Kosovo Strategy Report Full Deliver Able

Final Deliverable
Kosovo Agricultural Opportunities Strategy
Pristina, Kosovo
February 10, 2010
DISCLAIMER
The author’s views expressed in this publication do not necessarily reflect
the views of the United States Agency for International Development or the
United States Government
0
Table of Contents
Overview of Deliverable…........................................................................................2
Baseline Analysis of Agriculture Sector……………………………..…………………..7

– Quantitative Baseline of Kosovo’s Agriculture Sector……...……………………8
– Overview of Constraints and Opportunities……..………………………………40
– International Best Practices Assessment………..…………………………….102
Recommendations to Improve Kosovo’s Agriculture Sector…......………………...142

– Overview…………………………………………......……………………………143
– Recommended Diversified Crop Mix for Kosovo…......………………………144
– Initiatives & Action Plan for Implementation………….....…………………….210
– Reaching Kosovo’s Overall Potential………………………….……………….268
1
Table of Contents
Overview of Deliverable
Baseline Analysis of Agriculture Sector
Recommendations to Improve Kosovo’s Agriculture Sector
2
The objective of this document is to present details of the
Agricultural Opportunities Strategy, including findings from the
analysis and recommendations for Kosovo’s agriculture sector
Document Objectives
Over the course of nine weeks, the Booz Allen team, including an agronomist, analyzed in detail Kosovo’s
agriculture sector. The team developed findings along three main areas, including a quantitative baseline of
Kosovo’s agriculture sector, current constraints facing the sector and an assessment of best practices in
agriculture around the world
Based on the analysis, the team developed recommendations in three main areas including: 1) a crop
diversification initiative, including strategic crops of focus for Kosovo; 2) initiatives to address constraints in
Kosovo’s agriculture sector; and 3) impact analysis showing the impact of the program on agricultural
production and employment
The team has briefed the US Ambassador to Kosovo, members of the USAID Mission, “EU Plus” donor
group and representatives of the Government of Kosovo on the findings of the analysis
3
The Agricultural Opportunities Strategy (AgStrat) comprised five
steps that spanned a total of nine weeks
Kosovo AgStrat Project Approach
Overall Project Duration: 9 weeks
2
Complete
Complete
Quantitative
Quantitative
Baseline
Baseline and
and
Constraints Analysis
Constraints Analysis
Examine Kosovo’s export
1 performance according to 4 5
supply and demand Develop
Develop Action
Action Plan
Plan
Gauge
Gauge Stakeholder
Stakeholder Study local and global trends Recommend
Recommend CropCrop &
& Prioritize
Prioritize
Aspirations
Aspirations &
& Examine current constraints Diversification
Diversification for
for Initiatives
Initiatives for
for
Confirm Objectives
Confirm Objectives and opportunities Kosovo
Kosovo Implementation
Implementation
Aggregate and review all Complete a study of the Recommend the actions
GoK and USAID Kosovo 3 natural environment in and initiatives that will be
reports, studies, Kosovo to determine what required to help Kosovo
documentation Conduct
Conduct can be grown in the reach its agricultural
Reconfirm stakeholder International
International Best
Best country potential
objectives, guiding Practice
Practice Assessment
Assessment Prioritize crops that can be Prioritize actions based on
principles and priorities grown based on economic their impact in terms of
Test initial hypotheses Examine successful attractiveness, economic value of production and
concerning agricultural initiatives of other countries to feasibility and production employment
strategy improve agricultural and marketing chain Recommend timeframes,
Synthesize implications on performance considerations sequencing and key
objectives and guiding Undertake analysis of the Recommend a short list of counterpart participation
principles competition landscape high-value crops that
should be introduced
1 week 3 weeks 2.5 weeks 2.5 weeks
Source : BAH Analysis
4
We interviewed a number stakeholders, reviewed studies,
documents and reports…
List of Interviewees & Documents Reviewed
Interviewees
Interviewees Reports
Reports Examined
Examined
HE
HE Idriz
Idriz Vehapi,
Vehapi, Ministry
Ministry of of Agriculture,
Agriculture, Minister
Minister of
of Agriculture
Agriculture Agriculture
Agriculture Household
Household Survey,Survey, 2007,
2007, Statistics
Statistics Office
Office of
of Kosovo
Kosovo
Rifat
Rifat Blaku,
Blaku, Ministry
Ministry ofof Public
Public Administration,
Administration, Vice
Vice Minister
Minister Agriculture Land Utilization Project Report, 2008, GFA Consulting Group
Agriculture Land Utilization Project Report, 2008, GFA Consulting Group
Hakile
Hakile Xhaferi,
Xhaferi, Mediha
Mediha Halimi,
Halimi, Fetie
Fetie Muriqi,
Muriqi, Xhevat
Xhevat Lushi:
Lushi: Ministry
Ministry of
of GmbH
GmbH // BVVG
BVVG // DFFEDFFE // European
European Union
Union
Agriculture, Forestry and Rural Development
Agriculture, Forestry and Rural Development The
The Kosovo
Kosovo Greenbook
Greenbook –– AA Strategy
Strategy for
for Sustainable
Sustainable Agricultural
Agricultural and
and
Isuf
Isuf Cikaqi,
Cikaqi, Ministry
Ministry ofof Agriculture,
Agriculture, Director
Director ofof Plant
Plant Protection
Protection Rural Development in Kosovo,
Rural Development in Kosovo, 2003 2003
Department
Department
Syle
Syle Tahirsylaj,
Tahirsylaj, Ministry
Ministry ofof Environment
Environment and and Spatial
Spatial Planning,
Planning, Director
Director Study
Study on
on the
the State
State of of Agriculture
Agriculture in
in Kosovo,
Kosovo, 2006,
2006, ARCOTRASS
ARCOTRASS
Consortium/European
Consortium/European Commission Commission
Dr.
Dr. Shukri
Shukri Fetahu,
Fetahu, University
University of of Pristina,
Pristina, Faculty
Faculty
Dr.
Dr. Skender
Skender Muji,
Muji, University
University of of Pristina,
Pristina, Dean
Dean Kosovo
Kosovo Poverty
Poverty Assessment,
Assessment, 2007, 2007, World
World Bank
Bank
Flamur
Flamur Kadriu,
Kadriu, Food
Food andand Veterinary
Veterinary Agency,
Agency, Chief
Chief ofof Veterinary
Veterinary Public
Public Report on Potential of Greenhouse Industry in
Report on Potential of Greenhouse Industry in Kosovo,
Kosovo, 2008,
2008,
Health
Health Sector
Sector Intercooperation
Intercooperation
Bujar
Bujar Haxhidauti,
Haxhidauti, Customs,
Customs, Manager
Manager of of Performance
Performance and and Planning
Planning Horticulture
Horticulture Strategy
Strategy of of Kosovo,
Kosovo, 2009-2013
2009-2013
Department
Department Output
Output Price
Price Index
Index andand Prices
Prices in
in Agriculture,
Agriculture, 2008,
2008, Statistics
Statistics Office
Office of
of
Haki
Haki Kurti,
Kurti, Statistical
Statistical Office
Office of
of Kosovo,
Kosovo, Chief
Chief of
of Agricultural
Agricultural and
and Kosovo
Kosovo
Environmental
Environmental Division
Division
The
The Rapid
Rapid Rise
Rise of of Supermarkets
Supermarkets in in Central
Central and
and Eastern
Eastern Europe:
Europe:
Ismet
Ismet Kastrati,
Kastrati, Peja
Peja Institute,
Institute, Director
Director ofof Agriculture
Agriculture Implications
Implications for the Agrifood Sector and Rural Development, 2004
for the Agrifood Sector and Rural Development, 2004
Bardh
Bardh Begolli,
Begolli, Peja
Peja Institute,
Institute, Head
Head of of Laboratory
Laboratory
Agran
Agran Halimi,
Halimi, AGROVET
AGROVET Laboratory,
Laboratory, Master
Master ofof Soil
Soil Science
Science Audit
Audit of
of the
the Kosovo
Kosovo FruitFruit && Vegetable
Vegetable Sector
Sector (KPEP),
(KPEP), 2009
2009
Deme Abazi, Iber-Lepenc,
Deme Abazi, Iber-Lepenc, Director Director Horticultural
Horticultural strategy
strategy of of Kosovo
Kosovo 2009
2009 –– 2013
2013
Arberor
Arberor Prekazi,
Prekazi, Iber-Lepenc,
Iber-Lepenc, Director
Director Horticultural Promotion in Kosovo,
Horticultural Promotion in Kosovo, 2008 2008
Avni Kastrati, Statistical Sector
Avni Kastrati, Statistical Sector ofof Kosovo,
Kosovo, Director
Director Profile
Profile of
of the
the Macedonian
Macedonian Fresh Fresh Vegetable
Vegetable Value
Value Chain,
Chain, 2008
2008
Maliq
Maliq Gjyshinca,
Gjyshinca, Intereuropa
Intereuropa Profile
Profile of
of the
the Macedonian
Macedonian Table Table Grapes
Grapes Industry,
Industry, 2008
2008
Shefqet
Shefqet Kelmendi,
Kelmendi, Kelmendi
Kelmendi Company
Company Vegetable
Vegetable Value
Value Chain
Chain Assessment,
Assessment, 2008 2008
Artan
Artan Osmani,
Osmani, EU EU Commission
Commission
Anton
Anton Selitaj,
Selitaj, UNDP,
UNDP, Associate
Associate Training Interns in Milk Quality Field
Training Interns in Milk Quality Field Work
Work (KPEP),
(KPEP), 2009
2009
Luan
Luan Hoti,
Hoti, Intercooperation,
Intercooperation, Marketing
Marketing Officer
Officer Audit
Audit of
of the
the Kosovo
Kosovo FruitFruit && Vegetable
Vegetable Sector,
Sector, 2008
2008
Betim Emra - Manager of Cargo Departament,
Betim Emra - Manager of Cargo Departament, Pristina
Pristina Airport
Airport Business
Business Consulting
Consulting in in AA Growing
Growing Kosovo
Kosovo Workshop
Workshop Materials,
Materials, 2009
2009
Arlinda Arenliu, Pestova
Arlinda Arenliu, Pestova Responding to Subsidized Dairy Imports Into Kosovo
Responding to Subsidized Dairy Imports Into Kosovo (KPEP), 2009 (KPEP), 2009
Habil
Habil Zeqiui,
Zeqiui, Ministry
Ministry ofof Agriculture
Agriculture Standards
Standards of of Identity
Identity for
for Milk
Milk and
and Milk
Milk Products,
Products, 2009
2009
Taulant
Taulant Koshi,
Koshi, Eurofood
Eurofood Vegco
Vegco Business
Business Model:Model: AA Vegetable
Vegetable Packing,
Packing, Cooling
Cooling && Sales
Sales
Feim,
Feim, Rexhepi,
Rexhepi, Perdrini
Perdrini Enterprise,
Enterprise, 2009
2009
Selmon
Selmon Shala,
Shala, Agroqyshku
Agroqyshku
5
… and compiled a comprehensive agriculture data repository
based on cross-reference from multiple sources to ensure data
consistency
Data Sources and Guiding Principles
Data
Data Source
Source Information
Information Extracted
Extracted
Production,
Production, Yield,
Yield, Area
Area Harvested
Harvested
FAOSTAT
FAOSTAT Export
Export // Import
Import Values
Values and
and Volumes
Volumes
Consumption,
Consumption, Feed,
Feed, Seed
Seed and
and Other
Other uses
uses Core
Core Guiding
Guiding Principles
Principles
UN
UN Comtrade
Comtrade // ITC Breakdown
ITC Breakdown of of Exported/
Exported/ Imported
Imported Value
Value byby Destination/
Destination/
Origin
Origin Rely
Rely as
as much
much asas possible
possible on
on one
one
data source to provide
data source to provide
WDI
WDI Population
Population Data
Data consistent
consistent andand comparable
comparable
Int’l
Int’l Fertilizer
Fertilizer Fertilizer
Fertilizer Consumption
Consumption export
export figures
figures
Industry
Industry Assoc.
Assoc.
Statistics
Statistics Office
Office of Production,
of Production, Yield,
Yield, Area
Area Harvested,
Harvested, Fertilizer
Fertilizer Use,
Use, Irrigation,
Irrigation,
Cross-check
Cross-check trade,
trade, price,
price, and
and
Kosovo
Kosovo Local
Local Market
Market Prices
Prices with alternative
production data with alternative
production data
data
data sources
sources
Ministry
Ministry of
of Production,
Production, Yield,
Yield, Exports/Imports
Exports/Imports
Agriculture,
Agriculture, GIS
GIS Irrigation
Irrigation Maps
Maps Prefer
Prefer mirrored
mirrored data sets over
data sets over
Forestry,
Forestry, Rural
Rural single-source
single-source
Development
Development
Customs
Customs Office Imported
of
Office of Imported and
and Exported
Exported Volumes
Volumes and
and Values
Values overall
overall as
as well
well Complement
Complement missing
missing information
information
Kosovo
Kosovo as for select HS codes
as for select HS codes with
with expert opinion and
expert opinion and
interpolation
interpolation
Peja
Peja Institute
Institute Soil
Soil types
types and
and Analysis
Analysis
Ministry
Ministry of
of Temperature
Temperature Data
Data and
and Rainfall
Rainfall Data
Data for
for 77 Meteorological
Meteorological
Environment Stations
Stations
Environment & &
Spatial
Spatial Planning
Planning

6
Table of Contents

– Quantitative Baseline of Kosovo’s Agriculture Sector
– Overview of Constraints and Opportunities
– International Best Practices Assessment
7
Quantitative Baseline of Kosovo’s Agriculture Sector
Market Definition and Methodology
Kosovo Agricultural Commodities Performance
Crop-specific Performance and Market Assessment
8
We started our analysis by looking at the “universe” of agricultural

commodities, which fall into twenty-four product chapters
Overview of Agricultural Commodities
HS Chapter Name HS Chapter Name

01 Live Animals 13 Lac, Gums, Resins, Etc.
02 Meat & Edible Meat Offal 14 Vegetable Plaiting Materials
03 Fish & Crustaceans 15 Animal or Vegetable Fats, Oils & Waxes
04 Dairy, Eggs, Honey, & Ed. Products 16 Ed. Prep. Of Meat, Fish, Crustaceans,
Etc.
05 Products of Animal Origin
17 Sugars & Sugar Confectionery
06 Live Trees & Other Plants
18 Cocoa & Cocoa Preparations
07 Edible Vegetables
19 Preps. Of Cereals, Flour, Starch, Milk
08 Ed. Fruits & Nuts, Peel of Citrus/Melons 20 Preps of Vegs, Fruits, Nuts, Etc.
09 Coffee, Tea, Mate & Spices 21 Misc. Edible Preparations
10 Cereals 22 Beverages, Spirits & Vinegar
11 Milling Industry Products 23 Residues from Food Industries, Animal
Feed
12 Oil Seeds/Misc. Grains/Med.
Plants/Straw 24 Tobacco & Manuf. Tobacco Substitutes
Note : HS stands for the Harmonized System developed by the World Customs Organization for traded products
9
Over 61% of the total value for agriculture commodities exported

by Kosovo in 2008 came from primary crops and related processed
products
Composition of Primary Crops and Processed Products in Total Export Basket
Total Agricultural Export Value Primary Crops and Related Processed Product
Total Agricultural Export Value Export
Primary Value
Crops and Related Processed Product Export Value
(2008)
(2008) (2008) (2008)
Prep of
Cereal,
Other Starch, Flour
3% 1%
Oil crops
Horticulture 2%
27% Milling Prep of
Cereals
Coffee, Tea, Products vegetable,
1%
Spices 24% fruit, nuts
1% 26%
Beverages
Cereal Coffee, Tea,
29%
1% Spices
Processed 2%
Veg/Fruit Oil Seeds, Vegetables,
16% Misc. Grains Fruits, Nuts Other plants
Processed 3% 11% 32%
Cereals,
Animals and Grain
Animal 15%
Products
6%
Note: Other includes the following HS chapters: 23,21,17,15,3,18,24

Note:HS
Note: Other includes
codes the following
for the following crops HS
are:chapters:
Vegetables23,21,17,15,3,18,24
and Other Plants (HS 6,7); Fruits, Nuts (HS 8); Oil Seeds, Misc. Grains (HS 12); Coffee, Tea, Spices (HS 9); Cereals(HS 10); Milling Products
Note:
(HS HS
11); codes
Prep for theStarch,
of Cereal, following
Flourcrops are:Prep
(HS 19); Vegetables and fruit,
of vegetable, Other Plants
nuts (HS 6,7); Fruits, Nuts (HS 8); Oil Seeds, Misc. Grains (HS 12); Coffee, Tea, Spices (HS 9); Cereals
(HS 20)
Source: Customs
(HSOffice of Kosovo;
10); Milling BAH Analysis
Products (HS 11); Prep of Cereal, Starch, Flour (HS 19); Prep of vegetable, fruit, nuts (HS 20)
10
We will focus our baseline analysis on these primary crops

including horticulture, cereals, oil crops, and spices/stimulants as
well as processed fruits, vegetables, and cereals
Primary Agricultural Commodities and Related Processed Products
1 Horticulture
Strawberries,
Strawberries, oranges,
oranges, Onions,
Onions, garlic,
garlic, lettuce,
lettuce, cauliflowers,
cauliflowers,
Fruits
Fruits tangerines,
tangerines, citrus
citrus fruit,
fruit, bananas,
bananas, Vegetables
Vegetables tomatoes,
tomatoes, cabbages,
cabbages, cucumbers,
cucumbers,
(HS
(HS 08)
08) dates, guavas, mangoes,
dates, guavas, mangoes, (HS
(HS 07)
07) artichokes,
artichokes, spinach,
spinach, green
green pepper
pepper
avocados,
avocados, kiwis,
kiwis, grapes,
grapes, etc.
etc. etc.
etc.
Beans,
Beans, cassava,
cassava, chick
chick peas,
peas, Roots
Roots &
& Potatoes,
Potatoes, sweet
sweet potatoes,
potatoes, cassava,
cassava,
Pulses
Pulses lentils,
lentils, broad
broad beans,
beans, lupins,
lupins, yams,
yams, etc.
etc.
Tubers
Tubers
(HS
(HS 07)
07) vetches
vetches
(HS
(HS 06*)
06*)
2 5 Processed
Rice,
Rice, barley,
barley, oats,
oats, rye,
rye, millet
millet and
and Processed Jams,
Jams, juice,
juice, frozen
frozen products
products
Cereals
Cereals sorghum,
sorghum, maize
maize and
and wheat
wheat Fruits
Fruits &
&
(HS
(HS 10)
10) Vegetables
Vegetables
(HS
(HS 20)
20)
3 6 Processed
Cottonseed,
Cottonseed, groundnuts,
groundnuts, Processed Cereal
Cereal flour
flour and
and other
other milling
milling
Oil
Oil Crops
Crops sunflower,
sunflower, sunflower
sunflower seed,
seed, Cereals
Cereals && products, bread, pasta
products, bread, pasta
(HS
(HS 12)
12) sesame
sesame seed,
seed, almonds,
almonds, etc.
etc. Grains
Grains
(HS
(HS 11,
11, 19)
19)
4
Anise,
Anise, saffron,
saffron, basil,
basil, coriander,
coriander,
Spices,
Spices, fennel,
fennel, cinnamon,
cinnamon, pepper,
pepper, cut
cut
Stimulants
Stimulants flowers and bulbs, coffee, tea,
flowers and bulbs, coffee, tea,
(HS
(HS 09)
09) etc.
etc.
Note: (*)HS Code 6 also includes cut flowers

Source: FAOSTAT; UN Comtrade; BAH Analysis
11
The baseline will analyze different aspects of production,

consumption, imports, and exports to better understand Kosovo’s
current agriculture performance
Kosovo Baseline Analysis Components
Exports
Exports = Production
Production - Consumption
Consumption + Imports
Imports
– Kosovo export value by – Production volume from – Consumption volume from – Import volume from
crop category from 2004- 2005-2008 2005-2008 2005 – 2008
2008 – Analyze production of top – Analyze consumption of – Analyze imports of top 5
– Kosovo exports to 5 crops top 5 crops crops
destination markets – Production – Main products – Main imports
– Export market analysis for concentration consumed – Import growth
top crops – Production growth – Consumption
– Kosovo export – Production Value = Total growth
performance compared to Agriculture Land * %
benchmark countries Cultivated * Average Crop
– % exports to Yield * Unit Value
production
– Exports to area
harvested

12
13
Kosovo’s exports have grown from 2.5M to over 11M Euros over
the past five years with horticulture making up the largest share
Breakdown of Kosovo Agricultural Commodities Exports Value by Commodity Type
(2004–2008, in Million Euros)
CAGR
(2004-2008)
11.9M
11.2M Total
0.5M Oil Crops 97.5%
3%
2% Spices and Stimulants -1.0%
4.0M 2.9M 26% Cereals (includes processed cereals) 200.2%
6.6M
2.9M
0.7M 3.1M
26% Processed Fruits and Vegetables 68.2%
4.0M 2.2M
2.5M
1.2M 4.9M
0.4M 4.3M
3.1 M 43% Horticulture 26.9%
1.9M 2.1M
2004 2005 2006 2007 2008
Note: The HS chapters used to determine commodity exports include 6-12, 19, 20
Source: Customs Office of Kosovo; BAH Analysis
14
Kosovo has experienced a 45.5% growth in agriculture exports,

which is higher than its competitors because of its entry into new
markets
Growth rate is higher because
Kosovo is entering new markets Agriculture Commodities Export Growth
while other countries have already (2004-2008, in Million Euros)
established export markets
Kosovo Macedonia Serbia Croatia Italy Spain
11.2M 142M 622.9M 205.1M 12,221.7M 12,170M
8,773.9M
388.8M
65.9M 93.5M
10,803M
2.5M
2004 2008 2004 2008 2005 2008 2004 2008 2004 2008 2004 2008
CAGR 45.5% 21.2% 17%* 21.7% 8.6% 3%
Note: CAGR stands for compound annual growth rate calculated by taking the nth root of the total percentage growth rate, where n is the number of years in the period
Note: (*) Serbia’s CAGR is from 2005-2008
Note: The HS codes used to determine commodities exports include 6-12, 19,20
Source: Customs Office of Kosovo, TradeMap; BAH Analysis 15
Albania and Macedonia account for over 50% of Kosovo’s

agriculture commodities destination markets, with the EU also
representing a large portion of exports
Relative Share of Destination Markets* for Kosovo Agricultural Commodities Exports
(2004-2008, in Million Euros)
CAGR Exports Main
Total (2004-2008) Trade Commodity
11.7M
11.2M 3% Other*** 88.4%
0.8M
0.5M 6% Montenegro 145.5% Horticulture
0.7M
0.8M
1.2M 11% Bosnia and 220.6%
Herzegovina Horticulture
1.4M
1.4M 13% EU** 12.9% Horticulture
2.4M Processed Fruits and

6.4M 1.5M 13% Serbia 38.7% Vegetables, Horticulture
0.4M
1.1M Processed Fruits
2.3M 2.4M 21% Macedonia 113.8%
and Vegetables
3.6M 1.9M
1.4M 3.6M
0.6M 32% Albania 107.8% Horticulture
1.3M 3.5M
0.5M 2.1M
0.9M
0.8M
2004 2005 2006 2007 2008
Note: * In 2004, Serbia and Montenegro were recorded as one country, whereas for the other years, the are recorded separately; **EU includes: Austria, Bulgaria, Germany, Italy, Sweden,
Switzerland, UK; ***“Other” includes: Australia, Algeria, Jamaica, Turkey, Croatia, Slovenia, Romania
Note: CAGR for Serbia and Montenegro is calculated from 2005-2008
Source: Customs Office of Kosovo; BAH Analysis
16
Export of Kosovo’s five major agricultural commodities are

predominantly concentrated in a small number of countries
Market Distribution of Selected Agricultural Commodities in Kosovo
(2008)
HS070960 - Peppers HS071420/HS070190 HS081040 - HS080240 - Chestnuts HS070959-

- Potatoes Blueberries Mushrooms
Other Montenegro Other

2.7% 2.9% 0.1% 0.8% 3.0%
3.7% 3.8% Other
15.6% 9.7% Other 10.2% 9.3% Italy 7.6% 6.0% Slovenia
15.8% 14.3% Macedonia 13.0%
17.0% Montenegro
15.5% 27.7% Montenegro 27.3% Italy

10.9%
20.7% Montenegro 40.5% 43.4%
52.1% Macedonia
83.3% 79.2%
69.0% 62.6% 70.5% 47 63.7% Serbia
Serbia 62.1% Albania
Serbia
49.3% 45.8%
27 37.8% Serbia
46
31
% Share % Volume % Share % Volume % Share % Volume % Share % Volume % Share % Volume
Note: (*)Exported value for primary crops is determined by looking at HS chapters 6-10,12
Note: Combined HS071420 (sweet potatoes) and HS 070190 (other potatoes) since assumed potatoes identified as sweet potatoes were misclassified given the significant volume
Note: Numbers may not add to 100% due to rounding
Source: Customs Office of Kosovo
17
The top five primary crops represented a larger share of exported

value compared to benchmarks
Top 5 Exports Compared to Total Agriculture Exports
(2008, in Million Euros)
5.5M 8.6M 420.2M 6055.0M 9,661.4M 105.3M Country Top 5 Crop Categories
Kosovo Peppers, potatoes, blueberries,

chestnuts, mushrooms
Macedonia Fresh mushrooms, dried
mushrooms/truffles, cherries,
poppy seeds, asparagus
Serbia Raspberries/mulberries/
blackberries/loganberries,
94.9% maize, maize seed, fruits/nuts
72.1% Italy Coffee, grapes, apples, rice, live

65.1% plants
60.5%
66.5% 94.9% 65.1%42.3% 42.3% 40.5% Spain Mandarins / clementines,
40.5% 60.5% tomatoes, oranges, peppers,
peaches
Croatia Maize, mandarins/ clementines,
sunflower seeds, maize seed,
rape/colza seeds
Kosovo Macedonia Serbia Italy Spain Croatia
Top 5 Exported Commodities Remaining Exported Commodities
Note: Exported value for primary crops is determined by looking at HS chapters 6-10,12
Source: Customs Office of Kosovo, TradeMap
18
Kosovo’s imports have grown from 48M to over 155M Euros over
the past five years with processed cereals making up the largest
share
Breakdown of Kosovo Agricultural Commodities Import Value by Commodity Type
(2004–2008, in Millions, Euro)
CAGR
Total (2004-2008)
155.8M
5.2M 3.3% Oil Crops 59.7%
13.3M 8.5% Spices & Stimulants 34.9%
129.3M Processed Fruits &
16.6M 10.6% 28.4%
Vegetables
9.8M
110.0M
15.8M 22.2% Horticulture
8.6M 34.6M 30.2%
91.1M
11.9M
7.7M 28.7M
11.5M 27.4M
35.6M 22.9% Cereals 54.9%
26.2M 26.0M
48.6M
22.7M
6.1M 9.8M
12.1M
6.2M 50.6M 32.5% Processed Cereals 26.9%
45.2M
33.2M 36.9 M
19.5M
2004 2005 2006 2007 2008
19
The agriculture commodities imported from the top ten importing

countries account for over 73% of Kosovo’s total imported value
Relative Share of Importers of Agricultural Commodities into Kosovo
(2004-2008, in Millions, Euro) Total CAGR
472.6M (2004-2008)
125.8M 26.6% Other 13.4%

384.1M
319.2M 17.4M 3.7% Germany 36.7%

100.3M 18.8M 4.0% Austria 20.4%
285.5M 19.3M 4.1% Slovenia 28.3%
81.0M 14.0M 21.2M 4.5% Croatia 40.0%
16.1M 22.4M 4.7% Bulgaria 47.2%
10.4M 17.9M
112.7M 17.5M
27.8M 5.9% Hungary 43.2%
14.1M
14.5M 17.1M 31.0M 6.6% Turkey 29.5%
11.8M
13.4M 26.2M
157.4M 12.6M 42.4M 9.0% Brazil 33.1%
25.4M 29.4M
18.0M
76.2M 45.0M 12.1% Macedonia 32.1%
57.0M
25.0M 40.8M
16.0M
35.9M 89.9M 89.3M 18.9% Serbia 46.9%
77.4M
13.5M
18.7M 28.2M
2004 2005 2006 2007 2008
Note: 101 countries imported agriculture commodities into Kosovo in 2008; CAGR for Serbia is calculated from 2005-2008; The HS chapters used to determine commodity exports include 6-12,
19, 20; Total numbers may not add to sum of country totals due to rounding
Source: Customs Office of Kosovo 20
For a representative basket of crops*, the rise in export value from

475K to 3,154K Euros was primarily driven by growth in price…
Component Marginal Analysis of Kosovo Agricultural Exports Value
(2005- 2008, in Thousand Euros)
3,154.9K
The large increase in price is most

likely driven by the increase in price
of a few commodities, including
wheat, rye and barley +336%
Cumulative
Effect
563 %
+16.3K +227%
475.7K
Exported Value 2005 Increase in Exported Volume Increase in Price Exported Value 2008
Note: To determine respective impact of each component, the following mathematical approximation was used: EV / EV = V/V + Price/ Price; Since farm gate prices were
not available, we calculated price from the change in export value and volume
Note: Price increase was impacted by price spikes over 2006-2008 for products like: wheat (+125%),rye (+98%), and barley (64%) (TradeMap World Export Prices)
Note: (*)A representative basket of products with production, import, and export volume were included for this calculation: wheat, rye, barley, oats, maize, potato starch/potatoes, tomatoes, eggplants,
pepper, courgettes, mushroom, cucumbers, melons, cabbages, spinach, leeks, onions, garlic, beans, apples, pears, plums, apricots, peaches, cherries, chestnuts, strawberries, raspberries, blackberries
21
…while increased export volumes were largely the result of an

increase in production, coupled with a decrease in consumption
Kosovo Agricultural Commodities Trade Balance
(2005–2008, in Thousand Tons)
147.5
7.2
826.8
Year 686.5
2005
Production - Consumption, Feed, + Imports = Exports
Seed, Other Use
+41.3 (6%) -39.2 (-5%) -64.2 (-44%) +16.3 (227%)
83.3 23.5
787.6
727.8
2008
Production - Consumption, Feed, + Imports = Exports

Seed, Other Use
Note: A representative basket of products were included for this calculation: wheat, rye, barley, oats, maize, potato starch/potatoes, tomatoes, eggplants, pepper, courgettes, mushroom,
cucumbers, melons, cabbages, spinach, leeks, onions, garlic, beans, apples, pears, plums, apricots, peaches, cherries, chestnuts, strawberries, raspberries, blackberries
Note: Consumption volume data not available. Consumption, feed, seed, and other use numbers were calculated by Production + Imports – Exports = Consumption
Source: Customs Office of Kosovo, Statistics Office of Kosovo (2008 data from SoK is preliminary and was being finalized at the time of the study )
22
Production increase was primarily driven by growth in wheat,

potato and watermelon crops
Change in Agriculture Production Volumes for the Top Five
Producer Crops (2005-2008, in Tons)
350,000
300,000 % of Total
Production
CAGR
Volume
250,000 (2005-08)
(2008)
Wheat 40.3% 2.3%

200,000
Potato 14.3% 6%
150,000
Maize 17.4% -3.7%
100,000
Pepper 7% -2.3%
50,000 Watermelon 3.4% 22.5%
0
2005 2006 2007 2008
Wheat Potato Maize Pepper Watermelon
Note: The top 5 crops of the representative basket of products were those with the largest production in tons in 2008; They represented over 82% of the total production volume in tons
Note: The representative basket of products included: wheat, rye, barley, oats, maize, potato starch/potatoes, tomatoes, eggplants, pepper, courgettes, mushroom, cucumbers, melons, cabbages, spinach,
leeks, onions, garlic, beans, apples, pears, plums, apricots, peaches, cherries, chestnuts, strawberries, raspberries, blackberries
Source: Statistics Office of Kosovo (2008 data from SoK is preliminary and was being finalized at the time of the study )
23
Across the board, volumes for the most imported crops (tomatoes,
apples, maize, melon and peppers) have decreased
Change in Agriculture Import Volumes for the Top Five Imported
Crops (2005-2008, in Tons)
35,000
30,000 % of Total
Import
CAGR
Volume
25,000 (2005-08)
(2008)
Tomato 14.4% -8.6%

20,000
Apple 11.9% -5.5%
15,000
Maize 11.6% -24.9%
10,000
Melon 22.2% -7.1%
5,000 Pepper 8.2% -2.5%
0
2005 2006 2007 2008
Tomato Apples Maize Melons Pepper
Note: The top 5 imported crops of the representative basket were those with the largest imported volume in tons in 2008; They represented 68.4% of the total tons imported in 2008
Source: Statistics Office of Kosovo, Customs Office of Kosovo
24
Export volume increased for all top five exported crops, resulting
in a decrease in the quantity of domestic consumption, feed, and
seed crops
Change in Agriculture Export Volumes for the Top Five Exporter
Crops (2005-2008, in Tons)
2,500
18,000
% of Total
2,000 Export
CAGR
Volume
12,000 (2008)
(2005-08)
1,500 Potato 80.1% 47.0%
6,000 Pepper 8.8% 185.3%
1,000
Onion/Shallot 3.1% 28.4%
Tomato 2.1% 267.2%

500
Chestnut 2.0% 187.5%
0
2005 2006 2007 2008
Potato Pepper Onions/Shallots Tomatoes Chestnuts

Note: The top 5 exported crops of the representative basket were those with the largest exported volume in tons in 2008 for the smaller representative basket of crops; They represented 96% of the total
tons exported in 2008 for the smaller basket of crops
Note: Consumption volume data is not available for this basket of crops; Potato (HS070190,071420) uses the 6000-18000 scale. All other crops use the 0-1000 scale
Source: Statistics Office of Kosovo, Customs Office of Kosovo
25
Kosovo’s export performance remains well below its potential

compared to benchmarks
11 Agricultural Commodities Export Value per Ton Produced* 22 Agriculture Commodities Export Share of GDP
(2007) (2007)
Spain 169
Macedonia 2.6%
Italy 163
Serbia 2.2%
Macedonia 70 Spain 1.7%
Serbia 44 Italy 0.9%
Croatia 41 Croatia 0.6%
Kosovo 15 Kosovo 0.4%
33 Agricultural Commodities Export Value per Area 44 Agricultural Commodities Export per Capita
Harvested of Agricultural Land (2007, Euro per Area Harvested) (2007, Euro per Capita)
Italy 1199 Spain 272
Spain 737 Italy 184

Macedonia 348
Macedonia 67
Croatia 183
Serbia 66
Serbia 148
Croatia 49
Kosovo 25
Kosovo 6
Note: The HS chapters used to determine commodities exports include 6-12, 19, 20
Note: (*) The following categories in FAOSTAT were used to estimate total production per country: cereals, coarse grain, vegetables and melons, fruit excluding melons, roots and tubers, pulses, and oil
crops
Source: WDI; FAOSTAT; Population Reference Bureau; TradeMap
26
Agricultural production value is driven by total arable land, the

portion of arable land cultivated, crop yield and value
Agriculture Commodities Production Drivers
Total
Total Arable
Arable Available land for agricultural use (excludes urban and
Land
Land rural areas, desert, natural parks, etc.)
Portion of arable land cultivated

Percent
Percent of
of
Cultivated
Cultivated Land
Land
Production
Production
Value
Value Overall agriculture commodities harvested in ton per
Average
Average Crop
Crop hectare cultivated
Yield
Yield Short-growing seasons allow use of same physical
areas for multiple crop rotation
Price per ton (Euros/ton)

Unit
Unit Value
Value
Production Value = Agricultural Land X Land Cultivated X Average Crop Yield X Unit Value
(Euro) (Hectare) (%) (Ton/Hectare) (Euro/Ton)
Source: FAOSTAT
27
Kosovo Agricultural Commodities Performance (Total Arable Land)
Approximately 76% of total land in Kosovo is arable, of that only

85% is cultivated
Proportion of Arable Land and Cultivation in Kosovo
(2008)
Proportion of Arable Land in Kosovo by Hectares Total Arable Land Cultivated in Kosovo
(2008) (2008)
Vineyard
Orchards 0%
2%
Greenhouse
Meadow 0%
37%
Arable Land
76%
Arable Land
and Kitchen
Non Arable Gardens
Land 53%
24%
Total Cultivated Land Pasture Left Fallow

1% 7%
Total Uncultivated Land
Note: Assume all crops in 2008 are grown in orchards, vineyards, greenhouses, and arable land and kitchen categories with the following exceptions: assume 100% of hay volume (tons) is grown in meadow,
50% of mixed grass (tons) is grown in meadow, and 75% of trefoil (tons) is grown in meadow; Thus 83% of meadows is being cultivated for hay, mixed grass, and trefoil and 6.5% (37.2%-(37%*83%)) of
meadows is considered fallow
Non Arable Land includes forestry (20%) and houseyard (4%)
Source: Statistics Office of Kosovo (2008 data from SoK is preliminary and was being finalized at the time of the study) 28
Kosovo Agricultural Commodities Performance (Percent of Cultivated Land)
The primary use of cultivated land is to grow cereals, vegetables,

fodder crops, and fruits; non-use of land is attributed to low
profitability and lack of equipment
Crop Cultivation and Reasons for Fallow Land
(2008)
Crop Cultivation Breakdown by Volume Reasons for Leaving Land Fallow
(2008) (2006)
Fruits Low Economic

Profitability 30.5%
4%
Lack of
25.3%
Equipment
Lack of
14.7%
Fodder Manpower
Cereals
crops
40%
31% Lack of Security 12.1%
Other 8.4%
Lack of Inputs 5.1%

Vegetables
25%
Crop Rotation 2.6%
Mines 1.1%
Source: “Determinants of the Fallowing Decision in Kosovo”, Johannes Sauer, Sophia Davidova, Laure Latruffe; Statistics Office of Kosovo
29
Kosovo Agricultural Commodities Performance (Average Crop Yield)
Compared to similar benchmarks, Kosovo ranks low in agricultural

productivity although higher than some regional countries
Agricultural Productivity
(2007, Tons/Ha)
45.1 46.4
40.5
36.1 36.7
33.4
30.6 31.3
25.6
21.9
19 20
16.6
14.6
Italy
Republic
Slovenia
South Africa
Kenya
Albania
Slovakia
Bulgaria
Macedonia
Kosovo
Spain
Serbia
Croatia
Morocco
Czech
Note: In order to compare productivity across countries, measured overall productivity in cereals, fruit and vegetables commodities
Source: FAOSTAT, Statistics Office of Kosovo
30
Agriculture yields for select crops have increased since 2005, but
still rank lower than international benchmarks
Kosovo Yield (Ton per Hectare) Potato Yield Berries Yield*
(2007, Ton per Hectare) (2007, Ton per Hectare)
CAGR
4.7% Spain 28.2
Italy 9.6
23.3 23.1 Average
17.4 Italy 25.5
19.2 Yield Kosovo 9.2
Kosovo 19.2
2005 2006 2007 2008
Spain 5.0
Croatia 17.0
23 23 21 Macedonia Serbia 4.3
19.2 Potato 13.1
2005 2006 2007 2008 Serbia 9.1 Croatia 2.0
20.2 26.7 Cabbage Yield Pepper Yield**

8.4 9.2 Berries (2007, Ton per Hectare) (2007, Ton per Hectare)
2005 2006 2007 2008
Spain 32.7 Spain 48.3
24.4 27.1 24.9 Macedonia 26.6 Italy

22.8 18.9
Cabbage
Kosovo 24.9 Macedonia 16.8
2005 2006 2007 2008
Italy 19.4 Kosovo 16.1
21 23 16.1 21.7 Croatia 18.3
Peppers Croatia 10.6
Serbia 13.2 Serbia 7.8
2005 2006 2007 2008
Note: (*) Berries yield not available for Macedonia for 2007; berries include blackberries, strawberries and raspberries
(**)Peppers and chilies are grouped together for Croatia, Italy, Serbia, Spain and Macedonia, but not for Kosovo
Source: FAOSTAT, Statistics Office of Kosovo
31
Kosovo has potential to improve yields by increasing cropping

intensity and fertilizer consumption
Cropping Intensity (Area Harvested by Agricultural Land)*
(2005)
1.2 1.2 1.2
1.1
0.9
0.6
Macedonia Kosovo Croatia Serbia and Italy Spain

Macedonia
1809
Fertilizer Consumption**
(2006, Kg/Ha) 1380
151 176 254

32
Macedonia Kosovo Serbia Croatia Italy Spain

Note: (*) Area harvested refers to the area a crop is gathered, the area is counted as many times as the area is harvested; Agricultural lands (in hectares) refers to arable lands (under temporary crops,
meadows), under permanent crops (such as cocoa, coffee planted for several years) and lands under permanent pastures (mainly forage planted for 5 years). Data from 2007 was used to calculate area
harvested; however, the most recent data for agricultural land was only available from 2005. Agricultural land data combined Serbia and Montenegro whereas as area harvested data is only for Serbia.
(**)Fertilizers products cover nitrogenous, potash and phosphate (NPK) fertilizers; the metric measures the quantity of plants nutrients used per unit of agricultural land
Source: FAOSTAT for area harvested, WDI for agricultural land and International Fertilizer Industry Association data for fertilizer consumption
32
Kosovo Agricultural Commodities Performance (Total Agriculture Commodity Value)
Kosovo’s local prices for agricultural commodities are relatively

low when compared against EU FOB origin prices
Kosovo Market Price Compared to FOB Origin Prices
(2008, Euro/Kg*)
2.50
+1.66 Indicates differential in Kosovo’s price and highest price shown Because of the price differential,
2.25 opportunities exist to capture
market share from competitors
2.00
+1.12
1.75
+0.40
1.50
+0.54 +0.07
1.25
+0.29
1.00
+0.33
+0.57
0.75
+0.15
+0.15
0.50
+0.16 +0.06
0.25
0.00
Tomatoes
Wheat
Spinach
Cucumbers
on
on
Pepper
Cabbage
Pear
Grape
Potato
Chestnuts
Watermel
Oni
Kosovo Market Price United Kingdom FOB Origin Price France FOB Origin Price
Belgium FOB Origin Price
Germany FOB Origin Price Netherlands FOB Origin Price Italy FOB Origin Price
Note: (*) Differential was calculated between Kosovo and the country with the largest Euro/Kg gap from Kosovo
Note: Kosovo prices were collected in all seven regions (Peja, Pristina, Prizren, Ferizaj, Gjilan, Gjakova, Mitrovica ) on the 15th of each month and reflect prices farmers receive for the production
that are sold outside the sector. The price collection was carried out at markets, farms and other places where prices on agriculture products are available.
Note: Pepper (HS070960): Germany FOB Origin for Turkey, UK FOB Origin for Italy; Spinach (HS070970): UK and Netherlands FOB Origin for Italy; Cabbage (HS070490): Germany and UK FOB
Origin for Italy; Pear (HS080820): Germany FOB Origin for Turkey, UK FOB Origin for Italy; Chestnuts (HS080240): France and Italy FOB Origin for Turkey; Cucumber (HS070700): Germany FOB
Origin for Turkey, UK FOB Origin for Spain; Tomatoes (HS070200): Germany and UK FOB Origin for Turkey; Watermelon (HS080711): Germany and France FOB Origin for Italy; Wheat
(HS100190): Italy FOB Origin for Greece, Germany FOB Origin for Italy; Onion (HS070310): UK FOB Origin for Italy, Germany FOB Origin for Turkey; Grape (HS080610): UK FOB Origin for Turkey,
Netherlands FOB Origin for Spain; Potato (HS070190): Belgium and Netherlands FOB Origin for Italy; Statistics for Spain’s exports are 2007
Source: “Agriculture and Environment Statistics Output Price Index and Prices in Agriculture 2008”, Statistics Office of Kosovo; TradeMap; UN Comtrade 33
34
Crop-specific Performance and Market Assessment (Potatoes)
Kosovo’s potato sector has competitive yields compared to

benchmarks, with small differences in FOB origin prices
compared to Belgium and Netherlands
Agricultural
Agricultural Commodity
Commodity Production
Production and
and Export
Export Volume
Volume Agricultural
Agricultural Yield
Yield Comparison
Comparison
Ton/Ha
K Ton 30
100
11% Produced 25
Volume
75 20
15
50 10
5
25 Exported 0
59%
Kosovo
Italy
Serbia
Macedonia
Croatia
Spain
Volume
0
2004
2005
2006
2007
2008
Agricultural
Commodity Price
Price Comparison
Comparison
CAGR
Agricultural
Commodity Comments
Comments
Euro per Kg (2004-2008)
Netherlands
Potatoes
Potatoes are
are grown
grown in in all
all municipalities*
municipalities* across
across Kosovo
Kosovo
FOB Origin 7.6%

In
In 2008, over 100K tons of potatoes were produced while
2008, over 100K tons of potatoes were produced while over
over
0.40
Belgium -0.1% 18K
18K tons were exported to Albania (62.1%), Montenegro (20.7%),
tons were exported to Albania (62.1%), Montenegro (20.7%),
FOB Origin Macedonia
Macedonia (14.3%),
(14.3%), Serbia
Serbia (2.5%)
(2.5%)
Kosovo
-0.8% Kosovo’s
Kosovo’s yield
yield isis higher
higher than
than regional
regional competitors,
competitors, butbut lower
lower than
than
Price best practice producers like Italy and Spain
best practice producers like Italy and Spain
0.15 Kosovo’s local
Kosovo’s local market
market price
price has
has been
been similar
similar to
to the
the Netherlands
Netherlands
and
and Belgium FOB origin prices for the past 5 years, indicating
Belgium FOB origin prices for the past 5 years, indicating that
that
2004
2005
2006
2007
2008
there
there may
may bebe little
little opportunity
opportunity to to capture
capture market
market share
share in
in these
these
Difference +0.02 +0.06 +0.11 +0.14 +0.02 Belgium countries
countries
vs. Kosovo
Note: Potato export data is for HS070190,071420; HS070190 used for price comparison; (*) Surveyed Agriculture Offices in 30 Municipalities listed in the 2007 Household survey; Netherlands FOB Origin from
Italy; Belgium FOB Origin from Italy
Source: FAO STAT, Statistics Office of Kosovo (2008 data from SoK is preliminary and was being finalized at the time of the study); Customs Office of Kosovo;
35
Agriculture and Environment Statistics Output Price Index and Prices in Agriculture 2008, TradeMap; BAH Analysis
Crop-specific Performance and Market Assessment (Peppers)
Kosovo has higher pepper yields compared to benchmarks;

FOB origin prices are lower than those of the United
Kingdom and Germany
Agricultural
Production and
and Export
Export Volume
Volume Agricultural
Agricultural Yield
Yield Comparison*
Comparison*
Ton/Ha
K Ton 50
60
-2% Produced
40
Volume
40 30
20
10
20
Exported 0
Kosovo
Italy
Serbia
Croatia
Macedonia
Spain
116% Volume
0
2004
2005
2006
2007
2008
Agricultural
Commodity Price
Price Comparison
Comparison
CAGR
Agricultural
Commodity Comments
Comments
Euro per Kg (2004-2008)
2.50
United Peppers
Peppers are
are cultivated
cultivated in in 26
26 of
of the
the 30
30 municipalities**
municipalities** listed
listed in
in the
the
18% 2007
2.00 Kingdom 2007 Household
Household Survey
Survey
1.50
FOB Origin In
In 2008,
2008, over
over 51K
51K tons
tons of
of peppers
peppers were
were cultivated
cultivated while
while only
only 2K
2K
Germany tons were exported primarily to Serbia (62.6%) and
tons were exported primarily to Serbia (62.6%) and Montenegro Montenegro
1.00 3.7%
(27.7%)
FOB Origin (27.7%) with
with the
the remaining
remaining volume
volume sentsent to
to Albania
Albania (5%),
(5%),
0.50 Kosovo Germany
Germany (2%),
(2%), Macedonia
Macedonia (1.2%),
(1.2%), Sweden
Sweden (0.9%),
(0.9%), Romania
Romania
8.3% (0.6%), and Italy (0.005%)
0.00 Price (0.6%), and Italy (0.005%)
Kosovo’s
Kosovo’s yield
yield is
is competitive
competitive with
with Italy
Italy
2004
2005
2006
2007
2008
UK’s
UK’s FOB
FOB origin
origin price
price is
is significantly
significantly higher
higher than
than Kosovo’s
Kosovo’s local
local
Difference +0.71 +1.28 +0.93 +1.35 +1.66 UK vs. market price
market price
Kosovo
Note: (*)Peppers and chilies are grouped together for Croatia, Italy, Serbia, Spain and Macedonia, but not for Kosovo; (**) Surveyed Agriculture Offices in 30 Municipalities listed in the 2007 Household survey;
United Kingdom FOB Origin from Turkey; Germany FOB Origin from Turkey
Source: FAO STAT, Statistics Office of Kosovo (2008 data from SoK is preliminary and was being finalized at the time of the study), Customs Office of Kosovo; HS070960 used for peppers
Agriculture and Environment Statistics Output Price Index and Prices in Agriculture 2008, TradeMap; BAH Analysis 36
Crop-specific Performance and Market Assessment (Tomatoes)
While tomato yields have been comparatively low, Kosovo’s

FOB origin price is much lower than Germany’s, and
marginally less than the United Kingdom
Agricultural
Production and
and Export
Export Volume
Volume Agricultural
Agricultural Yield
Yield Comparison
Comparison
Ton/Ha
K Ton 70
25
Produced 60
20 11% Volume 50
40
15 30
20
10
10
5 Exported 0
Kosovo
Italy
Serbia
Macedonia
Croatia
Spain
267% Volume
0
2004
2005
2006
2007
2008
Agricultural
Commodity Price
Price Comparison
Comparison
CAGR Agricultural
Euro per Kg Agricultural Commodity
Commodity Comments
Comments
(2005-2008)
1.20
Germany 0.0% Tomatoes
Tomatoes areare cultivated
cultivated in
in 27
27 of
of the
the 30
30 municipalities*
municipalities*
FOB Origin In
In 2008,
2008, over
over 20K
20K tons
tons of
of tomatoes
tomatoes werewere cultivated
cultivated while
while 500
500 tons
tons
0.90 were exported to Montenegro (62.5%), Bulgaria (14.8%), Albania
were exported to Montenegro (62.5%), Bulgaria (14.8%), Albania
UK FOB -14.2% (12.1%),
Origin
(12.1%), Italy
Italy (4.4%),
(4.4%), Macedonia
Macedonia (4%), (4%), Romania
Romania (1.8%),
(1.8%), Serbia
Serbia
0.60 (0.4%),
(0.4%), and
and Germany
Germany (0.01%)
(0.01%)
Kosovo
Price
1.8% Kosovo
Kosovo has
has aa lower
lower yield
yield in
in comparison
comparison withwith other
other regional
regional and
and
0.30 best
best practice
practice countries
countries
Given
Given Germany’s
Germany’s higher
higher FOB
FOB origin
origin price,
price, Kosovo
Kosovo could
could be
2004
2005
2006
2007
2008
be
competitive in select EU markets
competitive in select EU markets
Difference +0.32 +0.12 +0.47 +0.29 Germany
vs. Kosovo
Note: CAGR is calculated from 2005-2008; (*)Surveyed Agriculture Offices in 30 Municipalities listed in the 2007 Household survey; HS 070200 is used for
tomato data; Germany FOB Origin from Turkey; United Kingdom FOB Origin from Turkey
Source: FAO STAT, Statistics Office of Kosovo (2008 data from SoK is preliminary and was being finalized at the time of the study), Customs Office of
Kosovo, Agriculture and Environment Statistics Output Price Index and Prices in Agriculture 2008, TradeMap; BAH Analysis 37
Crop-specific Performance and Market Assessment (Onions)
Kosovo’s onion sector has experienced lower yields

compared to benchmarks and maintains a higher FOB origin
price than Germany
Agricultural
Production and
and Export
Export Volume
Volume Agricultural
Agricultural Yield
Yield Comparison
Comparison
Ton/Ha
K Ton 60
16 4%
Produced
48
Volume
12
36
24
8
12
4 Exported 0
153%
Kosovo
Italy
Serbia
Macedonia
Croatia
Spain
Volume
0
2004
2005
2006
2007
2008
Agricultural
Commodity Price
Price Comparison
Comparison
CAGR Agricultural
Commodity Comments
Comments
Euro per Kg
0.75 (2004-2008)
Onions
Onions are
are grown
grown inin all
all municipalities*
municipalities* across
across Kosovo
Kosovo
UK FOB 1.5%
Origin In
In 2008,
2008, almost
almost 16K
16K tons
tons of of onions
onions were
were cultivated
cultivated while
while 740
740 tons
tons
0.50 were exported to Montenegro (67.4%), Albania
were exported to Montenegro (67.4%), Albania (31%), and (31%), and
Kosovo -5% Romania
Romania (1.5%)
(1.5%)
Price
0.25 Kosovo has aa lower
Kosovo has lower yield
yield inin comparison
comparison withwith other
other regional
regional and
and
Germany -12% best
best practice
practice countries
countries
FOB Origin
0.00 Kosovo’s
Kosovo’s market
market price
price is is similar
similar to
to or
or higher
higher than
than UK
UK and
and
Germany
Germany FOBFOB origin
origin prices,
prices, making
making Kosovo
Kosovo uncompetitive;
2004
2005
2006
2007
2008
uncompetitive;
Export
Export growth
growth has
has been
been focused
focused primarily
primarily on
on local
local regional
regional
Difference +0.01 +0.23 +0.14 +0.28 +0.15 UK vs. markets
markets
Kosovo
Note: (*)Surveyed Agriculture Offices in 30 Municipalities listed in the 2007 Household survey; HS 070310 used for onion data; United Kingdom FOB Origin from Italy; Germany FOB Origin from Turkey
Source: FAO STAT, Statistics Office of Kosovo (2008 data from SoK is preliminary and was being finalized at the time of the study), Customs Office of Kosovo,
Agriculture and Environment Statistics Output Price Index and Prices in Agriculture 2008, TradeMap 38
Crop-specific Performance and Market Assessment (Watermelons)
While watermelon producers have lower yields in Kosovo,

FOB origin price is significantly less than Germany and
France
Agricultural
Production and
and Export
Export Volume
Volume Agricultural
Agricultural Yield
Yield Comparison
Comparison
Ton/Ha
K Ton 45
25
Produced
36
20 18% Volume
27
15
18
10 9
5 Exported 0
Kosovo
Italy
Serbia
Macedonia
Croatia
Spain
Volume
0 44%
2004
2005
2006
2007
2008
Agricultural
Commodity Price
Price Comparison
Comparison
CAGR Agricultural
Euro per Kg Agricultural Commodity
Commodity Comments
Comments
(2005-2008)
0.40 Germany 11.0% Watermelons
Watermelons are are cultivated
cultivated inin 25
25 of
of the
the 30
30 municipalities*
municipalities*
FOB Origin
France 9.2%
In
In 2008,
2008, almost
almost 25K
25K tons
tons ofof watermelons
watermelons were were cultivated
cultivated while
while
0.30 just under 45 tons of watermelons were exported to
just under 45 tons of watermelons were exported to Montenegro Montenegro
FOB Origin
(84.2%),
(84.2%), Albania
Albania (15.7%),
(15.7%), andand Germany
Germany (0.1%)
(0.1%)
0.20 Kosovo -3.5%
Price Kosovo
Kosovo has
has aa lower
lower yield
yield in
in comparison
comparison with with other
other regional
regional and
and
best
best practice
practice countries
countries
0.10 German
German andand France
France FOB
FOB origin
origin prices
prices have
have consistently
consistently been
been
higher than Kosovo’s local price
2004
2005
2006
2007
2008
higher than Kosovo’s local price
Difference +0.05 +0.12 +0.10 -+0.16 Germany

vs. Kosovo
Note: CAGR for price is calculated from 2005-2008; (*)Surveyed Agriculture Offices in 30 Municipalities listed in the 2007 Household survey; HS080711 is used for watermelon data; Germany FOB Origin
From Italy; France FOB Origin from Italy
Source: FAO STAT, Statistics Office of Kosovo (2008 data from SoK is preliminary and was being finalized at the time of the study), Customs Office of Kosovo, 39
Agriculture and Environment Statistics Output Price Index and Prices in Agriculture 2008, TradeMap
Table of Contents

40
Constraints Methodology
Kosovo has a number of advantages that can be tapped to

increase the total agricultural production in the country
Kosovo’s Agricultural Competitive Advantages
Proximity to EU and Regional Markets Opportunities to Improve Productivity

Kosovo is within 1-2 days delivery time of all major Kosovo lags behind European benchmark countries
fresh wholesale markets in Europe. in cropping intensity (0.9), yield per hectare (20),
export value per harvested hectare (€25) and
Agricultural production volumes and exports have
percentage of arable land in production (66%),
been growing, at 2.4% and 48.3% compound
offering significant opportunities to improve
annual growth rates, respectively.
agricultural production and employment.
The number of trading partners is expanding with
There is sufficient workforce for expanded
exports to 10 new countries since 2004 including
agricultural production (only 15% of farmers cite
Austria, Denmark, UAE and the United States.
workforce as an issue).
Agricultural
Agricultural
Competitive
Competitive
Advantages
Advantages
Significant Donor Support Natural Environment Supports Diversification
Government and donors are providing €15-18 Kosovo’s natural environment supports all crops that
million per year in support to the agricultural can be grown in temperate climates.
sector including programs in over 20 crops in
every area of the country. Growing seasons support harvest 30 days earlier
than in northern Europe allowing some seasonality
With effective coordination, this funding can advantages.
become a major source for improvements in ag-
related infrastructure, input quality, productivity, Water and other resources are relatively plentiful
crop diversity, quality and export promotion. and there are opportunities to expand both small-
scale and formal irrigation systems.

