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  • Regional O ce for Europe and Central AsiaFOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONS

    EASTERN EUROPE AND CENTRAL ASIA AGRO-INDUSTRY DEVELOPMENT COUNTRY BRIEF

    ALBANIA

    Contents

    Key indicators ................................................................................................................................................................................................ 2

    Agro-industry national policy framework ........................................................................................................................................... 2

    Economic and social development and trends ................................................................................................................................. 3

    Agro-industry outlook and performance ............................................................................................................................................ 5

    Trade Liberalization, WTO accession and trade performance ...................................................................................................... 7

    Foreign direct investments .....................................................................................................................................................................10

    Research & Development and innovations ......................................................................................................................................11

    Food safety, certifi cation and quality control ..................................................................................................................................12

    Business environment and competitiveness ...................................................................................................................................13

    Ranking Albania ..........................................................................................................................................................................................15

  • 2Key indicators

    Key Economic Indicators1 2006 2009 2011 Food & Beverages indicators 2006 2009 2011

    GDP (PPP), US$ billion 21.49 27.56 28.76 Output, % of manufacturing 19.97 20.0 n/a

    Manufacturing VA, % of GDP n/a 19.36 19.38 Value Added, % of manufactur.

    16.35 16.4 n/a

    Agriculture VA, % of GDP 22.0 20.40 20.04 Enterprises, % of manufactur.

    32.9 33.6 n/a

    Employment in Agric., % of total

    58.0 44.1 41.0 Employment, % of manufactur.

    13.1 14.4 n/a

    Gross Fixed Capital F., % of GDP

    25.05 28.79 24.94 Investments, % of manufactur.

    28.8 12.1 n/a

    FDI net infl ows, % of GDP 3.56 7.96 n/a FDI infl ows, % of total infl ow n/a n/a n/a

    R&D, % of GDP n/a 0.15 n/a R&D, % of Output n/a n/a n/a

    Merchandise Trade, % of GDP

    42.22 46.54 56.60 Net Trade, US$ billion -0.22 -0.34 -0.40

    Merchandise Exports, US$ billion

    0.79 1.09 1.96 Exports, %of merchandise Exp

    3.82 2.97 2.15

    Merchandise Imports, US$ billion

    3.06 4.55 5.38 Imports, % of merchandise Imp

    8.13 8.12 8.18

    Exports annual growth, % 20.4 -19.7 25.7 Exports annual growth, % 18.4 1.8 20.4

    Import annual growth, % 17.0 -13.4 17.2 Import annual growth, % 16.7 -10.9 12.4

    GNI per capita, 1000 US$ 2.97 3.97 3.98 Output per capita, US$ 71.1 96.4 n/a

    Trade per capita, US$ 2009-2011

    3,299 Exports per capita, US$ 9.6 10.1 13.0

    Doing Business Indicators Rank

    117 85 Agribusiness Indicators Value

    3.1

    Global Merchandise Exports Imports Rank

    137122

    FDI Inward Attraction Index Global Competitiveness Index

    4089

    Agro-industry national policy framework

    National development programmes: The key documents1 that are setting out the Government policies for overall economic development as well as for agriculture, rural and agro-industry development include: (i) the National Strategy for Development and Integration 2007-2013 that was prepared in the framework of the Integrated Planning System as a coherent refl ection of 38 sectors and crosscutting strategies. A new NSDI 2013-2020 is under preparation process that is projected to be in place in March 2013; (ii) the Inter-sectoral Rural Development Strategy 2007-2013; (iii) the Strategic Programme for Development of Innovation and Technology of SMEs 2011-2016; (iv) the Strategy on Consumer Protection and Market Surveillance 2007-2013 that was prepared by the Ministry of Agriculture, Food and Consumer Protection; the Ministry of Economy, the Ministry of Trade and Technology, and the Ministry of Health; (v) the National Strategy for Science, Technology and Innovation 2009-2015, in which agriculture and agro-industry are of the priorities sectors; (vii) the Business and

