The Balkans are characterised by fragmented territories and heterogeneous areas – cities that look towards Europe contrast with a forgotten rural countryside, often the site of stories about marginalisation, migration, communities left to their own devices and lost opportunities.

Rural is still a synonym of backwardness, poverty, and exclusive dependence on the agricultural sector; far from the romantic vision rural areas enjoy in many European countries. Yet there are some dissident voices that tell of success stories and some initiatives that enable a glimpse towards the future to those long forgotten areas, too far from the political centres that count.

Land use and farm structures
Land and agriculture are still important economic factors in the Western Balkans, where the share of the arable land in the total surface area varies from 23 per cent in Croatia to 66 per cent in Serbia. A first aspect that emerges, and a necessary premise that holds true for all statistics regarding the primary sector in the Western Balkans, is the lack of an updated, homogeneous and comparable database.

In the case of Croatia, where the data on land use has been harmonised with Eurostat, the reference is to utilised agricultural area (UAA). Whereas for other countries, there is no clear distinction between the land that is actually used and that which is not.

Abandoning and not using land are the most common consequences of the transformations of the primary sector in transition countries. This is both due to the consistent migrations towards urban centres and the parcelling out of land as a result of the process of 'de-collectivisation' that started at the beginning of the 1990s.

In the Balkans, the countries in which land has been most severely abandoned or left underutilised, for different reasons, are Albania, Bosnia-Herzegovina and Kosovo.

Albania is on the list because of a particularly complex process of land redistribution that gave way to serious uncertainties about land ownership, which in turn limited the development of a land market and thus drove away possible investors. Bosnia-Herzegovina and Kosovo both suffered forced displacement of entire communities that, especially in the more marginal areas, brought with it illegal occupations and failed returns, creating the need to manage extremely controversial problems.

During the transition years, the agricultural sector went through a prolonged phase of decline in which it did not fulfil its commercial objectives and instead ended up carrying out a much more social function. As the high number of small units of production focussed on subsistence or semi-subsistence demonstrates, this is still very much the case even 20 years since the dissolution of Yugoslavia and the fall of the communist regime in Albania.

The average size of agricultural businesses is in fact under two hectares (ha) in Albania, Kosovo and Macedonia, three in Croatia, and between three and four in the other countries.
This dynamic is reflected in a dual structure, in which small family units coexist with modern commercial businesses.

Looking at the EU, where the average farm size is almost 13 ha, the main differences are to be found in the number of farms over 10 ha and in the arable land that such farms use. In the EU, the agricultural businesses of more than 10 ha represent 10 per cent of the total and use 85 per cent of the arable land, whereas in Croatia, Montenegro and Serbia they are just five per cent and the arable land they use is 52 per cent in Croatia, 41 per cent in Montenegro and 25 per cent in Serbia.

Overall, the size of farms is smaller than those in the Mediterranean part of the EU (Greece, Italy, Spain, Portugal) in the 1970s.

Agriculture in the economy
Great structural problems thus exist, which, however, do not prevent the agricultural sector from maintaining a strong position in terms of the overall economy and employment, although this is also due to the not-so-brilliant performance of the other sectors.

In the EU, the primary sector accounts for 1.8 per cent of the gross domestic product (GDP) and employs less than six per cent of the active work force, whereas in the Western Balkans the numbers are very different: in Albania, the primary sector accounts for 18.5 per cent of the GDP and for 57 per cent of employment; in Bosnia-Herzegovina – 9.1 per cent and 20.6 per cent, respectively; in Croatia – 6.4 per cent and 13.2 per cent; in Macedonia – 10.8 per cent and 18.2 per cent; in Montenegro, 7.5 per cent and 28 per cent; in Serbia, 12 per cent and 21.4 per cent.

In Kosovo, the numbers are 19 per cent of GDP and 15 per cent employment (2006 data), but the estimates risk being misleading. Kosovan institutions in fact fix the rate of official unemployment at 40 per cent, data that should be questioned considering the weight of its shadow economy, especially significant in the agricultural sector.

Furthermore, despite considerable differences among the countries, the transition from planned to market economies has been marked by numerous contradictions and inefficiencies, both from a structural and a political point of view, which in many cases has hindered the development and consolidation of the chains of production.

In this scenario farmers were not given incentives to modernise, become more specialised and increase the competitiveness of production systems. Thus, for a long time, the sector was unable to attract significant investments.

