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Albanian farmers encounter problems with the sale of grain/ Reason, high costs

2023-07-31 19:18:41, Aktualitet CNA

In Albania, many farmers are having difficulties in selling this year's wheat because the market price is almost the same as the production costs. The authorities called on them a year ago, after the Russian aggression in Ukraine, to grow wheat in order to mitigate the consequences of the supply crisis caused by the war. But despite the increase in subsidies, the planted areas did not expand significantly. The authorities say that the financial aid was intended to preserve this area and consolidate production. Meanwhile, the situation has been made more difficult by the problems in agriculture that are mostly related to informality and fragmentation of the land.

In Albania, in the last few days, wheat farmers and experts in the field of agriculture are expressing increasing concern, since the selling price of wheat in the market is the same, or in some cases even below the cost of production, and varies from 26-27 new lek per kg, or 27 thousand lek per ton. The price doubled after the Russian aggression in Ukraine in 2022, and reached above $500 per ton, but the markets stabilized again after reaching an agreement between Russia and Ukraine on the transportation of Ukrainian grain to the Black Sea in July of the same year .

Franc Kaloshi, a farmer in the Lushnja area who has been cultivating wheat for 22 years, told the Voice of America that this is his most difficult year. Production costs have increased, he says, and the market price is below these costs.

" Production is on the ground, this has not happened for 22 years. I can't sell it at this market price. I left it here in the warehouse. If another higher price comes up, I will sell it. If I don't sell the wheat, next year I don't plant a single hectare of wheat because I can't. The state subsidizes me oil for 10 ha, which means 910 liters of oil. With that much oil, my tractors worked for 48 hours. However, I thank the state for what it has given me ," said Franc Kaloshi, a farmer in the Lushnja area, to the Voice of America.

The situation in agriculture in recent years has been difficult as a result of the crises caused by the Corona virus pandemic, and mainly the Russian aggression in Ukraine that brought about a significant increase in prices throughout the supply chain in global markets. Before the beginning of the crisis, the price of wheat on the stock exchange was more or less the same as what is traded today, but farmers say that production costs have increased by 25-30% due to the increase in the price of agricultural inputs, oil or labor. arriving at selling price limits. One of the grain collectors in the country links these high costs to several factors.

" There are many farmer problems in our country, from the fragmentation of the land into plots, the quality of pesticides or seeds. But wheat all over the world is subsidized from Canada, America, Greece, Austria, Serbia or Macedonia. There is no country that does not subsidize wheat, even heavily subsidized. Otherwise the wheat fails to be produced and marketed successfully. In our country, a subsidy was made for 4 thousand farmers, but the part that did not receive is unprotected, although those who received also complain." - said for the Voice of America, Adi Haxhiymeri, Chairman of the Union of Flour Producers.

A year ago, the Albanian government for the first time announced a subsidy of 30,000 new lek per hectare for the cultivation of wheat, which was added to several support schemes for oil farmers. But this did not affect a significant increase in the area of ??wheat in the country. Authorities told VOA that the price is a product of supply and demand in international markets and that financial interventions had the effect of consolidating the area under wheat cultivation.

" The plantings that followed confirmed this. The area not only did not decrease but increased by about 3 thousand ha. It was no small help to the farmers who benefited because they reduced the production costs. 30 thousand ALL per ha, is a significant reduction in the conditions when the price of oil and those of imputs increased significantly. We have something more than 3 thousand ha more in extreme conditions. Farmers after the subsidy faced lower costs. We did our best within the limits of the budget. We have intervened to reduce costs "- said Irfan Tarelli, Director of Development Policies at the Ministry of Agriculture and Rural Development, for the Voice of America.

In recent days, there has been an upward trend in the price of wheat on the stock exchange, from 250 to 300 dollars per ton, as a result of Russia's withdrawal from the agreement that allowed Ukraine to export grain to the Black Sea. This can bring a favorable situation for Albanian farmers as they can sell the wheat at a higher price.

According to INSTAT data, the area of ??wheat has decreased significantly since the 2000s, by 62%, and by 21% in the last 5 years alone, and domestic production meets half of the needs. The level of subsidies in agriculture, even though it has seen growth in recent years, is still insufficient according to experts, to influence the growth of areas planted with wheat. In addition, many farmers are penalized by the lack of land ownership documentation. Franc Kaloshi and his family cultivate various agricultural products on an area of ??220 ha of land in the area of ??Lushnja, but they do not possess regular ownership documents for the entire area. This harmed him in the case of subsidizing wheat with 30,000 Lek per ha.

" I applied for 68 ha, and received subsidy for only 16 ha. This happened because I only had regular ownership documents for so many hectares, according to the law. So far we have not been asked for a lease contract for the land under administration, and we have not given it much importance. From this moment on, we are signing regular rental contracts, as it helps us to acquire subsidies from the state, which, although they may be low, still come in handy "- continued Franc Kaloshi, a farmer in the area of ??Lushnja .

Even grain collectors see informality in agriculture as a serious problem, which according to them greatly damages the farmer and agricultural production as a whole.

" The fact that in 2023 we still don't have ownership certificates for everyone who owns a piece of land is absurd. Consequently, not having documents, you are out of the game, you are not treated with financial support. This is not discussed "- affirmed Adi Haxhiymeri, Chairman of the Union of Flour Producers.

Officials from the Ministry of Agriculture told VOA that efforts to formalize farmers have increased and that the provision of subsidies is also an incentive measure.

And yet, experts in the field of agriculture think that in addition to financial schemes to help farmers, the authorities should draft clearer agricultural policies in order to guide farmers.

" When building agricultural policies, take into account that there is a fairer orientation of farmers. Don't just discuss the acreage to increase production. Conduct market research. Which is the wheat cultivar that is required by the processing industry, all the chains must be in sync with each other "- said Ilir Pilku, an expert in agriculture, for the Voice of America.

But in addition to the problem of the selling price of wheat, more or less the same as the production costs, this year farmers also faced severe climatic conditions accompanied by heavy rains on the eve of the harvest, which, according to experts, damaged the quality. Some collectors said that quality has become an obstacle to buying wheat in the domestic market, but the authorities argue that this finding cannot be generalized, and that for them the problem remains the unfavorable price on the exchange and not the quality.

But the situation going forward looks set to depend on global markets, which are awaiting new developments after Russia suspended participation in the deal that allowed Ukraine to export wheat through the Black Sea. This agreement was brokered by the United Nations and Turkey in order to alleviate the global food crisis. Ukraine is a major producer of grain, and the disruption of exports from it could bring a shock to the markets and possibly a new higher price of wheat on the stock exchange./ VOA