GCF Knowledge Product for Economic Incentives for SLM in Albania

1. PROJECT: Developing the capacities of Albania for an effective engagement with
the Green Climate Fund
Economic Instruments to promote sustainable use of land in Albania

3. Table of Contents
1. Introduction........................................................................................................................1
2. Short description of engagement of Albaniawith GCF............................................................2
3. Climate Change Mitigation Benefitsfrom SLM.......................................................................2
4. GCF engagement in SLM.......................................................................................................3
4.1. GCF support for SLM.....................................................................................................3
5. SLMLegal Framework andPriorityin Albania ........................................................................6
5.1. Context........................................................................................................................6
5.2. Legal Framework for SLMin Albania..............................................................................6
6. Development of Incentives inAgriculture and Rural Development in Albania for SLM..............8
6.1. Developmentinitiatives..............................................................................................11
7. Conclusions and recommendations.....................................................................................11
List of figures
Figure 1: Approved GCFforest and land use sector projects and readiness grants...........................4
Figure 2: GCF pipeline in the forest and land use sector.................................................................5
List of tables
Table 1: Support measures and relation to Master Action Plan activities by status of achievement10

5. Economic Instruments to promote sustainable use of land in Albania 1
1. Introduction
This publication comes at a critical moment in time, whencountriesare in the process of defining
theirtargets and ambitionsforthe second round of nationallydetermined contributions,whichare
due in2020. Thisoffersa unique opportunity forcountriesandthe global communitytorevisittheir
national climate targets,in light of the ambitionto limit the global temperature increase to 1.5 °C,
andturn the targetsintoconcrete measurableinterventions. The agriculture,forestryandother land
use (AFOLU) sector, accounting for a quarter of global greenhouse gas emissions, offers numerous
opportunities for countries to meet this global temperature target. It is therefore crucial that
countriesplace forests,aspartof widerlandscapes,at the heartof theirnext nationallydetermined
contributions to fully embrace their potential to deliver the necessary results.
Ittookovera decade toreacha global agreement onamechanismthatacknowledgesthe roleof the
forest and land use in addressing climate change under the umbrella of the United Nations
Framework Convention on Climate Change (UNFCCC). Even before, many countries had policies in
place and undertook actions to address deforestation and sustainable land management.
Nonetheless, these efforts were not at the needed pace for tackling deforestation and land
degradation.
Albania has significant natural resources, including fertile agricultural land, an Adriatic/Ionian
coastline, abundant water resources with hydropower potential and valuable mineral deposits.
Approximately41%of Albania‘slandisclassifiedasagricultural land,includingthe 15% of total land
classifiedaspasture.The amountof arable landhasincreasedfrom21% in2007 to anestimated24%
in2010. Agricultural landisprimarilyconcentratedinthe coastal plainsof the west,rivervalleysand
highplateaus.About60% of pasturelandis locatedinthe highlands,hillsandmountainsandisused
for summergrazing; 40% of pasturelandis locatedin lowlandsand usedduring the wintermonths.
Fifty-one percentof the total cropland inAlbaniais irrigated(WorldBank 2007a; World Bank 2009a;
Shundi 2006; World Bank 2011a).
Forestscoveran estimated29%of total landareain Albania.Inthe 2000 – 2005 period,the country
gainedforestlandatanannual rate of 0.6% due toeffortsof reforestationfromthe government.The
amountof nationallyprotected landhasincreasedfromanestimated8% of total landin2008to13%
of total landin2010. However,due toAlbania’smountainousterrain,heavyautumnandwinterrains,
as well aspracticesof overgrazinganddeforestation,thecountry‘ssoil resourcesare very vulnerable
toerosion. Albanianlowlandsare subjecttofloodingduring the rainyperiods.Compoundedwiththe
limitednumberof operating wastewatertreatmentfacilities, the surface andgroundwaterare often
subject to become contaminated by industrial and domestic effluents(World Bank 2009a; World
Bank 2003a; Zdruli and Lushaj 2001; GOA 2010a).
Asa resultof intensiveuseof natural ecosystems,theenvironmentinAlbaniaisdegraded.According
to the National Environmental Strategy and the Cross-Sector Environmental Strategy, land
degradation,soil erosion,andbiodiversitylossesare among the key environmental problems inthe
country.For thisreason,anddue to the fact that Albanianeconomyishighlyreliantonlandandsoil
as an importantresource,the governmenthasbeenfollowingpoliciestoextendthe protectedareas
from9 to 13 percentbetween2007and 2010 andare plannedtoincreaseto 18% bythe endof 2019.
Soil erosion,mainlycausedbyunsustainableforestry,agricultural andpastoral practices,isa major
concern.Erosionaffects24%of the national territory(onaverage37t ha-1yr-1) soil loss,wellabove
the “sustainable”10 t ha-1 yr1 levels,howevermore than 60 % of the remaininglandisalso highly
vulnerable towatererosionwhichisfurtheracceleratedbythe illegal forestcuttingthat after 1990
destroyed about 300,000 ha of forests.

