New Agency To Manage Future EU Agriculture Funds

TIRANA, July 29 – Farmers will be able to more easily receive loans through a new state agency that aims at subsidizing agriculture, said Minister of Agriculture Jemin Gjana at a roundtable held last Tuesday.
The agency, which will begin operating in 2009, does not have a final name yet. However, experts of the Ministry of Agriculture (MoA) are calling the agency the Payments Agency (PA) or Agricultural and Rural Development Payments Agency.
The Payments Agency will be a source of funding for farmers and will manage the entire process, from filing the application to tracking loan payments. Initially, the funds of the agency will come from the state’s budget, said Gjana. The Ministry has decided to reallocate $15 million to the agency’s budget coming from the 2KR project, a failed subsidizing project of MoA.
Additional funding might come from the pre-accession funds allocated for Agriculture that Albania might receive. The Stabilization Association Agreement (SAA) requires the establishment of the Payment Agency as a part of the Common Agriculture Policy (CAP), the EU policy on Agriculture. There are parallel agencies in EU member countries as well as in candidate countries, Gjana said.
“The agency was needed in order to acquire EU funds [in support of farmers and their projects],” Gjana said. The EU requirement was one of the main reasons bringing about the founding of the agency. The farmers and the administration have been trained and will be able to absorb and manage the funds set aside for agriculture, he added.
Currently, the agency is not eligible for EU-funding because Albania is not yet a candidate country. Once the country becomes a candidate for EU membership, the Payments Agency will be the only channel for farmers to be eligible for EU support. The government has planned to gradually establish the agency, in order to teach the agency staff about the different processes, said Gjana.
Initially, the agency will employ a staff of some 100 employees, and will work as a division of the MoA. With the consolidation of this central division, the agency might expand with local branches, said Gjana. In order to receive funding, the agency has to go through the accreditation process that checks if the agency is qualified to manage money. The sooner the agency begins working, the sooner the Albanian government and the EU will be able to accredit it, he added.
The Ministry has already begun working on the legal framework of the Payments Agency, Gjana said. The experts of the Ministry expect to have the framework ready by this autumn, so that the agency can begin working on the first phase by the beginning of 2009.
Minister of Finances Ridvan Bode and Minister of Economy Genc Ruli were present at the roundtable, and expressed their support for the implementation of the agency. Bode said he saw the hesitation of commercial banks towards funding agriculture as worrisome. “Only two percent of all approved loans are given to farmers, when agriculture is responsible for 20 percent of the country’s GDP,” Bode added.
The agency is an example of policies that attempt to make agriculture attractive and reliable in the eyes of the banks, said Bode.