Agriculture Is In Limbo

The Governor of the Bank of Albania, Ardian Fullani, declared last week before the Parliamentarian Committee for Economy that the government should take effective measures to develop the agriculture sector. The only way out of the crisis is to increase domestic food production. “The world food crisis is going to continue during the mid-term period and urgent measures are needed to restructure agriculture. The pressure on the supply side is going to increase and this is going to influence the inflation rate”, said Fullani. The Albanian government should take the necessary measures to modernise the agricultural sector. It should expand arable land, but first it should provide ownership certificates to farmers and the registration of land in the Land Registry. Only these measures can allow Albanian farmers to apply for loans from banks.
However, this may not happen any time soon. Albanian agriculture, last year, recorded its worst performance in the last decade. While all other sectors of the economy experienced real growth, agricultural production decreased by 1.9 percent. This comes as no surprise, because agriculture receives only crumbs from the state budget. For the current year, the International Monetary Fund is predicting agricultural growth of only 2.5 percent, which is two times lower than the entire economic growth.
Several factors are contributing to the current situation in Albanian farming. First, the land distribution in the early 1990s created a large number of owners who possess only small land parcels that do not allow any significant mechanization. Second, the possibility to get credit is nearly nonexistent. Finally, yet importantly, the high price of diesel (around ALL 150 per litre) is forcing farmers to turn to primitive tilling techniques.
Pogradeci County, in Southeastern Albania, close to the border with Macedonia, is a good case in point. Only 49 percent of arable land is cultivated using machines. The rest is cultivated using primitive ploughs. The county has ten reservoirs, but only 20 percent of its arable land is irrigated, because the irrigation system has been destroyed. In the entire county, there are some 30 tractors and five combine harvesters, which remain mostly unused because of high diesel prices. The high diesel and fertilizer prices are the reason why Albanian farmers cannot afford to cultivate their land. If they do, they are not going to find any market for their products, which are more expensive than products imported duty-free from Macedonia, just 10 km away.