Albanian Agriculture Developing Under ‘Learning by Doing’ Model
By By Denisa Cania
Albanian Daily News
Published October 25, 2016

“Albanian agriculture sector
has undergone several reforms which have started to yield results and this is
shown by the fact that agriculture sector is witnessing significant growth,”
the Minister of Agriculture, Rural Development and Waters Administration,
Edmond Panariti declared in an exclusive interview for Albanian Daily News.



According to him, the agriculture sector
and the farmers need more financial support in order to further grow and
develop. In this regard, he said that the Albanian Agriculture Ministry has
sought the European Union delegation to be more flexible in terms of financing
Albanian farmers.



Minister Panariti also made a wrap up of
his visit to China and the signing of the memorandum of understanding with Chinese
Water Resources Minister expressing the confidence that such agreement will
pave the way for concrete cooperation in the field of irrigation, drainage and
flood prevention. He also talked about the new initiative launched by his
ministry “one single window” as well as plans to open the commodity market in
Albania. Full interview continues as follows:


-Mr.
Minister, first of all I would like to thank you for this interview since I
know that these have been very busy days. You have just concluded a very
important visit to China which witnessed the signing of a Memorandum of
Understanding between Albanian Ministry of Agriculture and Ministry of Water
Resources of People’s Republic of China. Which are your expectations in regard
to such agreement?



-First of all, it was a very big
pleasure to pay an official visit to the People’s Republic of China and
finalizing my visit with the signing of the Memorandum of Understanding between
the two ministries. This is a framework agreement but as a matter of fact it is
a very important step ahead in finalizing specific projects that will follow up
after the entering into force of this agreement signed by me and my Chinese
counterpart. Then, we will start right away with specific and concrete projects
which I already discussed with some very prominent Chinese companies such as
the ChinaPower. I discussed with the CEO of this company on how we can initiate
together some joint projects regarding the development of irrigation and flood
prevention infrastructure. As a matter of fact, given that this company already
has a representative in Tirana, I will meet him and make a joint proposal to be
submitted to the headquarters about a project about that will be co-financed by
the two countries to sustain the irrigation and flood prevention system of
Albania. On the other hand, we would also welcome Chinese projects and
investments in dam constructions, building of reservoirs, etc., which are very
important for the development of agriculture.



-Referring
to the issues that you raised during the meetings with the Chinese authorities,
which are the fields where you think that China can provide concrete assistance
and support to Albania’s agriculture sector?



-Actually, we would like to explore more
the potential offered in the Chinese market in the sense that we would like to
be more present in China with our agricultural products. Of course, some
Albanian agriculture products are already present in China as we have started
exporting some modest quantities of agricultural products but there is a huge
space that we have to use to boost our exports there. For instance, the
Albanian oil producers have already concluded contracts with Chinese companies
while they have also participated successfully in international fairs, with the
latest one held in Hong Kong where one of the Albanian oil producers was
awarded the golden medal. On the other hand, there is a growing interest of
Chinese investors to consider leasing surfaces of agriculture lands to start up
with plantation of olive oil for export in China. So, we are considering such
proposals very seriously and carefully and we would like to consider the
possibilities of concluding these proposals in leasing contracts for potential
investors.



-How
do you see the development of the agricultural sector during these three years
that you have been the Minister of Agriculture considering that this sector has
been often described as the engine of the economic growth in Albania?



-In fact it is the engine of Albania’s
economic growth because the Albanian agriculture is actually experiencing a
boost. This year we have seen an enormous growth of exports, we have doubled
the exports of fruits, we have 60% more exports of fresh vegetables, we have
tripled the export of eggs and we have also increased by about 45% the exports
of medicinal plants. We are doing well with exports of other agriculture
commodities too. All these figures show that Albanian agriculture now is a
market-oriented agriculture and that is why we are experiencing an enormous
contribution that the agriculture sector is providing to the country’s economy.
The overall contribution of the agriculture sector to country’s economy growth
has jumped from 18% in 2013 to 20% as it was confirmed by the Albanian
Institute of Statistics recently. We are also experiencing an overall increase
of Albanian productivity in agriculture. For instance, one of the most amazing
achievements during my term as Minister of Agriculture has been the fact that
the surface covered by the greenhouses has almost tripled. We started with
1,000 hectares and now we are at 2,470 hectares. That means that we are able to
almost double or triple the production because when you start producing in
greenhouses of course you can have two up to three cycles of production
compared to the conventional type of agriculture. This is why I am very much
focused on supporting the increase of the greenhouses which have also brought
about an increase of Albania’s productivity in agriculture, mainly in
vegetables and in some kinds of fruits.



-Mr.
Minister, do you think that Albanian farmers are ready to attract strategic
investments, whether domestic or foreign ones?



-Well, now I think that the Albanian
farmers are eligible to apply for IPARD Like schemes which are actually a
warming up before they can pass to the IPA schemes which are more challenging
and demanding in terms of competition. We have already launched three calls and
many farmers have already benefited. In any case this is more like a training
that the farmers have to go through. They have to increase their skills in
terms of the process of application in order to be competitive.



