December 2001

From University of Newcastle upon Tyne

New report calls for huge changes to Kosovan farming industry

THE Kosovan farming industry must undergo huge changes if attempts to rebuild it are successful, according to a report by the University of Newcastle upon Tyne, UK.

The expert advising the European Union (EU) on a rural recovery programme also says Afghanistan will need similar intervention when hostilities cease.

The EU is attempting to revitalise the country's agricultural economy after years of neglect due to damaging pre-war Government policies and the 1999 conflict.

In the late 1990s, up to 70% of the workforce was employed in agriculture, and Kosovan farmers are now being offered low interest loans to re-establish their farms and set up new businesses as part of a EU funded revitalisation plan.

According to Newcastle University expert John Lingard, however, financial help should be sharply focused on businesses that have a long term, sustainable and profitable future, in order to make the Kosovan rural recovery programme a lasting success.

He says that economic success is the key to a long-term political stability, and achieving this will mean curtailing some traditional agricultural enterprises, such as wine making and oilseeds and investing in sectors, such as eggs and milk production, fruit and vegetables and making changes to others.

Dr Lingard, an agricultural economist who has previously worked as an adviser in 15 different countries, was appointed by the EU to assess the advantages and competitiveness of the Kosovan farming industry. He leaves today, Friday December 7, for the Kosovan capital Pristina to continue his analysis and present his preliminary findings.

The EU has set up an 'Agri-Business Development Units, (ABU), to administer agricultural loans, which are typically about 320,000. Farmers must present a business plan, which will be assessed using Dr Lingard's recommendations, before they are loaned the necessary money.

In recent years the Kosovan agricultural industry has been severely neglected. Kosovo was part of Yugoslavia, but under rule from Belgrade it was dominated by the Serbs who deliberately starved the Kosovan Albanians of many resources, including agricultural inputs. In the 1999 conflict, many Kosovan farmers were forced to leave their land behind and seek refuge over the border in Macedonia.

Kosovo is currently governed by UNMIK (United Nations Mission in Kosovo) and is heavily protected and policed by KFOR (Kosovan Forces) and an international police force. The remaining Serbian population live in tightly guarded enclaves to prevent revenge attacks by the Kosovans.

As part of the EU rural recovery programme, Dr Lingard assessed various agricultural sectors for long-term viability in line with the domestic and international market for their products.

According to his report, the sectors that are not likely to be profitable include those producing cereals like wheat and maize, which historically have been grown by Kosovan farmers. An unsuitable climate, ill-repaired irrigation facilities and a variety of other factors result in low yields which are about a third of those elsewhere in Europe, and consequently it would be much cheaper to import some supplies.

The report also advises the ABU against investing in vineyards, another traditional agricultural sector. Dr Lingard explains that the international wine industry is saturated and Kosovans would find it very difficult to sell their products in very competitive international markets.

Likewise, the report says it would not be economical to produce broilers (poultry meat) as Kosovo could not compete with the price of North and South American imports, and it would be far too expensive to buy in the main sources of feed, such as soya beans and maize, from abroad.

Fresh milk production is, however, a good sector to invest in, and the volume of milk could increased greatly if Western cattle breeds such as Holsteins, Friesians and Simmentals were imported to re-invigourate the dwindling cattle herd with livestock of higher genetic potential, says the report. Currently Kosovo imports 600,000 litres of long life milk per day. Most of the cattle were, like most of the country's livestock during the war, killed, eaten or stolen, and production per cow is just 1,500 litres of milk- one quarter of that found elsewhere in Europe.

The availability of fresh, domestically produced milk would also stimulate cheese, yoghurt, ice cream and butter production.

The report also advises the ABUs to back plans for egg production businesses, on the grounds there is a huge domestic market. The Kosovan population of two million people consumes less than two million eggs per week - about 1-2 per person. Currently it is very costly to bring in fresh eggs from outside Kosovo, as they have to be transported overland due to the country being land-locked.

The report also recommends fruit and vegetables as good sectors to invest in. Being labour intensive, these sectors could use the abundance of cheap labour available in rural Kosovo. There would also be the potential for export of fruit and vegetables to nearby countries such as Italy.

Dr Lingard also says that flour mills and animal feed businesses could be viable enterprises but more investigation is required before investors enter this area of agribusiness.

Dr Lingard said: "Unless we get Kosovo onto a sound and sustained economic footing, we are not going to make progress politically. We need a vibrant economy in order to avoid any future ethnic conflict.

"ABU lending programmes are one way to accelerate rural development provided that credit applications are directed to farm sectors in which Kosovo is competitive."

"It would be counterproductive, however, to give loans to businesses which are going to fail in a few years time. This would not only take the farmers back to square one, it would also ensure they fall into debt and would be unable to pay back their loans to the European Union."

Dr Lingard will spend two weeks in Kosovo, returning to the UK in late December, and will visit the country again in January to make a final assessment.

For further information: Dr John Lingard, senior lecturer, Department of Agricultural Economics and Food Marketing. Tel: 0191 222 6882. Email: john.lingard@ncl.ac.uk. Dr Lingard is ONLY available up until 7.30pm Thursday 6th December.

Notes to editors:

1. Dr Lingard also visited Afghanistan in 1978 working on a cotton marketing project and says that Afghanistan will need a similar agricultural study on cessation of hostilities.

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