Agriculture in Kosovo: Can agriculture sector generate economic growth in Kosova?

• Author: Fatmir Gashi
• Position: NLB Prishtina
• Pages: 203-212

203

ISSN 2410-759X

Acces online at www.iipccl.org

Balkan Journal of Interdisciplinary Research

IIPCCL Publishing, Tirana-Albania Vol. 1 No. 2

September 2015

Agriculture in Kosovo: Can agriculture sector generate economic growth

in Kosova?

Fatmir Gashi

NLB Prishtina

Abstract

Economic growth in Kosovo during the last decades has been very low, and that is

reflected through the main macroeconomic indicators, such as low gross domestic

product-GDP, high trade deficit, high unemployment rate, lowforeign direct investments

and otherindicators which have limited the country’s economic development. Therefore

in order to solve these macroeconomic problems within last years, especially negative

trade balance, the government undertook measures in order to find the model that will

lead toeconomic growth and bring country out of stagnation.One of the sectors that is

seen as potential sector for development is agriculturesector? But the question that arises

is can agriculture sector be priority sector that will generate economic growth and

development in country? Which are comparative advantages as well as barriers for

development ofagricultural sector. The findings of this study, lead to conclusions that

agriculture has potential to generate economic growth and development in Kosovo.

Therefore, the government and other national and international institutions should

increase support for this sector, as one of the main economic sectors that will contribute

to development of Kosova.

Keywords: agriculture sector, economic growth, gross domestic product, trade deficit,

unemployment.

Introduction

The potential contribution of agriculture to economic growth has been an on-

going subject of many controversy discussions among many economists duringlast

decades. Many authors believes that agriculture can promote economic development,

especially in low income nations. (Shultz 1964, Gollin, Parente and Rogerson 2002).

While other group of authors believe thatno country can rely in agriculture as a

main economic activity, and agriculture can be only as a supportive activity. (Lewis

,1954, Hirschman ,1958, Fei and Ranis, 1961, Jorgenson 1961), (TitusO.Awokuse,

Does agriculture really matter for economic growth in developing countries, 2009,5).

According to the World Bank, in the 21st century, agriculture continues to be a

fundamental sector for sustainable development and poverty reduction. Agriculture

sector contributes to development as an economic activity, as a livelihood, and as a

provider of environmental services, making the sector a unique instrument for

development. It can be source of growth for the national economy, a provider for

investment opportunities for the private sector and a prime drive of agriculture

related industries and the rural nonfarm economy. Agriculture can work in concern

with other sectors to produce faster growth, reduce poverty, and sustain the

environment. (The World Bank Report 2008, Agriculture for development,3)

In Kosovo, especially in the first years after the war, agriculture was not seen as

priority sector from government, and there were lack of financial support, due to

reduction of capacities in this sector before and during the war. The lack of