Executive Summary

The present Progress Report 2 presents the progress of the Agricultural Land Utilisation Project (ALUP), EuropeAid/120769/D/SER/KOS, funded by the EU through its European Agency for Reconstruction (EAR), implemented by the the Ministry of Agriculture and Rural Development (MAFRD) and assisted by the consultants consortium comprising GFA and BVVG of Germany) and DFFE of Denmark.

The general goal of ALUP is to increase productivity and utilisation of agricultural land. The  project aims to achieve this by defining 5 project components (“results”), which respectively relate to (i) legal and regulatory framework, (ii) land consolidation, (iii) spatial planning and environment, (iv) access to land through improvement of the functioning of the land market, and (v) improved coordination mechanisms.  In addition, the project is engaged in the assistance to the Kosovo Trust Agency (KTA/UNMIK) in land privatisation issues. Three pilot areas have been be established as a part of three of these project results.

During the reporting period, the activities in each project Result have taken up momentum. Particular progress has been made in the legal and land consolidation components, and in the assistance to KTA/UNMIK. In addition, much attention has been spent on identify possible assistance of ALUP to the northern municipalities. But also the other components have seen satisfying progress

In general one can say that the Result 1 (Legal Framework) is solidly on its way. Progress is good and the assistance of ALUP to the MAFRD is appreciated. Activities comprised the review of existing legislation, the drafting Administrative Instructions (A.I.) for the Law on Agricultural Lands (LoAL) and the preparation of a comprehensive training programme on drafting of legislation and on the implementation of the LoAL. Target groups are ministerial and municipal officials. Particular attention was paid to ethnically mixed municipalities: in Gjilan/Gnjilane and Lipjan/Lipljan meetings were held on inter ethnic issues in the legal framework.

During the next period the Administrative Instructions to the LoAL will be completed, the municipal training-workshop programme on implementation of the LoAL will be launched and trainings for officials of the MAFRD and the Ministry of Environment and Spatial Planning (MESP) will be held.

Also in Result 2 (land consolidation) progress is good. Interest of farmers is higher than expected and additional schemes are already considered. In the Shisman pilot project the decisive phase has now been arrived at and negotiations on an allocation plan and the commitment of farmers to such a plan have started. The issue how to cover the transaction costs for the 1st pilot project has been resolved and agreement between MAFRD and ALUP exists how to approach this problem in the next land consolidation projects.  The financing and sustainability of a broader land consolidation approach in Kosovo is increasingly felt as an issue and are currently addressed in ALUP. 

The critical assumption for sustainability of developing framework and technique for land consolidation is that financing instruments are identified that can sustain a larger scale implementation of land consolidation in the period 2007-13. This issue will have high priority in next reporting period.

Improved insight into the required capacities for land consolidation was gained. “To do” land consolidation requires a learning process closely linked to implementation. The immediate constraint to capacity building is both that there are neither local institutions  able to assume responsibility for land consolidation nor are there ongoing projects in which project staff can be offered in-service training. The overall experience is that knowledge transfer in land consolidation at present is blocked by a current tendency of project design that does not include investments / implementation components.

During the next period, negotiations in the pilot project in Shisman, Gjakovë/Đakovica should lead to formal agreements and the Land Consolidation Commission should start its activities. Linkages with the Agriculture and Rural Development Plan (ARDP) 2007-13 will be followed up and ALUP will seek to clarify sources of financing for land consolidation.

The feasibility of the envisaged 2nd land consolidation in Klinë/Klina, involving absentee Serbian Kosovar land owners – will be investigated.

Result 3 (spatial planning) has been under pressure since unexpectedly the project’s spatial planning capacity was almost fully occupied with Result 4.2. Still, data collection has progressed well and currently the GIS data base, needed for the Rural Land Management Plan and the Environmental Action Plan are being set up. MAFRD applied formally to the Ministry of Public Services to make available free of charge or at reduced rate aerial photography of the pilot area, i.e. the municipality of Klinë/Klina.

A reduction in price of 50 % was granted, which was appreciated.  However, these  reduced prices are still excessive as compared to other countries (€ 6-10 /km2). In order to make this essential information sources widely available through practical application for the good of Kosovo, at the same time acknowledging that the aerial photography must well contribute to the upkeep of KCA and enable for new photo’s to be produced at regular intervals, the consultants hold the opinion that the prices should come down to more or less normal international levels. ALUP has decided to resort to the use of satellite imagery and reduce the use of aerial photography. Giver the technical requirements this is well possible.

The soil survey and land suitability mapping will be completed on short notice. An environmental inventory will be done and the GIS data base will be completed. Basic maps will be produced, and the contents of the Rural Land Management will be worked out in more detail.

