Kosovo emergency agri-input program [KEAP], October 1999-May 2000 : completion of project report

Unique in its approach at the time, KEAP proved to be a beacon for private sector-led activities in agriculture. It clearly demonstrated a sound way for transition to development and is recognized as such by the United Nations Mission in Kosovo (UNMIK) and government authorities in their planning. Among its accomplishments, KEAP has: (1) identified over 150 input dealers and 18 importers, motivated and trained them in forming a trade association, helped them conduct a series of district and national-level meetings and democratic elections of officers, and put them in contact with suppliers in Albania and elsewhere; (2) disseminated timely, accurate, and rapid assessments of input requirements; (3) provided regular updates on the large commercial gap between donor input supplies and total demand; (4) assessed capital damages and provided advice to flour and feed millers, vegetable processors, and seed producers; (5) established trade associations of flour millers and of feed and poultry producers with potential memberships of 90 and 105, respectively; (6) initiated a pilot credit program for dealers with a Dutch NGO that resulted in increased local agri-input supplies and a 30% reduction in prices; (7) proposed a scheme to auction and monetize donations of commodities from both the United States and European Union (EU) to establish a revolving credit fund for dealers; (8) offered policy recommendations on trade, taxation, and regulations concerning inputs and milling; (9) initiated systems and media feeds to provide market information for dealers and input recommendations for farmers; (10) began demonstration plots for new varieties of potatoes, corn, and beans, and set the stage for private sector extension services; and (11) helped local dealers establish contacts with regional suppliers, resulting, among other things, in deals for 4,000 tons of fertilizer and 800 tons of seed potatoes. On the down side, KEAP experienced problems that constrained realization of its full potential. For example, by using NGOs to distribute free agri-inputs and wheat flour, donors undermined efforts to activate private sector distribution and milling networks and created market uncertainty about their intentions. Credit for dealers remained scarce, and subsidized fertilizer from Serbia undercut commercial imports. IFDC, the World Bank, and others were unable to convince the revenue- strapped UNMIK to remove the disincentive of its customs tax on commercial fertilizer imports. The lessons and promise that emerged from KEAP have encouraged USAID to fund IFDC to undertake a 2-year program to strengthen trade associations, provide business and technical training to members, analyze and influence policies, expand access to credit, and support technology transfer to farmers. The EU/UNMIK reconstruction investment program for agriculture in its next phase will rely heavily on the sustainable approach pioneered by USAID/IFDC of using the private sector to distribute inputs. The project"s legacy is its demonstration of the rapid interest in and capacity for organizing agricultural trade associations that promise to serve the needs of farmers and members. Clearly, the private sector in Kosovo can resume the primary role in ensuring the supply of and access to farm inputs and services, including the provision of technical and business information. Authorities and donors should encourage the process and help Kosovo achieve its significant potential in agriculture, e.g., by expanding the credit and financial services sector, supporting appropriate policy development and regulatory frameworks, stimulating demand for modern inputs, and helping establish markets for outputs. (Author abstract, modified)