Albanian government: No clear agriculture policy

In spite of increasing food prices, the Albanian agriculture sector is lagging behind. During the last ten years, it has grown in average only 2 percent per year. In 2007, agriculture was the sector with the lowest growth rate in the Albanian economy. The sector was plagued by the prolonged drought, lack of artificial irrigation, and increased prices for gasoline and fertilizers.
In an interview with the Albanian Telegraphic Agency, the Albanian Minister of Agriculture, Jemin Gjana, spoke about one problem only, the use of arable land for construction and other ventures instead of growing crops. It is true that ten to 15 percent of arable land, or around 50,000 hectares, are not used for other purposes than agriculture.
However, the most important factor causing the stagnation of the agriculture sector is the failure of the government to put together a sound policy regarding the development of agriculture and Albanian rural areas. For example, the government decided to eliminate the existing subsidies, promising to replace those with programs that are more effective. These programs have not yet materialized. In the past, Albanian farmers were supplied with excise-free gasoline, something that helped to reduce production costs and gave the Albanian farmers a chance to compete with foreign goods. However, the government discovered massive abuses with the program and instead of fixing it, canceled it all together.
Facing the increase in food prices, the Albanian government decided to allocate $10 million in a stabilization fund for the agriculture sector. The fund should be managed by a new agency, part of the Ministry of Agriculture and Food, which is not yet operational. However, even $10 million are insufficient compared to the subsidies given to farmers in neighboring countries. Macedonia, for example, is using $55 million to assist its farmers. Consequently, Albanian farmers are unable to compete with Macedonian farmers in the Albanian market. Only during 2007 did the trade deficit of Albania with Macedonia increase to $75 million, mainly due to food imports.
The same holds true even for agriculture products from Italy and Greece, Albania’s largest trade partners. The data from the Albanian Center for International Trade (ACIT) shows that during 2007, the trade deficit of Albania, from food and agriculture products, increased to Euro 459 million, or Euro 75 million more than in 2006.