41
Constraints Methodology
To effectively understand the challenges facing Kosovo’s

agriculture sector, a constraints analysis has been completed
along six dimensions
Overview of Constraints
11
Untapped Coordination among Small Farmers: Proportion of active associations and activity levels
Untapped Extension Services: Assessment of current extension services and potential to focus on high value crops
Potential
Potential of
of Small
Small Lack of Financing for Small Farmers: Financial products currently available to small farmers in Kosovo
Farmers
Farmers Mechanization: Mechanization rates by equipment, type and size of farms; degree of small farmer mechanization
22 Donor Coordination: Level of donor coordination among donors supporting Kosovo’s agriculture sector
Market Intelligence: Types of market intelligence on end customer characteristics and requirements.
Lack
Lack of
of Demand-
Demand- Distribution: Collection centers and packhouses in Kosovo enabling reliability and flexibility of distribution
Driven
Driven Focus
Focus Promotion & Branding: Participation rate in trade shows; effectiveness of branding and promotion campaigns
Pricing: Storage capacity in Kosovo allowing farmers to take advantage of seasonally high prices
33
Development of Irrigation Networks: Coverage of irrigation networks; working capacity levels of irrigated systems; pricing of
Infrastructure
Infrastructure irrigation systems.
Capacity
Capacity Issues
Issues Building greenhouse capacity: Size of greenhouse market in Kosovo; types and construction of greenhouses; return on
investment of greenhouses in Kosovo
44 Land & Land-Sea Delivery: Land-sea routes and road networks in Kosovo and within the region; accompanying costs and travel
Transportation time for deliveries
Transportation
Air Transport and Shipping: Level of dedicated air cargo freighters for perishables and experience of agriculture exporters with
Disadvantages
Disadvantages air delivery
Export and Cold Chain: Types of cold chain for fresh, chilled and frozen products
55
Inadequate
Inadequate Food Safety & Quality: Current organizational responsibility for food safety; effectiveness of private labs for food quality testing
Agriculture
Agriculture Regulation of Inputs: Types of regulation for seed, fertilizer and pesticide quality and usage.
Regulations Environment: Current issues facing arable land and quality and availability of natural resources
Regulations
66 Enforcement of Trade Agreements: Types of implementation issues for Kosovo’s trade agreement; level of trade facilitation
Trade
Trade Access
Access capacity within the Kosovo government
Issues Responses to Subsidies: Current treaties enabling government supports; overview of current supports in other countries
Issues Recognition of Sovereignty: Overview of countries recognizing Kosovo’s sovereignty; recognition-related risks from other
countries.
42
Untapped Potential of Small Farmers
In Kosovo, small farms account for 98% of all agricultural land with
the smallest farms, under 1.5 ha, accounting for 38%
Arable Land by Farm Size and Type

% of Area (2006)
1%
1% 1% 5% 1% 2% 1% Large & Specialized
Farms (2%)
20% 22%
28% 30%
34% 33% 3+ ha.
42% 36%
25%
29%
30% 30% Small
31% 28% 1.5-3 ha.
27% Farms
27%
(98%)
53% 48%
40% 39% 38% 0-1.5 ha.
31% 34% 32%
Prishtina Mitrovica Peja Gjakova Prizren Ferizaj Gjilan Kosovo Total
Sources : Statistical Agency of Kosovo (2006)

43
At 1.4 hectares, Kosovo’s average farm size is among the smallest

in Europe although several other countries in SEE also have small
farm size
Average Farm Size By Country
Hectares (2003 for Croatia, 2005 for EU, 2006 for Kosovo, 2007 for Serbia, Macedonia and Albania)
84.2
Kosovo’s
Kosovo’s average
average farm
farm size
size is
is
smaller
smaller than
than thethe European
European average
average
and than for large Balkan countries
and than for large Balkan countries
55.6
52.7 52.4 such
such as
as Bulgaria,
Bulgaria, Romania
Romania and
and
48.6 Serbia
Serbia but in line with the farm size
but in line with the farm size
43.7 42.1 in
in Albania,
Albania, Croatia
Croatia and
and Macedonia
Macedonia
32.1 31.8
29.9
27.4 26.9
23.9 23.0
21.4
19.1
13.2 11.9
11.4 11.0
7.4 6.3 6.0 6.0 5.5 5.5 5.1 4.8
3.4 3.3 2.0 1.9 1.7 1.4 0.9
Croatia
Macedonia
Serbia
Denmark
United Kingdom
EU15
EU27
EU12
Romania
Albania
Czech Republic
Germany
Portugal
Luxembourg
Finland
Belgium
France
Ireland
Estonia
Slovakia
Greece
Malta
Poland
Netherlands
Italy
Hungary
Cyprus
Spain
Lithuania
Slovenia
Latvia
Bulgaria
Kosovo
Austria
Sweden
Sources : Eurostat, Statistical Agency of Kosovo (2006), Ministry of Agriculture Albania, Central Bureau of Statistics Croatia, Ministry of Agriculture Serbia, Statistical Office of Macedonia, BAH Analysis
44
Although there is some indication that large and specialized farms

make better use of the land, leaving only 1.7% fallow compared to
9.5% for all farms …
Cultivated Over Total Agricultural Land by Farm Size
% Based on Area (2006)
0 - 1,5 ha 92.7% 7.3%
1,5 - 3 ha 88.8% 11.2%
3 + ha 88.9% 11.1% Large and

Specialized
Farms Leave
Large and Specialized Only 1.7% of
98.3% 1.7%
Farms Land Fallow
Compared to
9.5% for All
All Farms 90.5% 9.5% Farms
Cultivated
Left Fallow
Sources : Statistical Agency of Kosovo (2006)

Note : Cultivated area includes arable, meadows, orchards and greenhouses. Left fallow includes pastures.
45
… there are several factors that would limit the feasibility and
attractiveness of land consolidation
Obstacles to Consolidation of Agricultural Land
Subdivision Land
Land is
is traditionally
traditionally willed
willed to
to all
all surviving
surviving children.
children. This
This has
has led
led to
to the
the division
division of
of land
land into
into progressively
progressively
Subdivision of
of
smaller
smaller plots, often with one farmer owning several non-contiguous plots. This fact complicates and
plots, often with one farmer owning several non-contiguous plots. This fact complicates and adds
adds
Land
Land Between
Between
costs to efforts to consolidate
costs to efforts to consolidate land.land.
Family
Family Members
Members
A
A significant
significant amount
amount of of arable
arable land
land belongs
belongs to to socially-
socially- or
or publicly-owned
publicly-owned enterprises
enterprises that
that have
have not
not been
been
Privatization definitively
definitively privatized.
privatized. Much
Much ofof this
this land
land is
is subject
subject to
to claims
claims by
by previous
previous owners.
owners. InIn addition,
addition, much
much ofof the
the
Privatization of
of
SOEs land is being farmed by smallholders without formal or indisputable title. Because of this
land is being farmed by smallholders without formal or indisputable title. Because of this status, sale or status, sale or
SOEs and
and POEs
POEs
consolidation
consolidation ofof land
land on
on socially-owned
socially-owned enterprises
enterprises (SOEs)
(SOEs) will
will be
be complex
complex andand time-consuming.
time-consuming.
Title
Title to
to agricultural
agricultural land
land held
held byby IDPs
IDPs creates
creates significant
significant complications
complications to
to change
change of
of ownership,
ownership, sale
sale of
of
Title
Title Issues
Issues land and consolidation. There is a significant amount of arable land that is not held under clear title
land and consolidation. There is a significant amount of arable land that is not held under clear title
Associated
Associated with
with because
because of of disputes
disputes dating
dating to
to 1999
1999 and
and from
from the
the Yugoslav
Yugoslav period.
period. This
This includes
includes claims
claims by
by the
the Orthodox
Orthodox
IDPs
IDPs Church
Church in in Peja
Peja and
and Decani.
Decani.
Employment While
While larger
larger farm
farm size
size unequivocally
unequivocally correlates
correlates with
with higher
higher yields
yields and
and productivity,
productivity, sources
sources including
including
Employment and
and EuroStat
Rural EuroStat indicate
indicate that
that smaller
smaller farms
farms may
may actually
actually produce
produce more
more employment
employment per per hectare.
hectare. This
This indicates
indicates
Rural that
Livelihoods that consolidation could exacerbate rural unemployment. In addition, a sense of food insecurity persists
consolidation could exacerbate rural unemployment. In addition, a sense of food insecurity persists
Livelihoods which
which lead
lead families
families to
to value
value smallholder
smallholder farms
farms as
as an
an important
important safety
safety net
net in
in case
case of
of instability.
instability.
Sources: Interviews
46
Therefore, it is important for Kosovo’s agricultural development to

address obstacles in leveraging smallholder farmers
Challenges in Leveraging Kosovo’s Small Growers Potential for Export
A
A
While
While cooperatives
cooperatives and
and associations
associations exist
exist in
in aa number
number of of crops
crops and
and areas
areas of of the
the country,
country, there
there are
are less
less than
than 15
15
Lack
Lack of
of Coordination
Coordination associations
associations in
in operation
operation and
and these
these represent
represent only
only aa small
small percentage
percentage of of farmers.
farmers.
among
among Small
Small
The
The capacity
capacity of
of existing
existing cooperatives
cooperatives is is weak
weak andand few
few focus
focus on
on the
the full
full value
value chain
chain of
of activities
activities (i.e.
(i.e. bargaining
bargaining &&
Farmers
Farmers services,
services, asset
asset sharing,
sharing, labor
labor sharing,
sharing, knowledge
knowledge for for value-added
value-added crops).
crops). Services
Services are
are limited.
limited.
B
B No
No effective
effective extension
extension service
service exists
exists to
to assist
assist small
small farmers
farmers in
in developing
developing newnew crops
crops and
and improving
improving yields
yields of
of
existing
existing ones.
ones. Food
Food processors
processors such
such asas Pestova
Pestova provide
provide extension-like
extension-like services
services but
but are
are impeded
impeded by
by lack
lack of
of
Lack
Lack of
of Education
Education enforceable
enforceable contracts
contracts with
with farmers
farmers that
that would
would create
create an
an incentive
incentive to
to invest.
invest.
and
and Training
Training
The
The educational
educational institutes
institutes that
that do
do exist
exist focus
focus onon aa small
small number
number ofof traditional
traditional crops
crops (peppers,
(peppers, winter
winter wheat,
wheat,
tomatoes, potatoes).
tomatoes, potatoes).
C
C While
While the
the banking
banking system
system isis robust
robust and
and access
access toto hypothecated
hypothecated lines
lines of
of credit
credit does
does exist,
exist, farmers
farmers with
with minimal
minimal
collateral do not have sufficient access to investment
collateral do not have sufficient access to investment capital.capital.
Poor
Poor Access
Access To
To Alternative financial
Alternative financial products
products suchsuch as
as crop
crop insurance,
insurance, warehouse
warehouse receipts
receipts and
and community-based
community-based microfinance
microfinance
Finance
Finance are
are not
not readily
readily available.
available.
Food
Food processors
processors do do provide
provide some
some access
access to
to credit
credit for
for their
their supplying
supplying farmers
farmers but
but investment
investment isis limited
limited by
by the
the
lack
lack of
of borrowing
borrowing capacity
capacity ofof the
the processors
processors and
and lack
lack of
of enforceable
enforceable contracts.
contracts.
D
D
Although
Although the
the rate
rate of
of tractor
tractor use
use isis quite
quite high,
high, there
there is
is aa low
low level
level ofof mechanization
mechanization for for harvesting,
harvesting, grading
grading and
and
packing
packing and
and other
other stages
stages inin the
the production
production value
value chain.
chain.
Use
Use of
of Technology
Technology
The
The lack
lack of
of cooperatives
cooperatives to to pool
pool equipment
equipment purchases
purchases and and the
the lack
lack of
of certified
certified repair
repair technicians
technicians in
in country
country is
is aa
major obstacle to adoption
major obstacle to adoption
Sources: Interviews
47
Untapped Potential of Small Farmers (Lack of Coordination among Small Farmers)
Approximately 9.6% of all associations and cooperatives in Kosovo

are considered active…
Summary of Major Agricultural Cooperatives and Associations in Kosovo
Proportion of Active Associations /

Cooperatives Operative in Kosovo
Comments
Comments
Only
Only 9.6%
9.6% ofof associations
associations and and cooperatives
cooperatives in in
Kosovo
Kosovo are
are considered
considered active active
–– Active
Active associations
cooperatives are are
13 Active defined
defined as as entities
entities that
that have
have shown
shown aa
Associations / commitment
commitment to to their
their members
members in in marketing
marketing
Non-active Associations / Cooperatives and that operate as businesses
and that operate as businesses
Cooperatives, 90.4%
Mamushe Historically,
Historically, associations
cooperatives have have not
not
Active Associations / Perdrini been
been popular
popular for for three
three main
main reasons
reasons
Cooperatives, 9.6% –– Dependence
Anadrini Dependence on on the
the extended
extended family
family for
for
Agroqyshu production relationships and
production relationships and support support
Krusha Madhe –– Lack
Lack ofof trust
trust inin developing
developing business
business ventures
ventures
Tina Association with other association and cooperative
with other association and cooperative
KOVRGA members
members
FRUTI –– Producers
Producers have have not not placed
placed asas much
much emphasis
emphasis
Women for on
Women (5)
on relationships
relationships with with buyers;
buyers; ifif the
the business
business
model
model isis driven
driven moremore by
by attracting
attracting buyer
buyer
attention,
attention, then
then there
there is
is greater
greater ability
ability to
to foster
foster
Total:
Total: 135
135 Associations
Associations trust
trust among
among members
members
Source : BAH Analysis; KPEP

48
Untapped Potential of Small Farmers (Lack of Coordination among Small Farmers)
… the active associations / cooperatives have varying levels of

membership and do not complete many critical activities
Cooperatives in Kosovo By Function, Location and Crop
Number of Members in Active Associations / Types of Activities Completed by Active

Cooperatives (1) in Kosovo Associations / Cooperatives in Kosovo
175
Crop
Bargaining Labor Asset Expertise/
Collection/
for Inputs Sharing Sharing Extension
Marketing
Mamushe ✓
Perdrini ✓ ✓ ✓
100 100 Anadrini ✓ ✓

Agroqyshu ✓
✓ ✓
Krusha
60 Madhe
50
✓ ✓
Tina
Association
25 KOVRGA ✓
8 FRUTI ✓
✓ ✓ ✓ ✓
Agroqyshu Women Tina Krusha Perdrini Anadrini Mamushe Women for
for Madhe Women
Women (2)
Gap in Activities
Note (1) : Does not include membership figures for all active associations
Note (2) : Average number of members per cooperative
Source : BAH Analysis; KPEP 49
Untapped Potential of Small Farmers (Lack of Education and Training)
While a number of organizations are providing training and

extension services in Kosovo, capacity is weak
Extension and Training Organizations in Kosovo
Public
Public Sector
Sector Public-Private
Public-Private Partnership
Partnership Private
Private Sector
Sector
Structure: The Ministry of Agriculture Structure: There are no true public- Structure: Food processors and
operates Extension Departments in private partnerships involving the GoK associations offer extension-like
each of the 33 municipalities, but and private parties for extension services to their supplying farmers.
capacity is limited and activities are services. However, many of the donor For example, Pestova provides advice
focused primarily on data collection for projects function essentially in this to farmers on quality, varieties and
statistical purposes. The Peja Institute way. As an example, Intercooperation ways to maximize yields in potatoes,
manages test plots and conducts has trained and certified 25 private Bylmeti works with dairy farmers to
testing and limited production of seed agronomists and is subsidizing their improve raw milk quality and animal
for winter wheat, potatoes, peppers cost to farmers. KPEP is supporting nutrition.
and maize. However, there is no associations such as Perdrini which
effective publicly-funded extension. provide extension services.
Funding: Processing companies
Funding: The Ministry of Agriculture Funding: Intercooperation is cost-
typically provide extension services
has access to a programmable budget sharing payments to agronomists at a
and inputs free of charge in exchange
of €5-6M per year, which is primarily rate of 75% in 2009 and 50% in 2010.
for commitments of product.
used for grants and price supports. In The cost is €50 per day. Clients
Investment in these services is limited
2009, funds were allocated to include large farmers, associations
by the informal nature of the
purchases of apple rootstock, wheat and informal community organizations.
relationships. Associations provide
seed and rehabilitation of irrigation
services for a nominal membership fee
systems and to support a subsidy of
(€10 per year) and for fees for
€50 per cow for farmers who own at
marketing and sale of crops.
least five cows.
Source: Interviews; BAH Analysis

50
Untapped Potential of Small Farmers (Lack of Education and Training)
Without effective extension, a large area is dedicated to crops that

are unprofitable, produced through poor methods or sold through
poor channels
The Role of Extension in Helping Small Farmers Improve Choices and Techniques
Crop Profitability By Total Production
Attractive Crops Grown Very Little Attractive Crops Grown A lot
Beans (bush) Comments

Comments
High (≥ €1000)
(2106 ha)
Kosovo
Kosovo farmers
farmers grow
grow large
large quantities
quantities ofof low-
low-
Farmer’s Profit Per Hectare
Peppers Sold to Processor profit crops (maize), make poor

profit crops (maize), make poor production production
Potato choices
(504 ha) choices (maize
(maize without
without irrigation,
irrigation, white
white beans
beans
(3746 ha) on
Beans (Pillar) on pillar)
pillar) and
and choose
choose less-profitable
less-profitable market
market
(2106 ha) channels
channels (i.e.
(i.e. selling
selling peppers
peppers in in the
the green
green
market rather than for processing)
market rather than for processing)
Unattractive Crops Grown A lot
Extension services
Extension services can can help
help farmers
farmers select
select
Tomatoes better
better crops,
crops, adopt
adopt better
better production
production
(903 ha)
techniques
techniques and and sell
sell through
through moremore profitable
profitable
Low (≤ €1000)
Peppers Sold to Green Market channels

channels
(2018 ha)
Maize (Irrigated)
(21671 ha)
Maize (Unirrigated)
(14447 ha)
Low (≤2000 ha) High (≥ 2000 ha)
Total Hectares of Kosovo Production in 2008
Source : KPEP, Predrini, Agroqyushu, Mamusha Association; Statistics Office of Kosovo (Note: 2008 data from SoK is preliminary and was being finalized at the time of the study)
Notes : % of production include horticulture and cereals only; Maize includes maize and mixed maize and beans includes beans and mixed beans
Assume: 60% of maize is irrigated while 40% is not irrigated; 80% of peppers are sold to green market while 20% is sold to processors 50% of beans are bush while 50% are pillar
51
Untapped Potential of Small Farmers (Poor Access To Finance)
There are a number of organizations providing finance to farmers

and food processors, but the types of instruments are limited
Financial Products Available to Farmers
Suitability
Agency Product Term Comments
to Ag
Line of credit or Term loans up to 5 years Products offered are acceptable for processor and farm working capital
term loan Lines of Credit up to 12 needs. However, the revolving nature of loans requires clients to
12-14% with months revolving. mortgage long-term assets for short-term financing.
Commercial preferential rates Collateral requirements at Because agriculture is not a target sector for the banks, loan officers do
Banks as low as 9% 1.5 to 3+x loan value. not focus on nor understand clients in the sector.
(including to some The $10M GDA was considered successful although only one bank
ag processors) (Raiffeisen) participated; although all the loans have been made under
GDA, Raiffeisen will continue to lend without GDA guarantee
Generally priced With a few exceptions, Competition is high in urban and peri-urban areas, less so in villages,
on a monthly under 12 months with with Kosinvest more focused on rural clients than others.
declining basis some enterprise loans up Beginning in 2010, MFIs will be allowed to take deposits, possibly
Microfinance with annual rates to 60 months. lowering cost of capital and interest rates.
at 24%+ Collateral requirements
vary - lending on
references is common.
Purchase order Less than a year. POF is Although not a good instrument for smallholders, it is well-suited for
Purchase Order financing a working capital processors and exporters.
Financing On par with bank instrument Initial CFF capital was only $1.5M and is fully committed. New loans
interest rates. are based now on reflows. Lendable market estimated at $20M+.
Variable rates and Around current lending Two companies are registered for leasing - Raiffeisen Leasing and CFF
terms. Nascent rates High - but neither are active yet except in vehicle leasing.
Leasing
Potential There would appear to be a significant market in agriculture for leasing
of tractors and motocultivators (close to 80k units).
Conclusions
The financial sector must serve both the smallholder farmer directly as well as the processor or distributor to which he / she sells
The current mix of financial products does not serve either segment well because of lack of focus on the sector, relatively short-terms and high collateral
requirements. There is an opportunity for alternative products
Sources: Interviews with Raiffeisen, Crimson Capital, Kosinvest, ProCredt, FINCA, Bankers’ Association, AFK, others.
52
Untapped Potential of Small Farmers (Use of Technology)
The overall amount of mechanization is high although small

farmers primarily use machinery for soil preparation
Mechanization by Type of Equipment and Size and Type of Farm
% – 2006
Soil Preparation
32%
24% Other Operations in the Production Chain
20% 20% 19% 19%

17%
15% 16% 16% 16%
14% 14%
13%
11%
9% 9%
7%
4% 4%
2% 1% 1% 2% 2% 1% 1%
0%
ne
er
or
ne
er
r
er
er
er
r
r
ck
or
p
il e
ye
to
m
at
ad
ad
w
w
ow
hi
ct
hi
ra
ac
Ba
ra
Pu
rro
t iv
ro
ac
ra
ac
re
re
ay
M
Tr
Sp
ar
ul
lT
Sp
Sp
ay
Ha
rm
H
er
oc
H
e
al
at
g
rg
e
ille
er
h
k
ot
in
Sm
ur
ot
is
La
li z
M
M
D
an
To
So
rti
M
Fe
Small Farms Large & Specialized Farms

Sources: Statistical Agency of Kosovo (2006)
Note: Data was provided in total numbers. We have estimated a total of 257k small farmers and 276 large and specialized farms based on other land use data in order to calculate
percentages. Motocultivators include motocultivators and all categories of “related equipment. Large tractor is defined as over 40hp.
53
Untapped Potential of Small Farmers (Use of Technology)
Although many of the production steps will not benefit from

mechanization because of the low cost of labor, improvements in
several area are critical
Degree of Small Farmer Mechanization Across the Production Chain
Infrastructure Soil Post-Harvest

Planting Harvesting Packaging Storage
Development Preparation Handling
Degree of
Mechanization
Additional High Planting of Harvesting is Although there For several There is a lack
greenhouse mechanization cereals is highly primarily is some need processors of cold storage
investment for cereals. mechanized, manual and, for additional bottling, capacity and
would allow Low in but horticulture because of conveyers and packaging many farmers
smallholders vegetable is primarily the low cost equipment for and steriliza- store
to produce crops. manual. Some of labor, will sorting (e.g. for tion is a vegetable in
Needed crops earlier in mechanization continue as apples), production barns.
Investments the season exists for such. mechanization bottleneck Investment in
for when high planting of Increased is not a which effects cold storage is
Smallholders prices can be peppers (Las mechaniza- bottleneck. the volume necessary.
obtained. Palmas). As tion is not Manual sorting they are able
Small-scale long a labor economical. on tables is to buy from
“blast costs are low, sufficient. smallholders
irrigation” this is not a
systems are bottleneck
also needed.
Most Critical Areas
Sources: Interviews
54
Lack of Demand Driven Focus
There are a number of obstacles to developing a demand-driven

focus in agriculture that will maximize the value of production,
employment and benefits to farmers
Demand-Driven Strategy Obstacles
Poor
Poor Donor
Donor There
There is
is aa significant
significant amount
amount of
of donor
donor funding
funding for
for agriculture
agriculture focused
focused on
on
Coordination
Coordination To
To factors that will influence the value chain - infrastructure, production,
factors that will influence the value chain - infrastructure, production,
Meet
Meet Market
Market extension,
extension, marketing.
marketing. However,
However, there
there is
is poor
poor coordination
coordination between
between thethe
Demands
Demands GoK
GoK and
and donors
donors toto focus
focus on
on constraints,
constraints, crops
crops and
and areas
areas of
of the
the value
value chain
chain
Producers
Producers have
have limited
limited understanding
understanding of of customer
customer requirements
requirements forfor variety,
variety,
Limited
Limited Ability
Ability to
to shape,
shape, grade,
grade, size
size and
and packaging
packaging ofof products.
products.
Meet Customer
Meet Customer In
In some
some cases,
cases, associations
associations or
or food
food processors
processors are
are playing
playing the
the role
role of
of
Requirements
Requirements educating
educating producers on product requirements. However, there has been
producers on product requirements. However, there has been
limited
limited success.
success.
Lack
Lack of
of Demand-
Demand-
Driven
Driven Focus
Focus Well-developed
Well-developed distribution
distribution andand marketing
marketing chains
chains can
can provide
provide product
product to
to
Limited
Limited Development
Development target
target markets
markets in in aa flexible
flexible and
and reliable
reliable way
way based
based onon the
the specialized
specialized roles
roles
of
of Distribution and
Distribution and of
of actors
actors in
in the
the distribution
distribution andand marketing
marketing chain.
chain.
Marketing
Marketing Chain
Chain In
In Kosovo,
Kosovo, there
there isis little
little specialization
specialization and
and key
key roles
roles in
in the
the distribution
distribution chain
chain
are
are not
not being
being filled.
filled.
Although
Although Kosovo
Kosovo producers
producers are are participating
participating in
in aa large
large number
number of of
promotional
promotional events
events in
in target
target markets,
markets, Kosovo
Kosovo isis not
not recognized
recognized as as aa
Limited
Limited Promotion
Promotion producer of high quality “branded” agricultural products. It is
producer of high quality “branded” agricultural products. It is a commoditya commodity
Capabilities
Capabilities supplier.
supplier.
Little
Little focus
focus has
has been
been placed
placed onon promotional
promotional events
events besides
besides trade
trade fairs.
fairs.

55
Lack of Demand Driven Focus (Donor Coordination To Meet Market Demands)
Donor support for agriculture is €15-18M per year although

coordination between donors and with the GoK is weak
Selected Data on Donor Programs- Estimated Funding in € (Annualized - 2009)
Donor Funding for Agriculture Current Focus Areas Planned Future Focus Areas
Institutional Support for MAFRD (Austria, Establishing farm register value (€1M)
€65M from 1999-2009 or c. Slovenia, Hungary) Land Use €1.5M
€7M per year Meeting EU standards on Food Safety Forestry Value TBD
European
and Veterinary Services (Germany and Support for Disease Control €1.5M
Commission
Lithuania) Animal Registration €1.5 Million;
Rural Grants in support of Dairy and Fruit &
Vegetable Processing €5M
Annual support estimated at Support for dairy, non-wood forest Development of strategy in progress
c. €2-3M per year including products and fruit & vegetables through
USAID KPEP (€2.9M Euros per year KPEP
total value), DCA and other Develop Credit Authority (DCA)
supporting access to finance (1)
Annual support estimated at Cadastre Development Program Country Economic Memorandum (CEM) in
€4-5M per year (loans and ($12M/4-year) development. Will allocate $10-15M from July
TA) including the Cadastre Support for the MAFRD Grants Program 2010-July 2013. Areas of focus
World Bank program and the WB-funded - $10M total; €3M dispensed in 2009 for – Improving Public Sector Extension
MAFRD grants program producer supports, purchase of apple – Improving MAFRD Finance & Budgeting
root stock, irrigation
– Supporting Alignment with EU Standards
IBRD support for irrigation possible
Annual support estimated at Intercooperation (€1M p.a.) focused on Not known
€2-3M fruit, veg, MAP
GTZ (€300K) focused on medicinal and
European
aromatic plants
Bilaterals
Several Italian funded ag programs
Turkish funding for cold storage capacity
in Mamushe
Note (1) : DCA program is fully subscribed and no longer lending
Sources: Interviews 56
Lack of Demand Driven Focus (Limited Ability to Meet Customer Requirements)
In a well-developed agricultural system, both large and small

producers fit within a marketing chain that brings goods to market
Well-Development Marketing Chain
Sorting, Export Logistics Distribution in
Production and
Collection Grading Transportation and Customs Export
Harvesting
Packing Procedures Markets
Collection
Collection Wholesalers
Wholesalers and
and
Small
Small Farmers
Farmers Small
Small Marketers
Marketers Transportation
Transportation agents
agents
Centers
Centers retailers
retailers
Land
Land transport
transport Customs,
Customs, Taxes
Taxes Distribution
Distribution
Vertically
Vertically integrated
integrated producers
producers // marketers
marketers companies
companies and Quarantine
and Quarantine Agents
Agents
Farming
Farming cooperatives,
cooperatives, farmers
farmers associations
associations
Large
Large Marketers
Marketers Small
Small Marketers
Marketers
Large
Large marketers
marketers are
are normally
normally vertically
vertically integrated
integrated along
along Small
Small marketers
marketers mainly
mainly focus
focus on
on selling
selling crops
crops produced
produced
the
the whole
whole supply
supply chain,
chain, and
and have
have their
their own
own production
production by
by the
the multitude
multitude of
of small
small producers
producers operating
operating in in the
the
lands,
lands, packing
packing houses
houses and and end-customer
end-customer contracts
contracts sector.
sector. Cooperatives
Cooperatives can can also
also play
play this
this role.
role.
The
The rationale
rationale behind
behind their
their business
business model
model is is to:
to: Small
Small marketers
marketers depend
depend on on dealers
dealers and and packing
packing houses
houses
–– Reduce
Reduce supply risk and dependency on the
supply risk and dependency on the large
large to
to supply
supply them
them with
with their
their needs
needs ofof export
export volumes
volumes
number of small size farmers
number of small size farmers The
The level
level of
of profitability
profitability for
for small
small exporters
exporters is is much
much lower
lower
–– Better
Better control
control cost
cost and
and quality
quality of
of crops
crops produced
produced than
than large
large ones
ones since
since they
they pay
pay for
for the
the mark-ups
mark-ups of of all
all
Large
Large marketers
marketers base
base their
their business
business onon supplying
supplying majormajor player
player upstream
upstream of of the
the supply
supply chain
chain (farmers
(farmers and
and
international
international retail
retail chains
chains packers)
packers)
Source: Interviews
57
The distribution system in Kosovo lacks specialized intermediaries

in the value chain and non-Kosovo customers perform key roles
Marketing Chain in Kosovo
Sorting, Export Logistics Distribution in

Production and
Collection Processing Transportation and Customs Export
Harvesting
Packing Procedures Markets
Small
Small Farmers
Farmers Perdrini
Perdrini Association
Association Pepper
Pepper Processing
Processing Customers
Customers in
in Macedonia
Macedonia
Foreign
Foreign
Small
Small Farmers
Farmers Pestova
Pestova (Processor)
(Processor) Distributors
Distributors
Collectors
Collectors Hit
Hit Flores
Flores Slovenian
Slovenian Processors
Processors
Small
Small Farmers
Farmers Etlinger
Etlinger Austrian
Austrian Customer
Customer
Comments
Comments
For
For the
the majority
majority ofof export
export products,
products, the
the exporter
exporter works
works directly
directly with
with small
small producers
producers and
and do
do not
not benefit
benefit
from vertically integrated production or from a cooperative or intermediary who can perform
from vertically integrated production or from a cooperative or intermediary who can perform intermediary intermediary Roles performed
steps
steps in
in the
the marketing
marketing chain.
chain. by foreign
customer
In
In addition,
addition, most
most exporters
exporters rely
rely on
on foreign
foreign customers
customers forfor critical
critical steps
steps in
in the
the marketing
marketing chain
chain including
including
final
final packaging,
packaging, processing,
processing, transportation
transportation and
and sale
sale to
to distributors
distributors and
and retailers.
retailers. This
This both
both reduces
reduces thethe
margins of exporters and makes them dependant on customers with knowledge
margins of exporters and makes them dependant on customers with knowledge of the end market. of the end market.
Source: Interviews
58
Improvements in demand chains have floundered on lack of trust,

a “transactional mentality” and a lack of incentives
An Example of Compliance with Customer Requirements
Sale
Sale of
of Peppers
Peppers to
to Macedonian
Macedonian Processors
Processors General
General Issues
Issues
Customer Requirements: Macedonian 1 Lack of trust. Because farmers do not value

1
the relationship with the customer, they are
processors in Bitola have been purchasing
prepared to game the system to increase
peppers from Kosovo since 2008. There are
volume in the short-term at the expense of the
specific requirements for variety, size (over
long-term relationship.
30cm), shape (straight) and color (red).
2
2 Lack of knowledge of customer
Intermediaries: Perdrini has participated as an requirements. Unless an intermediary (such
intermediary working with farmers to collect as Perdrini) educates farmers on requirements,
produce that meets the customer specifics. there is limited knowledge and ability to meet
Perdrini has also helped farmers grow the these requirements.
correct varieties. 3 Lack of enforceable contracts. In most

3
cases, there is no contract between the
Problems: Farmers intentionally try to “game” intermediary (or buyer) and the farmer such
the system by packing peppers that do not that investments in inputs and training cannot
comply with requirements on the bottoms of always be recouped. This limits the willingness
boxes. Perdrini does not receive a fee for of intermediaries and buyers to invest in
services to incent continued investment and helping smallholders understand and meet
there is no contractual relationship between the requirements.
farmer and Perdrini or Perdrini and the
44 Lack of incentives. In Kosovo, virtually all

processor. However, as the third year of the
intermediaries are associations rather than
relationship begins, farmer responsiveness to
cooperatives. Associations are not able to buy
customer requirements is improving.
and sell products and, therefore, have no
material incentive in expending volumes.
Source: Interviews
59
Lack of Demand Driven Focus (Limited Development of Distribution and Marketing Chain)
There are a limited number of packhouses and storage businesses

in Kosovo although more are in the planning stage
Selected Packhouses and Cold Storage Facilities in Operating and in Planning
Leshak Podjeve
Dren
Istog Albanik
In operation.
In operation. Socanice 100m2 cooling for
100m2 cooling for cabbage, carrots
apples Banjske Comments
Podjeve Comments
Zubin Potok Zvecan Mitrovice
Llapshtice Gllamik Collection
Collection and and packing
packing operations
operations
Batllave Orllan
Istog Rakosh Runik Vushttri
highlighted
highlighted on the map are ones
on the map are ones that
that are
are
Vrelle
Kilodernice Skenderaj integral
integral to to the
the production
production value
value chain,
chain,
Fshat I Ri Gjurakc Liaushe Prapashtice
Vitomirice Dobrushe Polac Cirez
Prishtina Marec
i.e.
i.e. facilitating
facilitating the
the movement
movement ofof
Kastriot
Peje Siceve Dobroshevc
Fushe Kosove Hogosht agriculture
agriculture goods from producers to
goods from producers to the
the
Raushiq Baran Drenas Bardh I Madh
Strellc
Kline
Komoran
Artane markets
markets
Jabllanice Drenoc Janjeve Dardane
Decan Liapushnik
Irznic Lipjan Bresalc
Mamushe Kralan Krojmir Krajishte
Miresh Approximately
Approximately 5050 storage
storage units
units exist
exist
In planning Malisheve around
100m2 cooling for
Junik
Ratkoc Rahovec Gjilan around Pristina;
Pristina; however,
however, the
the facilities
facilities
Shtime Ferizaj
tomatoes Gjakove Therande Pozharan Zheger are
are used for wholesalers and traders to
used for wholesalers and traders to
Xerxe Pleshine
Rogove Krushe e MMushtisht Greme Gjylekare store
store goods
goods that
that have
have already
already been
been
Gacke Viti
Krusha
Damjan Pirane VerbeshticeBrod
Kacanik purchased.
purchased. They
They are
are not
not part
part of
of the
the
Korishe
In planning, Prizren
Hoce e Qytetit
Sherpce production value chain
production value chain
Zhur Ham Elezit Vushttri
180m2 cooling for Mushnikove
tomato, In operation.
Brodosafc
cucumber, 150m2 cooling for
Dragash potatoes
cabbage, pepper, Brod
melon
Restelica

60
Despite this, packhouses can be profitable and should be attractive

for private investment
Data from the Business Plan for a Proposed Packhouse Business in Peja Called “Vegco"
Annual Purchases by Commodity
Metric Ton
Cash Flow Per Year
Thousands of € Cumulative
Cash Flow
Melon - 410 MT
€ 423 € 465
€ 350 € 385
Cucumber - € 330
980 MT
Peppers - Investment Year 1 Year 2 Year 3 Year 4 Year 5

1880 MT
Cabbage - 3-Year Return of
1900 MT Investment
Tomato -
980 MT Based on business plan
assumptions, Vegco has an
-€ 1,143 IRR of over 35% making it
Total
Total == 6150
6150 MT
MT potentially a very attractive
Processed Annually
Processed Annually investment
Sources : KPEP, BAH Analysis

Notes : IRR = Internal Rate of Return, which is a calculation of the overall return of the investment.
61
Improvements in this area will be necessary to satisfy customer

demands for quality and predictable, flexible and reliable delivery
Product and Service Requirements of Agriculture Commodities Importers
Retailers
Retailers are
are increasingly
increasingly requiring
requiring high
high quality
quality products
products by
by imposing
imposing certain
certain certification
certification standards
standards
(e.g.,
(e.g., GlobalGAP,
GlobalGAP, BRC,
BRC, HAACP,
HAACP, IFSIFS standards)
standards)
High
High Quality
Quality Kosovo
Kosovo isis handicapped
handicapped by
by the
the lack
lack of
of standards
standards compliance
compliance of
of producers
producers and
and private
private labs
labs and
and by
by
Product
Product lack
lack of
of compliance
compliance of
of GoK
GoK institutions
institutions with
with EU
EU standards.
standards.
Predictability: Whereas
Predictability: Whereas thethe demand
demand is
is variable,
variable, irregular,
irregular, and
and changes
changes from
from one
one day
day to
to another,
another,
retailers expect that their changing requirements would be predicted by their suppliers
retailers expect that their changing requirements would be predicted by their suppliers
Predictable,
Predictable,
Flexible Flexibility: The
Flexibility: The retailers
retailers prefer
prefer not
not to
to commit
commit toto purchase
purchase specific
specific quantities.
quantities. Retailers
Retailers such
such as
as
Flexible and
and Carrefour
Carrefour try
try to
to order
order the
the agriculture
agriculture crops
crops that
that they
they need
need few
few days
days inin advance
advance
Reliable
Reliable
Service
Service
Reliability: On-shelf
Reliability: On-shelf availability
availability is
is one
one of
of the
the top
top priority
priority fore
fore retailers.
retailers. Retailers
Retailers are
are very
very sensitive
sensitive
about
about time. They want to track the status of their crop order, and to make sure that delivery would
time. They want to track the status of their crop order, and to make sure that delivery would be
be
Delivery
Delivery on-time
on-time

62
As an example, food produce retailers in the UK are reducing their

inventory stock levels and as such require more flexible and
frequent deliveries from their suppliers
Retail Logistics Trends
E (2006)
M PPLLE
AM
EEXXA
K
UUK Average Retailer Stock Level Average Delivery Frequency from Distribution Center
(in Day) per Category per Week
30
Non Foods 3.6
Slower Moving
25 4.6
Grocery
CAGR
(1996-2005)
Stock Level (Days)
Frozen 5.1
20
Category
BWS -0.7% Beers, Wines
5.1
and Spirits
15 Chilled / Fresh
Non 7.5
Foods -6.3% Meats
SMG -1.8% Fast Moving

9
10 FMG -1.2% Grocery
Frozen -3.4%
Produce 9.8
5
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 0 2 4 6 8 10 12
Year Delivery Frequency
Sources: IGD Research, Retail Logistics 2006

63
Lack of Demand Driven Focus (Limited Promotion Capabilities)
In 2009, Kosovo producers were represented at approximately

eight trade events, primarily as visitors
Kosovo’s Trade Show Participation Around the World (2009)
BioFach, Nuremberg, Germany,

February, 6 visitors
Fruit Logistica, Berlin, Germany, GroTech, Antalya,
February, 1 exhibitor, 6 visitors Turkey, December, 4
visitors
Albania Agricultural Germany Turkey Novi Sad Agricultural

Trade Show, October,
Fair, Serbia, May, ~
USA 2 exhibitors, ~ 5 Albania Serbia 30-40 visitors
visitors
Macedonia Bulgaria
International Trade Fair of FoodTech, Plovdiv,
New York Fancy Consumer Goods, Macedonia, Bulgaria, May, 8
Food Show, October, 2 exhibitors, visitors
June, 4 visitors Approximately 25-30 visitors
Conclusion
Kosovo producers participated in approximately eight trade shows around the world in 2009. Participants attended the fairs either as visitors to learn
about the market, competition and commodities, and / or as producers to display their goods
The major constraint in the attendance rate is that food processors need to be HACCP certified as a minimum to do business in countries abroad
Source : BAH Analysis; KPEP Interviews

64
Lack of Demand Driven Focus (Limited Promotion Capabilities)
With few exceptions, Kosovo producers have not managed to

promote their products, which are perceived as commodities with
poor quality
Promotion Issues Impacting Kosovo Agriculture Production
Kosovo
Kosovo agriculture
agriculture exporters
exporters are
are positioning
positioning their
their products
products on
on the
the lowest
lowest rung
rung of
of the
the supply
supply chain
chain and
and are
are
used
used primarily
primarily to
to fill
fill seasonal
seasonal demand
demand inin neighboring
neighboring markets
markets when
when domestic
domestic products
products are
are unavailable.
unavailable.
With
With the
the exception
exception of
of Pestova
Pestova and
and aa few
few other
other processors,
processors, no
no exporters
exporters have
have recognized
recognized brands
brands and,
and, in
in
fact,
fact, products
products are
are often
often relabeled
relabeled or
or re-packaged
re-packaged before
before being
being shipped
shipped to
to the
the retailer.
retailer.
Weak
Weak Agriculture
Agriculture producers
producers do
do not
not brand
brand fresh
fresh or
or processed
processed products
products as
as “Made
“Made in
in Kosovo”
Kosovo” even
even in
in markets
markets
Branding
Branding (e.g.. US, UK, Albania, Germany) where such branding would be well-received.
(e.g.. US, UK, Albania, Germany) where such branding would be well-received.
Agriculture
Agriculture producers
producers are
are not
not leveraging
leveraging Fair
Fair Trade
Trade trends.
trends. They
They are
are not
not associating
associating their
their products
products to
to the
the
natural
natural heritage
heritage of
of specific
specific regions,
regions, and
and not
not emphasizing
emphasizing the
the role
role of
of small
small farmers
farmers in
in producing
producing the
the crop.
crop.
In
In addition,
addition, few
few producers
producers areare taking
taking advantage
advantage ofof organic,
organic, halal
halal or
or other
other value-added
value-added branding.
branding.
There
There are
are aa relatively
relatively large
large number
number of of export
export promotion
promotion events
events organized
organized annually
annually to
to promote
promote exports
exports of
of
field
field and
and horticultural
horticultural crops,
crops, mainly
mainly handled
handled byby donor
donor agencies.
agencies. However,
However, these
these events
events are
are not
not executed
executed
Limited
Limited as
as part
part of
of aa clear
clear multi-year
multi-year campaign
campaign to to develop
develop specific
specific markets
markets for
for specific
specific Kosovo
Kosovo products
products and
and
Promotion overall
overall measurement
measurement of of results
results from
from trade
trade programs
programs isis weak.
weak.
Promotion
Campaigns
Campaigns There
There isis very
very little
little focus
focus on
on other
other types
types of
of marketing
marketing programs
programs that
that can
can be
be both
both low-cost
low-cost and
and highly
highly
effective such as “earned media”, advertising and direct marketing to retailers and buyers
effective such as “earned media”, advertising and direct marketing to retailers and buyers in target in target
markets.
markets.
Sources: Interviews
65
Infrastructure Capacity Issues
Overall 17.4% of agricultural land is irrigated with significant

differences by municipality
Percent of Irrigated Land by Region
(% of Arable Land - 2007)
Leposaviqi
Zvecani Mitrovica
Zubin Potoku
Podujeva Comments
Comments
Vushtrria
Istogu Skenderaj Municipalities
Municipalities like
like Shtërpca
Shtërpca
Peja
F. Kosova Prishtina and
and Zveçani show aa high
Zveçani show high
Kamenica percentage
percentage of of irrigation
irrigation
Klina Drenas Obiliqi
Novoberda because
because ofof the
the relatively
relatively
Decani small
small amount of arable
amount of arable land
land
Malisheva Lipjani
Gjilani
(1168
(1168 and
and 801
801 ha ha
Gjakova
Shtimja respectively)
respectively) and
and thethe use
use ofof
Rahoveci
Ferizaji informal
informal pump-based
pump-based
Suhareka Vitia systems.
systems.
Gjilani, Ferizai
Gjilani, Ferizai and
and Vitia
Vitia are
are
Prizreni Shterpca
Kacaniku also
also served
served primarily
primarily byby
informal
informal systems
systems
Dragashi
Source : Statistics Office of Kosovo (2007)

66
Three formal irrigation systems cover most of Dukagjini and

northern Kosovo-Plains but leave the southeast uncovered
Areas Covered by Formal Irrigation Systems
(2009)
Comments
Comments
Ibër-Lepenc Ibër-Lepenc is
Ibër-Lepenc is aa sprinkler
sprinkler system
system supplied
supplied by by the
the
Drini i Bardhë Gazivode reservoir (Iber River)
Gazivode reservoir (Iber River) via the 54 km via the 54 km
Pridvorica-Obiliq
Pridvorica-Obiliq canal. canal. Although
Although itit had had an an original
original
designed
designed capacity of 30,000ha, less than 1200ha are
capacity of 30,000ha, less than 1200ha are
currently
currently irrigated.
irrigated. At At the
the time
time of of its
its design,
design, aa phase
phase
two
two covering
covering 43,000
43,000 ha ha in
in southern
southern Kosovo Kosovo Plains
Plains and
and
the Vitina Plain was planned but
the Vitina Plain was planned but not completed. not completed.
Radoniqi-Dukadjini consists
Radoniqi-Dukadjini consists of of two
two systems.
systems. The The
Radoniqi
Radoniqi system (Gjakova) is a sprinkler system
system (Gjakova) is a sprinkler system built
built
in
in 1986
1986 with
with aa designed
designed capacity
capacity of of 10,250
10,250 ha ha and
and aa
current
current irrigated
irrigated areaarea of of 5000
5000 ha. ha. TheThe Dukadjini
Dukadjini
system
system (Prizren) is an open channel system
(Prizren) is an open channel system built
built in
in
1963.
1963. Although
Although 3500ha3500ha was was originally
originally covered
covered by by
sprinklers,
sprinklers, almost
almost 75% 75% has
has beenbeen lostlost toto creeping
creeping
urbanization.
urbanization.

Drini Bardhë was
Drini ii Bardhë was formed
formed from from thethe 2003
2003
Radoniqi- consolidation
consolidation of of the
the three
three irrigation
irrigation companies
companies of of Peja,
Peja,
Dukadjini Area Deçani and Istog municipalities. It is
Deçani and Istog municipalities. It is an open channel an open channel
system
system built
built inin the
the 1950s.
1950s. ItIt is is considered
considered inefficient
inefficient
Uncovered by
and
and poorly
poorly maintained
maintained and and suffers
suffers shortages
shortages in in July
July
Formal and August.
and August.
Irrigation
System
Source : MESP Irrigation Strategy (2009), Kosovo Trust Agency website, World Bank (2009), Interviews.
67
All of the formal systems are operating below installed capacity

due to deferred maintenance and lack of demand
Capacity of Formal Irrigation Systems
(2009 with some 2004 data)
37,190 Design Capacity

Equipped Area
30,000 Present Irrigable Area

Area Actually Irrigated
23,500
18,000
14,500 15,250
13,600
7,500 7,500
4,000
1,200 2,100
Drini i Bardhë Ibër-Lepenc Radoniqi-Dukadjini
Sources: MESP Irrigation Strategy (2009), World Bank, Interviews

Notes : Ibër-Lepenc Irrigable area requires rehabilitation of the pump network. Area actually irrigated is 2004 for Drini i Bardhë and Radoniqi-Dukadjini and 2009 for
Ibër-Lepenc.
68
In 2006, none of the systems were operating on a financially

sustainable basis
Financial Results for Public Irrigation Systems
Thousands of € – 2006
Ibër-Lepenc
Ibër-Lepenc Radoniqi-Dukadjini
Radoniqi-Dukadjini Drini
Drini ii Bardhë
Bardhë
Loss = €5,073 Loss = €1,895 Loss = €496

KTA (€44) Donors (€269)
In-kind Reduction
KCB (€80)
Grant Previous in Equity
€353 (Other) €212 (Other) €30 (Other)
(€63) Grants (€133) (€189)
€193
€1,650 Staff Cost Reduction KCB(€40)
Reserves
in Equity for Bad €442 Depreciation
Reduction
(€1,638) Debt
in Equity
(€5010)
€6,090 Depreciation €1,045 Staff Cost

€118 Staff Cost
Sales €3,020
€101 €583 Depreciation
Other Inc Other Inc €29
Irrigation Inc €455 €418 Supplies Irrigation Inc €65
Operating Operating Operating Operating Op Income Operating

Income Expense Income Expense Expense
Sources: Audited Financial Statements from KTA website.

Notes : P&Ls show grants as a source of income. For purposes of this analysis, grants have been removed from Income. 2006 is the
last year for which financial statements are available.
69
Fees are charged on a flat per hectare basis and the price is
significantly less than the true cost of irrigation
End-user Irrigation Tariff (Price) and Shadow Price (Cost)
€ per Ha per Year (2009)
The Ibër Lepenc system

loses approximately €280
for every hectare
irrigated
€ 120 Comments
Comments
Iber Lepenc
Ibër-Lepenc
Ibër-Lepenc charges
charges aa flatflat fee
fee of
of €120
€120 perper hectare
hectare
€ 400 per
per year
year andand loses
loses approximately
approximately €280 €280 perper
irrigated
irrigated hectare.
hectare. ItIt compensates
compensates for for these
these losses
losses
in
in part
part through
through sale
sale ofof technical
technical water
water toto the
the
Kosovo
Kosovo ee Res Res power
power station,
station, salesale of
of electricity
electricity
from
from the
the Zuben
Zuben Potok
Potok hydro
hydro station
station and
and provision
provision
of
of municipal
municipal drinking
drinking water.
water.
€ 100
The
The other
other systems
systems charge
charge €100€100 perper hectare
hectare perper
Other Systems year.
year. Although
Although costs
costs are
are less,
less, because
because the the
systems
systems require
require less
less pumping
pumping than than for
for Ibër
Ibër
Lepenc, the shadow price is likely significantly
Lepenc, the shadow price is likely significantly
Shadow Price Not Known higher
higher than
than the
the cost.
cost.
Sources: Interviews
70
Continued investment in the formal systems should be carefully

examined for engineering and economic feasibility
Summary of Estimated Investments in Formal Irrigation Systems
Estimated
Irrigation
Investment Description of Issues
Provider
(2007-2013)
Ibër-Lepenc is suffering from low market demand and is currently irrigating only 3% of its installed
capacity. Reconstruction of pump stations is being considered. However, improvements must be
Ibër-Lepenc I €6.4M made in the context of bringing the system back up to a break-even level of demand and considering
non-irrigation demands on the reservoir.
The Lepenc system (Ibër Lepenc II) was originally designed in the 1960s to irrigate land in Southern
€298.5-677.6M Kosovo-Plains and in Macedonia. It was intended to transfer water from the Lepenc catchment and
Ibër-Lepenc II (Pending New from two smaller catchments on the Drenica and Gracanka rivers. Although a system in southeast
Study) Kosovo is required, plans for the Lepenc system must be thoroughly updated to account for political,
economic and technical changes over the past 40 years.
Dukadjini has lost almost 75% of the area in its original planned capacity due to unregulated
urbanization in Prizren municipality. Of the remaining area, 1500 hectares consists of open
Dukadjini NA channels which are now in poor condition and used in part for urban waste. Continued investment in
the system needs to be based on a new plan reflecting current conditions.
Planned investment for the Radoniqi system including rehabilitation of two pumping stations to
Radoniqi €9.6M increase the irrigable area by 3,600 hectares. Of all the systems, Radoniqi is considered the best
candidate for expansion based on demand and the current maintenance state of the system.
Drini I Bardhë is an open channel system that has been poorly maintained and suffers from low
water efficiency. True water use is hard to gauge because of the large number of private channels
Drini i Bardhë €9.6M
drawing water directly from the rivers. Careful analysis is needed before additional investment can
be made with the most likely candidate for investment on the Peja system.
Sources: MESP Irrigation Strategy (2009), World Bank

Notes : Estimated investment (2007-2013) is drawn directly from the Irrigation Strategy. Investment estimates for Iber-Lepenc
71
Overall the are a number of inter-related problems that must be

addressed to put the formal irrigation system on a stable basis
Problems Identified in Formal Irrigation Principles of a Strategy to Improve Formal
Irrigation
Water
Water Permit
Permit Issues
Issues Processes
Processes
Cost Effectiveness. The cost effectiveness of any
Low
investments in irrigation must be assessed. Cost-
Low Water
Water Use
Use Efficiency
Efficiency
effectiveness depends greatly on the value and types
Low of crops that are and will be cultivated in the irrigated
Low Collection
Collection Rate
Rate for
for Water
Water Use
Use
Payments
Payments area. For this reason, investment in the IPs must be
considered together with development of the sector as
Significant
Significant Deferred
Deferred Maintenance
Maintenance a whole.
Demand. All of the systems, and especially Ibër-
Lack Lepenc, irrigate such a small portion of the irrigable
Lack of
of Inter-basin
Inter-basin Transfer
Transfer System
System
area that almost no cost structure could achieve
financial sustainability. The key to survival and
Unregulated
Unregulated Urbanization
Urbanization development of these systems is to improve marketing
and pricing and re-build demand to break-even levels.
Insufficiently
Insufficiently Qualified
Qualified IP
IP Staff
Staff Integrated View of Water Needs. Most of the IPs
serve other water needs besides irrigation – technical
Inability
Inability to
to Attract
Attract Staff
Staff on
on Public
Public water for industry, potable water, power generation,
Service Salaries
Service Salaries etc. The evolution of the irrigation system must
happen within the context of an integrated water
Low
Low Level
Level of
of Market
Market Demand
Demand management strategy for Kosovo that considers all
uses of the resource.
Lack
Lack of
of Volume-based
Volume-based Pricing
Pricing
Sources: MESP Irrigation Strategy (2009), World Bank

72
Starting from a low base, total area under greenhouse almost

doubled from 2004-2008
Growth in Greenhouse Area
Ha - 2004-2008
154
+28%
133
Comments
Comments
93 Greenhouses
Greenhouses are are used
used primarily
primarily
production
production of tomatoes and aa small
of tomatoes and small
amount
amount of of cucumbers.
cucumbers. SomeSome
73 lettuce
lettuce is
is produced
produced as as aa second
second
crop
crop in winter. Most other major
in winter. Most other major
crops
crops including
including peppers,
peppers, white
white
beans,
beans, aubergine
aubergine andand melons
melons and
and
produced
produced in in open
open field.
field.
2005 2006 2007 2008
Sources: Intercooperation Report (2008)

73
However, the area will need to double again even to meet import
substitution goals and by much more to support export crops
New Greenhouse Area Required for Import Substitution
Ha - 2008
130 284
Tomatoes Comments
Comments
Peppers 60
Cucumbers
Analysis
Analysis concludes
concludes thatthat 130
130 hectares
hectares of of
greenhouse are needed to substitute
greenhouse are needed to substitute imports imports
of
of only
only three
three crops
crops -- tomatoes,
tomatoes, peppers
peppers and and
50 cucumbers - during the late Spring and
cucumbers - during the late Spring and
Summer
Summer which
which isis the
the peak
peak time
time for
for imports.
imports.
154 20 By
By improving
improving the
the quality
quality of
of greenhouses,
greenhouses,
tomato
tomato harvests
harvests could
could bebe moved
moved fromfrom the
the last
last
decade of June to the beginning of
decade of June to the beginning of June and June and
imports
imports could
could bebe substituted
substituted fromfrom June
June to
to
November. Pepper harvests could
November. Pepper harvests could be moved be moved
from
from late
late July
July (open
(open field)
field) to
to the
the second
second half
half
of
of May,
May, etc.
etc.
Greenhouses
Greenhouses could
could also
also significantly
significantly improve
improve
the price and volume of export crops destined
the price and volume of export crops destined
for
for Europe
Europe and
and the
the region.
region.
2008 Area Additional Area Total Area Needed

Needed For Import For Import
Substitution Substitution

74
Almost all greenhouse area is in Dukagjini and 87% is of the simple

tunnel variety, which is cheap to build but has relatively low yields
Location and Types of Greenhouses
Ha - 2008
Block Type
154 Medium Technology
3 Block Type 2%
16 Medium Technology
11%
93
4 2
134 Simple Tunnels

87%
87
29
2 1
11 11 Simple Tunnel
1 6 4 26
10 7 1
4 4 1 2 1 Conclusion
Tunnel greenhouses are much cheaper to build at €2-4 per square meter
MamushaSuhareka Rahovec Prizren Gjakova Other Total
as opposed to €15-20 for more advanced technology.
However, tunnels cannot vent heat in Summer allowing only one
planting; they have lower yields and do not allow vine plants like
tomatoes to grow to heights required for retail quality.
75
Greenhouse cultivation improves yields and incomes, but the

payback is long
Return on Investment for Greenhouse Grown Crops
€ per 1000 square meters planted
6-Year Return of Cumulative

Investment Cash Flow
€709 €709 €709 €705 €709 €705 €705 €709 €709 €705
Investment
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Tomato Produced in
Tunnel Greenhouse
(Single Planting) 9-Year Return of
(€4,000)
Investment
Cumulative
€1817 €1819 €1817 €1011 €1817 €1811 €1017 €1817 €1817 €1811 Cash Flow
Investment
Tomato + Cucumber
Produced in Block
Greenhouse (Two
Plantings)
(€ 15,000) 9-Year Return of
Investment Cumulative
€1795 €1795 €1795 €989 €1795 €1795 €1789 €995 €1795 €1789 Cash Flow
Investment
Peppers + Lettuce
Produced in Block
Greenhouse (Two
Plantings)
(€ 15,000)
76
Greenhousing enables farmers to take advantage of seasonality to

achieve higher prices
Monthly Price of the Example Ag Commodities
EU Import Prices
(2008-2009) (in €; Series Beginning = 1)
1.6
Kosovo Open Kosovo Open Tomato
1.4 Field Harvest Field Harvest
1.2
0.8
Cucumber
0.6
0.4 Peppers
Kosovo Open
Kosovo Open
0.2 Field Harvest
Field Harvest
0
D 08
Ju 8
Ju 9
Ap 8
A u 08
Ap 9
A u 09
N 8
9
S e 08
S e 09
08
F e 09
Ju 8
Ju 9
M 8
M 9
M 08
M 09
O 8
Ja 8
O 9
0
0
-0
-0
-0
-0
-0
-0
0
0
0
-0
0
n-
n-
-
n-
n-
l-
l-
b-
g-
b-
g-
r-
r-
p-
p-
ov
ar
ar
ct
ay
ct
ay
ec
Ja
Fe
Sources: ITC Comtrade, Terminal Market Data; Intercooperation for Some Harvest Dates; Interviews
77
However, there are a number of technical and economic

constraints that must be overcome to significantly expand
greenhousing, with access to finance the most critical issue
Constraints to Expansion of Greenhousing
11
Quality
Quality of
of The
The tunnel
tunnel style
style greenhouses
greenhouses currently
currently in
in use
use do
do not
not vent
vent Summer
Summer heat
heat well
well leading
leading to
to early
early senescence
senescence
Greenhouse
Greenhouse of
of crops and reduced yields. There are currently a few small companies in Kosovo building better quality
crops and reduced yields. There are currently a few small companies in Kosovo building better quality
Construction
Construction greenhouses
greenhouses that
that enable
enable better
better micro-climate
micro-climate control.
control.
22 The
The value
value of
of climate
climate controlled
controlled production
production is is the
the ability
ability to
to take
take advantage
advantage of
of seasonality
seasonality and
and to
to improve
improve
Post-harvest
Post-harvest the
the quality
quality of
of the
the produce.
produce. InIn order
order to
to take
take advantage
advantage of of this,
this, the
the marketing
marketing chain
chain must
must bebe improved
improved
Processing
Processing and
and including
including better
better market
market intelligence,
intelligence, investment
investment in in packing
packing and and sorting
sorting houses,
houses, and
and cold
cold storage
storage and
and
Marketing
Marketing transport.
transport.
33
Improved
Improved Crop
Crop Only
Only tomatoes
tomatoes and
and aa small
small amount
amount of
of cucumbers
cucumbers are
are currently
currently grown
grown in
in greenhouses
greenhouses in in Kosovo.
Kosovo. Crops
Crops
such
such as
as peppers,
peppers, aubergine,
aubergine, melon
melon and
and white
white beans
beans are
are good
good candidates
candidates for
for diversification.
diversification. Farmers’
Farmers’
Diversity
Diversity
decisions
decisions on
on choice
choice of
of crop
crop and
and variety
variety are
are not
not based
based on
on qualified
qualified advice
advice or
or appropriate
appropriate farm
farm trials.
trials.
44
Planting
Planting and
and Most
Most farmers
farmers plant
plant only
only once
once per
per year
year or
or use
use lettuce
lettuce as
as aa second
second crop
crop during
during the
the winter,
winter, primarily
primarily
Harvesting because poor aeration does not allow a second crop during the Summer. Improved
because poor aeration does not allow a second crop during the Summer. Improved greenhouse greenhouse
Harvesting
Schedule aeration,
aeration, improved
improved knowledge
knowledge of
of planting
planting and
and harvesting
harvesting schedules,
schedules, and
and better
better availability
availability of
of seedlings
seedlings
Schedule
will improve the growing season and return on investment from greenhouses.
will improve the growing season and return on investment from greenhouses.
55
Crop
Crop Management
Management Although
Although drip
drip irrigation
irrigation and
and mulching
mulching are
are in
in use,
use, farmers
farmers require
require technical
technical assistance
assistance on
on growing
growing
Techniques practices
practices (plant density, plant spacing, fruit setting, use of fertilizer, etc.). In addition, farmers tend
(plant density, plant spacing, fruit setting, use of fertilizer, etc.). In addition, farmers tend to
to
Techniques
over-use
over-use chemical
chemical fertilizers,
fertilizers, which
which reduces
reduces yields
yields and
and can
can impact
impact thethe quality
quality and
and safety
safety of
of the
the crop.
crop.
66
Even
Even with
with proper
proper crop
crop management
management andand planting
planting schedules,
schedules, the
the payback
payback period
period for
for greenhouses
greenhouses can
can be
be
Critical
Most
Access
Access To
To Finance
Finance relatively long. Programs are necessary to ensure that smallholder farmers have the necessary
relatively long. Programs are necessary to ensure that smallholder farmers have the necessary access access
to
to finance
finance to
to invest
invest in
in this
this area.
area.
Sources: Intercooperation Report (2008), BAH Analysis

78
Transportation Disadvantages
85% of Kosovo’s agricultural exports travel over land to their final

destination through four primary land border crossings
Primary Exit Points for Kosovo’s Agricultural Exports (2008)
Kulla
Kulla (To
(To Montenegro,
Montenegro, West
West 0.07% 0.01% Air
Europe
Europe and
and Port
Port of
of Bar)
Bar)
Ag
Ag Exports
Exports == €2.7M
€2.7M // 9.7MT
9.7MT Merdare
Merdare (To
(To Serbia,
Serbia, E-80
E-80 and
and
Northern Europe)
Northern Europe) 14.7% 17.6% Land-Sea
Ag
Ag Exports
Exports == €4.9M
€4.9M // 10.8MT
10.8MT
Mitrovice
Prishtina
Peje
Pristina
Pristina Airport
Airport Land
Ag 85.2% 82.4%
Ag Exports
Exports == €13k/8kT
€13k/8kT
Prizren
Hani
Hani ii Elezit
Elezit (To
(To Macedonia,
Macedonia,
Vermica
Vermica (To
(To Albania,
Albania, West/South
West/South Southern
Southern Europe
Europe andand Port
Port of
of
Europe
Europe and Port
and Port of
of Durres)
Durres) Thessaloniki; Value
Category 1(€) Category 2 (T)
Weight
Thessaloniki; E-75
E-75 through
through Serbia)
Serbia)
Ag
Ag Exports
Exports == €5.1M
€5.1M // 23.6MT
23.6MT Ag
Ag Exports
Exports == €4.3M
€4.3M // 14.2MT
14.2MT
Sources: Kosovo Customs, Interviews with Transport Companies

Note: The five border crossings pictured represented 94.25% of agricultural exports in 2008
79
The unavailability of transiting Serbia makes road transportation 9-

17% more costly and disadvantages Kosovo within the region
Comparison of Transport Costs for Shipping a 23 Ton Load by Road to Hamburg, Germany
(in € per Truckload) (2009)
Distance
This
This route
route is
is the
the most
most
in KM
direct but is currently
direct but is currently
unavailable
unavailable because
because itit
1552 Belgrade 1,397
requires
requires transit of
transit of
Serbia.
Serbia.
1896 Pristina (Merdare) 1,706
1956 Podgorica 1,760
1980 Skopje 1,782

These
These routes
routes are
are
currently
currently most used and
most used and
2065 Pristina (Hani) 1,859 are 9% and 17% more
are 9% and 17% more
costly
costly than
than the
the Merdare
Merdare
2135 Tirana 1,922 route.
route.
2217 Pristina (Kulla) 1,995
Because imports greatly exceed exports, deadhead rates for exports from Pristina are discounted by 12% when a round-trip is provided.
Sources: Interviews with Transport Companies

80
High value perishables and processed goods can overcome the cost
of shipping while commodities cannot
Commodity Values and Transport Costs as a Percentage of Value
(€ per 23 Ton Truckload to Hamburg - 2009)
7% Transport Cost as % of
Goods Value
9%
10%
11%
Transport Costs Exceed 20% of Value of Goods

