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Albanian Agriculture 2.0: The Future Starts Now

USAID Assistant Administrator for EurAsia, Thomas Melia (center), during his speech at the conference “Support to the Future of Agriculture” in Tirana.

 

May 2016 - $18 million new investments; $28 million new revenues; 1.150 new jobs created; in only 3 years. This is not an electoral promise. This is real deal. And believe it or not, it happened with the most underfinanced sector in Albania: Agriculture. After a hiatus of more than 20 years, the sector is starting to breathe in financing. In a three-year span, AgroCapital, USAID project implemented by Creative Business Solutions (CBS), managed to support in financing Albanian farmers and agribusinesses, by closing the gap between bankers and farmers. A gap that made the sector for so long considered un-bankable.

“Financing is like sun and water for the agribusinesses”, said USAID Assistant Administrator for EurAsia, Mr. Thomas Melia. “We are very glad to see the impressive results of AgroCapital project in increasing investments and bridging the gap between the farmers, banks and agribusiness”, said Melia, present at a round table held today in Tirana with senior level officials from the Albanian Government, European Union, USAID, banks and financial institutions in Supporting the Future of Albanian Agriculture.

“The EU and other financial institutions have made more funds available for agribusinesses in the coming years. The best way we can help these businesses is by supporting reforms in Albania’s court and legal system. Enhancing the rule of law will have a significant impact in creating a more transparent, equitable, and predictable business environment which supports lending and access to finance”, noted Thomas Melia.

While in the last three years, Albanian agribusinesses have improved access to finance, levels are still significantly below EU or regional standards, including some neighboring countries with smaller populations.

“When it comes to National Subsidy Schemes, we are below the medium of the region. Even below Kosovo which gives 60 million Euros to agriculture and even further than Macedonia, which supports the sector with 150 million. This gap cannot be filled only by the state budget. The skepticism of the banking system to credit the sector need to be overcome”, stated the Minister of Agriculture, Edmond Panariti.

In 2016, the National Subsidy Schemes budget amounts nearly Euro 13 Million, while the AgroCapital program facilitated about 20% of the successful applicants for the National Subsidy Schemes. “Financing growth is vital for agriculture. We are especially happy to have turned the corner and been able to win over financial institutions and agribusinesses skepticism to invest in agriculture. The EBRD and GoA Guarantee Fund of Euro 75 Million, not only more financing is assure, but also more consultancy services for the Albanian farmers”, said minister Panariti in his address emphasizing the importance of financing the agricultural sector as the government considers it vital to the economy.

In the last year, the budget of the Albanian Government through the national schemes in agriculture was approximately Euro 13 Million for a vast number of beneficiaries. AgroCapital facilitated financing for approximately 20% of the successful applicants to the government’s national scheme.

Enio Jaço, Executive Director of CBS, emphasized how AgroCapital’s success is due to the use of new solutions to bridge the gap between the agribusiness community and financing instruments like IPARD, SARED and GOA Guarantee Fund and institutions.

“The existence of the program is underlined by the share-volume requests that agribusinesses have for support with financing. Significant volume of new investments were injected into agro-economy with our support,” Jaço said. “The program facilitated $14.8 million financing for Albanian agribusinesses, stimulated sale growth with $28 million, and generated 1,150 new jobs.

” Effective planning and coordination would significantly increase Albania’s chances for higher absorption of EU funds and a sustainable economic growth in Agriculture. Albania will receive a remarkable 72 million € in IPARD funds for 2016-2020.

The Head of the Political, Economic and Information Section of the EU Delegation to Albania, Mr Jan Rudolph said that the European Union views agriculture as a crucial sector for the development of Albania. “We have been supporting Albanian agriculture since the early 1990s and continue that under the IPARD financing framework. For the next four years, the European Union has allocated Euro 72 Million for the Albanian agriculture financing and these are real investments not only for agriculture, but also Albania towards its EU integration”, said Jan Rudolph.

High-level government representatives, heads of banks and financial institutions, industry experts, agribusinesses, donors and investors discussed how coordination of financing instruments from donors would address the challenges of Albanian agriculture towards the country’s European Union integration./Agroweb.org/