Agricultural households, poverty and the rural labour market in Kosovo

Abstract

This article assesses the incomes of farm households in Kosovo and engagement in other gainful activities (OGAs) outside agricultural production. After adjusting for household size, rural incomes in Kosovo are low. For the poorest quartile of sampled households, incomes per household member are below EUR657 per annum. Overall, agricultural sales account for only 27% of total (cash) income and OGAs make a substantial contribution to the livelihoods of rural households. The poorest households are characterised by lower engagement in self-employment, are less likely to receive remittances, have less non-agricultural work experience and the head of the household has low educational attainment. The poorest quartile operates significantly smaller farms and is less likely to sell agricultural output. There is considerable underemployment of family members and, if the economic situation improves, the flow of labour out of agriculture is likely to be substantial. The main self-reported barriers to self-employment are insufficient capital and credit, suggesting a role for mircofinance schemes to enable start-ups and small business expansion. In dealing with its current chronic economic problems in rural areas, Kosovo would be best served by adapting measures from a development agenda, particularly microfinance and policies to support self-employment.

Notes

1. Field, garden, plastic tunnel, orchard, vineyard, meadow.

2. This maximum value represents an outlier, but it does not affect the analysis.

3. Comparable per capita incomes for agricultural households in Bulgaria and Romania were EUR4942 and EUR4357 respectively (Möllers et al. 2011).

4. In Kosovo secondary school previously implied eight years; now it has nine years of schooling.