Agriculture, the "house without a roof", that is bankrupting the farmers of the southeast

2024-10-09 10:57:30Fokus SHKRUAR NGA REDAKSIA VOX

The lack of support schemes and non-implementation of legal obligations by institutions risk leading farmers to bankruptcy. The data collected by INA Media show that more than 1,300 farmers of the southeast, who lost their agricultural products as a result of rain and hail, did not receive any compensation, but were only recorded as statistics by the municipality, which recognized the damages.

Two years ago, Fuat Orhani, a farmer in Rrêmbec i Maliqi, lost 15 ha of wheat as a result of a hailstorm that lasted only a few minutes. He spent 50,000 Lek/ha, but the crops were good and he hoped for double.

"Just before the harvest there was a terrible hailstorm, which destroyed everything. Not only me, but also others lost everything", - remembers Fuati, one of the biggest wheat farmers in Maliq.

That year the Ministry of Agriculture declared the wheat scheme a priority and Fuati, like thousands of farmers across the country, invested in this crop, but got nothing. After the damage caused by the hailstorm, this farmer could not even cover his expenses.

"I was hoping to get 1,500,000 ALL, but in the end I only got 600,000 ALL. Not only did I not make a profit, but I came out minus 150,000 ALL from my own investment", Orhani confesses.

According to the available data, in 2022 the Municipality of Maliqi estimated that its farmers suffered 72 million ALL of damage from natural phenomena, while a year later this damage was worth 18 million ALL.

In a public appearance with the farmers, the Minister of Agriculture, Anila Denaj, admitted that they had lost about 2 million dollars of produce from the hail, but did not offer any solution, since, according to her, "The Ministry of Agriculture has no instrument to protect them." ".

During the debates with the farmers, she referred to the support for hail nets as the only mechanism in this direction, but even this scheme is half-hearted, since the orchard sector is excluded from benefiting from this program.

The data made available by the municipalities show that at least 1,300 farmers in Korça, Devoll, Maliq and Pogradec have lost millions of lek in agricultural products, but were not compensated, as the local government claims that they do not have funds to compensate them. ; as a result, they have delegated the requests to Civil Emergencies, but the latter denies such a thing.

Agriculture is one of the sectors with the biggest contribution to the country's economy. Referring to INSTAT, in 2022 this sector employed 33.9% or about 500 thousand Albanians and contributed 19% of the GDP, but Albanian farmers are exposed and vulnerable to the damages they may suffer from natural disasters, since Albania there is still no clear, legal framework.

Unlike Albania, which counts over 97 thousand farmers with NIPT, but has not distributed any money for compensation of damages, Kosovo has created a special fund and compensates injured farmers with millions of euros every year.

Law no. 139/2015 of Local Self-Government and Law no. 49/2019 of Civil Protection clearly define who and how farmers who are damaged by natural disasters should be compensated, but local and central institutions refuse to implement them.

From the data provided by INA Media, it was found that the municipalities only keep minutes and statistics about the damages, but in no case have they compensated the farmers.

Municipalities only make statistics
The right to compensation, provided for in Article 41, of Law No. 45/2019, "On civil protection", is divided between municipalities and Civil Emergencies, but both institutions delegate responsibility to each other.

The municipalities claim that they have no money to compensate the farmers, so they have delegated the requests and financial invoices to the Civil Emergencies, but the Emergencies deny that such requests have arrived.

"Financial compensation for farmers, who have suffered damage to agricultural and livestock crops, occurs only in the case when a state of natural disaster has been declared", - say Civil Emergencies in a written response to INA Media.

As a result of this legal dispute, thousands of farmers in the four municipalities of the southeast: Korçë, Devoll, Maliq and Pogradec, are facing loss of production and financial loss, which risks leading them to bankruptcy.

According to the documents made available by these municipalities, about 80% of the areas planted with fruit trees in the villages of Mançurisht, Progër, Cangonj, Vranisht, were damaged by hail, but the farmers have not received any compensation.

"We held a meeting in Zemblak with the Deputy Minister of Agriculture. We raised this problem with him and he told us that he would look for a solution, but so far there is nothing", says Sulejman Meço, farmer, also the headman of the village of Mançurisht in Devolli.

"The municipality and agronomists have been coming out for years and years and have made statistics, but no compensation has been made to the farmers", he continues.

Referring to Law no. 139/2015 on Local Self-Government, 4% of the municipal budget must be used for civil emergencies, in cases of natural disasters, floods, fires or earthquakes; but at least the three most affected municipalities of the southeast have never used this fund. According to them, the value of the damages exceeds the financial possibilities available to them.