26,251 15%
18%
20,000 18,783 20% 21%
16,000
28% 30%
11,092
8,907 7,969 7,590 53%
5,146 4,600
1,778
Berries (fresh) Dried Herbs Fresh Pickled Potato Apple Tomato Carrots Cabbage White Bean Courgette
(Hit Flores) Peppers (1st Peppers
Sort) (Etlinger)1
Sources: Kosovo Customs, Interviews with Transport Companies

Note: 1) Etlinger price assumes highest value products in retail packaging. Product in wholesale packaging (2kg) is valued at €8000 per truckload.
81
Land-sea routes use three ports – Thessaloniki in Greece, Bar in

Montenegro and Durres in Albania
Primary Handling Ports for Goods from Kosovo
SLOVENIA
CROATIA
Bar,
Bar, Montenegro
Montenegro
BOSNIA SERBIA
5M
5M tons/year
tons/year per
per year
year cargo
cargo
worked
worked
ITALY KOSOVO 120k
120k m2m2 covered
covered storage
storage
MONTENEGRO Bar
Bar is
is not
not used
used as
as frequently
frequently in
in
recent years by Kosovo
recent years by Kosovo
ALBANIA MACEDONIA
companies
companies
Thessaloniki,
Thessaloniki, Greece
Greece
Durres,
Durres, Albania
Albania GREECE
15.95M
15.95M tons/year
tons/year (366k
(366k TEUs)
TEUs)

2.28M
2.28M tons/year
tons/year cargo
cargo worked
worked 85k m2 covered storage
85k m2 covered storage

23.5k m2 covered storage
23.5k m2 covered storage Used

Used byby Kosovo
Kosovo companies
companies for
for

Primarily
Primarily used
used by
by Kosovo
Kosovo trial
trial exports to the UAE
exports to the UAE and
and
companies
companies for imports of
for imports of grain
grain Saudi
Saudi Arabia
Arabia (Abi
(Abi Foods)
Foods)
and
and perishables
perishables from
from Italy
Italy (Port
(Port
of Bari)
of Bari)
Source: Lloyd’s (2007); Interviews

82
After completion of the Tirana Highway, the land route will remain
the most economical compared to other routes
Comparison of Transport Costs for Shipping a 23 Ton Truckload to Rotterdam (2009)
Most Economical Route

€2300 / ~35 hours
Pristina (through Kulla) Podgorica(through BiH/Croatia Highway)
Rotterdam
Current
Current
Situation
Situation Most Economical Land-Sea Route
€2900 / ~55 hours
Pristina Durres Ancona Rotterdam
€850 / ~ 12 hours €785 / ~ 12 hours €1265 / ~ 26 hours
(through Skopje-Ohrid) (Ro-Ro on ferry) (Ro-Ro on ferry)
Upon
Upon Most Economical Land-Sea Route
Completion
Completion ofof
Pristina-Tirana €2600 / ~45 hours
Pristina-Tirana Pristina Durres Ancona Rotterdam
Highway
Highway €550 / ~ 5 hours €785 / ~ 12 hours €1265 / ~ 26 hours
(through Vermica) (Ro-Ro on ferry) (Ro-Ro on ferry)
IF
IF Transit
Transit of
of
Serbia Most Economical Route
Serbia
Becomes
Becomes €1900 / ~25 hours
Pristina E-80
Normalized
Normalized (through Merdare) (Croatia, Slovenia, Austria) Rotterdam
Conclusion
Upon completion of the Tirana Road, some traffic will shift to the Port of Durres or to land routes through Albania to compensate for bad weather
conditions, to take advantage of warehousing capacity there, or for goods originating in the Prizren area
However, the land route through Kulla will remain the most economical overall. If relations are normalized with Serbia, the Merdare route will have
significant advantages over all other routes to destinations throughout Europe.
Sources: Interviews with Transport Companies and Ports; BAH Analysis
83
There is currently no dedicated air cargo services to Pristina

airport with all cargo travelling on scheduled passenger rates
Air Cargo Operators at Pristina Airport
(in € per kg of effective weight assuming 100kg shipment - 2009)
Approximate
Approximate Price
Price per
per Kg
Kg to
to
Air
Air Carrier
Carrier Description
Description Frankfurt
Frankfurt (FRA)
(FRA)
Adria
Adria Airlines
Airlines Operates
Operates belly
belly cargo
cargo onon daily
daily flights
flights €2.58
€2.58 per
per kg
kg effective
effective weight
weight
(Intereuropa)
(Intereuropa) from
from Pristina
Pristina to
to Ljubljana
Ljubljana
Maximum
Maximum shipment
shipment sizesize of
of 22 tons
tons
Currently handles c. 500 kg/day
Currently handles c. 500 kg/day
Austrian
Austrian Airlines
Airlines Operates
Operates belly
belly cargo
cargo 66 days/wk
days/wk from €1.40
from €1.40 per
per kg
kg effective
effective weight
weight
(MCM)
(MCM) Pristina to Vienna
Pristina to Vienna
No
No dedicated
dedicated cargo
cargo flights
flights or
or
charters. Maximum weight
charters. Maximum weight of of
shipment
shipment 100100 kg
kg
Turkish
Turkish Airlines
Airlines Operates
Operates belly
belly cargo
cargo on
on passenger
passenger €1.70
€1.70 per
per kg
kg effective
effective weight
weight
planes
planes 55 times
times perper week
week
A
A freighter
freighter operates
operates 11 time
time per
per week
week
IST-PRN-
IST-PRN- MXP(Milano)-IST
MXP(Milano)-IST but but is
is
only
only used
used for
for inbound
inbound cargo
cargo to
to PRN
PRN
Use of the Turkish freighter to carry outbound cargo from Pristina to Milan (MXP) is an opportunity for Kosovo
exporters. Re-routed freighter rates are typically 30-50% of full rates. Turkish Airlines requires a license
from ICAO to offer this service.
Sources: Interviews
84
Inadequate Agricultural Regulation
The structure for food safety regulation in Kosovo is disjointed

with several different organizations responsible for parts of the
issue…
Agencies with Responsibility for Food Safety
Ministry
Ministry of
of Agriculture,
Agriculture, Forestry
Forestry and
and Office
Office of
of Prime
Prime Minister
Minister Ministry
Ministry of
of Health
Health
Rural
Rural Development
Development (MAFRD)
(MAFRD)
Ministry
Ministry of
of
MAFRD
MAFRD OPM
OPM Health
Health
Department
Department of
of
Plant
Plant Peja
Peja Institute
Institute Sanitary
Sanitary
Protection
Protection KFVA
KFVA Inspectorate
Inspectorate
Department of Plant Protection: Kosovo Food & Veterinary Agency Sanitary Inspectorate
Issues export certificates for all fresh and Issues Export Certificates for all animal Inspects and certifies processing facilities
processed foods based on lab tests for products
processed and visual inspection for fresh Issues import certificates for veterinary drugs,
Issues import certificates for seeds semen, live animals, etc.
Responsible for all phyto-sanitary inspectors
Peja Institute at border posts
Acts as the only government lab for safety
testing of plant products
Issues export certificates for wine and grapes
Conclusions
According to Food Law of April 9, 2009, similar functions from the Peja Institute and the Plant Protection Department will be consolidated into KFVA.
However, at present, this has not occurred and there is duplication of effort between the various organizations.
KFVA has a plan in place to achieve EU compliance in animal products with a target date of 2011. It is currently in the process of answering the
questionnaire and has invited the EU to set up the Food & Veterinary Office (FVO) in Kosovo. Plans at MAFRD are less advanced.
The labs at Peja Institute and KFVA do not have any international certification (e.g. ISO, EurepGAP) which has caused recognition issues.
Source: Interviews
85
… there are also two private labs, whose scope are limited by lack
of certification
Private Food Safety and Quality Labs in Kosovo
11 22
Sara
Sara &
& Meti
Meti Agrovet
Agrovet
Year
Year Opened
Opened 2008 2005
Location
Location Pristina Fushe Kosovo (suburb of Pristina)
Chemical and microbiological analysis in plants, Soil analysis but also capable of heavy metal
Area
Area of
of Focus
Focus food, fertilizers detection in food products
Size 2009 turnover €80,000 2009 turnover €100,000

Size
Conclusions
The Peja Institute is the primary body for testing agricultural goods. However, the Institute will use
the private labs to complete secondary testing when exporters or producers contest findings that
goods have not passed certification standards
Neither of the private labs are internationally recognized or have bilateral agreements with
governments in other countries
Sources: Interviews
86
The regulation and use of inputs is perceived to be ineffective for a

number of reasons
Issues Related to Regulation of Inputs
Farmers are not trained in the use of fertilizers and pesticides and tend to over-apply relative to the
amounts needed for specific crops
Over-Application
Over-Application Over-use is exacerbated by the common availability of poor quality inputs which require application
of
of Fertilizers
Fertilizers and
and at a rate above what is indicated by the instructions
Pesticides
Pesticides Over-use has been found on a number of occasions to effect the safety of horticultural products,
and consignments have been denied export certificates because of contamination by pesticides
and fertilizers
There is a significant amount of seed and other inputs that are imported and sold illegally and are
of poor quality, effecting yields and crop quality. The main entry points are believe to be the open
gates in the north.
Poor
Poor Quality
Quality of
of The Peja Institute tests and registers seed varieties, but testing is limited to only four crops
Seed and Other
Seed and Other (peppers, tomatoes, potatoes, winter wheat) and much seed is sold that has not been registered.
Inputs
Inputs
No input retailer has developed branding that justifies higher input prices based on input quality.
Despite this, several of the larger processors have begun to import higher quality seed and other
imports directly.
Input distributors report very infrequent inspections of their products and complain that lack of
Insufficient
Insufficient enforcement makes it difficult to compete with illegal or counterfeit imports.
Inspection
Inspection of
of Input
Input
MAFRD admits that their inspection force is insufficient to properly regulate the sale of agricultural
Distributors
Distributors
inputs at retail and wholesale distribution points.
Sources: Interviews
87
Pilot studies have shown farmer over reliance on pesticides, which

could create serious environmental consequences given the
increase use of counterfeit pesticides in the region
Pesticide Consumption & Use of Counterfeit Pesticides
Pesticide Consumption (Kg/Ha, 2001) (1) Comments

Comments
Pesticide
Pesticide consumption
consumption per per hectare
hectare isis higher
higher in in countries
countries
23.7 with
with more
more developed
developed agriculture
agriculture sectors
sectors
20.9 –– With
With Balkan
Balkan countries
countries entering
entering more
more export
export markets,
markets,
pesticide consumption has
pesticide consumption has increasedincreased
According
According to to aa recent
recent World
World Bank
Bank report,
report, pesticide
pesticide useuse has
has
not
not been
been monitored
monitored in in Kosovo.
Kosovo. Imported
Imported fertilizers
fertilizers and
and
6.2 pesticides
pesticides started
started being
being controlled
controlled andand licensed
licensed in in 2007,
2007, but
but
5.1
there
there are
are no
no data
data onon the
the intensity
intensity and
and extent
extent of of pollution
pollution
1.3
An
An Intercooperation
Intercooperation pilotpilot study
study in
in Dugagjjini
Dugagjjini showed
showed that that
surveyed farmers are heavily dependant
surveyed farmers are heavily dependant on pesticides.on pesticides.
Kenya Czech Slovakia Slovenia Italy
Farmers
Farmers are
are notnot aware
aware that
that large
large use
use isis not
not always
always
Republic
necessary,
necessary, and can lead to environmental problems
and can lead to environmental problems
Comments
Comments
Portion of Counterfeit Pesticides in Total Market (%, 2007) (2)
Studies
Studies have
have shown
shown aa rapid
rapid growth
growth inin counterfeit
counterfeit pesticide
pesticide
use
use in Eastern Europe. Many of these pesticides come
in Eastern Europe. Many of these pesticides come from
from
10% Asia,
Asia, especially
especially China
China
8.5% Types
Types ofof counterfeit
counterfeit and
and illegal
illegal pesticides
pesticides include
include fakes,
fakes,
counterfeits
counterfeits and
and illegal
illegal parallel
parallel imports
imports
4.5% The
The effects
effects of
of counterfeit
counterfeit pesticide
pesticide use
use include:
include:
–– Harm
Harm toto the
the environment,
environment, whichwhich could
could bebe detrimental
detrimental
2% 2% to
to subsequent
subsequent crops
crops
–– Farmers’
Farmers’ economic
economic and and reputation
reputation damage
damage
Czech Hungary Italy Bulgaria Slovenia –– Economic
Economic and and reputation
reputation damage
damage forfor the
the food
food value
value
Republic chain
chain
(1) Commodities include cereals, fruits and vegetables; (2) Averages taken for Bulgaria & Italy; Source: FAOSTAT; World Bank; EU- Counterfeit Pesticides
Across Europe; Intercooperation- Integrated Pest Management Intervention; BAH Analysis
88
Trade Access Issues
Trade access issues effect Kosovo’s agricultural exports in three

fundamental ways
Trade Access Issues
Kosovo
Kosovo enjoys
enjoys membership
membership in in CEFTA
CEFTA andand benefits
benefits from
from Generalized
Generalized
System
System ofof Preferences
Preferences (GSP)
(GSP) status
status with
with both
both the
the European
European Union
Union and
and
Incomplete
Incomplete United States. These regimes confer advantages on Kosovo for some
United States. These regimes confer advantages on Kosovo for some
Enforcement
Enforcement of
of agricultural
agricultural products
products vis
vis aa vis
vis regional
regional competitors.
competitors.
Trade Agreements
Trade Agreements However, there have been implementation issues
However, there have been implementation issues with
with each
each of
of these
these
agreements that have hindered growth
agreements that have hindered growth in trade.in trade.
A
A number
number ofof Kosovo’s
Kosovo’s trading
trading partners
partners subsidize
subsidize agricultural
agricultural production,
production,
especially
especially in
in animal
animal products
products andand cereals.
cereals. These
These subsidies
subsidies in
in some
some cases
cases
Trade
Trade Access
Access Insufficient
Insufficient disadvantage Kosovo producers both in the domestic market and in exports.
disadvantage Kosovo producers both in the domestic market and in exports.
Issues Response
Response toto Trade
Trade However,
Issues However, subsidy
subsidy levels
levels on on horticulture
horticulture and
and processed
processed food
food are
are fairly
fairly low.
low.
Partner Subsidies
Partner Subsidies Kosovo has lacked the ability to respond to subsidies on a comprehensive,
Kosovo has lacked the ability to respond to subsidies on a comprehensive,
economy-wide
economy-wide level
level that
that complies
complies with
with trade
trade agreements.
agreements.
Kosovo’s
Kosovo’s sovereignty
sovereignty has
has been
been recognized
recognized by
by 36
36 countries
countries including
including many
many
of the world’s largest food importers.
of the world’s largest food importers.
Recognition
Recognition of
of Specific
Specific sovereignty-related
sovereignty-related trade
trade issues
issues have
have been
been experienced
experienced onlyonly with
with
Sovereignty
Sovereignty two
two countries - Serbia and BiH. However, although not tested, there are 12
countries - Serbia and BiH. However, although not tested, there are 12
other
other countries
countries (including
(including Russia
Russia and
and Romania)
Romania) where
where there
there is
is risk
risk that
that
recognition
recognition issues
issues may
may impede
impede trade.
trade.

89
Trade Access Issues (Incomplete Enforcement of Trade Agreements)
Despite preferential trade regimes, Kosovo’s trade deficit with

CEFTA, EU and the US has widened over the past five years
Trade Deficit Over Time

Agricultural Products Only (Chapters 1-24), 2004-2009, €
2005 2009 (E) CAGR*

€ 500,000,000
€ 450,000,000 Total - All Countries €278M €393M 12.3%
€ 400,000,000
€ 350,000,000 Other Countries €53M €108M 24.5%
€ 300,000,000
€ 250,000,000 United States €12M €17M 11%
€ 200,000,000
€ 150,000,000
CEFTA €111M €151M 11%
€ 100,000,000
€ 50,000,000 European Union €99M €116M 5.7%
€0
2004 (6 2005 2006 2007 2008 2009
months) (extrapolated
from 9
months)
Sources: Kosovo Customs

Notes: Trade deficit is represented as a positive number for illustrative purposes. 2009 total is extrapolated on a straight line basis from data
through September. CAGR = Compounded Annual Growth Rate
90
The preferential trade regimes do confer some benefits on Kosovo

for major agricultural products
Kosovo’s Relative Advantages on Selected Ag Products (2009)
When Kosovo has a For the Comments

Comments
exporting benefit over: Following
to: Products: Tomatoes Cucumbers Peppers Mushrooms Strawberries
Kosovo’s
Kosovo’s preferential
preferential tradetrade
Albania Other CEFTA 10% 0% 10% (2) 10% 10% regimes
regimes givegive itit some
some
Members advantages
advantages in in exports.
exports.
EU Members 0% 0% 6% 0% 10% The biggest advantages
The biggest advantages
are
are with
with Croatia
Croatia and and
MFNs (1) 10% 0% 10% 10% 10% Albania
Albania which
which have have high
high
tariffs even on
tariffs even on other other
Croatia Other CEFTA 38.5% 35.27% (3) 20% (4) 15% (4) 28.05%
Members CEFTA
CEFTA members
members and and
generally
generally give give Kosovo
Kosovo duty duty
EU Members 0% 35.27% 20% 15% 20% free access.
free access.
MFNs (1) 15% 35.27% 20% 15% 28.05% Kosovo
Kosovo alsoalso has has some
some
advantages
advantages in in the
the EUEU vis
vis aa
European Other CEFTA 0% 0% 0% 0% 0% vis MFN exporters.
vis MFN exporters.
Union Members However,
However, the the EU’s
EU’s trade
trade
EU Members 0% 0% 0% 0% 0% policy
policy ofof non-discrimination
non-discrimination
in
in the
the Balkans
Balkans means means that that
MFNs (1) most
15% (5) most countries in
countries in the
the region
16% 16% (5) 12.8% 7.2% region
are
are onon aa level
level playing
playing field.
field.
United Other CEFTA 0% 0% 0% 0% 0%
States Members Kosovo qualifies
Kosovo qualifies for for
privileges
privileges under
under US US GSP.
GSP.
EU Members 2.58% 0% 1.96% 0% 0.22% However,
However, littlelittle benefits
benefits can can
MFNs (1) 2.58% - 3.85% (6) 1.96% 0% 0.22% be
be reaped
reaped as as the
the USUS hashas
such
such low
low tariffs
tariffs
Sources: ITC Comtrade

Notes: (1) Most favored nation, one which has no special trade regime. (2) The full rate is applied only to Serbia. Macedonia has a rate of 6%. (3) Full rate applied only Kosovo has a tariff-
to Serbia. Macedonia has a rate of 15.87%. (4) Applies only to Serbia. Several countries have preferential rates. (5) The largest exporters, Morocco and related advantage
Turkey, have free trade agreements with the EU and lower rates. (6) The largest exports have duty free access putting Kosovo at a disadvantage.
91
However, implementation issues have arisen which have made it

difficult to take advantage of these trade regimes
Implementation Issues with FTAs and Preferential Trade Regimes
Agreement Country Description of Issues

Serbia and BiH do not recognize Kosovo and do not allow entry or transit of Kosovo registered goods
or vehicles
Serbia and – Serbia. Despite the restrictions, significant trade volume exists and a significant amount of trade
BiH travels to and from Kosovo via Merdare aboard Serbian registered vehicles.
Central – BiH. Restrictions on transiting BiH are significant primarily because it is required to reach the
European Free Croatian coastal highway from Albanian or Montenegro
Trade All other countries in the Western Balkans provide Kosovo duty-free access under CEFTA. However,
Agreement trade disputes have arisen over several issues including:
(CEFTA) – Phyto-sanitary Inspection. Montenegro does not recognize Kosovo food safety certifications and
Other
often require additional testing and certification. Macedonia at times requires HACCP
Countries certification for entry of agriculture products into the country.
– Assessment. Albanian Customs has at times assessed the value of goods as higher than the
declared value increasing VAT liability.
Exports to the EU require that the exporting country be listed on the “Third Country Eligibility List”.
EU Generalized Although Kosovo is not on the list, and exports could technically be rejected, exports of fresh and
System of processes products are entering the EU.
Preferences Food shipments have been turned back for quality and safety related reasons. A shipment of wine to
(GSP) Austria was turned back because lab test results were not accepted. A shipment of low alcohol beer to
Italy was turned back because the alcohol content was found to be too high.
Exports to the US have been minimal and, for this reason, few exporters are knowledgeable of US
US GSP requirements or able to meet standards. The most important standards are FDA labeling requirements
and USDA Prior Inspection of Facility requirements
Sources: Interviews
Note : FTA is free trade agreement.
92
Many of the implementation issues result from a lack of capacity in

trade facilitation
Selected Agencies with Responsibility for Trade Facilitation
Agency Staff Role Issues

Responsible for development and implementation of MTI’s lack of capacity is crippling. Few of the staff adequately
trade policy. understand CEFTA and general trade best practices. The lack of
Department of
5-10 Chairs CEFTA Committees on Agriculture, Customs and capacity typically translates into poorly chosen and ineffective
Trade, MTI
Rules of Origin, and Tariff and Non-Tariff Barriers. safeguard measures. Little donor assistance has been provided.
Represents Kosovo to CEFTA Secretariat
Enforces CEFTA provisions at the border. The Customs Authority has taken its role seriously, and fields specific
Kosovo Provides advisory opinions on CEFTA rules. requests for information from the Private Sector, but does not deeply
600
Customs understand CEFTA rules and lacks resources necessary to broadly
provide information.
Responsible for negotiating bilateral commercial and Adequate understanding of its role, but emphasizes political benefits
Dept of Bilateral
1-5 trade agreements. of agreements far more than economic benefits.
Affairs, MFA
Virtually no coordination with other GoK entities or Civil Society.
Constitutional responsibility for leading foreign policy and Has taken little initiative in articulating trade policy as a component of
Office of the signing international agreements. foreign policy.
1-5
President
Responsible for conducting safety testing and issuing Although consolidation is planned, KFVA handles only animal products.
export certificates for animal products. Conducts testing Export certificates for plant and processed products are issued by other
Kosovo Food & and provides import certificates for agriculture imports agencies.
Veterinary 5-10 (drugs, semen, etc.). KFVA is just starting the process of EU compliance. It is hoped that an
Agency (KFVA) According to Food Law of April 9, 2009, similar functions EU Food & Veterinary Office (FVO) can be established in 2010 and
from the Institute of Agriculture and the Plant Protection compliance obtained in 2011.
Department will be consolidated in KFVA.
Conclusions
An overall weakness of the system is that there is no apex organization or inter-ministerial body to coordinate trade facilitation and examine
trade issues on an economy-wide (rather than sector specific) basis. Trade actions often favor one sector at the expense of another. In
addition, no organization has the skills or resources to negotiate effectively with trade partners.
Sources: Interviews
93
Trade Access Issues (Insufficient Response to Trade Partner Subsidies)
Agricultural supports are bound by CEFTA and, for Kosovo’s

trading partners, also by the WTO Agreement on Agriculture
Treaties Governing Agricultural Supports
Central
Central Europe
Europe Free
Free Trade
Trade Agreement
Agreement WTO
WTO Agreement
Agreement on
on Agriculture
Agriculture
CEFTA
CEFTA generally
generally provides
provides that that trade
trade relations
relations among
among Financial
Financial assistance
assistance to to farmers
farmers through
through direct
direct (price
(price
parties
parties be developed in accordance with WTO rules
be developed in accordance with WTO rules support) or indirect means are classified in
support) or indirect means are classified in 3 categories3 categories
or
or “boxes”:
“boxes”:
However,
However, itit does
does notnot fully
fully follow
follow the
the WTO
WTO agreement
agreement
on −Green Box: permitted
−Green Box: permitted as as minimally
minimally trade-
trade-
on agriculture and is generally more permissive in
agriculture and is generally more permissive in
terms distorting.
distorting. They
They include
include direct
direct income
income support
support to to
terms ofof agriculture
agriculture subsidies
subsidies permitted.
permitted.
farmers,
farmers, rural
rural development
development and and environment
environment
–– Members
Members are are required
required to to follow
follow the
the WTO
WTO programs
programs and should be “decoupled” from
and should be “decoupled” from
agreements
agreements on on Sanitary
Sanitary & & Phyto-sanitary
Phyto-sanitary
Measures production
production level
level and
and should
should not
not be
be targeted
targeted to to
Measures (SPS),
(SPS), Technical
Technical Barriers
Barriers to
to Trade
Trade
(TBT) and Valuation.
(TBT) and Valuation. specific products
specific products
−Amber
−Amber Box:Box: discouraged
discouraged as as trade
trade distorting
distorting (e.g.,
(e.g.,
–– Members
Members are are notnot allowed
allowed to to use
use export
export subsidies
subsidies
for measures to support prices, subsidies
measures to support prices, subsidies directly directly
for agriculture,
agriculture, defined
defined as as subsidies
subsidies that
that create
create
more
more output
output than
than cancan bebe absorbed
absorbed in in the
the local
local related
related to
to production
production quantities
quantities oror targeted
targeted at at
market.
market. specific
specific crops).
crops). Levels
Levels must
must bebe reduced
reduced to to 15%
15% for for
developed and 10% for developing
developed and 10% for developing countries. countries.
Other
Other subsidies
subsidies are
are generally
generally permitted.
permitted. −Blue Box: permitted
−Blue Box: permitted “with
“with conditions”.
conditions”. RefersRefers toto
any “amber box” program implemented
any “amber box” program implemented with with
measures
measures to to reduce
reduce production.
production. No No limits.
limits.
Implications for Kosovo

All of Kosovo’s neighbors are CEFTA members and all except Serbia are WTO members. Kosovo is required to comply with
CEFTA regulations on agricultural subsidies and has expressed an intention to comply with WTO requirements.
Kosovo’s trade policy calls for development of “green box” policies focused on support to poor farmers in remote areas and on
the provision of health, water and educational facilities as a way of improving the quality of rural life.
Source: WTO, CEFTA, Trade Policy of Kosovo/MTI (2009)

94
Agricultural supports vary significantly by commodity type with

grains and animal products receiving the most
Production Support Estimate (PSE) by Commodity PSE is the total of all
OECD Countries, % (1986-2003) supports to agricultural
81% producers over the
78% farm gate value of all
production.
Average for all

59%
55%
Commodities Average for all
54%
52% 51% Commodities
47% 48%
40% 41%
37% 38% 37%
32% 33%
31%
29%
27% 26%
24% 24%
20% 21%
18% 17% 17%
7% 8%
5%
1986-1988 2001-2003
Rice Sugar Milk Other grains Lamb
Wheat Beef and Veal All Commodities Other Commodities Maize
Oilseeds Pork Poultry Eggs Wool
Source: OECD (2003)

Note : PSE is the total of all supports to agricultural producers over the farm gate value of all production.
95
Overall, OECD countries spent over €229 billion in agricultural

supports in 2003 with milk receiving more support than any other
commodity
Total Production Supports by Commodity
OECD Countries, € Billion (1986-2003)
€257 €264 €255

€241 €236 €244
€232 €235 €229
€228
€215 €214 €214
€209 €208 €211 Other Commodities
€202 €203
Eggs and Wool
Poultry
Sugar
Oilseeds
Other Grains
Maize
Pork
Wheat
Rice
Beef & Veal
Milk
p
86
87
88
89
90
91
92
93
94
95
96
97
98
99
00
01
02
03
19
19
19
19
19
19
19
19
19
19
19
19
19
19
20
20
20
20
Source: OECD (2003)
96
The level of support varies significantly by country …

Production Support Estimate (PSE) by Country
% - 2008 or Latest Data
61.9%
58.1%
51.0% 51.7%
47.8%
27.8% 26.6%
24.9% 24.5%
20.9%
13.1% 13.0%
8.7%
6.9% 6.3% 5.9%
0.8%
Mexico
Slovakia
New Zealand
Norway
Hungary
Turkey
Iceland
Japan
EU-27
Australia
United States
Romania
Korea
Canada
Poland
Bulgaria
Czech Republic
Source: OECD (2009)

Note : PSE is the total of all supports to agricultural producers over the farm gate value of all production. All countries are 2008 except
Hungary, Slovakia and Poland (2003) and Romania and Bulgaria (2006). Thereafter, these countries are included in the EU
average.
97
…and, across the OECD, market price supports, considered a

minimally-distorting “green box” measure, were the most
commonly used
Production Support Estimate (PSE) by Country
% - 2008 or Latest Data
Misc Based on farm income
Based on input constraints
Based on input use
Based on historical
entitlements
Based on area planted
Based on output
Market Price Supports

d
e
o
es
l ia
e
a
ry
ia
nd
ay
nd
n
ey
ic
an
ag
ic
an
ag
ad
pa
re
bl
ak
ga
ra
at
w
rk
la
la
ex
Ko
al
er
pu
Ja
el
an
er
or
ov
st
St
Po
er
un
Tu
M
Ze
Ic
Av
Av
Au
N
Re
C
itz
Sl
H
d
te
ew
Sw
EU
D
ch
ni
EC
N
U
ze
O
C
Source: OECD (2004).

Note : EU is EU-12 for 1986-94, EU-15 from 1995. Market Price support is net of producer levies and excess feed costs.
98
Although there is little data, all of Kosovo’s neighbors are

employing some kinds of supports for the agriculture sector
Summary of Subsidies in Neighboring Countries
Anecdotal
Anecdotal evidence
evidence exists
exists of
of subsidies
subsidies amounting
amounting to
to approximately
approximately €€ 270
270 per
per 0.1
0.1 Ha
Ha and
and upup toto 50%
50% of
of the
the
Albania
Albania cost
cost of
of irrigation
irrigation systems
systems and
and cold
cold storage
storage units.
units. Additional
Additional per
per head
head subsidies
subsidies may
may exist
exist for
for sheep
sheep and
and
cattle
cattle
Anecdotal
Anecdotal evidence
evidence of
of questionable
questionable reliability
reliability of
of subsidies
subsidies of
of €.04
€.04 per
per kilogram
kilogram of
of vegetables
vegetables produced
produced and
and
Macedonia
Macedonia of
of €30
€30 per
per head
head of
of sheep
sheep owned.
owned. The
The subsidy
subsidy on on sheep
sheep is
is part
part of
of aa program
program toto rebuild
rebuild the
the size
size of
of
Macedonia’s
Macedonia’s herd
herd
Serbia Serbia
Serbia subsidizes
subsidizes mechanization
mechanization and
and marketing
marketing of
of agricultural
agricultural products
products directly
directly with
with aa budget
budget of
of
Serbia approximately €20M per year
approximately €20M per year
Montenegro
Montenegro Montenegro
Montenegro is
is openly
openly providing
providing export
export subsidies
subsidies on
on processed
processed foods
foods that
that are
are likely
likely in
in violation
violation of
of CEFTA
CEFTA
requirements
requirements
Conclusions
Most of Kosovo’s neighbors and partners in CEFTA provide some subsidies on agriculture including some that are likely in
violation of CEFTA requirements and subject to de minimis regulation under WTO rules (amber box). Several industries - notably
the milk industry - have made claims that these subsidies damage their competitiveness on the domestic market.
At present, though, all evidence is anecdotal. In order for Kosovo to in a position to take action under CEFTA more detailed
information must be requested from the parties or otherwise obtained.
Source: HPK Study, Interviews.

99
Trade Access Issues (Recognition of Sovereignty)
There are currently 63 countries that recognize Kosovo including

22 out of the 27 EU member countries
Countries that Recognize Kosovo’s Independent Status
Finland
Iceland Sweden
Netherlands Norway Estonia
Canada
United Kingdom Denmark Latvia
Lithuania
Ireland Germany Poland
Belgium Slovakia
Austria
Croatia Romania Hungary
France
Italy Bulgaria
USA Spain
Portugal Albania Greece Turkey Japan
Macedonia Cyprus Afghanistan South Korea
Malta Jordan
Bahrain
Saudi Arabia UAE
Belize Dominican Republic
Senegal
Gambia Burkino Faso
Costa Rica
Panama Sierra Leone
Liberia Malaysia
Colombia
Maldives
Peru
Comoros Marshall Islands
Palau
Micronesia
Australia Naura
Countries Recognizing Samoa
Countries Not Recognizing New Zealand

EU Members Not Recognizing
Sources: Ministry of Foreign Affairs, News Sources.

Note : Several countries have not been labeled on the map because of space. They are Czech Republic, Lichtenstein, Luxembourg, Monaco,
Montenegro, San Marino, Slovenia, Switzerland.
100
Trade Access Issues (Recognition of Sovereignty)
Only two countries actively block trade with Kosovo although there
is a risk that others might also
Countries That Block Trade with Kosovo
Russia
Belarus
Bosnia Romania
Spain
Serbia
Azerbaijan China
Cyprus
Vietnam
Venezuela
Comments
Comments
Burundi
Only
Only Serbia
Serbia and
and BiH BiH actively
actively block
block thethe transit
transit
of goods, vehicles and people
of goods, vehicles and people from Kosovo from Kosovo
Bolivia across
across their
their territories.
territories.
There
There are
are 12
12 other
other countries
countries which
which do do not
not
recognize
recognize Kosovo
Kosovo and and have
have taken
taken an an active
active
position
position against
against recognition
recognition at at the
the ICoJ.
ICoJ.
Argentina Although
Although trade
trade withwith these
these countries
countries hashas not
not
been
been tested,
tested, itit is
is felt
felt that
that there
there could
could be
be aa risk
risk
of
of trade
trade disruption.
disruption. These These countries
countries areare
Argentina,
Argentina, Azerbaijan,
Azerbaijan, Belarus,
Belarus, Bolivia,
Bolivia,
Burundi,
Burundi, China,
China, Cyprus,
Cyprus, Spain,
Spain, Russia,
Russia,
Romania,
Romania, Venezuela
Venezuela and and Vietnam.
Vietnam.
Source: Lloyd’s (2007); Interviews

101
Table of Contents

102
International Best Practice Assessment
Benchmarking Methodology
Benchmarking Analysis
103
A combination of quantitative and qualitative criteria were selected

to identify relevant countries for benchmarking
Country Selection Framework
Quantitative
Quantitative Qualitative
Qualitative
Agricultural Productivity (Tons/Ha, 2007) (1) Seasonality and Target Markets

45.1 46.4 Mix of On, Off and On
40.5
36.1 36.7 Niche agricultural Season
33.4
30.6 31.3 exporters Niche
25.6 Season
21.9 Target market overlap
19 20
16.6 for agricultural exports Off
14.6
Season
Best-In-Class Countries
Czech Republic
Italy
Slovakia
Macedonia
Kenya
Albania
Slovenia
Morocco
South Africa
Serbia
Kosovo
Bulgaria
Croatia
Spain
Best in class examples of countries that excel at
dealing with challenges relevant to Kosovo
Best in class competitors that produce and export
Agricultural Export Value Growth (%, 2004-2008) (1) (2) agriculture commodities similar to those in Kosovo
62%
38% 35%
33% 31%
28% 28%
Geographic Characteristics
18%
12% 10% 10% Size of the country
8% 7%
2%
Location of the country (landlocked vs. coastal)
Climate, soil, water, etc.
ly
a
ia
co
vo
n
ia
ia
lic
ia
ia
ia
ri c
ny
ni
It a
ai
ak
on
rb
en
at
ar
so
ub
oc
ba
Sp
Af
Ke
ro
Se
lg
ov
ov
ed
or
Ko
ep
Al
Bu
C
h
Sl
M
Sl
ac
R
ut
So
M
ch
ze
C
(1) Commodities include cereals, fruits and vegetables; (2) Figures for Morocco & Macedonia are 2003-2007; Kosovo (2005-2008); Source: FAOSTAT; Trademap; BAH Analysis
104
As a result, eight countries were selected as primary benchmarking

targets – however, when applicable, best practices from other
countries were also analyzed
Overview of Benchmark Countries Examined According to Six Dimensions
Leveraging Small Infrastructure Government
Demand-Driven
Countries Farmers Capacity Transportation Agriculture Trade Access
Export Strategies
Potential Building Regulations
Macedonia ✓ ✓ ✓
Serbia ✓ ✓ ✓ ✓ ✓
Morocco ✓ ✓ ✓
Primary Italy ✓ ✓ ✓
Benchmarks Spain ✓ ✓ ✓
Kenya ✓ ✓ ✓
Slovakia ✓ ✓ ✓
Israel ✓ ✓ ✓
South Africa ✓ ✓
United States ✓ ✓
Croatia ✓
Albania ✓
Secondary
Benchmarks Czech Republic ✓
Brazil ✓
Mozambique ✓
Slovenia ✓
Chile ✓
Source : BAH Analysis 105
The benchmarking analysis focused on six key dimensions that are

designed to address constraints facing Kosovo’s agricultural
sector
Overview of Benchmarking Dimensions
Dimensions Description
11 Coordination among Small Farmers: Models of farmer cooperatives; coordination among associations
Extension Services: Models for providing extension services; types of training administered
Leveraging
Leveraging Small
Small Lack of Financing for Small Farmers: Access to credit for small-scale farmers; use of crop insurance, purchase order
Farmers Potential
Farmers Potential financing, microfinance and other financial products
Land Consolidation: Steps to comprehensive land consolidation; models for land consolidation
22 Donor Coordination: Export promotion strategies for agricultural commodities enhanced by effective donor coordination
Product Characteristics: Development of new products based on understanding of consumer tastes and preferences
Demand-Driven
Demand-Driven Reliability & Flexibility of Distribution: Improved distribution channels for small volumes; collection centers
Export
Export Strategies
Strategies Promotion & Branding: Cost effective export promotion strategy; promotion of new products in strategic markets
Pricing: Optimal pricing; methods for addressing seasonality issues for farmers to receive best prices
33
Development of Irrigation Networks: Development of innovative irrigation systems with restricted water access; models of
Infrastructure
Infrastructure irrigation charging systems
Capacity
Capacity Building
Building Building greenhouse capacity: Methods to support development of greenhouses; types of extension programs for
developing greenhouse capacity
44
Costs of Road Delivery: Methods to decrease cost of transportation; prioritization of road investments
Facilitated Border Crossing: Development of additional transportation channels to reach destination markets
Transportation
Transportation Air Transport and Shipping: Use of air cargo forwarders and commercial airlines to transport goods to strategic markets
Cold Chain: Improved cold chain systems for small-scale farmers
55 Food Safety & Quality: Regulatory models for overseeing food safety and quality; private quality labs
Government
Government Compliance with Regulations: Comparative costs for farmers to comply with international food safety standards
Agriculture
Agriculture Regulation of Inputs: Regulations surrounding seed and fertilizer use
Regulations
Regulations Environment : Methods to enforce and implement pesticide regulation to protect the environment
66
Trade Facilitation Capacity: Development of trade facilitation capacity measures; donor-funded methods for advancing trade
facilitation capacity development
Trade
Trade Access
Access Responses to Subsidies : Interim solutions to subsidies; advanced solutions for subsidies, including export risk guarantee
Recognition of Sovereignty: Methods to increase trade recognition
Source : BAH Analysis 106
International Best Practice Assessment
Benchmarking Analysis
107
Leveraging Small Farmers Potential
Cooperatives of smallholder famers have become a common model

in Italy to increase their ability to compete on the market and create
economies of scale
Overview of Italian Cooperatives by Crop
Average Revenue per Coop Type ($mil) Average Workforce per Coop Type (N)
59.43 202
114
38.39 29
22
6.04 16
4.81 4.93 4.98
3.72 3.79 9 11
2.06 5 7 8
0.70 4
0.20 0.51 3
Dairy
Dairy
Forestry
Poultry
Supply
Wine
Poultry
Wine
Tobacco
Farm
Forestry
Veg
Tobacco
Services &
Rice
Grain
Olive Oil
Grain
Joint
Farming
Rice
Fruits &
Livestock
Supply
Veg
Sugar &
Sugar &
Joint
Farm
Farming
Fruits &
Services &
Livestock
Olive Oil
Average Revenue per Member in Coop Type ($mil)

Comments
Comments
3.92
0.14 The
The membership
membership of of many
many Italian
Italian cooperatives
cooperatives is is
0.07
0.09 comprised primarily of small producers
comprised primarily of small producers
0.06
0.04 –– The
0.00 0.01 0.02 0.02 0.03 0.03 The goal
goal of
of the
the cooperative
cooperative model
model is is to
to support
support
small farm operations
small farm operations
Dairy
Supply
Poultry
Farm
Forestry
Veg
Services &
Tobacco
Livestock
Grain
Rice
Fruits &
Joint
Farming
Wine
Sugar &
Olive Oil
–– Cooperatives
Cooperatives aggregate
aggregate efforts
efforts of
of farmers
farmers who who
would
would not
not otherwise
otherwise be be able
able to
to compete
compete
effectively
effectively on
on the
the market
market
Average Number of Members per Coop Type (N) –– In
In the absence of economies of
the absence of economies of scale,
scale,
693
1039 cooperatives
cooperatives enable small farmers to
enable small farmers to avoid
avoid
436 significant
significant economic
economic losses
losses that
that could
could force
force
350
317 them
them toto sell
sell their
their farms
farms
177
123
31 52 57 58
22
Forestry
Poultry
Dairy
Joint
Farming
Veg
Olive Oil
Rice
Grain
Wine
Tobacco
Livestock
Fruits &
Sugar &
Source: Alternative Italian Agricultural Cooperative Systems in the Changing EU Food System; BAH Analysis
108
Public cooperatives- those managed by an outside manager- tend

to use internal sources of equity extensively
Overview of Italian Cooperatives by Equity Management Type
Equity / Asset Ratio (EAR) by Coop Cluster Type Overview
Overview ofof Cooperatives
Cooperatives by by Function
Function
0.48 0.40 Cooperatives
Cooperatives can
can be
be classified
classified according
according to to function:
function:
0.30
0.25 –– Bargaining
Bargaining && Service:
Service: provide
provide members
members with with
0.22
0.22 “intangibles”
“intangibles” services
services
0.04 –– Hollow:
Hollow: more
more extreme
extreme form form of
of bargaining
bargaining coopcoop
–– Labor: operate mostly in labor-intensive
Labor: operate mostly in labor-intensive businessesbusinesses
Bargaining & “Hollow” Labor Durable- “Public” Industrialized Value-
Service Coop Coop Sharing Coop Coop Added –– Durable-sharing:
Durable-sharing: allowallow small
small farmers
farmers toto utilize
utilize costly
costly
Coop Coop Coop fixed
fixed assets
assets at
at aa fair
fair price
price
–– Public:
Public: achieve
achieve large
large average
average scale
scale of
of operations
operations
Internal Sources Ratio (ISR) by Coop Cluster Type using
using products of a large number of small patrons
products of a large number of small patrons
0.10 –– Industrialized:
Industrialized: membership
membership comprised
comprised of of large,
large,
0.00 0.04 0.01
professional
professional farmers
farmers
-0.10
–– Value-added:
Value-added: focus
focus on on developing
developing high
high value
value
-0.31 processed products
processed products
-0.87 Management
Management of of Public
Public Coops
Coops
Service Coop Coop Sharing Coop Coop Added Public
Public coops
coops are
are largely
largely supervised
supervised by by third-party
third-party
Coop Coop Coop managers
managers hiredhired by
by the
the cooperative.
cooperative. The The managers
managers instruct
instruct
farmers
farmers on the types and amounts of crops to grow, and
on the types and amounts of crops to grow, and
Allocated Equity Ratio (AER) by Coop Cluster Type manage
manage the the capital
capital structure
structure ofof the
the coop
coop
0.89 0.83 On
On average,
average, public
public coops
coops tendtend to
to be
be leveraged
leveraged because
because ofof
0.57 0.50 the
the low
low contribution
contribution of of farmers’
farmers’ assets
assets
0.46 0.46
0.35 –– TheThe coop
coop isis the
the only
only one
one that
that is
is using
using the
the internal
internal
sources of equity extensively
sources of equity extensively
–– On On average,
average, 10% 10% of of revenues
revenues are are retained
retained asas
Service Coop Coop Sharing Coop Coop Added financial
financial resources, which represents aa sizable
resources, which represents sizable share
share
Coop Coop Coop
Note: EAR = percent share of total assets financed through equity; ISR = capacity of the cooperative to accumulate equity from business operations; AER = percentage of allocated equity on total equity
Source: Equity Management Practices in Italian Agricultural Cooperatives: a Cluster Analysis Approach; BAH Analysis
109
In Macedonia, a number of small agriculture cooperatives have

come together under an umbrella association, AKOM, which
provides advocacy support
Overview of Alliances of Cooperatives in Macedonia (AKOM)
Support
Support to
to Farmer's
Farmer's
Associations
Associations in
in
Macedonia
Macedonia Project
Project
Provides support Comments
Comments
Partnership Alliances
Alliances of
of Function: Founded
Function: Founded inin June
June 2007,
2007, AKOM
AKOM is is aa non-
non-
Federation
Federation of
of Farmers
Farmers Cooperatives
Cooperatives inin governmental organization created to unite, represent
governmental organization created to unite, represent
in
in Macedonia
Macedonia (FFRM)
(FFRM) Macedonia
Macedonia (AKOM)
(AKOM) and
and serve
serve cooperatives
cooperatives in
in Macedonia
Macedonia vis-à-vis
vis-à-vis
Provide representation governmental
governmental andand non-governmental
non-governmental institutions
institutions
Prva
concerning
concerning cooperative
cooperative issues
issues (policy,
(policy, economy,
economy,
Prva lozarska
lozarska Ovcarska
Ovcarska kooperativa
kooperativa
kooperativa
kooperativa Izgrev
Izgrev finance, legal etc.)
finance, legal etc.)
(Wine
(Wine and
and fruit)
fruit) (Sheep
(Sheep breeding
breeding && cheese)
cheese)

Objectives:
Objectives:
Nektar
Nektar Koop
Koop Agrokultura
–– Promote
Promote the
the development
development of
of coops
coops
(Beekeeping Agrokultura koop
koop
(Beekeeping &&
accompanying
accompanying products)
products)
(Procurement
(Procurement of
of Inputs)
Inputs) –– Advance
Advance information
information exchange
exchange among
among coops
coops
–– Represent
Represent and
and provide
provide advocacy
advocacy for
for coops
coops with
with
Farmer
Farmer Demetra
Demetra NGOs and the government
NGOs and the government
(Sheep
(Sheep breeding
breeding && cheese) (Marketing
(Marketing for
for ag
ag products)
cheese) products) –– Support
Support promotion
promotion and
and marketing
marketing efforts
efforts
–– Provide
Provide services
services and
and expertise
expertise to
to coops
coops
Eko
Eko –– kooperativa
kooperativa Koperant
Koperant
(Processed –– Research
Research and
and provide
provide findings
findings to
to coops
coops
(Processed forest
forest fruits)
fruits) (Marketing
(Marketing for
for ag
ag products)
products)

Sample Activities :: Developed
Sample Activities Developed workshops,
workshops, study
study
trips and consulting services for cooperatives
trips and consulting services for cooperatives
Pigi
Pigi Novaci
Novaci koopkoop
(Pig
(Pig products)
products) (Marketing
(Marketing for
for ag
ag products)
products)
Vedro
Vedro kooperativa
kooperativa Lejla
Lejla
(Milk
(Milk and
and accompanying
accompanying (Milk)
(Milk)
products)
products)
Source: Alliances of Cooperatives in Macedonia website; BAH Analysis

110
Extension models around the world fall into four main categories:
public sector, partnerships, cost-recovery and privatized
Overview of Extension Model Types
11
Systems that provide public sector
Extension Model Types by Delivery & Funding
funding and delivery of extension
Public
Public Sector
Sector services, either partially or entirely. Some
countries have slowly started introducing
charges for previously free services, such
Cost Recovery as the United States
Public
Public Sector Extension

(fee-based) Systems 22
Services Involves contracting out the delivery of
extension field services to non-
(Canada, Israel, USA)
(OECD countries, Pluralism,
Pluralism, governmental organizations, such as non-
previously in Mexico) Partnerships,
Partnerships, profit NGOs, or to for-profit companies,
Power
Power Sharing
Sharing including consultancy firms and farmers’
Delivery
cooperatives
33
Some agricultural advisory services have
Cost redesigned their fiscal arrangements,
Pluralism, Partnerships, Privatization, Cost Recovery
Recovery
Private
initiating cost recovery or fee-based

Power Sharing Commercialization (fee-based)
(fee-based) services to farmers. Became prevalent in
Systems
Systems the European OECD member countries,
(Chile, Estonia, Hungary, (The Netherlands, New largely because of national deficits
Venezuela, S. Korea, Taiwan) Zealand, England & Wales)
44
Both the funding and the delivery of

Public Private Privatization,
Privatization, extension services are shifted entirely, or
Commercialization
Commercialization largely, to the private sector
Funding
Source: FAO- Agricultural and Rural Extension Worldwide: Options for Institutional Reform in the Developing Countries; BAH Analysis
111
The US has established a public land-grant model for funding

extension services; the government funds extension at
universities, which in-turn provide services to farmers
Example of United States Model: Public Sector Extension Services
11
Public
Public Sector
Sector Extension
Extension Services-
Services- United
United States
States Comments
Comments
Background: The
Background: The Cooperative
Cooperative Extension
Extension System
System in
in
US the
the United
United States
States is
is aa non-formal
non-formal educational
educational
US Department
Department ofof
Agriculture
Agriculture (USDA)
(USDA) program
program designed
designed to to "reach
"reach out,"
out," with
with teaching
teaching and
and
research. Land-grant institutions "extend"
research. Land-grant institutions "extend" their their
Oversees
resources,
resources, solving
solving public
public needs
needs with
with college
college or
or
Approves
National university
university resources
resources through
through non-credit
non-credit programs
programs in
in
Congress
budget National Institute
Institute of
of Food
Food
Congress &
& Agriculture
Agriculture (NIFA)
(NIFA) agriculture
agriculture
Funds & supports Structure: The
Structure: The USDA
USDA oversees
oversees the
the work
work of
of NIFA,
NIFA,
which
which funds and supports extension programs at
funds and supports extension programs at
Land-grant Washington
Washington State
State
land-grant
land-grant universities.
universities. Programs
Programs are
are largely
largely
universities University
University Extension
Extension administered
administered through
through thousands
thousands ofof county
county and
and
Program
Program regional extension offices, which bring land-grant
regional extension offices, which bring land-grant
expertise
expertise to
to local
local levels
levels
Oversees extension programs and
offices in over 39 counties Funding: NIFA
Funding: NIFA distributes
distributes annual
annual Congressionally
Congressionally
appropriated
appropriated formula
formula grants
grants to
to supplement
supplement state
state and
and
county funds to designated land-grant universities
county funds to designated land-grant universities
–– The
The amount
amount of of funds
funds provided
provided to
to each
each institution
institution
is
is determined
determined byby formulae,
formulae, often
often statutorily
statutorily
defined,
defined, that
that may
may include
include variables
variables such
such as
as the
the
rural
rural population
population or or farm
farm population
population
–– Local
Local or
or regional
regional university
university leaders
leaders decide
decide
which
which specific projects will be supported
specific projects will be supported by
by an
an
institution’s formula grant allotment
institution’s formula grant allotment
Source: USDA- NIFA website; Washington State University Extension Program; BAH Analysis
112
Kenya uses partnership arrangements for training, while Germany

has developed a cost-recovery model; the Netherlands has
privatized the provision of extension services
Example of Partnership, Cost-Recovery and Privatized Models
22 33 44
Pluralism, Partnerships, Power Sharing-
Pluralism, Partnerships, Power Sharing- Cost
Cost Recovery
Recovery (fee-based)
(fee-based) System-
System- Privatization,
Privatization, Commercialization-
Commercialization-
Kenya
Kenya Germany
Germany Netherlands
Netherlands
Dutch
Dutch
State
State of
of
Gov’t
Gov’t of
of Kenya
Kenya Government
Government
Thuringia
Thuringia
Assigns responsibility
Supports Outsources &
Buyer NGO subsidizes
Buyer Sponsors & Funds & NGO DLV
DLV
Funds Trains Trains
Private
Private Farmer
Farmer
companies
companies Organization
Organization Provides training Pays for services
Farmer
Farmer Funds
Organization
Organization training
Farmers
Farmers
Background: Public-private partnerships Background: In Germany, all of the Federal Background: The Netherlands decided to
among the government, buyers, farmer groups States are responsible for extension services. privatize its public extension agents, at first by
and NGOs have become more common to At one point, 80% of farmers used extension transferring them with initial financial support
support smallholders’ compliance of IFSS. services, creating a drain on the state budget to work with farmer associations
Such partnerships focus on providing Structure: The government has outsourced Structure: More recently, the Dutch
information, financial support, and capacity extension services to private companies since government has assigning responsibility for
building 1998 extension services to a private company, DLV,
Structure: The group’s certification is Funding: Public funding for extension which provides training to farmers in exchange
sponsored by the buyer, with the training services dropped over 50%. As a result, part for a fee
provided by the NGO. The certification loses of the extension cost is paid by farmers while Funding: Farmers pay for extension services
validity if the relationship between the buyer the other part is subsidized by the which are provided by DLV
and farmer group fail. The government government. With the introduction of the cost-
supports the process and relationship recovery model, demand for extension fell,
Funding: Mix of funding is provided by the with only 13% of farmers using the system.
buyer and NGOs, who provide training Farmers pay for training that they need
Source: Food Safety Requirements in African Green Bean Exports and Their Impact on Small Farmers; Contracting for Extension; FAO- Agricultural and Rural Extension Worldwide: Options for
Institutional Reform in the Developing Countries; BAH Analysis
113
In order to improve farmers’ access to credit, South Africa has

developed a model based on financial intermediation at the local
level through “Village Banks”
Overview of Village Banks in South Africa
South Africa Village Banks Village Bank Evolution
South Africa’s farmers had difficulty in

accessing credit through commercial banks Savings Loans Commercial
Background
Background
– Distance from branch networks Phase Phase Phase

– Lack of collateral
– Moral hazard and adverse selection
Rotating Loans to Provision of
Government did not offer customized credit
savings community insurance and
lines for small farmers
associations authorities as fund
(savings of well as for transferring to
Village Banks project was funded by USAID,
specified individuals for producers
with additional resources from World Bank
amounts to give entrepreneurial At this stage,
“Savings-first” institutions – concession of
lump payouts to and targeted link to the
Overview
Overview
credit only when volume of savings allowed it

each member) investment formal financial
Institutions owned by member farmers –
Deposit and activities sector is
controlled by local communities
withdrawal Only achieved stressed –
Decentralized services at local level
services for after savings eased
Typically negligible loss ratio
local producers assets are at regulations to
Self-regulated the level of become formal
with no supporting loan institutions (e.g.
Different products according to farmer
government portfolio lower
Offering
Service Offering
segments (defined by gender and source of

interference capitalization
income) – e.g. women farm workers,
Small size and requirements)
unemployed rural poor, small scale
profits – staff is
employers, etc.
Service
motivated
Bank revenue is generated by interest on
through variable
loans and depositing of resources in the
earnings
nearest commercial bank branch (“link bank”)
Source: Lit Search; BAH Analysis

114
There are also a wide range of products that comprise the

agricultural finance system, including purchase order financing,
crop insurance and microfinance payment systems
Overview of Financial Products to Increase Smallholder Farmers’ Access to Credit
Purchase
Purchase Order
Order Financing
Financing (POF)
(POF) Crop
Crop Insurance
Insurance Microfinance
Microfinance Payment
Payment Systems
Systems
Transaction-based form of working capital A mechanism that provides insurance for System that enables individuals to perform
financing. a variety of crop types in the event of basic banking functions via mobile phone
– When a business receives an order loss and SMS
from a buyer, a POF lender advances – Different crop insurance types – Enables users to check status of
a loan to the business to cover all the include single-risk, combined, yield, accounts, make payments of loans
Definition
Definition
steps necessary (production, revenue, whole-farm yield, and and/or transfer funds
purchasing, processing, packaging, indirect insurance – Can lower the costs of providing
etc.) to ship the order – Crop insurance can be voluntary or financial services in remote, sparsely
– POF allows for a longer horizon that compulsory, depending on the populated areas
includes production of the commodity country. However, possible risks of – Continued growth and improved
to be shipped crop insurance include moral interoperability depend heavily on the
hazard, where farmers may take regulatory and enabling environment
excessive risk or not take enough and their impact on product
measures to mitigate risk innovation
The purchase order (the contract between Farmers in Central and Eastern Europe In 2000, Kenya’s Equity Building Society
the seller and buyer) becomes the hold approximately 3% of the crop introduced mobile banking in about 20 of
collateral for the loan insurance in the world. Most insurance the country’s most isolated towns and
– The accounts receivable is premiums are concentrated in the United villages
transferred to the lending institution States and Europe – The program offered a range of
Example
Example
and becomes the source of loan Donors can play a role in the introduction financial services, including
repayment of crop insurance. For instance, the World agricultural loans, even in remote
– The financial institution collects Bank provided research support before rural areas, with full cost recovery. By
payment for the loan plus interest and the introduction of crop insurance in early 2004, these mobile units were
fees from the buyer once the product Morocco to ensure success serving 29 locations and about
has been delivered 12,000 clients
Source: System of Warehouse Receipts; Managing risks and designing products for agricultural microfinance; Warehouse Receipts: facilitating credit and commodity markets; Insurance of crops in
developing countries; BAH Analysis
115
According to the FAO, land consolidation is a best practice for

addressing rural poverty in Eastern Europe
Overview of Best Practice Land Consolidation Techniques
Steps to Comprehensive Land Consolidation
11 Methods
Includes analyzing the situation to identify needs, Methods to
to Land
Land Consolidation
Consolidation
Initiate
Initiate Land
Land
Consolidation preparing a concept plan that outlines goals, costs
Consolidation
and sources of financing, receiving approval and Land consolidation can occur in several ways, for
Project
Project
forming management team to oversee effort example:
– As consolidated farm, where a farm comprises
22
Activities such as selecting consultants, defining the a number of parcels located some distance
Design area and scope of the project, preparing the cost- from one another
Design Project
Project
estimate and schedule of the project, and defining the – As consolidated ownership, where a farmer’s
performance monitoring system to measure success holding includes land owned by the farmer as
well as land leased from others. The leased
33
Includes identifying or adjudicating boundaries and land may be owned by a neighboring farmer or
Inventory
Inventory Existing
Existing it may involve a case of “absentee ownership”
legal status of parcels, delimiting important
Situation
Situation with the owner living in a distant city
environmental areas, determining the value of parcels,
and addressing objections to land ownership
44 Advantages
Advantages
Activities such as preparing a plan the details the new
Define
Define the
the Detailed
Detailed parcel layout location of new roads, facilities, etc.,
Consolidation
Consolidation Plan
Plan Land consolidation can offer benefits:
socializing the plan with different scenarios and the
impact of each, and approving and refining the plan – Facilitate the creation of competitive agricultural
production arrangements by enabling farmers
55 to have farms with fewer parcels that are larger
Implement
Implement Detailed
Detailed Includes selecting the contractors to complete the
and better shaped, and to expand the size of
Consolidation
Consolidation Plan
Plan work, constructing any new or reformed public works,
their holdings
and surveying new boundaries
– Can offer opportunities for land owners to sell
66 their land to others willingly. The objective is not
Conclude
Conclude Activities include addressing any remaining to make people landless
Consolidation
Consolidation compensation or cost issues; updating the cadastral
Process
Process map, and issuing and registering new titles
Source: FAO- The design of land consolidation pilot projects in Central and Eastern Europe; BAH Analysis 116
Demand-Driven Export Strategies
Three main methods were used to coordinate multiple donor

activities to support development of SIEPA in Serbia: line ministry
coordination, sub-group meetings and a donor coordination matrix
TT EE
Donor Coordination Mechanisms to Support Development of SIEPA
NNOO STTIIVV Donors Coordination Mechanisms Recipient
U S
HAAU
EEXXH
EAR
EAR Comments
Institutional Comments
Institutional strengthening
strengthening
&& cost
cost sharing
sharing Overview: Created
Overview: Created in in 2001
2001 by by the
the Government
Government of of
Serbia,
Serbia, SIEPA
SIEPA oversees
oversees the the promotion
promotion of of Serbian
Serbian
USAID Line
Line Ministries
Ministries exports
exports onon the
the international
international market,
market, and and assists
assists
USAID
(Ministry
(Ministry of
of Economy, foreign
Cluster
Cluster development
development 11 Economy, foreign investors
investors and and buyers
buyers
support National
National SME
SME Dev
Dev
support
Agency)
Agency)

