Impact of Agricultural Policy in Development of Agriculture Sector Within the Period of 1999-2015 in Kosovo

Agriculture sector represents one of the oldest economic branches, although the economics of agriculture represents a relatively new branch. In this regard the aim of this paper is to reflect on the issue based on sustainable and comparative arguments; furthermore, the paper aims to identify current disadvantage as well as opportunities for more sustainable agricultural development on the impact of subsidized fiscal policies in the future. Moreover, the effect of agricultural policy instruments on development of agriculture and agricultural income is likewise one of the purposes of this research. Given that agricultural policies play key role for the development of the poor countries, this has lead Kosovo towered listing agriculture development policies among the highest priorities of the political agendas. After the war, in Kosovo, agricultural sector has been neglected in terms of priorities in national development strategies, as well as in financial terms, since there had not been sufficient financial support provided. However, after a few years, recognizing the need of development of the sector as of priorities on poverty reduction, as well as on stimulation of the economic development, the sector has begun to be engaged in the national agendas. Meantime, this represents fundamental message of the World Bank, presented in the World Development Report (World Bank, 2008). In the case of Africa, the members of African Union agreed to allocate at least 10% of their budget to agriculture and rural development sector, and recently the G8 has scheduled to provide 1 billion Euros, as a support to African agriculture investments. In 2007, in Kosovo, grant scheme and subsidize (direct payments), has been accessed to the Agriculture and Rural Development Plan of 2007 -2013. Direct and indirect effects of these instruments on agricultural income / farms are poorly documented. This support was increased by the inclusion of other sectors and cultures until 2014, which includes the following measures: 1.Measure 101:“Investment on physical assets of agricultural economies ", 2. Measure 103:Investments in physical assets on processing and marketing the agricultural products, 3. Measures 302: Diversification of farms and business development. There is a lack of proper research, when the direct effects of the supportive measures on the agriculture and economic development are concerned.


Introduction
Agriculture traditionally is one of the leading sectors in the local economy and the sector plays a key role in socio-economic development of the country as a result of social role in providing food and ensuring stable revenue.Kosovo is rich with high quality land agricultural.Agriculture is a key sector in the economy of Kosovo, but it declined before and after the last war (1990-1999) .With the decline of agricultural production, agro-food trade deficit of Kosovo has deepened.However, they are made continuous efforts both by the government and donors as well as from domestic agricultural producers that despite the difficulties and obstacles are numerous and competition unequal countries in the region to lead successful businesses, reaching to export their products to neighboring countries and a small amount in the EU.
Average agricultural land per person in Kosovo is very small and is around 0.15-0.18hectares, which is less than half the EU average.Fragmentation and the small size of agricultural parcels is a problem continuing to support sustainable agricultural production.The situation is further aggravated by the continuous conversion of agricultural land into residential plots or the transformation of their industrial areas.
The agricultural sector contributes 11.9 % to GDP 1 and employs roughly estimated that 4.6 % of the total competitive employee .Kosovo has potential in the horticulture sector, namely, production of fruits and vegetables, as well as for products livestock products.Local request horticultural and livestock products are expected to increase, since the purchasing power has increased.
Over the last decade, demand for horticultural products has increased more than in any other category of food.Although there is great potential for growth and expansion of productivity in agriculture, the sector faces with the several challenges which are being reduced quantity and quality of agricultural production and reducing competition in local markets and agriculture debts.Agriculture sector continues to be one of the most important sectors in the economy of Kosovo.Kosovo has been but will be for many years to come dominated by activities in the agricultural sector.Food costs take around 64% of household spending, when broken down to bread and cereals (19%), milk, cheese and eggs (17%), meat (15%) and vegetables (13%).Imports exceed exports of agricultural farmland with a significant margin.Kosovo has a comparative advantage in the fields, orchards and plants from gardening, as well as livestock.While these have higher production and profit potential, farmers continue to produce low yield production, such as grains for the safety reasons.Overall the small farmers in Kosovo have low efficiency.
According to various studies only average farmer operates a third generation.Four main sources of inefficiency are: 1.The fragmentation of the land and its fragmentation into small plots; 2. Lack of use of modern production techniques; 3. Irrigation water and 4. Limited support services.
Only a small number of farmers support services address to receive information and advice on seeds , production , pest control , livestock breeding and limited access to financing by making it more difficult and increasing the pharm.

