Radovan Karadzic, Sarajevo is not your city, and you have no right to say that it is, just as you do not have the right to say in public, even if it’s in court, that someone has dug up bones around Bosnia and brought them to Srebrenica to make a fake graveyard. This is insulting.
Agriculture Growth Strangled by ‘Unaffordable’ Loans
Pristina | 24 December 2009 | Lavdim Hamidi
Radisheve village
Interest rates for agricultural loans in Kosovo are twice as high as those offered for other businesses and mortgage rates. Experts claim the absence of affordable credit is preventing one of the country’s most promising sectors from expanding.
Kadri Krasniqi hoped to build a farm for himself and his ten family members in Lipjan, on the southern outskirts of Prishtina, to secure their financial future. But after numerous attempts to find an affordable loan, he gave up.
“I had planned to invest more than 10,000 euro in the agricultural sector, but the interest rates are too high – that’s why I had to drop the idea,” Krasniqi told Balkan Insight.
Naser Rugova, an MP and chairman of the committee for agriculture, called on banks to cut their rates, adding that the agricultural sector had been left by the wayside.
“Banks have to change their approach toward agricultural loans, since in every other country this sector is supported by the banking sector, while in Kosovo it is the opposite,” he said.
He added that previously 65 per cent of Kosovo’s population lived from agriculture, but that this figure was dropping.
“Until now, the lending policies for the agricultural sector have not been favorable, and now it’s time to draft a concrete strategy for supporting this sector,” added Rugova.
According to the latest edition of ‘Bankometer’ published by the Institute for Advanced Studies, GAP, interest rates for agro-loans in Kosovo are between 15 and 24 per cent, while other businesses are charged between 12 and 15.6 per cent. Mortgages are even lower, at between 8.9 and 12 per cent.
High rates have resulted in agricultural loans representing just 4 per cent of the total credit issued by commercial banks, with manufacturing taking up close to 21 per cent and the service sector 75 per cent.
According to the European Commission’s 2009 Progress Report on Kosovo, despite some progress, the agricultural sector was still struggling, in part because of a lack of credit.
It wrote: “Kosovo’s agriculture continues to suffer from fragmented land tenure, lax control of the use of arable land for construction, non-transparent valuation and pricing of agricultural land (for both sale and lease), difficulties for farmers to access credit, and an outdated and inadequate land registration system.”
But a commercial bank officer, who asked not to be named, told Balkan Insight: “The rates are higher because the risk is higher.”
The leader of the Kosovo Alliance for Business, Agim Shahini, believes the agricultural sector needs far more attention than it currently receives as it is crucial for developing family businesses and Kosovo’s economy.
He said subsidies for this sector will create an opportunity to replace imported agricultural produce with homegrown goods.
He added that the agricultural sector was not a priority for Kosovo commercial banks, which is reflected in the high interest rates, whereas rates in the EU are around 2 to 3 per cent.
The governor of the Central Bank of Kosovo, Hashim Rexhepi, said that his institution cannot interfere with the interest rates of commercial banks.
He admitted that rates were higher in Kosovo compared to the EU and neighboring countries, but explained that at a meeting that he had with officials from the Government, they had defined steps for supporting the agricultural sector in Kosovo.
But he added that the relevant institutions for implementing those policies have not followed these plans through.
Officials from Kosovo’s Government told Balkan Insight that the budget for the Ministry of Agriculture was growing year on year.
The ministry in 2010 will have a budget of 12 million euro, while in 2008 it had 9 million euro.