Types
Types of Coordination: Since
of Coordination: Since its
its inception,
inception,
SIEPA
SIEPA has received assistance from aa number
has received assistance from number ofof
UNIDO
UNIDO donors.
donors. Three main methods have been used
Three main methods have been used toto
Support
Support for
for Natl
Natl Agency
Agency for coordinate
SME
for coordinate assistance
assistance efforts:
efforts:
SME Development
Development
–– Coordination
Coordination through line
through line ministries,
ministries, suchsuch asas
the Ministry of Economy, directly
the Ministry of Economy, directly impacted impacted
Japanese
Japanese Government
Government Donor by
by the
the assistance
assistance
Funding Donor Serbia
Serbia Investment
Investment
Funding support
support –– The
The UN UN Resident
Resident Director
Director and and the
the World
World
Coordination
Coordination w/
w/ and
22 and Export
Export Bank
10
10 Sub-groups
Sub-groups && Promotion Bank initiated
initiated monthly
monthly donordonor coordinator
coordinator
Promotion Agency
Agency meetings
GTZ
GTZ SIPEA
SIPEA Support
Support (SIEPA) meetings to to review
review current,
current, future
future andand
(SIEPA) planned
Business
Business advisory
advisory && planned activities
activities andand provided
provided jointjoint policy
policy
linkage
linkage services
services guidance
guidance to to the
the government.
government. SIEPA SIEPA
promoted
promoted and and supported
supported thesethese meetings
meetings
Swiss
Swiss Dev
Dev Corp
Corp directly
directly
Funding
Funding for
for business
business –– USAID
USAID developed
developed aa donor donor coordination
coordination
development
development services matrix
services matrix to track all donor activities
to track all donor activities
Donor
Donor
33 Coordination
Results :: SIEPA
Results SIEPA has has received
received aa number
number of of
World
World Bank
Bank // MIGA
MIGA Coordination awards,
Capacity Matrix awards, including
including shortlist
shortlist forfor WTPO
WTPO Best Best Trade
Trade
Capacity building
building && Matrix Promotion
institutional strengthening
institutional strengthening
Promotion Organization
Organization from from aa Developing
Developing
Country
Country in in 2008
2008 and and special
special prize
prize for
for the
the Best
Best
Practices
Practices in in Promotion
Promotion from from the
the La La Baule
Baule 2007
2007
SIDA
SIDA World
World Investment
Investment Conference
Conference
National
National FDI
FDI strategy
strategy
development
development
Source: Lit Search; EAR Action Programme 2006 for Serbia; SEDP Final Report, 2007; Comparative Overview of Local Government Ministries in the
Region and Abroad; Transitional Support Strategy Update; SME Development
117
Kenyan green bean exporters have developed a strategic market in

the UK by tailoring production to buyer preferences, using contract
farming and developing additional safety codes of practices
Key Success Factors: Development of Kenyan Green Beans to Meet Consumer Needs
II
Studies show that buyers in developed countries may choose to buy agricultural commodities from developing markets
for three main reasons: 1) the buyer may not find any existing suitable standard for regulating particular production
processes 2) the buyer may not regard existing standard as sufficiently credible; or 3) the buyer may deliberately
develop a standard that differentiates the in-house brand from that of competitors
Tailoring
Tailoring Kenya has developed a strategic market for exporting green beans to supermarkets in the United Kingdom
Production
Production – Semi-processed ‘high-care’ products such as mixed salads, assortments of cut vegetables for dips, vegetable
to
to Buyer-
Buyer- kebabs, stir-fry and other mixes, are all produced under very stringent hygienic conditions
Driven
Driven – Kenyan producers have been able to add value, via consumer packing of cut, sliced and modified vegetables or
Supply
Supply Chain
Chain vegetable combinations. The “high-care” market has been a key to profitability
Exporters who supply the UK supermarket chains closely monitor and coordinate input supply, quality and usage as
well as technical advice to the growers. EU importers do not directly monitor the green bean growers, but rather monitor
the exporters and expect that the exporters will in turn monitor their growers. Leading export companies will regularly
test workers for presence of pathogens, penalizing producers for any infractions
IIII Contract farming has helped poor smallholders in Kenya by facilitating access to markets, such as the UK
– In particular, contract farming allows smallholders access to technical information regarding the pesticide usage,
Using
Using Contract
Contract hygiene requirements and agronomic practices that facilitate compliance with IFSS
Farming
Farming to
to – Contracted smallholders receive technical information in the form of handouts, training and field extension
Meet
Meet Demand
Demand services
– Contract production of green beans enables buyers to monitor and enforce IFSS compliance (at lower transaction
costs) under a longer-term relationship
III
III
Kenya has also developed homegrown food safety standards (KenyaGAP, Horticultural Ethical Business Initiative) for
Developing
Developing horticulture crops destined for the export market
Additional
Additional Compliance with these codes are mandatory for growers and exporters
Code
Code of
of Development of code of practices is a strategic method for exporters to signal their desire to meet high consumer
Practices
Practices standards
Source: Strategic use of private standards to enhance international competitiveness: Vegetable exports from Kenya and elsewhere; Food Safety Requirements in African Green Bean
Exports and Their Impact on Small Farmers; BAH Analysis
118
The vast majority of Romanian dairy producers are family farms

that have less than two cows, with 21% of milk production going to
the milk collection system…
Overview of Romanian Dairy Producers
Size Structure of Livestock Farms (2001) Total Raw Milk Production (2001)
State Farms Other Large Farms
95% 1%
2%
4.01%
0.36% 0.08% 0.04% 0.03% 0.02% 0.01% 0.01% Family Farms

97%
1-2 3-5 6-10 11-15 16-20 21-30 31-50 51-100 more
heads heads heads heads heads heads heads heads than 100
heads
Size Distribution of Dairy Industry, Number of Employees (2004) Use of Milk Production (2001)
93.2%
Milk Collection
System
21%
Farm Usage &

Direct Sales
2.90% 3.00% 79%
0.70% 0.20%
0–49 50–99 100–249 250–499 Over 500
Source: The Dynamics of Vertical Coordination in Agrifood Chains in Eastern Europe and Central Asia; BAH Analysis
119
…however, a recent survey of dairies showed increased use of

collection arrangements, payment systems and support
mechanisms for smallholder farmers in Romania
Overview of Collection Centers, Payments and Assistance in Romania
Types
Types of
of Collection
Collection Arrangements
Arrangements Overview
Overview of
of Farm
Farm Assistance
Assistance by
by Dairies
Dairies Surveyed
Surveyed
11
Danone Friesland Promilch Raraul
Farmers deliver milk to
Farmer
Farmer to
to collection points at firms
Firm Collection
Collection Point
Point // Extension services
Firm
Dairy
Dairy Firm
Firm
Provide good quality
22 inputs financing
Firms collect milk from
Firm farmers for delivery to
Firm from
from collection points
Support to purchases of
Collection
Collection Point
Point //
Farmer
Farmer simple inputs
Dairy
Dairy Firm
Firm
Investment support by
33 small loans
Collect Deliver
33rdrd Party
Party milk Collection
Collection milk Support in receiving
Conveyors Dairy
Dairy Firm
Firm
Conveyors Point
Point bank loans
Payment
Payment Systems
Systems to
to Ensure
Ensure Quality
Quality Comments
Comments
11 Payments Proportional to Quality: Farmers are paid at

Examples
Examples of of extension
extension programs:
programs:
collection centers according to the fat content and protein –– Friesland
Friesland sends inspectors in
sends inspectors in the
the field,
field, who
who visit
visit farmers
farmers
and
and advise them on milk hygienic circumstances, cleaning
advise them on milk hygienic circumstances, cleaning
content, density and germ counts in milk supplied
practices,
practices, andand fodder
fodder management
management
22 Bonus System: Farmers are paid a relatively low base price, but
–– Promlich
Promlich distributes
distributes leaflets
leaflets with
with practical
practical information
information on on
bonuses are provided when farmers deliver above-average milk cultivating
cultivating feed,
feed, storing
storing milk,
milk, cleaning
cleaning practices,
practices, etc.
etc.
quality, according to protein content, germ count and consistency Examples
Examples of of investment
investment programs:
programs:
in delivery –– Danone
Danone supports
supports farmers
farmers who
who aimaim toto improve
improve their
their business
business
through
through small-scale
small-scale investments.
investments. The The farmer
farmer may
may apply
apply for
for
33 Penalization System: Firms measure milk according to a
pre-financed
pre-financed inputs
inputs only
only after
after he
he has
has delivered
delivered good-quality
good-quality
specified number of grades. Farmers delivering milk at the milk
milk to
to Danone
Danone forfor at
at least
least six
six months.
months.
lowest grades are penalized
Source: The Dynamics of Vertical Coordination in Agrifood Chains in Eastern Europe and Central Asia; BAH Analysis
120
Effective promotion methods include targeted marketing based on

product type and pre-positioning of commodities at agriculture
food fairs
Innovative Promotion & Branding Methods
Targeted
Targeted Promotion
Promotion Based
Based on
on Product
Product Type
Type Pre-Positioned
Pre-Positioned Distribution
Distribution at
at Fairs
Fairs
ASOEX / ProChile co-funded an intensive marketing Agricultural food fairs are important for promoting
campaign targeting the sale of blueberries in the UK new products, learning about consumer tastes, and
“Eat the Blues – You Have to Eat Them to Beat increasing innovation
Them” campaign included a number of efforts: Smallholder farmers may be constrained if they
– An on-the-street sampling scheme in Yorkshire, cannot ship and distribute their products readily at
with handouts of fresh, free blueberries international fairs
Overview
Overview – Free 3-week distribution to premium health spas – The USAID South African Trade Hub addressed
– Aggressive sampling at radio stations and shows this challenge by sponsoring six regional
companies to attend the 2006 Spring Fancy
– A national print and online PR campaign geared Foods Show in Chicago
to the over-50s with the potential to reach over – The program helped pre-position distribution of
3.5 million consumers products so that small farmers could promote
and easily sell their products with minimal lag
time during and after the food fairs
Shipments have grown from 1,440 tons in 2005-2006 Participation helped raise the collective profile of
to 2,307 tons in 2006-2007, an increase of 60 percent southern Africa as a supply source for specialty foods
Impact
Impact Due the success of the pilot program, the marketing Three of the six companies sponsored by the USAID
campaign has become of yearly event, with possible Trade Hub have since realized new exports to the
expansion into other countries U.S. specialty and gourmet food sector
Timeline for Success at Food Fairs
Year 1 Year 2 Year 3

Buyers examine Buyers take sample Buyers are ready to
product and of product at food purchase larger
express interest fair and tests with orders based on
local market market assessment
Sources: “The Emergence of New Successful Export Activities in Latin America: The Case of Chile” (IADB); Lit Search, Interviews, USAID website; Fresh Plaza website; BAH Analysis
121
In order to optimize pricing for commodities, best practices point

to three solutions: align with market prices, establish a niche
product or develop a franchised quality product
Methods to Optimize Pricing for Agricultural Commodities
11 22 33
Align
Align with
with Market
Market Prices
Prices Establish
Establish aa Nice
Nice Product
Product Buy
Buy Into
Into A
A Franchised
Franchised Product
Product
The Foreign Agricultural Trade of the Kenyan green bean producers pinpointed The Pink Lady® trade mark was originally
United States (FATUS) service provides a market for “high-care” products to UK established in Australia for use on apples
historical prices for USA’s exports and supermarkets that met specified quality standards
imports, by crop and country of origin / – Customers differentiated value based – In countries where the trade mark is
destination on quality of the product rather than registered, apples sold under the
– User-friendly interface, with updated price Pink Lady® brand must meet
information – Exporters enforced and even rigorous and specific standards, and
– Diverse breakdowns, allowing developed stringent international the trade mark can only be used
producers to even assess impact of food safety standards to meet under license
customs and duties on market prices consumer quality standards – License holders pay royalties, which
for their crops – Exporters have also developed cover management of the trade mark
Service is on-line and free of charge flexible distribution arrangements to – Members span over four continents
The tool allows producers to check trends supermarkets, at times decreasing or in countries such as the United
and recent development of crops in increasing the size of order hours States, South Africa, Chile, Japan,
international markets before delivery. The variability is Uruguay, etc.
– Monitor competitors’ positions offset by the continued relationship Because of the high quality of the Pink
with the buyer Lady brand, producers can expect to
– Assess and act on seasonal trends
receive a premium on price
Source: USAID; USDA; International Pink Lady Alliance Limited; Booz Allen Analysis
122
Infrastructure Capacity Building
Despite the lack of water access, the Israeli government has

developed innovative irrigation methods to increase productivity
while decreasing water use
Overview of Israel’s Irrigation System and Impact
Types
Types of
of Micro
Micro Irrigation
Irrigation Methods
Methods Implementation
Implementation &
& Impact
Impact
Drip irrigation can supply from one liter to 20 Water Use Per Hectare Crop Productivity Per Unit
liters per hour. With a peak water utilization (m3/yr) of Water (kg/m3)
Drip
Drip Irrigation
Irrigation 9000 2.5
rate of 95%, this method is suitable for
intensive cultivation 5700
1.2
Sprinklers are designed for crops that require
Mini-sprinkler irrigation of an entire area or field. The
Mini-sprinkler
sprinklers achieve a water utilization rate of
70%-80% 1952 1995 1952 1995
In an underground drip irrigation system, air Comments

Comments
valves open when the water is turned off and
Underground
Underground allow air into the pipe to prevent external dirt Despite
Despite the the scarcity
scarcity of of water,
water, the
the Israeli
Israeli government
government has has
from being sucked into the dripper taken
taken a number of steps to increase farmers’ access
a number of steps to increase farmers’ access to
to
water
water
Portion of Israeli Land with Efficiency Rate According –– According
According to to the
the Water
Water Law,
Law, water
water is
is considered
considered aa public
public
Different Irrigation Types (%) to Irrigation Types (%) good
good and
and managed
managed by by the
the Water
Water Commissioner,
Commissioner, who who isis
responsible
responsible for for determining
determining thethe use
use and
and allocation
allocation ofof
95% water
water inin all
all areas,
areas, including
including irrigation
irrigation for
for agriculture
agriculture
Sprinklers –– In
In 2006,
2006, the
the Israeli
Israeli government
government developed
developed the the National
National
75%
20% Program for Promoting Water Technologies - NEWTech.
Program for Promoting Water Technologies - NEWTech.
The
The program
program invests
invests in
in human
human capital,
capital, R&D
R&D funding
funding and
and
Micro-Irrigation
local
local market
market implementation
implementation for for the
the development
development of of
80%
irrigation
irrigation systems.
systems. The The Israeli
Israeli Ministry
Ministry of
of Industry,
Industry, Trade
Trade
and
and Labor leads the Program with 10 other government
Labor leads the Program with 10 other government
Micro-irrigation Sprinker entities
entities
Source: Irrigation and Desertification: Ecological Consequences of Arid Land Reclamation in the Aral Sea Basin and Land
Degradation Control; Management of Water Resources in Israel; Israel Agriculture; BAH Analysis
123
Four main types of irrigation charging systems exist around the

world: area-based, crop-based, volumetric and tradable water
rights
Types of Irrigation Charging Systems
Area-based
Area-based Crop-based
Crop-based Volumetric
Volumetric Tradable
Tradable Water
Water Rights
Rights
A fixed rate per hectare of A variable rate per irrigated A fixed rate per unit water Entitlements of users in an
farm with a “two-part” tariff hectare of crop, i.e. different received, where the charge is irrigation project, otherwise
Description
Description
designed to cover the fixed charges for different crops proportional to the volume; or, a known as rights holders,
costs of the service, or a (not based on volume, but rising block tariff where the are allowed to buy or sell
fixed rate per hectare the type of crop and area charge is tied to quantity of rights in accordance with
irrigated irrigated serve as proxies for water, but tiered unit costs can specified rules designed
the volume of water be applied for different farms primarily to protect third
received) parties’ rights
The marginal price of water The marginal price of water Provides an incentive to save Brings supply and demand
Farmers
for Farmers
is zero. Farmers take as is zero. Farmers take as water and has the potential to into balance. Where water is
much water as they would much water as they would reduce consumption scarce and rationed, farmers
like to consume, but the cost like to consume, but the cost For block tariffs, low rates are for will use water carefully even
Incentives for
is unaffected by the amount is unaffected by the amount substantial, initial entitlements though the marginal price to
used used them may be zero
Incentives
and high rates are for additional

water beyond threshold. Results
in a low total cost and a high
marginal price
In Spain, the most In Egypt, several charging In Israel, farmers receive a Available in the United
Example
Country Example
widespread charging mechanisms exist, including water allocation for which they States, sales require
mechanism is a fixed charge the crop based pricing for are charged on an increasing authorization by a licensing
per hectare. The variable irrigation block tariff according to the authority (most western
element is the energy cost percentage of the allocation states) or may require court
Country
associated with pumping and used approval (e.g. Colorado)

pressurizing water delivery
systems
Source: Water Charging in Irrigated Agriculture; Cost Recovery for Agriculture: Egyptian Experience; BAH Analysis
124
A number of methods exist to support expansion of greenhouses,

including donor funding, tax credits, investment support, income
support and loan programs
Overview of Methods to Support Greenhouse Development
Methods
Methods to
to Support
Support Greenhouse
Greenhouse Development
Development Examples
Examples of
of Donor
Donor Support
Support Mechanisms
Mechanisms
Funding can come in several forms, from investment 11

USAID / Croatia: Modernization of Greenhouse Facilities
loans for building greenhouses (World Bank in
Donor
Donor Funding
Funding Armenia) or providing monetary support to improve
machinery (USAID in Croatia) to decrease costs and USAID
USAID // Croatia
Croatia Help farmers reorganize and
improve competitiveness purchase equipment for
greenhouses
The Canadian government set up the Scientific Farmers had outdated equipment and the capacity of their seedling
Research and Experimental Development Tax Credit production facilities was inadequate. Machinery was also expensive
Tax
Tax Credits
Credits Program, an incentive program designed to for farmers
encourage the development of new products and With USAID support, pepper production jumped by 50% over the
processes, including greenhouses previous year and costs fell by 15%
The Government of Ontario, Canada, has set-up a 22
$12M investment fund to promote consumer Donor Efforts in Armenia to Improve Infrastructure
Investment
Investment awareness of locally produced goods, including
Support
Support agriculture grown using greenhouses. Programs
include consumer promotion and setting-up a ACDI/VOCA
ACDI/VOCA USDA
USDA CARD
CARD DAI-ASME
DAI-ASME IFAD
IFAD
distribution network for greenhouse goods
Technical Marketing Market Loans
The Government of Canada has developed a Net assistance assistance research
Income Income Stabilization Account (NISA) program, which

Income
is meant to stabilize farm income. Farmers deposit a
Support
Support portion of their income, which is directly matched by
the government. In years of low income, farmers can Greenhouses
Greenhouses
make withdrawals
The Canadian government has a federal government
The greenhouse industry received support from multiple donors to
guaranteed loans program designed to increase the
Loan improve infrastructure. From 2003-2006, the acreage of
Loan Programs
Programs availability of loans for greenhouse producers. Farm
greenhouses in Armenia doubled. On average, 10 ha of
Credit Canada (FCC) also provides flexible loan
greenhouses were constructed annually
options features, including multiple interest rate and
payment options
Source: USAID Website; Government of Canada Website; Assessment of the Potential of the Armenian Greenhouse Cluster; BAH Analysis
125
Extension programs for irrigation can be provided through

universities, governments or public-private partnerships
Delivery Types of Extension Programs for Irrigation
In
In the
the United States, universities
United States, universities provide
provide tailored
tailored extension
extension services
services in
in greenhouse
greenhouse development
development
–– In In Colorado,
Colorado, major
major crops
crops grown
grown in in greenhouses
greenhouses are are container-grown
container-grown plants,
plants, including
including potted
potted color,
color,
bedding
bedding and and foliage
foliage plants,
plants, cut
cut flowers,
flowers, and
and tomatoes
tomatoes
–– The The Colorado
Colorado StateState University
University Floriculture
Floriculture and
and Greenhouse Extension program
Greenhouse Extension program offers
offers aa number
number of of
University
University tools
tools for
for farmers,
farmers, including
including 1) publications in
1) publications in areas
areas such
such as
as disease
disease management
management and and water
water reuse;
reuse; 2)2)
presentations
presentations and workshops; 3)
and workshops; 3) access
access toto in-house professors who
in-house professors who are
are experts
experts inin greenhouse;
greenhouse; 4) 4)
access
access to to an
an online
online Cooperative
Cooperative Extension
Extension Greenhouse Listserv that
Greenhouse Listserv that serves
serves asas aa discussion
discussion list
list and
and
aa point
point of
of exchange
exchange for
for greenhouse
greenhouse farmers
farmers
In
In Alberta,
Alberta, Canada,
Canada, the
the Ministry
Ministry of
of Agriculture
Agriculture and
and Rural
Rural Development
Development has has developed
developed aa number
number of of resources
resources
to
to support
support and
and promote
promote greenhouse
greenhouse vegetable
vegetable production
production
–– Online
Online guides
guides include information on
include information on industry
industry statistics,
statistics, regulatory
regulatory requirements,
requirements, market
market basics,
basics,
Government production
production knowledge,
knowledge, investment
investment andand capital
capital requirements
requirements
Government
–– Publications
Publications about
about starting
starting and
and developing
developing greenhouses
greenhouses in in Alberta
Alberta
–– Access
Access to technical advisors in the Ministry who are greenhouse specialists,
to technical advisors in the Ministry who are greenhouse specialists, horticulture
horticulture specialists
specialists
and economic analysts
and economic analysts
In
In the
the United
United States,
States, aa regional
regional public-private coalition was
public-private coalition was established
established to to promote
promote Integrated
Integrated Pest
Pest
Management (IPM) for the greenhouse industry in Northern
Management (IPM) for the greenhouse industry in Northern New England New England
–– TheThe coalition
coalition included
included growers,
growers, researchers,
researchers, extension
extension specialists
specialists and educators, socio-economists,
and educators, socio-economists,
Public
Public Private
Private bio-control
bio-control and pesticide suppliers, state agricultural personnel and other key industry
and pesticide suppliers, state agricultural personnel and other key industry representatives
representatives
Partnerships
Partnerships –– TheThe main
main objectives
objectives of of the
the program
program are
are to
to 1)
1) develop workshops on
develop workshops on IPM
IPM 2)2) develop
develop anan analysis
analysis of
of the
the
of growers to improve productivity and reduce chemical pesticide inputs;
needs of growers to improve productivity and reduce chemical pesticide inputs; 3) create a coalition
needs 3) create a coalition
of
of stakeholders
stakeholders in in the
the greenhouse industry which
greenhouse industry which will
will serve
serve as
as the
the foundation
foundation forfor preparing
preparing
collaborative
collaborative research
research and and extension
extension activities
activities
Source: A Public-Private Partnership to Promote IPM Implementation in Northern New England Greenhouse Ornamentals; BAH Analysis
126
Transportation
In Brazil, access to road infrastructure was a major challenge for

small farmers – one of the country’s largest states developed a
prioritization model to invest specific “logistical” funds
Increasing Road Access for Small Farmers in Brazil
Small
Small Farmer
Farmer Accessibility
Accessibility Studies
Studies Description
Description
Small farmers’ accessibility to major logistics network in Brazil was

evaluated through studies funded by government
– Assessment of time and distance to main transportation backbones
helped determine which areas required investments
Baselining
Baselining
– Qualitative aspects, such as pavement conditions, were also

considered
Results of baselining stage were a set of logistics infrastructure

interventions required to enhance accessibility of small farmers to
transportation backbones, with cost estimates and eventually forecast of
return rates (based on production and trade flow estimates)
Portfolio was prioritized considering a “cost per capita” metric – projects

with lower cost per capita were the first to be completed
Prioritization
Prioritization
Indicators for completion of projects were incorporated to the state’s

overall performance metrics – accessibility of small farmers to logistics
network became part of the state’s strategy and has specific budget
allocation
A letter of commitment was signed by local representatives and state’s

authorities, so as to ensure continuity of projects past government
mandates (4 years)
Source: Booz Allen Project – “RumoS 2015” (Government of Rio Grande do Sul State – Brazil); BAH Analysis
127
Transportation
Both the Serbian and Mozambique governments effectively used

donor support to find ways to decrease the costs of ground
transportation and facilitate road delivery for agricultural goods
Types of Donor Assistance to Decrease Ground Transportation Costs
Serbia-
Serbia- EBRD
EBRD Roads
Roads Technical
Technical Assistance
Assistance Mozambique-
Mozambique- MCC
MCC Road
Road Sector
Sector Investments
Investments
While the road network in Serbia provided adequate Almost two-thirds of the population in Mozambique
coverage and communication, routes needed to be depends on agriculture for their livelihood
improved to meet increase in traffic volume – Success of the agriculture sector is dependent
The responsible government agency, Serbian Roads on the availability of reliable ground transport
Overview
Overview Directorate, needed assistance in developing a Road – Studies showed that the Northern provinces
Recovery Plan to determine the investments (Cabo Delgado, Niassa, Nampula, and Zambézia)
required to improve road conditions, which would lacked the road density to sustain transport of
best improve economic conditions goods
The Serbian government used donor assistance in MCC Mozambique worked with the National Road
two ways: Administration and the Road Fund to:
– US Trade and Development Agency (USTDA), – Conduct an extensive study of the road network
Types
Types of
of who funded and oversaw development of the (5,231 km in the four provinces) to determine
Donor
Donor feasibility study for roads assistance areas of improvement and the costs required
Support
Support – The World Bank, which developed the Highway – Use the Road Economic Decision model to
Development and Management Tool (HDM-4) to simulate the economic effects of road
analyze the current road system, create a cost / interventions based on costs, resources, and
benefit analysis of improvements to be road conditions
completed under the Road Recovery Plan
Based on the recommendations of the Road MCC Mozambique made a final selection of road
Recovery Plan, the Serbian government improvements that would facilitate delivery of
developed three types of budget scenarios agriculture goods
Results
Results // (pessimistic, moderate, optimistic) – The study estimated that the net value of new
Impact
Impact – The government, along with USTDA, determined production for both cash and food crops would
the optimal amount of funding that would be produce USD 37.7 million in value add
required – Smallholder farmers producing maize and cash
– Amount of improved road conditions and crops would benefit from better market access
increased economic development were projected and reduced import and transport costs
Source: EBRD Roads Technical Assistance Project in Serbia; MCC Mozambique: Proposal for Road Sector Investments in the North; BAH Analysis
128
Transportation
Israel’s largest exporter of produce, Agrexco, found a cost

effective method to bypass borders by developing specialized
reefer vessels to directly transport goods to Europe
Agrexco’s Specialized Reefer Vessels – Key Facts
Agrexco has two specialized reefer vessels bearing its name, delivered in
2003 based on a 15-year usage contract with owner Agrexco’s Routes and Breakdown of Exports
The ships feature new technologies that allow flexibility in capacity usage –
Overview
Overview cars can be loaded into the refrigerated area, providing an important asset for LEGEND:
back-haulage Air
Sea (Spec. Reefer)
During peak seasons, Agrexco charters two additional vessels, along with COLOGNE
Sea (Conv. Reefer)
support ventilated liners
MARSEILLES
KOPER
Average speed is 22 knots – almost twice as fast as any other reefer vessel
Economics Capacity of 880 TEU (~60,000T)
Economics
Return business consists of cars back to Israel (to Israeli and Asian markets) PIRAEUS
ASHDOD
Agrexco products set sail from Haifa and Ashdod towards Europe (Marseilles
and Valencia)
– From Ashdod (loading port) to Marseilles, ships usually take 3 days
Routes
Routes and
and – 80% of the produce go to the company’s distribution center in Marseilles
Markets
Markets where Agrexco has a distribution center Conventional
Served
Served – At Marseilles, new containers and cars are loaded into the vessel - two Reefer
day-shifts for cargo loading Vessels
16%
– Ship heads to Valencia (additional cars are loaded) and after 14 days of
departure, arrives back at Ashdod Air
Cargo Specialized
19% Reefer Vessels
The 14-day timetable is composed so that there is time to make up if delays 65%
Time
Time and
and occur due to bad weather – ships can be loaded at night, for an extra cost that
Capacity
Capacity rather than paying fuel and other additional costs
Mgmt.
Mgmt. Agrexco also charters capacity to 3rd party companies (round-trip contracts)
Source: Interviews; Logistics Study for Agricultural Flow – Egypt / Europe; FAO - Global Agricultural Marketing Management (1997); Lit Search; BAH Analysis
129
Transportation
Kenya has successfully developed a strategic export market for

green beans to the UK using air transport
Kenya: Using Air Freight to Develop Strategic Green Bean Market
Reasons Behind Success of Green Bean Market
11 Producers and exporters of green beans chose to

Kenyan Green Bean Exports Using Air expand in markets that differentiated on quality, not
Transport by Destination, 2004 price
– UK clients and consumers are prepared to pay
Other 6% Product
Product a premium for “high-care” and quality green
Belgium 4% Tailored
Tailored to
to beans
Market
Market
Netherlands 6% – The increased demand for volume (four-fold
increase of green bean imports from 1990 to
2004) enabled exporters to offset costs of air
freights
22 Most green bean farms are within a two-hour
France 15% proximity to the Nairobi airport
Airport proximity benefits green bean exporting due
UK Producer
Producer to:
70% Proximity – Perishability of the product
Proximity
to
to Airports
Airports – Low value-volume ratio of the product, which is
due to high processing requirements and
makes long-distance transport costly
– Requirement of flexibility in orders
33
Total:
Total: 32,441
32,441 Tons
Tons Green beans are transported by one of two ways:
Availability
Availability – Studies estimate that 60-70% of cargo is
of
of Air
Air carried as belly freight on passenger planes,
Freight
Freight with British Airways offering daily flights to
Options
Options London, facilitating shipment of green beans
– Dedicated freight craft
Source: A life cycle analysis of UK supermarket imported green beans from Kenya; Strategic use of private standards to enhance international competitiveness:
Vegetable exports from Kenya and elsewhere; Food Safety Requirements in African Green Bean Exports and Their Impact on Small Farmers; BAH Analysis
130
Transportation
A recent study in Serbia recommended the development of field

packing areas to enable vertically integrated cold-chain
distribution of berries for small-scale farmers
Overview of Recommended Field Packing System for Smallholder Farmers
Field Packing Process
Advantages
Advantages
11 Producers deliver shipments of fresh berries to
Receive field packing centers, which could be private or
Receive shipments
shipments from
from Integrates purchasing locations into cold
farmers municipal centers, and are in close proximity to
farmers storage and processing facility systems by
farms
applying vertical integration
Centers pay producers for berries according to
going farmgate prices Costs arising on the way from producers to
cold stores are decreased
22 Products have extended shelf life
Berries are sorted, cleaned and packed either
capabilities, possibly double existing limits
Sort,
Sort, clean
clean and
and pack
pack manually or using machines
agricultural
agricultural goods
goods – Figures estimate that machine use is Consistent presentation and packaging for
equivalent to the work of 100 manual sorters enhanced marketability
33 Utilizing field-level packing and cooling systems,

Disadvantages
Disadvantages
chilled berries are prepared for local distribution
Place
Place goods
goods in
in pre-cooling
pre-cooling with relative ease and limited cost
Pre-cooling and packaging is important for
product durability and differentiation Smallholder farmers may not have means to
transport goods to field packing centers
Producers are dependent on the center to
44
Using small refrigerated trucks, fresh chilled give determine the cost for goods, which
Transport
Transport refrigerated
refrigerated berries are transported in small quantities directly may not be the best price they could receive
goods
goods to market
to market to market to wholesalers, retail supermarket on the market
chains, hotels, restaurants (in compliance with Field centers focus on domestic
required standards) consumption, which is small in comparison
to export quantities
Source: Cold Chain Strategy for Serbia; The Market Chain of Fruit Production in Serbia; BAH Analysis
131
Government Agriculture Regulations
While the PPECB operates as a quasi-private quality control body

for South Africa, the EACCE is a government body in Morocco that
ensures exports meet international food safety standards
Overview of Quality Control Agencies
Perishable L'Etablissement
L'Etablissement Autonome
Autonome dede Contrôle
Contrôle et
et de
de Coordination
Coordination
Perishable Products
Products Export
Export Control
Control Board
Board (PPECB)
(PPECB) des
des Exportations
Exportations (EACCE)
(EACCE)
South Africa’s official export certification agency for perishable Morocco’s official institution overseeing quality control and
products – mandated by the Government of South Africa – coordination of exports, as mandated by the Government of
controls all agriculture and animal exports from the country
Description
Morocco
Description
General
General
– Defines rules and impose penalties – Ensures that all agriculture and food products exported
– Negotiates with producers, shipping companies and other out of the country meet international food safety and
stakeholders standard guidelines
– Coordinates food exports through development and
Independent service provider of quality certification and cold execution of sector strategies and support of bilateral and
chain management services for producers and exporters multilateral export agreements
Financially and legally autonomous, the EACCE is overseen
Board comprised of representatives of main crop producers and
by a President, 10 members from the government, a member
Organization
Organization
largest exporter companies

from the Marketing and Exports Association, and eight
30 offices located in 11 production regions, reaching 1,500 members representing the exporters and producer
locations
21 regional offices located across the country
Matrix accreditation units – crop-specific and functional
Three types of labs are located in regional offices:
specialization
microbiological, phyto-sanitary and packaging
Two main service streams, reflected in the organizational Services are provided in three main areas:
structure – An export development unit, which oversees marketing
– Statutory services (Inspection & Cold Chain): government- efforts, data collection, and coordination of exports
Services
Services
mandated activities – A technical division that oversees quality control of

– Non-Statutory Services (Customized Services): independent infrastructure, processed products and fresh foods
and profit-oriented service providing, with tailored solutions – A laboratory division that oversees analysis of products
Funds are acquired through a legislated levy placed on all Funds are acquired through a mix of government funding and
exporters (fixed cost per carton exported, migrating to a a levy placed on imports
differentiated levy by product type)
Source: PPECB, EACCE; BAH Analysis
132
The PPECB maintains a nationally and internationally recognized

lab which provides testing for government and private entities to
ensure safety and quality
PPECB Quality Control Lab Interactions
Council
Council for
for SABS
SABS
Department
Department of
of Department
Department of
of Department
Department of
of Scientific
Scientific and
and (National
(National regulatory
regulatory
Health
Health Trade
Trade Agriculture
Agriculture Industrial
Industrial Research
Research body)
body)
Mandated to audit
compliance & enforce
Labs
Labs Quality Standards and Labs
Labs Labs
Labs
Food Safety Standards
Conducts tests to monitor

SA
SA National
food quality control

National
Accreditation
Accreditation PPECB
PPECB
Scheme
Scheme
Accreditation of Oversees work
laboratories to ISO /
IEC 17025
Quality
Quality Control
Control Lab
Lab
Completes testing & analysis
Exporters,
Exporters, Producers
Producers
Comments
Comments
The
The PPECB
PPECB maintains
maintains aa private
private lab
lab that
that oversees
oversees testing
testing for
for three areas: Mycotoxin
three areas: Mycotoxin Analytical
Analytical Program,
Program, Fats
Fats Analytical
Analytical Program,
Program, Labeling
Labeling
Analytical Program
Analytical Program
–– InIn addition
addition to
to government
government labs
labs under
under the the Department
Department ofof Health,
Health, CSIR
CSIR andand SABS,
SABS, the the PPECB
PPECB lablab completes
completes third
third party
party analyses
analyses
PPECB
PPECB has has been
been accredited
accredited according
according to to international
international standards,
standards, such
such as
as the
the ISO
ISO // IEC 17025, and
IEC 17025, and has
has also
also developed
developed aa cross-accreditation
cross-accreditation
with
with the
the United
United Kingdom
Kingdom Accreditation Standards. As
Accreditation Standards. As aa result,
result, South
South African
African and
and thethe UK
UK recognize
recognize each
each other’s
other’s accreditation
accreditation standards
standards
Source: PPECB website; PPECB 2008-2009 Annual Report; Standards and global trade: a voice for Africa; BAH Analysis
133
Studies on Kenyan green bean producers show that costs for

international food safety standard (IFSS) compliance are
significantly lower for farmer groups versus small or large farmers
Overview of Farmer Costs for IFSS Compliance
Total Income by grower type, 2006
Costs (in Kenya shillings) associated with IFSS compliance and
1,1120,000 1,248,000 336,000
certification by grower type, 2006 (*)
438,954
96% 76% 27%
Needs assessment 6%
Pesticide storage
unit
6%
Charcoal cooler 9%
Analyses 73%
10% 311,340
Grading shed 10% Remaining income

14% 228,190
12%
9% 24%
11% 3%
2% Cost of Compliance
23% as % of income 4%
Certification 24% 14% Farmer Group Large Farmer Small Farmer
8%
11%
Comments
Comments
38%
Cost
Cost per
per unit
unit income
income is
is smaller
smaller for
for the
the farmer
farmer
Pre-audit 30% 31% group, with each farmer paying only
group, with each farmer paying only 29,264 29,264
shillings
shillings for
for compliance
compliance
23% Income increases as
Income increases as more
more farmers
farmers work
work
11%
together
together toto increase
increase productivity
productivity and
and
Farmer Group Large Farmer Small Farmer innovation
innovation
Note (*): Does not include costs for toilet or disposal

Source: Food Safety Requirements in African Green Bean Exports and Their Impact on Small Farmers; BAH Analysis
134
Spain’s seed import regulations work under “certified origin”

schemes – other countries also adopt solutions to regulate inputs
of seeds and fertilizers
Overview of Input Regulations in Benchmark Countries
Seed
Seed Import
Import Regulations
Regulations Fertilizer
Fertilizer Import
Import Regulations
Regulations
Spain works under a “certified-origin” scheme. For For fertilizers, imports also work under
varieties registered in the EU, some countries have “certified-origin” and positive list approval
(for specific types of seeds) same treatment as EU – Fertilizers have to be previously
countries registered at the Ministry of Agriculture
Internal trade of imported varieties must be to be allowed to enter Spain
communicated to the Ministry of Agriculture – Only fertilizers from certified plants are
Spain
Spain (database of imported seed sellers, buyers and accepted – for countries outside the EU,
transactions) importers are required to send
Spain also adheres to OECD-sponsored seed Certification of Approval in country of
scheme that harmonize regulations in order to origin and related legislation to be
facilitate the import and export of seed; typically vetted by Spanish Authorities
through removal of technical trade barriers with
recognized labels (e.g., passports for trade)
Serbia: Ministry of Agriculture provides a pre- Australia: fertilizer imports must also meet
approval process – new seeds are imported strict Australian Quarantine regulations
within 7 days, and, unless stated otherwise, pre- administered by the Australian Quarantine
approval is considered final after 6 months Inspection Service (AQIS). Most fertilizer
Other Croatia: The Institute for Seeds and Seedlings products require an import permit and are
Other
Countries enforces seed laws set by the OECD, and conducts required to conform to import conditions
Countries
all DUS and VCU testing to determine domestic
movement and imports of seeds. The Institute follows
additional regulations set by the Ministry of Agriculture
Forestry and Water Management
Source: Interviews; Spain’s Ministry of Agriculture; DAI “Assessment of Egypt’s Agricultural Sector Competitiveness” (2002); Seed Production in Croatia; BAH Analysis
135
Protection of the environment against pesticide misuse is

supported by bans, as well as awareness and monitoring on use
and distribution of pesticides
Best Practices to Protect the Environment Against Pesticide Misuse
Croatia uses
Croatia uses aa mix
mix of
of bans
bans and
and restrictions
restrictions on
on pesticides
pesticides
–– Certain
Certain pesticides
pesticides (Alachlo)
(Alachlo) cannot
cannot bebe applied
applied with
with sprayers
sprayers
Prohibit
Prohibit use
use of
of
–– Pesticides,
Pesticides, such
such as
as Atrazine,
Atrazine, are
are limited
limited to
to areas
areas according
according toto specific
specific humidity
humidity levels
levels (1.5
(1.5 kg
kg ai/ha
ai/ha in
in humid
humid
specific
specific and 1 kg ai/ha in arid areas)
and 1 kg ai/ha in arid areas)
pesticides
pesticides –– Other
Other pesticides
pesticides are
are restricted
restricted according
according to to the
the type
type of
of agriculture
agriculture commodity
commodity (endosulfan
(endosulfan banned
banned for
for oil-
oil-
seed rape and forestry; trifIuralin use is not permitted in post-harvest sown soya bean and
seed rape and forestry; trifIuralin use is not permitted in post-harvest sown soya bean and sunflower) sunflower)
Encourage In
In Croatia,
Croatia, the
the Ministry
Ministry of of Agriculture,
Agriculture, Forestry
Forestry and
and Water Management has
Water Management has organized
organized an
an extension
extension service
service
Encourage which provides non formal education, training and knowledge transfer to farmers on pesticide use. The
which provides non formal education, training and knowledge transfer to farmers on pesticide use. The costs of costs of
proper
proper use
use of
of this
this service
service areare covered
covered by by Ministry
Ministry of Education. Short
of Education. Short courses
courses (one
(one day
day or
or several
several hours)
hours) are
are provided
provided by
by
pesticides
pesticides experts
experts to
to farmers
farmers in
in villages
villages or
or in
in smaller
smaller municipalities
municipalities
In
In the
the Czech
Czech Republic:
Republic:
–– All All professional
professional pesticide
pesticide users
users have
have toto keep
keep spray
spray records
records for
for 33 years
years
–– Farms larger than
Farms larger than 10 ha are required to submit pesticide use summaries
10 ha are required to submit pesticide use summaries to to the
the Department
Department of of Information.
Information.
Monitor
Monitor the
the Farmers report on amounts applied by formulated product, crop and geographical
Farmers report on amounts applied by formulated product, crop and geographical region region
–– Pesticide
Pesticide sales
sales data
data are
are also
also collected
collected by by the
the Czech
Czech Crop
Crop Protection
Protection Association
Association
use
use and
and In Slovakia:
In Slovakia:
distribution
distribution of
of –– All All traders
traders are
are required
required toto report
report sales
sales data annually, including
data annually, including manufacturer,
manufacturer, importer,
importer, distributors
distributors and
and
pesticide
pesticide retailers.
retailers. They are required to report the name and amount of formulated products for agricultural and
They are required to report the name and amount of formulated products for agricultural and non-
non-
agricultural
agricultural pesticides
pesticides
–– All All farmers
farmers have
have toto keep
keep detailed
detailed records
records of of their
their pesticide use and
pesticide use and are
are required
required to to submit
submit summaries
summaries to to
the Central Control and Testing Institute of Agriculture
the Central Control and Testing Institute of Agriculture
Source: Inventory of Agricultural Pesticide Use in the Danube River Basin Countries; Education for Family Farms and Gender Aspects in Croatia; BAH Analysis
136
Trade Access
The Macedonian government’s increased trade facilitation capacity

stemmed from four key success factors…
Success Factors for Trade Facilitation Capacity Building in Macedonia
In an effort to accede to the WTO, the Macedonian government undertook
Multi-Pronged
Multi-Pronged trade facilitation capacity building simultaneously at multiple agencies:
Capacity
Capacity – Training for government officials at agencies such as the Ministry of
Building
Building in
in the
the Economy to develop WTO agreements for the accession process
Government
Government – Technical assistance provided to Customs Administration personnel to
support compatibility of customs regime with international standards
Benefits
Benefits for
for Macedonia
Macedonia
Capacity building has been targeted at the national and regional levels:
Interventions – National: Targeted technical assistance to Ministry of Economy, Customs By
By taking
taking steps
steps toto
Interventions at
at accede
National Administration, and the Ministry of Finance accede to the WTO, the
to the WTO, the
National &
& government
Regional – Regional: Participation in regional initiatives, such as the regional seminars government was was able
able to to
Regional Levels
Levels strengthen trade
on trade facilitation for the Southeast European countries strengthen trade
facilitation
facilitation capabilities
capabilities
–– As
As aa result,
result, the
the
The Minister of Economy mobilized support for trade facilitation capacity process
process ofof
building for WTO Accession and developed the required technical expertise accession,
accession, as as much
much
Political
Political Will
Will &
& through the accession process with the support of donors as
as accession
accession itself,
itself,
Commitment
Commitment – Since its accession in 2002, the government has continued capacity was
was beneficial
beneficial to to
building, through implementation of the New National Customs Declaration improving capacity
improving capacity
Processing System and improved management at border crossings in
in multiple
multiple
government
government
In laying the foundation for strengthened trade capacity, Macedonia has been agencies
agencies
able to take advantage of CEFTA
Execution
Execution of
of
– Macedonia has instituted a CEFTA office in the Ministry of Economy and
Other Trade
Other Trade has spent considerable effort in increasing capacity through training
Agreements
Agreements programs
– The government has also taken advantage of UN / WTO technical
assistance to promote capacity in trade best practices
Source: Trade Facilitation in the WTO Context; Non-Tariff Barriers and Trade Facilitation; Contribution of Customs for Enhanced Traffic of Goods
Through National Border Crossings; BAH Analysis
137
Trade Access
… as well as country-focused and regional donor-funded projects

Donor-Funded Methods for Trade Facilitation Capacity Building in Macedonia
Method Description Impact
USAID provided expert technical assistance drafting Accession process was completed in less
documentation, identifying inconsistencies in the than three years of negotiations and
Macedonian trade regulations, training Macedonian Macedonia became the 146th member of
officials to extend their understanding of WTO the WTO in 2003
agreements and preparing them for negotiations
Country-
Country-
Focused
Focused
The United Nations Economic Commission for Following the workshop, the Macedonian
Europe provided workshops on trade data government started implementation of
harmonization and the Single Window system Single Window for agencies, exporters,
importers, carriers, brokers and freight
forwarders
Led by the World Bank and the United States, the Trade Reduced nontariff costs to trade and
and Transport Facilitation in Southeast Europe transport, decreased smuggling and
(TTFSE) program provided customs services procedures corruption at border crossings, and improved
reform, support to integrated customs information customs administrations and other border-
systems, and improvement of roads and border-crossing control agencies
Region-
Region- facilities for eight countries, including Macedonia
Focused
Focused
Through the Southeast Europe Regional Cross-Border Simplified transit documentation
Trade Facilitation, USTDA provided technical requirements to facilitate and increase trade
assistance to develop a regional “single window” among the three countries
entry system for the Customs Administrations of
Macedonia, Serbia and Bulgaria
Source: Trade Facilitation: Challenges and Opportunities in Eastern Europe and the Former Soviet Union; USTDA Trade Capacity Building Sector; USAID
Trade Capacity Building Database; BAH Analysis
138
Trade Access
A number of interim solutions exist for responding to competitor

subsidies…
Interim Responses to Subsidies for Developing Countries
Exercise
Exercise Allowed
Allowed CEFTA focuses on transparency in trade rather than free trade,
Information
Information and therefore contains information requirement provisions
Gathering
Gathering &
& – For example, any subsidies that are executed by other Donor
Donor Funding
Funding for
for Export
Export Risk
Risk
Dispute
Dispute countries should be made public (Art 44) Programs
Programs
Resolution
Resolution – CEFTA allows arbitration if parties do not feel they have
Provisions
Provisions under
under received satisfactory information or remedy (Art 43) Foreign
Foreign governments
governments and and donors
donors have have
CEFTA
CEFTA helped
helped countries in the region establish
countries in the region establish
export
export risk
risk guarantee
guarantee programs
programs
Legitimate methods exist to keep products that violate basic food –– The
The Ministry
Ministry ofof Economy
Economy in in the
the
safety provisions from being imported into Kosovo Netherlands
Netherlands developed
developed aa
Develop
Develop
– Recently, a non-milk product was being imported as a milk governmental
governmental program
program thatthat aims
aims toto
Legitimate
Legitimate
product into the country. In response, Kosovo Customs added encourage
encourage Dutch
Dutch investments
investments in in
Barriers
Barriers Based
Based on
on labeling requirements that required foreign companies to Serbia
Serbia and
and assist
assist SMEs
SMEs that that are
are
Quality
Quality &
& specify the ingredients of the import establishing
establishing cooperation with Dutch
cooperation with Dutch
Packaging
Packaging – All measures must be allowed under the WTO Technical partners
partners by
by co-financing
co-financing risk risk
Barriers to Trade Agreement insurance
insurance and
and exports
exports (up
(up toto 50%
50%
cost-share)
cost-share)
Execute Article 23 provides that where domestic producers of a product are –– The
The Serbia
Serbia and
and Montenegro
Montenegro Export Export
Execute
suffering serious economic injury due to imports, the CEFTA Credit
Credit Agency (SMECA) was
Agency (SMECA) was
Legitimate
Legitimate Tariff
Tariff member has the right to take safeguard measures, including established
established inin 2001
2001 through
through aa World
World
Provisions
Provisions Under
Under increased tariffs, so long as the measure meets CEFTA disclosure Bank
CEFTA
CEFTA Bank loan of $11.5M. Products for
loan of $11.5M. Products for
requirements national
national and
and foreign
foreign businesses
businesses
include
include export
export credit
credit insurance,
insurance,
exporter
exporter performance insurance
performance insurance and and
Develop Countries can enter into agreements with foreign governments or import credit insurance
Develop Export
Export import credit insurance
Risk donors to provide support for export risk guarantee programs and
Risk Programs
Programs finance programs through loans. Donor support aims at
with
with Donor
Donor decreasing the perceived risk from foreign companies and
Financing
Financing governments
Source: USAID- Financial & Consultancy Support Available to Serbian SMEs; PPPs- EVD (International Business Cooperation);
SMECA website; CEFTA; BAH Analysis
139
Trade Access
…more advanced solutions include export risk insurance &

guarantee programs, which can be provided through public,
private or semi-private entities
Organizational Models for Advanced Export Risk Insurance and Guarantee Programs
Germany Switzerland Turkey
(Private institution operating under government) (Independent government agency) (State-owned bank)
Mandate: The Federal Government has Mandate: Established by the Swiss Mandate: Turk Eximbank offers specialized
entrusted the management of the Official Government, Swiss Export Risk Insurance financial services through a variety of short-,
Export Guarantee Scheme to a consortium (SERV) offers an extended range of export medium- and long-term credit, insurance
of two private companies, Euler Hermes and credit insurance products and guarantee programs
PWC AG Structure: Governed by a management Structure: Managed by a Board of
Structure: Governed by an inter-ministerial board with members appointed by the Directors, which provides supervision
Committee with representatives from Federal Council principles for the General Directorate to
11 several ministries follow
Resources: Capital is structured in three
Organizational
Resources: Federal Government grants main areas: risk bearing capital, core Resources: The sole shareholder, Turkish
Overview
cover within an exposure limit on total capital, and balance carried forward Treasury, makes capital contributions to the
commitments fixed annually by Parliament Relations with State: Established under the Bank; receives domestic and foreign loans
Relations with State: Consortium acts only supervision of the Federal Department of Relations with State: As a state-owned
in the name and for the account of the state Economic Affairs and governed by the bank, maintains close co-operation with
and is governed by the Federal Budget Law Federal Council related government entities
Relations with Private Sector: Steps in Relations with Private Sector: Relations with Private Sector: Almost 70%
when privately owned insurance industry Complements, does not compete with of the commercial risk is delegated to
does not provide sufficient cover private sector reinsurance companies
Export guarantee schemes: Exporter insurance and guarantee schemes: Exporter insurance and guarantee schemes:
– Wholeturnover Policy for safeguarding – Supplier Credit Insurance covers – Short-term export credit insurance
trade receivables political risk, transfer risk, commercial provides companies with whole
– Manufacturing Risk Cover for risk turnover insurance cover for one year
22 Examples of production costs of exports – Manufacturing Risk Cover for inability for exports sold on short-term credit
Services – Supplier Credit Cover for amounts to continue production – Medium- and long-term export credit
Provided receivables – Confiscation Risk Cover for political insurance is offered to protect against
– Revolving Specific Policy risk and force majeure commercial and/or political risks
Other – Contract guarantee insurance Export finance programs:
– Constructional Works Cover – Short-term export credit
– Contract Bond insurance – Medium- and long-term export credits
Source: Export Credit Financing Systems in OECD Member Countries and Non-Member Countries, 2007 Update; BAH Analysis 140
Trade Access
Four methods exist to help countries increase recognition of

sovereignty: transit, corridor development, harmonized documents
& procedures, and automated customs procedures
Methods to Increase Recognition of Sovereignty
Harmonized
Harmonized Documents
Documents Automated
Automated Customs
Customs
Transit
Transit Corridor
Corridor Development
Development & Procedures
& Procedures Procedures
Procedures
Allows temporary Development of a tract Use of common By developing

suspension of customs of land (such as a customs declaration automated customs
duties or other taxes system of roads) that documents, such as the procedures, countries
Description
payable on goods allows a individuals from electronic transmission will avoid delays that
Description
originating from and/or a country to pass of data ahead of the are endemic to paper-
destined for a third through another to arrival of cargo at the backed transit systems,
country while under facilitate trade and transshipping point thereby increasing
transport across the access a port Harmonization with efficiency in the
territory of a defined other countries creates movement of goods
customs area greater access to trade
with partner countries
TIR Convention, used by A PPP was established Baltic Common Transit COMESA and SADC
more than 32,000 among transport Procedure signed have launched
transport companies in operators in co- between Latvia, Estonia programs that aim at the
over 50 countries in operation with the public and Lithuania to allow consolidation and
Europe, central Asia and authorities and facilitated transit of extension of
the Middle East, allows governmental cargos carried by road computerized customs
Example
Example
road transport operators institutions (as the transport procedures and

to cross borders in transport regulators) in transport information
international and transit Namibia to establish the systems
traffic without involving Walvis Bay corridor for
major procedures and landlocked neighbors
costs countries to have
access to the Atlantic
Ocean
Source: Trade, Trade Facilitation and Transit Transport Issues for Landlocked Developing Countries; BAH Analysis
141
Table of Contents

– Overview
– Recommended Diversified Crop Mix for Kosovo
– Initiatives & Action Plan for Implementation
– Reaching Kosovo’s Overall Potential
142
The final deliverable for AgStrat covers three interrelated areas:
crop diversification, initiatives & action plan to address constraints
and projected impact for the program
Overview of Recommendation Types in AgStrat Study
Working
Working with
with international
international and
and local
local horticulture
horticulture and
and agriculture
agriculture experts,
experts,
our
our team
team developed
developed aa quantitative
quantitative model
model toto recommend
recommend aa diversified
diversified list
list
of
of 10
10 crops
crops for
for production
production in
in Kosovo
Kosovo
Recommended
Recommended –– Crops
Crops werewere analyzed
analyzed according
according toto natural
natural resource
resource feasibility,
feasibility,
Diversified
Diversified Crop
Crop Mix
Mix production
production value,
value, economic
economic feasibility
feasibility && value
value chain
chain constraints
constraints
For
For each
each of
of the
the top
top 10
10 recommended
recommended crops,
crops, wewe analyzed
analyzed andand developed
developed
“Go-to-Market” snapshots on information needed to facilitate
“Go-to-Market” snapshots on information needed to facilitate market market
entry
entry
Based
Based on on the
the recommended
recommended list list of
of crops,
crops, asas well
well asas aa baseline
baseline analysis
analysis
of
of Kosovo’s
Kosovo’s agriculture
agriculture sector,
sector, we
we propose
propose 2121 initiatives
initiatives along
along seven
seven
AgStrat main
main areas
areas
AgStrat Final
Final
Deliverable Initiatives
Initiatives &
& Action
Action –– EachEach of of the
the proposed
proposed initiatives
initiatives includes
includes duration,
duration,
Deliverable
Plan
Plan implementation
implementation steps, indicators, potential
steps, indicators, potential risks
risks // mitigation
mitigation
factors,
factors, milestones,
milestones, key
key counterparts
counterparts and and cost
cost
The
The action
action plan
plan provides
provides the
the sequencing
sequencing of of initiatives
initiatives toto support
support
diversification of Kosovo’s crop
diversification of Kosovo’s crop mix mix
We
We have
have forecasted
forecasted thethe potential
potential impact
impact using
using two
two methods
methods ifif Kosovo
Kosovo
effectively
effectively implements
implements the the proposed
proposed initiatives
initiatives
–– Benchmark
Benchmark approach:
approach: Countries
Countries thatthat Kosovo
Kosovo cancan aspire
aspire to
to
Kosovo’s
Kosovo’s Overall
Overall mirror
mirror both economically (impact on GDP, employment and
both economically (impact on GDP, employment and
Potential
Potential exports)
exports) andand inin terms
terms of
of their
their agriculture
agriculture sector
sector (yield,
(yield, value,
value,
cropping
cropping intensity,
intensity, jobjob creation,
creation, investment)
investment)
–– Initiative-based
Initiative-based approach:
approach: The The projected
projected return
return on
on investment
investment at
at
the
the initiative
initiative level
level and
and aggregate,
aggregate, sector
sector level
level
Sources : BAH Analysis

143
Table of Contents

– Overview
144
We have developed a six step process for identifying Kosovo’s
diversified crop base
Process for Identifying Kosovo’s Diversified Crop Base
4a
4a Economic Feasibility
11 Universe of Ag 22 Natural Resource 33 Production 55 Value Chain 66 Final Crop

Commodities Feasibility Value Constraints Ranking
Identify commodities that can
be produced economically
and efficiently based on:
– Demand in target markets
– Lack of significant scale
economies
– High Value per weight
4b
4b Economic Attractiveness 10 Ten
167 Commodities 106 Commodities Top 50 Commodities Top 20 Commodities Commodities
Determine long Filter out Rank
Examine short Recommend
list of all commodities commodities by
list of final list of
possible that cannot be value per
commodities agricultural
agricultural supported by hectare($/Ton X
according to the commodities
commodities in micro-climates Tons/Hectare)
investment that Kosovo
the world in Kosovo Select Top 50
requirements, should develop
Categorize Estimate commodities
Identify commodities that will ease to produce, Used as basis
crops into potential
produce discernable and ease of for detailed
specific areas of acreage for each
economic impact according to: market access destination
focus remaining crop
– Labor intensivity market and
– Import substitution investment
– Potential for downstream analysis
processing
Source: BAH Analysis
145
1. Universe of Ag Commodities
For the first filter, we developed a list of 167 potential crops for
Kosovo focusing on four main categories of agricultural
production…
Primary Agricultural Commodities*
11 22 33 44
Spices,
Spices,
Horticulture
Horticulture Cereal
Cereal Oil
Oil Crops/Nuts
Crops/Nuts Stimulants
Stimulants
Apples
Apples Peaches
Peaches Artichokes
Artichokes Barley
Barley Almond
Almond Saffron
Saffron
Apricots
Apricots Pears
Pears Asparagus
Asparagus Canary
Canary SeedSeed Brazil
Brazil nuts
nuts Anise
Anise
Arecanuts
Arecanuts Persimmons
Persimmons Beans,
Beans, green
green Fonio
Fonio Cashews
Cashews Chamomile
Chamomile
Avocados
Avocados Pineapples
Pineapples Cabbages
Cabbages Maize
Maize Chestnuts
Chestnuts Parsley
Parsley
Bananas
Bananas Plantains
Plantains Carrots,
Carrots, turnips
turnips Millet
Millet Hazelnuts
Hazelnuts Cinnamon
Cinnamon
Blueberries
Blueberries Plums
Plums Kale
Kale Oats
Oats Kolanuts
Kolanuts Cloves
Cloves
Blackberries
Blackberries Medlar
Medlar Kohlrabi
Kohlrabi Quinoa
Quinoa Pistachios
Pistachios Cocoa
Cocoa beans
beans
Mulberries
Mulberries Quince
Quince Brussels
Brussels sprouts
sprouts Rice
Rice Macadamia
Macadamia nuts nuts Coffee
Coffee
Carobs
Carobs Tangerines
Tangerines Cauliflowers,
Cauliflowers, Rye
Rye Walnuts
Walnuts Ginger
Ginger
Cashew
Cashew apple
apple Watermelon
Watermelon broccoli
broccoli Sorghum
Sorghum Castor
Castor oil
oil seed
seed Mate
Mate
Cherries
Cherries Vinegrape
Vinegrape Chilies,
Chilies, peppers
peppers Triticale
Triticale Coconuts
Coconuts Nutmeg
Nutmeg
Cranberries
Cranberries Bambara
Bambara beans
beans Celery
Celery Wheat
Wheat Groundnuts
Groundnuts Peppermint
Peppermint
Dates
Dates Beans,
Beans, dry
dry Kidney
Kidney beans
beans Buckwheat
Buckwheat Hempseed
Hempseed Pyrethrum
Pyrethrum
Figs
Figs Lentils
Lentils Cucumbers,
Cucumbers, Flax
Flax fibre
fibre Hops
Hops Tea
Tea
Gooseberries
Gooseberries Lupins
Lupins gherkins
gherkins Jute
Jute Kapokseed
Kapokseed Tobacco
Tobacco
Grapefruit
Grapefruit Peas,
Peas, dry
dry Eggplants
Eggplants Manila
Manila fibre
fibre Karite
Karite nuts
nuts Vanilla
Vanilla
Kiwi
Kiwi Pigeon
Pigeon peas
peas Radish
Radish Ramie
Ramie Sunflowers
Sunflowers Turmeric
Turmeric
Durian
Durian Vetches
Vetches Garlic
Garlic Sisal
Sisal Linseed
Linseed Thyme,
Thyme, bay
bay leaves
leaves
Tamarinds
Tamarinds Cassava
Cassava Kapok
Kapok fibre
fibre Alfalfa
Alfalfa Melonseed
Melonseed Curry
Curry
Jackfruit
Jackfruit Chicory
Chicory roots
roots Lettuce,
Lettuce, chicory
chicory Mustard
Mustard seed
seed Basil
Basil
Passion
Passion fruit
fruit Potatoes
Potatoes Mushrooms
Mushrooms Oil
Oil palm
palm fruit
fruit
Pomegranate
Pomegranate Sweet
Sweet potatoes
potatoes Truffles
Truffles Olives
Olives
Lychee
Lychee Taro
Taro Okra
Okra Poppy
Poppy seed
seed
Carambola
Carambola Yams
Yams Onions
Onions Rapeseed
Rapeseed
Lemons,
Lemons, limes
limes Yautia
Yautia Caper
Caper Safflower
Safflower seed
seed
Mangoes,
Mangoes, guavas
guavas Juniper
Juniper berries
berries Peas
Peas Seed
Seed cotton
cotton
Oranges
Oranges Table
Table grape
grape Courgette
Courgette Sesame
Sesame seedseed
Other
Other melons
melons Tomatoes
Tomatoes Pumpkins
Pumpkins Soybeans
Soybeans
Papayas
Papayas Leeks
Leeks Spinach
Spinach Sunflower
Sunflower seeds
seeds
Note (*): Not all crops listed; Horticulture includes fruits, vegetables, roots & tubers, and pulses
Source: FAOSTAT; UN Comtrade
146
1. Universe of Ag Commodities
…and also mapped the type of historical agricultural production by

municipality
Snapshot of Agricultural Commodities Produced by Municipality
Ferizaj Gjakova Gjilan Mitrovica Peja Pristina Prizren
Novobërda
Leposaviqi
Rahoveci
F. Kosova
Malisheva
Skenderaj
Kamenica
Z. Potoku
Suhareka
Podujeva
Gllogovci
Kaçaniku
Shtërpca
Mitrovica
Vushtrria
Dragashi
Prishtina
Gjakova
Zveçani
Prizreni
Shtimja
Ferizaji
Deçani
Lipjani
Gjilani
Obiliqi
Istogu
Klina
Peja
Vitia
Wheat ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
Rye ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
Barley ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
Oats ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
Maize ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
Potato ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
Tomato ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
Aubergine ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
Pepper ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
Pumpkin ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
Mushroom ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
Cucumber ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
Water melon ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
Cabbage ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
Note: Grouped municipalities according to 2007 Household Survey produced by the Statistics Office of Kosovo
Source: Surveyed Municipality Agriculture Offices
147
2. Natural Resource Feasibility
The natural resource feasibility filter is based on an in-depth

examination of six natural and manmade factors to determine the
different climate zones in Kosovo
Climate Zone Determination Factors
Maximum temperature – Implies rainfall/irrigation requirements

