In the Eye of the Storm – Farmers of Albania

Gjon Rakipi
By Gjon Rakipi October 4, 2024 13:20

In the Eye of the Storm – Farmers of Albania

What Albania has a lot of is agricultural potential. Fertile lands and excellent weather. We can produce twice, even thrice a year. Yet, productivity is low and financial security for farmers is inexistant. Because of that, cropland abandonment has become a staple, as has urban migration and even emigration. The Albanian farmer is not seeing a way to make a living in their villages, and how can they? Albania went from a country where the state told farmers what to plant, when to plant it, and what to do with their yields—to a country where the government has little to no involvement. This excessively rapid reduction in state presence has left farmers largely disorganized, disoriented, and uninformed. There is no example that most succinctly relays the impact that this has had than the sugar refinery of Maliq in Eastern Albania. .

Albania’s sugar crash

At one time, Maliq was the site of sugar production in Albania,  where 15,000 hectares of beets were catered to by hundreds of farmers, and where the sugar factory would refine a continuous stream of produce into sugar. Today, Albania has to import sugar from abroad. What has happened in that time? The answer lies in a series of haphazard land distribution schemes that led to the privatization and parcelization of agricultural land. Farmers could now own land, but their land was small—less than two hectares for most. In short, land fragmentation. Farmers may have been happy tearing out beets and planting their own apple trees, but in doing so they dedicated their land to decades of apple production in a small domestic market where there’s significant competition and distribution channels are in disrepair.

Ultimately, agriculture in Albania faces tremendous challenges brought on by its history. More than this, though, it’s present reality is causing a fair share of hardship. The state today serves as more of a barrier to progress than a much needed pillar of support, with unfavorable taxation, a lack of subvention, and harmful policies. At the end of the day, Albania is being squeezed at the base of the agricultural value chain, the farmer.

Back to basics – the cooperative

With all this in mind, where is the solution? Well, the answer, somewhat ironically, lies in cooperatives. Essentially, you go back to a situation like Maliq, but this time farmers get to hold on to the produce and profits they make.

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Just a few days ago, representatives from FAO and the Albanian Ministry of Agriculture and Rural Development got together to highlight the merits of cooperativities, the importance of reforms and financial support, and spoke of “reaffirming their commitment to work closely with cooperatives and other partners.” Ultimately, these wishes mean well, but actually achieving them is a different matter. Albanian agriculture needs to get from fragmentation to integration, and that is no meagre task. This underestimation of the challenges is common in institutions that look to a top-down solution. They may be good ‘planners’, but they are make for poor ‘doers’. What matters are actions, and to do something for the Albanian farmer you have to get out into the field, you have to get close to the people, and you need expertise. More than that, you need to look for examples of success and how you can replicate them.

I was privy to such an example from the dairy sector in late 2023. That year is important—because in 2023 it was cheaper and safer to buy imported milk from Serbia than to buy locally from Albania. The majority of the blame for this rests on the ‘Open Balkan’ initiative, which had made it possible for tax free trade within the Western Balkan region. This was a move that disadvantaged smaller countries like Albania, and made it easier for a significantly larger country like Serbia to take over agricultural trade in the region by undercutting everyone. Beyond this shoddy bit of international policy-making, state taxation policies that influenced the domestic scene only exacerbated the problem. Large private enterprises like Albania’s dairy companies were favored, and the transactional costs of agricultural trade were placed on subsistence farmers alone. Together with an increase in taxes for buying agricultural inputs, farmers were cut off at the knees. Effectively, Albania was in a situation where it had become too expensive for farmers to keep their cattle. The dairy sector was finally crashing after a steady decline over the course of almost a decade.

In the midst of all this, many, many dairy farmers were unable to cope. Some went bankrupt, others switched to horticulture, or left agriculture altogether and moved to construction. Even more incredibly, some decided to migrate to Greece, where they would become farmers of all things.  But there were others who found success in this difficult of a situation. A tiny village in south-western Albania had managed to carve out a means of survival, and they did it by securing three things: (i) organization and cooperation, (ii) credibility and expertise, and (iii) integration in the local economy.

Three pillars of success

Organization and cooperation were primary. The subsistence farmers of this tiny village understood that their only path for survival was to rely on each other. They set up a sort of self-governing structure and established democratic rule of law. These are the markings of an ‘agricultural cooperative’. This new self-governing structure would appoint a representative, a leader that would speak for the organization.

Credibility and expertise, on the other hand, were not things that the village could ensure on its own. It was Heifer International that came to the rescue. This US-born non-profit has a history of successful initiatives in developing economies like that of Albania. In the tiny village they played the role of credibility enhancer. Heifer invested in the one entity best able to relay credibility and safety, an in-house laboratory.

A few thousand EUR investment later, courtesy of Heifer International, the village had the equipment needed to test milk quality, and the storage tankers needed to increase production and prevent spoilage. Charmingly, Heifer also sent over three cows. As important as the equipment, however, was the expertise that the Heifer Foundation provided. With many years of experience and a network of experts, Heifer is able to solve farmers’ issues in minutes. Without this expertise, the cooperative would be struggling for days with problems they had no idea how to tackle.

One last crucial role that Heifer plays is that of consistent oversight. The lab is equipped with cameras and microphones that instruct the representative on safety standards and proper protocol. In this way, Heifer made sure that any product making its way out of this lab was safe and of high quality. Ultimately, this is what distinguished the tiny village from its neighbors—quality. This also opened up the way to the third achievement of the little village: partnering up with the private sector in Albania.

The village now had high-quality, safe product to sell, but they needed a place to sell to. Of the large dairy companies in Albania that were contacted, Lufra recognized their potential. With this partnership, and hopefully with more on the horizon, the collection point has a possibility to grow.

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It’s important to note that the scientific research arm in Albania provided the much visibility and expertise needed to ultimately make the connection with Heifer possible, and Heifer itself played a crucial role. Nevertheless, the village achieved something that most in Albania have not: large-scale cooperation, a self-organizational structure, international partnership, credibility, and value chain integration.

This small village serves as an example of success for other subsistence farmers in Albania. In a globally connected economy, where industrialized practices are outpacing small-scale individual enterprises, the only choice is to cooperate. Individual subsistence farming is a thing of the past. The village recognized this; they needed to pool their resources and work together to provide for their families. This is a model of proven success for Albania. I think we should follow what works. What worked especially well was that outside funding was directed specifically to the indented beneficiary, without a middleman. Apparently this works. And I think it can work for many other villages. But there is one caveat...

Through the storm

It's true that for the dairy sector, this connection to the domestic value chain was important. This promoted the circular economy, and everyone benefited. But what happens when you’re looking at a much larger output than milk? Say you’re dealing with fruits and vegetables. In this case, you can’t really focus on the domestic market; it’s simply too small and there’s far too much competition. You can’t differentiate your product as easily, so you’re stuck with competing on price. This slashes your profit. So? What can you do? Well, how about the global market? After all, food will never go out of business.

This is where we modify our equation slightly; we keep the large-scale cooperation, self-governing structure with a democratically elected leader, credibility-enhancing institutions, but we add linking to the global market instead of the domestic market. This way, we can keep profits high and lift some of the burden of competition for the domestic market. Also, you replace that in-house laboratory with a large lab that can cater to the whole country, ensuring safety for more than just one village.

Large-scale cooperation, institutions that enhance credibility, and outside markets. That’s what I believe is the future of agriculture in Albania. Of course, the crux of all this is that institution of credibility, a food safety laboratory. Read more on that here.

 

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Gjon Rakipi
By Gjon Rakipi October 4, 2024 13:20
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