Competitiveness can be improved through increased productivity and higher quality products, while agriculture policy reform should be conducted within the context of current and future EU requirements
TIRANA, Sept. 18 – Albania’s challenge in the agriculture sector is transforming it from subsistence-oriented production into a modern, commercial, and competitive sector, while fostering alternative income opportunities for rural residents exiting the sector, says the World Bank in its partnership programme.
“Competitiveness can be improved through increased productivity and higher quality products. At the same time, agriculture policy reform should be conducted within the context of current and future European Union (EU) requirements, including harmonizing with EU legislation and standards,” says the World Bank.
Agriculture is a main source of employment and income in the rural areas, contributing 21 percent to GDP and accounting for 58 percent of employment in the country. Albania’s farming sector has been dominated by small private holdings since the collapse of the communist state in 1991, when peasant farmers disbanded the quasi-state collective farms. There are currently a total of some 375,000 private farms, each averaging only (roughly) 1.1 hectares of field crops in four plots. In addition to field crops, 91 percent of farms also have livestock and 37 percent tree crops. Over the last 10 years, there has been a slight downward trend in the total area devoted to field crops, with a major decrease in cereals, partly compensated for by an increase in areas under forages and, to a more limited extent, vegetables.
The World Bank has supported agriculture in Albania through investments in irrigation and exposure to new technologies and practices, and through piloting a small grant program that was subsequently scaled up by the government.
Despite accounting for almost 20 percent of the GDP and employing half of the country’s population, the agriculture sector is one of the least financed sectors by commercial banks. Total lending to the agriculture sector at the end of June 2013 was at 5.8 billion lek, up 18 percent compared to a year ago but only 1.45 percent of total lending to businesses. Agriculture is also the least financed among government priority sectors receiving only 0.5 percent of the GDP.
Eurostat: Albania is most agriculture-based enlargement economy
Albania’s agriculture sector has the highest gross value added (GVA) and employment share among all nine EU candidate and potential candidate countries, according to a recent report by the Eurostat, the EU statistical office, on enlargement countries.
Albanian agriculture sector accounts for around 20 percent of the gross value added by main sectors, and employs 44 percent of the country’s population, according to Eurostat data for 2011.
Latest data by the country’s state Institute of Statistics (INSTAT) show the agriculture employs 522,300 people, which is 47 percent of the total labour force.
INSTAT calculates all people living in rural areas possessing land as self-employed and takes into account only those people who register themselves as unemployed with state agencies.
While the agriculture GVA by main sector is at 1.7 in the EU 27, among EU aspirants the rate ranges from 5.2 percent in acceding Croatia, to 11.5 percent in Macedonia, 17.5 percent in Kosovo and 19.3 percent in Albania. At only 5 percent in the EU 27, employment in the agriculture sector among enlargement countries ranges from 5.3 percent in Iceland, to 5.6 percent in Montenegro, 18 percent in Macedonia, and 44.1 percent in Albania.
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.
