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Targeting Opportunities for Agriculture in Kosovo
In many countries, tradition – what is eaten locally, what has been consumed by traditional value chains – determines the mix of crops that farmers grow. Tradition, however, does not necessarily reflect the best use of land and water resources or the demands of regional and international markets. An analysis conducted by the USAID-funded Kosovo Private Enterprise Project (KPEP) suggests that a reliance on traditional growing patterns may, in part, be limiting Kosovo’s potential as a producer of agricultural goods. The prospect of producing higher value products for export to regional and international markets presents Kosovo with an opportunity to realize a significant boost to its GDP. Additionally, an increase in higher value exports, while assuming relative consistency in imports, may begin to help cut into the enormous trade imbalance that Kosovo amassed over the years, in part, by importing large quantities of food products.
Seeking to seize this important opportunity, the USAID/Kosovo Mission recently commissioned an agricultural opportunities analysis to identify existing opportunities to broaden the agricultural base and to reach into higher value-add markets. Over a period of nine weeks, a team of consultants conducted a baseline analysis, identified constraints in the agricultural sector, and used a tested supply-demand model to determine the "diversified crop mix" that will maximize agricultural revenue and return on investment.
A farmer surveys his crops in Kosovo. (iStockphoto.com)
The baseline study, which analyzed data on exports, production, imports, and consumption, noted that while 76 percent of Kosovo's land is arable, only 85 percent of the available arable land is cultivated. Many farmers leave land fallow due to lack of equipment and low profitability. Notwithstanding, Kosovo's agricultural yield ranked higher than some regional neighbors, including Serbia, Bulgaria, and Slovakia.
Kosovo is close to the European Union, has vast natural resources, and benefits from significant donor support for agricultural development. Serious issues have kept the country from realizing its full agricultural potential, including: 1) the untapped potential of small farmers, 2) lack of demand-driven focus, 3) lack of infrastructure capacity, 4) transportation shortcomings, 5) inadequate agriculture regulations, and 6) trade access. The report describes these issues in detail.
The report’s recommendations are organized into three categories: 1) recommended diversified crop mix for Kosovo; 2) initiatives to address weaknesses in the agriculture sector; and 3) action plan for implementation. The team determined the agricultural commodities best suited for Kosovo, by studying climate zones characteristics, including temperature, solar radiation, soil type, precipitation, altitude, and irrigation. Following this analysis, the team selected the 50 crops with the highest production value, ranked against six dimensions: 1) high demand in target markets; 2) high value per weight; 3) lack of significant scale economies; 4) degree of labor intensity required for production; 5) opportunities for import substitution; and 6) potential for downstream processing. The optimal crop mix was further filtered by ranking the top 20 crops according to required investment, ease to produce, and ease of market access.
The final report proposes 21 initiatives for developing the ideal crop mix for Kosovo and removing constraints in the agriculture sector. It also provides an action plan for the Government of Kosovo and supporting donors to help Kosovo reach its potential as an agricultural producer. Further information can be found in the executive summary. The full report provides the complete analysis and description of the methodology.
Tools for Development: Pilot Collaboration
USAID’s EGAT and Microenterprise Offices recently collaborated to fund a pilot assessment of the maize and rice value chains in Tanzania sponsored by USAID/Tanzania. This new service offering, called MicroCLIR, is the first attempt to apply the BizCLIR methodology specifically to a particular value chain. Booz Allen Hamilton teamed up with Development Alternatives Inc., which has developed the Competitiveness Impacts of Business Environment Reforms (CIBER) tool with support from USAID’s Microenterprise Office, to perform this work. The purpose of the assignment was two-fold: to analyze the legal, regulatory, and institutional constraints to the growth of two important food crops in Tanzania: maize and rice; and to see how the two diagnostic tools can be used in concert. The tools proved valuable in identifying both sector-specific and systemic constraints to rice and maize productivity, while the exercise of using the two tools together helped to clarify when and where the different approaches would be most effective in designing, implementing, and monitoring value-chain projects.
Producer weighing rice in Ifikara, Tanzania prior to shipment (MicroCLIR Team).
The team has completed the field work on this assessment and expects the report to be available on www.BizCLIR.com early this summer.
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