6. Economic Instruments to promote sustainable use of land in Albania 2
2. Short description of engagement of Albania with GCF
What is GCF
The GreenClimate Fund(GCF) isa global fundsetup by the UnitedNationsFrameworkConvention
on Climate Change (UNFCCC) in 2010 dedicated to helping developing countries reduce their
greenhouse gas emissions and enhance their ability to respond to climate change.
GCF has a crucial role in servingthe ParisAgreement,supportingthe goal of keepingaverage global
temperature rise well below 2o
C through channelling climate finance to developing countries.
Accounting for the needs of nations that are particularly vulnerable to climate change impacts and
supportingthe implementationof NDCs.GCFusespublicinvestmenttostimulateprivate financeand
unlock climate-friendly investment for low emission and climate resilient development.
GCF isaccountable to the UnitedNationsand guidedby the UNFCCC principlesandprovisions. The
Board, comprised equally of 12 developed and 12 developing countries, governs GCF. The Board
makes decisions based on the consensus agreement of all Board members.
Engagement of Albania with GCF
Albania is a developing country with a per capita GDP of 10 thousand USD. Though Albania is a
country with a low-carbon economy, with the signing of the Paris Agreement by the Government
(New York, 22 April 2016), Albania has entered in the new era of the climate international policy
process, where all partiescollectively aim to hold the increase of global temperature to 2°C above
the pre-industrial level.
In 2016, the Ministry of Tourism and Environment (at the time Ministry of Environment) was
nominated as the National Designated Authority to serve as the interface between the Albanian
Government and GCF. They provide broad strategic oversight of the GCF’s activities in the country
and communicate the country’s priorities for financing low-emission and climate-resilient
development.
3. Climate Change Mitigation Benefits from SLM
Greenhouse gas emissions from agriculture, land use, land use change, and forestry account for
approximately 33% of the global total. Root causes of these emissions are an increasing global
demand for food and fibre, coupled withunsustainable land managementpractices. It is therefore
widely acknowledged that the way in which land is used and managed has a major role to play in
mitigating global climate change.
Sustainable LandManagement(SLM) hasthe potential notonlytoreduce greenhousegasemissions
by reducing emissions from biomass burning, biomass decomposition, and the breakdown of soil
organicmatter, butalsotosequestercarbonthroughpracticesthatincrease biomassproductionand
promote the build-upof soil organicmatter.There are,therefore,substantial co-benefitsof SLMfor
climate change mitigation.
Sustainable Land Management (SLM) is perhaps one of the best measures available to mitigate
climate change inAlbania.Climate change inthisregioncanresultinflashfloods,droughtsandland
degradation.The farmingcommunitiescanplayabigrole inmitigationwithsupportfrompoliticians,
policy makers and donors.
There are opportunities to change the land use system and the farming practices in the country in
order to sequester greenhouse gases (mostly carbon dioxide),or reduce emissions (mostly nitrous
oxides and methane) through use of minimal chemical fertilizers and improved livestock

7. Economic Instruments to promote sustainable use of land in Albania 3
management. Otherexamplesinclude switchingfromshiftingcultivationtoanagro-forestrysystem,
changingcroppingpatterns,andintroducinghedgerowsofgrassesortree speciesalongthe contours
of sloping arable land.
Besidesfarmingpractices,the extentof landdegradationinthe Albaniaisalsoincreasingbecauseof
limitedlandresources.Itisfeasibleto change these degradedorbarrenareasintorangeland,social
forestry, and other plantations that could benefit the local environment and the farming
communities who are dependent on small land holdings. These changes are possible if SLM
technologiescan generate immediate incometofarmers, whilepolicyandlegal support isavailable,
and donor communities are willing to invest in the long-term returns from these interventions.
Managing land resources can help in two main ways:
1) By creating built landscapes that have low greenhouse gas emissions reducing mobile and
stationary sources of those gases; and
2) By conservinglandscapesthatare natural sinksfor carbon dioxide,like forests,andnatural
storage zones like tundra permafrost.
However, sustainable land management (SLM) for this purpose is not merely about reaching the
outcome of alowclimateimpactlanduseorlandcover. SLMcanalsocontributebybeingthesystems
framework within which activitiessuch as transportation, energy use,power generation,industrial
production, forestry and agriculture interact, creating an integrated, multi-sectoral response
appropriate to meeting the climate change challenge.
4. GCF engagement in SLM
GCF is constantly analysing the climate finance panorama in all its funding proposals to ensure
coordination and increase the ambition to reach global goals. While traditional development and
economiccooperationfundingforthe forestandlandusesectorisdeclining,anddonorgovernments
are turning more to multilateral types of funding (Blaser, 2019), results-based and market driven
finance are receiving increased attention. The latest attempts to analyse and communicate about
the global finance panoramaforthe forestandlanduse sector(e.g.the LandUse FinanceTool,UNFF
Global ForestFinancingFacilitationNetwork)are of relevance forunderstandingthe complex setting
in which GCF support is most efficient and effective.
4.1. GCF support for SLM
GCF support forforestsand land managementissoughtas part of a widerscope beyonditsclimate
change mitigationrole.Thisencompassesincreasingresilienceandenhancinglivelihoodsof the most
vulnerable people, communities and regions; increasing people’s health and wellbeing; enhancing
food and water security; and improving the resilience of ecosystems and ecosystem services. It is
understoodthatforestsprovidebenefitsbeyondcarbon,andindeedForestsandLandManagement
investments from GCF have shown to provide both mitigation and adaptation benefits.
The GCF support is provided through three funding windows that are currently available for the
implementation of Forest and Land Management.
a. Readiness and Preparatory Support
The Readiness Programme is a funding programme designed to enhance country ownership of
projectsand the abilityforcountriesto accessthe Fund’sfinancing.The GCF ReadinessProgramme
provides resources for strengthening the institutional capacities of NDAs and/or Focal Points and