    1 World Bank Indicators Database and ITC accessed in October 2012. Authors calculations

  • 3Investment Development Strategy 2007-2013; (vi) the Agriculture and Food Sector Strategy 2007-2013 (AFSS) with Sectoral, Sub-Sectoral and Crosscutting Strategies, which details medium and long-term policy objectives, the main interventions, the monitoring tools and the costs of implementation of policies and interventions and the expenditure programmes prepared in the framework of the Medium-Term Budget Programme (which ensure the coherence of policies and the longterm orientation of the development of the agriculture and food sector in order to clarify the reform and development process taking place in the public and private sectors and outline the needs for technical and fi nancial support to agriculture). The AFSS is based on the Government Programme on the economic development of the country, the implementation of the Stabilisation Association Agreement with the EU (2009), the NATO membership plan and the public investment and external assistance programmes. The Common European Policy on agriculture is included in the framework of rural development. In 2009 Albania applied for EU membership and was offi cially recognized as a potential candidate country. An agricultural census was carried out in 2012.

    Legal framework: Albania proceeded with a wide ranging reform of the economy, liberalizing prices and trade mechanisms, redistributing agricultural land and other state and collective farms assets to individuals, and privatizing most of the state marketing and agro-processing enterprises. Since then, the agricultural policy environment has been relatively free of distortions without price controls, limited subsidies and liberal trade policy. Albania adopted the law on Agriculture and Rural Development (2007), the Law on Food (2008), the Law on Business licensing (2009) and established a National Licensing Centre.

    Supporting institutions: In 2008 the Government approved a Fund On the Support to Agricultural Production foreseen in the budget of the Ministry of Agriculture, Food and Consumers Protection and in 2009, it established the Agriculture and Rural Development Agency (ARDA), as a paying agency. Private sector and civil society inputs to policy making were institutionalized under the Business Advisory Council established in 2006. The National Food Authority (NFA) was set up as a public institution under the jurisdiction of the Ministry of Agriculture, Food and Consumer Protection. The NFAs main targets are controls and inspections, as well as risk assessment and communication for the whole area of food safety, animal health and plant protection in Albania. Applied agricultural research is conducted by the Agricultural Technology Transfer Centres (ATTC) 2

    Economic and social development and trends

    Economic and social development: In 2012, Albania was reclassifi ed from an upper-middle income country to a lower middle income country3. Albania has a small economy, which had GNI per capita of US$ 3,980 in 2011. The total population is 3.21 million, of which the rural population comprises 46.6 percent. Annual population growth is 0.36 percent.

    According to EBRD report Albania remains one of the few transition economies that have weathered the global crisis reasonably well until now, partly because the economy is less integrated with global markets than others. GDP growth averaged around six percent between 2004 and 2008, but declined to about 3.3 percent in 2009 and to three percent in 2011. Manufacturing accounted for 19 percent of GDP and remained stable in 2011.

    The agricultural sector remains very important and it is dominated by small farms and highly fragmented land. Agriculture contributed 19.4 percent of value added to GDP and employed 41 percent of the total labour force in 2011. However, the economy remains highly import-dependent in terms of food and raw materials for agro-processing due to low agricultural productivity. Therefore, the country is vulnerable to any increase in food commodity prices. The public contribution to agriculture and agro-industry has continuously been quite limited,

    2 Ministry of Agriculture, Food and Consumer Protection (2011) Albanian Agriculture. Fact Sheet 3 WB countries classifi cation list

  • 4at about 1-1.5 percent of the budget and even less in GDP terms. In general, investments in agriculture have been fi nanced through foreign loans and grants.

    According to the UNIDO Industrial Development Report, Albania is considered to have very low manufacturing importance and an average level of agriculture importance.

    Chart 1. Evolution of value added to GDP in Albania (percent)

    Source: WBDI, accessed in October 2012; UNIDO database; National Statistics; Authors calculations

    Growing demand and trends: Albania has a structural defi cit on all of its major agricultural commodities; namely, cereals, fruits, oilseeds, poultry meat and sugar. Thes