MINISTRY OF AGRICULTURE FORESTRY AND WATER ECONOMY OF THE REPUBLIC OF MACEDONIA 2010 ANNUAL REPORT ON AGRICULTURE AND RURAL DEVELOPMENT 2011 PREFACE The annual agricultural report of the Ministry of Agriculture, Forestry and Water Economy is a publication that provides an overview of the achievements of the agricultural and food sector of the Republic of Macedonia and the activities of the Ministry for 2010. The report comprises ten chapters. This publication first provides the development policies for agriculture and rural areas, adaptation to the European Union and international cooperation, as well as the horizontal and administrative and control issues. Then it provides an overview of the macroeconomic situation of the Republic of Macedonia focusing on the agricultural and food sector, the value of agricultural production, the achieved production results by subsectors, including organic production, as well as the trade with agricultural and food products. In addition, the report also addresses the aspects of food safety and sustainable management of natural resources, as well as trends in education, science and knowledge transfer. When preparing the report, the authors used several sources of information, primarily the individual reports prepared and the sectors and offices within the Ministry of Agriculture, Forestry and Water Economy. Certainly, one important source of information is also the State Statistical Office of the Republic of Macedonia. In addition to publications and official sources, some parts of the report also use expert estimates. I hope that the Annual Report for 2010 will continue to be a useful reference and will be widely used by the participants in the agriculture and food sector. Sincerely, Minister of Agriculture Forestry and Water Economy Ljupcho Dimovski CONTENT I. DEVELOPMENT POLICIES FOR AGRICULTURE AND RURAL AREAS 5 1. Agriculture and rural development policy 5 2. Policies for supporting agriculture 6 2.1 Direct payment measures 6 2.2 Target categories of products and producers 6 3. Rural development support policies 7 3.1.1. National rural development policy 8 3.1.2 IPARD Program – program for agriculture and rural development 10 3.2. Direct financial support of agriculture and rural development in 2010 12 4. Agency for Financial Support of Agriculture and Rural Development 13 II. HARMONIZATION WITH THE EU AND INTERNATIONAL COOPERATION 15 1. EU integration 15 2. International cooperation 16 III. HORIZONTAL ISSUED AND ADMINISTRATIVE AND CONTROL SYSTEMS OF AGRICULTURAL POLICY 19 1. Institutional setup of the MAFWE 19 2.1 Single Register of Agricultural holdings (SRAC) 20 2.2 LPIS – Land Parcel Identification System 21 2.3. AMIS – Agriculture Market Information System 23 2.4 Farm Accounting Data Network (FADN) 24 2.5 Agricultural statistics and economic accounts in agriculture 25 3. Associations within the agricultural and food sector (commercial forms of association, organizations of producers, cooperatives, chambers of commerce) 25 4. Policies for Joint Regulation of Markets (JRM) 26 IV. GENERAL CHARACTERISTICS OF THE REPUBLIC OF MACEDONIA WITH AN OVERVIEW OF THE AGRICULTURAL AND FOOD SECTOR 28 1. Geographic characteristics, climate and population 28 2. Macroeconomic framework 29 3. General situation in the agro-complex 30 4. Main characteristics of the structure of farms 31 4.1. Typology of agricultural holdings 31 4.2. Structural survey of the agricultural holdings 33 5. Characteristics of rural areas 33 5.1. Education in rural areas 34 5.2. Employment in agriculture and rural areas 35 VI. AGRICULTURE PRODUCTION, PROCESSING AND TRADE 42 1. Crop production 42 1.1. Cereal crops 42 1.2. Industrial crops 44 1.3. Forage crops 46 1.4. Vegetable crops 47 1.5. Fruit production 50 1.5.1. Processing of fruits and vegetables 51 1.5.1.1. Buying of raw materials 51 1.5.1.2. Production of processed fruit and vegetables 52 1.5.1.3. Utilization of the production capacities 53 1.6. Grape growing and wine industry 53 1.6.1. Registry of grape plantations 55 1.6.2. Wine production 55 2. Livestock production 55 2.1 Cattle production 56 2.2. Sheep Husbandry 57 2.3. Goat husbandry 58 2.4. Pig farming 59 2.5. Poultry farming 60 3 2.6. Apiculture 60 2.7. Snail farming 61 3. Quality policy and organic farming 61 3.1. Quality policy 61 3.2. Organic farming 62 4. Fishing industry 64 5. Agricultural markets and trade with agricultural and food products 65 5.1. Exchange of trade data for primary agricultural products, processed agricultural products and fish products 65 5.2. Republic of Macedonia’s most significant partners in trade with agricultural and food and fish products in 2010 67 5.3. Trade with agricultural and food and fish products between the Republic of Macedonia and EU-27 in 2010 68 5.4. Analysis of the trade with EU-27 by products 70 5.5. Analysis of the Republic of Macedonia’s export to EU-27 by products 70 5.6. Analysis of the Republic of Macedonia’s import to EU-27 by products 71 VII. FOOD SAFETY 73 1. Veterinary policy 