The Council of Investments recommended the Albanian government to
increase direct subventiosn for farmers, in order to encourage
production of agricultural products and formalize the sector.
After a special study for agriculture, the council says that the direct subvention schemes are evaluated by farmers as the most efficient mechanism for formalization.
The recommendations says that the government subventions must cover a wide group of farmers, based on their production, as a direct encouragement for formalization.
Governments of neighboring countries spend 150 million EUR a year to support farmers. In Albania, the 60% fund is very low compared to the requests.
“In these conditions, the possibilities to profit from the scheme are reduced each day, although a farmer might have been able to fulfill all criteria and diminish the trust of participatns”, the report continues.
The government passed another measure for supporting farmers, VAT reimbursement at 20%. Figures show that farmers have benefited 5.1 million USD from it.
Although the VAT compensation has significantly increased the number of registered farmers, from 1800 to 30.000, many are still hesitant due to bureaucratic procedures and misinformation, since many farmers fear that registering would charge them with tax obligations, which is not true.
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