8. Economic Instruments to promote sustainable use of land in Albania 4
direct access entities to efficiently engage with the Fund. All developing countries can access this
funding, and the GCF aims to ensure that 50 percent of the readiness funding be awardedto least
developed countries and developing countries.
Thisreadinessfundingis awardedinthe formof grants of up to USD 1 millionperyearper country.
Technical assistance is also available. An additional USD 3 million per country may be accessed for
creating national adaptation plans or other qualifying adaptation planning. GCF readiness funding
for forestand landmanagementrelatedactivitieshasbeenapprovedformanycountries.Currently
a total of USD 4.5 million have been disbursed in readiness funds for countries receiving support
relatedtoforestand land management(butnotonly).Figure 6 showsthe approvedGCF forestand
land use sector readiness grants and projects.
Figure 1: Approved GCF forest and land use sector projects and readiness grants
b. Project Preparation Facility
Recognizingthatin some cases,funding isrequiredtoprepare a fundingproposal,GCF providesup
to USD 1.5 millionperproposalthroughitsProjectPreparatory Facility(PPF).Thisfundingisspecially
targetedto direct access entitiesandmicroto small size category projects;however,all AEs(direct
accessand international) are eligibletoapply.Supportis provided inthe formof grantsorrepayable
grantsand equityinexceptionalprivatesectorcases.FundingproposalsdevelopedwithPPFsupport
should be submitted to the Board within two years of approval of the PPF request.
PPF funding may be used for activities such as pre-feasibility and feasibility studies; project design;
environmental,social and gender studies; risk assessments; identification of programme/project-
level indicators;pre-contractservices,includingthe revisionof tender documents;advisoryservices
and/or other services to financially structure a proposed activity. Additional project preparation
activities may be included where necessary, provided that sufficient justification is available.
c. Funding Proposal Approval process
Forestand Land Use isamong the eightpriorityareasof focus of the GCF (separatedinto fourareas
for mitigation and four areas for adaptation) identified to enable transformational change. Due to
the nature of intervntions,in some cases, Forest and Land Use proposals may include one or more

9. Economic Instruments to promote sustainable use of land in Albania 5
areas of focus, be it for adaptation or mitigation. Interventions may include co-benefits such as
increased resilience and enhanced livelihoods of the most vulnerable people, communities, and
regions; increased resilience of health and well-being, and food and water security and improved
resilience of ecosystemsandecosystemservices. Eachproposal issubmittedbyan AE and assessed
bythe GCF according tosix investmentcriteria.Foreasyassessmentthusaprojectmustclearlyshow
(i) impact potential, (ii) paradigmshift potential, (iii) sustainable development potential, (iv) needs
of the recipient, (v) country ownership, as well as (vi) efficiency and effectiveness.
Proposalsare processedonarollingbasisandcanbe submittedatanytime.AnAEand NDA canalso
submitvoluntarilyaconceptnote for earlyfeedbackandrecommendationsfromthe Fund.Though
this is not a requirement it is often encouraged, and offers a good learning experience for the
applicant. GCF requires letters of non-objection to be signed by NDAs for all funding proposals
submittedby AEs.Thisistoensure thatthe proposedGCF investmentindeedsupportsthecountries
toward their national climate change and development goals. Additionally, in order to catalyse
private investment in addressing climate change, GCF established a Private Sector Facility, which
aimstoassistcountriestoaccesscapital markets.Funding proposalstothe Private SectorFacilityare
generally required to demonstrate higher co-financing ratios and warrant lower levels of
concessionality from GCF.
Figure 2: GCF pipeline in the forest and land use sector
a. Simplified Approval Process (SAP)
The SAP is a pilot scheme designed to give smaller-scale and lower-risk activities easier access to
funding. Essentially, the process differs from the regular proposal approval process insofar as it is
simpler,shorterandfaster.There are dedicatedtemplatesforconceptnotesand fundingproposals,
and these are processed through a streamlined online submission system.
Eligibility criteria are, essentially: size (total project budget), which must be USD 10 million or less
fundingrequestedfromGCF;and minimal to no risk(environmental andsocial risks). Proposalscan