73 1.1. Animal healthcare 73 1.2. Animal identification and registration system (IiR) 74 The animal identification and registration system consists of: 74 1.3. Veterinary inspection services at Republic of Macedonia’s border crossings 75 1.4. Veterinary public health 75 1.5. Laboratories 76 2. Phytosanitary policy 78 3. Agrochemistry sector 80 3.1. Phytosanitary inspection 80 4. Seed and Planting Material Administration 81 5. State phytosanitary laboratory (SPL) 82 6. State Agriculture Inspectorate 83 VIII. SUSTAINABLE MANAGEMENT OF NATURAL RESOURCES – FARM LAND, FOREST AND WATER 85 1. Farm land 85 2. Forestry – forestry and hunting 85 2.1. General characteristics of the forestry sector 85 2.2. Management and running of forest resources 86 2.3. International activities regarding forestry 86 2.4. Hunting 87 3. Water economy administration 87 3.1 Law on Water Economies and Law on Water Communities 87 3.2 Implementation of the laws 87 3.3 Hydro-melioration systems for irrigation and drainage 88 3.4. Water economy capital projects 90 4. National Hydro Meteorology Service 91 4.1 Climate areas in the Republic of Macedonia 91 4.2 Agro-meteorology analysis of the weather conditions in the Republic of Macedonia in the period January – December 2010 92 IX. EDUCATION, SCIENCE, KNOWLEDGE TRANSFER 95 1. Education in biotechnological sciences 95 1.1 Agricultural vocational schools 95 1.2 Higher education in agriculture 95 2. Science and research 96 3. Extension and consulting services 97 3.1 Services by scientific and research institutions (faculties and institutes) 97 3.2 Agriculture Extension Agency (AEA) 98 3.3 Professional consulting companies 99 4. Training system (informal education) 99 X. ATTACHMENTS 100 USEFUL ADDRESSES AND WEBSITES 110 4 I. DEVELOPMENT POLICIES FOR AGRICULTURE AND RURAL AREAS Agriculture (together with forestry and fishery) is the third biggest economic sector after services and industry in the economy of the Republic of Macedonia. The increase of the competitive pressure in the processes of intensive integration in the international flows of exchange of goods, and primarily with the accession of the Republic of Macedonia in the WTO and the signing of other bilateral and multilateral free trade agreements, is a serious challenge for the Macedonian Agriculture. In the upcoming medium term, the Macedonian agriculture and food sector as well as the relevant institutions, should significantly converge, according to their performance, organization, and development to the level determined by the standards defined in the regulations of the Common Agricultural Policy (CAP) of the EU, which are the most difficult and complex chapter in the negotiation process for accession in the EU. Following the national interests, the real needs and the needs of the sector, the reforms that will be implemented through three main areas: policy reforms, institutional reforms and legislative reforms, will also have in mind the need to mitigate the adverse effects facing a part of the agriculture and rural population during the intensive process of adaptation to the complex European standards. Objectives and measures of the development policies for agriculture and rural areas The National Development Plan 2008-2013, chapter 7 – Rural Development and Agriculture Development, stipulates the following objectives and measures of the development policies for agriculture and rural areas: 1. Strengthen the competition of Macedonian agriculture in the integrated regional markets of the European Union and southeastern Europe by implementing measures to increase the efficiency of agricultural production, processing and sales. 2. Improve the incomes of agriculture economies. 3. Provide the consumers with access to safe and healthy food. 4. Optimize the utilization of limited land, forest and water resources in a way that will not adversely impact the environment. 5. Build sustainable rural communities through an integrated development of rural areas and reduce the urban – rural development disparities. 6. Build appropriate, efficient public and private institutions to implement agriculture and rural development policies. The achievement of the vision and the stated strategic objectives for the development of the sector will be realized through the measures and instruments of the agricultural policies, i.e. the agricultural and rural development policy, policies for supporting agriculture and policies for supporting rural development. 1. Agriculture and rural development policy Agriculture and rural development are the key elements for the Republic of Macedonia in its pre- accession process to the European Union. Because of the unsustainable situation of rural areas in the Republic of Macedonia, as well as the EU guidelines related to the increasingly significant financial support of rural development, in January 2007, the Government of the Republic of Macedonia enacted a Law on Agriculture and Rural Development (Official Gazette of the Republic of Macedonia, no. 134/07).