Medat Rusi spent 7 million lek on the cultivation of fruit trees, but the hail destroyed 80% of the production. Despite following the entire procedure, no institution undertakes compensation for damages.

"In the last 4 years, we have had great damage from hail. At least they should compensate us for the expenses, but they only ask about the coast, because they have their own resorts", he says.

Four municipalities, asked by Investigative Network Albania, said that they have verified the damages on the ground and have sent the loss balances to the National Agency of Civil Protection and are waiting for it to compensate them.

"No compensation has been made. We have notified the Regional Agency of Agricultural Extension, Korçë and the National Agency of Civil Protection for the damages, as the amount exceeded the damage, which we could cover with the civil emergency fund", said these four municipalities to INA Media.

Only the Municipality of Pogradec has compensated two families with a value of 173 thousand ALL.

Fuat Orhani confesses that after the storm, the Municipality of Maliqi sent a commission to verify the damage, but, although they recognized the damage, they told him that they did not have funds for compensation, so they would forward the request for compensation to the National Agency for Civil Emergencies.

"Deputies came, the mayor came, working groups were set up, but no support. On the contrary, if we lost production due to a natural disaster, we lost another 4-5 days of work in vain, because we made the evaluation groups available", says Fuati .

Without support and at the mercy of the vagaries of the weather, Fuati is ready to give up.

"This is probably the last year that I deal with this work. We hoped that things could be fixed in Albanian agriculture, but here the opposite is happening", - says Orhani.

According to data from the Agriculture Agency, Korçë, there are 7 schemes, according to which farmers in the southeast can benefit from financial support. Most farmers benefit from the oil scheme, for which there were 10,700 applications for 2023 and 2024.

Agriculture, the "house without a roof", that is bankrupting the

The Albanian scheme, the most anemic in the region
Involved in a spiral of crisis, the 2024 budget for agriculture is not at all optimistic, neither compared to the previous year nor compared to the region. For this year, this sector has available a fund of 141 million euros, while a year ago it had 155.3 million euros, that is, about 14 million euros less.

The budget reduction was made in the item of rural development, which also includes support schemes.

This item currently has 72 million euros available, while the initial forecast was 99.4 million euros, while this year the sector will also lack IPARD funds.

The Ministry of Agriculture admits that there is nothing planned for the compensation of farmers affected by natural disasters.

"The Ministry of Agriculture and Rural Development (MBZHR) does not have a legal, supporting basis and, as a result, no financial means to cover damages in cases of natural disasters", this ministry confirmed to INA Media.

MBZHR clarifies that, in the Strategy of Agriculture, Rural Development and Fisheries, 2021-2027, in order to face the challenge of the effects of climate change with consequences on agricultural production, it has planned to undertake institutional and structural reforms, "but no fund has been provided of compensations for extreme phenomena, which come as a result of climate change".

On the website of the Ministry of Agriculture of Albania there is only one publication about compensation in case of disasters. It is about the farmers of Kafaraj in 2022. The former minister, Krifca, the political leader of the Fier district, Taulant Balla, and the mayor, Armando Subashi, called on the farmers to apply for compensation in the amount of 200 thousand lek new for each hectare planted with strawberries.

The situation in Kosovo is completely different. Although with a budget half of Albania's and with an agriculture that contributes 2.5 times less to GDP than our country (agriculture in Kosovo contributes 7.4% of GDP, in Albania, with 19%), Kosovo applies genuine support schemes for farmers whose crops are damaged in cases of natural disasters.

In 2020, the Compensation Fund was established in Kosovo with a budget of 3.8 million euros. From this fund, the government allocated nearly 2 million euros to 2,354 registered farmers.

In December 2022, the Ministry of Agriculture in Kosovo awarded 2.8 million euros to farmers in 22 municipalities affected by disasters, compensating 80% of the damages; while in the period 2020-2021, farmers have benefited 3 million euros as a result of damages from natural disasters.

This support of farmers in Kosovo has also happened at the municipal level. In 2020, the Municipality of Pristina compensated 152 farmers damaged by hail with 400 thousand euros.

The support scheme is also applied in North Macedonia, where the government approved in 2022 a decision on the payment of damages from natural disasters that farmers suffered in 2016, 2017 and 2018. The amount of compensation was determined at 10% of the total value of anticipated, where a total of around 4.5 million euros were paid.

According to a report by the World Bank, published in 2022, Albania is the country with the lowest level of support for agriculture in the region, but even the money that is given is mostly used for operational expenses. If in Kosovo, North Macedonia, Serbia and Bosnia-Herzegovina 70% of the agricultural budget goes as direct support to the farmer, in Albania 70% of the agricultural budget goes to operating expenses and only a small part ends up as direct support to the farmer.

