TIRANA, Sept. 2 – The high level of informality in Albania’s agriculture sector is the key barrier why Albanian farmers cannot benefit from international funding projects, mainly from EU funds, experts say.
The informality level in agriculture, a key sector which employs about half of the country’s population but provides only 20 percent of the GDP, is estimated at a record high of 70 percent, making it the most informal sector in the economy.
“The majority of farmers are not registered at all. A considerable part of the industry sector is also informal making farmers unwilling to register,” says Esmeralda Ballesha, an agriculture expert.
“Informality makes farmers unwilling to declare their income and have access to funds which is one of the biggest issues,” she adds.
With the remittances-fuelled construction boom almost over, more and more Albanian enterprises are turning to agriculture as a real opportunity of growth engaging mostly in egg, fruit and vegetable production, a considerable part of which are destined for exports.
Data published by the country’s state statistical institute, INSTAT, in its 2014 business register shows the number of new businesses engaged in agriculture, forestry and fishing quadrupled in 2014 when it rose to 1,031, up from only 259 in 2013.
A considerably number of the start-ups are subsidiaries of long-ailing construction companies which are turning to agriculture to diversify their investments.
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.
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.
Agriculture, a sector which employs around half of the country’s population, 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.
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.
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.
