Practical assistance for agriculture and efficient administration

Project description

Title: Support to agriculture and rural development (SARD)
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Albania
Lead executing agency: Albanian Ministry of Agriculture, Rural Development and Water Resources
Overall term: 2012 to 2016

Albania. Recipient of IPARD-like grant in front of his new sage-processing equipment. © GIZ

Context
Albania has developed from being the poorest country in Europe to a candidate for accession to the European Union (EU). This South-East European nation has been an official candidate country since mid-2014. The Albanian administration must therefore establish efficient, independent and transparent administrative and control systems in compliance with EU standards. Only then will the country be able to handle the EU promotional funding provided under IPARD (Instrument for Pre-accession Assistance for Rural Development) on its own responsibility. Amounting to more than 90 million euros in the period up to 2020, these funds are designated for investments in agriculture and rural development.

Enhancing agricultural competitiveness is one of the main priorities of the Albanian Government. This sector generates 20 per cent of the gross domestic product, and the figure is rising. Nearly half of the gainfully employed in rural areas work in agriculture. However, despite favourable conditions Albania is heavily dependent on agricultural imports. The sector suffers from serious structural problems, which have been tackled only hesitantly to date.

Objective
The Albanian Ministry of Agriculture, Rural Development and Water Resources promotes agricultural reform and is introducing EU standards in the authorities. The pilot project serves as a model for preparations for EU accession in other potential candidate countries. The aim of the reforms is EU accreditation of the agricultural Paying Agency and the Managing Authority of the Ministry to carry out administration of EU funding and programme planning independently.

Albania. Recipient of IPARD-like grant. Cultivating apples in Pogër, Korçë. © GIZ

Approach
With the aid of international cooperation activities, Albania is making preparations at a practical level to comply with EU standards. The Government is already issuing grants to agricultural and food-processing companies using the project’s ‘IPARD-like’ funds, in a type of test run in accordance with EU criteria. These grants amount to between 50 and 65 per cent of the investment value. To qualify, the enterprises have to invest in modernisation and compliance with minimum standards, for example in food safety, animal protection and environmental regulations. With the aim of increasing agricultural competitiveness, around 8.2 million euros have been earmarked for the grants; three quarters of the funds come from the EU and one quarter from the Albanian Government.

GIZ is supporting the reform efforts on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ). Its local partner is the Albanian Ministry of Agriculture, Rural Development and Water Resources. The activities financed with EU-IPA-2011 funding of 10 million euros are part of the Economic Development and Employment Promotion Programme, which GIZ is implementing for BMZ. GIZ provides training with a practical basis to prepare the Albanian authorities to award EU funds. In their daily operations the employees work with real-life cases to familiarise themselves with European regulations and procedures. A specially developed computer program ensures the necessary transparency when the funds are awarded.

The consulting firm PEM GmbH supports the implementation of the project.

Results
By mid-2014, farmers and food-processing businesses had submitted 255 applications for grants. Of these, 88 were successful and received funds totalling 5.5 million euros, for example for modern irrigation systems, construction measures in connection with animal welfare, or new machinery. Applications must satisfy the formal requirements in order to be successful. Only enterprises that operate officially are eligible to apply. This enhances their competitiveness vis-à-vis the many informal businesses, which do not receive any grants.

The project brings Albania a step forward as it prepares for EU accession with the aim of achieving good administrative governance. The country is modernising and reforming its agriculture, which is an important sector of the economy. Initial success is already verifiable: the success rate of applications eligible for approval increases with each call for applications under the grant scheme.

Albania. Local check, IPARD-like grant. Growing apples in Devoll, Korça. © GIZ