Agriculture, 55% of the funds for the support of agricultural production are received by the "administration"

2024-09-04 18:22:34, Ekonomi CNA

Agriculture, 55% of the funds for the support of agricultural production are

Illustrative photo

Due to the blocking of EU funds from the IPARD programs, the funds for agricultural subsidies were lower this year, but more than half of them, about 55 percent of them, are programmed as current expenditures and 45 percent as capital expenditures.

According to a regional study by the World Food Organization (FAO), in countries such as Bosnia-Herzegovina, Kosovo, North Macedonia and Serbia, the weight of direct payments to farms reaches 70-80% of agricultural budgets, most of which is related to livestock production or the use of inputs, while in Albania, although the funding is low, it goes mostly to administrative expenses and those that do not promote production.

According to data from the Ministry of Finance, the budget for supporting agricultural production, without the recent changes, was 7.2 billion ALL, of which about 4 billion ALL or 55% of the program were correct expenditures and 3.2 billion ALL or 45% are capital expenditure. In the last changes of the 2024 budget, the fund for the support of agricultural production was further cut due to the poor realization of this program at least until the first 5 months.

Data from the Ministry of Finance show that in the first 5 months of 2025, the funds for supporting agricultural production were 611 million ALL or only 8.4 of the annual program. Usually, in the first months of the year, farmers prepare the documents and applications, after which the funds are distributed in the last months of the year.

In the latest changes that came into effect last week, the government revised down the funds for agriculture. Support to farmers received the biggest cut, with around 4.3 million euros. Funds for the agricultural producer support program amount to 6.8 billion ALL from 7.2 billion in normative act number 1 with a decrease of 4.3 million euros.

Even in the initial budget of 2024, the agriculture sector received at least 9% less funding than the plan finalized in the normative act for amending the 2023 budget.

Source: Ministry of Finance

Albania financed the agricultural sector by an average of 0.19% of GDP during the years 2020-2021. According to a World Bank comparison, this is the lowest level in the Region and in the EU.

Only Albania stands out as a country in the Region with a low level of agricultural support for agriculture, which at the same time is the sector with the largest weight in GDP with about 19% of it.

In addition to internal funding from national budgets, agriculture was benefiting from significant funding from the European Union's IPARD program, an instrument for countries in the EU accession process.

Across the region, IPARD funds saw increased disbursements following the pandemic. According to the attached graph, Albania would benefit from 2023 to 2027 about 94 million.

Albania and Serbia were the biggest beneficiaries of the IPARD program, but an investigation by the Office of the Investigation for the Regularity of the Process (OLAF) has blocked the funds for Albania indefinitely.

Analyzing the activity for 2023, the EU anti-fraud office OLAF noted that applicants in Albania are required to pay a significant part of their grant to a local consultancy company.

Contracts that are awarded without competition, or with manipulated competition (with false offers being submitted) and on the other hand inflated prices and violation of contractual rules. After the investigation, OLAF recommended that the European Commission consider part of the funding of the First and Second Calls for Applications IPARD II around 33 million euros as abuse./ Monitor.al