FARMERS PRODUCING ONLY FOR THEMSELVES

The Unprotected Kosovo Market

Some seven - eight years ago, the issue of providing assistance to Kosovo, the then least developed region in the former Yugoslavia, became the topic of discussions on the internal relations within the joint state. At that time, it was pointed out that every day some USD 1.83 million came to Kosovo and instead of being invested in the development were used for improving the living standards. However, today the question is how much is spent in Kosovo, what is the balance of food-stuffs and where the resources are coming from, when it is known that there are no more subsidies for the development or maintaining the living standards in this region.

On his own initiative Halim Xherizi, M.S.Oec. elaborated in more detail the balance of the basic food-stuffs. He came to an almost improbable conclusion: every day almost 1.3 million DEM is spent in Kosovo, which is the exact amount of the calculated foreign exchange inflow from emigration abroad. Simple mathematics shows that as much as 500 million DEM is spent here on food annually, i.e. so much is given for food-stuffs coming from Serbia, Vojvodina, Montenegro and other regions. This figure is almost identical to the one provided by the Economic Institute of Pristina which speaks that as much as 2.3 billion DEM were remitted to Kosovo from abroad in the past five years and that the bulk was invested in food.

Relying on the estimates of research institutions as well as statistical data, Xherizi determined that during 1996 each inhabitant of Kosovo used 190 kgs of wheat, 30 kgs of corn, 85 kgs of vegetables, 50 kgs of fruits, 30 kgs of meat, 220 eggs, 132 liters of milk and 20 liters of oil.

Consumption of food-stuffs is somewhat higher than before, mostly due to the population increment. But, differences in the structure of consumption also appear. True, the number of inhabitants is higher, but so is the consumption of paste, which is corroborated by the data that each inhabitant consumes daily over half a kilo of wheat or almost one egg, but much less fruits, vegetables, meat or other quality products.

The low level of living standard is also illustrated by the fact that the consumption of wheat is three times higher than in countries members of the European Union, while the consumption of other, high quality and caloric items, is smaller. This also speaks of the level of poverty and poor diet of the population. Although Kosovo has large potentials for the development of the agricultural sector, the shortage of food products nevertheless occurs. This shortage is much greater and complex than it was before, as it is now covered "by imports" and paid exclusively in foreign currency, irrespective which country the producer comes from.

The analysis shows that the consumption of individual items exceeds the production by far. If we take wheat, for example, the annual production of this crop amounts to 33 thousand wagons, while the consumption is 44 thousand wagons, i.e. there is a difference of 11 thousand wagons. However, Kosovo annually imports 23 thousand wagons of wheat, either unprocessed or milled as flour, allocating 60 million DEM for these purposes. What is the reason for this? The answer is simple. A large quantity of wheat remains in family reserves or doesn't reach the market at all. The Kosovo farmer, relying on his bitter experience, doesn't take any chances although he is aware that this is not the most rational way of husbandry. He would much rather keep stocks that will last him several years, than offer the surplus on the market. There is no other way for him because there are no price incentives nor can he rely on the market to find the quantities he needs at all times. Therefore, he uses the surplus as fodder rather then offering it on the market.

Even more drastic situation is with the consumption of milk and dairy products. About 300 million liters of milk annually are produced locally, while the consumption is 290 million liters. It would be logical for those 10 million liters to appear as a market surplus. But, due to unorganized market and farm-surplus appropriation system, the Kosovo traders "import" from Serbia as much as 90 million liters of fresh milk, i.e. give 45 million DEM for it. The actual situation provides ample space for significant changes in this sector. Lately a number of businessmen started investing in mini-dairies for the purchase of surplus production from producers. Realistically speaking, the surplus is much higher than the statistical data show as it is a fact that the milk is being used irrationally or in a narrow circle as a result of the lack of the market, and in some cases milk is also "returned" to livestock as fodder.

Imports of other articles are also high. For example, over 60 million DEM is annually allocated for the import of oil, 50 million for eggs, 80 million - meat, 100 million - fruits and vegetables. One should not harbour the illusion that the Kosovo arable plots can satisfy all its needs in food, either as regards the structure or quantities. But, it is certain that with better market and production organization a lot could be changed. The milk production shows that there is a surplus which, however, does not reach the market although it can get a good price.

Under present circumstances it will be hard to introduce any changes. It's not farmer's fault that he doesn't produce a surplus for the market. It could all be explained by the uncertain situation and low market prices. As a result the production is limited to the essential minimum. It will be hard to convince him to make a long-term investment in a production with a turnover of capital slower than that of trade, although Kosovo has all preconditions for the development of agriculture as the majority of its population is living in the country. Besides, the area of arable land is large and much of the irrigation system underutilized. It can, therefore, be rightfully claimed that the unstable market and high risk associated with the investments are the sole obstacles hampering further development of agriculture and livestock, as well as the production of health food", concludes Haljim Djerizi.

AIM Pristina Ibrahim REXHEPI