Albania’s struggling agricultural sector full of potential, says World Bank – EURACTIV.com
Albania, whose dairy sector is struggling with rising costs and declining livestock numbers, has untapped potential in its agricultural production sector, especially the tomato sector which could be a source significant income for farmers, according to a World Bank report.
The agricultural sector in Albania is grappling with a myriad of problems. These include inefficient farming methods, distribution problems, low subsidies, rising fertilizer prices and competition from foreign products. While the country is home to many farms and plenty of fertile land, its farmers continue to struggle.
But the world bank report found that Albanians significantly undersold many items, including the humble tomato. Exports from the country cost $0.5 (€0.48) per kilo, while Italy exports the same product to the UK at $2.4 (€2.3) per kilo.
The report suggests that Albania should consider selling its products in more developed markets such as Western Europe, as Albanian products can be competitive in terms of international standards.
He also notes that export companies and the Ministry of Agriculture should strive to obtain the necessary certifications to increase farmers’ incomes, instead of many operating at a loss.
Other products identified by the World Bank as possible sources of income for Albanian farmers include canned fish, nuts, fruits, watermelons and olives.
But the outlook is not so rosy for Albanian dairy farmers, who face increased demand, rising prices and dwindling cattle numbers. Currently, a liter of milk sells for around 131 lek (€1.1), much more than in Kosovo (€1.01), Serbia (€0.86) and Montenegro (€0.85). The price is even lower in EU countries like Hungary (€0.67) and Poland (€0.61), according to data from Numbeo.
Other essential dairy products such as yogurt and cheese have also increased significantly over the past six months.
Part of this increase can be attributed to rising raw material costs, as Albanian farms import almost everything from abroad. Feed prices have increased by 50% this year alone, mainly due to grain shortages caused by the war between Russia and Ukraine.
Farmers who are not subsidized by the state have had to increase their selling price by around 30%, while factories have increased their costs at a similar rate.
But as Albanian farmers struggle, imports of dairy products from abroad have increased by 18% in the first five months of 2022. Over the past three years, this has increased by 27% in total, with a value of 38.8 million euros.
This is mainly due to an increase in milk imported from Serbia, accounting for 25% of the increase.
But the number of cattle heads is also declining rapidly, in addition to the problems of rising costs and competition with cheaper foreign products. Many small farms are closed as they become financially unviable, and issues such as emigration and internal migration to larger cities worsen the situation.
The number of cattle in 2020 was 362,583, a decrease of almost 13% compared to the previous year. Goats also fell by almost 11%. This corresponds to the drop in milk collected in 2020, which fell by almost 15%.
Overall, INSTAT data indicates that there has been a reduction in the number of livestock heads totaling 20% in 2021, which is expected to decline further in 2022.
Former agriculture minister Edmond Panariti said the high cost of milk is directly linked to the declining number of cows. He blamed the lack of financial support for farmers and high taxes on producers for exacerbating the problem.
On June 6, the price of Albanian dairy products increased in a general way and in all points of sale. Some 55 items rose 10-50%, the fourth price hike staged in 2022.