Result 4.1 (land market) has seen the first activities on land valuation.. The international expert set valuation of agricultural land in context of land management in Kosovo and to international practice of land valuation. The current legal and institutional framework for land valuation was reviewed. Key issues and problems were identified, including the principles of valuation, data quality, linkages between spatial planning, land zoning and land valuation, enforcement and dispute resolution, need for agricultural experts with specialisation in land valuation.

Findings and recommendations include: i) the subject of agricultural land valuation has to be set up from the ground; in fact no public data are available and ii) there is a need for a manual on valuation on agricultural land and related instructions iii) the issue must be approached in close cooperation with the Ministry of Economy and Finance (MEF)

Next quarter will bring the development of main methodological steps valuation steps and the preparation of draft guidelines for valuation. Further, the cooperation with the MEF will be worked out.

Result 4.2 (Dragash/Dragaš, dismantling of the SOE Sharr Prodhimi) has seen a concentration of activities  due to a sudden deadline on October 22 for the preparation of a preliminary land zoning map and the corresponding thematic maps.

Due to new developments in  the privatisation process of the Socially Owned Enterprise (SOE) “Sharr Prodhimi”, the programme for Result 4.2 had to be modified. Originally it was  planned to elaborate a structured global rural land development plan for the municipality of Dragash, from which proposals how to deal with the question of privatisation of “Sharr Prodhimi” would be derived. The reason for the modification was the decision by KTA to offer the assets of the SOE  on a Property Fair in München at the end of October to potential investors. Therefore, on the request of KTA, ALUP  prepared a land zoning map of the municipality for this occasion, displaying the possible uses and restrictions of such lands and the degree of required protection of the various zones

ALUP takes the position that the assets of Sharr Prodimi can be sold, with the exception of the almost 21.000 ha of high pasture lands and 800 ha of forest lands,  which should be kept under public control and can only be sold only in agreement with a municipal rural development plan and under conditions.  A quick sale of the assets will be a risk for the widely accepted aim to protect the valuable natural resources and the rights of use of the local population The understanding is that KTA has the same position, on condition that a  suitable institutional arrangements could be achieved. This would mean that proper transfer and clear ownership of these lands, and adequate management are ensured.

As a result of these developments, ALUP has made much more progress than envisaged at the start of the reporting period. Data collection has been done, a GIS data base set up and  a  land zoning plan with thematic maps have been prepared. However, the pressing dead line has left indispensable activities undone yet (consensus building among stakeholders, analysis of institutional set up, legal framework and property right).

This has resulted in a major progress in the result 4.2  (much more than envisaged), but leaving gaps as compared to the initial programme on the other hand.

However, the above position could not be guaranteed by KTA, as final decisions by UNMIK on this subject could be different. Nevertheless, ALUP consented to assist KTA, since it is anticipated that its land zoning maps will be used to ensure a basic nature and environmental protection for the area.

During the next months, the “gaps” referred to above will be filled. This means a focus on consultations, consensus building and analysis of institutional set-up, legal framework and property positions.

Finally, Result 5 (increased inter-governmental cooperation and communication) is still waiting for the first meetings of the two most important inter-ministerial committees. These are expected during the next quarter.

Significant progress was made in taking on work in one of the northern municipalities, and it is expected that a programme will be done jointly with the municipality of Zveçan/Zvečan on rural development, focused on village revival in hilly areas. ALUP’s assistance would comprise the formulation of a basic rural development plan, the methodology based on experience already developed in other areas. The result would be a concrete proposal for a village revival programme, including the rehabilitation of rural access roads. The output will be a report with maps on i) current conditions (topography, land use, infrastructure) ii) required interventions iii) the social and economic feasibility of the village revival programme iv) global cost estimates. This report must be suitable to attract the interest of potential investors.

In order to be able to implement this programme in the North, working days have to be made available and the number of days available for other project components have to be reduced. This will affect these other components, but not dramatically so. In total, 175 working days of local (Serbian Kosovar) expertise will be needed, and 21 working days of international expertise. The programme will be directed by the consultants team leader.

During the next months further discussions with the municipality and other stakeholders are envisaged, a programme proposal will be prepared and local staff will be recruited.

The study tour on land consolidation (24-10 // 01-11-06) was prepared. This required a lot of input, mainly of the Key expert 2, but also of the team leader and the office staff.

The relations with the MAFRD are excellent. In addition, the cooperation with the Institute of Spatial Planning ISP (Ministry of Environment and Spatial Planning, MESP), with which ALUP works closely together, has been most satisfactory for both parties. Working relations with relevant agencies and municipalities are effective and agreeable as well.

Cooperation with other projects- either EAR or non-EAR – has been pursued, in particular with the Agricultural Master Plan Project (AMPK), which is in a final stage of preparation of its Agricultural and Rural Development Plan 2007-13. ALUP mainly contributes to ARDP Measure 2 (Restructuring Physical Potential in the Agri-Rural Sector), but also to Measure 5 (Improving Natural Resource Management) and to some extend to other Measures.