Why is the high amount of local wheat not bought from mills?

2024-04-15 11:30:38Biznes SHKRUAR NGA REDAKSIA VOX

For milling factories, the primary material for the production of flour continues to be imported cereals. The amount purchased by them from farmers is very low, despite several meetings held in the past by the Ministry of Agriculture, with the aim of encouraging and developing agriculture.

Cereal imports in January-February 2024 increased by 51% compared to the same period of the previous year, according to INSTAT data.

Vasfi Sherifi, the head of the AGROVAS-SHE company, as well as an expert on agriculture, said that the main reason for not selling wheat to the milling factories is the quality of the production.

"For wheat produced in the country, the quality remains a problem. This is due to a number of factors. The first is that the seed sown is not homogeneous, so there must be a certified seed.

Farmers use different seeds, which reduce yield. Secondly, the technological formula for fertilizing the soil changes in each of them. All these factors damage the quality", he told Monitor.

Even for the chairman of the Association of Flour Processors, Adi Haxhiymeri, the reason for not supplying large quantities of local wheat is that the quality is not guaranteed. According to him, an amount of 5,000 tons of old wheat was bought from the milling factories. While in the foreign market, wheat is being bought by importers at a price of 270-280 USD per ton.

The main supply markets for flour processing plants are Italy, Ukraine and Russia.

In order to solve the problem with the grain sales market, last year, the Ministry of Agriculture and Rural Development envisaged several long-term measures, which included the increase of storage capacities through financing to the extent of 50% of the investment through grants from the IPARD III program.

One of the conditions for benefiting from the grants was foreseen to be the use of certified seed by the farmers, to increase the yield.

But after the launch of investigations by OLAF in July 2023 on suspicions of abuse with the distribution of IPARD II grants, the opening of the IPARD III program has remained blocked.


Agriculture takes the plunge, decline in 2023, steepest since 1997


The structure of economic growth in 2023 showed a marked decline in production in the country and especially in agriculture, which is also the largest sector in the economy.

Official INSTAT data indicated that agriculture declined by 0.68% in 2023, the strongest since 1997 (see attached chart).

The downward trend of growth rates started since 2013. In the last 10 years, agriculture has grown by an average of 1%, while the result has weakened in the last three years to turn negative in 2023.

From 2000 to 2010, agriculture grew by an average of 3.7% per year. More detailed data show that the biggest decline occurred in the livestock sector and in the closure of small farms, plots for self-consumption.

The reduction of the rural population from internal and external emigration, on the one hand, and the lack of state subsidies, on the other, have worsened the climate in the sector.

In 2022, the number of heads in livestock showed an annual decrease of about 13%, while during the decade the heads were halved.

Producers and livestock keepers claim that costs in the livestock and agriculture chain are high, as the state does not subsidize the sector.

With the removal of the VAT exemption, once again returning the level to 20%, the situation worsened further. The farmgate milk price is currently 40% to 60% higher than in the EU and the region.

In Albania, last year, livestock farmers who had more than 10 cows received 98 euros per head in two installments. While in Serbia, after the livestock farmers' strike, last year, the subsidy for a dairy cow is 365 euros and for each liter, the livestock farmer gets back 0.16 cents.

This difference in prices is orienting the Albanian factories towards the import of milk from abroad, which means that it is a multiple pressure for the livestock farmers who already suffer from the high costs of the raw material.

Agriculture contributes over 18% of economic growth in the country and is the largest sector in the country, but the two years of deficits in production are awakening the import channels again, while exports have remained stagnant.

Currently, about 70% of agricultural products in stalls and supermarkets come from imports, competing in prices even the few local farmers who try to produce for the market.

The situation in the sector is expected to worsen further this year, as the state budget provided less funding, while EU support from IPARD funds remains blocked. In the 2024 budget, the agriculture sector received 9% less funding than the 2023 plan.