By Ervin Lisaku
TIRANA, Jan. 6 – Albania continues remaining the most agriculture-based economy among the seven enlargement economies, according to a report published by Eurostat, the statistical office of the European Union this week.
Eurostat data shows Albania’s agriculture, forestry and fishing sector continues remaining one of the key drivers of the Albanian economy accounting for 22.2 percent of the GDP and 44.6 percent of total employment.
The large share in total employment at around half of the country’s population reconfirms the poor productivity of the sector which provides slightly more than a fifth of the country’s GDP.
A decade ago in 2003, Albania’s agriculture accounted for 23.5 percent of the GDP and employed 58 percent of the country’s population.
The share of employment in agriculture at the end of 2013 in the seven enlargement countries varied from 4.5 percent in Montenegro to 4.6 percent in Kosovo, 18.7 percent in Macedonia, 18.9 percent in Bosnia, 21.3 percent in Serbia and 23.6 percent in Turkey. Meanwhile, the sector contribution to the GDP ranged from 7.4 percent in Turkey to 14.9 percent in Kosovo and 22.2 percent in Albania, according to Eurostat.
Agriculture, forestry and fishing was the largest employer in the Albanian economy and the second largest employer in the Serbian and Turkish economies. By contrast, agriculture employed only 4.9 percent of the population in the EU 28 and provided 1.7 percent of the GDP.
Albania was the only enlargement country to record an increase in the relative share of its utilized agricultural area, up 2.4 points between 2003 and 2013, says the Eurostat report.
INSTAT data shows the services sector accounts for 52 percent of the GDP, followed by agriculture with 21.8 percent, industry with 14.4 percent and construction with 12.2 percent.
Agriculture, which has proved the most stable sector in the past five global crisis years, has positively performing even in quarterly contractions of the economy during the past six global crisis year. Despite employing around half of the country’s population, the agriculture sector accounts for only 22 percent of the GDP and is also one the least financed sectors of the economy, unveiling the poor productivity of this sector.
Huge trade gap
Agriculture, a sector which employs around half of the country’s population but provides only around 20 percent of the GDP, is one of the least productive sectors in Albania’s economy. Although it has been the sector with the most stable growth in the past six global crisis years, the Albanian economy continues remaining largely dependent on agriculture imports which are around six times higher compared to exports.
Data published by the agriculture ministry show the export/import coverage ratio for agriculture was at 17.4 percent which means Albania imports 5.7 times more than it exports, creating a huge trade gap in Albania agriculture balance sheet.
Exports of agricultural products rose by 17 percent to 15.2 billion lek (Euro 106 million) in 2013, fuelled by increases in canned fish and medicinal plants, the top Albanian agricultural exports, according to an annual report published by the ministry.
Albania’s agriculture
The Albanian government spends only 0.5 percent of the GDP on agriculture while credit to the agricultural sector represents only 1.3 percent of total credit to businesses, according to central bank data.
Around 500,000 people work in agriculture, of whom 55 percent are full time and 45 percent part time. “Labour productivity in agriculture is only 30 percent of labour productivity in the rest of the Albanian economy and 20 percent of the EU labour productivity in agriculture. More than 50 percent of the total population live in the rural areas where agriculture is the main economic activity,” says the European Commission.
Experts say the small size of farms, lack of appropriate management of land and agricultural infrastructure and technology make the Albanian agricultural sector more problematic compared to other countries in the region.
Agricultural cooperatives are now legally recognized as joint enterprises created on a voluntary basis, giving the Albanian farmers more opportunities to maximize their production and benefit more in funding from government and financial institutions.
