Albania has the highest agricultural production costs in the region

Albanian farmers face higher production costs than their competitors in the region due to heavy reliance on imported inputs, low levels of financial support from the state, labor shortages and weaknesses in agricultural infrastructure.

The combination of these factors makes domestic production more expensive and weakens its competitiveness against products coming from Serbia, North Macedonia and other Western Balkan countries.

According to reports by the Food and Agriculture Organization of the United Nations (FAO), small farmers in the region, particularly those in Albania, spend an average of around 28% of their total production value solely on purchasing seeds, chemical fertilizers and pesticides.

Most of these inputs are sourced through imports, meaning that farmers’ costs are directly affected by international prices, exchange rates and transport expenses.

For small farms, which dominate the structure of Albanian agriculture, the opportunities to buy in bulk and negotiate more favorable prices are limited.

One of the main reasons placing Albanian agriculture at a disadvantage is the low level of direct subsidies.

Data reported over the years show that other countries in the region have provided an average of more than 53 euros in direct support per hectare, while in Albania this support has historically been estimated at around 3 euros per hectare.

The difference is approximately 18-fold. This gap means that Albanian farmers must cover a much larger share of their costs from their own income.

In neighboring countries, subsidies cover part of the costs of inputs, fuel, agricultural machinery or investment, allowing products to reach the market at more competitive prices.

As a result, Albanian products face competition not only from European Union production, but also from agricultural goods from regional countries with more consistent support policies.

Direct costs are compounded by losses resulting from climate change, droughts and inadequate irrigation infrastructure.

The FAO report on the state of food and agriculture notes that the hidden costs of the agricultural system, including environmental damage and losses caused by climate change, weigh more heavily on countries with more limited incomes and investment capacities.

In Albania and other Western Balkan countries, the lack of modern irrigation systems increases the dependence of production on weather conditions.

A dry season can significantly reduce yields, while expenses for tilling the land, seeds, fertilizers and pesticides remain the same. This further increases the cost per unit of production and the farmer’s financial risk.

Another major pressure comes from labor shortages. Emigration and the departure of people from rural areas have reduced the number of workers available in agriculture.

The shortage is particularly noticeable during planting and harvesting periods, when demand for workers rises within a short time. Farmers are forced to offer higher daily wages, while in many cases production is not harvested on time or part of it remains in the fields.

Dependence on imported inputs, subsidies that are much lower than in neighboring countries, limited yields, irrigation problems and rising labor costs are creating a multiple burden for Albanian agriculture.

Without increased support and investment to reduce the cost per unit, domestic farmers risk losing further ground to imports and subsidized producers in the region./ Monitor.al