Temperature Minimum temperature – Too low limits survival for certain fruit crops
Temperature
Average temperature – Not as telling as the max/min but important to understand overall climate
Total annual solar radiation hours – A higher solar radiation could allow for late varieties and is
Solar
Solar
good for germination of seeds, as well as maturation of annual industrial crops, fruits, and
Radiation
Radiation
vegetables
Pedological map of Kosovo and soil samples – Analysis of organic content, fertility, PH level,
Natural
Soil
Soil Type
Type water capacity and need for drainage; For example, higher organic soils can allow for better crop
cultivation and fertility
Maximum precipitation, minimum precipitation, average precipitation and corresponding

Precipitation
Precipitation time period - For example, maize, vegetables, and fruits require more water while cereals having
a different growing season satisfy their water needs during winter/spring
Elevation by region – Generally can grow all crop types up to an elevation of 700 meters while
Altitude
Altitude only some forest production can be grown at higher elevations
Manmade
Irrigation Access to irrigated land by municipality and climate zone – Irrigation supplements rainfall
Irrigation
particularly in the drier summer season for crops requiring more water

148
2. Natural Resource Feasibility-Temperature
Relatively small temperature variation exists across Kosovo with

Peja experiencing both the highest and lowest temperatures
Temperature Variation Across Kosovo
Podujeva Meteorological Station

Min Temp: -7.4C
Mitrovica Meteorological Station Max Temp: 26.3C
Min Temp: -8.4C Average: 10.3C
Max Temp: 28.8C
Average: 10.4C
Podujeva Pristina Meteorological Station
Mitrovica Min Temp: -7.5C
Max Temp: 31.9C
Peja Meteorological Station Average: 11C
Min Temp: -8.4C
Max Temp: 32.7C
Average: 12.2C Pristina
Peja
Rahovec Meteorological Station

Min Temp: -2C
Max Temp: 29C
Rahovec Ferizaj Ferizaj Meteorological Station
Average: 8C
Min Temp: -7.6C
Max Temp: 30.7C
Average: 10.6C
Prizren
Prizren Meteorological Station

Min Temp: 0C
Max Temp: 29C
Average: 11.5C
Note: Min, max, average temperatures are from: 2001-2008 for Prizren, Rahovec; 2002-2008 for Peja, Pristina, Ferizaj; 2003-2008 for Mitrovica; 2004-2008 for Podujeva; Data for Mitrovica, Rahovec,
Prizren, Podujeva was aggregated over these periods, but annual data was available for Ferizaj, Peja, and Pristina Meteorological Stations
Note: Data for meteorological stations cover 10 square km
Source: Meteorological Institute; BAH Analysis, UNDP Funded Support for the Development of the Wine Industry of Kosovo (SWIK) Study, 2002 149
2. Natural Resource Feasibility-Temperature
In addition, little temperature fluctuation occurs across the regions

during the growing season from March to October
Monthly Temperature for Kosovo
(2005-2008, Celsius)
35
Ferizaj
25 Peja
Pristina
Non-Growing Season
15
Growing Season
5 Note: Temperature data

shown represents a sample
of data set. Complete
temperature analysis
included Meteorological
Institute data from 2001-
2008 and SWIK UNDP study
-5 data from 1977-1991
Nov
Nov
Nov
Nov
Jun
Jan
Jun
Jan
Jul
Jul
Jan
Jan
Jun
Jun
Feb
Feb
Mar
Apr
Jul
Jul
Aug
Sep
Aug
Sep
Dec
Dec
Dec
Mar
Feb
Feb
Mar
Apr
Apr
Mar
Apr
Sep
Aug
Sep
Aug
Dec
May
May
Oct
Oct
Oct
May
May
Oct
2005 2006 2007 2008
Note: Non-aggregated temperature data was only available for Ferizaj, Peja, and Pristina Meteorological Stations
Note: SWIK study contains historical temperature data from 1977 to 1991 for Dukadjini and Pristina
Source: Meteorological Institute; BAH Analysis, UNDP Funded Support for the Development of the Wine Industry of Kosovo (SWIK) Study, 2002
150
2. Natural Resource Feasibility- Solar Radiation
Annual solar radiation is also almost uniform across Kosovo,

predominately falling between 2600 and 3000 total annual radiation
hours
Photosynthetically Active Radiation (PAR) Map
(Total Annual Radiation Hours)
Source: UNDP Funded Support for the Development of the Wine Industry of Kosovo (SWIK) Study, 2002
151
2. Natural Resource Feasibility- Soil Type
According to the 1974 Soil Survey, there are 13 different

pedological units across Kosovo which can be subdivided into 26
soil types
Soil Types Across Kosovo
Comments
Comments
Kosovo
Kosovo benefits
benefits from
from the
the
presence
presence of of 13
13 of
of the
the 28
28
pedological
pedological units
units defined
defined byby the
the
FAO-UNESCO
FAO-UNESCO 1988 1988
classification
classification
The
The soil
soil types
types are
are thoroughly
thoroughly
mixed
mixed so that most soil
so that most soil types
types
present
present can
can be
be found
found in
in most
most
areas of the country
areas of the country
However,
However, overall,
overall, the
the Western
Western
part
part of the country has more
of the country has more
presence
presence of of alluvial
alluvial soil
soil while
while the
the
Eastern part has more presence
Eastern part has more presence
of
of vertisols
vertisols and
and reddish-brown
reddish-brown
soils
soils
Source: 1974 Pedological Survey of Yugoslavia; BAH Analysis

152
2. Natural Resource Feasibility- Soil Type
However, most of Kosovo is comprised of six main pedological

units
Main Types of Pedological Units in Kosovo
Characteristics
Characteristics Effects
Effects on
on Crops
Crops Composition
Composition
11 Deep or very deep soils, possibly high water High vigour, high yield, late Sandy Loamy
Alluvial capacity, possibly high water table, possibly variety, good technological Loamy
Alluvial
high fertility maturity
22 Shallow to medium depth, low to high water Possible nutritional disorders in Non calcareous
capacity, rich in swelling clays that crack in springtime, unbalanced yield to Brownized
Vertisols
Vertisols dry period, cold in springtime, dry in growth ratio, water stress in Leached with pseudogley
summertime midsummer, good maturity in low Eroded
yielding conditions
33
Reddish
Reddish Shallow to medium depth, low to medium Balanced yield growth ratio, good Sandy loamy
Brown water capacity, adequate fertility technological maturity Loamy
Brown Leached
44
Acidic soils with a hydromorphic layer Possible nutritional disorders in Umbric
Podzol
Podzol -- spring, unbalanced yield to growth
Pseudogley
Pseudogley ratio, good maturity only in low
yielding conditions
55 Very light structure, modification in color, Medium to good organic content, Eutric
Cambisols
Cambisols structure and consistency low to medium water capacity, Dystric
adequate fertility
66 Low deep soils with light structure & Modestly suited for agriculture Umbric
Leptosols
Leptosols presence of rock at maximum depth of 30 use in plane or low slope zones,
cm, modest presence of organic matter, the soil structure and depth could
modest water capacity and fertility improve
Source:1974 Pedological Survey of Yugoslavia; UNDP Funded Support for the Development of the Wine Industry of Kosovo (SWIK) Study, 2002,BAH Analysis
153
2. Natural Resource Feasibility- Precipitation
Precipitation data indicates a range of annual rainfall from 598 mm

to 798 mm and is slightly higher than average in Peja and Rahovec
Precipitation Variation Across Kosovo*
(Millimeters)
Mitrovica Meteorological Station

Min Monthly Rainfall: 18.1mm Podujeva Meteorological Station
Max Monthly Rainfall: 129.5mm Min Monthly Rainfall: 13.1mm
Average Annual Rainfall: 649.7mm Max Monthly Rainfall: 125.5mm
Average Annual Rainfall: 598.7mm
Peja Meteorological Station

Min Monthly Rainfall: 38mm Mitrovica Pristina Meteorological Station
Max Monthly Rainfall: 102.4mm Min Monthly Rainfall: 26.7mm
Average Annual Rainfall: 798.8mm Max Monthly Rainfall: 72.6mm
Peja Podujeva
Pristina
Rahovec Ferizaj Meteorological Station
Min Monthly Rainfall: 29.6mm
Ferizaj Max Monthly Rainfall: 91.1mm
Prizren
Rahovec Meteorological Station
Min Monthly Rainfall: 44mm
Max Monthly Rainfall: 96mm
Average Annual Rainfall: 765mm Prizren Meteorological Station
Min Monthly Rainfall: 35mm
Max Monthly Rainfall: 88mm
Average Annual Rainfall: 716mm
Note: Min, max, average annual rainfall data are from: 2001-2008 for Prizren, Rahovec; 2002-2008 for Peja, Pristina, Ferizaj; 2003-2008 for Mitrovica; 2004-2008 for
Podujeva; Data for Mitrovica, Rahovec, Prizren, Podujeva was aggregated over these periods, but annual data was available for Ferizaj, Peja, and Pristina Meteorological Stations; (*)
Rainfall data was used to determine min and max values in order to compare across the stations; Data for meteorological stations cover 10 square km
Source: Meteorological Institute; BAH Analysis
154
2. Natural Resource Feasibility- Precipitation
Across all the regions, precipitation is generally higher during the

beginning and the end of the growing season
Monthly Precipitation Across Kosovo
(2005-2008, Millimeters)
200
Ferizaj
Peja
150
Pristina
Non-Growing Season
100 Growing Season
50 Note: Rainfall data shown

represents a sample of data
set. Complete rainfall
analysis included
Meteorological Institute data
from 2001-2008 and SWIK
0 UNDP study data from 1977-
Nov
Nov
Nov
Nov
Jun
Jan
Jun
Jan
Jan
Jan
1991
Jun
Jul
Jul
Jun
Jul
Feb
Feb
Jul
Mar
Apr
Aug
Mar
Feb
Aug
Sep
Feb
Dec
Sep
Dec
Dec
Mar
Apr
Mar
Apr
Apr
Aug
Sep
Dec
Aug
Sep
May
May
Oct
Oct
Oct
May
May
Oct
2005 2006 2007 2008
Note: Non-aggregated rainfall data was only available for Ferizaj, Peja, and Pristina Meteorological Stations
Note: SWIK study contains historical rainfall data from 1977 to 1991 for Dukadjini and Pristina
Source: Meteorological Institute; BAH Analysis, UNDP Funded Support for the Development of the Wine Industry of Kosovo (SWIK) Study, 2002
155
2. Natural Resource Feasibility- Altitude
Cultivation occurs in a range of altitudes with low lying regions

best-suited for horticulture in the western portion of the country
Altitude Across Kosovo
(Meters)
Best Suited for

Horticulture:
300-500 m

156
2. Natural Resource Feasibility- Irrigation
While only 17.4% of the arable land in Kosovo is irrigated, there is

a wide range of irrigation available throughout the regions
Irrigation in Kosovo
Irrigation Scheme Irrigated Area by Municipality
Source: Agriculture Household Survey, 2007, Statistics Office of Kosovo; BAH Analysis
157
2. Natural Resource Feasibility- Climate Zones
The natural resource feasibility analysis reveals three primary

climate zones in Kosovo: Dukadjini, Kosovo Plains, and
Mountains…
Overview of Climate Zones Across Kosovo
Climate Zone 2:
Kosovo Plains
Climate Zone 1:
Dukadjini
Climate Zone 3:
Mountains

158
…with each displaying unique characteristics across six areas

Description of Climate Zones in Kosovo
Dukadjini
Dukadjini (DK)
(DK) Kosovo
Kosovo Plains
Plains (KP)
(KP) Mountains
Mountains (MT)
(MT)
Milder temperatures because of Similar to temperatures in DK, but Lower temperatures due to
Temperature
Temperature mountain and river influence lower temperature extreme elevation
2500 to 3000 2500 to 3000 1800 to 2600 depending on

Solar
Solar Radiation
Radiation elevation
Alluvial, Vertisols, Reddish Brown Alluvial, Vertisols, Cambisols, Leptosoil, Calcic Vertisols,
Soil
Soil Type
Type Reddish Brown, Podzol Pseudoclay Cambisols
Precipitation comes from the Precipitation comes from the Has the highest rain and snow
Precipitation
Precipitation Trends
Trends northwest, peaks in the spring and northwest after DK and receives precipitation levels due to elevation
fall, and is higher than KP lower rainfall
Altitude
Altitude 300-500 meters 500-1000 meters 1000-3000 meters
Presence of the Radoniqi-Dukadjini Presence of the Ibër-Lepenc For the most part un-irrigated
Irrigation
Irrigation and Drini i Bardhë systems system in the north of K-P with only except where coterminous with
informal irrigation in the South large-scale systems
Dukadjini Agricultural Zone has a Kosovo Plains Agricultural Zone has a Mountainous Agricultural Zone has
milder continental climate being continental climate that can be the typical climatic characteristics
influenced by the Mediterranean influened by the Russian anticyclone of mountainous European areas
climate and Drina river. This zone (winds). This zone has a shorter with higher precipitation, lower
General
General Description
Description has a longer growing season than growing season than DK, has less yearly temperatures, and
KP or MT by two weeks, has good access to irrigation facilities, and has predominance of Leptosoil, Calcic
rainfall, better access to irrigation, predominately Vertisols/Reddish Vertisols, Cambisols soil types
and more Alluvial, Vertisols, and Brown/Alluvial/ Cambisols/Podzol soil
Reddish Brown soil types. types.

159
The Kosovo Plains Zone has the most arable land, with 112K ha,
and the Mountains Zone has the least at 54K ha
Breakdown of Total Arable Land
Total Arable Land by Municipality Arable Land by Climate Zone
(Ha, 2007) (Ha, 2007)
111,898
60,750
54,258
Kosovo
Dukadjini
Mountains
Plains
Source: Agriculture Household Survey, 2007, Statistics Office of Kosovo; BAH Analysis
160
As a result, certain horticulture and cereal products can be better

developed as primary crops depending on the climate zone
Overview of Crop Type by Zone
Description Crops Currently Grown Total Favorable Crops in Model
A longer growing season, milder Melon, pear, peaches, cherries, 74 crops considered “most favorable” for
temperatures, higher rainfall, and more watermelon, pepper, tomatoes, this climate zone
alluvial, vertisols, and reddish brown soil
11 Dukadjini cucumbers, cabbage
types make Dukadjini ideally suited for
labor intensive horticultural crop cultivation
in deciduous fruits and vegetables
With less access to irrigation and soils that Wheat, rye, barley, maize, potatoes, 45 crops considered “most favorable” for
are richer in organic matter such as onions, beans, peas this climate zone
22 Kosovo Reddish Brown/Podzol/ Vertisols/
Plains Cambisols, Kosovo Plains is well suited for
industrial crop cultivation like winter cereal
and potato production
Mountainous agro-forest area is Cherries, hazelnuts, chestnuts, berries, 14 crops considered “most favorable” for
characterized by cooler temperatures, mushrooms this climate zone
33 Mountains shorter growing seasons, and soil types
that limit possible agriculture production to
crops including select nuts and berries
105
105 crops
crops for
for which
which there
there
167
167 crops
crops analyzed
analyzed are
are favorable
favorable conditions
conditions in
in
Kosovo
Kosovo
Note: (*) 100+ crops includes: 27 vegetables, 23 fruit, 19 oil crops, 12 cereals, 10 spices & stimulants, 8 pulses, 6 roots & tubers
161
3. Production Value
We then calculated the potential production value per hectare for

each remaining crop in order to select the top 50 high-value crops
Filtering Methodology to Identify 50 Strategic Crops
Filtering
Filtering Method
Method Overview
Overview
This filter
This filter ranks
ranks over
over 100
100 crops
crops according
according to to their
their
production
production value
value
100+ Crops
The average
The average cropcrop yield
yield data
data comes
comes fromfrom the
the
50 Crops FAOStat
FAOStat database and is supplemented with expert
database and is supplemented with expert
opinion
opinion
To determine
To determine priceprice per
per crop,
crop, an
an average
average import
import
price
price per
per ton
ton for
for the
the EU(27)
EU(27) waswas used
used asas aa proxy
proxy
−− The
The unit
unit price
price per
per ton
ton data
data comes
comes from
from
TradeMap,
TradeMap, FAOStat, and is supplemented with
FAOStat, and is supplemented with
expert
expert opinion
opinion
The production
The production values
values for
for over
over 100
100 crops
crops were
were
ranked
ranked and sorted to identify the top 50 crops with
and sorted to identify the top 50 crops with
the
the highest
highest production
production value
value
Production Value per Hectare Average Crop Yield Unit Value

= X
(Euro/Hectare) (Ton/Hectare) (Euro/Ton)

162
Source:
Cauliflowers, Mushrooms
500.0
17.5
brocccoli
Spinach Alfalfa
60.0
17.0
Onions Sugar beet
17.0
FAOStat, BAH Analysis

Leeks Beetroot
46.9 46.9
17.0
Kiwi fruit Tomatoes
17.0
500 tons/hectare
Maize Chicory roots
35.4 33.3
16.6
Peaches, Carrots,
15.1
nectarines turnips
Cabbages,
Watermelons
14.4
other
Sweet Brussels
28.8 24.7 24.7
12.0
potatoes sprouts
Apples Radish
11.8
Lettuce,
Pears
11.8
chicory
Cucumbers,
String beans
10.1
gherkins
Pomegranate Courgette
10.0
Chilies,
Artichokes 9.7 peppers
(Tons/Hectare)
Pumpkins,
Table grape
9.2
squash
Strawberries Chamomile
8.0
Beans, green Parsley

7.3
Kidney beans Peppermint

7.3
Average Crop Yield for the Top 50 Crops
Thyme, bay
Quinces
7.3
leaves
Bulbs Basil
7.1
Garlic Celery
7.1
Vinegrape Eggplants
7.1
Other
Apricots
6.8
23.6 23.6 23.0 23.0 22.7 22.0 22.0 22.0 22.0 22.0 22.0 22.0 21.3 21.1
melons
Rice, paddy Persimmons
5.9
Peas, green Potatoes

5.9
18.5 18.3
First we identified the yield for each crop, which ranged from 0.1 to
3. Production Value
163
Source:
Anise, Saffron
16M
badian,
Apricots Truffels
500K
Blueberries Pine nuts
5680
Cranberries,
Mushrooms Bilberries
Artichokes Hops
Garlic Cut flowers
1720 1700 1598 1399 1399 1383
FAOStat, TradeMap, Comtrade, BAH Analysis

Table grape Flower buds 5231 5000 4885 4885
Beans, Currants,
green gooseberries
Tobacco,
Kiwi fruit unmanufactured
Lettuce,
Chicory roots
chicory
Chamomile String beans
Blackberries,
Parsley
raspberries
Peppermint Mulberries
Thyme, bay
(Euro/Ton)
Figs
3550 3453 3436 3387 3292 3292 3210
leaves
Basil Asparagus
prices ranged from 47 to 16M Euros/ton
Groundnuts Almonds
Unit Value for the Top 50 Crops
Persimmons Bulbs
Plums,
Juniper berries
sloes
Peaches,
Poppy seed
2890 2848 2848 2840 2489
nectarines
Carobs Walnuts
Tomatoes Hazelnuts
Chilies and
Eggplants
1333 1331 1230 1228 1191 1191 1191 1191 1191 1158 1140 1130 1124 1105 1093 1071
peppers, green
Peas, green Cherries

1005
Cabbages,
Strawberries
983
other
2417 2408 2324 2176 2175
Mustard
Chestnuts
969
seed
1827
Then we determined the unit value (Euro/ton) for each crop, where
3. Production Value
164
Source:
Strawberries Saffron
17.4
1600.0
Peaches, Mushrooms
17.0
699.7
nectarines
Other melons Chicory roots
16.4
114.5
Currants, Chilies,
52.8
peppers
15.7
gooseberries
Spinach Tomatoes
15.3
Celery String beans
38.7 34.3
14.9
FAOStat, TradeMap, Comtrade, BAH Analysis

Radish Beetroot
14.7
Lettuce,
Leeks
14.4
chicory
Pumpkins, Chamomile
14.3
squash
Cauliflowers,
Parsley
13.7
broccoli
Artichokes Peppermint
13.6
Thyme, bay
Asparagus
13.3
leaves
Maize, green Basil
Table grape 13.2

12.3
Truffels
(Euro/Hectare)
Alfalfa Cut flowers

12.3
Apricots Flower buds

11.6
Cabbages,
Pears
29.2 29.0 26.2 26.2 26.2 26.2 26.2 25.0 24.4 24.4 24.3
11.2
other
Blackberries,
Eggplants
11.0
raspberries
Carrots,
Persimmons
Potential Production Value for the Top 50 Crops
10.0
turnips
Garlic Kiwi fruit

9.8
50 crops with the highest potential production value
Beans, green Bulbs

9.7
Cucumbers,
Pomegranate
9.2
gherkins
Apples Courgette
9.0
Cherries Cranberries,
8.7
bilberries
Potatoes Brussels
8.4
22.8 21.1 20.9 20.2 18.8 18.8 18.6 17.8
sprouts
We multiplied the yield and unit value per crop to identify the top
3. Production Value
165
4. Economic Attractiveness & Feasibility
These 50 crops were further filtered according to economic

feasibility and economic attractiveness…
Filtering Methodology to Identify 20 Strategic Crops
50 Crops
20 Crops Filtering
Filtering Method
Method Overview
Overview
This filter
This filter ranks
ranks the
the 50
50 crops
crops according
according to
to their:
their:
−− Economic
Economic feasibility
feasibility
−− Economic
Economic attractiveness
attractiveness
Economic feasibility
Economic feasibility identifies
identifies and
and prioritizes:
prioritizes:
−− Crops
Crops with
with the
the highest
highest demand
demand by
by the
the EU
EU
−− Crops
Crops that
that can
can bebe grown
grown on
on small
small plots
plots of
of land
land
−− Crops
Crops with
with the
the highest
highest EU
EU import
import price/ton
price/ton
Six Dimensional Filter
Economic attractiveness
Economic attractiveness identifies
identifies and
and prioritizes:
prioritizes:
4a
4a 4b
4b −− Crops
Crops that
that can
can be
be highly
highly labor
labor intensive
intensive
Economic
Economic Feasibility
Feasibility Economic
Economic Attractiveness
Attractiveness
−− Crops
Crops being
being imported
imported by by Kosovo
Kosovo that
that could
could be
be
11 Demand in Target 11 produced
produced locally
locally
Labor Intensivity
Markets
−− Crops
Crops that
that have
have greater
greater potential
potential for
for high-value
high-value
processing
processing
Lack of Significant
22
Economies of Scale
22 Import Substitution The final
The final ranking
ranking ofof crops
crops isis derived
derived from
from thethe
consolidation
consolidation ofof these
these six
six rankings,
rankings, and
and leads
leads toto the
the
selection of the top 20 crops
selection of the top 20 crops
33 High Value per Weight 33 Potential for
Downstream Processing

166
…using a combination of agriculture databases and expert

analysis to determine the results of each filter
Calculation Methodology and Data Sources
Calculation
Calculation Methodology
Methodology Data
Data Source
Source Weight
Weight
1.
1. Demand
Demand in
in Ranked
Ranked and
and prioritized
prioritized crops
crops in
in order
order of
of decreasing
decreasing demand
demand Comtrade,
Comtrade, FAOStat,
FAOStat,
http://france.usembassy.gov/irs-euro.html,
http://france.usembassy.gov/irs-euro.html, 25%
25%
Feasibility
Economic Feasibility
Target
Target Markets
Markets by the EU (27)
by the EU (27) BAH
BAH Analysis
Analysis
2.
2. Lack
Lack of
of
Significant Crops
Crops that
that can
can bebe grown
grown on
on small
small farms
farms (less
(less than
than 55 ha)
ha)
Significant received 15%
received the
the highest
highest ranking
ranking while
while crops
crops grown
grown on on large
large Surveyed
Surveyed Agriculture
Agriculture Experts,
Experts, BAH
BAH Analysis
Analysis 15%
4A. Economic
Economies
Economies of of farms
farms (greater
(greater than
than 50
50 ha)
ha) received
received the
the lowest
lowest ranking
ranking
Scale
Scale
Top
Top quartile
quartile of
of crops
crops with
with the
the highest
highest import
import value
value per
per ton
ton into
into
3.
3. High
High Value
Value per
per the EU received the highest ranking while the lowest quartile
the EU received the highest ranking while the lowest quartile Surveyed Agriculture Experts, BAH Analysis
4A.
Surveyed Agriculture Experts, BAH Analysis 20%

20%
Weight
Weight of
of crops
crops with
with the
the lowest
lowest import
import value
value per
per ton
ton received
received the
the
lowest
lowest ranking
ranking
Attractiveness
Highly
Highly labor
labor intensive
intensive crops
crops requiring
requiring more
more than
than 500
500 hours/ha
Economic Attractiveness
hours/ha Centro Ricerche Produzioni Vetetali (CRPV):

per year for cultivation and harvest received the highest Centro Ricerche Produzioni Vetetali (CRPV):
per year for cultivation and harvest received the highest COLTURE 20%
1.
1. Labor
Labor Intensivity
Intensivity ranking COLTURE ARBOREE
ARBOREE II COSTI
COSTI DIDI 20%
ranking while
while low
low labor
labor intensive
intensive crops
crops requiring
requiring less
less than
than PRODUZIONE
PRODUZIONE 2008,
2008, BAH
BAH Analysis
Analysis
100 hours/ha per year received the lowest
100 hours/ha per year received the lowest ranking ranking
2. IfIf the
the annual
annual import
import value
value is
is greater
greater than
than 250,000
250,000 Euros,
Euros, this
this
2. Import
Import 5%
crop
crop could
could be
be considered
considered for
for import
import substitution
substitution and
and received Kosovo
received Kosovo Customs
Customs Data,
Data, BAH
BAH Analysis
Analysis 5%
4B. Economic
Substitution
Substitution aa higher ranking
higher ranking
3. Crops
Crops thatthat could
could be
be used
used to
to produce
produce many
many high-value
high-value
3. Potential
Potential for
for processed
processed products
products in
in Kosovo
Kosovo received
received the
the highest
highest ranking
ranking Surveyed
Surveyed Agriculture
Agriculture Experts,
Experts, BAH
BAH Analysis 15%
Downstream
Downstream while Analysis 15%
while crops with few processing options received the
crops with few processing options received the lowest
lowest
4B.
Processing
Processing ranking
ranking

167
After combining the filters on a weighted basis, we identified 20

potential high-value, economically attractive and feasible crops
Selection of 20 Strategic Crops
Crop Target Market Economies High Value/ Labor Intensivity Import Downstream Weighted Rank
d
Demand 25% vv
of Scale 15% ff
Weight 20% 20% d
Substitution 5% d
Processing 15% Score
Chilies and peppers, green 1 1 1 1 1 1 1.0000 1
Strawberries 1 1 0.75 1 0.01 1 0.9005 2
Mushrooms 1 1 0.75 1 0.01 1 0.9005 2
Peaches and nectarines 1 1 0.5 1 1 1 0.9000 4
Blackberries, raspberries 0.75 1 1 1 0.01 1 0.8880 5
Cherries 0.75 1 1 1 0.01 1 0.8880 5
Kiwi fruit 1 1 0.75 0.67 1 1 0.8840 7
Truffles 1 1 1 0.67 0 1 0.8840 7
Cucumbers and gherkins 1 1 0.5 1 1 0.67 0.8505 9
Cut flowers 1 1 1 1 0 0.33 0.8495 10
Flower buds 1 1 1 1 0 0.33 0.8495 10
Pears 1 1 0.5 0.67 1 1 0.8340 12
Cranberries and bilberries 0.5 1 1 1 0 1 0.8250 13
Saffron 0.5 1 1 1 0 1 0.8250 13
Table grape 1 1 0.75 1 0 0.33 0.7995 15
Apples 1 1 0.25 0.67 1 1 0.7840 16
Asparagus 0.25 1 1 1 0.01 1 0.7630 17
Currants and gooseberries 0.25 1 1 1 0 1 0.7625 18
Bulbs 0.75 1 1 0.33 0.01 1 0.7540 19
Lettuce and chicory 0.75 1 0.75 1 0.01 0.33 0.7375 20

168
5. Value Chain Constraints
We further analyzed the remaining crops across the agriculture

value chain to better understand the challenges and opportunities
that would be faced in introducing them to Kosovo
Investment, Production, and Market Access Considerations Along the Agriculture Export Value Chain
11 Investment 22 Production 33 Market Access
Production Distribution in
Pre-Production Post Harvest
and Storage Transportation Foreign
Investment Handling
Harvesting Markets
Time to first Crop Quality control Product shelf life Refrigeration Distance to
Revenue management including lab Cold chain and requirements markets
Skills (production testing pre-cooling Perishability in Type of customer
development planning, Sorting, grading requirements transport
planting, pruning Demands for
required Packaging Product Local transportation reliability
harvesting)
Infrastructure, segregation from storage facility Flexibility of
machinery & Inputs (seeds, requirements to various ports or
fertilizer, delivery
equipment Pre-treatment airports
investment pesticides, etc.)
requirements International
Soil Humidity transport through
preparation requirements land, air, or
maritime shipping

169
More specifically, this final Value Chain Constraints filter focused

on investment required, ease to produce, and ease of market
access
Overview of Value Chain Constraints Analysis Filter Dimensions
11 Time to First Revenue and Life of Plant: Time required until first full harvest and productive life of plant;
Capital cost to plant and cultivate
Skills Development: Requirements for training and skills development needed to familiarize with test plots or
Investment
Investment to introduce new varieties of existing crops
Required
Required Infrastructure, Machinery & Equipment: Cost for irrigation systems given crop water requirements; Cost for
equipment, climate control and hail cover
Soil Preparation: Soil analysis, fertilization, and other preparation required to ensure healthy soil
22 Crop Management: Knowledge and expertise required for successful planning and overall crop management
-- planting, setting of fruit, pruning, harvesting, etc.
Inputs: Complexity and cost of inputs for pest management, fertilization, disease management, etc.; Difficulty
Ease of compliance with regulations in target markets
Ease to
to Produce
Produce
Quality Control: Specificity of product quality requirements, number and specificity of grades for fresh and
processed varieties, requirements for lab testing
Sorting, Grading and Packaging: Needed frequency of collection, difficulty of sorting and grading,
infrastructure required for packing, labeling, drying and other post-harvest processes
33
Storage: Storage life of products, importance of uninterrupted cold chain and pre-cooling, requirements for
Ease
Ease of
of Market
Market segregation of products to control odors, requirements for pre-treatment, humidity requirements, etc.
Access
Access Transportation: Refrigeration requirements, perishability during transport, etc.
Distribution to Markets: Distance to markets, type of customer (retailer, wholesaler, processor), demands for
reliability and flexibility of delivery

170
We developed a scale that defines required investment levels …

Required Investment Ranking Description
Weight Description
Almost no time is required until first harvest occurs
Productive life of the plant is greater than 20 years
Expertise for test plots or new varieties already exists
Minimal cost for irrigation, machinery, and other equipment
Minimal time is required until first harvest occurs
Productive life of the plant is 11-20 years
Expertise for test plots or new varieties already exists or can be obtained with minimal difficulty
Reasonable costs for irrigation, machinery, and other equipment
Slightly longer amount of time is required until the first harvest occurs
Productive life of the plant is 2-10 years
Some expertise exists, but additional expertise will be obtained with greater difficulty
Higher costs for irrigation, machinery, and other equipment
Significant time is required until the first harvest occurs
Productive life of the plant is 1 year or less
Little expertise or familiarity with test plots and new varieties with needed expertise difficult or expensive to
obtain
Prohibitive costs for irrigation, machinery, and other equipment

171
…and analyzed the potential for Kosovo to develop crops

according to investment commitment
Required Investment Analysis and Rank
Crop Type of Crop Time to First Harvest Productive Life Investment Cost* Score
Multi annual 3-4 years Up to 25 years Up to 100,000 Euro/ha
Skill Development: Additional knowledge is required to update varieties cultivated, introduce new types of virus-free stocks & rootstock,
Apples and update training and pruning techniques
Infrastructure, Machinery & Equipment Needed: Drip irrigation system with fertilization, hail storm net cover set on proper poles and
wires, a tractor, a crusher and weed sprayer, chemical sprayer, fork lift and a motor harvester/pruning carriage
Soil Selection & Preparation: Conducting a soil analysis, selecting medium quality calcareous/ alkaline (iron clorosis) or slightly acid
soils, and preparing soil (soil ripping, soil drainage, medium depth plough, organic and chemical fertilization, squaring and trees plantation)
Multi annual 2-3 years up to 20 years From 10,000-60,000
Euro/Ha
Blackberries/ Skill Development: Very simple crop so minimal additional training is needed about how to grow, harvest, etc.
Raspberries Infrastructure, Machinery & Equipment Needed: Small tractor with a crusher or motor cultivator, eventually a drip irrigation system with
fertilization
Soil Selection & Preparation: Conducting a soil analysis, selecting marginal and slightly alkaline/slightly acid soils, and preparing soil
(soil drainage, medium depth plough, organic and chemical fertilization, squaring and trees plantation)
Multi annual 3-4 years 25+ years Up to 100,000 Euro/ha
Cherries Skill Development: Additional knowledge is required to introduce new varieties particularly for sweet cherries
Infrastructure, Machinery & Equipment Needed: A drip irrigation system with fertilization, a hail storm net cover set on proper poles and
wires, a tractor, a crusher, a weed sprayer, a chemical sprayer, a motor harvester/pruning carriage
Soil Selection & Preparation: Conducting a soil analysis, selecting light drained soils, and preparing soil (soil ripping, soil drainage,
medium depth plough, organic and chemical fertilization, squaring and trees plantation)
Note: (*) Investment cost includes infrastructure, machinery, equipment, soil preparation, and seeds/plants/trees; Fork lift and motor harvester/pruning carriage equipment
is considered a production cost and not upfront investment cost; Land cost not included
172

according to investment commitment (cont’d)
Multi annual 2-3 years Up to 20 years From 10,000 to 60,000
Euro/Ha
Cranberries/ Skill Development: Very simple crop so minimal additional training is needed about how to grow, harvest, etc.
Bilberries Infrastructure, Machinery & Equipment Needed: A small tractor with a crusher or motor cultivator, eventually a drip irrigation system
with fertilization
Soil Selection & Preparation: Conducting a soil analysis, selecting acid soils, and preparing soil (soil drainage, medium depth plough,
organic and chemical fertilization, squaring and trees plantation)
Multi annual 2-3 years Up to 20 years From 10,000 to 60,000
Euro/Ha
Currants/ Skill Development: Very simple crop so minimal additional training is needed about how to prune, grow, and harvest
Gooseberries Infrastructure, Machinery & Equipment Needed: A small tractor with a crusher or motor cultivator, eventually a drip irrigation system
with fertilization
Soil Selection & Preparation: Conducting a soil analysis, selecting slightly acid soils rich of humus, and preparing soil (soil drainage,
Multi annual 3-4 years Up to 25 years Up to 100,000 Euro/Ha
Skill Development: Additional knowledge is required to produce kiwi since it is not currently produced in Kosovo including varieties to be
Kiwi cultivated, pruning and harvesting techniques, basic parasite and fungal control, etc.
wires, a tractor, a crusher, a weed sprayer, a chemical sprayer , a fork lift, a motor harvester/pruning carriage
Soil Selection & Preparation: Conducting a soil analysis, selecting less calcareous/ alkaline (iron clorosis) soils, and preparing soil (soil
ripping, soil drainage, medium depth plough, organic and chemical fertilization, squaring and trees plantation)
173

Peaches/ Skill Development: Additional knowledge is required to update varieties cultivated, introduce new types of free virus stocks & rootstock,
Nectarines and update training and pruning techniques
wires, a tractor, a crusher, a weed sprayer, a chemical sprayer, a fork lift , a motor harvester/pruning carriage
Soil Selection & Preparation: Conducting a soil analysis, selecting light and drained soils, and preparing soil (soil ripping, soil drainage,
Multi annual 3-4 years up to 25 years Up to 100,000 Euro/Ha
Skill Development: Additional knowledge is required to update varieties cultivated, introduce new types of free virus stocks & rootstock,
Pears and update training and pruning techniques
wires, a tractor, a crusher, a weed sprayer, a chemical sprayer a fork lift , a motor harvester/pruning carriage
Soil Selection & Preparation: Conducting a soil analysis, selecting less calcareous/ alkaline (iron clorosis) soils, and preparing soil (soil
ripping, soil drainage, medium depth plough, organic and chemical fertilization, squaring & trees plantation)
Multi annual From the first year Up to 5-7 years From 60,000 up to
150,000/250,000 Euro/Ha
Skill Development: Additional knowledge is needed to update varieties and introduce new production models and techniques (e.g.
mulching, etc.)
Strawberries Infrastructure, Machinery & Equipment Needed: Cost reflects production in plastic tunnels, but the production period could be expanded
by investing in a more sophisticated type of green house with higher investment costs but higher revenues; Machinery and equipment are
needed as per cultivation of horticultural crop (e.g. medium tractor, tiller, crusher, sprayer, etc.)
Soil Selection & Preparation: Conducting a soil analysis, selecting less calcareous/ alkaline (iron clorosis) or slightly acid soils, and
preparing soil (soil drainage, medium depth plough, organic and chemical fertilization, mulching (plastic or organic material) and stolon
plantation)
is considered a production cost and not upfront investment cost; Land cost not included; Modern greenhouses cost 150,000 Euro/ha and plastic tunnels are 40,000 Euro/ha
174

Skill Development: Additional knowledge is required to update varieties cultivated, introduce new types of free virus stocks & rootstock,
Table Grape and update training and pruning techniques
Infrastructure, Machinery & Equipment Needed: Drip irrigation system with fertilization, a hail storm net cover set on proper poles and
wires, a tractor, a crusher and a weed sprayer, a chemical sprayer, a fork lift and a motor harvester/pruning carriage
Soil Selection & Preparation: Conducting a soil analysis, selecting less calcareous/ alkaline (iron clorosis) or slightly acid soils, and
preparing soil (soil ripping, soil drainage, medium depth plough, organic and chemical fertilization, squaring and trees plantation)
Annual to Multi annual From first to third year 1-3 years Up to 10,000 Euro/Ha
Skill Development: Since simple crop, minimum additional knowledge is required (e.g. varieties)
Bulbs Infrastructure, Machinery & Equipment Needed: Related to annual crop cultivation machineries (tractor, tiller) and a light plough to
harvest the bulbs
Soil Selection & Preparation: Conducting a soil analysis, selecting light calcareous/ alkaline or slightly acid soils, and preparing soil (soil
drainage, medium depth plough, organic and chemical fertilization)
Multi annual All year long but mostly Strictly correlated to Up to 150,000/250,000
from early spring to late the species Euro/Ha
autumn
Cut flowers Skill Development: Significant and sophisticated level of knowledge is required
Infrastructure, Machinery & Equipment Needed: High investment and production costs due to greenhouse construction and
maintenance
Soil Selection & Preparation: Conducting a soil analysis, selecting light calcareous/ alkaline (iron clorosis) or slightly acid soils, and
preparing soil (soil drainage, medium depth plough, organic and chemical fertilization)
175

Multi annual All year but mostly from Strictly correlated to Up to 150,000/250,000
early spring to late autumn the species Euro/Ha
Skill Development: Significant and sophisticated level of knowledge is required
Flower Buds Infrastructure, Machinery & Equipment Needed: High investment and production costs due to greenhouse construction and
maintenance
Soil Selection & Preparation: Conducting a soil analysis, selecting light calcareous/ alkaline (iron clorosis) or slightly acid soils, and
preparing soil (soil drainage, medium depth plough, organic and chemical fertilization)
Multi annual 2-3 years Up to 20 years From 60,000 to150,000/
250.000 Euro/Ha
Skill Development: More knowledge required for variety selection & cropping techniques due to its long term producing species
Infrastructure, Machinery & Equipment Needed: : Cost reflects production in plastic tunnels but the production period could be
Asparagus expanded by investing in a more sophisticated type of green house with higher investment costs but higher revenues; Machinery and
equipment are needed as per cultivation of horticultural crop (e.g. medium tractor, tiller, crusher, sprayer, etc.)
ripping, soil drainage, medium depth plough, organic and chemical fertilization, dig the ditch 60x20 (as largeness x depth) and rhizome
plantation)
Annual From late spring to early Annual From 60,000 to150,000/
autumn 250,000 Euro/Ha
Skill Development: Low to medium level of additional knowledge required to introduce new growing techniques, varieties and related
Chilies/ marketing
Infrastructure, Machinery & Equipment Needed: Cost reflects production in plastic tunnels, but the production period could be expanded
Peppers
needed as per cultivation of horticultural crop (medium tractor, tiller, crusher, sprayer, etc.)
drainage, medium depth plough, organic and chemical fertilization, mulching (plastic or organic material) and young plant plantation)
176

Annual From late spring to early Annual From 60,000 to150,000/
autumn 250,000 Euro/Ha
Skill Development: Low/medium level of knowledge required to introduce new growing techniques, varieties, related marketing
Cucumbers/ Infrastructure, Machinery & Equipment Needed: Cost reflects production in plastic tunnels, but the production period could be expanded
Gherkins by investing in a more sophisticated type of green house with higher investment costs but higher revenues; Machinery and equipment are
drainage, medium depth plough, organic and chemical fertilization, mulching (plastic or organic material) and young plant plantation)
Annual From late spring to early Annual on inoculated From 60,000 to150,000/
autumn substrata 250,000 Euro/Ha
Skill Development: Production knowledge needed is not complicated, but production requires intensive cultivation methods , a particular
location for production (also greenhouses), and inoculated substrata not currently available in Kosovo but could be imported. Training
Mushrooms needed for varieties such as champignons and pleurotus
Infrastructure, Machinery & Equipment Needed: Cost reflects production in plastic tunnels, but the production period could be expanded
Soil Selection & Preparation. No soil preparation needed as production is done on inoculated substrata
Annual From late spring to summer Annual From 60,000 to150,000/
250,000 Euro/Ha
Lettuce & Skill Development: Medium level of knowledge required to introduce new growing techniques, varieties, related marketing
Chicory Infrastructure, Machinery & Equipment Needed: Cost reflects production in plastic tunnels but the production period could be expanded
by investing in large green houses with higher investment costs but also higher revenues; medium tractor, tiller, crusher, sprayer, etc.
Soil Selection & Preparation: Conducting a soil analysis, selecting slightly calcareous/ alkaline or slightly acid soils, and preparing soil
(soil drainage, medium depth plough, organic and chemical fertilization, mulching (plastic or organic material) and young plant plantation)
177

Multi annual From the first year Up to 7 years From 10,000 to 60,000
Euro/Ha
Skill Development: Medium level of knowledge is required as this crop requires a very precise use of the agricultural techniques for soil
Saffron preparation, harvesting and selecting techniques
Infrastructure, Machinery & Equipment Needed: Costs based on production in open field with very good soil preparation; Medium
tractor, tiller, crusher, sprayer, etc.
Soil Selection & Preparation: Conducting a soil analysis, selecting light and drained soils, and preparing soil (soil ripping, soil drainage,
medium depth plough, organic and chemical fertilization, bulb plantation)
Multi annual From the 4/5 years Up to 50-80 years and From 10,000 to 60,000
more Euro/Ha
Skill Development: Medium level of knowledge is required including: inoculation of trees such as hazelnut, oak, beech, poplar, cultivated
in neutral or slightly alkaline soils, cultivation techniques (irrigation in late spring/summer particularly in beginning of crop production,
Truffles simple maintenance of the planted inoculated tree), harvesting requires the training of a sniffing dog able to understand where the truffles
are
Infrastructure, Machinery & Equipment Needed: Cost based on setting up production in ornamental trees. Medium tractor, tiller,
crusher, sprayer, etc.
Soil Selection & Preparation: Conducting a soil analysis, selecting medium quality slightly calcareus/ alkaline soils or slightly acid soils,
and preparing soil (soil drainage, medium depth plough, organic and chemical fertilization, squaring and young plant plantation)
178
We next created a scale that defines the levels for the “ease of
production” ranking …
Ease of Production Ranking Description
Weight Description
Extensive expertise exists for overall crop management
Input costs are minimal, input requirements are straightforward, and regulatory compliance is easily obtained
Product quality/grade requirements are minimal and easily obtainable
Simple sorting/grading/etc. procedures, minimal and inexpensive infrastructure requirements
Sufficient expertise exists for overall crop management
Input costs are reasonable, input requirements are understandable, and regulatory compliance can be obtained
Product quality/grade requirements are manageable and obtainable
Understandable sorting/grading/etc. procedures, reasonable infrastructure requirements
Some expertise exists for overall crop management
Input costs are higher, input requirements can be unclear, and regulatory compliance can require significant effort
Product quality/grade requirements can be extensive and can be difficult to obtain
Several sorting/grading/etc. procedures, significant infrastructure requirements
Minimal expertise exists for overall crop management
Input costs are prohibitive, input requirements are unclear, and regulatory compliance requires significant effort
Product quality/grade requirements are extensive and difficult to obtain
Extensive, complicated sorting/grading/etc. procedures, prohibitive infrastructure requirements

179
…and analyzed the potential for Kosovo to develop each crop

based on ease of production
Ease of Production Analysis and Rank
Crop Explanation Score
Crop Management: Additional knowledge and expertise is needed in training and pruning to improve quality of
harvesting
Inputs: Pest management is relatively simple as long as weather forecasts are observed and followed; the cost of pest
management and fertilization is relatively low; compliance with regulations in target markets is possible with average
effort
Apples Quality Control: Processes to produce fresh, intact product (no pinches, hail storm damage, etc.) are fairly simple to
master. Categorization by diameter is required with ow quality products (small diameter, defects) are generally sent for
processing. Lab testing needed to determine level of pest residuals
Sorting, Grading & Packaging: Harvesting occurs in two intervals; requires significant, specialized infrastructure and
machinery to select, package, label products
Crop Management: This crop requires minimal additional training for pruning and quality harvesting
Inputs: Pest management is not complex since the crop has practically no parasites, cost of pest management and
fertilization is very low, compliance with regulations in target markets can be easily obtained
Blackberries/ Quality Control: Procedures are minimal and obtainable, fresh intact product is selected meeting quality requirements
Raspberries while the lower quality is generally processed, practically no need for lab testing for pest residuals since the species has
no parasite
Sorting, Grading & Packaging: Continuous harvesting is needed, but requires simple sorting and packaging procedures
and modest infrastructure requirements
Crop Management: Additional knowledge and expertise is needed to introduce new varieties, train and prune the trees,
and improve quality harvesting
Inputs: Pest management is not complex since the crop has few parasites, cost of pest management and fertilization is
low, compliance with regulations in target markets can be easily obtained
Cherries Quality Control: Fresh intact product needs to be categorized by diameter, low quality products (low diameter, defects)
generally sent for processing, need lab testing to determine level of pest residuals
Sorting, Grading & Packaging:The crop is harvested by hand, requires simpler sorting and packaging procedures and
modest to high infrastructure requirements

180

based on ease of production (cont’d)
Crop Management: This crop requires minimal additional training for quality harvesting
Cranberries/ Quality Control: Procedures are minimal and obtainable, fresh intact product is selected meeting quality requirements
Bilberries while the lower quality is generally processed, practically no need for lab testing for pest residuals since the species has
practically no parasite
Crop Management: Additional knowledge and expertise is needed to train and prune the trees and improve quality
harvesting
Inputs: Pest management is not complex since the crop has very few parasites, cost of pest management and
Currants/
Quality Control: Procedures are minimal and obtainable, fresh intact product is selected meeting quality requirements
Gooseberries while the lower quality is generally processed, practically no need for lab testing for pest residuals since the species has
few parasite
harvesting
Inputs: Pest management has low complexity since the crop has practically no parasites, cost of pest management and
fertilization is low, compliance with regulations in target markets is easily obtainable
Kiwi Quality Control: Procedures are fairly simple, fresh intact product needs to be categorized by diameter, low quality
products (small diameter, defects) generally sent for processing, need lab testing to determine level of pest residuals

181

harvesting
Inputs: Pest management requires some technical assistance resulting in medium complexity, cost of pest management
and fertilization is medium, compliance with regulations in target markets can be achieved with medium difficulty
Peaches/
Quality Control: Procedures are fairly simple, fresh intact product (no pinches, hail storm damage, etc.) needs to be
Nectarines categorized by diameter, low quality products (small diameter, defects) generally sent for processing, need lab testing to
determine level of pest residuals
harvesting
Inputs: Pest management is relatively simple as long as weather forecasts are observed and followed, cost of pest
management and fertilization is medium, compliance with regulations in target markets is possible with average effort
Pears Quality Control: Procedures can be easy, fresh intact product (no pinches, hail storm damage, etc.) needs to be
categorized by diameter, low quality products (small diameter, defects) generally sent for processing, need lab testing to
determine level of pest residuals
Crop Management: This crop requires minimal additional training for introduction of new varieties and quality harvesting
Inputs: Pest management is not complex, pest management and fertilization costs are medium, compliance with
regulations in target markets can be obtained with medium difficulty
Strawberries Quality Control: Procedures are easy and obtainable, fresh intact product is selected meeting quality requirements while
the lower quality is generally processed, strong need for lab testing due to pest residuals

182

Crop Management: Additional knowledge and expertise is needed to train and prune the trees, and improve quality
harvesting
Inputs: Pest management requires weather forecasting and technical assistance and has a medium complexity, cost of
pest management and fertilization is relatively high, compliance with regulations in target markets is possible with
Table Grape average effort
Quality Control: Procedures can be easy, fresh intact product needs to be categorized by quality size, need lab testing
to determine level of pest residuals
Sorting, Grading & Packaging: Harvesting occurs in different intervals; requires significant, specialized infrastructure to
select, package, label products
Crop Management: Minimal expertise is required for crop management particularly directed to production techniques
and quality harvesting
Inputs: Pest management has a low complexity, cost of pest management and fertilization is low, compliance with
regulation in target market can be achieved with minimal effort
Bulbs Quality Control: Requirements are minimal and easy to meet, the bulbs are selected by calibre and the lowest are kept
for seed
Sorting, Grading & Packaging: Harvesting occurs one time, requires simple sorting and packaging procedures, and
modest infrastructure requirements
Crop Management: Significant expertise is required particularly for production techniques and high quality harvesting
Inputs: Pest management needs some technical assistance and has a medium/high complexity related to the cultivated
species, cost of pest management and fertilization is medium, compliance with regulations in target markets can be
difficult
Cut Flowers Quality Control: Procedures can be difficult to obtain while flowers are selected by quality size, residual testing could be
required
Sorting, Grading & Packaging: Continuous harvesting is needed, and requires significant, specialized infrastructure to

183

Crop Management: Significant expertise is required particularly for production techniques and high quality harvesting
Inputs: Pest management needs some technical assistance and has a medium/high complexity related to the cultivated
species, cost of pest management and fertilization is medium, compliance with regulations in target markets can be
difficult
Flower Buds Quality Control: Procedures can be difficult to master as different species of flowers have different requirements for
quality, color and size. There are multiple sorts per flower type. Residual testing is required.
Sorting, Grading & Packaging: Continuous harvesting is needed, and requires significant, specialized infrastructure to
Crop Management: Additional knowledge and expertise is required particularly directed to crop production techniques
and high quality harvesting
Inputs: Pest management is not complex, cost pest management and fertilization is low, compliance with regulations in
target markets can be obtained with medium difficulty
Asparagus Quality Control: Procedures are minimal and easy to obtain, small/medium shoots have a better quality, larger shoots
could be processed, residual testing is required
Sorting, Grading & Packaging: Continuous harvesting is needed, and requires collection infrastructure where workers,
not machines, select, package, and label products
Inputs: Pest management has a medium complexity, average costs for pest management and fertilization, compliance
Chilies/ with regulations in target markets can be obtained with medium effort
Peppers Quality Control: Procedures are minimal and easy to obtain, fresh intact product is selected by size, the lowest quality
product is processed, need of lab testing for pest residuals

184

Inputs: Pest management has a medium complexity, average costs for pest management and fertilization, compliance
Cucumbers/ with regulations in target markets can be obtained with medium effort
Gherkins Quality Control: Procedures are minimal and easy to obtain, fresh intact product is selected by size, the lowest quality
product is processed, need of lab testing for pest management residuals
Crop Management: Additional expertise is required for crop management particularly for production techniques and
quality harvesting
Inputs: Pest management is not complex and has practically no parasites, cost of pest management and fertilization is
low, compliance with regulations in target markets are easily obtained
Mushrooms Quality Control: Procedures are minimal and easy to obtain, higher quality products can be of all sizes and will have no
defects while the other products are processed, lab testing for pest residuals is minimal
Crop Management: Medium expertise is required particularly directed to new variety testing and quality harvesting
Inputs: Pest management is not complex, cost of pest management and fertilization is low, compliance with regulations
Lettuce & in target markets is easily obtainable
Chicory Quality Control: Procedures are minimal and easy to obtain, higher quality products can be of all sizes and will have no
defects while the other products are processed, lab testing for pest management residuals is needed
Sorting, Grading & Packaging: Harvesting occurs in different times and requires collection infrastructure where
workers, not machines, select, package, and label products

185

Crop Management: Additional knowledge is required for crop introduction and diffusion, production techniques, quality
harvesting, and destemming
fertilization is low, compliance with regulations in target markets is easy to obtain
Saffron Quality Control: Requirements are managable and obtainable, fresh intact stigmas of different sizes are selected and
processed, no need of lab testing for pest management residuals
Sorting, Grading & Packaging: Continuous harvesting is needed, and requires collection infrastructure where workers
select products and machines dry, package, and label products
Crop Management: Minimal expertise is required in crop production techniques and quality harvesting
Inputs: Pest management is not complex and is related to the host species, cost of pest management and fertilization is
low, compliance with regulations in target markets can be obtained with average difficulty
Quality Control: Procedures can be difficult to obtain and require high quality standardization in shape, size, smell,
Truffles denomination of origin, etc., high quality intact products are of mixed sizes, the lowest quality is processed, need lab
testing for fertilizer residuals
Sorting, Grading & Packaging: Procedures are complex, the crop needs a trained dog for harvesting, requires
specialized workers, not machines, to select, package, and label products

186
For the final component of the Value Chain Constraints, we created

a scale that defines the level of difficulty in getting products to
market…
Ease of Market Access Ranking Description
Weight Description
Long product storage life, minimal storage requirements

Low perishability, minimal transport requirements
Close proximity to markets, reliable demand, flexible delivery
Relatively long product storage life, reasonable storage requirements

Relatively low perishability, reasonable transport requirements
Relatively close proximity to markets, fairly reliable demand and flexible delivery
Relatively short product storage life, several storage requirements

Relatively high perishability, several transport requirements
Relatively significant distance to markets, fairly unreliable demand and inflexible
delivery
Short product storage life, extensive storage requirements

High perishability, extensive transport requirements
Significant distance to markets, unreliable demand, inflexible delivery

187
…and analyzed the potential for Kosovo to develop crops based on

the ease of market access rankings
Storage: Very long storage life (up to 9 months according variety) obtained with cold chain or modified atmosphere in
controlled humidity, pre treatment needed for longer storage
Transportation: Refrigeration required for long distances, modest perishability
Apples Distribution to Markets: Close proximity to markets but must meet quality standards, crop could easily reach distant
markets given value of crop and perishability, products can be purchased by all customer types (wholesaler, retailer,
processor), crop requires medium reliability of demand, delivery can be flexible
Storage: Very short storage life (up to 15-20 days) obtained with cold chain, no treatment needed for storage
Transportation: Refrigeration required for transportation, very high perishability
Blackberries/
Distribution to Markets: Close proximity to markets but must meet quality standards, crop could reach short to medium
Raspberries distant markets given value of crop and perishability, products can be purchased by every type of costumer (wholesalers,
retailer, processors), crop requires strong reliability of demand, no flexibility in delivery
Storage: Very short storage life (up to 1 month) obtained with cold chain. Pre-cooling required in most conditions.
Cherries Distribution to Markets: Close proximity to markets but must meet quality standards, crop could reach long distance
markets given value of crop and perishability, products can be purchased by every type of costumer (wholesalers,
Transportation: Refrigeration required for transportation, very high perishability.
Cranberries/
Distribution to Markets: Close proximity to markets but must meet quality standards, crop most likely will not reach
Bilberries distant markets given value of crop and perishability, products can be purchased by every type of costumer (wholesalers,
Transportation: Refrigeration required for transportation, very high perishability.
Currants/
Distribution to Markets: Close proximity to markets but must meet quality standards, crop most likely will not reach
Gooseberries distant markets given value of crop and perishability, products can be purchased by every type of costumer (wholesalers,

188

the ease of market access rankings (cont’d)
Storage: Very long storage life (up to 8 months) obtained with cold chain or modified atmosphere in controlled humidity,
no need for pre treatment for longer storage
Kiwi Distribution to Markets: Close proximity to markets but must meet quality standards, crop could reach distant markets
given value of crop and perishability, products can be purchased by all customer types (wholesaler, retailer, processor),
crop requires medium reliability of demand, delivery can be flexible
Storage: Short storage life (up to 1/2 month) obtained with cold chain and pre cooling, no need for pre treatment for
longer storage but pre cooling may be needed when fresh product is stored
Peaches/ Transportation: Refrigeration required for long distances, medium to high perishability
Nectarines Distribution to Markets: Close proximity to markets but must meet quality standards, crop could reach distant markets
crop requires reliability of demand and a modest flexibility of delivery
Storage: Long storage life (up to 6-7 months according variety) obtained with cold chain or modified atmosphere in
controlled humidity, pre treatment needed for longer storage
Pears Distribution to Markets: Close proximity to markets but must meet quality standards, crop could reach distant markets
Storage: Very short storage life (up to 15 days ) obtained with cold chain and pre-cooling could be required if stored
Transportation: Refrigeration required for long/medium distances, very high perishability
Strawberries Distribution to Markets: Close proximity to markets but must meet quality standards, crop could reach short to medium
distant markets given value of crop and perishability, products can be purchased by every type of costumer (wholesalers,

189

Storage: Medium storage life (up to 4 month) obtained with cold chain, pre cooling could apply when fresh product is
stored
Transportation: Refrigeration required for transportation, medium perishability
Table Grape Distribution to Markets: Close proximity to markets but must meet quality standards, crop could reach distant markets
Storage: Medium/long storage life (up to 6 month according to variety) obtained with cold chain or modified atmosphere
in controlled humidity, some pre treatment needed for packaging
Transportation: Refrigeration required for long distances, low perishability in low humidity
Bulbs Distribution to Markets: Close proximity to markets but must meet quality standards, crop could reach very distant
markets given value of crop and perishability, products can be purchased by all customer types (wholesaler, retailer,
processor), crop requires medium reliability of demand, delivery can be flexible
Storage: Very short storage life (up to transportation period) obtained with cold chain, pre cooling could apply for better
conservation in transport
Cut Flowers Distribution to Markets: Close proximity to markets but must meet quality standards, crop could reach distant markets
given value of crop and perishability but must have speedy transport, products can be purchased by every type of
costumer (wholesalers, retailer, processors), crop requires strong relationships with buyers, no flexibility in delivery
Storage: Very short storage life (up to transportation period) obtained with cold chain, pre cooling could apply for better
conservation in transport
Flower Buds Distribution to Markets: Close proximity to markets but must meet quality standards, crop could reach distant markets
given value of crop and perishability but must have speedy transport, products can be purchased by every type of
costumer (wholesalers, retailer, processors), crop requires strong relationships with buyers, no flexibility in delivery

190

Storage: Very short storage life (up to 15 days ) obtained with cold chain, pre cooling could apply for better conservation
Asparagus Distribution to Markets: Close proximity to markets but must meet quality standards, crop could reach medium distant
Storage: Short storage life (up to 1 month ) obtained with cold chain, pre cooling could apply
Chilies/
Distribution to Markets: Close proximity to markets but must meet quality standards, crop could reach medium distant
Peppers markets given value of crop and perishability, products can be purchased by every type of costumer (wholesalers,
Storage: Short storage life (up to 1 month ) obtained with cold chain
Cucumbers/
Distribution to Markets: Close proximity to markets but must meet quality standards, crop could reach medium distant
Gherkins markets given value of crop and perishability, products can be purchased by every type of costumer (wholesalers,
Storage: Short storage life (up to 15 days) obtained with cold chain, but better to be consumed fresh
Mushrooms Distribution to Markets: Close proximity to markets but must meet quality standards, products can be purchased by
every type of costumer (wholesalers, retailer, processors), crop requires strong reliability of demand, no flexibility in
delivery

191

Storage: Medium storage life (up to 15 days ) obtained with cold chain
Lettuce & Transportation: Refrigeration required in transportation, very high perishability
Chicory Distribution to Markets: Close proximity to markets but must meet quality standards, crop could reach nearby markets
given value of crop and perishability, products can be purchased by every type of costumer (wholesalers, retailer,
processors), crop requires high reliability of demand, and no flexibility in delivery
Storage: No storage life since flowers are harvested and immediately processed inside the farm
Transportation: No refrigeration required, minimal transportation requirements, very low perishability
Saffron Distribution to Markets: Close proximity to markets but must meet quality standards, crop could reach long distant
retailer, processors), crop requires low reliability of demand, flexibility in delivery
Storage: Short storage life (up to 15 days) obtained with cold chain but better to be consumed fresh
Truffles Distribution to Markets: Close proximity to markets but must meet quality standards, products will be distributed in
specialized shops of connoisseurs and could be processed as truffle cream or stored under olive oil, crop requires strong
reliability of demand and no flexibility of delivery

192
6. Final Product Selection
Based on this final analysis, ten strategic export crop categories

were identified including bulbs, lettuce/chicory, asparagus, apples,
and table grapes
Selection of 10 Strategic Crops in Diversified Crop Mix
Filter 4 – Economic Step 5 – Value Chain Constraints Step 6
Crop Top 20 Rank Weighting Investment Required Ease to Produce Ease of Market Access Final Rank
Bulbs (flower) 19 0.75 1
Lettuce/chicory 20 0.50 2
Asparagus 17 1.25 3
Apples 16 1.50 4
Table grape 15 1.75 5
Cucumbers/gherkins 9 2.75 5
Currants/gooseberries 18 1.00 7
Saffron 13 2.00 7
Cranberries/bilberries 13 2.00 7
Kiwi fruit 7 3.00 7
Pears 12 2.25 11
Chilies/peppers 1 4.00 12
Blackberries/raspberries 5 3.25 13
Cherries 5 3.25 13
Strawberries 2 3.75 15
Mushrooms 2 3.75 15
Peaches/nectarines 4 3.50 17
Truffles 7 3.00 18
Cut flowers 10 2.50 19
Flower buds 10 2.50 19

Note: Top 20 ranking determined by economic feasibility and attractiveness filter; Harvey ball scale is as follows: 1- ; 2- ; 3- ; 4-
Source: BAH Analysis 193
Finally, we created ‘Go To Market’ snapshots which include four
main components: supply, demand, infrastructure, and variety
selection
Overview of ‘Go To Market’ Components
Supply Demand
Determine largest suppliers of selected crop varieties Determine the largest importers of selected crop
by volume varieties by volume
Assess whether suppliers are increasing or decreasing Assess whether buyers are increasing or decreasing
quantity exported quantity demanded
Analyze growing season gaps and potential to take Evaluate opportunities to take advantage of seasonal
away market share prices
Identify relevant supplier trends (e.g. oversupply of Identify relevant buyer trends (e.g. changing customer
crop variety, increasing quality standards/regulations, preferences in taste, shape, color; buyer/supplier
supplier consolidation, new technologies, etc.) relationship dynamics)
‘Go
‘Go To
To Market’
Market’
Components
Components
Infrastructure Variety Selection
Determine infrastructure requirements for production,
Identify the types of varieties that exist for a particular
such as greenhouse capacity and irrigation networks
crop
Assess onsite processing and packaging
Examine the unique characteristics that define each
requirements
variety category
Identify distribution infrastructure needs for roads, air
transport, shipping, collection centers, cold chain, etc.

