RT 4
Investing across borders: The way forward for agriculture and rural
development in the Balkan countries
Moderator: Kaj Mortensen
Purpose• To exchange views on the main
challenges facing agriculture and rural areas
– particularly in cross border areas
• In the Western Balkans, but maybe the same applies elsewhere
• Explore ways to address these challenges
– With a view to develop recommendations to policy makers, donors and investors
Focus – enhance understanding of:• In what form and to what extent
agriculture can:– contribute to employment generation in
rural areas– at the same time – be competitive
• How to enhance capacity of the rural economy to absorb surplus agricultural labour through investments in alternative economic activities
History of the issue / development
• Paris - theoretical aspects• exchange of ideas in-between,
FAO/SWG work• EC study started on facilitating area-
based development approach• EC+FAO work on exploring potential for
diversification in Albania and Montenegro
Trade in border areas
• CEFTA is here but (1) not used to its full extent and (2) not very useful for "our" purposes
• Very little could be expected from free trade agreements, when it comes to facilitating developments in cross-border areas
Trade in border areas
• Situation will change significantly after the accession of some members. Border crossing will become even more difficult.
• Overall conclusion - Border will remain a big constraint
Non-tariff trade barriers
• AGROKOR – Best of the best• focuses only on the most efficient part of
the sector. How would this relate marginalised areas? Will they go there?
• if they go into an area - they will provide an added value, most likely
• very efficient system – to the extent that there is no people working – fully mechanised milk farm? – but where will people go?
Bringing finance/money to people – access to credit in rural areas
• Scheme under the Macedonian Bank for Development Promotion
• work with the most "complicated" clients (high delivery costs, poor transport and communication, no or low value collateral, etc.) – high lending risk
• Difficult to access normal financial services unless there is a mechanisms sharing transaction costs
• Optimistic - Financial institutions seem to be interested in expanding their client base. In fact – the "rural clients" are not so bad afterall – repayment rate 96%
• Solutions - reduce lender's transaction costs, facilitate "grass level financial institutions"- micro-financing, expand the list of items to be used for collateral
Where theory and practice meets – area-based approach as a tool to facilitate economic diversification?
• EC/SWG/FAO study on facilitating area-based development approach
• The ABD approach should:– Identify the needs– Propose interventions (an "action plan")– Hope that this will be picked up by the
endorsed by the governments, IFIs, etc.
• There have to be opportunities in a declining area – establish thresholds – beyond a certain point it might be difficult to "rescue" the area.
• Make strategic planning– Capacity of local governments is very
important – they should be the main drivers, but
– We need good combination of local capacities in administration and the strategic (regional) approach
Some general points
• If we cannot bring products from those areas to the market – we should try bringing market to those products!
• To have a dual policy – for competitive farming and a policy with more social aspects tailor-made for rural areas
• Has to be a strong commitment of national governments
• Just start "moving"
Top Related