The law on compensations does not apply.
The legal framework for how farmers should be compensated in cases of natural disasters is defined in Law 139 of 2015 on Local Self-Government, in Law no. 45 of 2019 of Civil Protection, as well as in a series of laws and acts, which have clearly defined how farmers should be compensated.

According to the law, it is the municipalities that must compensate the damages to the farmers, as well as obliges them to have up to 4% of the budget as a budget reserve for these cases. Only in cases where the value of the damage exceeds 8% of the value of the emergency budget that the municipalities have, then they must be compensated by the National Agency for Civil Emergencies.

"Municipalities should change their approach to how they should deal with cases of natural disasters and, above all, how they should make compensation", says Agron Haxhimali, president of the Association of Municipalities of Albania.

In a meeting held in Korça in May 2023, Haki Çako, the head of the National Civil Emergencies Agency, said that they proposed changes to the Law on Civil Protection, which should clearly define the categories that should be compensated, but they were asked the farmers to pay the dues first.

"If you take the risk to invest, to pay or even to plant a crop and you don't take into consideration the risk that comes from a natural disaster, of course the large scale of the disaster is taken over by the state, at the moment that the damage capacity exceeds the percentage of a municipality's budget, which is 8%; then they address the National Agency of Civil Protection, which then makes the compensation case by case", said Çako at the time.

However, so far Civil Emergencies have not compensated any farmer, although the two most damaged municipalities in the southeast, Devolli and Maliqi, have made requests and filed documentation with this Agency. In fact, in a response to INA Media, Civil Emergencies denied that such requests have been submitted to them.

"The National Civil Protection Agency does not have any documentation forwarded by the municipalities of Korçë, Pogradec, Maliq and Devoll, with the aim of compensating farmers as a result of damages caused by natural disasters", - say Civil Emergencies.

After years of efforts, a large part of the farmers have lost hope.

"They buried Albanian agriculture, the villages are empty, you can no longer find workers or people, all the houses are locked", says Fuat Orhani.

Agriculture, unpreferred for insurance companies
Amid truncated policies and unexpected natural phenomena, farmers are also excluded from the insurance scheme, as insurance companies see the insurance of agricultural products as risky. Even in cases where they accept such insurance, they set the price of the insurance premium as a condition, which for farmers is "killer".

This year, for the first time, they have launched farmer insurance, but only for hail, while they refuse to take over damage caused by temperatures, such as frosts in the spring.

Medat Rusi insured his land several years ago against natural disasters, but he did not receive compensation either, as the company did not recognize the damages.

"We suffered great damage from the frost, but they did not compensate us, as they told me that we do not give anything for the frost. We don't even trust insurance," he says.

Artur Balli, who runs an insurance company in the Korça region, admits that insurance in agriculture is currently negligible. High risk, fragmented surfaces and premiums are just some of the factors in this impasse.

"In our country, we are dealing with small plots, individuals and small herds, and as a result the insurance price is higher", he says.

Currently, the price of the insurance premium for the farmer ranges from 0.5% to 6% of the production, which continues to increase due to the increase in prices.

Agron Haxhimali, local government expert, says that the insurance premium is not proportional to the profits that the farmer has. According to him, it is necessary for the government to intervene with facilitating policies.

"It can share a part of the financing with a certain group of farmers or with farmers in need. There can be a legal framework, for the government to be supportive with financial resources of insurance premiums and the important thing is to convince the companies, that it is not just a private relationship and the government does this as a regulator", - suggests Agron Haxhimali.

"Insurance of agricultural products by insurance companies in this case should be lobbied by the state", says Ferdinand Ali, who also represents the agricultural association.

Artur Balli says that, if the government were to intervene, insurance companies would have a guarantee to prioritize this sector as well.

"It has been requested from the insurance companies that this compensation, which the state makes to the farmer, should not be in lek, oil products, etc., but should be in the insurance premium", says Balli.

Eight years ago, Ylver Bylykbashi benefited from a support project from AZHBR programs for the anti-hail protection system. Ylveri was supported to equip 4 ha with anti-hail systems, while 2 ha, which cost about 50 thousand euros, was covered by its own expenses. According to him, the cost of these systems is very high and unaffordable for most farmers; but these programs for protection systems are no longer applied by the Ministry of Agriculture.

"For all these years, there has been hail in our region, and the damage, especially to tree growers, is very great. I covered only 30% of the surface, as the cost of building the anti-hail system is very high, from 20 to 25 thousand euros per hectare", he says.

For Ferdinand Ali, who also represents the agricultural association, the solution is not impossible. He suggests "the installation of protective, anti-hail systems, especially for wood growers, as well as the insurance of agricultural products by insurance companies, which in this case should be lobbied by the state"./ Inamedia

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