Three essays on agricultural policy in Kosovo

The agricultural sector in Kosovo is heavily subsidized. The government of Kosovo has been increasing its budget for the agricultural sector on an annual basis. Following this increase, in 2009, the Ministry of Agriculture introduced for the first-time a Direct Payments (DP) program in the country after first direct payment schemes for heifers and for wheat harvesting fuel was initiated a year earlier. In 2016, the Government allocated over €26 million to the Ministry of Agriculture to implement this program.

Besides direct payments, a significant amount of budget goes to the extension services. However, these public services for farmers have been inefficient to address farmer’s needs due to their low efficiency, an “ad-hoc” extension service predominantly oriented towards trainings, operating with distracted public advisors with only general agricultural education, limited use of information and communication technologies (ICT), rare field visits, and shortages in staff members.

Although huge sums have been allocated to implement these two programs, to date there has not been any scientific evaluation of the actual impact of these schemes. Hence, the overall objective of this research is to evaluate the current agricultural policy in Kosovo and recommend possible paths to move forward. Specifically, the first aim is to evaluate the effects of Direct Payments Program on different farm outcomes, the second aim is to analyze how farmers make use of and spend direct payments, and lastly, the third aim is to examine farmers’ preferences for specific attributes within the extension services, and their willingness to trade off direct payments with an effective extension system.

For the first objective, this study will use FADN panel data, for the second, it will use in depth qualitative interviews with a sample of beneficiary and non-beneficiary farmers, while for the third objective, a Discrete Choice Experiment (DCE) has been conducted in the summer of 2018 with 350 farmers across all the seven regions of Kosovo.