Comment: Corruption in Kosovo’s agricultural sector – Exit

“He who sows will reap” – is an expression that means – if you plant the seeds, you can enjoy the harvest later. But many civil servants and civil servants in Kosovo are reaping without sowing, being embroiled in a pattern of large-scale and widespread corruption and fraud.

By order of Office of the Special Prosecutor of the Republic of Kosovo (SPORK), on December 3, 2021, the police carried out a large-scale operation to arrest 31 people, including 12 officials in various positions in municipalities and regional offices of the Agricultural Development Agency. The action was extended to Peja, Istog, Urosevac, Lipjane, Pristina, Klokot, Vucitrn and Podujevo. Those arrested are suspected of the following criminal acts: ‘bribe’, ‘abuse of position or official authority’, ‘payment of bribes’, ‘subsidy scam’ and ‘falsification of papers/ official documents “.

70 percent goes to civil servants, 30 percent to farmers

These people were not the only ones to be arrested by the police. The operation, dubbed “Subsidy”, began in February 2021, after which 12 officers found themselves handcuffed, and the operation continued into June, detaining another 21 people.

During searches of the suspects’ homes, around 400,000 euros were found. Cars, computers and telephones were also seized. The intercepted phone conversations that led to the disclosure of the entire bribery scheme also testify to the fact that many officials requested and received money from the farmers for the granting of subsidies.

Previously, the inspectors had made arrangements with the farmers to split the amount of the subsidy and in some cases the officials/public officials got up to 70%, while the farmers kept 30% of the amount. The fraud has gone so far that even false reports have been made. This is illustrated by the case in the city of Istog where the documents describe how wheat and corn were sown on a large flat area, when in fact the ground/earth was in a forest. Falsely increasing planted areas, increasing the number of cattle or the number of bees – these are some of the methods allegedly used by ministry inspectors to accept bribes.

Lawsuit for embezzlement of 4 million

The agricultural sector continues to be one of the biggest centers of corruption in Kosovo.

Another trial is underway where the defendants are the former Minister of Agriculture and his subordinates. In the so-called ‘Grants’ case, the head of the ministry Nenad Rikalo and others are accused of illegal conduct during the awarding of grants in 2018. The budget of the Republic of Kosovo lacked 4 million euros due to this misconduct.

According to the indictment, the minister exceeded his powers by preparing a “special program” for granting grants, without having allocated funds and by circumventing legal procedures.

The scheme has allowed various companies to illegally profit from large sums under the guise of rural development.

The police did not fail in their duties, undercover operations were carried out and people involved in corrupt grant agreements were arrested every time. But the trials of these cases are a real challenge. In addition to delays in legal proceedings, impunity, ie the non-imposition or imposition of light and lenient sentences, is also a problem.

Irregularities in the distribution of grants and grants over the years have also been confirmed by the National Audit Office (NAO), which reviews institutions’ financial statements. But, as usual, law enforcement did not follow up on these reports.

In the latest report (2020), poor management of advance payments for rural infrastructure investments has been reported and cases have been identified of grant recipients not meeting the set criteria.

The auditor was unable to carry out the regular audit procedures for 12 transactions with a value of 497,577 euros, paid from budgetary funds earmarked for grants and transfers, because the above-mentioned transactions were investigated by the judicial authorities and the auditor avoided intervening in these cases.

The fact that the value of debts to farmers at the end of 2020 amounted to more than 40 million euros testifies to the mismanagement of funds intended for farmers. The increase in the amount of liabilities is the result of a lack of funds and mismanagement, ie misuse of grants. But Agriculture Minister Faton Peci, reporting to a parliamentary committee in December last year, said the debt had been settled.

“During this period, we managed to repay 40 million euros of inherited financial debts and we additionally enabled the implementation of the Direct Payments Program – Subsidies 2021 in the amount of 28 million euros. As part of the implementation of this program, subsidy payments to farmers have already started and so far about 19,000 payment orders (in the form of government decisions) have been printed. “Thanks to these policies, we managed to start the year for the first time without debts or financial obligations,” the minister said.

But in September last year the government faced protests from farmers, who objected to tougher criteria for receiving subsidies. The executive government justified the actions by stating that it acted only on the remarks and shortcomings identified in the report of the National Audit Office. Also, during their preparation, the circumstances that arose after the embezzlement of the Agency for Agricultural Development were taken into account.

Failure in the fight against corruption

The large number of institutions involved directly or indirectly in the fight against corruption has not yielded the expected results, which often makes it difficult to identify the factors that lead to such system failure. In some cases, there is a lack of integration and coordination between them, and skills are unclear or conflicting.

For these reasons, the fight against corruption and organized crime in Kosovo continues to be one of the areas most criticized by international and national institutions.

According to the latest report from the European Commission, Kosovo is ranked among the countries that are at an early stage in the fight against this phenomenon.

“Limited progress has been made with respect to the justice system and prosecution, including the functioning of the justice system, and the investigation and prosecution of high-level organized crime.” “Continued efforts are needed for more proactive investigations, final court decisions and asset forfeiture,” the report said.

The lack of results in the fight against corruption has led to a weakening of trust in Kosovo’s institutions. Bearing this in mind, several years ago the Government, in cooperation with the Judicial and Prosecutorial Council and other institutions in this sector, but also with civil society and international donors, launched the Rule of Law Functional Review Process in which it adopted the Rule of Law Strategy 2021-2026.

The system should be reinforced with a verification process, which will be used to assess the integrity of judges and prosecutors. This initiative is strongly opposed by the judiciary itself and has not found support within the European Union either. The EU expressed concern about the trend of re-evaluation of all prosecutors and judges, recalling that the current legal solution provides a sufficient basis to filter the system.

The least developed sector

Without the development of agriculture, we cannot expect to have an advanced economy that would affect welfare and employment growth.

Due to bad manipulation, agriculture remains the most underdeveloped sector. As a result, Kosovo fails to achieve returns even for domestic market needs.

Deep reforms are needed by eliminating mismanagement and investing more efforts to strengthen transparency and accountability.

The involvement of some farmers in corruption schemes has harmed those who refuse to participate in such activities and pay bribes. Such actions encourage farmers not to report wrongdoing for fear of not receiving financial support in the future due to retaliation. Therefore, encouraging farmers to report such misconduct and establishing a fair and legal process for awarding grants and subsidies would allow for more sustainable development of the agricultural sector in Kosovo.

The blog was created as part of the “Tales from the region» initiative led by Res Publica and Institute of Communication Studies, in cooperation with partners from Montenegro (PCNEN), Croatia (Lupiga), Kosovo (Sbunker), Serbia (Autonomy), Bosnia and Herzegovina (Analiziraj.ba) and Albania (To go out), as part of the project “Connecting the Dots: Improved Policies through Civic Engagement” with the support of the British Embassy in Skopje.

Lana T. Arthur