Agricultural and rural policies in Kosovo in recent years
During these years of transition, Kosovo just like most of the Central and Eastern Europe countries in transition, characterized by major of social, economic and institutional reforms.In this context of dramatic and rapid, almost all of these countries have gone through a visioning process of their development is accompanied somewhere less somewhere more, with a time of instability in the strategic documents formulated.By analysis of the characteristics and evolution of development policy approaches provided in these strategic documents in terms of rural development , we can distinguish three main periods : (I ) the period from 1999 to 2007 ; ( II ) the period from 2007 to 2013 and (iii ) the period from 2013 until today.
One of the first strategic document is "Plan for Agriculture and Rural Development 2007-13" document which was adopted by the government in April 2007 and updated in 2009-2013 2 , including a game with great measures, especially the inclusion of direct support, which corresponds strongly with measures of Pillar I of the Common Agricultural Policy of the EU (CAP).
Given that the main priorities of that time were considered: introduction efficiency of agricultural land, increase production and guarantee of sufficient quantities of food for the rural population, the main orientations of strategic development policies recommended in this document pertaining to: improve supply farmers with agricultural inputs and development of networks of traders inputs, the introduction of more productive varieties, improving irrigation system and the establishment of agricultural extension system to improve the technical and managerial knowledge to farmers.
 Plan for Agriculture and Rural Development (ARDP 2007-13) 1 had identified these overall objectives for agro -rural development in Kosovo, such as:  Additional income for farmers and rural dwellers, leading to improved living standards and working conditions in rural areas;  Improving the efficiency and competitiveness of agricultural primary production, in order to achieve import substitution and take advantage of export markets;  Improving the processing and marketing of agricultural and forest products, with increased efficiency and competitiveness;  Improving the quality and hygiene standards on the farm / factory;  Rural sustainable development and improving the quality of life ( including infrastructure) through promotion of farming and other economic activities , which are in harmony with the environment.

Material and Methods
The research was done in Kosovo in year 2015, based on qualitative and quantitative data collected from the direct beneficiaries and desk research, aimed to address the direct impact of grants and subsides provided by Ministry of Agriculture and Rural development in Agriculture sector .The quantitative data where collected in six main sectors supported by government, by organizing the six focus groups discussions such as: vegetable producers, fruit producers, grape producers, beekeeping, milk producers and meet producers.Questions that were addressed in these focus groups are: Question 1: How well did MAFRD publicize the availability of the grant aid?Question 2: How well did ADA organise the call for applications?Question 3: Did ADA provide sufficient guidance on the preparation of applications?Question 4: Were the applications processed efficiently?Question 5.To what extent have payment claims been efficiently processed?Question 6; did the eligibility criteria for applicants target the grant aid at those who had the potential to become competitive commercial farms and needed the grant aid to achieve that potential?Question7: Did the project selection criteria channel the scarce funds to projects with the most physical potential and need of grant aid?Question 8: Did the list of eligible investments include all those needed to achieve the physical potential of the targeted farms/ food processing businesses?Question 9: Was grant aid the most effective way of motivating farmers/food processors to invest in restructuring/modernisation?Question10: Was the level of grant aid appropriate?Also for the qualitative data the very deep desk research was done, studing almost documents related to topic: strategies, legislation, researchs available both locally and internationally, and also compared to the experiences of other countries in this field.

