assessing the potential economic impacts of developing a domestic internationally accredited laboratory for Georgia’s hazelnut market. Thomas C. Beck, the EPI consultant, used both qualitative and quantitative methods to identify areas of potential impact and monetize the effects. The consultant found that an internationally accredited laboratory would spur economic expansion and quality improvements throughout the hazelnut sector. The existence of such a laboratory would also lead to higher productivity by increasing quality assurance. These changes would eventually enable Georgia’s hazelnut sector to attain price parity with the hazelnuts of other nations.