TIRANA, Nov. 18 – The Albanian government has unveiled a package of incentives for the agriculture sector, urging entrepreneurs and farmers to cooperate with each other and join their fragmented land parcels into cooperatives so that they can benefit funding of up to $1 million.
Speaking at a meeting with business representatives targeting investments in agriculture, Prime Minister Edi Rama said the “Agro 100” package will support farms of 100 hectares with 1 million dollars in five years while greenhouses of 10 hectares will benefit $100,000.
“We strongly believe that agriculture is one of the main sources of sustainable economic growth. The land fragmentation can only be overcome by enterprises’ interest,” said Rama.
“By turning into de facto cooperative and producing the same product with the same quality, a farmer household struggling at subsistence level will turn into a small formalized business able to sell and be paid,” he added.
Businesses can also apply for soft loans under a Euro 300 million guarantee fund made available with the EBRD for the next three years, the prime minister announced.
Agriculture, a sector which employs around half of the country’s population but provides only 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.
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.
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 but are not popular due to negative connotations to communist farm structures before the early 1990s.
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.