194
Go To Market Snapshot- Bulbs
Demand for bulbs is increasing in Eastern Europe, with

lilies and tulips among the most popular varieties.
Prices for bulbs fluctuate, depending on the season
‘Go To Market’ Snapshot -- Bulbs
Supply
Supply Demand
Demand Infrastructure
Infrastructure Variety
Variety Selection
Selection
The Netherlands, New Japan, North America (US Bulbs do not require There are several species of
Zealand and the US are the and Canada) and Western greenhouses, as they can bulbs in the market including
largest world suppliers of Europe (mainly Holland) are be grown in open fields or Lily, Tulip, Calla Lily
bulbs the largest import markets semi-covered fields (using (Zantedeschia),
Kenya is the main supplier for bulbs plastic rain cover) to protect Ornithogalum, Iris, Bagonias
to European markets (also From October to April, from rain and Gladioli
South Africa, Zimbabwe, prices are higher for bulbs Either machines or hand- Each species has various
Ethiopia to a smaller extent) because worldwide supply is labor can be used for sub-species. For example,
South America (Colombia, lower; conversely, prices are cultivating bulbs there are over 100 varieties
Ecuador and Chile in lower from April-September If machines are used, simple of Cala Lilies but only 10-15
particular) supplies North because worldwide supply is tractor machinery and are commonly seen
America higher extraction bulb diggers are Varieties are differentiated
Overall demand for bulbs most commonly seen based on color and value
New Zealand and Australia
has increased in Eastern (price)
mainly supply Asia A consistent reliable source
European countries such as Lilies have high market
of water is necessary, such value but are difficult to
Bulgaria, Hungary, Romania as overhead irrigation, drip
and Russia in recent years grow, while Daffodils are
irrigation or storage tanks easier to grow but receive a
There is an emergence of Cold storage facilities are lower value in the market
the Middle Eastern market required for bulbs
Source: Managing Director, Bloomz New Zealand, 2010 195

Go To Market Snapshot- Lettuce/Chicory
Hydroponic greenhouses are used for lettuce/chicory and a

cold chain system is required for fresh varieties; iceberg
lettuce is becoming increasingly popular in Eastern Europe
‘Go To Market’ Snapshot -- Lettuce/Chicory
Supply
Supply Demand
Variety Selection
Selection
Spain, the US, and the Canada, Germany and UK Hydroponic greenhouses Romaine, leaf, butterhead
Netherlands are the three are the top lettuce importers are typically used for lettuce. and iceberg lettuce are the
largest exporters of lettuce, making up 19%,18% and All lettuce types are most common varieties of
making up 32%,19% and 17% of world imports germinated with sprinklers lettuce in the market
7% of world exports respectively in 2008 and subsequently irrigated Some studies show that
respectively in 2008 Lettuce prices are with drip, sprinkler, or consumers are opting to
In the US, lettuce exports characterized by wide intra- furrow; all lettuce types replace iceberg lettuce with
have increased continuously seasonal variation largely require frequent irrigations leaf and romaine lettuce in
in value since 1989 when an because of an increasing to minimize moisture stress their home-made salads for
estimated $60.5 million overlap of harvest periods Fresh cut lettuce requires added taste, texture, and
worth was exported among producing areas, cold chain. After harvest, variety. Eastern Europe,
compared to a record of production expansion to lettuce is transported to a however, has seen a surge
$275.2 million in 2004 new areas, and weather cooling shed and distribution in the availability of iceberg
US lettuce exports mainly conditions center where it is stored at lettuce, with consumers
go to Canada, Mexico and 35 to 36° F favoring its crispy texture
Japan, whereas Spain and Technological Historically, leaf and
Netherlands’ exports tend to improvements, mainly in romaine lettuce have
stay in Europe packing materials, have received higher prices than
been largely responsible for iceberg and other head
China is the world’s leading varieties
producer of lettuce, followed the increase in availability of
by the US; however, a large different varieties and ready-
portion of China’s to eat salads
production is consumed
domestically
Source: USDA Foreign Agricultural Service; USDA Economic Research Service; TradeMap; Agricultural Issues Center ,University of California 196
Go To Market Snapshot- Asparagus
Supply of asparagus is increasing faster than demand,

causing prices to drop, although white asparagus is
holding up well
‘Go To Market’ Snapshot -- Asparagus
Supply
Supply Demand
Variety Selection
Selection
The largest exporter of The top asparagus Asparagus is highly The two forms of asparagus
asparagus is Peru, which importers are the US, the perishable and requires a in the marketplace are white
exported about 90,000 metric EU and Japan cold chain system. and green asparagus. White
tons (mt) in 2006. Mexico, the Due to intense competition Asparagus is typically asparagus in generally
second largest exporter, from Mexico and Peru, US partially cooled during canned/jarred and green
supplied about 50,000 mt, exports of asparagus have washing, selection, and asparagus is either sold
and the US exported about been declining while imports packing, and then hydro- fresh or frozen/chilled
10,000 mt in the same year. have been steadily cooled to near 32 °F after About 40%of asparagus
Out of the three, only Peru’s increasing packing grown in Peru is green and
export market share has Consumer demand is based Processing of asparagus for shipped to the U.S. market,
grown each year over the last on freshness, length and pickling can bring growers a while the rest is white, which
several years diameter of the stalks, color price premium and can be is processed and sent to the
China is one of the leading of spears, tightness of the sold in winter months when EU market
producers of white spear tips, and the extent of prices are higher given White asparagus is widely
(canned/jarred) asparagus. bruising lower supply used in Europe and Asia,
Spain, Germany, Netherlands World demand is growing Asparagus needs to be while green asparagus is
and France are major buyers slower than supply in many blanched and sterilized popular in the US
of China’s white asparagus, markets, causing prices to before being placed in cans White asparagus is
accounting for 80% of drop. Peruvian asparagus generally priced higher than
China’s total asparagus producers have already green asparagus
exports in 2008. However, experienced falling prices in
production is predicted to the US and Europe
drop by 20% in 2010 due to
continued low prices
Source: USDA/FAS , Agricultural Issues Center ,University of California 197

Go To Market Snapshot- Apples
Global apple exports and imports are increasing and

China is by far the leading world supplier. Apples can be
stored fresh for up to 4-5 months
‘Go To Market’ Snapshot -- Apples
Supply
Supply Demand
Variety Selection
Selection
China is the largest exporter Russia is the world’s largest Drip irrigation system is There are several thousand
of apples, supplying the importer of apples, importing generally used for apples varieties of apples but some of
world with 1.5 million metric 1.1 billion metric tons in Ultra-Low Oxygen (ULO) the most common ones are
tons in 2008/09; China’s 2008/09, 4% more than the cold storage facilities can Gala, Golden Delicious, Granny
exports are forecast to surge previous year keep apples fresh for 4-5 Smith, Liberty and Red
more than 15% due to new Overall world imports of months. Producers may Delicious
plantings in the northwest apples are forecast up 20% decide to store apples until Liberty apples, which are scab-
provinces and increased due to strong demand for the off-season, when they resistant, are grown commonly
demand from Asia and the high quality fruit from the US can sell them for higher in Belarus, Germany, Italy and
Middle East and from Chile and other prices Latvia
The EU is the second Southern Hemisphere Apples to be sold fresh into Jonagold (a combination of
largest apple exporter in the countries during their off- the marketplace should be Golden Delicious and Jonathan)
world; production is forecast season. World demand has harvested at a later maturity apples are one of the major
down 4% due to reduced also expanded for healthy than apples that are pre- varieties grown worldwide and
area in Poland and snack and off-season fruit destined for long-term are popular in Europe. Jonagold
pollination problems in Consumers tend to buy storage accounted for nearly 60% of
Spain apples based on color, apple production in Belgium. It
Global apple exports have though color does not effect is also an important variety in
jumped 15% in the past 3 taste or texture Japan, and is the third most
years mainly due to growth important variety in Canada
in China and the EU apple Gala apples are also becoming
markets, favorable weather increasingly popular in Europe
and improved management because they are considered to
be high quality
Source: USDA/FAS ; Agricultural Issues Center ,University of California; Cornell University, College of Agricultural and Life Sciences 198
Go To Market Snapshot- Table Grape
Chile and the US are the leading table grape suppliers to

the world; high quality requirements must be met for
table grapes to be successfully marketed
‘Go To Market’ Snapshot -- Table Grape
Supply
Supply Demand
Variety Selection
Selection
Chile is the largest world The EU, US and Russia are Chilean and South African The more than 60 varieties
supplier of fresh table grapes, the top table grape importers grapes are shed packed of table grapes are grouped
exporting 850,000 metric tons The EU accounts for about 1/3 because they tend to be into three groups: red, black,
(mt) in 2008/09; the US is the of world imports but the sent to distant markets, green (also called white)
second largest supplier, economic crisis is expected to whereas most grapes from Thompson Seedless grapes
exporting 336,045 mt in reduce EU imports by 4% in the US are field packed (green) are one of the most
2008/09, followed by Italy 2009/2010 Table grapes should be commonly grown grapes in
Chile and US accounted for ½ Lack of decay, cracked quickly stored in a cold the US an Chile. These
of global grape exports in berries, stem browning, storage facility at a grapes are popular because
2009 shriveling, sunburn and insect temperature of 30-32° F they are seedless, have thin
Southern hemisphere damage are important factors Table grapes typically skin and crisp texture
exporters are expected to for consumer acceptance; high require a hot, dry climate, While green grapes are
continue expanding exports consumer acceptance is also deep well-drained soil and a commonly consumed in the
due to demand by northern attained for fruit with high large amount of irrigation US, red grapes are more
hemisphere consumers for off- Soluble Solids Concentration water popular in Europe
season fruit (SSC) ratio Because of their high quality
China is the largest producer, Croatian customers prefer requirements at the point of
but a small exporter due to low table grape varieties with big sale, table grapes demand
quality and handling capacity berries, such as those hand labor, technical
Macedonia, Montenegro and imported from Italy, Spain, knowledge and experience
Bosnia are large suppliers of South Africa and Chile.
table grapes to Eastern Macedonian grapes are
Europe considered to be lower quality
Source: USDA/FAS; UC Davis Horticulture Crops Research Laboratory; USAID/Macedonia AgBiz Program; TradeMap
Note : Exported quantity in tons, data was used from 2004-2008 199
Go To Market Snapshot- Cucumbers/Gherkins
Cucumbers / gherkins are highly labor intensive crops

that can either be processed or sold fresh; global demand
has remained stable
‘Go To Market’ Snapshot -- Cucumbers/Gherkins
Supply
Supply Demand
Variety Selection
Selection
Mexico, Spain, and Germany, US and UK are Cucumbers are grown in The main types of
Netherlands are the top the largest importers of either open field or cucumbers are pickling
three exporters of cucumbers / gherkins, greenhouses. Greenhouse cucumbers (gherkins) and
cucumbers / gherkins in the making up 26%, 19% and cucumbers are grown fresh salad (slicing)
world. Mexico and Spain’s 8% of world imports hydroponically. Drip cucumbers
exports grew by 12% and respectively in 2008 irrigation supplies nutrients
2% respectively from 2004- Consumption of gherkins and water to each plant
2008, while Netherlands’ has remained stable and Gherkins are very labor
exports have gone down generally remains consistent intensive, as they have to be
slightly for the same years year-round hand-picked and growing
Spain and the Netherlands Consumers of cucumbers / and maintaining them
are the cheapest producers gherkins tend to be most requires craftsmanship and
of fresh cucumbers in driven by price, but flavor crop knowledge
Europe1 and texture are also A cold chain needs to be set
Due to its labor-intensive important attributes up for fresh crops.
nature, gherkin production is Processed gherkins must be
being moved to countries packed in a jar within 20 hrs
such as Serbia and India, to maintain freshness
where labor is relatively
cheap
Source: USDA/FAS; UC Davis Horticulture Crops Research Laboratory; TradeMap; Gherkin trader , Koeleman Foods International
Note (1): The Netherlands is able to produce cucumbers cheaply in part because it uses hydroponic greenhouses, which boost production. While cucumbers are grown in open fields in Spain,
cheaper immigrant labor (mainly from Romania) is utilized, bringing down costs 200
Go To Market Snapshot- Currants/Gooseberries
Ukraine is a significant exporter and importer of

currants / gooseberries; currant prices have been
dropping in the last decade so some caution is required
‘Go To Market’ Snapshot – Currants/Gooseberries
Supply
Supply Demand
Variety Selection
Selection
Gambia and Ukraine are the Poland and Ukraine are Currants are machine There are 4 sections of
leading exporters of among the top importers of harvested. Full production is economically important
currants/gooseberries. In currants / gooseberries in achieved in year 4 (3+ years currant species within the
2008, Gambia alone Europe. Asia is also a after planting) with a yield of genus: black currants, red
accounted for over 90% of popular market, with 7,000 lbs and white currents,
world exports. Ukraine Indonesia and Malaysia as Due to their fibrous, shallow ornamental currants, and
accounted for 6%. India is the top importers roots, currants are ideal for golden currants
third leading exporter, The market for black drip irrigation Red currants (mostly sold
accounting for a little over 1% currants is primarily for Sprayers and tractors are fresh) are the most common
of exports processed (concentrate) other equipment generally type of currant found in the
Commercial production of product which is a global used for currants European market
currants and gooseberries market. Producers therefore Black currants, which are
has had limited success in the Fruit for processing is less common in the
are often competing with low generally hand-picked when
U.S. due to a federal ban that cost producers in Eastern European market, are
was placed on Ribes plants fully sized but not mostly used for processing
Europe completely ripe. Unripe
(includes currants / The increase in currant (juice, jam)
gooseberries) which were currants can be placed in
production in the last cold storage for a few days,
thought to have caused decade has led to low fruit
disease in pines. The federal if necessary, while
prices globally gooseberries can keep for
restriction was lifted in 1996,
but there is still confusion up to 2 weeks
regarding the legality of
growing these plants
Source: TradeMap; British Columbia Ministry of Agriculture; University of Kentucky, College of Agriculture 201
Go To Market Snapshot- Saffron
Saffron is highly labor-intensive and sells at very high

prices, but buyers should be weary of counterfeit supply
‘Go To Market’ Snapshot -- Saffron
Supply
Supply Demand
Variety Selection
Selection
Spain is the world’s largest The major importers of Saffron is an extremely Iran is able to produce a
saffron exporter, making up saffron in 2008 were Italy, labor-intensive crop, as very high quality saffron at
46% of world exports, US, UAE and France more than 80% of favorable prices because
though production High consumer demand is production must be done by labor is relatively cheap.
decreased from 20 metric shown for saffron with depth hand (harvesting, drying, Three main varieties of
tons to 5 metric tons in the of color (dark red with no packaging) Iranian saffron include:
last several years because yellow plant parts mixed in), Immediate post-harvest Select Pushali, ‘Coupe’
growers have sought less flavor intensity and fresh processing gives the best Sargol, and Mashad. The
labor-intensive crops aroma saffron spice quality. After first two varieties are higher
While Iran produces over Global demand for saffron is harvest, flowers are taken to grade, due to their high
90% of the world’s raw under pressure due to its warehouses where stigmas coloring strength and fine
saffron, it is not the largest high price; however, are separated from each flavor components
exporter because it lacks a bringing down prices may bud by hand. Once the Unlike Iranian varieties,
strong processing system. compromise supply because stigmas have been Spanish varieties (Mancha
Spain processes and re- saffron is labor-intensive removed, they are lightly Select and Mancha
exports about 40% -50% of Saffron prices at wholesale dried over charcoal embers. Superior) tend to leave the
Iran’s saffron and retail rates range from Saffron for processing is yellow "tails" on the
There is a large supply of US$500-$5,000/pound. In sold in plastic bags placed stamens, making the red
counterfeit saffron in the Western countries, the in cardboard boxes coloring less deep than
world because it is easy to average retail price is Saffron for retail and food Iranian varieties
manipulate the coloring and $1,000/pound. A pound service is sold in tins
sell at a high price comprises between 70,000
to 200,000 threads.
Source: World Applied Sciences Journal, The Third Afghan National Conference of Saffron in Herat Province , 2008, TradeMap 202
Go To Market Snapshot- Cranberries
Global cranberry supplies have been decreasing

but demand continues to rise, mainly in North
America and UK, causing prices to increase
‘Go To Market’ Snapshot -- Cranberries
Supply
Supply Demand
Variety Selection
Selection
The largest exporters of The largest world importers Man-made wetlands or bogs Cranberries are native to
cranberries are Canada, Chile of cranberries in 2008 were are used for harvesting North America, where there
and US, making up 37%, 25% US, Canada and UK cranberries are more than 100 varieties
and 16% of world exports While supplies of Sprinkler systems are used to The most common varieties
respectively in 2008* cranberries have decreased hydrate berries and some are Early Blacks, Howes
While both Canada and the US’ in recent years, global growers have water reservoirs and Stevens. Although Early
exports have decreased by 2-3% demand continues to rise, adjacent to the bogs for ready Black is not as productive as
between 2004-2008, Chile’s causing prices to go up. In water supply other varieties, it is popular
exports have increased by 31% 2007, frozen berries sold at Flooding is used for because of its earliness in
for the same years levels above $1.50/pound harvesting of processed ripening and its ability to
US cranberry production was and concentrate sold at cranberries only. Water grow in many types of
down 10% in 2009 possibly due levels between $80 and harvesting requires proper cranberry soil. Howes are
to cooler, wet weather in $100+/gallon handling and storage to popular because they are
Massachusetts and Wisconsin, The popularity of maintain quality well-colored, glossy and
which reduced pollination and cranberries has been Cranberries for the fresh frost resistant
caused frost that damaged bogs increasing in recent years market are harvested
95% of the US cranberry market due to strong marketing mechanically without flooding,
is made up of processed campaigns and evidence of using a picking machine that
cranberries; only about 5 % of the fruit's health benefits combs the berries off the
the total cranberry crop is sold vines
for fresh fruit
Cranberries are not commonly
grown in Europe
Source: USDA, FAS, TradeMap

Note : Export/import data for cranberries was found on TradeMap which groups cranberries with other fresh fruits of the genus Vaccinium 203
Go To Market Snapshot- Kiwis
New Zealand and Italy are the leading suppliers of kiwis

in the world and mainly export the Hayward variety
‘Go To Market’ Snapshot -- Kiwis
Supply
Supply Demand
Variety Selection
Selection
In 2008, New Zealand was the The most common varieties

The top importers of kiwis in Frequent irrigation is required
leading exporter of kiwis in the of kiwi are: Hayward, (green
the world are Belgium, for kiwis, either through a drip,
world, followed by Italy and Chile. flesh, fuzzy skin) Zespri Gold
Germany, Spain, Netherlands minisprinkler or undervine
The three countries exported and Green, (established by
and Japan, making up 12%, sprinkler system. Kiwifruit vines
34%, 25% and 13% of kiwis in New Zealand’s Zespri Group)
9%, 9%, 5% and 5% of need more irrigation than
the world respectively Hardy Kiwi (does not have
imports respectively grapes or fruit trees under
hair) and Kiwigold (yellow
In 2007, Italy produced over EU countries are primarily similar soil and weather
flesh)
500,000 tons of kiwis, while New supplied by the top EU conditions
Zealand produced 385,000 tons 95% of Italian kiwis are of the
exporters (Italy, France and Once harvested, kiwis are
Hayward variety. Hayward is
China, Chile, France, Greece, Greece). Europe is also a carried in field boxes to packing
also the dominant variety
Japan and the US are also significant market for Chile, as stations. The fruits are
grown in New Zealand and
significant producers 60% of Chilean kiwis were mechanically conveyed across
Chile
In 2007, New Zealand exported imported by Europe in 2006 a brushing machine that
removes the hairs and, in some Zespri Gold is considered a
60% of its kiwis to Europe and Japan and the US are also a
plants, the styles and sepals as difficult product because it
30% to Asia, mainly to Japan key importers of Chilean kiwis.
well has a shorter selling season
About 70% of Italy’s kiwis are The US also imports from New than the traditional Green
exported, mostly to other EU Zealand Kiwis are packed in a fiberboard
variety. Only 17-18% of New
countries or wooden boxes
Zealand’s kiwi exports were
Continued growth in world kiwi Kiwis are placed in cold storage of the Zespri Gold variety in
production, together with for up to one year at 0°C to 2007
improved storage facilities, have maximize their storage life
allowed kiwi sales in the northern
and southern hemispheres to
overlap, resulting in declining
export prices
Source: Fresh Plaza Kiwi Report 2007, USDA Foreign Agricultural Service, 2001, TradeMap 204
Go To Market Snapshot- Pears
World pear exports are expanding due to increasing

demand from Russia and Asia. Some pear varieties,
such as D’Anjou, require cold storage in order to ripen
‘Go To Market’ Snapshot -- Pears
Supply
Supply Demand
Variety Selection
Selection
China, the EU and the US Russia is the world’s largest A drip irrigation system with There are over 3,000 known
accounted for half of global importer with 360,000 metric fertilizers is most often used pear varieties grown around
pear exports in 2009 tons in 2008/09. Russia is for pears the world but the most
US pear exports are likely to purchase 10% more Pears that have been common varieties include
projected to gain 10% due to this year due to smaller graded and packed are Bartlett, D’Anjou, Bosc,
greater purchases from domestic supplies and either sent to cold storage or Comice and Forelle
Brazil and Russia; EU higher demand for sent via truck or rail for Red and Green Anjou
exports are also expected to inexpensive fruit from China shipment to fresh market varieties have been most
rise by 7% and China’s by EU imports are expected to Canned pears are packaged popular among Russian
5% due to growing demand fall slightly in 2010 due to in either lugs or bins and are consumers, while the
from Asian markets demand being filled by loaded on cannery trucks Bartlett variety remains the
World pear exports are ample domestic supplies with fork-lift equipment most common variety sold
forecast to expand 4% in D'Anjou and Comice worldwide
2010 due to expected higher varieties will not ripen
demand from Canada and unless they have been held
Russia 8 -10 weeks in cold storage
Slightly larger world
production is predicted,
resulting from favorable
weather and improved
management practices
Source: USDA, FAS, TradeMap 205

Detailed Go To Market Snapshot- Table Grapes
We selected one crop, Table Grapes, to do a more comprehensive

review and identified major players and trends impacting the
market Breakdown of Supply and Demand and Related Trends
Quantities Exported, 2004-2008 (in tons) CAGR

Breakdown
Breakdown of
of Supply,
Supply, 2008
2008 1000000
Chile 5%
800000
600000 US 10%
Other 1
31%
Chile
Italy 2%
34%
400000
South Africa 2%
200000 Netherlands 11%
US
South Africa, 6% 15% 0
Italy
Netherlands 9% 2005 2006 2007 2008
5%
Breakdown Quantities Imported, 2004-2008 (in tons)

Breakdown of
of Demand,
Demand, 2008
2008
800000
CAGR
US
16% 600000 US 2%
Other 2
Netherlands
400000 Netherlands 15%
9%
55%
Germany Germany -0.2%
8%
200000 UK 4%
UK 7% Canada 3%
0
Canada 5%
2004 2005 2006 2007 2008
Note (1) : Includes supply from 86 other countries such as Turkey, Egypt, Mexico, Spain, India, Brazil, Greece, Argentina, China, Hong Kong
Note (2): Includes supply from 136 other countries such as France, Hungary, Hong Kong, Poland, Mexico, Belgium, Ukraine, Czech Republic, China, Bangladesh
Source: TradeMap 206
Table grapes have specific infrastructure requirements that are

critical for successful production, processing, and distribution
Infrastructure Requirements for Table Grapes
Drip Irrigation System: A typical irrigation system for table grapes includes pumps, filters, and pipes. The type
of catching pump depends on the area of grapes to be irrigated with the system (e.g. larger pump is required for
larger areas of land). Water quality determines the type of filters required (e.g. river water with algae requires a
different filter than underground water with sand). Typically use plastic pipes for the primary and secondary
distribution lines. Primary lines must be in place prior to planting during soil preparation while secondary lines
must be put in before trees start to sprout. Drip or spray sprinklers can be used. Injectors distribute fertilizer
Production
Production throughout system
Infrastructure
Infrastructure Hail Storm Net Cover: Assemble during the year of first grape harvest or earlier in the life of the tree if hail
storms occur once per year on average. Hail storm net is positioned 3-4 meters over the grape trees. Quality
plastic nets last approximately 10-12 years. Will need to replace one time since the grape system lasts around
25 years
Factory Shed: Storage facility required for harvesting equipment, tractor, sprayer, rotary tiller, forklift, carriage to
transport to collection center
Cooling System: Required if don’t pack and sell grapes immediately 1-2 days after harvest. Grapes can
be stored up to 3-4 months. Cooling system has two main components: pre-cooling chamber and cold
chamber. Grapes enter the pre-cooling chamber (20° Celsius) right after harvest and are moved to the cold
Processing
Processing and
and chamber (around 5° Celsius) after a couple days. Each cooling system has a capacity of 25 metric tons
Packaging
Packaging and stores up to 100 metric tons of fruit per year
Infrastructure
Infrastructure In/Out Weighing System: Capable of weighing up to 20 ton trucks. In the packaging line,1 weighting
system is required for every 10 workers packaging and weighing boxes
Outside of packaging, no other processing occurs for table grapes
Road Transport: Table grapes are typically delivered by road since they can be expensive to transport
long distances. Use refrigerated trucks at around 5° Celsius
Distribution
Distribution
Air and Sea Transport: Requires cold storage containers or facilities around 5° Celsius
Infrastructure
Infrastructure
Distribution Center: A center typically has a receiving storage chamber, cold storage facilities, and cold
trucks of varying sizes according to business capacity
Sources: Interviews
207
Seeded grapes continue to be the main variety of table grapes

produced by the EU; prices for the Italia variety have been
dropping in the past few years due to limited demand
Table Grapes Variety Overview
Table Grape Varieties of EU’s Top Three Producers Average Grower’s Price, Italy 2
(Italy, Spain, Greece, 2007-2009) (Price in Euro/Kg, Marketing Year 2007-2010)
Italy Greece
Euro per Kg It alia
Victoria, 1.50 Victoria
1.40
Red Red Globe
1.32
Globe, 1.19 Seedless
Seedless 1.25 1.15
seedless 34%
34% 1.00 1.01
0.94
Italia (seeded)1 Seeded 0.95
66% 66% .83 0.66
0.75 0.68
0.73 0.68
0.73
0.80 0.68
0.51 0.54 0.43
0.56
Spain 0.50 0.53 0.51 0.39
0.41
0.44
0.47 0.31
0.25 0.43
0.25
0.24
0.14
Seedless Seeded 0.00
30% (Aledo, Ideal,
June
June
June
Oct
Oct
Oct
Nov
Dec
Nov
Dec
Nov
Dec
July
July
July
Sept
Sept
Sept
Aug
Aug
Aug
Muscatel,
Domingo,
Napoleon)
2007/08 2008/09 2009/10
70%
Source: USDA Foreign Agricultural Service, GAIN Report , EU-27 Fresh Deciduous Fruit Annual, 2009
Note (1): Production of seedless grapes in Italy continues to be marginal, due to their lower profitability, particularly in terms of yields, although their prices are substantially higher than seeded grapes
(2) Italian growers' prices are used as a proxy because Italy produced 63.5% of all table grapes produced in the EU market. Prices of Italia during the current marketing year have decreased by 21% in
October 2009 compared to the previous year, and 31% lower than two years ago. This is a result of the limited demand from both domestic and export markets. Greece has been experiencing a
partially similar situation, with producer prices averaging well below last year’s levels. An additional factor in Greece and for seedless table grapes in Spain is the strong Euro exchange rate,
compared to the British pound and other currencies.
208
A number of success factors exist for marketing table grapes, all of

which require a concerted strategy among producers
Success Factors for Effectively Marketing Table Grapes
11
Identify
Identify retailers,
retailers,
importers Contact retailers about buying Fresh Grapes from the
importers and
and
distributors exporting country
distributors of Fresh
of Fresh
Grapes Partner with designated distributors for delivery of Fresh
Grapes inin each
each target
target
market Grapes from exporting country
market
Comments
Comments
22
Implement plans through associations and producers to None
None of of these
these steps
steps will
will
be
be successful
successful unless
unless all
all
enforce certifications including GlobalGAP, BRC, IFS
Implement
Implement and
and refine
refine Develop optimal packaging requirements such as grape the fresh grape
the fresh grape
quality
quality control and
control and producers
producers are are on
on the
the
bunches in punett, breathable bag, etc.
packaging
packaging requirements same
requirements Enforce sanitary inspections so that Pesticide Residue same page
page andand support
support aa
Analyses for shipments meet target market requirements unified strategy
unified strategy
Associations
Associations should
should
33 develop
develop internal market
internal market
Develop fund for marketing events to attract attention and controls
controls to to make
make sure
sure
Design
Design marketing
marketing recognition of Fresh Grapes from export country
that
that all
all members
members adhere
adhere
program
program to
to launch
launch Fresh
Fresh Develop targeted, strategic marketing efforts for specific
to the program
to the program and and
Grapes
Grapes Campaign
Campaign countries and regions, as in the case of Chilean
blueberries in London produce
produce table
table grapes
grapes that
that
meet a certain level
meet a certain level of of
quality
quality and
and freshness
freshness
44
Market entry will not be immediate as the table grape
Launch
Launch adad campaigns
campaigns inin market has established producers and exporters
target
target markets
markets touting
touting – Countries entering the market will need to
the
the quality
quality and
and freshness
freshness differentiate themselves by delivering high quality
of
of Fresh Grapes
Fresh Grapes for better prices
Sources: Interviews
209
Table of Contents

– Overview
210
Twenty-one initiatives will support implementation of crop
diversification and address Kosovo’s agriculture challenges for
both traditional and new crops
Overview of Proposed Initiatives
1 A. Improve business viability and coordination of associations
B. Introduce and strengthen extension system to promote traditional crops and improve diversity
Leveraging
Leveraging Small
Small C. Increase and diversify types of financial products available to smallholder farmers
Farmers
Farmers Potential
Potential D. Improve cadastral system and test effectiveness of pilot land consolidation program
2 A. Develop and launch donor coordination activities for agriculture
B. Create market intelligence system and communication plan
Demand-Driven
Demand-Driven C. Improve capacity of collection centers, pack houses and cold storage
Focus
Focus D. Establish centralized organization to oversee marketing & export promotion of agriculture goods
Crop Diversification Initiative
3 A. Rehabilitate the large-scale irrigation system in Kosovo

B. Increase use of small-scale irrigation systems
Infrastructure
Infrastructure C. Support development of greenhouses
Capacity
Capacity Building
Building D. Increase energy competitiveness of the agriculture sector
4 A. Prioritize and develop rural roads using cost-benefit analysis and PPPs
B. Develop air perishables plan and remove regulatory and market obstacles
Transportation
Transportation C. Analyze and communicate cost advantages of the new Tirana highway
5 A. Establish a centralized, strengthened organizational model for food safety and quality control
Government
Government B. Help private quality control labs to achieve international certification
Agriculture
Agriculture C. Establish program to protect the environment against pesticide and input misuse
Regulations
Regulations
6
A. Develop institutional initiatives to facilitate trade and build capacity in the Government of Kosovo
Trade
Trade Access
Access B. Develop and execute interim response to subsidies in neighboring countries
0
Sources : BAH Analysis 211

The primary initiative will be a crop diversification program which
will bring significant volumes of high value crops to market by the
end of the third year
Initiatives to Increase the Value and Diversity of Kosovo’s Agricultural Output
1
Increase Value and Increase Value and Increase Value and Increase Value and
Leveraging
Leveraging Small
Small Diversity of Kosovo’s Diversity of Kosovo’s Diversity of Kosovo’s Diversity of Kosovo’s
Farmers
Farmers Potential
Potential Agricultural Output Agricultural Output Agricultural Output Agricultural Output
(Year 1) (Year 2) (Year 3) (Year 4&5)
2
1. Communicate the high 1. Continue year one 1. Continue year one and 1. Continue previous years
Demand-Driven
Demand-Driven priority crops to farmers programs to include two programs – focus programs – shift
Focus
Focus and agribusiness additional farmers; on services to ensure financial support from
owners and identify 2. Develop capacity of crop- that a broad base of grants to sustainable
3 champions for specific specific co-ops and small farmers are forms of loans and
crops; associations participating and insurance;
Infrastructure
Infrastructure 2. Develop test plots for successful; 2. Focus support on multi-
3. Complete crop-specific
Capacity
Capacity Building
Building priority crops and begin value chains for storage, 2. Develop market annual crops that are
extension services; packing, labeling, linkages and provide reaching maturity (e.g.
4 3. Begin to provide cost- transportation; technical support for kiwi)
share grants, insurance domestic and export
4. Design and implement sales of new, high-value
Transportation and loans for producers marketing programs in
Transportation of new crops; crops;
Kosovo and in target
4. Visit fairs to develop export markets;
5
relationships and market 5. Make test shipments to
Government
Government intelligence buyers;
Agriculture
Agriculture
Regulations
Regulations Improve yields and value in Continued improvement Kosovo produces and Kosovo produces and
6 high priority crops already in yields and values. First sells significant sells growing volumes
grown in small quantities shipments of new high- volumes of new high- of new high-value
Trade in Kosovo (e.g. gherkins, value crops made to value crops crops. Multi-annuals
Trade Access
Access
table grape, chicory) domestic and export come to market.
0 buyers

Initiatives can be executed using full resources or achieving “quick
wins”
Recommended Initiatives: Implementation with Quick Wins & Full Resources
Quick
Quick Wins
Wins Full
Full Resources
Resources
Crop Ramp up production of high-value crops already Develop production, sales and exports of significant
Crop
Diversification grown in Kosovo (e.g. gherkins, table grape, chicory) volumes of high-value crops realizing efficiency gains
Diversification
and address value chains gaps throughout the value chain
Improve the effectiveness of associations and coops
Develop extension and “coop-like” services by
in areas such as input purchase, labor and
Leveraging
Leveraging building relationships between lead firms and
equipment sharing and marketing
Small
Small Farmers
Farmers growers (PPP model)
Develop extension services through both PPP and
Potential
Potential Implement a guarantee program for equipment
public models
leasing and finance
Implement land consolidation programs
Improve coordination of donor spending on
agriculture production and marketing
Improve the organization and processes for food
Development market information system including
safety and quality and attain a European-level of
Demand-Driven
Demand-Driven farm gate and market pricing in Kosovo target
quality
Focus
Focus countries
Develop a functional public-private investment
Attract private investment to collection, packhouse
promotion organization for agriculture
and storage businesses
Invest in the financial and engineering sustainability

Infrastructure
Infrastructure Finance development of water-efficient small-scale of the formal irrigation system
Capacity
Capacity irrigation systems and modern greenhouse through Develop over 200 additional hectares of
Building
Building grants programs greenhouses with a marketing chain for climate-
controlled crops
213
Initiatives can be executed using full resources or achieving “quick
wins” (cont’d)
Recommended Initiatives: Implementation with Quick Wins & Full Resources (cont’d)
Quick
Quick Wins
Wins Full
Full Resources
Resources
Publicize the economic benefits of the Tirana

Use an economic model to prioritize farm-to-market
highway and attract Albania-based freight forwarders
Transportation
Transportation road projects and develop the rural road network
to Kosovo
through construction PPPs
Obtain ICAO license for air freight pick-ups at ICAO
Centralized organizational structure driving
compliance of national and international food safety
standards, thereby increasing exports of agriculture
Work with MAFRD, KFVA, and Ministry of Health to
goods
Government
Government improve food safety inspections
Developing system of private quality labs that are
Agriculture
Agriculture Establish alliances with inputs importers to provide
internationally recognized and have developed
Regulations
Regulations training to farmers in proper application of inputs,
bilateral agreements with key exporting countries
thereby driving increase in production value
Fully automated tracking system tracking sales and
distribution of all inputs, thereby decreasing the
presence of counterfeit pesticides to less than 1%
Focus on improved capacity of all trade officials in
Develop the data needed to enforce CEFTA GoK, including Department of Trade (MTI), Kosovo
information sharing provisions (Art 44) on all Customs, Dept of Bilateral Affairs (MFA), Office of
countries placing subsidies on agriculture goods the President and KFVA, to negotiated trade
Trade
Trade Access
Access
Develop an inter-ministerial council for trade and a agreements with regional countries
“rapid reaction force” to respond to trade issues Develop legitimate trade responses developed for all
affecting agriculture subsidies placed on agriculture goods, driving an
increase in domestic consumption
214
All initiatives can be implemented in a phased approach during
roll-out of crop diversification…
Proposed Implementation Timeline
Initiative Year 1 Year 2 Year 3 Year 4 & 5
Farmers
A. Improve business viability and coordination of associations

Leveraging
Potential
B. Introduce and strengthen extension system to promote traditional crops and improve diversity
C. Increase and diversify types of financial products available to smallholder farmers

Small
D. Improve cadastral system and test effectiveness of pilot land consolidation program
Driven Focus
A. Develop and launch donor coordination activities for agriculture

Demand-
B. Create market intelligence system and communication plan
C. Improve capacity of collection centers, pack houses and cold storage
D. Establish centralized organization to oversee marketing & export promotion of agriculture goods
Infrastructure
A. Rehabilitate the large-scale irrigation system in Kosovo

Capacity
Building
B. Increase use of small-scale irrigation systems
C. Support development of greenhouses
D. Increase energy competitiveness of the agriculture sector

Trade Regulations Transport
A. Prioritize and develop rural roads using cost-benefit analysis and PPPs
B. Develop air perishables plan and remove regulatory and market obstacles
C. Analyze and communicate cost advantages of the new Tirana highway
A. Establish a centralized, strengthened organizational model for food safety and quality control
Gov’t Ag
B. Help private quality control labs to achieve international certification
C. Establish program to protect the environment against pesticide and input misuse
A. Develop institutional initiatives to facilitate trade and build capacity in the Government of Kosovo
B. Develop and execute interim response to subsidies in neighboring countries

… and are consistent with the strategy developed by MAFRD
Agriculture Opportunities Strategy Initiatives

Increase
Increase value
value and
and diversity
diversity ofof agricultural
agricultural output
output (0)
(0)
Agriculture and Rural Development Plan
Improve
Improve coordination and business services of
coordination and business services of
associations
associations (1a)
(1a)
(ARDP) Framework Introduce

Introduce and
and strengthen
strengthen extension
extension services
services (1b)
(1b)
(2009-2013)
Increase
Increase and diversify types of financial products
and diversify types of financial products
available
available to
to smallholder
smallholder farmers
farmers (1c) (1c)
Axis
Axis 11
Improve
Improve cadastral
cadastral system
system (1d)(1d)

Increase
Increase access
access and
and use
use ofof market
market information
information (2b)
(2b)
Kosovo Agri-Rural Development
Improve
Improve capacity
capacity ofof collection
collection centers
centers (2c)
(2c)

Establish
Establish centralized
centralized org
org for
for marketing
marketing and and promotion
promotion
(2d)
(2d)

Ensure
Ensure compliance
compliance withwith quality
quality and and safety
safety standards
standards (5 (5 aa
&& b)
b)
Axis 1 Axis 2 Axis 3

Encourage
Encourage farm
farm enterprise
enterprise diversification
diversification (0)
(0)
Environment & Rural
Promote
Promote sustainable and alternative land
sustainable and alternative land use
use (1d)
(1d)
Competitiveness Improved Land Diversification Axis
Axis 22
Establish
Establish program
program toto protect
protect the
the environment
environment against
against
Use and Quality of pesticide
pesticide and
and input
input misuse
misuse (5c)
(5c)
Rural Life
Introduce
Introduce PPP
PPP extension
extension services
services inin rural
rural areas
areas (1b)
(1b)
Increase
Increase types
types of
of financial
financial products
products forfor rural
rural farmers
farmers (1c)
(1c)
Brand
Brand and
and market
market local
local products
products (e.g.
(e.g. Rahovica
Rahovica table
table
Axis grapes)
grapes) (2d)
(2d)
Axis 33
Increase
Increase use
use of
of small
small scale
scale irrigation
irrigation systems
systems (3b)
(3b)
Axis 4 Community-Based Local Development Strategies Create
Create and
and rehabilitate
rehabilitate roads
roads in
in rural
rural areas
areas (4a)
(4a)
Increase
Increase competitiveness
competitiveness and and access
access to to energy
energy (3d)
(3d)
Increase
Increase value
value and
and diversity
diversity of
of agricultural
agricultural output
output (0)
(0)
Improve
Improve coordination
coordination and
and business
business services
services of
of
Axis
Axis 44 associations
associations (1a)
(1a)
Introduce PPP
Introduce PPP extension
extension services
services for
for communities
communities (1b)
(1b)
Sources : Agriculture and Rural Development Plan (ARDP) 2009-13, BAH Analysis 216
Initiative: Increase the Value and Diversity of Kosovo’s Agricultural Output (Year 1)
Duration: 5 years Supporting Analysis: pp18, 26, 29 (AgStrat Baseline)
Description Implementation Steps

Currently there are not many types of crops or 1. Communicate high priority crops to farmers/agribusiness owners and identify champions for crops
diverse varieties of each crop cultivated in a. Identify farmers/associations capable of growing top crops identified in the crop diversification model
Kosovo. This is a legacy of the Yugoslav b. Articulate benefits of growing top crops and potential varieties to farmers, determine which crops
production system and of a sector that is they would consider cultivating, and select 2-4 new crops and specific crop varieties for test plots
focused primarily on local tastes. This puts the c. Introduce new varieties and expand volumes of high yield/value crops already produced in Kosovo
sector at risk, exacerbates the trade deficit, and (e.g. gherkins, grape, chicory)
reduces the livelihoods of farmers. 2. Develop test plots for priority crops and begin extension services
The crop diversification initiative is designed to a. Select organizations or technical experts that can provide the necessary knowledge and extension
help Kosovo address these challenges and services needed for farmers to successfully grow quality, high yield crops
bring significant volumes of high value crops to b. Begin trainings with identified pilot farmers to explain in detail how to grow each crop, including
market by the end of the third year. The first planting, seed varieties, pesticide use, and water irrigation
year of the crop diversification initiative will: 1) c. Discuss planting techniques required to cultivate varieties that will meet customer preferences for
communicate the high priority crops to farmers taste, color, shape, size, etc. as well as meet or exceed quality requirements and safety standards
and agribusiness owners and identify d. Plant and monitor varieties in test plots. At the end of the growing season, analyze which varieties
champions for specific crops, 2) develop test are best suited for production in which areas and document lessons learned and changes for
plots for priority crops and begin extension production in year two
services, 3) begin to provide cost-share grants, 3. Begin to provide cost-share grants, insurance, and loans for producers of new crops
insurance and loans for producers of new a. Establish credit/insurance mechanisms for farmers producing new pilot varieties
crops, and 4) visit fairs to develop relationships b. Establish a small grants program with cost-share
and market intelligence 4. Visit fairs to develop relationships and market intelligence
a. Conduct market analysis for top crops and varieties selected to have a thorough understanding of
the potential customers, targeted customer buying preferences, and main competitors supplying
these products (leverage MIS once launched)
b. Determine quality requirements and safety standards specific to each target market
c. Analyze the distribution channels and identify distributors, wholesalers, and retailers
d. Identify and attend select trade fairs (e.g. Fruit Logistica) as participants to begin to develop
relationships and gather market intelligence
Indicator Key Risks / Mitigation Plans Key Milestones
Increase in export value Farmers do not want to grow new crops or varieties: 1% increase in export value
Increase in jobs Detail benefits from growing each crop (potential 30 smallholder farmers and 2 largeholder
Number of farmers participating in test plots farm gate prices for products meeting quality farmers participating in test plots
Yield of test plots for each crop requirements, processing potential, size of target 50% of farms achieve at least an average yield
Proportion of harvest meeting quality and market) and initial technical and financial support to for test plots when compared to regional
safety standards participate in initial crop diversification program benchmarks for crop
50% of harvest meets quality/safety standards

The goals during the second year of the crop 1. Continue year one programs to include additional farmers
diversification initiative are to: 1) continue a. Identify additional farmers to expand test plot production and monitoring
year one programs to include additional b. Conduct testing to confirm rigorous quality and safety standards are met (conducted by the new food
farmers, 2) develop capacity of crop-specific safety and quality control organization)
cooperatives and associations, 3) complete 2. Develop capacity of crop-specific cooperatives and associations
crop-specific value chains for storage, packing, a. Encourage cooperation within smallholder farmer community to ensure that economies of scale may
labeling, and transportation, 4) design and be obtained for competitive opportunities
implement marketing programs in Kosovo and b. Increase capacity of cooperatives and associations to cultivate (with competitive yields), harvest, and
in target export markets, and 5) make test organize high quality products that meet international quality and safety standards as a group
shipments to buyers 3. Complete crop-specific value chains for storage, packing, labeling, transportation
a. Design packaging and labeling to ensure quality and freshness and to enable portion control given
some consumers pay more for individually labeled and packaged produce
b. Analyze current packaging, storage, labeling, and transportation requirements near test plots
c. Conduct gap analysis to determine needed infrastructure for each crop-specific value chain
d. Develop plan to identify investors/donors/others to build and efficiently manage infrastructure
4. Design and implement marketing programs in Kosovo and in target export markets
a. Develop marketing programs and campaigns to introduce crops to target markets
b. Attend target trade fairs (e.g. Fruit Logistica) to expand potential buyer network, approach buyers
with range of varieties, and offer sample products to buyers as well as gather innovative ideas and
additional market intelligence
5. Make test shipments to buyers
a. Select top products for export and work with KFVA to efficiently complete export requirements
Increase in export value Buyers are unaware of Kosovo’s new crop variety 5% increase in export value
Increase in jobs production: Farmers and associations must work 70 smallholder farmers and 5 largeholder
Number of farmers participating in test plots with marketing experts and actively participate in farmers participating in test plots
Yield of test plots for each crop high profile trade shows to expand their network and 60% of farms achieve at least an average yield
Proportion of harvest meeting quality and spread the word about Kosovo’s ability to produce for test plots when compared to regional
safety standards high-quality crop varieties that meet customer benchmarks for crop
Number of contracts secured for export orders preferences 60% of harvest meets quality/safety standards
Total quantity ordered for export by crop 5 contracts secured for export orders
(varies by crop)

Duration: 5 years Supporting Analysis: pp18, 26, 29 (AgStrat Baseline), p8,37 (AgCLIR)

In the third year, the crop diversification 1. Continue year one and two programs—focus on services that ensure smallholder farmer participation
initiative will: 1) continue year one and two a. Continue to work with smallholder cooperatives to increase yields and meet customer demands by
programs – focus on services to ensure that a increasing their management capacity, knowledge of agriculture contracts, and trust
broad base of small farmers are participating b. Continue to develop and implement micro-lending products to ensure cost-share grants, insurance,
and successful and 2) develop market linkages and loans are available for farmers (especially smallholder producers)
and provide technical support for domestic and c. Work collaboratively with the food safety and quality control organization to ensure farmers
export sales of new, high-value crops (especially smallholder farmers) thoroughly comprehend quality/safety requirements
d. Develop the capacity of smallholder farmers to ensure they can meet quality/safety requirements
e. Conduct rigorous quality testing at KFVA in conjunction with associations, processors and donors to
certify quality products and reject products that do not meet quality standards with clear
documentation outlining reasons for rejection
f. Work with processors and purchases to select and package quality products for export markets; and,
work with Customs to complete necessary paperwork and other requirements to efficiently export to
target markets
2. Develop market linkages and provide technical support for domestic and export sales
a. Conduct direct marketing in domestic / export markets for traders in local green markets in Pristina
b. Continue to attend current tradeshows to aggressively market and sell products as well as attend
new trade fairs serving strategic markets or selected crops
c. Attend trade shows to display, market, and sell products
d. Contact potential buyers and send sample products to other buyers not present at trade shows
e. Consider hosting potential buyers in Kosovo if sufficient demand for crops exists
f. Export high-quality products to identified destinations
g. Follow up with buyers to address any unforeseen challenges and ensure client satisfaction
Increase in export value Buyers do not perceive Kosovo as a high-quality 10% increase in export value
Increase in jobs producer: Highlight Kosovo’s significant investment 150 smallholder farmers and 8 largeholder
Yield of test plots for each crop in and commitment to its new quality and food safety farmers participating in test plots
Proportion of harvest meeting quality and organization, upgraded quality labs, and highly 75% of farms achieve at least an average yield
safety standards trained professionals enabling Kosovo to rigorously for test plots when compared to regional
Number of contracts secured for export orders assess crops and enforce stringent quality standards benchmarks for crop
Total quantity ordered for export by crop 75% of harvest meets quality/safety standards
(varies by crop) 10 contracts secured for export orders
Number of trade fairs attended 5 trade fairs attended
Number of farmers/association representatives Minimum of 5 farmers/association
attending each trade fair representatives attending each trade fair
Initiative: Increase the Value and Diversity of Kosovo’s Agricultural Output (Year 4 & 5)

In the fourth and fifth years, the crop 1. Continue previous years programs – shift financial support from grants to sustainable forms of loans and
diversification initiative will: 1) continue insurance
previous years programs – shift financial a. Continue all programs from previous years
support from grants to sustainable forms of b. Begin to wind down grants funding while increase cost share
loans and insurance and 2) focus support on c. Provide technical assistance to financial services companies to ensure that financial products for
multi-annual crops that are reaching maturity crop diversification are robust and commercially viable
(e.g. kiwi) d. Identify sources of financing to replace donor support
2. Focus support on multi-annual crops that are reaching maturity
a. Focus extension on multi-annual crops introduced in the diversity initiative and only reaching
maturity at this time (e.g. kiwi).
b. Support producers of multi-annuals in making test shipments to buyers

Increase in export value Sustainability. Focus on transition of all programs to 20% increase in export value
Increase in jobs GoK and other stakeholders. Ensure that financial 300 smallholder farmers and 12 largeholder
Yield of test plots for each crop products are commercially viable. Identify sources farmers participating in test plots
Proportion of harvest meeting quality and of funding to replace donor funds. 75% of farms achieve at least an average yield
safety standards Access to capital for producers of multi-annuals. for test plots when compared to regional
Number of contracts secured for export orders Assist multi-annual producers with cash flow benchmarks for crop
Total quantity ordered for export by crop management as crops reach maturity. 75% of harvest meets quality/safety standards
(varies by crop) 20 contracts secured for export orders
Number of trade fairs attended 5 trade fairs attended

Initiative: Increase the Value and Diversity of Kosovo’s Agricultural Output

Rationale
Rationale Key
Key Counterparts
Counterparts
Experts train farmers on production
Targeted
Targeted crops
crops will
will increase
increase farmer
farmer livelihoods
livelihoods techniques and address challenges with test
providing
providing an incentive for expansion for
an incentive for expansion for the
the 30%
30% ofof Crop
Crop Experts
Experts plots to be able to meet quality/safety
small farmers who leave part of their
small farmers who leave part of their land fallow land fallow standards and customer preferences
because
because theythey have
have no no profitable
profitable useuse forfor it.
it. Experts to conduct market analysis for
Marketing/
Marketing/
Crop
Crop diversification
diversification has has prioritized
prioritized labor
labor intensive
intensive crops,
crops, Packaging selected crops, develop marketing
Packaging
the strategy/campaign for selected crops,
the cultivation
cultivation of of which
which willwill significantly
significantly reduce
reduce rural
rural Experts
Experts
unemployment. develop packaging labels
unemployment. IncreasedIncreased demand
demand for for sorting/grading,
sorting/grading, Customs to provide assistance to help new
packing,
packing, storage,
storage, processing
processing and and transportation
transportation will will Customs
Customs exporters navigate export process
create
create many
many knock-on
knock-on jobs jobs inin agribusiness.
agribusiness. Ministry/
Ministry/ Quality Organization to train farmers on
Quality
Quality Org
Org
Targeted
Targeted crops
crops areare inin high
high demand
demand in in regional
regional markets
markets quality/safety standards and monitor crops
and the European Union and will decrease
and the European Union and will decrease the trade the trade
Ministry
Ministry ofof Leverage Peja Institute and MoA experience
deficit
deficit through
through expanded
expanded exportsexports andand substitution
substitution of of Agriculture/ with test plots and crop specific production
Agriculture/
imports.
imports. Peja knowledge and techniques
Peja Institute
Institute
Production
Production of of the
the targeted
targeted crops
crops will
will develop
develop Kosovo’s
Kosovo’s
reputation as a skilled producer of
reputation as a skilled producer of high-value high-value Provide technical and financial assistance to
horticulture, Donors launch and monitor progress of crop
horticulture, branded
branded for for the
the country.
country. Donors
diversification strategy
High
High Level
Level Cost
Cost Estimate
Estimate

Technical Assistance: $10,800,000
Technical Assistance: $10,800,000 (8
(8 people
people for
for 55 years)
years)

Small
Small Grant Fund (1,000
Grant Fund (1,000 grants
grants averaging
averaging $5000):
$5000): $5,000,000
$5,000,000

Supporting
Supporting for
for Revolving
Revolving Loan
Loan Fund
Fund or Insurance: $1,000,000
or Insurance: $1,000,000 (amount
(amount in
in subsidies
subsidies for
for guarantee-
guarantee-
assumption will leverage a $10,000,000 guarantee)
assumption will leverage a $10,000,000 guarantee) 11
Total
Total Estimated
Estimated Costs:
Costs: $$ 16,800,000
16,800,000
Note (1) : Assumption that DCA leverage funds 10:1; based on expert analysis
Initiatives for leveraging smallholder farmers’ potential range four
main programs covering associations, extension systems,
financial products and a land consolidation program
Initiatives to Leverage Small Farmers’ Potential
1
Leveraging
Leveraging Small
Small A
A B
B CC D
D Improve cadastral
Introduce
Introduce and
and Increase
Increase and
and Improve cadastral
Farmers
Farmers Potential
Potential Improve
Improve business
business strengthen extension
strengthen extension diversify
diversify types
types of
of system
system and
and test
test
viability
viability and
and system
system toto promote
promote financial
financial products
products effectiveness
effectiveness of of pilot
pilot
2 coordination
coordination of of traditional
traditional crops
crops and
and available
available to
to land
land consolidation
consolidation
associations
associations improve diversity
improve diversity smallholder
smallholder farmers
farmers program
program
Demand-Driven
Demand-Driven
Associations and Currently no effective There is significant gap While the legal
Focus
Focus cooperatives are public sector model or in the range and number framework for
3 crucial to the success PPP model for of financial products that property and property
of smallholder farmers. extension services are targeted to registration are in line
However, functioning exists. We propose a smallholder farmers. with best practices,
Infrastructure
Infrastructure associations are a multi-model approach to The initiative aims at implementation of the
Capacity
Capacity Building
Building minority -- only 9.6% of 1) develop the public providing smallholder cadastral system is
associations in Kosovo sector model to help farmers greater access very weak. We
4 are considered active. farmers effectively to financial instruments propose a three-part
The primary goals of produce and sell that will increase effort that will improve
Transportation the initiative are to 1) traditional crops that are production, sales and the current cadastre
Transportation
assist associations and considered both high export overall though: system to align land
cooperatives in profit and high yield and 1) a guarantee program rights with geographic
5 developing sustainable 2) establish the PPP for leasing, insurance distribution, increase
Government
Government value-added services model of providing and other innovative judges’ ability to
Agriculture and 2) develop extension services to products, 2) introduction adjudicate cases of
Agriculture sustainable service help farmers, of mobile banking land dispute and test
Regulations
Regulations relationships between processors and system and 3) a the effectiveness of
6 lead firms and exporters effectively program to partner with land consolidation.
smallholder growers. produce and market a MFIs to offer more cost-
diversified crop mix. effective products in
Trade
Trade Access
Access rural areas.
0
222
Initiative 1A: Improve business viability and coordination of associations

Duration: 3 years Supporting Analysis: pp48-49 (AgStrat Baseline), pp37-39 (AgCLIR)

Associations and cooperatives are crucial to 1. Assist associations and cooperatives in developing sustainable value-added services
the success of smallholder farmers. However, a. Complete exhaustive analysis of all associations according to crop type, management model,
functioning associations such as Perdrini and revenue, equity management
Anadrini are a minority -- only 9.6% b. Complete survey for consumer perception to determine the areas where associations could enhance
associations (13 total) in Kosovo are or support development of new products
considered active. Much of the difficulty lies in c. Pinpoint weaknesses in stage of association development and formulate business case to help
establishing active associations that provide support those that appear to be financially stable and meet consumer demand
valuable services to farmers and have a self- d. If necessary, refine management model, including appointment of board and senior leadership
sustaining business model. Some of the e. Identify and provide technical assistance as necessary to address weakness in areas of the
obstacles include dependence on extended agriculture value chain, including production, processing and marketing
family for production relationships, lack of trust f. Establish policy and legislation to legalize cooperatives in Kosovo
in developing business ventures and little 2. Develop sustainable service relationships between lead firms and smallholder growers
emphasis placed on relationships with buyers. a. Based on exhaustive analysis of current associations, identify gaps in associations available to
Therefore, we propose a two-pronged farmers according crop type, management model, regional coverage
approach to 1) assist associations and b. Identify and examine financial viability and management model of processors, exporters or large
cooperatives in developing sustainable value- producers in similar crop sectors to potentially develop lead associations
added services and 2) develop sustainable c. Match processors, exporters and producers with pools of farmers to develop value-added services
service relationships between lead firms and d. Develop management models with lead firms and growers to ensure sustainability and value-add
smallholder growers. e. Identify and provide technical assistance as necessary to address weaknesses in areas of the value
chain, including production, processing and marketing
f. Develop contracts between growers and lead firms and create a low-cost adjudication process to
address disputes
Increase in production value Farmers’ unwillingness to work with lead firms: At least 15 assisted associations operating as
Increase in export value assign responsibility to farmers on board and provide profitable businesses by the end of year 2
Value of agriculture goods bought and sold by clear decision rights and interaction mechanisms Increase in consumer satisfaction of
lead firms Inability to improve production, processing and/or association-developed products by 50% as
Increase in the range and depth of services marketing: monitor product development, pinpoint measured by consumer survey
provided by associations recurring weakness and address with technical
Increase in consumer satisfaction for products assistance
developed by associations Fear that lead firms with take advantage of small
farmers: develop clear MoUs between lead firms and
farmers

