The lack of clear property titles is a key burden for the further development of the agricultural sector in Albania; a sector that employs about half of the population of the country, but that due to its low productivity supplies only about a fifth of the national production.
The Minister of Agriculture, Niko Peleshi, says that the lack of title deeds for about half of the country's agricultural land represents a key barrier to the development of larger farms and access to local and community subsidies that could make much more competitive products from Albania.
"In my opinion, the weakest point is the problem of ownership. Almost the 50% of the property titles are not registered at the real estate registration offices"- Minister Peleshi said in an interview.
The situation of the properties became complicated in the 1991 just when the communist regime and its planned economy collapsed with the much-cited "7.501" law, which had divided the agricultural land on a per capita basis and not taking into consideration the compensation of the owners expropriated due of the agrarian reform of the 1946, when the communists came to power.
In many areas of Albania, particularly in the north, the "7.501" law has been largely ignored and most families own the land of their predecessors before 1946 was expropriated; however, land titles are lacking to justify the land and this situation very often leads to conflicts.
"There are some areas in the north of the country, but also elsewhere, where the "7.501" law has not been applied at all, which means that there are a number of problems that need to be solved until we have farmers who own property for their land. ”- Minister Peleshi continues.
In addition to the problem of property titles, insufficient financing, the lack of subsidies and infrastructure such as irrigation and a high tax burden are a serious problem for the agricultural sector in Albania.
Experts have recommended reviewing the high tax burden on agriculture by offering differentiated rates compared to other sectors. Farmers currently pay 15% for the sale and rent of their land, a rate of 20% on fertilizers and have no subsidies on fuel, whose prices are in Albania among the highest in Europe.
Furthermore, the Albanian government only spends 0,5% of GDP on agriculture, while credit to the sector represents only the 2% of total credit to businesses, according to data from the Central Bank of Albania.
Agriculture is also one of the least attractive sectors for direct foreign investments: currently, foreign people and companies cannot buy agricultural land, even if they have the possibility of renting land up to a maximum of 99 years.
Establishing the question of unclear ownership is the first thing to do before talking about increasing productivity and economy of scale in agriculture, says Minister Peleshi.
"The biggest handicap that Albanian agriculture has to face is fragmentation and we can overcome it through cooperation and by joining the sales process rather than unifying the lands in cooperatives.
We promote a basic model for every farmer, who can work their land, have their own products, but who will be united in the sales process in the form of an agricultural cooperation company that has its VAT fully reimbursed. ”- emphasizes Peleshi.
According to Peleshi, a new asset processing agency, which is expected to begin operations early next year, will significantly accelerate real estate registration on agricultural land, currently hampered by the lack of unified maps and legal battles.
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