Products and productivity
After the decline that followed the transition process and – for some countries – the conflicts, the volume and profits of production started to grow again, albeit with some natural oscillations, mainly due to the weather conditions.

Cereal grains are the main crops and occupy an important share of arable land: about 40 per cent in Albania, almost 50 per cent in Kosovo, more than 50 per cent in Bosnia-Herzegovina, more than 60 per cent in Croatia, Macedonia and Serbia. Only in Montenegro, where potatoes and vegetable crops make up 30 per cent and 20 per cent of arable land, respectively, do cereals play a slightly less important role (about 20 per cent).

After cereal grains, the main products are vegetables (more than 10 per cent in Macedonia and Bosnia-Herzegovina), and industrial crops (oilseed and beets) that exceed 10 per cent in Croatia and Serbia. Considering volumes instead, fruit crops stand out with 26 per cent of Croatia’s output, 19 per cent of Albania's, 16 per cent of Serbia's and 12 per cent of Macedonia's.

Far from reaching EU levels, in the last decade profits have grown significantly, proving that after all, at least for the business end of the agricultural sector, improvements have actually taken place, both in terms of efficiency and production techniques.

A separate case must be made for the animal breeding sector that, despite progress in almost all countries, still shows structural weaknesses in terms of legislation, fully meeting sanitary standards (referring to the EU framework, especially in terms of control systems), and the introduction of traceability systems (animal identification and registration).

Overall, the sector is dominated by beef and milk farming, although individual countries show significant differences in terms of traditions, types of land and diets connected to religious beliefs. In this respect, Serbia (36 per cent), Croatia (26 per cent) and Macedonia (16 per cent) produce significant quantities of pork, while Albania and, to a certain degree, Bosnia-Herzegovina, Kosovo and Montenegro stand out for their sheep and goat farming. Bosnia-Herzegovina shows an additional internal diversification that reflects the administrative division following the Dayton peace accords of 1995.

Trading and food processing update
Important elements in the analysis of the evolution of the agricultural sector can also be derived from the structure of the trade balance: observing how much raw materials and processed products affect imports and exports.

Clearly, the higher the imports of processed products and the exports of raw materials, the weaker is the sector within that country. Exports of processed products and imports of raw materials is often the symptom of a healthy sector, capable of internalising a considerable amount of the added value in the process of product transformation. From this point of view, most supply chains show structural weaknesses and a limited ability in keeping the added value within the territory.

Trade is generally in constant growth both at the regional and the international levels, with the EU as the primary trade partner. Among the most relevant data is the share of the food and agriculture industry on the total import-export ratio, which it is much greater than the EU average (5.7 per cent of exports and 6.3 per cent of imports in 2008), and the negative trade gap in this sector, with Serbia the only country to show a positive balance in the food processing industry.

Observing the individual countries, the food and agriculture industry amounts to less than 10 per cent of imports only in Croatia and Serbia and is close to, or even greatly exceeds 15 per cent in all the other countries. The weight of exports tends instead to converge around 10 per cent with the exceptions being Serbia (18 per cent), Albania (6.6 per cent) and Bosnia (6.3 per cent).

Rural area delays
In addition to rampant poverty, rural areas have to deal with shortcomings in terms of infrastructure, public services (social, health and education) and job opportunities that are not in the primary sector. In this context, migration has increased, especially among the youth, both towards urban areas and abroad.

This haemorrhage of human capital risks making the decline and depopulation process irreversible not only for the more peripheral areas and the smaller villages, but also for those medium to small-sized towns that often constitute nerve centres for the supply of important basic services.

At risk is the loss of traditions, history and skills that are the direct consequence of centuries of interactions and reciprocal adaptations between people and the surrounding territory. These resources have already been eroded (at times quite substantially) in many areas of the Balkans as a consequence of socialist planning and the conflicts marked by the forced removal of entire communities.

The economy of rural communities is greatly based on the primary sector, which in marginal areas is characterised by structural problems that are even more vicious than in the less peripheral areas. Despite these conditions, in relative terms, the rural population in the Western Balkans remains greater than that of the EU countries on the Mediterranean (Greece, Italy, Portugal, Spain): 46 per cent of versus 36 per cent.

This article was originally published on Osservatorio Balcani e Caucaso.