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FYR Macedonia: Agriculture Strengthening and Accession Project

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FYR Macedonia
Agriculture
Agriculture Strengthening and Accession Project

Overview

The World Bank supported Agriculture Strengthening and Accession Project (ASAP) supports FYR Macedonia in developing agricultural institutions in an EU compliant manner. Agriculture accounts for 16% of GDP and some 20% of employment in the country. The sector also plays a central role in the rural areas, where almost half of FYR Macedonia’s population lives. Sector performance over the last decade has been mixed, largely due to the dependency of the sector on different weather events, such as droughts and excessive rainfalls. In addition, the agri-food industry faces multitude constraints to competitiveness, including low levels of investment in farm technology and supply chains, as well as underdeveloped land and rural credit markets. Similar to the development in other countries in the region, increasing trade liberalization and modernization of the economy are transforming Macedonian agriculture. FYR Macedonia’s status as an EU Candidate Country imposes additional institutional and regulatory requirements.

Full Report—85 Pages
FYR Macedonia Country Partnership Strategy
—PDF, 2011-2014

Challenge

The agriculture sector plays an important role in FYR Macedonia’s economy through its contributions to GDP (agriculture accounts for 12% of GDP), employment, trade and the rural economy, with the country’s nearly half the population living in rural areas. About 49% of the total land area is agricultural land, split evenly between cultivable land and pastures. Of the cultivated land, about 80% is used by approximately 180,000 private family farms.

Though many of them are becoming increasingly commercially oriented, trade liberalization and modernization of the economy pose new challenges to the country’s agricultural sector. Opportunities that arise with increased trade are vast, but unless producers and agro-processors in the country become more competitive, it will be difficult for them to compete against foreign products, both on foreign and domestic markets. Current constraints to productivity and competitiveness include low use of quality inputs, such as seeds and fertilizers, limited use of technology, and dilapidated and poorly maintained irrigation systems. Lack of reliable irrigation makes farmers dependent on the weather which, in turn, discourages cultivation of high-value crops. Outdated equipment, the inability to meet quality and food safety standards, and poor marketing skills -- all impact the agro-food processors’ competitiveness.

Overcoming these constraints called for effective public sector actions that would facilitate the private sector investments through transparent, predictable policies and regulations and investment in public goods. FYR Macedonia’s status as an EU Candidate Country gives the country access to significant financial assistance for the sector, but it also imposes new institutional and regulatory requirements.


Approach


The government of Macedonia requested the World Bank’s assistance in addressing many of the challenges and constraints outlined above. Specifically, support was sought to strengthen the capacity of the Ministry of Agriculture, Forestry and Water Economy to support the agriculture sector, including improving its ability to formulate and implement effective policies and increase effectiveness of public expenditures in an EU-compliant manner.

In response to this request, the Agriculture Strengthening and Accession Project (ASAP), approved by the World Bank Board of Executive Directors in May 2007, was prepared to improve the delivery of government assistance to the agricultural sector in accordance with the European Union’s (EU’s) pre-accession requirements. The project provides technical and financial assistance to support agricultural growth and rural development while advancing the country’s broader strategic development goals of economic development and the EU accession. The project builds on the findings of the 2006 World Bank Study on Agriculture and EU Accession.

The project supports setting up the necessary institutional framework compliant with the EU accession requirements and to enable Macedonia’s access to the pre-accession assistance. In addition, ASAP finances activities that strengthen the capacity of the Veterinary Department to deliver services that help producers and agro-processors meet new food safety and quality standards. Lastly, in response to the Government’s request, ASAP supports the ongoing institutional reform of the irrigation sector, which was initiated under the previous World Bank Irrigation Restructuring and Rehabilitation Project.


Results


Increased capacity of the Ministry of Agriculture, Forestry and Water Economy in the delivery of the EU rural development funds under the EU Instrument for Pre-Accession Assistance for Rural Development (IPARD), managed through the Macedonian Paying Agency since December 2009. The conferral of management enables Macedonian farmers and agro-food processors to apply for IPARD grants to finance investments that will position them better to access EU markets and to become more competitive among other EU producers.

Reduction in the prevalence of veterinary diseases (brucellosis and tuberculosis), increased preparedness for disease outbreaks, enhanced food safety, and increased safeguarding measures for animal and public health through the individual identification and registration of animals.