Initiative 1A: Improve business viability and coordination of associations

Duration: 3 years Supporting Analysis: pp108-110 (AgStrat Baseline)
Rationale
Rationale Key
Key Counterparts
Counterparts
Strengthening
Strengthening associations
associations in in Kosovo
Kosovo willwill help
help farmers
farmers Maintain data and information on all
produce
produce products
products thatthat meet
meet consumer
consumer demand,
demand, thereby
thereby associations, including results from analysis
increasing competitiveness of
increasing competitiveness of products products MAFRD
MAFRD of all associations
Monitor development of new and current
Associations will
Associations will create
create greater
greater economies
economies of of scale,
scale,
associations
which
which will
will help
help farmers
farmers decrease
decrease their
their costs
costs andand
compete
compete moremore effectively
effectively onon the
the market
market
Direct
Direct technical
technical assistance
assistance willwill help
help farmers
farmers understand
understand Provide monetary and technical assistance
the methods of production, processing
the methods of production, processing and marketingand marketing Donor in addressing indentified weakness
Donor
needed
needed to to create
create sustainable
sustainable business
business models
models Programs Work with lead firms and farmers to develop
Programs
management models and provide technical
Associations will help foster greater trust and
Associations will help foster greater trust and working
working assistance for pilot associations
relationship
relationship among
among farmers
farmers and
and lead
lead firms
firms
Provide
Provide basis
basis for
for knowledge
knowledge transfer
transfer among
among lead lead firms
firms
and small farmers
and small farmers Work with donor programs to improve
Current
Current
Improve distribution
Improve distribution networks
networks among
among lead
lead firms
firms and
and Associations
Associations
business viability of associations
farmers
farmers in associations, thereby increasing sales
in associations, thereby increasing sales to
to the
the & Openly communicate recurring weaknesses
& Lead
Lead Firms
Firms
end
end consumer
consumer and obstacles to be addressed
High
High Level
Level Cost
Cost Estimate
Estimate

(4 people
people for
for 33 years)
years)

Small
Small Grants
Grants to
to Associations
Associations and
and Lead Firms (40
Lead Firms (40 grants
grants at
at $10,000
$10,000 each):
each): $400,000
$400,000
Total
Total Estimated
Estimated Costs
Costs :: $2,992,000
$2,992,000 for
for TA
TA and
and Small
Small Grants
Grants

Initiative 1B: Introduce and strengthen extension system to promote traditional crops and improve diversity
Duration: 2 years Supporting Analysis: pp50-51 (AgStrat Baseline), pp25-26 (AgCLIR)

Currently no effective public sector model or 1. Develop public sector extension services for traditional crop mix
PPP model for extension services exist. The a. Complete assessment of current extension services provided for traditional crops that are
Ministry of Agriculture operates an Extension considered high profit / high production
Department in each of the municipalities, but b. Assess and pinpoint current weakness in farmers’ production, processing and marketing of
activities are limited to data collection. Donor- traditional crops
funded projects such as KPEP and c. Develop extension program that includes recommended workshops/classes, on-site interventions,
Intercooperation provide extension services, publications, websites and access to technical advisors to address identified weaknesses
but the government does not play a role. d. Formulate detailed budget to implement public sector extension program
Therefore, we propose a multi-model approach e. Draft public sector extension program and MoU, including the services to be provided by the
to 1) develop the public sector model to help MAFRD, experts, universities, the Peja Institute; program will include governance structure, funding
farmers effectively produce and sell traditional mechanism and sources, decision rights and accountability
crops that are considered both high profit and f. Secure funding sources, launch public sector extension services, and monitor effectiveness
high yield and 2) establish the PPP model of 2. Work with donors to develop partnership (PPP) extension services for crop diversification
providing extension services to help farmers, a. Determine the skills and knowledge that will be required for farmers to grow new high-value crops
processors and exporters effectively produce b. Identify pilot group of farmers who will produce crops and assess skill sets to pinpoint gaps that can
and market a diversified crop mix. be addressed by extension programs
c. Work with Donor Coordination Committee and MAFRD to identify the proper donors and buyers who
could provide extension services under partnership model
d. Develop extension program that includes recommended workshops/classes, on-site interventions,
publications, websites and access to technical advisors to develop new crops
e. Formulate detailed budget to implement PPP extension program
f. Draft PPP extension program and MoU, including the services to be provided by the donors and
buyers; program will include governance structure, funding mechanism and sources, decision rights
and accountability
g. Secure funding and investment sources, launch PPP extension services, and monitor effectiveness
Increase in yield Inability to identify proper experts for training: work with MAFRD At least 1000 farmers assisted
Number of farmers trained and reached and donors to exhaustive search for key agriculture experts within first year of program
through public and PPP extension services Low participation rate from farmers: develop more on-site Minimum 100 training programs and
Number of training programs and interventions interventions for areas with low participation rates on-site interventions administered
administered Inability to attract buyers for PPPs: provide investment and/or Completely operational public sector
tax incentives for participation extension program by end of year 1
Enforcement of agreement and funding: monitor effectiveness of At least 5 PPP extension programs
program and address problems as they arise created by end of year 1

Initiative 1B: Introduce and strengthen extension system to promote traditional crops and improve diversity
Rationale
Rationale Key
Key Counterparts
Counterparts
The
The public
public sector
sector model
model will
will be
be more
more effective
effective in in Oversee development of public extension
Ministry
Ministry of
of
developing system; provide funding, monitor
developing a large scale program for high profit
a large scale program for high profit // high
high Agriculture
Agriculture
yield effectiveness of program and make changes
yield products
products
–– Experience/
Experience/ knowledge
knowledge exists
exists inin key
key government
government
Donor
Donor Oversee development of PPP extension
agencies
agencies (MAFRD,
(MAFRD, Peja Peja Institute,
Institute, etc.)
etc.) and
and Coordination
Coordination system; identify donors and partners,
farmers, thereby ensuring success
farmers, thereby ensuring success of program of program Committee monitor progress and make changes
Committee
The PPP model
The PPP model will will be
be effective
effective in
in ensuring
ensuring knowledge
knowledge
transfer
transfer between
between companies
companies and and donors
donors to to farmers,
farmers, Develop training programs, materials,
processors University
University of
processors and and government
government entities
entities of website and publication for extension
Pristina
Pristina
–– Introduction
Introduction of of new
new crops
crops will
will require
require outside
outside system
expertise
expertise that may not currently exist in Kosovo
that may not currently exist in Kosovo
A multi-model approach ensures that Kosovo takes
A multi-model approach ensures that Kosovo takes Provide expertise in specific crop areas to
advantage Peja
Peja Institute develop extension programs
advantage of of all
all possible
possible partners
partners andand funding
funding sources
sources Institute
Monitor content delivered in programs
High penetration rate of public sector
High penetration rate of public sector model through model through
training
training ofof farmers,
farmers, associations,
associations, processors,
processors, etc. etc. who
who Provide funding and expertise to develop
in turn, can train members and
in turn, can train members and employees employees Buyers
Buyers &
& PPP extension programs in coordination
Companies
PPP model
PPP model could
could attract
attract presence
presence of of more
more buyers
buyers who who Companies with donors
are interested in working with farmers
are interested in working with farmers in Kosovo in Kosovo
High
High Level
Level Cost
Cost Estimate
Estimate

Technical
Assistance in in Ministry
Ministry for
for Public
Public Model: $1,296,000 (3
Model: $1,296,000 (3 people
people forfor 22 years)
years)

Short-term TA to Implement the PPP approach: $432,000 (1 full time person equivalent for
Short-term TA to Implement the PPP approach: $432,000 (1 full time person equivalent for 22 years)
years)

Administration
Administration ofof 200
200 Training Programs: $300,000
Training Programs: $300,000 (20(20 participants
participants atat rate
rate of
of $1,500
$1,500 per
per program)
program)

Experts
Experts for
for 200
200 Training Programs: $720,000
Training Programs: $720,000 (2(2 trainers,
trainers, average
average 22 day
day classes)
classes)

On-Site
On-Site Technical Assistance: $300,000
Technical Assistance: $300,000 (1,000
(1,000 farmers
farmers 44 times
times per
per year,
year, $75
$75 for
for each
each visit)
visit)

Administration Costs for Onsite Assistance:
Administration Costs for Onsite Assistance: $60,000$60,000
Total
Total Estimated
Estimated Costs
Costs :: $3,108,000
$3,108,000 forfor Training
Training & & On-Site
On-Site Assistance
Assistance

Initiative 1C: Increase and diversify types of financial products available to smallholder farmers
Duration: 3 years Supporting Analysis: pp52, 114-5 (AgStrat Baseline), pp 18-29 (AgCLIR)

Currently small farms represent 98% of total 1. Develop guarantee program to increase commercial presence of leasing, insurance and other innovative
farms in Kosovo. There is significant gap in the products to smallholder farmers
range and number of financial products that are a. Examine and identify banks and companies nationally and regionally who could offer leasing
targeted to smallholder farmers. Primary services, insurance and other innovative products to smallholder farmers
reasons for this gap include distance from b. Work with donors to set-up leasing and other guarantee programs with banks / companies, detailing
banking networks, lack of smallholder farmer target markets, funding sources, guarantee structure and recourse for disputes
collateral, and little knowledge among the 2. Introduce mobile banking system targeted to rural areas and smallholder farmers
banking and commercial sector about a. Work with current microfinance providers, such as Kosinvest, to identify potential telecom partners,
agriculture producers in Kosovo. In addition, donors and banks and determine mobile banking services to be offered for target markets
while microfinance has been successful in b. Develop business model detailing the funding structure and operational structure of mobile banking
Kosovo, financial products are limited to loans arrangement, including roles and responsibilities of banks, telecoms, donors, etc.
and target mostly urban areas. Finally, large c. Introduce policies/regulations for interoperability, payment systems and consumer protection
market potential exists for leasing farm d. Develop MoU between banks, telecom companies and donors to delineate roles, responsibilities,
equipment to smallholder farmers. Close to funding commitments and recourse for disputes
80,000 tractors and motocultivators and 3. Work with MFIs in Kosovo to provide more cost-effective and attractive financial products smallholder
available in the market for leasing. While two farmers in rural areas
companies are registered for leasing, neither a. Complete scan of MFIs operating nationally and regionally to identify partners
are active except in vehicle leasing. b. Examine and identify target regions and communities of smallholder farmers that lack access to cost
We proposed a three-part effort that provides effective and attractive financial instruments (deposits, loans and crop insurance)
smallholder farmers greater access to financial c. Work with MFIs and donor institution to determine the portfolio of financial products to be offered, the
instruments that will increase production, sales amount of funding necessary for program and secure resources
and export overall: 1) a guarantee program for d. Develop MoUs between donors, banks and community leaders to delineate roles, responsibilities,
leasing and other innovative products, 2) funding commitments and recourse for disputes
introduction of mobile banking system and 3) a
program to partner with MFIs to offer more
cost-effective products in rural areas.
Increase in production value Lack of interested banks, telecom companies, etc. in program Over 500 farmers reached through
Increase in number of farmers with access to because of risk and repayment issues: use donor backing to MFI partner program by end of year
financial instruments guarantee repayment 1
Increase in financial literacy among smallholder Lack of penetration rate among smallholder farmers: develop Mobile banking system established
farmers communication plan describing program and resulting benefits and launched by end of year 1
Increase in mechanization rate from leasing Delays in implementing policies and legislation for mobile Over 10,000 pieces of equipment
program banking: bring in and work with experts who have launched leased by the end of year 1
similar programs in other countries
Initiative 1C: Increase and diversify types of financial products available to smallholder farmers
Duration: 3 years Supporting Analysis: pp52, 114-5 (AgStrat Baseline), pp 18-29 (AgCLIR)
Rationale
Rationale Key
Key Counterparts
Counterparts
Increased
Increased access
access to to finance
finance will
will enable
enable farmers
farmers to
to have
have Assist in drafting and implementing
the resources they need to increase production of high GoK
GoK regulations and policies required for mobile
the resources they need to increase production of high
yield banking system
yield // high
high profit
profit goods
goods
Greater understanding and
Greater understanding and presence
presence of of banks
banks could
could Work with GoK, banks, telecom companies
lead
lead toto increased
increased investment
investment in in Kosovo’s
agriculture Donor
Donor and equipment companies to determine the
sector
sector Coordination
Coordination markets, services and funding required from
Committee
Committee programs; provide funding for guarantee
Leasing
Leasing program
program could
could lead
lead to
to increased
increased program
mechanization
mechanization of farmers, thereby increasing
of farmers, thereby increasing
productivity
productivity and and quality
quality of of agricultural
agricultural goods
goods Work with donors, banks and microfinance
Telecom
Telecom institutions to introduce mobile banking
Mobile
Mobile banking
banking system
system increases
increases rural
rural farmers’
farmers’ access
access companies
companies system
to
to finance,
finance, especially
especially thosethose that
that are
are far
far from
from banking
banking
networks
networks
Provide equipment to be leased through
Equipment
Equipment backing of financial intermediaries and
companies
companies donors
Banks
Banks & & Provide funding and expertise to introduce
Microfinance
Microfinance wide range of financial products for
Institutions
Institutions smallholder farmers
High
High Level
Level Cost
Cost Estimate
Estimate

(3 people
people for
for 33 years)
years)

DCA
DCA // Revolving
Revolving Fund
Fund for
for Leasing
Leasing and Insurance: $1,000,000
and Insurance: $1,000,000 (amount
(amount in
in subsidies
subsidies for
for guarantee-
guarantee-
assumption
assumption will
will leverage
leverage aa $10,000,000
$10,000,000 guarantee).
guarantee).
Total
Total Estimated
Estimated Costs
Costs :: $2,944,000
$2,944,000 for
for TA
TA &
& DCA
DCA // Revolving
Revolving Fund
Fund

Initiative 1D: Improve cadastral system and test effectiveness of pilot land consolidation program
Duration: 4 years Supporting Analysis: pp45-48 (AgCLIR report); p116 (AgStrat baseline)

While the legal framework for property and 1. Improve cadastre registry system to track land ownership, size and location
property registration are in line with best a. Develop automated registry system in all Municipal Cadastre Offices and a centralized system at
practices, implementation of the cadastral Kosovo Cadastral Agency (KCA), including system to update information across the network
system is very weak. Significant discrepancies b. Aggregate all land ownership information into automated system
exist between the immovable property rights c. Work with governments of neighboring countries to return all previous registries to Kosovo
registered at the KCA, Municipal Cadastre d. Develop and launch program to survey, validate and reconcile land ownership information (including
Offices and true geographical distribution of geography and size) with current immovable property rights
property. In addition, many courts do not follow e. In case of discrepancies between KCA and survey program where there are no land disputes,
the evidentiary requirements for making final update registry with current information; in cases of dispute, forward case to adjudication process
decisions and / or do not have correct 2. Provide training and technical assistance to municipal courts to improve adjudication process
information to resolve land disputes. a. Identify procedural deficiencies based on OSCE study in addition to on-site visits of municipal courts
While studies show that large and specialized b. Create centralized, automated case management system that aggregates land disputes cases in
farms make better use of the land, leaving only municipalities, including network to KCA to access current registry information
1.7% fallow, compared to 9.5% for all farms, a c. Develop training program on 1) processes, decision rights, and evidentiary requirements for
number of constraints exists for land municipal courts that addresses identified gaps and 2) implementation and use of the automated
consolidation, such as movement of property case management system
rights through family generations, unclear d. Launch training program across all municipalities and central court system and monitor progress in
titling, and potential for increased rural resolution of disputes. Where weaknesses continue, provide targeted technical assistance
unemployment. 3. Develop pilot program for land consolidation
a. Evaluate MAFRD’s current efforts on land consolidation to extract findings for revised pilot
We propose a three-part effort that will improve b. Develop project framework for land consolidation for an identified region with significant land
the current cadastre system to align land rights fragmentation, including cost-estimate, schedule, and performance monitoring system
with geographic distribution, increase judges’ c. Determine inventory of land parcels, including geography, size, value, and any current disputes
ability to adjudicate cases of land dispute and d. Prepare draft consolidation plan, including new layout of parcels, ownership structure, location of
test the effectiveness of land consolidation. roads and facilities
e. Socialize plan with key stakeholders and make any necessary changes before implementation
Increase in production value Delays in compiling and reconciling information for cadastral Cadastral registry system inputted
Proportion of titles that correctly reflect land system: launch parallel, coordinated efforts across municipalities with all correct information and
ownership and geographic distribution to reconcile data reconciled by year 1
Proportion of land disputes resolved through Inability of judges to resolve disputes despite training: targeted 50% increase in resolved cases by
reformed adjudication system technical assistance to address weaknesses and movement of end of year 1
Increase in production value of agriculture land “difficult cases” to a central court system Consolidation plan completed and
in pilot program for land consolidation Lack of stakeholder buy-in for land consolidation: clearly defined socialized by end of year 1
MoU and land rights defined for participating farmers
Initiative 1D: Improve cadastral system and test effectiveness of pilot land consolidation program
Duration: 4 years Supporting Analysis: pp45-48 (AgCLIR report); p116 (AgStrat baseline)
Rationale
Rationale Key
Key Counterparts
Counterparts
Decrease
Decrease in in land
land disputes
disputes will
will stabilize
stabilize ownership
ownership Work with GoK entities to identify and
structure Donor
structure for farmers, potentially increasing use
for farmers, potentially increasing use of of land,
land, Donor provide monetary/technical support for
productivity and jobs Coordination
Coordination
productivity and jobs cadastre registry system, adjudication
Committee
Committee process and pilot land consolidation pilot
Land
Land consolidation
consolidation program
program will
will help
help create
create economies
economies
of scale and competitive agricultural
of scale and competitive agricultural productionproduction
arrangements
arrangements for for farmers
farmers with
with fewer
fewer parcels
parcels of of land
land KCA
KCA and
and Aggregate and automate information for
Accurate
Accurate and and updated
updated cadastral
cadastral registry
registry will
will enable
enable Municipal
Municipal cadastral registry system; oversee land
GoK
GoK and and stakeholders
stakeholders to to better
better track
track use
use of
of land
land and
and Offices
Offices survey program to reconcile land information
devise support programs that can increase
devise support programs that can increase agricultural agricultural
productivity
productivity
Work with donors and subject matter experts
In
In aa land
land consolidation
consolidation program,
program, landlords
landlords can
can Municipal
Municipal to implement dispute resolution training
encourage
encourage tenants to maintain property and make
tenants to maintain property and make court
court system
system program and automated case management
improvements
improvements (according
(according to to HACCP,
HACCP, etc.),
etc.), thereby
thereby system
opening
opening up up new
new market
market opportunities
opportunities
Kosovo
Kosovo Work with adjudication training program and
Property
Property donors to develop and enforce evidentiary
Agency
Agency requirements to resolve disputes over land
High
High Level
Level Cost
Cost Estimate
Estimate

Systems
Systems Work
Work to to Develop
Develop Cadastral
Cadastral Registry System: $2,000,000
Registry System: $2,000,000

Technical Assistance: $2,592,000 (3(3 people
people for
for 44 years)
years)

Pilot
Pilot Support
Support in Municipalities: $864,000
in 22 Municipalities: $864,000 (1(1 full
full time
time person
person per
per municipality
municipality for
for 22 year
year pilot)
pilot)
Total
Total Estimated
Estimated Costs
Costs :: $5,456,000
$5,456,000 for
for Systems
Systems Work,
Work, TA
TA &
& Pilot
Pilot Support
Support

Initiatives to improve the demand-driven focus of the sector
include better donor coordination, market intelligence, improved
packing and storage and a stronger export promotion agency
Initiatives to Improve the Demand-Driven Focus of the Agriculture Sector
1
Leveraging
Leveraging Small
Small A
A B
B C
C D
D Establish centralized
Farmers Establish centralized
Farmers Potential
Potential Develop
Develop and
and launch
launch Create
Create market
market Improve
Improve capacity
capacity of
of organization
donor organization to to
donor coordination
coordination intelligence
intelligence system
system collection
collection centers,
centers, oversee
2 activities oversee marketing
marketing & &
activities for
for and
and communication
communication pack
pack houses
houses and
and export
agriculture plan cold export promotion
promotion of of
agriculture plan cold storage
storage agriculture
agriculture goods
goods
Demand-Driven
Demand-Driven
The primary goal of this Access to supply and Currently, Kosovo’s This initiative will
Focus
Focus initiative is to develop demand data and distribution establish a public-
3 and implement donor market price infrastructure capacity private Agriculture

coordination activities information (farm gate, is insufficient to Export Promotion
agriculture programs with retail, wholesale) is support significant organization focused
Infrastructure
Infrastructure active support and essential to making growth in production . on agriculture
Capacity
Capacity Building
Building participation from key informed production A two-pronged activities initially and
implementers. A donor and sales decisions for strategy will be will expand to other
4 could initially create and agriculture goods that developed including sectors over time.
chair a Donor will maximize revenue the 1) design and This agency will take
Transportation Coordination Committee, potential. This initiative implementation of a over the agriculture
Transportation
with transition to a will: 1) design and targeted marketing promotion functions of
government agency, to develop a market campaign to attract the Investment
5 coordinate donor intelligence system to investors for needed Promotion Agency of
Government
Government expertise, funds, and track key data and 2) infrastructure and 2) Kosovo (IPAK) and
activities to achieve develop and execute a the provision of will provide training,
Agriculture
Agriculture maximum impact on the communication plan to technical assistance distribute market
Regulations
Regulations sector. ensure all intended for investors to intelligence
6 beneficiaries are aware support business information, and
of and have access to planning and launch launch targeted
the data and reports branding and
Trade
Trade Access
Access promotion campaigns
0

Demand-Driven Focus
Initiative 2A: Develop and launch donor coordination activities for agriculture
Duration: Ongoing Supporting Analysis: pp56,117 (AgStrat Baseline); p11, 18, 38 (AgCLIR)

Effective donor coordination and 1. Form Donor Coordination Committee:
communication is essential to leveraging a. Identify initial donor and/or proper ministerial champion (i.e. MAFRD) and nominate qualified
available expertise and funding to achieve individual to lead and oversee Donor Coordination Committee
maximum benefit potential. While there are b. Determine additional government Ministry representatives
several donor organizations active in Kosovo’s c. Contact donors working in Kosovo’s agriculture sector, confirm interest in participating in Donor
agriculture sector, there is poor coordination Coordination Committee, and designate a POC for coordination activities with decision making
across current and planned projects. authority
The primary goal of this initiative is to develop d. Ensure all key implementers for coordination projects participate in the Committee
and implement donor coordination activities e. Define Donor Coordination Committee strategy, mission statement, goals, objectives, protocols for
agriculture programs with active support and working together and operating responsibilities
participation from key implementers. A donor
could initially create and chair a Donor 2. Conduct Donor Coordination Activities:
Coordination Committee, with transition to a a. Create and maintain a comprehensive donor matrix outlining donor funding priorities and expertise,
government agency, to coordinate donor current and planned agriculture projects, project location and duration, intended beneficiaries, local
expertise, funds, and activities to achieve counterparts and support, desired outcomes, etc.
maximum impact on the sector including b. Using donor matrix, identify and prioritize regional and crop-specific opportunities for cooperation on
infrastructure, production, extension, and current and future projects, assign personnel responsible, outline detailed implementation steps
marketing necessary for successful coordination of selected donor activities
c. Initiate monthly donor coordinator meetings to review current and planned activities, monitor
progress, and address challenges
Value of donor investment in agriculture Donors lack of participation: Replace donor €15-18M of donor investment in agriculture
coordinated through committee representatives with alternates, clearly document coordinated through committee
Proportion of donor organizations represented benefits and incentives for participants in all selected 75% donors active in Kosovo are represented
in Donor Coordination Committee vs. total coordination projects, and post progress publically in Donor Coordination Committee
donors active in Kosovo Lack of trust or fear of reliance on other donors: Donor Coordination Committee meeting
Proportion of donor members present at Donor Develop MoU and/or other contractual agreements attendance at 75%
Coordination Committee meetings vs. total clearly stating roles, responsibilities, and conflict Donor coordinated projects are 25% of total
donor members of Donor Coordination resolution procedures number of donor funded projects
Committee
Proportion of donor coordinated projects vs.
total number of donor funded projects

Demand-Driven Focus
Initiative 2A: Develop and launch donor coordination activities for agriculture
Duration: Ongoing Supporting Analysis: pp56,117 (AgStrat Baseline); p11, 18, 38 (AgCLIR)
Rationale
Rationale Key
Key Counterparts
Counterparts
Potential initial organizer of Donor
Reduce
Reduce duplicative,
duplicative, potentially
potentially contradictory
contradictory donor
donor Coordination Committee, with transition to
funded efforts in the agriculture sector
funded efforts in the agriculture sector government agency (to be determined)
Facilitate collaborative
Facilitate collaborative partnerships,
partnerships, improve
improve donor
donor Donors
Donors Provide monetary and technical assistance
communication, and build
communication, and build trust trust for coordinated agriculture projects
Assist lead government agency to monitor
Focus
Focus donor
donor efforts
efforts to
to achieve
achieve maximum
maximum impact
impact and
and progress of donor coordinated projects
return
return on
on investment
investment along
along the
the agriculture
agriculture value
value chain
chain
Potential organizer to create and oversee
Allow
Allow donors
donors toto take
take on
on projects
projects requiring
requiring larger
larger funding
funding
Donor Coordination Committee activities
amounts
amounts by by sharing
sharing the
the costs
costs across
across organizations
organizations
MAFRD Maintain donor coordination matrix
MAFRD
Ensure
Ensure proper
proper sequencing
sequencing of of projects
projects along
along the
the containing donor and project data
agriculture value chain
agriculture value chain Monitor and document progress of donor
Facilitate knowledge
Facilitate knowledge exchange
exchange andand discussions
discussions toto coordinated projects
determine
determine best
best approach
approach to to deal
deal with
with constraints
constraints facing
facing Contribute to identification, prioritization ,
Kosovo’s
agriculture sector
sector and implementation of agriculture priorities
Other
Other and corresponding coordinated donor
Ministries
Ministries funded projects
Actively participate in Donor Coordination
Committee meetings
High
High Level
Level Cost
Cost Estimate
Estimate

Technical
Assistance
Develop
Develop donor
donor coordination
coordination matrix
matrix (5
(5 total
total person-days):
person-days): $4,500
$4,500
Total
Total Estimated
Estimated Costs:
Costs: $4,500
$4,500 for
for TA
TA

Demand-Driven Focus
Initiative 2B: Create market intelligence system and communication plan

Duration: 3 years to establish and ongoing maintenance Supporting Analysis: pp55, 122 (AgStrat Baseline); p39 (AgCLIR)

Access to information such as supply and 1. Create market intelligence system (MIS)
demand data, market price information, and a. Determine appropriate home sponsor for this initiative (e.g. MAFRD, SOK) and conduct necessary
quality requirements is essential to making capacity building activities as needed
informed production and sales decisions. For b. Develop list of intended beneficiaries
example, the Foreign Agricultural Trade of the c. Identify quantitative and qualitative data requirements (e.g. import and export volume by crop
United States (FATUS) service provides worldwide, farm gate/wholesale/market price information by crop, consumer preferences by market,
historical prices for USA’s exports and imports, safety standards, quality information, pesticide usage, contacts for wholesalers, distributers, etc.)
by crop and country of origin / destination d. Design templates for standard database reports and market research reports for major crops
In addition, it is critical to know your end e. Determine data sources, collection methods, collection frequency, and organization/person
customer and be able to produce high quality responsible for data collection and market research reports
products that meet desired end customer f. Develop a plan to ensure data collection and report development is maintained and up to date
preferences in order to sell your agriculture g. Select appropriate database system and tailor it to address data requirements, desired functionality
goods. In Kosovo, there is limited knowledge (i.e. search functions, data reports, email and SMS capabilities) , and potential end user restrictions
and ability to meet customer requirements (i.e. knowledge or access limitations)
unless an intermediary (such as Perdrini) h. Test functionality to ensure intended beneficiaries can use and understand database prior to rollout
educates farmers on requirements. Most 2. Develop and execute communication plan:
exporters are dependant on customers with a. Create detailed marketing campaign and training program (train the trainers) plans to introduce
knowledge of the end market. market intelligence system to smallholder farmers and other beneficiaries throughout Kosovo
b. Conduct MIS training sessions to showcase database components, illustrate how to use data to
This initiative will: 1) design and develop a make more informed production and sales decisions, explain how to access data (e.g. online, SMS)
market intelligence system to track key data c. Conduct tailored outreach events to provide additional technical information through handouts and
and 2) develop and execute a communication discussion forums to cover topics such as the importance of proper pesticide usage, hygiene
plan to ensure all intended beneficiaries are requirements and agronomic practices required to comply with international food safety standards
aware of and have access to the data/reports
Increased value of production Beneficiaries don’t know how to effectively use MIS: 5% increase value of production
Number of MIS training sessions conducted Involve select beneficiaries throughout design and 2 training sessions/month/ trainer
Number of market intelligence system users testing phase and execute rollout training program 5,000 market intelligence system users
Frequency of market intelligence system users and follow up training sessions Average user accesses information 2 times per
% of smallholder farmer users Services not sustainable: Identify Government of week
Number of outreach events and total Kosovo funding source and leverage for-profit 75% of the users are smallholder farmers
attendance models (fee for service, consulting, subscription, 2 outreach events/region/month for 20 people
page view advertising, split of SMS fees)

Demand-Driven Focus
Initiative 2B: Create market intelligence system and communication plan

Duration: 3 years to establish and ongoing maintenance Supporting Analysis: pp55, 122 (AgStrat Baseline); p39 (AgCLIR)
Rationale
Rationale Key
Key Counterparts
Counterparts
Possible home/sponsor to lead development
The
The market
market intelligence
intelligence system
system will
will establish
establish aa of market intelligence system and ongoing
consolidated,
consolidated, ‘one‘one stop
stop shop’
shop’ platform
platform toto disseminate
disseminate MAFRD/SOK
MAFRD/SOK data collection effort
critical production and market
critical production and market data data Create quarterly market research reports
Enable producers
Enable producers to to make
make informed
informed production
production Conduct topic specific outreach activities
decisions
decisions that
that meet
meet customer
customer requirements
requirements for for variety,
variety,
shape, Possible home/sponsor for data collection
shape, grade,
grade, size
size and
and packaging
packaging of of products
products and
and Local
Local efforts (trade data, market data, safety and
possibly
possibly identify
identify and
and predict
predict buyer
buyer trends
trends Organization
Organization quality standards) and outreach activities
Clearly document safety standards and
Clearly document safety standards and quality
quality
standards
standards required to increase export potential
required to increase export potential and
and sell
sell Inform development of market intelligence
products
products to to target
target markets
markets Farmers/ system and regularly access data
Farmers/
Empower
Empower producers
producers withwith instant
instant price
price information
information to to Associations
Associations Actively participate in and help improve
help ensure farmers receive the highest
help ensure farmers receive the highest market pricesmarket prices outreach activities
Identify opportunities
Identify opportunities to to take
take away
away market
market share
share from
from
regional competitors given declining
regional competitors given declining growth growth Provide assistance to develop and launch
Donors
Donors market intelligence system and develop
outreach programs
High
High Level
Level Cost
Cost Estimate
Estimate

Technical
Technical Assistance:
Assistance:
Conduct
Conduct requirements
requirements analysis,
analysis, design,
design, and
and develop
develop MIS:
MIS: $700,000
$700,000
Test
Test and
and deploy
deploy MIS
MIS and
and launch
launch training
training program:
program: $600,000
$600,000
Develop
Develop and
and conduct
conduct outreach
outreach programs
programs (1 (1 person
person for
for 11 year):
year): $216,000
$216,000
Total
Total Estimated
Estimated Costs:
Costs: $1,516,000
$1,516,000 for
for TA
TA

Demand-Driven Focus
Initiative 2C: Improve capacity of collection centers, pack houses and cold storage
Duration: 3 years Supporting Analysis: pp58-62 (AgStrat Baseline); p8, 37 (AgCLIR)

To effectively and efficiently move agriculture 1. Design and implement a targeted marketing campaign
goods from producers to markets, a production a. Conduct detailed needs assessment to clearly document specific infrastructure requirements
value chain must have a sufficient capacity in including number by infrastructure type, capacity, location, clientele profile (small holder farmers,
for collection, packing, processing and storage large holder farmers), etc.
in key agricultural areas. Currently, Kosovo’s b. Prepare a series of pre-packaged investor prospectuses for each type of infrastructure investment
distribution infrastructure capacity is insufficient starting with Vegco to highlight the demand plan, costs, financials, IRR, Capex and legal overview.
to support significant growth in production . For c. Explore successful organizational models (private institution operating under government,
instance, Kosovo has only 5 collection and independent government, state-owned bank) offering insurance programs to cover political and
packing operations dedicated to the production commercial risks for investors
value chain and also has limited cold chain d. Develop marketing materials highlighting possible incentives, local resources available such as
infrastructure. Overall, key roles in the skilled labor and inputs, and examples of other successful ventures
distribution chain are not being filled. e. Identify target investor pool including Kosovo diaspora and investors active in the region with
To address this challenge, a two-pronged assistance from the Kosovo Chamber of Commerce (KCC) and the Alliance of Kosovo Businesses
strategy will be developed including the: 1) (AKB)
design and implementation of a targeted f. Contact and develop a relationship with individuals in target investor pool, send prospectus and
marketing campaign to attract investors for marketing materials, invite them to Kosovo to see first hand existing business opportunities
needed infrastructure and 2) the provision of
technical assistance for investors to support 2. Provide technical assistance
business planning and launch a. Develop detailed technical assistance plan outlining areas of support, eligibility and duration of
support, organizations and personnel providing support, etc.
b. Areas of support can include:1) development of supply contracts with farmers and cooperatives, 2)
assistance with regulations, land purchases, licensing and visa, 3) support for financing of equipment
purchases, and 4) development of linkages and contracts with buyers
Total Investment Investors do not want to invest in Kosovo due to 4 investors per year building infrastructure in
Number of investors building infrastructure in perceived risk: Develop marketing materials Kosovo
Kosovo highlighting political stability. Develop risk insurance €4 million in FDI per year (based on Vegco,
Proportion of built infrastructure vs. total (e.g. Serbia and Montenegro Export Credit Agency - each investment is1M Euros)
needed infrastructure SMECA). Prepare a pre-packaged investment 75% of needed infrastructure is built
prospectus based on VegCo.

Demand-Driven Focus
Initiative 2C: Improve capacity of collection centers, pack houses and cold storage
Duration: 3 years Supporting Analysis: pp58-62 (AgStrat Baseline); p8, 37 (AgCLIR)
Rationale
Rationale Key
Key Counterparts
Counterparts
The
The appropriate
appropriate number,
number, capacity,
capacity, placement,
placement, and and Agriculture
Agriculture Lead development of targeted marketing
quality of collection centers, pack houses, and cold Export
Export campaign
quality of collection centers, pack houses, and cold
chain Agency Work with other ministries to provide
chain infrastructure
infrastructure builds
builds aa strong
strong and
and comprehensive
comprehensive Agency
(AEA)/IPAK
production (AEA)/IPAK defined technical support
production infrastructure
infrastructure distribution
distribution chain
chain able
able toto
effectively and efficiently meet growing export
effectively and efficiently meet growing export demand demand
Ministries including Trade and Industry and
Increase in
Increase in collection
collection and
and storage
storage centers
centers will
will improve
improve Other
Other Forestry, Agriculture, and Rural
the
the flexibility of distribution for sellers allowing farmers
flexibility of distribution for sellers allowing farmers Ministries
Ministries Development will support AEA/IPAK to
to
to take
take advantage
advantage of of higher
higher off
off season
season prices
prices and
and provide defined technical assistance
reduce
reduce reliance
reliance on on imports
imports
Additional
Additional packpack houses
houses and
and cold
cold chain
chain infrastructure
infrastructure Interested investors will work with AEA/IPAK
will
will satisfy customer demands for quality and
satisfy customer demands for quality and enable
enable Investors
Investors and local ministries to establish businesses
predictable,
predictable, flexible,
flexible, and
and reliable
reliable delivery
delivery
Increase
Increase in in tax
tax revenue
revenue received
received andand employment
employment
created
created from
from new new businesses
businesses Provide technical assistance to develop and
Donors
Donors launch targeted marketing campaign and
build business plans
High
High Level
Level Cost
Cost Estimate
Estimate

Technical Assistance: $972,000
Technical Assistance: $972,000 (1.5
(1.5 people
people for
for 33 years)
years)
ODCs: $250,000
ODCs: $250,000 for
for marketing
marketing costs
costs
Total
Total Estimated
Estimated Costs
Costs :: $1,222,000
$1,222,000 for
for TA
TA and
and ODCs
ODCs

Demand-Driven Focus
Initiative 2D: Establish centralized organization to oversee marketing & export promotion of agriculture goods
Duration: 3 years Supporting Analysis: pp55, 64, 65, 121 (AgStrat Baseline), p34, 37 (AgCLIR)

IPAK does not focus on agribusiness given the 1. Establish organization
importance of the sector in the economy. a. Define the public-private structure, mission and programs for the Agricultural Export Agency (AEA)
Overall, the agency has a €250k budget and b. Develop the public-private governance model including the governmental sponsor (e.g. PM, MTI,
only 13 employees, many of whom do not MAFRD) and the private-sector participants, develop the resource plan, and hire qualified staff
speak foreign languages. Services provided to c. Develop marketing and promotion plan including events and low-cost marketing programs and
users are generally considered poor. Since define focus on crops, products and markets
agriculture is a significant portion of Kosovo’s d. Develop performance metrics and M&E
economy, it is essential to have a strong, 2. Provide training and technical assistance
capable organization leading marketing and a. Develop/provide trainings on sales, marketing, public relations, negotiation, customer service,
export promotion to realize Kosovo’s full contracts, etc.
agriculture export potential 3. Launch branding campaigns
This initiative will establish a public –private a. Create branding campaigns focused on positioning priority crops above the commodity level (e.g.
organization to focus on Agricultural export “Try Kosovo Kiwi!”);
promotion. This agency will take over the b. Develop campaigns focused on attributes of Kosovo that emphasize value-add – certifications such
agriculture promotion functions of IPAK and will as organic, halal or fair trade, designations based on historic producer regions (e.g. Rahovica table
provide training, distribute market intelligence grapes), production by small family farmers
information, and launch targeted branding and 4. Initiate Promotion campaigns
promotion campaigns. a. Launch low-cost and highly effective marketing campaigns such as “earned media”, web sites,
advertising and direct marketing to retailers and buyers in target markets (e.g. Chilean blueberries)
b. Target marketing based on product type and pre-positioning of commodities at agriculture food fairs
c. Support qualified smallholder farmers to distribute their products readily at international fairs (e.g.
USAID South African Trade Hub sponsored six companies to attend the 2006 Spring Fancy Foods
Show in Chicago, helped pre-position distribution of products so small farmers could promote and
easily sell their products with minimal lag time during and after the food fairs, provided free 3-week
distribution to premium health spas, offered samples at radio stations and shows, and launched a
national print and online PR campaign with the potential to reach over 3.5 million consumers)
Increase in agriculture export value Products do not meet quality and safety standards: 10% increase in agriculture export value
Number of training sessions conducted Establish and enforce stringent quality and safety 3 trainings per region per month
Number of attendees at training sessions standards and launch an information campaign to 20 attendees for each training session
Growth in export quantity for targeted crops educate producers on the importance of standards 25% CAGR in export quantity for first 5 years
Number of internationally recognized brands Small producers cannot reach economies of scale: 4 additional internationally recognized brands
Number of exporters represented at trade fairs Support bundling of less-than-truckload quantities 5 exporters represented at each trade fair

Demand-Driven Focus
Initiative 2D: Establish centralized organization to oversee marketing & export promotion of agriculture goods
Duration: 3 years Supporting Analysis: pp55, 64, 65, 121 (AgStrat Baseline), p34, 37 (AgCLIR)
Rationale
Rationale Key
Key Counterparts
Counterparts
Kosovo’s
agriculture goods
goods have have weak
weak branding.
branding. They
They Agriculture
Agriculture Help farmers find markets for their products
are positioned on the lowest rung of the supply chain Export
Export and increase knowledge of demand driven
are positioned on the lowest rung of the supply chain
and Agency export considerations
and are
are used
used primarily
primarily toto fill
fill seasonal
seasonal demand
demand in in Agency
(AEA)
neighboring (AEA) Monitor progress of service delivery
neighboring markets
markets whenwhen domestic
domestic products
products are
are
unavailable
unavailable Support AEA to execute its mission
Export promotion
Export promotion isis fragmented
fragmented and and is
is not
not focused
focused on
on Reorganize and redefine purpose to build on
IPAK
IPAK
key
key markets and crops. Little focus has been placed
markets and crops. Little focus has been placed on
on existing strengths and eliminate weaknesses
promotional
promotional events
events besides
besides trade trade fairs
fairs Monitor progress of service delivery
This
This organization
organization will
will centralize
centralize and and strengthen
strengthen Marketing Work with the AEA to outline and implement
Kosovo’s Marketing
Kosovo’s marketing
marketing andand promotion
promotion capabilities,
capabilities, and
and Export
Export key marketing and promotion services
facilitate
facilitate significant
significant export
export growth
growth andand enhanced
enhanced brand
brand Promotion Ensure service delivery excellence and
Promotion
recognition
recognition worldwide,
worldwide, develop
develop capacity
capacity and
and knowledge
knowledge Experts
Experts results
of
of small
small and
and large
large holder
holder farmers
farmers to to make
make informed,
informed,
proactive
proactive decisions when identifying potential markets
decisions when identifying potential markets
and
and buyers
buyers Provide monetary and technical assistance
Donors
Donors to develop the AEA
High
High Level
Level Cost
Cost Estimate
Estimate

(2 people
people for
for 33 years)
years)
ODCs: $250,000
ODCs: $250,000 for
for marketing
marketing costs
costs
Total
Total Estimated
Estimated Costs
Costs :: $1,546,000
$1,546,000 for
for TA
TA and
and ODCs
ODCs

Initiatives to improve infrastructure include four programs focused
on irrigation, greenhouses and electrical infrastructure
Initiatives to Improve Infrastructure Capacity
1
Leveraging
Leveraging Small
Small A
A B
B C
C D
D
Farmers
Farmers Potential
Potential Rehabilitate
Rehabilitate the
the Increase
Increase use
use of
of Increase
Increase energy
energy
Support
Support development
development
large-scale
large-scale irrigation
irrigation small-scale irrigation
small-scale irrigation competitiveness
competitiveness ofof
2 of
of greenhouses
greenhouses
system
system in
in Kosovo
Kosovo systems
systems the
the agriculture
agriculture sector
sector
Demand-Driven
Demand-Driven
The purpose of this Water-efficient small- Expansion of climate- Like other industries
Focus
Focus initiative is to take a scale irrigation controlled cultivation in Kosovo, agriculture
3 comprehensive provides savings, is essential in Kosovo is effected by chronic

approach to reform of reduces water both to substitute shortages of
the large-scale consumption and is imports and to expand electricity and other
Infrastructure
Infrastructure irrigation systems important for exports. Although sources of energy (i.e.
Capacity
Capacity Building
Building encompassing both development of many greenhouse area has natural gas, fuel). The
engineering and high-value crops. The increased, most crops purpose of this
4 economic issues, all 4 purpose of this are still grown in open initiative is to assess
basins and inter-basin initiative is to increase field. The purpose of the effects of the
Transportation transfer systems, and use of small-scale this initiative is to availability and cost of
Transportation
water demand for all irrigation systems, overcome barriers to power on agriculture
uses (human develop capacity in expansion of climate- and implement
5 consumption, industry irrigation installation controlled cultivation programs in
Government
Government and irrigation). companies and by overcoming alternative fuels,
Agriculture develop access to technical, knowledge conservation and
Agriculture finance mechanisms. and access to finance pooling of
Regulations
Regulations barriers. investments in energy
6 distribution
equipment.
Trade
Trade Access
Access
0

Infrastructure Capacity Development
Initiative 3A: Rehabilitate the large-scale irrigation system in Kosovo

Duration: 4 years Supporting Analysis: pp66-72, pp123-124 (AgStrat Baseline)

The large-scale irrigation system in Kosovo is 1. Provide training on Integrated Water Resource Management
not sustainable, suffering from low demand in a. Provide training to experts who will participate in the 2011 Water Strategy, led by MESP
some areas with scarcity of supply in others; 2. Conduct a study to provide clarity and transparency to investment decisions covering all basins and IPs
prices insufficient to recover cost; low (as recommended by World Bank)
investment in operations & maintenance; and a. Institutional appraisal - capacity, available funding and public expenditure
human capacity issues . Of the 71k hectares b. National Water Demand Management Program - develop processes for managing trade-offs in water
covered by the systems only 18k are currently use and investment including pricing and conservation programs
irrigated. In order to reform this system, a c. Development of investment plan for Ibër basin including inter-basin use of the Gazivodë Reservoir
comprehensive approach must be taken which d. Identification of water demand scenarios and likely shortages
encompasses both engineering and economic e. Development of resource plan for irrigation providers
issues; all 4 basins and inter-basin transfer f. Assessment of climate change on supply and demand of water
issues and water demand for all uses (human g. Prioritization of investments using multi-criteria analysis- priorities, costing, funding models
consumption, industry and irrigation). 3. Organizational and Process Re-design at MESP, MAFRD and IPs
a. Support development of more effective organizations and processes for water management
b. Support changes to laws and enforcing regulations
4. Technical assistance to IPs to establish sustainable business models focusing on Radoniqi and Ibër-
Lepenc
a. Develop financial plans including estimates of break-even irrigated area, needed O&M investments
and shadow price
b. Develop and implement marketing plans including creation of Water Use Associations to improve
collection
c. Consider options for private-sector financing
Increased revenue in O&M at the Irrigation Inability to attract sufficient investment from private sector, Completion of IWRM training
Providers development banks or Kosovo Central Budget (KCB) - Completion of investment study
Increased investment in O&M at the Identification of funding models at time of investment
Irrigation Providers prioritization, focus on feasible investments only
Increase in irrigated area Lack of political will to enforce Water Law which calls for “full
Investment in expansion and rehabilitation of cost recovery” and to re-organize water management functions
irrigation systems at MAFRD, MESP and IPs - Strong GoK buy-in at PM level
needed before project start
Possibly adverse effects on low-value staples crops (e.g.. corn)
if prices increase - Need for effective extension services to
assist in transition to higher value crops
Initiative 3A: Rehabilitate the large-scale irrigation system in Kosovo

Rationale
Rationale Key
Key Counterparts
Counterparts
Sustainable
Sustainable operation
operation of of at
at least
least some
some of of the
the Irrigation
Irrigation OPM - Project sponsor. Direction setting for public
Providers,
Providers, improving
improving the the efficiency
efficiency of of the
the systems,
systems, reducing
reducing expenditure priorities, organization.
the GoK MESP Dept of Water
the strain on the GoK budget and avoiding pending financial
strain on the GoK budget and avoiding pending financial GoK
crisis. MAFRD Dept of Irrigation & Drainage and of Rural
crisis. Development
Prioritization
Prioritization of of investments
investments in in water
water infrastructure
infrastructure resulting
resulting in
in
sustainable
sustainable use use of of all
all four
four river
river basins
basins in in Kosovo.
Kosovo. LikelyLikely Development of finance, marketing and investment
Irrigation
Irrigation functions
priorities
priorities including
including expansion
expansion of of the
the Radoniqi
Radoniqi system,
system, re-re- Providers
Providers Provision of irrigation services to farmers
planning
planning of the Dukadjini system which has lost 75% of its
of the Dukadjini system which has lost 75% of its
original
original area
area to to urbanization,
urbanization, and and recharging
recharging of of the
the Drini
Drini ii
Bardhë Funding of technical assistance
Bardhë basin
basin fromfrom thethe Ibër
Ibër basin.
basin. The The planned
planned expansion
expansion of of
Donor
Donor Coordination and communication
the Ibër Lepenc system to the southeast of
the Ibër Lepenc system to the southeast of the country should the country should
Programs
Programs Protection of subsistence farmers who could be
also
also be
be considered.
considered. hurt by higher tariffs
Expansion of
Expansion of the
the total
total irrigated
irrigated areas
areas resulting
resulting in in higher
higher crop
crop
yields.
yields. Development
Development Lead financing of projects including private
investors and GoK public expenditures
Improved
Improved water
water pricing
pricing promoting
promoting efficient
efficient use
use ofof water
water for
for Banks
Banks
economic purposes.
economic purposes.
Develop water use associations to pool purchases of
water
Cooperatives
Cooperatives Improve water use efficiency by advising farmers on
water-saving techniques
High
High Level
Level Cost
Cost Estimate
Estimate

Technical
Assistance:
–– IWRM
IWRM Training
Training -- $25,000
$25,000 (50
(50 participants)
participants)
–– Investment
Investment Analysis - $1,100,000 (61
Analysis - $1,100,000 (61 person-months,
person-months, IBRD
IBRD analysis)
analysis)
–– Implementation - $3,200,000 (5 people for 3 years)
Implementation - $3,200,000 (5 people for 3 years)
Expense: Minimum
Capital Expense:
Capital Minimum €25.6M
€25.6M (Ibër-Lepenc
(Ibër-Lepenc 11 -- €6.4M;
€6.4M; Radoniqi
Radoniqi -- €9.6M;
€9.6M; Drini
Drini ii Bardhë
Bardhë -- €9.6M)
€9.6M)
Total
Total Estimated
Estimated Costs:
Costs: TA
TA == $4,300,000;
$4,300,000; CapEx >€25,600,000 11
CapEx == >€25,600,000
Note (1) : CapEx requirements not included in high level cost estimate
Initiative 3B: Increase use of small-scale irrigation systems


Water-efficient small-scale irrigation provides 1. Pilot Programs for Water-Efficient Small Scale Irrigation Systems
savings to farmers, reduces water consumption a. Identify irrigation suppliers/installers and provide technical assistance in technology, marketing and
and is important for development of many business plan.
crops (e.g. table grapes, fruit trees). The b. Identify gaps in available technologies.
purpose of this initiative is to increase use of c. Work with suppliers and other counterparts to identify pilot sites
d. Support pilot sites with small grants.
small-scale irrigation systems, develop e. Measure and communication cost savings and yield improvements and resulting ROI.
capacity in irrigation installation companies and f. Work with Ministry of Environment and Spatial Planning (MESP) to identify licensing and other
develop finance mechanisms. regulatory issues and remove obstacles.
g. Examine whether incentives can be provided by GoK for efficient water use.
2. Establish financing programs for small-scale irrigation systems

a. Communicate financial facts about small-scale irrigation to banks and MFIs - costs, improvements in
farm cash flow, etc.
b. Work with banks and MFI to design procedures to increase financing for irrigation systems.
c. Consider provision of a DCA or other guarantee mechanism to support investment in small-scale
irrigation systems
d. Identify potential for vendor financing working with technology and equipment providers

Additional income to small irrigation Availability of investment capital for cost-shares in pilot systems. Implementation of at least 10 pilot
providers Mitigation - partial financing of investments through grants systems in first year and 40 in
Increased revenue (yield and value) to program, development of bank and MFI financing mechanisms, second year
farmers work with at least some large farms. Development of capacity in at least
Development of a financing program Capacity of irrigation suppliers/installers to participate in the 1 provider/installer of irrigation
Development of capacity in irrigation system pilots. Mitigation - provision of technical assistance to systems
suppliers suppliers/installers both on technical issues and on marketing
and business planning.

Initiative 3B: Increase use of small-scale irrigation systems

Rationale
Rationale Key
Key Counterparts
Counterparts
Water-efficient
Water-efficient small-scale
small-scale irrigation
irrigation provides
provides savings
savings to
to
farmers and reduce water consumption
farmers and reduce water consumption Provision of technical assistance to irrigation
Donor
Donor installers and farmers
Drip irrigation
Drip irrigation is
is critical
critical for
for several
several ofof the
the high-value
high-value Program
Program Supervision of pilot programs
crops
crops in the crop diversity initiative including table
in the crop diversity initiative including table Management of Small Grant Fund
grapes,
grapes, chicory,
chicory, asparagus.
asparagus.
Improving process for water licensing for

MESP
MESP systems under 100 ha
Potential source of financing or water-

MAFRD
MAFRD efficiency incentives through grant fund
Banks,
Banks, MFIs
MFIs Source of financing for small-scale irrigation
and
and Irrigation
Irrigation systems
Vendors
Vendors
High
High Level
Level Cost
Cost Estimate
Estimate

Technical Assistance: $160,000 (9
(9 total
total person-months
person-months asas part
part of
of aa larger
larger initiative)
initiative)

Small Grants Fund: $1,000,000 ($10k average grant size for 100 systems)
Small Grants Fund: $1,000,000 ($10k average grant size for 100 systems)

Potential
Potential DCA
DCA or
or other
other Finance Mechanism: (Not
Finance Mechanism: (Not budgeted)
budgeted)
Total
Total Estimated
Estimated Costs:
Costs: $1,160,000
$1,160,000 for
for TA
TA and
and Small
Small Grants
Grants
Initiative 3C: Support development of greenhouses

Duration: 4 years Supporting Analysis: pp73-78, 125 (AgStrat Baseline)

Expansion of climate-controlled cultivation is 1. Technical assistance to Kosovo installers of modern greenhouses
essential in Kosovo both to substitute imports a. Work with 3-5 installers of modern, block-style greenhouses to improve technology and equipment,
and to expand exports. Although greenhouse construction quality, cost control and marketing.
cultivation has expanded to over 154 Ha over b. Create vendor financing options with equipment suppliers that reduce the up-front capex required for
the past 4 years, most crops are still grown in greenhouses.
2. Extension services for climate-controlled cultivation
open field. The purpose of this initiative is to
a. Identify the right model for provision of services
overcome barriers to expansion of climate- b. Provide training and extension to improve crop management (insect and disease control, planting
controlled cultivation by providing technical and harvesting schedule, etc)
assistance to greenhouse construction c. Advise farmers on crop diversification, identifying high-value crops that can benefit from greenhouse
companies, improving crop management development
techniques, developing marketing & distribution 3. Development of marketing & distribution plans for climate-controlled crops
channels and creating financial products. a. Work with distributors in the local market and with exporters to create distribution and sales channels
for climate-controlled production
b. Advise farmers on price fluctuations and the best times and channels for sale of greenhouse grown
crops
4. Development of financial products to support development of greenhouses
a. Explore options for donor funding, tax credits, investment and income support
b. Work with banks to develop cost-effective products suitable for the 6-9 year pay-back period
required for greenhouse investments including term loans, mortgages and leasing

Increased value of crops produced in Availability of finance: modern greenhouses require a substantial Program should target at least 130
greenhouses or other climate-controlled investment and changes in crop management techniques to hectares of new greenhouses over 4
conditions achieve pay-back. The program will not be acceptable unless years, an approximate doubling of
Value of investment in greenhouses sources of financing can be developed and farmers’ growing the current stock
Expansion of total area of greenhouses practices be changed
– Of that, area under “modern” Mitigation
greenhouses as opposed to tunnels
Number of farmers trained and supported with – Provide extension services on crop management and post-
extension services harvest distribution to ensure ROI is achieved
Number of greenhouse installation companies – Focus on financial products that provide an incentive for
supported investment including “better than market” finance from donors
or MAFRD and/or from vendors of greenhouse equipment

Initiative 3C: Support development of greenhouses

Duration: 4 year Supporting Analysis: pp73-78, 125 (AgStrat Baseline)
Rationale
Rationale Key
Key Counterparts
Counterparts
Without
Without greenhouses,
greenhouses, most most crops
crops are
are harvested
harvested within
within aa Provide technical assistance to greenhouse
two-week
two-week window
window causing
causing aa glut glut of
of product
product during
during that
that construction firms
time
time and
and aa scarcity
scarcity at at other
other times.
times. This
This problem
problem must must be
be Donor Development of extension programs and
Donor
addressed both for import substitution and
addressed both for import substitution and exports and exports and Program training for farmers
Program
development
development of of greenhouses
greenhouses are are critical.
critical. Development of access to finance programs
include possible provision of grants and/or
This program will address the obstacles to
This program will address the obstacles to expansion
expansion of of capital or guarantees to banks
greenhouses
greenhouses including
including the the quality
quality of of construction,
construction,
farmers’
farmers’ knowledge
knowledge of of the
the best
best planting
planting andand harvesting
harvesting Support access to finance programs through
schedules,
schedules, knowledge of appropriate crop management
knowledge of appropriate crop management MAFRD grant funding and KCB allocation
MAFRD
techniques
techniques forfor greenhouse
greenhouse cultivation,
cultivation, lack
lack ofof post-
post- Support training programs
harvest processing and marketing
harvest processing and marketing channels, and channels, and
diversification
diversification ofof the
the crops
crops planted
planted in in greenhouses.
greenhouses. Support introduction of new technologies
Equipment
Equipment and construction techniques
Because the payback period is 6-9 years, even
Because the payback period is 6-9 years, even with
with Suppliers
improvements Suppliers and
and Support vendor financing programs
improvements in in all
all of
of these
these areas,
areas, access
access to to finance
finance is
is Installers
Installers
also Provide training to farmers
also an
an important
important –– perhaps
perhaps the the most
most important
important ––
obstacle
obstacle toto overcome.
overcome. This This program
program will will address
address the the
obstacle
obstacle byby developing
developing two two types
types ofof financing:
financing: 1) 1) vendor
vendor Provide training and extension programs
financing
financing provided
provided by by international
international equipment
equipment suppliers
suppliers Associations/
Associations/ Support development of distribution &
through
through Kosovo greenhouse construction companies and
Kosovo greenhouse construction companies and Universities
Universities marketing chain
2)
2) bank
bank financing
financing provided
provided through
through banks.
banks.
High
High Level
Level Cost
Cost Estimate
Estimate

(3 people
people for
for 44 years
years as
as part
part of
of aa larger
larger initiative)
initiative)

Finance
Finance Fund
Fund and Grants: $2,900,000
and Grants: $2,900,000 (Total
(Total investment
investment to
to develop
develop 130 130 ha
ha ofof greenhouse
greenhouse isis €19.5M
€19.5M oror
$29.3M. We have assumed that grants, 2-stage lending and guarantees will need to cover
$29.3M. We have assumed that grants, 2-stage lending and guarantees will need to cover 10% of this 10% of this
total.)
total.)
Total
Total Estimated
Estimated Costs:
Costs: $5,500,000
$5,500,000 TA
TA and
and Financing
Financing
Initiative 3D: Increase energy competitiveness of the agriculture sector

Duration: 2 years Supporting Analysis: Not specifically addressed in baseline

Like other industries in Kosovo, agriculture is 1. Identify impacts of power and fuel shortages on all stages of the agriculture value chain
effected by chronic shortages of electricity and a. Determine availability and cost of electricity compared to benchmark countries
natural gas. While it is assumed that this b. Determine cost and availability of natural gas and other fuels compared to benchmark countries
situation will improve with the completion of the c. Forecast supply and estimate unmet demand for each of the next ten years
Kosovo e Re, the impacts on all aspects of the 2. Develop a plan to mitigate unmet and uneconomic demand over the next ten years
agriculture value chain including irrigation, a. Consider alternate power sources and fuels
greenhouse, soil preparation and harvesting, b. Consider conversation and renewables
cold storage, packaging, etc. must be c. Highlight activities and methods that are uncompetitive under current energy supply conditions
understood. The purpose of this initiative is to d. Analyze energy pricing for agriculture and recommend changes
3. Implement programs to increase energy competitiveness
assess the effects of the availability and cost of
a. Provide small grants for alternative fuels including farm waste and fuel crops (e.g. canola) and small-
power on agriculture and implement programs scale wind and solar (e.g. solar for irrigation pumping)
in alternative fuels, conservation and pooling of b. Provide small grants for conservation and energy efficiency projects
investments in energy distribution equipment. c. Provide incentives to discontinue uneconomic activities
d. Create Agriculture Processing Parks in A+ or A areas that will enable agribusinesses to pool the
costs of investment in energy distribution.

Value of energy saved There is a risk that incentives for alternative fuels will distort 100 programs implemented
Total additional investment in energy decisions about whether to plant fuel crops instead of food or 20 programs in first year
Number of farmers and agribusinesses export crops. Mitigation: The 10-year plan will examine in detail
assisted which fuel substitution programs are economically rationale. In
addition, specific grant proposals will be evaluated to ensure that
grants are non-distorting.

