"Shrunk" agriculture, the blocking of EU funds and the administration's bloated budget

The agricultural sector has been shrinking in the last 10 years. This is evidenced by the farmers themselves, as well as the increase in imported products. Despite this, in the last budget changes, this sector was once again left in oblivion where the government revised down the funds for agriculture. Support for farmers received the biggest cuts, with around 4.3 million euros. Funds for the agricultural producer support program amount to 6.8 billion ALL from 7.2 billion in normative act number 1 with a decrease of 4.3 million euros.

Even in the initial budget of 2024, the agriculture sector received at least 9% less funding than the plan finalized in the normative act for amending the 2023 budget.

But beyond that, the blocking of EU funds from IPARD programs, where the funds for agricultural subsidies were lower this year, and where more than half of them, about 55 percent of them are programmed as current expenditures and 45 percent as capital expenditures , bring another problem for this sector.

According to a regional study by the World Food Organization (FAO), in countries such as Bosnia-Herzegovina, Kosovo, North Macedonia and Serbia, the weight of direct payments to farms reaches 70-80% of agricultural budgets, most of which is related to livestock production or the use of inputs, while in Albania, although funding is low, it goes to administrative expenses and such that do not promote production.

What happened to the IPARD funds?

An investigation by the EU's anti-fraud office revealed serious misuse of pre-accession EU funding for agriculture in Albania and recommended freezing the €112m package for the successor agricultural aid programme. The report is submitted to the Albanian authorities

33 million euros were the funds of the European Union provided as aid to Albanian agriculture that were misused. The figure was revealed by the European Union's Anti-Fraud Office, OLAF, which has also recommended blocking the next 112 million euro package until measures are taken to guarantee the protection of the EU's financial interests.

In its overview of the case of abuses in Albania, OLAF reported that it “investigated serious allegations involving the misuse of EU funds from the Instrument for Pre-Accession Assistance for Rural Development (IPARD II) in Albania.

One allegation was that applicants for IPARD II were obliged to pay a large percentage of their grant to 'pre-selected' consultancy companies, which would then facilitate contracts with the Albanian Agency for Rural Development and Agriculture (AZBR). , which distributed the funds.

In the work overview for 2023, OLAF revealed the three main violations taking place with IPARD II funds, which led in July 2023 for the European Union to suspend this support.

"After a series of complex investigative steps, including digital forensic searches of documents related to IPARD II recipients, AZHBR and other economic operators, OLAF discovered some serious irregularities during the grant awarding phase and the implementation of some projects.

These irregularities included:

-Applicants are required to pay a significant portion of their grant to a local consulting company;

- Contracts that are awarded without competition, or with manipulated competition (with false offers being submitted);

-Inflated prices and violation of contractual rules.

Agriculture left in oblivion

Data from the Ministry of Finance show that in the first 5 months of 2025, the funds for supporting agricultural production were 611 million ALL or only 8.4 of the annual program. Usually, in the first months of the year, farmers prepare the documents and applications, after which the funds are distributed in the last months of the year.

Albania financed the agricultural sector by an average of 0.19% of GDP during the years 2020-2021. According to a World Bank comparison, this is the lowest level in the Region and in the EU.

Only Albania stands out as a country in the Region with a low level of agricultural support for agriculture, which at the same time is the sector with the largest weight in GDP with about 19% of it.