Agriculture takes a nosedive/ Decline in 2023, strongest since 1997

2024-04-03 08:40:00, Ekonomi CNA

The structure of economic growth in 2023 showed a marked decline in the production sector in the country and especially agriculture, which is also the largest sector in the economy.

Official INSTAT data indicated that the agriculture sector recorded a decline of 0.68% in 2023, the strongest of the sector since 1997 (see attached chart).

The downward trend of growth rates in this sector started since 2013. In the last 10 years, the agriculture sector has grown by an average of 1%, while the result has weakened in the last three years to turn negative in 2023.

From 2000 to 2010, the agricultural sector grew by an average of 3.7% per year. More detailed data show that the greatest decline occurred in the livestock sector and in the closure of small farms, plots for self-consumption.

The reduction of the rural population from internal and external emigration, on the one hand, and the lack of state subsidies, on the other, have worsened the climate in the sector.

In 2022, the number of heads in livestock showed an annual decrease of about 13%, while during the decade the heads were halved.

Producers and livestock keepers claim that costs in the livestock and agriculture chain are high, as the state does not subsidize the sector.

Agriculture takes a nosedive/ Decline in 2023, strongest since 1997

With the removal of the VAT exemption, once again returning the level to 20%, the situation worsened further. The farmgate milk price is currently 40% to 60% higher than in the EU and the region.

In Albania, last year, livestock farmers who had more than 10 cows received 98 euros per head in two installments. While in Serbia, after the livestock farmers' strike, last year, the subsidy for a dairy cow is 365 euros and for each liter, the livestock farmer gets back 0.16 cents.

This difference in prices is orienting Albanian factories towards the import of milk from abroad, which means that it is a multiple pressure for livestock farmers who already suffer from the high costs of raw material.

Agriculture contributes over 18% of economic growth in the country and is the largest sector in the country, but the two years of deficits in production are awakening the import channels again, while exports have remained stagnant.

Currently, about 70% of agricultural products in stalls and supermarkets come from imports, competing in prices even the few local farmers who try to produce for the market.

The situation in the sector is expected to worsen further this year, as the state budget provided less funding, while EU support from IPARD funds remains blocked. In the 2024 budget, the agriculture sector received 9% less funding than the 2023 plan.

The data from the tables accompanying the 2024 budget show that the total funds for the Ministry of Agriculture will be ALL 14.1 billion in 2024, from ALL 15.6 billion in 2023./ Monitor.al