Initiative 3D: Increase energy competitiveness of the agriculture sector

Duration: 2 years Supporting Analysis: Not specifically addressed in baseline
Rationale
Rationale Key
Key Counterparts
Counterparts
The
The availability,
availability, reliability
reliability and
and cost
cost of
of electricity,
electricity, natural
natural
gas
gas and other fuels effects the competitiveness of the
and other fuels effects the competitiveness of the Conduct analysis and provide technical
Donor
Donor
Kosovo
Kosovo agriculture
agriculture sector.
sector. assistance
Program
Program
The
The implications
implications on on competitiveness
competitiveness must must be
be Administer and monitor grants program
understood
understood and and aa plan
plan developed
developed to to offset
offset
disadvantages
disadvantages especially
especially untiluntil the
the Kosovo
Kosovo ee Re Re power
power
plant can be brought
plant can be brought on line.on line. Act as primary GoK counterparts for the
program
This initiative
This initiative will
will improve
improve the the competitiveness
competitiveness of of MAFRD,
MAFRD,
Provide data and validate assumptions for
agribusiness
agribusiness by by substituting
substituting cheaper
cheaper and and more
more readily
readily Ministry
Ministry of
of
analysis. Ensure that agriculture demand is
available Energy
available biofuels
biofuels forfor electricity
electricity andand hydrocarbons,
hydrocarbons, by by Energy
incorporated into national energy plans
introducing conversation projects,
introducing conversation projects, by assistingby assisting As possible, contribute to grants program
agribusinesses
agribusinesses in in identifying
identifying and
and discontinuing
discontinuing
processes
processes that that are
are not
not competitive
competitive because
because of of energy
energy
and
and by developing Agriculture Processing Parks with
by developing Agriculture Processing Parks with Assist the program in providing technical
A+ assistance, communicating about the grants
A+ energy
energy supply
supply from
from KEK.
KEK. Associations
Associations
program and identifying and qualifying
grants applications
High
High Level
Level Cost
Cost Estimate
Estimate

Technical Assistance: $1,080,000 as
as part
part of
of aa larger
larger program
program (2.5
(2.5 persons
persons for
for 22 full
full years)
years)

Small
Small Grants Program: $1,500,000
Grants Program: $1,500,000 (100
(100 projects
projects at at aa grant
grant value
value of
of €10k,
€10k, or
or $15k,
$15k, on on average)
average)
Total
Total Estimated
Estimated Costs:
Costs: $2,580,000
$2,580,000 for
for TA
TA and
and Small
Small Grants
Grants Program
Program

Initiatives to improve transportation include three programs to
develop the rural road network, develop air freight services and
communicate benefits of the new road link to Tirana
Initiatives to Improve Transportation
1
Leveraging
Leveraging Small
Small A
A B
B C
C
Farmers
Farmers Potential
Potential Prioritize
Prioritize and
and develop
develop rural
rural Develop
Develop air
air perishables
perishables plan
plan Analyze
Analyze and
and communicate
communicate costcost
roads using cost-benefit
roads using cost-benefit and
and remove regulatory
remove regulatory and
and advantages
advantages of the
of the new
new Tirana
Tirana
2
analysis
analysis and
and PPPs
PPPs market
market obstacles
obstacles highway
highway
Demand-Driven
Demand-Driven
The density of the rural road Development of high-value The Tirana highway will be
Focus
Focus network in Kosovo is lower agriculture exports often relies complete by Spring 2010.
3 than any of its regional on air transportation, which Interviews with Pristina-based
competitors, which act as a provides advantages in freight forwarders indicate that
disadvantage to agriculture freshness, timeliness and they do not plan to shift
Infrastructure
Infrastructure and rural economic activity in reliability of delivery. In significant traffic to this route.
Capacity
Capacity Building
Building general. The purpose of this Kosovo, there is very little Some of this behavior is
initiative is to prioritize export by air and no dedicated economically rational, but some
4 developments in the rural road freighters servicing the is based on habit or lack of
network based on the country. The purpose of this knowledge as many freight
Transportation economic impact of the initiative is, in the short-term, operators are used to the
Transportation
investments, identify funding to remove policy obstacles to Yugoslav network. The purpose
and develop tenders for new an air perishables freighter of this initiative is to provide
5 construction including service from Pristina-Milan quality data on the economics of
Government
Government development of PPPs that can and, in the long-term, to the new route, to communicate it
Agriculture lessen the initial capital outlay develop a strategy expansion and to attract additional freight
Agriculture for road construction. of cost-effective air forwarders from Albania and
Regulations
Regulations perishables services from elsewhere in the region to
6 Pristina. Kosovo.
Trade
Trade Access
Access
0

Transportation
Initiative 4A: Prioritize and develop rural roads projects using cost-benefit analysis and PPPs

The density of the rural road network in Kosovo 1. Prioritize planned investments in farm to market roads using a cost-benefit economic model
is lower than any of its regional competitors, a. Create a comprehensive list of planned rural road projects
which act as a disadvantage to agriculture and b. Determine the economic impact of each project in terms of economic output (GDP) and employment
rural economic activity in general. The purpose using a model like the World Bank Road Economic Decision (RED) model.
of this initiative is to prioritize developments in c. Working with stakeholders, prioritize projects in terms of cost-benefit for rural development.
the rural road network based on the economic d. Work with a Kosovo stakeholder to transfer the model and the analytical framework
impact of the investments, identify funding and 2. Develop detailed costing and project plans for each High Priority project
develop tenders for new construction including a. Estimate the length of road for each project and establish the International Roughness Index (IRI) for
development of PPPs that can lessen the initial each road segment
capital outlay for road construction. b. Using data from similar projects, cost the project based on the length, IRI of each segment and the
type of road desired.
3. Identify financing model, create tender process and identify contractors
a. Define the source(s) of financing and financing model for each project including direct payment,
BOTs, etc.
b. Conduct pre-tender meetings with potential bidders.
c. Develop tender documents and assist Kosovo counterparts to manage tender process.
4. Manage construction projects and maintenance; repeat prioritization
a. Assist Kosovo counterparts to manage the projects.
b. Development maintenance plans.
c. On an annual basis, repeat cost-benefit analysis to prioritize next round projects.

Total reduction in transport costs Availability of funding to complete projects. Mitigation Prioritization and costing analysis complete
Reduction in prices of raw materials – Develop diversified sources of funding including At least 2 projects tendered in first year and 10
Length of road constructed Kosovo budget, development banks and private in life of project
Value of tenders completed investors in PPPs
Model successfully transferred to counterpart Interest/willingness of GoK to prioritize development
and process in place for on-going prioritization of rural roads using an economic benefit model.
of projects Mitigation. Work closely with MOT and other
counterparts to ensure that they agree with the
specifics of the model and have the knowledge to
use it.
Transportation
Initiative 4A: Prioritize and develop rural roads projects using cost-benefit analysis and PPPs
Rationale
Rationale Key
Key Counterparts
Counterparts
Kosovo
Kosovo has has the
the lowest
lowest road
road network
network density
density ofof any
any Identify the list of possible projects
country
country inin the
the region.
region. Low
Low quality
quality of
of the
the road
road network
network Ministry Participate in and approve the prioritization,
Ministry of
of
has
has been
been identified
identified asas an
an impediment
impediment for for farm
farm toto market
market Transport costing and development of projects
Transport
transport and other rural investment
transport and other rural investment (e.g.. Tina (e.g.. Tina Manage tenders, projects and maintenance
Association
Association interviews).
interviews). Funding
Funding is is limited.
limited. of roads
The initiative will address this problem in

The initiative will address this problem in aa cost-
cost-
effective Finance the analytical phases of the project.
effective way
way byby prioritizing
prioritizing farm
farm to
to markets
markets roadsroads that
that
will provide the highest benefits in terms of rural Identify sources of financing for construction
will provide the highest benefits in terms of rural Donors
Donors and
and
including through loans, risk insurance, etc.
incomes
incomes and and employment
employment and and financing
financing them them first.
first. Development
Development
Banks Support sustainability of the analytical
Banks
It will also identify diversified sources of financing for
It will also identify diversified sources of financing for framework and the construction; measure
PPPs
PPPs that
that can
can bebe used
used to to reduce
reduce thethe up-front
up-front capital
capital results
investment
investment required
required forfor road
road development.
development.
Support financing of the projects through
Private attraction of finance partners in PPP
Private
Sector consortia
Sector
Oversee the building and maintenance of
Source : CIA World Factbook infrastructure
High
High Level
Level Cost
Cost Estimates
Estimates

Technical
Assistance:
Initial Analysis
Initial Analysis -- $250,000
$250,000 (based
(based onon similar
similar MCC
MCC studies
studies in
in Serbia,
Serbia, Mozambique)
Mozambique)
Implementation -- $3,900,000
Implementation $3,900,000 (6
(6 people
people for
for 44 years
years as
as part
part of
of aa larger
larger program)
program)
CapEx: Paving
CapEx: Paving and
and upgrading
upgrading of
of farm-to-market
farm-to-market roads
roads estimated
estimated at at $120,000-150,000
$120,000-150,000 per
per km.
km.11
Total
Total Estimated
Estimated Costs:
Costs: $4,150,000
$4,150,000 for
for TA
TA and
and Implementation
Implementation
Note (1) : CapEx requirements not included in high level cost estimate
Transportation
Initiative 4B: Develop air perishables plan and remove regulatory and market obstacles
Duration: 1 year Supporting Analysis: pp84, 130 (AgStrat Baseline)
Development of high-value agriculture exports 1. Identify and resolve policy obstacles to air freight pick-up at Pristina airport
often relies on air transportation, which a. Identify the specifics of the ICAO licensing requirement
provides advantages in freshness, timeliness b. Develop a strategy to negotiate with ICAO in cooperation with existing carriers servicing Pristina
and reliability of delivery. In Kosovo, there is (Turkish, Austrian, Slovenian)
very little export by air and no dedicated c. Resolve issues to enable exports on the existing Istanbul to Milan freighter operated by Turkish
freighters servicing the country (Turkish Air 2. Develop a forward-looking plan to expand air freight access
flies a freighter from Milan but does not pick up a. Based on development of high-value crops, development a 10-year estimate of demand for
in Pristina). The purpose of this initiative is to perishables air freight
develop an air perishables plan including the b. Estimate the price point at which air freight will be economically feasible
level of demand that would make air transport c. Interview air freight operators to determine the point at which expanded air freight at PRN is feasible
d. Prepare a high level estimate of the level of demand that would require additional capital investment
feasible and infrastructure, economic and at PRN
policy obstacles to development of this area. 3. Brief counterparts on results and establish supply and demand commitments
a. Secure commitments from international organizations and companies to use commercial air freighter
service as perishables volume increases as a way to increase supply ahead of demand
b. Establish commitments from air freight operators to offer commercial services at sustainable rates to
Pristina airport
Increase in quantity exported by air “Chicken and the egg” problem / additional air service will not Completion of plan and briefing of
Total saving on air freight from use of re- come without more market demand - To mitigate, 1) identify private sector stakeholders
routed freighter commitments from international organizations to use new air including major freight airlines not
Number of weekly freighters servicing PRN. freight services while perishables demand builds up; 2) create yet in Kosovo (Lufthansa and
Tons of agriculture perishables shipped from demand estimates in conjunction with the “high value crops” Scandinavian are the largest).
Kosovo programs to show a 5-year perishables demand estimate Introduction of at least one weekly
Recognition of sovereignty issues may complicate negotiations dedicated freighter service.
with ICAO – To mitigate, fully research in pilot phase and At least 25 tons of perishables
approach accordingly. shipped in first year

Transportation
Initiative 4B: Develop air perishables plan and remove regulatory and market obstacles
Duration: 1 year Supporting Analysis: pp84, 130 (AgStrat Baseline)
Rationale
Rationale Key
Key Counterparts
Counterparts
Development
Development of of perishables
perishables exports
exports for for many
many crops
crops will
will
Ministry
Ministry of
of Source of data on infrastructure and policy
rely on availability and affordability of air transport.
rely on availability and affordability of air transport. The The
Transport/
Transport/ constraints
benchmarks
benchmarks include include several
several examples
examples -- most most notably
notably Pristina
Pristina Main counterpart for negotiations with ICAO
Kenyan
Kenyan greengreen beanbean exports
exports toto the
the UK.
UK. Airport
Airport (perhaps with Ministry of Foreign Affairs)
The
The most
most affordable
affordable services
services areare provided
provided on on dedicated
dedicated
air
air freighters
freighters on on “dead
“dead head”
head” services,
services, where
where Kosovo
Kosovo
producers
producers can can export
export freight
freight using
using spare
spare capacity
capacity on on air
air
freighters
freighters usedused to to import
import goods
goods to to Kosovo.
Kosovo. Donors Fund technical assistance portion of work
Donors and
and
Assist in developing short-term “demand
Currently
Currently Turkish
Turkish Air Air operates
operates aa dedicated
dedicated air air freighter
freighter Development
Development
commitments” from international
flying Banks
flying between
between Istanbul-Pristina-Milan
Istanbul-Pristina-Milan and and Milan
Milan is is one
one Banks
organizations and multi-national companies
of the largest terminal markets for produce
of the largest terminal markets for produce in Europe. in Europe.
An
An ICAO
ICAO license
license mustmust be be obtained
obtained to to enable
enable Turkish
Turkish
Airlines
Airlines to to pick
pick up
up freight
freight at
at Pristina
Pristina on on this
this route.
route.
Private
Private Provide data on feasibility - costs at various
The
The purpose
purpose of of this
this initiative
initiative is
is provide
provide access
access to to air
air Sector levels of volume
Sector
shipment
shipment for Kosovo’s perishables exports through aa re-
for Kosovo’s perishables exports through re- Freight
Freight Support GoK in ICAO negotiations
routed
routed freighter
freighter service,
service, providing
providing access
access to to new
new Companies
Companies Operate services
markets.
markets.
High
High Level
Level Cost
Cost Estimate
Estimate

Technical Assistance: $350,000 for
for 33 people
people for
for 44 months
months
Total
Total Estimated
Estimated Costs:
Costs: $350,000
$350,000 for
for TA
TA

Transportation
Initiative 4C: Analyze and communicate cost advantages of the new Tirana highway
Duration: 1 year Supporting Analysis: p83 (AgStrat Baseline)
The Tirana highway will be complete by Spring 1. Detailed cost and time analysis of shipping routes
2010, significantly reducing the transportation a. Interview Skopje, Pristina, Peja, Novi Pazar, Ljubljana and Tirana based shippers to determine the
cost to the Port of Durres and to the Albanian cost and time required to ship to/from points in Europe through various routes from various points in
coastal highway. Interviews with Pristina- Kosovo including Pristina and Peja. Include analysis of land-sea and land-air routes.
based freight forwarders indicate that they do b. Understand the drivers of cost and actions that could be taken to lower cost, time or uncertainty on
not plan to shift significant traffic to this route. various routes
Some of this behavior is rational as shipping c. Publish analysis comparing the various routes
through Kulla or Merdare will remain more
economical in many cases. However, some is 2. Communication and marketing to freight companies
based on habit or lack of knowledge as many a. Communicate the results of the study to ensure that shippers have full information and are making
freight operators are used to the Yugoslav informed choices regarding shipping routes.
network. The purpose of this initiative is to b. Through interviews, identify conditions that would attract additional shipping companies to Kosovo.
provide quality data on the economics of the c. Working with the GoK and private sector, promote Kosovo as a location for shipping and freight
forward companies to invest.
new route, to communicate it and to attract
additional Albania-based shippers to Kosovo.
Increase in exports resulting from No significant risks. Completion of analysis and briefing
increased market access to stakeholders
Number of new freight forwarders locating to or
adding service for Kosovo
Amount of investment by freight forwarders in
Kosovo

Transportation
Initiative 4C: Analyze and communicate cost advantages of the new Tirana highway
Duration: 1 year Supporting Analysis: p83 (AgStrat Baseline)
Rationale
Rationale Key
Key Counterparts
Counterparts
The
The currently
currently mostmost used
used transit
transit route
route forfor agricultural
agricultural
products
products to/from Kosovo is the route through Kulla
to/from Kosovo is the route through Kulla and
and Ministry of Transport to serve as GoK liaison
Montenegro. This route has significant
Montenegro. This route has significant disadvantages: disadvantages: for the project
GoK MTI, MEF and Kosovo Customs to make
It is
It is 17%
17% more
more expensive
expensive than than the
the direct
direct route
route GoK
through
through Serbia
Serbia (if (if that
that route
route were
were open);
open); reforms to attract additional investment from
freight forwarders
It is
It is subject
subject to to snow
snow closure
closure inin winter
winter months;
months;
It requires
It requires transit
transit of of BiH
BiH which
which atat times
times refuses
refuses
Kosovo
Kosovo certificates
certificates of of origin
origin for
for non-recognition
non-recognition
reasons
reasons Donor
Donor
Fund technical assistance portion of work
The opening of
The opening of the
the Tirana
Tirana highway
highway offers
offers aa new
new option
option to
to Programs
Programs
transport
transport goods
goods either
either by by land
land through
through Albania
Albania andand
Croatia
Croatia oror by
by land-sea
land-sea through
through thethe port
port of of Durres
Durres
Currently
Currently mostmost operators
operators in in Kosovo
Kosovo do do notnot have
have
sufficient
sufficient information about the new route. In addition,
information about the new route. In addition, Private
Private
because Sources of data and counterparts for project
because mostmost areare Yugoslav
Yugoslav companies,
companies, there there is
is aa pre-
pre- Sector
Sector
Potential new investors in the transport
disposition
disposition to to Yugoslav
Yugoslav road road networks.
networks. This This initiative
initiative will
will Freight
Freight
Companies sector
reduce transport costs by making operators
reduce transport costs by making operators aware of aware of Companies
alternate
alternate routes
routes and
and will
will attract
attract new
new investments
investments from from
freight
freight forwarders
forwarders locating
locating to to Kosovo.
Kosovo.
High
High Level
Level Cost
Cost Estimate
Estimate

Technical Assistance: $324,000 (1.5
(1.5 people
people for
for one
one year)
year)
Total
Total Estimated
Estimated Costs:
Costs: $324,000
$324,000 for
for TA
TA

Initiatives to strengthen government agriculture regulations
include centralizing food safety & quality control, strengthening
private labs and establishing an environmental protection program
Initiatives to Strengthen Government Agriculture Regulations
1
Leveraging
Leveraging Small
Small A
A Establish a centralized, B
B C
C
Farmers Establish a centralized,
Farmers Potential
Potential strengthened Help
Establish
Establish program
program toto
strengthened Help private
private quality
quality protect
organizational protect the
the environment
environment
2 organizational model model for
for control
control labs
labs to
to achieve
achieve against
food against pesticide
pesticide and
and
food safety and quality
safety and quality international
international certification
certification input
control input misuse
misuse
control
Demand-Driven
Demand-Driven
Establishment of a Private labs in Kosovo are Pesticide and input misuse
Focus
Focus government body that can not internationally poses serious problems to the
3 effectively oversee food recognized and do not have environment, leading to

safety will be critical for bilateral agreements with destruction of arable land and
Kosovo to increase other governments. The lack potentially decreasing
Infrastructure
Infrastructure competitiveness and of recognition impedes agriculture yields. We propose
Capacity
Capacity Building
Building exports of its agricultural Kosovo’s ability to remain a three-part approach to
goods on regional and competitive. We propose a protect the environment and
4 international markets. The two part effort to reform arable land against
initiative will consist of a private quality control labs in destruction: 1) develop more
Transportation two-part effort to: 1) Kosovo: 1) work with private comprehensive policies and
Transportation
create a centralized labs to create business legislation that restrict illegal
organizational structure models that will help them and counterfeit pesticides
5 for food safety and quality achieve international according to application, use
Government
Government control and 2) strengthen certification while remaining and/or commodity type; 2)
Agriculture capacity in food safety financially stable; and 2) leverage alliances to provide
Agriculture through training and strengthen the skills and training to farmers in input
Regulations
Regulations technical assistance to capacity of individuals use; and, 3) track sales and
6 meet international food working in private labs so distribution of all inputs
safety standards. that they can help achieve through a centralized,
international recognition. automated system.
Trade
Trade Access
Access
0

Initiative 5A: Establish a centralized, strengthened organizational model for food safety and quality control
Duration: 2 years Supporting Analysis: pp 85, 132 (AgStrat Baseline)

Establishment of a government body that can 1. Develop unified organizational model for food safety and quality control
effectively oversee food safety will be critical a. Draft revised organizational model to centralize food safety functions within a single entity in the
for Kosovo to increase competitiveness and GoK. Model should include roles, responsibilities, decision rights, reporting lines, communication and
exports of its agricultural goods on regional and internal operating procedures
international markets. Currently, execution of b. Identify budget requirements for new organizational structure, including committees and taskforces
food safety standards take place in parallel at to assist with the transition phase
the Plant Protection Department at MAFRD, c. Circulate revised organizational structure to senior government leadership in the Prime Minister’s
the KFVA under the Office of the Prime office, MAFRD and Ministry of Health
Minister and Sanitary Inspectorates under the d. Revise and draft laws required to establish and enforce new organizational model
Ministry of Health. As a result, food safety e. Communicate laws defining new food safety organizational structure to Parliament and secure
assurance is uncoordinated, which also leads approval
to overlap in function. In addition to the f. Develop implementation timeline for transitioning organizational structure to steady state
structural issues, government employees lack g. Develop and launch communication plan to socialize organizational changes, including roles, internal
the proper skills and capacity to complete operating procedures, to all government employees and stakeholders
required functions to meet international food h. Launch transition to new organizational structure
safety guidelines. Kosovo will continue to suffer 2. Build capacity in food safety through training and technical assistance to meet international standards
from lack of exports and recognition issues if a. Determine employee competencies required to meet international best practices in food safety and
these problems are not addressed. achieve recognition. Key areas will include 1) inspection and oversight of production, infrastructure,
We propose to a two-part effort to address processing, marketing 2) analysis and testing of products 3) coordination of exporters
these issues:1) create a centralized b. Assess competencies of all government employees involved in food safety in Kosovo and determine
organizational structure for food safety and gaps in skills
quality control and 2) strengthen capacity in c. Identify training needs for all employees based on the gaps
food safety through training and technical d. Sketch a detailed training plan outlining courses, partners, funding, timeline, and evaluation
assistance to meet international food safety e. Launch training program; provide targeted technical assistance for areas of significant weakness
standards.
Increase in exported value of agricultural Delays in approving organizational structure: socialize New structure and accompanying
goods recommendations and secure buy-in early in the process laws approved within first 2 months
Decrease in cost of obtaining export certificates Resistance from government employees on new structure: Transition to new organizational
Increase in the number of countries accepting develop targeted communication plan that outlines the benefits structure by end of year 1
exports from Kosovo to Kosovo’s competitiveness and agricultural sector 3,000 government employees
Number of employees trained who meet Lack of participation in training: make training mandatory for all trained by end of year 1
required competencies employees to be transitioned to new position

Initiative 5A: Establish a centralized, strengthened organizational model for food safety and quality control
Rationale
Rationale Key
Key Counterparts
Counterparts
Stronger
Stronger reputation
reputation forfor food
food safety
safety and
and quality
quality control
control Donor
Donor Assist in development and transition to new
will help increase the country’s competitiveness Coordination
Coordination organizational structure; assess training
will help increase the country’s competitiveness
internationally, Committee needs and administer capacity building
internationally, thereby
thereby augmenting
augmenting production
production value
value Committee
and
and exports
exports
Assist in developing and approving final
By
By achieving
achieving international
standards, greater
greater ability
ability for
for GoK
GoK // organizational structure for food safety and
Kosovo to establish strategic markets
Kosovo to establish strategic markets in foreign in foreign Parliament
Parliament quality control in Kosovo
countries
countries through
through bi-lateral
bi-lateral recognition
recognition of of food
food safety
safety
standards
standards Work with donors and other GoK
MAFRD
MAFRD // Peja counterparts to transition to new
Greater
Greater likelihood
likelihood forfor countries
countries to to decrease
decrease trade
trade Peja
barriers Institute organizational model and support capacity
barriers for
for agricultural
agricultural commodities
commodities acrossacross the
the board
board Institute
building
Centralized
Centralized structure
structure will
will allow
allow for
for stricter,
stricter, coordinated
coordinated Work with donors and other GoK
enforcement of food safety standards
enforcement of food safety standards on producers,on producers, Prime
Prime counterparts to transition to new
processors
processors and and exporters
exporters Minister
Minister organizational model and support capacity
Office
Office // KFVA
KFVA
Production
Production of of high
high quality
quality products
products willwill enable
enable building
producers
producers to take advantage of preferential trade
to take advantage of preferential trade Implement functional changes as necessary
regimes
regimes under
under CEFTA
CEFTA Ministry
Ministry of
of according to new, centralized. Ensure that
Health
Health services do not overlap with those of the
centralized unit
High
High Level
Level Cost
Cost Estimate
Estimate

(3 people
people for
for 22 years)
years)
Total
Total Estimated
Estimated Costs
Costs :: $1,296,000
$1,296,000 for
for TA
TA

Initiative 5B: Help private quality control labs to achieve international certification

Currently two private quality control labs exist 1. Revise business model for labs to achieve certification according to best practice models
in Kosovo. However, neither of the private labs a. Examine business model, functional structure and service offerings of private labs and pinpoint
are internationally recognized or have bilateral weaknesses against international best practice models
agreements with governments in other b. Refine and recommend new business model that will enable labs 1) achieve international
countries. The lack of recognition greatly certification and 2) remain financially stable
impedes Kosovo’s ability to remain competitive c. Formulate timeline and plan for private labs to achieve international certifications (ISO, etc.)
both regionally and internationally. This could d. Determine funding requirements to reform private labs, including money for technical assistance,
lead to a continued decrease in sales and infrastructure, equipment, technicians, analysts, etc.
exports. e. Determine funding support and technical assistance to be provided with donor support
We propose a two-part effort to reform private f. Launch program and monitor progress according to timeline for achieving certifications; provide
quality control labs in Kosovo: 1) work with technical assistance to target identified weaknesses
private labs to create business models that will 2. Build capacity in private quality control labs to increase ability to achieve international recognition
help them achieve international certification a. Determine employee competencies required to meet international best practices for private quality
while remaining financially stable; and 2) control labs
strengthen the skills and capacity of individuals b. Assess competencies of employees and determine gaps in skills
working in private labs so that they can help c. Where relevant, identify training needs for all employees based on the gaps; for significant gaps,
achieve international recognition. determine the profiles of individuals that should be hired and develop recruitment plan
d. Sketch a detailed training plan, outlining courses, partners, funding, timeline, and evaluation
e. Launch training program; provide targeted continued technical assistance to complement training
f. Launch recruitment plan to hire required resources

Increase in exported value of agricultural Delay in acquiring international certification: constant monitoring Reformed private lab business
goods of progress against timeline; provide targeted technical models launched by the end of year
Decrease in the value of commodities rejected assistance to areas that are off track 1
because of food safety issues Inability to find required people and skill sets for private labs: use Recruiting for private labs 100%
Increase in the number of countries accepting exchange program format for experts from labs in other complete by the end of year 1
exports from Kosovo countries to provide training and technical assistance At least 3 agreements at negotiation
Number of international certifications acquired Employee attrition to more lucrative positions: provide program phase for bi-lateral recognition with
for university students to work in private labs while acquiring international labs by the end of year
their degrees 1

Initiative 5B: Help private quality control labs to achieve international certification
Rationale
Rationale Key
Key Counterparts
Counterparts
Stronger
Stronger reputation
reputation forfor food
food safety
safety and
and quality
quality control
control
Provide technical assistance and monetary
Donor assistance to help labs achieve international
internationally,
internationally, thereby
thereby augmenting
augmenting production
production value
value Donor
certification
and Coordination
and exports
exports Coordination
Identify partners for labs, including
Committee
Committee
By
By achieving
achieving international
standards, greater
greater ability
ability for
for international labs and international
Kosovo to establish strategic markets in
Kosovo to establish strategic markets in foreign foreign government entities
countries
countries through
through bi-lateral
bi-lateral recognition
recognition ofof food
food safety
safety
standards
standards Establish MoUs for private labs to complete
MAFRD,
MAFRD, Peja
Peja
Third
Third party
party labs
labs provide
provide additional
additional assurance
assurance that
that Institute,
Institute,
third party testing of agriculture goods
agriculture
agriculture goods
goods meet
meet international
international food
food safety
safety KFVA, Define audit and quality control procedures
KFVA, MoH
MoH
standards
standards for private labs
Private
Private labs
labs can
can perform
perform quality
quality control
control and
and auditing
auditing of of
testing
testing completed
completed by by government
government entities
entities
Accredit labs according to national
In
In cases
cases ofof high
high volume,
volume, GoK GoK can
can outsource
outsource testing
testing andand
analysis to internationally certified private labs
KFVA/
KFVA/ standards
analysis to internationally certified private labs MAFRD Determine impact of private lab testing on
MAFRD
export and import of goods
High
High Level
Level Cost
Cost Estimate
Estimate

Technical Assistance: $432,000 (1
(1 people
people for
for 22 years)
years)

Small
Small Grants Program: $150,000
Grants Program: $150,000 (5
(5 small
small grants
grants atat $30,000
$30,000 for
for each
each lab)
lab)
Total
Total Estimated
Estimated Costs
Costs :: $582,000
$582,000 for
for TA
TA and
and Small
Small Grants
Grants Program
Program

Initiative 5C: Establish program to protect the environment against pesticide and input misuse
Duration: 2 years Supporting Analysis: pp 87-88, 136 (AgStrat Baseline)

Pesticide and input misuse poses serious 1. Develop more comprehensive policies and legislation prohibiting use of illegal and counterfeit pesticides
problems to the environment, leading to a. Draft comprehensive list of banned and counterfeit pesticides, according to composition, application
destruction of arable land and potentially method and/or restriction according to commodity type, based on international best practice models
decreasing agriculture yields. Farmers are not b. Socialize and vet list of prohibited and counterfeit pesticides with agriculture experts from the donor
trained in the use of pesticides and tend to community, MAFRD, Peja Institute, etc.
over-apply relative to the amounts needed for c. Revise and/or draft policies and legislation enforcing bans on restricted pesticides and products
specific crops. The situation is more critical d. Communicate revised policies and legislation through awareness program for farmers, processors,
with the rapid growth in counterfeit pesticides in manufacturers, distributors, importers, etc.
Eastern Europe. Input distributors report very 2. Establish alliances to provide extension services in pesticide, seed and other input use
infrequent inspections from MAFRD and a. Identify pesticides, seed and other input distributors, retailers and importers operating in the region
complain that lack of enforcement makes it who currently provide training on application for farmers
difficult to compete with illegal or counterfeit b. Identify members of the donor community and GoK to serve as partners in the alliance
imports. c. Define MoU among all partners in alliance, including roles, responsibilities, funding sources
We propose a three-part approach to protect d. Develop training program, content and timeline. Arrangement could possibly focus around
the environment and arable land against distributors, retailers and importers providing training on pesticide, seed and input use for farmer
destruction: develop more comprehensive associations buying inputs
policies and legislation that restrict illegal and e. Launch extension program and monitor progress; make changes as necessary
counterfeit pesticides according to application, 3. Create automated pesticide, seed and input tracking system
use and/or commodity type; 2) leverage a. Develop automated registry system housed possibly MAFRD.
alliances to provide training to farmers in b. Establish MoU to share pesticide, seed and input data with traders and Customs. Create network to
pesticide, seed and input use; and, 3) track link sales data from retailers and import data from the Customs Authority
sales and distribution through a centralized, c. Develop training program both internally within the MAFRD to update and track pesticide, seed and
automated system housed within the GoK. input sales and distribution and externally for traders and Customs to provide accurate data

Increase in production value of goods Continued use of banned pesticides, seeds and inputs by Revised policies and legislation for
Increase in exports of agriculture farmers: develop more stringent inspection and penalization banned pesticides implemented by
commodities system for misuse end of 1
Decrease in use of banned pesticides, seed Lack of participation in training program: develop training MoU for two alliances established
and inputs programs targeting associations to reach more farmers by end of year 1
Number of farmers trained who are properly Lack of participation in tracking system: develop arrangement to Automated tracking system
using pesticides, seeds and inputs provide market data from MIS directly to all retailers and developed in designated GoK entity
Proportion of pesticide, seed and input sales importers participating in the program by end of year 1
and imports tracked in automated system

Initiative 5C: Establish program to protect the environment against pesticide and input misuse
Duration: 2 years Supporting Analysis: pp 87-88, 136 (AgStrat Baseline)
Rationale
Rationale Key
Key Counterparts
Counterparts
Experts help develop regulations
Protecting
Protecting use
use of of arable
arable land
land will
will lead
lead to
to increased
increased Donor
Donor Serve as partners in alliances
yields and quality of agriculture
yields and quality of agriculture goods goods Coordination
Coordination Provide funding and technical expertise for
Committee
Committee
Stringent bans
Stringent bans on on pesticides
pesticides andand seeds
seeds improves
improves automated tracking system
reputation
reputation of
of Kosovo’s
Kosovo’s ability
ability to
to produce
produce safe,
safe, high-
high- Provide input and enforce banned list
quality goods, thereby increasing exports
quality goods, thereby increasing exports and produced and produced
MAFRD
MAFRD Potentially house automated tracking
value
value system
Alliances
Alliances create
create solid
solid networks
networks for for farmers
farmers toto buy
buy
pesticides,
pesticides, seeds
seeds and and inputs
inputs from
from legal
legal and
and well-
well-
established Provide input and enforce banned list
established distributors
distributors Peja
Peja Institute
Institute Participate in extension program for farmers
Extension
Extension programs
programs increases
increases farmers’
farmers’ ability
ability to
to
develop
develop products
products thatthat meet
meet international
international food food safety
safety Serve as partners in alliances to provide
standards
standards Pesticide
Pesticide funding and extension services
Retailers
Retailers &
&
Tracking
Tracking system
system willwill help
help GoK
GoK entities
entities limit
limit the
the sale
sale and
and Suppliers
Provide sales information for tracking
distribution Suppliers system
distribution of
of illegal
illegal pesticides,
pesticides, seeds
seeds and and inputs
inputs that
that
could
could potentially
potentially destroy
destroy quality
quality of of arable
arable land
land inin
Kosovo
Kosovo Kosovo
Kosovo Provide import data for automated tracking
Customs
Customs system
High
High Level
Level Cost
Cost Estimate
Estimate

Technical Assistance: $864,000 (2(2 person
person for
for 22 years)
years)

Grants
Grants Program
Program to
to Certify
Certify Retailers
Retailers and Distributors: $225,000
and Distributors: $225,000 (15
(15 grants
grants at
at aa cost
cost of
of $15,000
$15,000 each)
each)

Conduct
Conduct Requirements
Requirements for
for Automated
Automated Tracking System (analysis,
Tracking System (analysis, design,
design, and
and develop):
develop): $500,000
$500,000
Total
Total Estimated
Estimated Costs
Costs :: $1,589,000
$1,589,000 for
for TA
TA and
and Grants
Grants Program
Program

Initiatives for trade access include developing institutional
initiatives to facilitate trade and developing interim response to
subsidies in neighboring countries
Initiatives to Increase Trade Access
1
Leveraging
Leveraging Small
Small A
A B
B
Farmers
Farmers Potential
Potential Develop
Develop institutional
institutional initiatives
initiatives to
to Develop
Develop and
and execute
execute interim
interim
facilitate
facilitate trade and build capacity
trade and build capacity inin response
response to subsidies
to subsidies inin
2
the
the Government
Government of of Kosovo
Kosovo neighboring
neighboring countries
countries
Demand-Driven
Demand-Driven
Focus
Focus Although Kosovo participates in A number of neighboring countries,
CEFTA and can exercise benefits employ subsidies that are likely in
3 under EU GSP and US GSP, violation of CEFTA requirements.

implementation has been The subsidies will continue to
Infrastructure
Infrastructure incomplete with all the agreements, damage Kosovo’s competitiveness
Capacity thereby hindering the growth in internationally and on the domestic
Capacity Building
Building trade. The initiative will consist of market if proper response
4 two main programs to address mechanisms are not implemented.
these issues: 1) creating a The primary goal of this initiative is
centralized, coordination body with to develop legitimate, effective
Transportation
Transportation representatives from government responses to subsidies through two
organizations (MTI, MEF, MFA, methods: 1) formulating remediation
5 Customs, PM’s Office, President’s plans by applying key CEFTA
Office, MAFRD), civil society provisions and 2) exercising the
Government
Government (Chamber of Commerce, Chamber right to enforce legitimate responses
Agriculture
Agriculture of Advocates) and the private sector to trade allowed under CEFTA.
Regulations to facilitate trade and 2) developing
Regulations
multiple capacity building efforts
6 using both national and regional
efforts.
Trade
Trade Access
Access
0

Trade Access
Initiative 6A: Develop institutional initiatives to facilitate trade and build capacity in the Government of Kosovo (GoK)
Duration: 5 years Supporting Analysis: pp 89-93, 137-138 (AgStrat Baseline), pp 43-51 (AgCLIR)

Although Kosovo participates in CEFTA and 1. Develop an inter-ministerial council to facilitate trade policy
can exercise benefits under EU GSP and US a. Identify representatives from government organizations (MTI, MEF, MFA, Customs, PM’s Office,
GSP, implementation has been incomplete with President’s Office, MAFRD), civil society (Chamber of Commerce, Chamber of Advocates) and the
all the agreements, thereby hindering the private sector
growth in trade. Implementation issues stem b. Develop rules of order, mission, bylaws and administration of meetings
from two primary reasons: 1) no central body c. Define and designate leadership team, including roles, responsibilities, decision rights and plan for
exists to coordinate trade facilitation and council to be housed in the PM’s office
examine trade issues on an economy-wide d. Identify sources of funding and timeline; initial finding could come from donor support with transition
(rather than sector specific) basis and 2) key to PM’s office for sustainability
GoK trade entities, such as the Department of e. Establish core "Rapid Response team“ which would include 5-6 key players in trade and at least one
Trade (MTI), Kosovo Customs, Dept of from private sector. Rapid response team would always be available to take immediate action on
Bilateral Affairs (MFA), Office of the President emerging trade issues.
and KFVA, lack the skills or resources to 2. Develop multi-pronged capacity building effort in the GoK
negotiate effectively with trade partners. a. Assess skills sets of all employees involved in trade facilitation at Department of Trade, Kosovo
Customs, Department of Bilateral Affairs (MFA), Office of the President and KFVA to determine gaps
The initiative will consist of two main programs
b. Design national capacity building plan, including training, technical assistance and workshops, to 1)
to address these issues: 1) creating a
strengthen trade facilitation 2) improve implementation of current trade agreements and 3) develop
centralized, coordination body among the GoK,
process to accede to the WTO 4) prepare them for negotiations for future trade agreements
civil society and private sector to facilitate
c. Determine regional capacity building plan, including initiatives to participate in regional seminars with
trade and 2) developing multiple capacity
neighboring countries and exchange programs with trade officials in other governments
building efforts using both national and regional
d. Work with other donors to determine cost, funding sources and timeline; pinpoint partners to
efforts.
implement national and regional capacity building plans
e. Launch capacity building efforts and monitor effectiveness; make changes as necessary

Increase in exports of agriculture goods to Lack of participation in inter-ministerial council: make Execution of all preferential trade
CEFTA partners participants accountable for roles in the rules of order, also regimes under CEFTA with Albania
Decrease in imports of agriculture goods from specifying methods of recourse for non-fulfillment of obligations and Croatia by end of year 2
CEFTA partners Absence of discernable improvement in trade facilitation: for Inter-ministerial council established
Increase in the benefits executed under organizations with continued weaknesses, developed targeted and responding to trade issues on a
preferential trade regimes technical assistance to address issues regular basis by end of year 1
Increase in bilateral agreements executed with
trade partners

Trade Access
Initiative 6A: Develop institutional initiatives to facilitate trade and build capacity in the Government of Kosovo
Duration: 5 years Supporting Analysis: pp 89-93, 137-138 (AgStrat Baseline), pp 43-51 (AgCLIR)
Rationale
Rationale Key
Key Counterparts
Counterparts
Increase
Increase in in exports
exports ofof agricultural
agricultural goods
goods under
under Provide initial funding and coordination
Donor
Donor
preferential trade regimes
preferential trade regimes support in set-up of inter-ministerial council
Coordination
Coordination Provide funding and technical support for
Strengthened government’s
Strengthened government’s trade trade capacity
capacity could
could Committee
Committee capacity building efforts
decrease
decrease the the number
number of of countries
countries that
that are
are currently
currently
blocking
blocking trade,
trade, thereby
thereby opening
opening up up new
new markets
markets forfor
exports
exports
MTI,
MTI, MEF,
MEF,
Inter-ministerial
Inter-ministerial body
body in in conjunction
conjunction withwith strengthened
strengthened MFA,
MFA, Representatives on inter-ministerial council
trade
trade capacity
capacity will
will enable
enable the the government
government to to respond
respond Customs,
Customs, Receive capacity building support on trade
more effectively to unfair trade practices
more effectively to unfair trade practices PM’s
PM’s Office,
Office, facilitation issues
Increased
Increased capacity
capacity toto negotiate
negotiate bi-lateral
bi-lateral agreements
agreements President’s
President’s Designate members of “Rapid Response”
with Office team
with trade
trade partners
partners Office
Strengthened
Strengthened capacity,
capacity, especially
especially at at Customs,
Customs, could
could
decrease
decrease the the number
number of of illegal
illegal imports
imports entering
entering the
the
MAFRD,
MAFRD,
country
country Chamber
Chamber of
of
Commerce,
Commerce, Representatives on inter-ministerial council
Chamber
Chamber of
of
Advocates
Advocates
High
High Level
Level Cost
Cost Estimate
Estimate

(1 person
person full
full time
time and
and 11 person
person half-time
half-time for
for 55 years)
years)
Total
Total Estimated
Estimated Costs
Costs :: $1,620,000
$1,620,000 for
for TA
TA

Trade Access
Initiative 6B: Develop and execute interim response to subsidies in neighboring countries (GoK)
Duration: 5 years Supporting Analysis: pp 94-99, 139 (AgStrat Baseline), pp 43-51 (AgCLIR)

A number of neighboring countries, including 1. Develop remediation plans to trade subsidies by exercising key provisions under CEFTA
Albania, Macedonia and Montenegro, employ a. With donor support and spearheaded by the Ministry of Trade & Industry, develop core team of
subsidies that are likely in violation of CEFTA experts to examine current trade subsidies applied by neighboring countries. Members will be
requirements. The subsidies will continue to appointed to analyze subsidies in specific sub-sectors (i.e. dairy, horticulture, livestock, fish)
damage Kosovo’s competitiveness b. Complete exhaustive analysis of current subsidies, in particular exercising Article 44 of the CEFTA
internationally and on the domestic market if agreement which requires that subsidies executed by countries be made public
proper response mechanisms are not c. Develop response plans and safeguard measures, including increased tariffs for goods where
implemented. At present, Kosovo is not domestic producers are suffering serious economic injury due to imports, as allowed under Article 23
exercising key CEFTA provisions, including of CEFTA
legitimate responses to subsidies and barriers d. Socialize response plan with inter-ministerial committee and secure buy-in
to trade, because they 1) lack the process and e. Launch response plan and communicate safeguard measures to neighboring countries as per
capacity and 2) do not exercise key information CEFTA disclosure requirements
gathering provisions. f. For areas where information was not sufficiently provided under CEFTA, examine possibility of
The primary goal of this initiative is to develop launching arbitration procedures based on time, cost, and potential economic impact
legitimate, effective responses to subsidies 2. Formulate and enforce legally-accepted trade responses to competitor subsidies under CEFTA
through two methods: 1) formulating a. Develop task force to examine imports of agriculture goods according to a variety of sectors (i.e.
remediation plans by enforcing CEFTA dairy, horticulture, livestock, fish).
provisions and 2) exercising the right to b. Task force launches effort to test products that could potentially violate basic international food
develop and enforce legally-accepted trade safety standards
responses allowed under CEFTA. c. Task force develops potential list of responses for implementation; socialize list with inter-ministerial
committee and secure buy-in
d. Draft communiqué detailing list of responses based on violations and submit to countries to increase
transparency
e. Develop and administer training to Customs officials at border posts for them to spot and refuse
imports violating food and safety standards
Increase in domestic sales of agriculture Lack of capacity to develop effective remediation plans: provide Remediation plan developed and
goods donor support in form of technical assistance to core team of approved by inter-ministerial council
Increase in exports of agriculture goods to experts by end of month 6
CEFTA countries Additional subsidies and barriers placed by neighboring List of potential responses
Decrease in imports of goods violating food countries: continued technical assistance provided by donors to developed and approved by inter-
safety standards from CEFTA countries ask for full disclosure of subsidies and provide support for ministerial council by end of year 1
arbitration

Trade Access
Initiative 6B: Develop and execute interim response to subsidies in neighboring countries
Duration: 5 years Supporting Analysis: pp 94-99, 139 (AgStrat Baseline), pp 43-51 (AgCLIR)
Rationale
Rationale Key
Key Counterparts
Counterparts
The
The decrease
decrease in in imports
imports from
from neighboring
countries will
will Provide technical assistance / funding for
Donor
Donor
increase competitiveness of goods on the
increase competitiveness of goods on the domestic domestic core team in developing remediation plan
Coordination
Coordination
market
market and to assist task force in developing
Committee
Committee legitimate responses to subsidies
Potential
Potential for
for neighboring
countries to
to decrease
decrease
subsidies
subsidies if Kosovo appears to be a more credible
if Kosovo appears to be a more credible
trading Spearhead effort to develop remediation
trading partner.
partner. Could
Could potentially
potentially lead
lead to
to an
an increase
increase in
in Government
Government plan and develop legitimate responses to
exports
exports of
of Kosovo
Kosovo subsidies
Decrease
Decrease thethe number
number of of illegal
illegal and
and unsafe
unsafe agriculture
agriculture
good entering the market
good entering the market
Review remediation plan and list of potential
Sector-focuses
Sector-focuses taskforce
taskforce will
will ensure
ensure that
that all
all areas
areas of
of Inter-
Inter- trade responses; provide final approval
agriculture
agriculture are
are properly
properly examined
examined for for subsidies
subsidies andand ministerial
ministerial Oversee efforts to enforce remediation plan
responses Committee
responses are are developed
developed Committee and enforce legitimate responses
Kosovo Receive training and exercise right to refuse

Kosovo
Customs goods that violate food safety standards in
Customs
Kosovo
High
High Level
Level Cost
Cost Estimate
Estimate

(1 person
person full
full time
time and
and 11 person
person half-time
half-time for
for 55 years)
years)
Total
Total Estimated
Estimated Costs
Costs :: $1,620,000
$1,620,000 for
for TA
TA

Table of Contents

– Overview
268
The potential impact of the agriculture reforms were developed
using two approaches: benchmark-based and initiative-focused
Approaches to Project Potential Impact on Kosovo’s Agriculture Sector
Purpose: Identify target countries whose current agriculture performance

will serve to project Kosovo’s agriculture performance in 5 and 10 years
Methodology: Top down approach that compares Kosovo’s agriculture
Benchmark-
Benchmark- performance to selected regional and best practice benchmark countries
Based
Based along agriculture metrics including agriculture production, exports, full-time
Approach
Approach employment, and yield
Output: Estimates for Kosovo’s increase in agriculture production,
increase in agriculture exports, and additional agriculture jobs created by
year 5 and year 10
Purpose: Quantify the impact to Kosovo’s agriculture sector of

implementing the 21 recommended initiatives
Methodology: Bottom up approach that calculates the monetized value
Initiative-
Initiative-
Focused and return on investment (ROI) for each recommended initiative designed
Focused
Approach
Approach to develop the diversified crop base and address Kosovo’s challenges in
the agriculture sector
Output: Value and ROI for each initiative and overall value and ROI for all
initiatives

269
Benchmark-Based Approach
We evaluated a number of different benchmark countries along key

agriculture, export and employment statistics…
Key Agriculture Statistics for Benchmark Countries
Kosovo
Kosovo Macedonia
Macedonia Albania
Albania Croatia
Croatia Slovenia
Slovenia Slovakia
Slovakia Poland
Poland Italy
Italy
Agricultural
Agricultural
Production
Production (€)
(€) 228M 640M 616M 1,849M 637M 1,637M 14,503M 35,419M
Agricultural
Agricultural
Production
Production (MT)
(MT) 0.5M 1.5M 1.4M 3.3M 0.9M 3.2M 34.9M 51.5M
Agricultural
Agricultural
Employment
Employment 90.8K 320.5K 5,938.4K 515.6K 207.7K 217.7K 5,093.5K 1,938.1K
(FTEs)
(FTEs)
Export
Export Value
Value (€)
(€) 4.4M 69.6M 3.2M 106.5M 48.1M 271.2M 1,444.4M 4,285.5M
Exports
Exports as
as %
% of
of
Production
Production 1.9% 10.9% 0.5% 5.8% 7.6% 16.6% 10.0% 12.1%
Yield
Yield (MT/ha)
(MT/ha) 20 25.6 33.4 21.9 36.1 19.0 33.7 45.1
Value
Value (€/MT)
(€/MT) N/A 1 433 430 569 729 507 416 688
Cropping
Cropping
Intensity
Intensity (area
(area 0.48 0.48 0.35 0.61 0.7 0.6 0.74 0.74
hvstd
hvstd // ag
ag land)
land)
Note: In order to compare across countries and data sources, looked at cereals, fruit and vegetables commodities only; Used 2007 data for all except agricultural land, which was 2005
Note (1) : Price data for Kosovo not provided
Source: FAOSTAT, ILO, CIA factbook, TradeMap, WDI for agricultural land (2005), Statistics Office of Kosovo, Customs Office of Kosovo, BAH Analysis 270
…and selected Macedonia and Slovenia to serve as proxies for 5-

year and 10-year goals respectively
Primary Selection Criteria for 5 & 10 Year Goals
11 Higher Yield 22 Exports a Higher Proportion 33 Higher Value of Goods

(Metric Tons / Ha) of Production (%) (Euros / Metric Tons)
36.1 10.9% 729
25.6 7.6%
433
20.0
1.9%
N/A 1
Kosovo Macedonia Slovenia Kosovo Macedonia Slovenia Kosovo Macedonia Slovenia
Note: In order to compare across countries and data sources, looked at cereals, fruit and vegetables commodities only; Used 2007 for data shown
Note (1) : Price data for Kosovo not provided
Source: FAOSTAT, TradeMap, Statistics Office of Kosovo, Customs Office of Kosovo, BAH Analysis 271
Kosovo has the potential to increase production by €798M, create

151K more jobs and augment exports by €73.2M by 2020…
Impact to Kosovo’s Agriculture Sector: Five and Ten Year Projections
Five & Ten Year Production Potential Five & Ten Year Employment Potential (1) Five & Ten Year Export Potential
(Euros) (Number of FTEs) (Euros)
+798M +73.2M
+151K
1,026M 77.6M
242,212
+39K +27.7M
129,742 32.1M
+67M
295M
90,750
228M
4.4M
2010 2015 2020 2010 2015 2020 2010 2015 2020
CAGR 5.3% 16.2% CAGR 7.4% 10.3% CAGR 48.8% 33.2%
Note: In order to compare across countries and data sources, looked at cereals, fruit and vegetables commodities only; Used 2007 for data shown
Note (1) : Employment figures based on employment growth rates of Macedonia & Slovenia, and discounted by a negative growth rate in ag employment for Slovenia in 2015 and for Italy in 2020
Source: FAOSTAT, TradeMap, Statistics Office of Kosovo, Customs Office of Kosovo, BAH Analysis 272
…however, Kosovo may need to increase exports by a larger

amount to support target production levels
Component Marginal Analysis to Absorb Projected Production
(2010- 2020, in Euros)
376M 1,026M
+195%
363M
Cumulative
Effect
532%
+188%
50M
228M 35M 44M +26%
-15% +23%
Current Imports (decrease of Consumption Growth Consumption Growth Consumption Growth Additional Exports Target Production
Consumption (2010) 50%) Due To Larger Due To Inflation Due To Greater Per Needed To Support level (2020)
Population Capita Consumption Target Production
Level (2020)
Note : Assumers that 50% vegetable, fruits and cereal imports will decrease; 1.775% population growth rate (Statistical Office of Kosovo); assumes 2% inflation growth; growth rate for per capita
increase in consumption: 10% (2004-2008)
Source: BAH Analysis; Statistical Office of Kosovo
273
Initiative-Focused Approach
Total estimated costs for all initiatives is €42.8M over 5 years, with
crop diversification comprising 28% of total costs
Cost Breakdown by Area and Initiative
Cost Breakdown for Recommendation Areas Cost Breakdown by Initiative

(Percentage of Total) (Euros)
11.9M 10.2M 3M 9.5M 3.4M 2.4M 2.3M

Trade Access, 5% 7%
Gov’t Ag Regulations, 6% 19% 7%
Transportation, 8% 38% 36%

Crop 46% 50%
Diversification
28%
100%
41%
Infrastructure 20% 29%
Capacity
Development 86% 17%
Leveraging
22% Small Farmers
8%
Potential
24% 21%
37% 50%
35% 32%
Demand Driven Focus, 7% 21%
Total:
Total: €42.8M
€42.8M
.1%
Crop Leveraging SM Demand Driven Infrastructure Transportation Ag Regulations Trade
Diversification Potential Focus
Initiative A Initiative C
Initiative B Initiative D
274
The annualized cost of implementing the recommended initiatives

is €8.6M, which represents 52% of current annualized donor
spending on agriculture
AgStrat Implementation Costs vs. Current Annualized
Donor Spending on Agriculture 1 (Euros)
52%
Comments
Comments
16.5M
Given
Given the
the current
current funding
funding of
of approximately
approximately
European Bilaterals €€ 15-18M,
15-18M, Kosovo
Kosovo isis well-positioned
well-positioned toto
15%
undertake
undertake substantial
substantial reforms
reforms in
in agriculture
agriculture
–– IfIf Kosovo
Kosovo continued
continued toto receive
receive the
the
World Bank
27% same funding annually,
same funding annually,
approximately
approximately 52% 52% would
would cover
cover allall
21 initiatives in the Agriculture
21 initiatives in the Agriculture
8.6M USAID Strategy.
Strategy. The The difference
difference could
could bebe
16% used
used to to support
support other
other priorities
priorities in
in
agriculture
agriculture
European
–– With
With increased
increased donor
donor coordination,
coordination,
Commission efficiency
efficiency and cost-savings could
and cost-savings could be
be
42% realized
realized
Annualized AgStrat Current Annualized Spending-

Implementation Costs 2009
Note (1): Spending provided as estimated range of €15-18M, but €16.5 figure used for purposes of comparative analysis
Source: Interviews, Slide 58 of AgStrat Interim Deliverable, BAH Analysis 275
At an aggregate level, implementation of all the initiatives are

expected to generate a conservative ROI of 6.06
Value Breakdown by Area and Initiative
Return on Investment of New Initiatives 1 (Euros)
Value Breakdown by Initiative (Euros)
ROI: 6.06
259M 76.9M 92.2M 17.6M 30.5M 14.2M 15.9M 12.2M

Trade, 5% 4%
13%
Ag Regulations, 6% 35%
Transport, 5%
34%
38%
Infrastructure 95%
12%
DD Focus, 7% 100% 25% 79%
16%
57%
Leveraging
Small Farmers 22%
Potential 24%
58%
35%
26% 10.5%
26% 28%
42.8M Crop 10.5%
Diversification 4% 5%
30% Crop Leveraging SM Demand Driven Infrastructure Transportation Ag Regulations Trade
Diversification Potential Focus
Initiative A Initiative C
Initiative B Initiative D
5-Year Projected Cost Projected Value Total
Note (1) : ROI assumptions conservative because 1) calculation based on 1 iteration for total costs over 5 years; 2) value created from production based on figures for fruits, vegetables and cereals
Source: BAH Analysis 276
Institutional and infrastructure-related initiatives tend fall in lower

ROI ranges because of the focus on strengthening the current
state rather than producing direct value
Value Breakdown by Area and Initiative
1A: Improve business viability and coordination of associations
1B: Introduce and strengthen extension system to promote traditional
crops and improve diversity Comments
Comments
1C: Increase and diversify types of financial products available to
Although
Although somesome initiatives
initiatives have
have
smallholder farmers comparatively
comparatively smaller ROI, they
smaller ROI, they can
can still
still
2A: Develop and launch donor coordination activities for agriculture produce significant value for the agriculture
ROI
ROI greater
greater produce significant value for the agriculture
2C: Improve capacity of collection centers, pack houses and cold storage sector
than
than 10
10 sector
4B: Develop air perishables plan and remove market and regulatory
obstacles –– InIn general,
general, initiatives
initiatives that
that are
are
5C: Establish program to protect the environment against pesticide smaller
smaller in scope can be linked more
in scope can be linked more
misuse readily
readily toto aa short/
short/ medium-term,
medium-term,
6B: Develop and execute interim response to subsidies in neighboring quantifiable
quantifiable returns
returns
countries –– Large-scale
Large-scale projects
projects tend
tend toto take
take
0: Crop Diversification Initiative more
more time
time toto realize
realize return
return
1D: Improve cadastral system and test effectiveness of pilot land Overall,
Overall, the
the ROI
ROI for for infrastructure
infrastructure andand
ROI
ROI between
between consolidation program institutional projects tend to smaller
institutional projects tend to smaller
55 and
and 10
10 3B: Increase use of small-scale irrigation systems because:
because:
3D: Assess energy requirements for agriculture –– Projects
Projects tend
tend to to focus
focus onon
strengthening
strengthening currentcurrent state
state and
and
2B: Create market intelligence system and communication plan services rather than producing
services rather than producing
2D: Establish centralized organization to oversee marketing & export additional
additional direct
direct value
value
promotion of agriculture goods
3A: Rehabilitate the large-scale irrigation system in Kosovo
–– InIn the case of greenhouse, ROI
the case of greenhouse, ROI was
was
3C: Support development of greenhouses
determined
determined based based on on production
production
4A: Prioritize and develop rural roads projects using cost-benefit analysis and
value
value ofof traditional
traditional crops
crops rather
rather than
than
ROI
ROI less
less the
PPPs the recommended, higher value
recommended, higher value
than
than 55 crop
4C: Analyze and communicate cost advantages of the new Tirana highway crop mix
mix
5A: Establish a centralized, strengthened organizational model for food safety
and quality control
5B: Help private quality control labs to achieve international certification
6A: Develop institutional initiatives to facilitate trade and build capacity in the
Government of Kosovo 277
Sources : BAH Analysis
The initiative-focused analysis accounts for 86% of the total value
identified by the 2015 estimate of Kosovo’s potential from the
benchmark-based approach
Overview of Value Created by Recommended AgStrat Initiatives
Projected Value Creation: Initiative vs.
Benchmark Approaches (Euros)
86%
301M Comments
Comments
Initiative
Initiative focused
focused analysis
analysis identifies
identifies 86%
86% of
of
the
the value
value projected
projected from
from benchmarks.
benchmarks. The The
initiative
initiative based
based analysis
analysis is
is inherently
inherently
conservative
conservative because
because
–– The
The projected
projected value
value of
of the
the initiatives
initiatives
259M is
is based only on indicators that
based only on indicators that can
can
be readily monetized
be readily monetized
–– Parallel
Parallel efforts
efforts in
in other
other areas
areas related
related
to
to agriculture,
agriculture, such
such as as investor
investor
protection,
protection, education,
education, social
social services
services
and
and contract
contract enforcement
enforcement will will help
help to
to
provide
provide additional
additional value
value inin helping
helping
Kosovo to meet its overall potential
Kosovo to meet its overall potential
Initiative-Focused Benchmark-Based
Approach Approach

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Final Deliverable

Kosovo Agricultural Opportunities Strategy

 Baseline Analysis of Agriculture Sector……………………………..…………………..7

 Recommendations to Improve Kosovo’s Agriculture Sector…......………………...142

 Baseline Analysis of Agriculture Sector

 Recommendations to Improve Kosovo’s Agriculture Sector

Source : BAH Analysis

 Baseline Analysis of Agriculture Sector

 Recommendations to Improve Kosovo’s Agriculture Sector

 Market Definition and Methodology

 Kosovo Agricultural Commodities Performance

 Crop-specific Performance and Market Assessment

We started our analysis by looking at the “universe” of agricultural

HS Chapter Name HS Chapter Name

02 Meat & Edible Meat Offal 14 Vegetable Plaiting Materials

03 Fish & Crustaceans 15 Animal or Vegetable Fats, Oils & Waxes

Over 61% of the total value for agriculture commodities exported

Note: Other includes the following HS chapters: 23,21,17,15,3,18,24

We will focus our baseline analysis on these primary crops

Note: (*)HS Code 6 also includes cut flowers

The baseline will analyze different aspects of production,

Source : BAH Analysis

 Market Definition and Methodology

 Kosovo Agricultural Commodities Performance

 Crop-specific Performance and Market Assessment

4.0M 2.9M 26% Cereals (includes processed cereals) 200.2%

2004 2005 2006 2007 2008

Kosovo has experienced a 45.5% growth in agriculture exports,

Kosovo Macedonia Serbia Croatia Italy Spain

11.2M 142M 622.9M 205.1M 12,221.7M 12,170M

CAGR 45.5% 21.2% 17%* 21.7% 8.6% 3%

Albania and Macedonia account for over 50% of Kosovo’s

2.4M Processed Fruits and

2004 2005 2006 2007 2008

Export of Kosovo’s five major agricultural commodities are

HS070960 - Peppers HS071420/HS070190 HS081040 - HS080240 - Chestnuts HS070959-

Other Montenegro Other

15.5% 27.7% Montenegro 27.3% Italy

The top five primary crops represented a larger share of exported

Kosovo Peppers, potatoes, blueberries,

72.1% Italy Coffee, grapes, apples, rice, live

Top 5 Exported Commodities Remaining Exported Commodities

2004 2005 2006 2007 2008

The agriculture commodities imported from the top ten importing

125.8M 26.6% Other 13.4%

319.2M 17.4M 3.7% Germany 36.7%

2004 2005 2006 2007 2008

For a representative basket of crops*, the rise in export value from

The large increase in price is most

…while increased export volumes were largely the result of an

+41.3 (6%) -39.2 (-5%) -64.2 (-44%) +16.3 (227%)

Production - Consumption, Feed, + Imports = Exports

Production increase was primarily driven by growth in wheat,

Wheat 40.3% 2.3%

50,000 Watermelon 3.4% 22.5%

Wheat Potato Maize Pepper Watermelon

Tomato 14.4% -8.6%

5,000 Pepper 8.2% -2.5%

Tomato Apples Maize Melons Pepper

1,500 Potato 80.1% 47.0%

6,000 Pepper 8.8% 185.3%

Tomato 2.1% 267.2%

Potato Pepper Onions/Shallots Tomatoes Chestnuts

Baseline Analysis of Agriculture Sector……………………………..…………………..7

Recommendations to Improve Kosovo’s Agriculture Sector…......………………...142

Baseline Analysis of Agriculture Sector

Recommendations to Improve Kosovo’s Agriculture Sector

Baseline Analysis of Agriculture Sector

Recommendations to Improve Kosovo’s Agriculture Sector

Market Definition and Methodology

Kosovo Agricultural Commodities Performance

Crop-specific Performance and Market Assessment

Market Definition and Methodology

Kosovo Agricultural Commodities Performance

Crop-specific Performance and Market Assessment

Portion of arable land cultivated

Price per ton (Euros/ton)

Market Definition and Methodology

Kosovo Agricultural Commodities Performance

Crop-specific Performance and Market Assessment

Baseline Analysis of Agriculture Sector

Recommendations to Improve Kosovo’s Agriculture Sector