Abandonment, and Land Market Operation in Albania
Resource information
Albania's radical farmland
distribution is credited with averting an economic crisis
and social unrest during the transition. But many believe it
led to a holding structure too fragmented to be efficient,
and that public efforts to consolidate plots are needed to
lay the foundation for greater rural productivity. This
paper uses farm-level data from the 2005 Albania Living
Standards Measurement Survey to explore this quantitatively.
The analysis finds no support for the argument that
fragmentation reduces productivity. However, producers fail
to utilize about 10 percent of the country's productive
land, and, in the majority of cases, this land has been idle
for at least five years. Farmers quote inefficiently-small
plots as the reason for this in few cases, casting doubt on
the scope for land consolidation to solve this issue.
Instead, the data are consistent with the notion of land
market imperfections, which can be traced to gaps in the
legal and policy framework, as well as inefficiencies in
registry operations, leading to land abandonment on a large
scale. To maintain the productive potential of
Albania's rural economy and, if and when needed, the
ability to conduct consolidation in a cost-effective and
sustainable manner, it will be critical to complement the
emphasis on consolidation with an effort to address those
gaps and inefficiencies on a priority basis.