Results of research
As a result of quantitative research it emerges that the Kosovo government has had and continues to lack the human and institutional capacities to implement and monitor the subsisdies and grants for the agriculture and rural development.Even the new structure was established for the taking over this activities such as :Agency for Agricultural Development (ADA)payment uni .According to the obtained results from focus groups, there were numerous irregularities starting form beginning the announcement notice, terms of declaration, information, support of the officials through advice and consultations, dissemination of subsisdie until to the implementation and monitotrimi process.
According to the fact that agricultural policy represents a volume of the rules of laws on domestic agriculture and imports of agricultural products.Governments are usually implementing agricultural policies to achieve specific income in local market of agricultural products.They can be eg a guaranteed volume of supply, price stability, and quality product, selection of products, land use or employment.Common Agriculture Policy is a system of programs and agriculture in the European Union1.It consists of a series of measures, some of which refer to rural development.
It is important that funding be provided for those measures in order to contribute towards the realization of the planned objectives to the common agricultural policy.While these measures have certain elements in common, but also differ in a number of significant respects, their financing should be combined within a framework of rules, which allow different treatment when it feels such a need.In order to receipt of these differences into account would create two types of European Funds for Agriculture, labeled as the European Guarantee Fund for Agriculture to finance market measures and the European Agricultural Fund for Rural Development (EuropeanAgricultural Fund for Rural Development -EAFRD) to finance development programs rural.I that was established in 1963 to form the basis for the European Programme for Food and Agriculture.
The following description presents the scheme of grants distributed across from the Ministry of Agriculture, Forestry and Rural Development in 20152

Conclusion and Recommendations
The Ministry of Agriculture has not defined the clear indicators to measure the results and effects on the economic development impact of the program for financial support in agriculture and rural development programs.This conclusion is the result of the fact that so far only monitoring system is the volume of funds distributed and subsectors which are subsidized.But it must take into account the fact that the increased amount of funds compared with last year distributed in a sector it is not an indicator, that sector it has become more efficient or profitable.Rather it can be easily seen where volume growth of subsidies in some sectors has generated even less production.The impact of fiscal policy on the development of the agrarian sector turns out to be more significant in the economy of developing countries as well as in countries with advanced economy.But, unlike many countries, including Kosovo distribution of subsidies and grants in Kosovo on behalf of a sustainable fiscal policy, being implemented in a very disproportionate way.As such it continues to be largely variable and unstable and subsidies are allocated on a systematic basis which represents unspecified uncertainty for farmers So we can conclude that subsidies are not the most efficient public resource to generate a sustainable agricultural growth and efficiency, the importance was lost because of how they are used during these years.Therefore the Ministry Agriculture, Forestry and Rural Deveopment should be accurately determined purpose and expected outcomes of various measures to support the Program directly in agriculture as well as the Program for rural development.This Implies two reasons: that the national strategy for development of the agricultural sector has failed to foresee and identify key sectors for development of sustainable economic development of the country, with the sector of agriculture, second, that subsidies and grants benificiary have failed to understand essentially importance and destination of these support.
Based on these data and others not mentioned here, can be concluded to be a redefinition of supported for this sector, the sector start to be supported since 2006 until today, and the support was increased rappidly and a trend of import of agricultural products overall imports was almost the same in the trade exchange of agricultural products, we have consistently observed that a slight export growth for the years 2008-2014.The largest increase in export value of agricultural products was in 2014 (39 mil.€) 1 .Also, the value of imports has increased steadily.The highest point of the value of imports was in 2014 (616 mil.), it means that the support does not show results until now.

Recommanditions
There are required further scientific research in this area, and the establishment of a system of external monitoring and evaluation.In order to know how the expenditure of funds effects which however are not to be underestimated and it is a trend positive high in recent years It should also be noted that there will remain uncontested need for continued analysis this problem in more detailed and more concrete to raised in light other additional data which will not only serve for comparisons between different periods, but rather It would have been an important guidance to design of fiscal policies, in particular those policies which target the agrarian sector.

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Creation of employment opportunities in rural areas, particularly through rural diversification and alignment of Kosovo's agriculture with the EU 2 .This document continued to be the main document of development interventions by 2015 even after drafting the Strategy of Development of Agriculture (called "Plan for Agriculture and Rural Development 2014-2020 ") which has not yet been approved by the government of Kosovo .Plan for Agriculture and Rural development Plan 2014 -2020 " 3 provides mediumterm duration and aims to set the foundations for a sustainable agricultural sector.