On the other hand, I have also discussed
with the European Union delegation in Tirana and I have told the EU Ambassador
that we need more flexibility from the EU so that we can assure that more
farmers can benefit from such financing schemes. Such flexibility would
classify more farmers as winners of funds. It is a process of learning by doing
and I think I had the understanding of the EU delegation on that issue. We need
to provide farmers another chance if they are not able to do it in the right
way in the beginning of the application but not disqualify them as this would
be a discouragement that would make them quit from applying again. I have also
discussed this with executing agencies which are involved in IPARD Like schemes
such as the GIZ and I am sure that we will have a kind of win-win story. Thus,
we will be able to benefit the EU funds from the EU which is good for the EU
and we are going to give those funds to the Albanian farmers who badly need
financial support to row and to modernize their businesses.



-It
is true that farmers need financial support while on the other hand, the
foreign investors keep saying that in order to invest in agriculture, they need
more surfaces of lands and not just one parcel here and another somewhere else.
What can be done in this regard?



-Actually, this is the situation in
Albania since the implementation of agrarian reform in the ’90 when we had the
land distributed to individual farmers and in a way we started to have the
fragmented agriculture where individual farmers had to about one hectare of
land. Of course with that surface you cannot have big investments and you can
cannot be competitive or a player in the agricultural production. This is why
one of the plans that we are putting in place is the lad consolidation. How we
should increase the size of land so that it can be attractive for the foreign
or domestic investments. There are two ways of doing that. First one is that we
can have the virtual unification of these plots of lands without having to go
through sell and buy transactions as the latter would be a complicated process
since we still have not solved the issue of certificates of ownership for all
agricultural lands. Of course we are working on that but it needs more time. On
the other hand, I think it is difficult to create the land market with sell and
buy process which would bring the consolidation of land because most of these
farmers have also built their houses within the agricultural land. Therefore,
they are interested to sell the house too but the investor is not interested to
buy the house but only the land. But there is another process that is speeding
the land consolidation. These are mechanisms such as the creation of
cooperatives, where farmers unite and have an aggregator who orients the
farmers towards the products they have to cultivate based on the market
demands. Such mechanism has already started to yield results as it made it
easier for the farmers to coordinate their work and in the end have their
products sold. In this way, farmers get specialized in one variety which is
specifically demanded in the market and not cultivate everything but which in
the end is not sold. This makes a consolidated value chain and this brought the
increase in productivity. I believe in this model and I think this model should
be also followed by other ministers to take over agriculture ministry since it
is a successful model.



-And
what can you tell us about the “one single window” initiative launched by your
ministry?



-The “one single window” initiative is
related to the fact that we cannot supply the needs of agriculture only by the
state funds. Albania lagging behind its neighbors when it comes to financial
support provided to agriculture sector. Let me give you some figures: we are
subsidizing agriculture with around 50 million euros. Kosovo subsidizes its
agriculture with 65 million euros while Macedonia provides subsidies worth 155
million euros. So, with this amount of money we have, we can’t meet the needs
of this sector. So we need to explore other ways. This is why we had the idea
of boosting the loaning process by the second level banks. You know that the
banking system has always been very skeptical towards the agriculture sector
considering it as a sector with high risks. In order to mitigate the risks and
to encourage the banking system to give loans to farmers, we decided to apply a
new mechanism which is based on guarantee funds. So, for the first time the
Albanian government concluded an agreement with IBRD and they created a joint
fund of almost 65 million of euros. Albania government put around 15 million of
euros and IBRD the other 50 million of euros. So we have now 65 million euros
which serve as guarantee funds to stimulate banks give loans to farmers. So
far, four banks have successfully passed through due diligence process and they
are ready to benefit from guarantee fund and they can start financing farmers
and businesses at very favorable loan rates.



The one single window was something
necessary because many farmers were not ready to apply for themselves or
prepare good business plans so they needed some technical assistance. This is
why the Albanian government decided to apply this mechanism in order to support
the farmers. We have already established the first office where the farmers can
get all necessary assistance and information to draft good business plans and
to take them to the bank so they can take loans which are now covered by the
guarantee funds. This mechanism is important mainly for the small and medium
enterprises which need such support.



-We
know that you are an expert in the field of veterinary. What can you say about
the current situation of this sector in Albania and are you doing to further
improve it?



-As you might know, we have recently
launched very deep and radical reforms in the veterinary system. The veterinary
system in Albania was almost public in terms of control and eradication of
diseases, diagnosis, prevention and all measures to ensure that our livestock
was not affected by diseases. But this turned out to be insufficient to cover
the needs of the entire territory. That is why we decided to change that and we
set up a veterinary reform which laid the foundation for a partnership between
the public and the private entities. Now, we have for the first time the
veterinary stations which will spread across the country. For the first time,
we have a full database on animal registry, diseases, vaccination, etc. One of
the biggest achievements is that now we have a unique veterinary system.
Before, this system was very fragmented and under different administrative rule
which made it difficult to coordinate the entire structure. Now we have only
one system that covers animal health problems, veterinary and public health
problems under one administrative roof.



-Sources
from your ministry said that you are currently working on the creation of an
agricultural stock market. Could you elaborate on this issue?



-Actually, it is about a commodity
market as stock market would be a higher level. This is a very serious attempt
because we need to regulate the way how transactions in the agriculture sector
are carried out and somehow regulate the relations between the producers and
buyer.



Commodity market will establish the
prices at a weekly basis by organization of early bids. 



Thus, the opening of this stock exchange
will meet the demands of the developing agricultural sector and it will
regulate retail and wholesale prices and exports in order to prevent
speculations. First agricultural stock exchange will be an integrated platform
to regulate prices that will be announced publicly. This is a major step that
will put Albania’s agriculture in a stronger position and we aim to complete
within this mandate of the current government. 





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