The agro-processing, farming and vine producing in Kosovo has traditionally been dominated by socially owned enterprises, which used to obtain a substantial part of the raw materials from thousands of private farmers.

 

Currently, the former socially owned companies in this field are not active. New private companies have started their operations in this field in recent years and their production is showing significant and continuous increase. The majority of local processors are still relatively small and able to cover just a minor part of the processed vegetable demand. According to estimations, local processors cover just some 30 percent of the local market needs, with the remaining balance being imported.

Lack of financial means needed for the revitalisation and modernisation of existing capacities and insufficient management efforts to reorganize production and distribution, have meant that capacity utilisation remains low. Therefore, the technical capacities of
some agro-processing companies are currently not utilised to a high extent.

By addressing financial issues, assuring new markets and introducing new and efficient management techniques, the agro-processing industry in Kosovo could once again achieve high production rates, thus being able to compete with foreign products in international
markets.

Direct support for the development of private farming would also be achieved, thus enabling significant support to the development of a purely organic agriculture in general.

At present, Kosovo is experiencing a livestock recovery process. Livestock farming has made great strides in recent years – both in the number and yield.

In particular, there are two main factors in favour of livestock investments in Kosovo. Firstly, the country offers very good natural and climatic conditions for various types of livestock farming. Secondly, market demand for livestock farming products is currently
much higher than domestic production.

The planned revitalisation of the food processing industry will furthermore create higher opportunities for livestock farming in the future.Recently introduced supportive governmental policies and incentives aim to promote business opportunities in this field and should enable Kosovo to rely increasingly on domestic meat and dairy production in the near future, or even enable Kosovo to export high quality organic products.

Currently, the most significant obstacle facing Kosovo’s meat producers is still the reopening of export markets. With Kosovo’s geographical location and its close proximity to non-EU countries such as Albania, Montenegro, Serbia, Bosnia and Herzegovina, Croatia and Turkey, a short-term pragmatic approach could be to initially focus on meat exports to these destinations, with the possibility of expanding into EU markets when conditions allow.

Grape-growing and wine production has a long tradition in Kosovo. While local small-scale wine – production was developed rampantly during the last two centuries, the wine industry in Kosovo became large-scale in the 1970s with the founding of the first larger SOEs.

During its “glory days”, the wine industry benefited from 9,000 ha vineyard area, divided into private and public ownership, and spread mainly throughout the south and west of Kosovo.

The four state-owned wine production facilities were not as much “wineries” as they were “wine factories”. Only the Rahovec facility that held approximately 36 percent of the total vineyard area had the capacity of around 50 million litres annually. The major share of the
wine production was intended for exports.

At its peak in 1989, the exports from the Rahovec facility amounted to 40 million litres and were mainly distributed to the German market.

The viniculture still represents one of the most important sectors of the Kosovar agriculture, with a good potential to attract foreign investments. The continental climate and the height of 300-400 meters above the sea level are incredibly well-suited to vineyards and the development of wine grapes. There are more than 200 sunny days annually to help ripen the grapes, on par with some well known wine production regions.

These advantages create very good conditions for the qualitative wine production in Kosovo. The wine industry in Kosovo currently consists of some 5,000 ha of vines. In order to stimulate and support grapegrowing and wine production, the Government of Kosovo has passed a Wine Law that governs wine production at a high standard and is perhaps one of the finest in the world for such a small growing region such as Kosovo.

The creation of the Wine Institute in Rahovec in 2007 that will lead the change towards quality and technology-based wine-making techniques is also an important step towards the revitalisation and modernisation of the wine industry in the future.

 

This report is part of a series prepared by the Economic Initiative for Kosovo (ECIKS), an organization supporting the economic development and foreign investments in Kosovo.