What is "contract farming"?/ The model is changing in Albania, cooperatives are being strengthened
The agricultural sector is expected to undergo a transformation of the model of how it functions in Albania, with the aim of strengthening and increasing its weight in the Gross Domestic Product.
This transformation is expected to occur in the next four years. In its governing program, the government plans to transition from small traditional farms to modern farms linked to the market through "Contract Farming", by encouraging the creation of Agricultural Cooperative Societies, otherwise known as cooperatives, and models of economies of scale. The pilot will begin in 5 municipalities, which also have developed agriculture.
But what is "contract farming?" This concept refers to "contract farming", that is, an agreement signed between the farmer and the buyer, who can be a company, processor or exporter, where the conditions of production and sale of an agricultural product are determined in advance. Through this contract, the farmer undertakes to produce a certain crop or raise livestock according to the standards set by the buyer. While the buyer commits to purchasing the product from the farmers, with predetermined conditions, such as price, quantity, quality and deadlines.
Often the buyer can provide agricultural inputs such as seeds, chemical fertilizers, technical advice or advance financing. Among the benefits of contract farming is market and price security for the farmer. Supply and quality security for the buyer. As for Agricultural Cooperative Societies or modern cooperatives, the law in Albania has existed for a long time but has not functioned properly on the ground. This is also due to the mentality of Albanian farmers, who are afraid of the idea of uniting lands solely for the purpose of cultivation, agricultural equipment or production.
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