SKOPJE (Macedonia), October 27 (SeeNews) – Macedonian farmers hope to start receiving some 45 million euro ($66.9 million) in European Union aid for rural development from the middle of next year following a positive assessment of the country's ability to absorb financing from the bloc, officials said.
The European Union will make the entire sum available to Macedonia from its Instrument for Pre-Accession Assistance for Rural Development (IPARD) programme by 2011, the Head of the Sector for Project Approval in the Macedonia’s Agency for Financial Support of Agriculture and Rural Development (AFSARD), Aleksandar Anteski, told SeeNews. The first tranche will be worth some 20 million euro.
In September, the latest two-week conferral mission designed to confirm the readiness of Macedonian institutions to manage IPARD funds was concluded with a positive report, recommending to the European Commission to accredit AFSARD to manage IPARD financing next month, Anteski said.
According to him, the Agency is expected to announce a public call for utilisation of IPARD funds in December, while concluding agreements with farmers may start in April or May 2010.
“Farmers eligible for these funds must draft a viable business plan and should launch projects with 100% of their own investment. Following the completion of the projects, half of the invested sum will be reimbursed, of which 75% will be repaid from IPARD funds and 25% from the state budget,” he explained.
The EU funds are aimed to support investment in agricultural holdings to restructure and to upgrade to EU standards, investments in processing and marketing of agricultural and fishery products to restructure those activities and to upgrade them to community standard, and diversification and development of rural economic activities.
The country’s consulting agencies and international organizations such as EU and USAID are all involved in the training process to inform the farmers on the ways of using the EU money.
But, according to Beti Delovska, a managing partner in Skopje-based privately-held BASME Consulting and Training (C&T) agency, the Macedonian public in general is not well informed about the IPARD process.
Neither the procedures and rules for funds' allocation, nor the amounts that will be provided are clearly defined, but only the main activates which will be supported, she said.
Thus, BASME training courses are focused only on the main aspects of the process: how and what clients need to apply, which activities will be supported and details not included in handbooks and brochures, she added.
“We consider it very important that all interested parties are ready for this process, since it functions according to the EU rules that to a great extent differ from our business customs and culture,” she noted.
“Many details that are acceptable here, may result in rejection of projects during their evaluation.”
“The IPARD measures focus at improving the competitiveness of economically viable agricultural holdings and food industry in selected sub-sectors through investment policies to improve technological and market infrastructure. This is aimed at increased added value of agricultural products and achieved compliance with EU quality, health, food safety, animal welfare and environmental standards,” the official IPARD programme document posted on AFSARD website said.
Equally, the IPARD assistance should contribute to improved quality of life of the rural population, increased income and creation of new employment opportunities. Eligible projects shall refer to plant production in the priority sectors vineyards, orchards and vegetable production, dairy livestock, pig and poultry breeding, as well as production of raw milk and fattening of animals for meat production, it said.
According to statistics provided in the IPARD document, the total income from agricultural activities of all Macedonian agricultural households and companies shows a sustained annual growth in the 1998-2004 period. In 2004, the sector was estimated at 25.123 billion denars ($616 million/377 million euro).
In 2006, Macedonia’s agricultural land was 1,225,513 hectares (ha) or about 48% of its total land area, while forests covered 947,653 ha (37%). Farm land included 687,324 ha of pastures (55.5%) located mainly in the highlands, and 537,419 ha of cultivated land (44%) concentrated mainly in valleys. Cultivated land decreased from 633,000 ha in 1999 to 537,419 ha in 2006, mainly due to land abandonment and industrial developments.
According to 2006 statistics, 438,925 ha (82%) of total cultivated land was arable land and gardens, 60,264 ha (11%) were meadows, 25,239 ha (5%) were vineyards and 12,991 ha (2%) were orchards. Around a third of total arable land is left uncultivated each year.
Macedonian farmers are aided by government subsides as part of the national strategy for rural development. Prime Minister Nikola Gruevski said earlier that 70 million euro is allocated for agricultural subsidies in 2009. One hundred million eurowill be provided in government aid to farmers in 2010, 115 million euro in 2011 and 130 million euro in 2012.
Macedonia's Agriculture Ministry launched a country-wide awareness campaign for utilisation of IPARD money on Monday.
Agriculture generated 9.4% of Macedonia’s GDP in the second quarter of 2009. The sector of agriculture, hunting, forestry and fishing recorded a growth of 2.8% in the second quarter, compared to a rise of 7.2% a year earlier, official statistics showed. Macedonia's GDP contracted by 1.4% in the same quarter.
Macedonia’s population numbers around two million. Out of total workforce, 19.3% is employed in the farm and forestry sector.
In 2008, Macedonia's exports totalled $3.978 billion. Food exports contributed $308.4 million, of which fruit and vegetables accounted for $165.6 million, cereals for $41.15 million, meat and meat products - $33.8 million and dairy products and eggs - $9.65 million, according to statistics provided by Macedonia's central bank.
The EU granted Macedonia a membership candidate status in December 2005. The European Commission earlier this month recommended the launch of accession negotiations with the Macedonia in the light of the progress achieved by the Balkan country.