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36
DOI: http://dx.doi.org/10.20534/EJEMS-17-3-82-86
Zahoaliaj Dorjana, PhD Candidate, Agricultural University of Tirana, Albania E-mail: [email protected] Osmani Adela, PhD, Agricultural University of Tirana, Albania E-mail: [email protected];
Skunca Dubravka, PhD, Assoc. Prof., "Union-Nikola Tesla" University, Belgrade, Serbia E-mail: [email protected] Kolaj Rezear, PhD, Agricultural University of Tirana, Albania E-mail: [email protected]
THE ROLE OF PUBLIC INSTITUTIONS TO AGRICULTURAL DEVELOPMENT - THE CASE OF ALBANIA
Abstract: During post-communist transition to market economy, Albanian agriculture is transformed. However, due to rapidity of development factors are visible some complications. This problematic typically is presented in Lushnja region - in south-west of Albania, where farmers' producers in greenhouses due to regionalization and specialization faced to prolonged difficulties. Considering specifics nature of problems in the new terms - evidenced also the need for more support from public institutions to this sector. The literature generally supports the impact of public institutions to the agricultural development. Appropriate institutions and institutional arrangements are of utmost importance for success of agricultural development. Insufficient institutional support services could be regarded as one of the main reasons for agricultural development failure. Institutions of a country determine its economic performance. The study objective is a analytical presentation of the public institutions impact to the farmers' income trend - in the case of farmers' vegetable producers in Lushnja region, Albania. In order to achieve the objective it is structured a questionnaire and after being confirmed on a focus-group, are tested by random choice a size of questionnaires (220). Based on data provided a linear model has been used. The result shows impact of public institutions performance to the farmers' income level. So, not only theoretically but also practically facts from area reality illustrate that high mobility of factors has contributed for supply instability of this agro-category, which has led to income falling and consequently to decrease of the agro-investments. Analyzing sector performance can generalized that simply by increasing investments in agro-sectors may cannot be overcome the problems — and the public institutions role in this aspect is important.
Keywords: Public institutions, income trend, farmers' producers in greenhouses, Albania.
Introduction
During the last decades ofpost-communist transition towards market economy, Albanian agriculture has undergone transformational developments. These dynamic developments have included ownership system of agricultural land, agricultural production system and the mechanization, and the chain of inputs distribution — as well as their marketing and sales. In the new development conditions Albanian farmers' have benefited from the free market effects, being equipped with new competencies whatsoever has allowed orient to the new competitive activities — based on availability of regional resources. So, many agricultural regions that were characterized by low income as a result of the obligatory policy of agricultural cooperatives during the communist system, while during the first decade of transition through free initiative began oriented to the activities that were based simply on regional advantages — during the second decade due to increased production and pressure of the market forces evidenced the tendency for regionalization and its specialization.
These developments have been typically characteristic in the south-western and south-eastern area of the country. In the south-eastern area a main activity is vegetable production in the region of Lushnja. This activity harmonizes the favorable climatic conditions for agricultural production during the whole year, abundant and relatively cheap labor force — and continuously demand for these products on the markets. A typical case study that illustrates about this argument is Hysgjokaj — a semi-hilly village in region of Lushnja. Residents of this village during communist period cultivated (mainly) maize culture, earning on average 2 $/day (14-16 leke/day). Given the socio-economic developments and considering the regional advantages of annual temperatures, which enables a competitive product for the earliness with any other agricultural producer in Balkans region — farmers' gradually passed from vegetable production on the open area to the intensive production in greenhouses.
Presently in Hysgjokaj live about 2 603 (2011 census results) inhabitants and it is built more than 300 ha of greenhouses, offering a production level of 16 000 tones vegetables during whole year. The average of greenhouses surface lies between 0.1-0.2 ha and in the new demographic terms the structure of production it is mainly oriented to the young farm family (mainly 2-3 members). This production is particularly characteristic during early and late season of production, being realized at local, regional and international markets of agricultural products at favorable prices. In this area are present significant international companies, which provide inputs on the market; such as seeds, chemicals, fertilizers for agricultural cultivation. They organize seminars and training for farmers' — aiming access to know-how and their professional growth.
However, due to rapidity of development factors — are visible some complications. This problematic is related to various factors — external and internal; it is also extended in time identifying old and new problems of agricultural sector. As such we can mention the instability of markets during last year's including prices of energy resources and food, as well as non-convergence between them in a broader global aspect, or variations in local and regional markets affected by post-crisis 2008 and ongoing — and the consequences of demographic developments and high mobility of labor force within and outside country. In this context of developments often is evidenced the role of institutions; including informal institutions as setting part of values, beliefs and attitudes ofplayers level (farmers'), which affect conditions in which is implemented the decision making in an complicated environment such as crop production — and especially formal public institutions.
