Agriculture: the government should guarantee the loans

Zana Konini, the director of Albanian
Savings and Credit Union (ASC Union) declared
that the loans to the Albanian agriculture
are increased each year. These loans
have helped to increase the domestic production.
Konini argues that the farmers do
not lack financing, “but a scheme that guarantees
that the production is gathered”. The
increase of the food prices in Albania is
caused by the increase of the food prices in
the world markets. However, the Albanian
agriculture can recuperate from the crisis.
The main problem for the credit agencies is
that they loan in Euro from their partners
and are obliged to finance the Albanian farmers
in Albanian Lek. Therefore, the credit
agencies are vulnerable to changes in exchange
rates. The government can help the
agencies by covering the risk of changes in
the exchange rates. Such measure is going to
reduce the risk of the agencies and reduce the
cost of loans to the farmers. Further, the government
can act as in intermediary guaranteeing
that the loans given to the farmers with
low interests. Years ago, the World Bank financed
with low interest loans the agencies,
which in turn financed the farmers. However,
the World Bank project was terminated some
years ago, although the project was considered
as successful. The Albanian government
should replace the World Bank and restart
the financing. (Tirana Times Staff)