Strengthened capacity of the Ministry of Agriculture, Forestry and Water Economy to ensure sustainability and improved delivery of irrigation and drainage services in the water sector. The project’s support to the water sector resulted in the establishment of Water Economies, Irrigation Water Communities, and Water User Associations. Recently, the Water Economies associations have undergone training to strengthen their capacity to deliver services and support the organization of the Irrigation Water Communities.



Voices


At the moment, we are far from producing crops by the EU standards, but with little help and financial assistance by the EU funds we are now receiving, we are getting there .

—Zlatko Georgievski, farm owner



Through the Agriculture Strengthening and Accession Project (ASAP), we have been able to help Macedonia make great strides towards EU accession in the agriculture sector by working closely together with the Macedonian Ministry of Agriculture, Forestry and Water Economy, and also coordinating with our colleagues in the EU Delegation. As a result, Macedonia has become a regional leader by achieving EU certification of its agricultural Paying Agency in record time, giving its farmers access to significant EU funds for agricultural modernization and rural employment creation. The project has also allowed Macedonia to improve its food safety system, and increase the sustainability of its irrigation system.


—William Sutton, World Bank Task Team Manager of the ASAP project

Toward the Future


Strengthened capacity of the Ministry of Agriculture, Forestry and Water Economy will help develop new effective rural development policies through systems which will support the analysis of the use and impact of agricultural support, including financing under IPARD. ASAP support to the Ministry of Agriculture, Forestry and Water Economy continues through the setting up of an Integrated Administration and Control System, including the Farm Registry and a Land Parcel Information System, the establishment of the Agriculture Information System, and the strengthening of the Agricultural Inspection Services. In addition, the project supports means to facilitate communication between the Ministry of Agriculture, Forestry and Water Economy’s headquarters and the Ministry’s regional offices, both through the upgrading of IT systems and through the refurbishment of several regional offices.

The cooperation between the World Bank and FYR. Macedonia expands through the Regional Program on Reducing Vulnerability to Climate Change in Agricultural Systems in Europe and Central Asia (ECA), which aims to better determine the potential impacts of climate change on the agricultural sectors of vulnerable ECA countries, and to provide practical recommendations on actions these countries can take to increase the resiliency of their farmers in the face of climate phenomena.

The objective of the program is to enhance the ability of ECA countries to mainstream climate change adaptation into agricultural policies, programs, and investments. This will be achieved by raising awareness of the threat, analyzing potential impacts and adaptation responses, and building capacity among country stakeholders with respect to climate change impact assessment and adaptation in the agricultural sector.

A key component of the program will be to undertake rigorous analysis and economic modeling of adaptation options, in combination with consultations of farmers, policymakers and researchers to assist with prioritization. Efforts will be made to identify “win-win-win” adaptation options that have benefits for adaptation, mitigation, and the local economy.

The program will initially be carried out in four pilot countries—Albania, F.Y.R Macedonia, Moldova, and Uzbekistan. These countries were chosen because: (i) they are in the southern band of the ECA Region that is expected to have the greatest negative agricultural impacts as a result of climate change; and (ii) they tend to have relatively large agricultural sectors or high numbers of small-scale, mostly poor farmers that make them particularly vulnerable. These countries also provide a good diversity of agro-climatic conditions and agro-ecological zones.

In May 2010, the National Awareness Raising and Consultation Workshop on Reducing Vulnerability to Climate Change in Macedonia was held in Skopje to lay the foundation for continued work in the country. Training and capacity building services are also being offered to local experts, in conjunction with sub-national consultation meetings with farmers, policymakers and researchers, in order to help raise awareness of the risks and opportunities posed by climate change on the agriculture sector. This work will culminate in the development of an agriculture and Climate Change Impact Assessment and Menu of Adaption Options which highlights the physical, economic and social impacts of climate change on the agriculture sector and identifies adaption priorities for investments, capacity development and policy improvement. The analysis will be disseminated at a high-level National Dissemination and Consensus Building Conference, which will be jointly hosted by Ministry of Agriculture, Forestry and Water Economy and the World Bank in early 2011. A regional Knowledge Exchange conference also is planned to be held in 2011, wherein Macedonian experts can share their experiences and results, and learn from experts from other countries who participae in the Regional Program on Reducing Vulnerability to Climate Change in ECA Agricultural Systems.

 

 

For more information, please visit the Projects website.



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