Considering specifics of the production in greenhouses especially in the new conditions due to re-gionalization and specialization evidenced also the need for more support from public institutions and related agencies that provide assistance to the agricultural sector. The need for more assistance from
public institutions related with broader issues — due to the technical nature ofoperations faced by farmers' producers in greenhouses: as such we can mention recognition of contemporary inputs and access to them, accesses to the new technologies and their impact on the growth of agricultural production standards as premise for increasing competitiveness — as well as marketing and sales issues. Considering the importance ofproduction perspective in greenhouses — as a main activity providing income of new farm family and high added value, public institutions proportionally should have also more attention along whole process; including chain inputs and outputs.
Actually, perspective of the production in greenhouses is influenced by several factors. As such we can mention the level of income, and lending rates faced by farmers', and grants or other financial forms of institutions and state support — or even the need for inciting of possible schemes of cooperation at input levels, or for collecting and output standardization and its sale. Moreover, income levels and the trend that has characterized this unit production in recent years represents an important argument; because as we emphasized this agricultural industry operates with relatively high risk — since it offers only one product categories in the market. A presentation of impact role by public institutions to the income trend of farmers' producers in greenhouses — will be useful to analyze from a different perspective the economic future ofthis important production industry.
1. Literature review
The literature generally supports the impact of public institutions to the agricultural development. The institutions are set of fundamental political, social — and legal ground rules that establish the basis for production, exchange and distribution [2]. Appropriate institutions and institutional arrangements are of utmost importance for the success of agricultural development [3]. Insufficient institutional support services could be regarded as one of the main reasons for agricultural development failure [4]. There is also a sort of two-way causality between in-
stitutions and economic growth. On the one hand, institutions have a profound influence on economic growth — and on the other hand, economic growth and development often result in a change in institutions [5]. It is both of importance to explain the determinants of institutions and their evolution over time — and to evaluate their impact on economic performance, efficiency, and distribution [6].
All land-use decisions are made by local actors, but their actions are constrained by broad-scale factors, such as institutions — national policies and governance [7]. The institutions are of particularly importance in post-communist countries similar to Albania. Where institutional change was quick and new institutions were relatively strong during the transition (Poland), it is observed the lowest abandonment rates of agricultural land [8]. The transformation of agriculture and transformation to sustainability can be considered issues of institutional change. Therefore, in order to achieve the goals of transformation and sustainability in post-communist countries — new institutions need to be built with involvement of relevant actors [9]. Institutions of a country determine its economic performance [10].
2. Objectives and hypotheses
Objective of the study is a analytical presentation of the public institutions impact on the farmers' income trend — in the case of vegetable producers in Lushnja, Albania.
Study hypothesis:
H1 — with increasing of assistance level of public institutions, increases the farmers' income trend.
The factor (Publ. Inst.) is measured by farmers' perception by following way:
Public Institutions — variable recorded XJ.
3. Measurement procedure
It is structured a questionnaire and after being confirmed on the focus-group with representatives of the agricultural area in order to improve and its précising — it is processed with interviewing in selected simple, and by random choice are tested
questionnaires (220). Based on data provided and used:
procedures of their tests a linear model has been Y = a0 + a1X1 + e
Table 1. The model estimation results.
Dependent Variable: Y (Trend of income)
Method: Least Squares
Sample: 1 220
Included observations: 220
Variable Coefficient Std. Error t-Statistic Prob.
C 2.345142 0.107019 21.91340 0.0000
X, (Publ. Inst.) -0.148417 0.073532 -2.018387 0.0448
R-squared 0.018345 Mean dependent var 2.145455
Adjusted R-squared 0.013842 S. D. dependent var 0.609459
S. E. of regression 0.605226 Akaike info criterion 1.842621
Sum squared resid 79.85319 Schwarz criterion 1.873472
Log likelihood -200.6883 F-statistic 4.073887
Durbin-Watson stat 1.873126 Prob (F-statistic) 0.044776
** Level of significance 0.05
The measurement result shows the impact level of the factor estimated — and it is very significant.
Conclusions
Result of measurement proved impact of public institutions performance to the income level of the farmers' vegetable producers in greenhouses in Lushnje, Albania. The finding is consistent with a wider literature and authors and in the way as it is hypothesized. Moreover, not only theoretically but also exploring practically the area of developments — facts from reality illustrate that many problems are related with public institutions performance of the rural areas. These developments are related specifically to the complicated nature of agricultural production in greenhouses as a product with high added value from the one hand — and from the other hand also with challenges of the
economic environment in which developed this activity.
From economic environment view should considering that the high mobility of factors (especially worked force) within and inside ofcountry has contributed not only for its expensiveness, but also for the supply instability of this products category which has led to instability and income falling — and consequently to the decrease of agricultural investments. In fact, the problem of agricultural supply instability cannot be solved by increasing investments, but by determined and set production quotas. This generalized performance can be used to understand the nature of current problems in the Albanian agriculture; which means, increased problematic in some agro-sectors can be overcome by increasing the level and intensity of sectoral instruments used by policy makers and institutions.
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