Rear view of two farmers walking in plowed field
The six Western Balkan countries—Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia, and Serbia—have expanded their economies since the early 1990s, joining the group of upper-middle-income countries. Although their economies are more diversified today, agriculture still employs a third of the labor force and is a significant source of welfare in some countries like Albania. Investing in agriculture for increased productivity, competitiveness, and resilience amid more extreme weather conditions in Europe due to climate change, is therefore crucial to help the region benefit from new opportunities coming along with the ongoing European Union (EU) accession process. This will only be possible when more attention is paid to the greening of the sector through climate adaptation and mitigation.
The agriculture sector in the Western Balkans currently has a relatively low carbon footprint, but it is largely due to high rurality and low farming intensity rather than a result of strategic policy choices. To address increasing climate impacts, the Western Balkans must tackle the four major challenges that have continued to affect the farming communities - structural issues in farming systems, production coupled farm support (i.e., subsidies linked to the production of specific crops and/or livestock products), slow greening process, and weak institutional capacity.
Fragmented and subsistence farms. The average farm size in the Western Balkans ranges from one-third (Serbia) to one-tenth (Albania) the size of the EU average of 16 hectares. Subsistence farms are still found in many places. They are characterized by low-intensity productive systems, limited fertilizers and chemicals use, declining livestock production, and lower agricultural greenhouse gas emissions. Small farm size and massive rural outmigration hinder investments, keeping the sector less productive and competitive.
Unproductive public expenditures. Despite a substantial and growing agricultural budget as a share of GDP and the increased pre-accession assistance (IPARD) and donor funding, the Western Balkans face a significant gap with the EU in supporting climate-smart agriculture. Furthermore, current public expenditures focused on supporting increased production through coupled subsidies, not aligning with the EU’s new Common Agricultural Policy (CAP). Farm capital formation and the Agricultural Knowledge and Innovation System (AKIS) investment fall significantly short compared to the EU, leaving farms undercapitalized and less productive.
Lack of digitalization for climate-smart agriculture. Most of the Western Balkan countries lack digital farm advisory systems for disseminating climate-smart agriculture, which aims for triple wins in productivity and income, climate resilience, and reduced emissions. An integrated approach can transform agriculture in the Western Balkans.
Limited Institutional capacity. To benefit from agricultural reforms, increased investments are necessary to boost institutions delivering essential public services. Additional funds and attention from the authorities are needed for food safety measures and laboratories, research, innovation and extension, marketing, and logistics infrastructure.
The World Bank’s Spotlight on Greening Agriculture in the Western Balkans offers hope, consistent with the Green Agenda for Western Balkans. The report proposes eight policy recommendations, drawing lessons from the EU’s green transition of agriculture, and considering the region’s diverse agri-ecological zones and natural landscapes. Along with the greening process, the spotlight emphasizes the importance of social policies supporting on-farm diversification and alternative economic opportunities to ensure a just and climate-resilient transformation of the region’s agriculture and rural economy, helping build a more resilient, sustainable future.
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