10. Economic Instruments to promote sustainable use of land in Albania 6
be submittedbyall AEs,butdirect accessentitiesare highlyencouragedtoapply, andconceptnotes
may also be submitted directly by NDAs or focal points.
SAP can be an instrumental tool and enabler to advance countries’ national processes towards
fulfilment,implementationand accessingforestsand land use results-basedpayments.This means
supporting countries to reach compliance with the UNFCCC requirements, including the Warsaw
Framework for Forests and Land Use and implement demonstration activities that could be
replicated or scaled up to achieve results at subnational or national scales.
5. SLM Legal Framework and Priority in Albania
5.1. Context
Further to the complex reform process undertaken by the Country and the granting of candidate
statusfor EU membership,Albaniahasincludedenvironmentalprotectionamongitshighpriorities.
ImportantStrategiesandlegislationwereadoptedinthe pastyearstoestablishasolidand effective
environmental policy.
The Law on Environmental Protection (2013) is the frameworklaw providing the legal basisfor the
adoptionof strategies,plansandimplementinglegislationinseveral environmentalsectorsincluding
the protection of soil.
The Law on the Protection of Agricultural Land (2004) provides the legal basis for creation and
functionof a newinspectorate onlandprotectionandlandrehabilitation. The law alsoprovidesthe
basis for the establishment of the Inter-ministerial State Committee on Land Protection and
identifieditsmandate asthe coordinationof workandactivitiesbetweenthe Ministryof Agriculture
and Rural Development(MARD),Ministryof TourismandEnvironment(MTE),otherinstitutionsand
local government.
The Law onForestryand ForestServicesprovidesawide range of managementtoolstoprotectand
preserve forest resources and prevent deforestation, while the Law on Pasture and Grazing Land
gives the legal framework for the pasture and meadows management.
Several strategies and sectorial action plans have been developed and executed since 1992 to
address obligations under the UNCCD and EU Acquis. The National Strategy for Development and
Integration (NSDI) 2016-2020, identifies key environmental challenges in Albania that include: (i)
contamination of water resources (ii) soil erosion as a result of unsustainable forestry,agricultural
and pastoral practices (iii) land contamination from abandoned industrial installations, mining
enterprisesandwaste dumps;and(iv)wastemanagementwhichconstitutestobe amajorsource of
pollution.The NationalStrategyforthe Environment(2016-2020) iscurrentlyinthe processof being
updated. The document will be the basis for national planning on objectives related to l and
protection. Further objectives pertaining to rural development are addressed by the National
Strategy for Rural Development (2014-2020), which focuses extensively also on soil erosion.
5.2. Legal Framework for SLM in Albania
Economic Instruments for stimulating investments in land productivity are coordinated mainly
through the Ministry of Agriculture and Rural Development.
Law No. 9817 “On Agriculture and Rural Development” sets out the objectives, measures and
programming of agricultural rural development policies, public agricultural services, research and

11. Economic Instruments to promote sustainable use of land in Albania 7
vocational training, as well as the database and policy information in the agricultural and rural
development sectors.
Objectivesof agricultural andrural developmentpoliciesunderthislaw are to undertake measures
for the implementation of agricultural policies and rural development,and are mainly intendedto
achieve the following general objectives:
o Increasing incomes for the rural population, increasing their well-being by improving their
working and living conditions, and creating equal opportunities for men and women;
o Increasing production by promoting competitiveness and technical progress, as well as
ensuring optimum use of production factors and in particular labor;
o Market stability, ensuring sustainability in agricultural production;
o Foodqualityandsafety,ensuringthatthe foodchainisof asustainable qualityanddoesnot
cause harmful effects on human health;
o Protecting and preserving the environment by ensuring that agriculture preserves natural
resources;
o Poverty reduction, which aims to reduce disparities between levels of development in
different regions, as well as the backwardness of less-favored rural areas, by developing
alternative and complementary employment-generating activities with a view to slowing
downemploymentremovingthe populationfromthe villagesaswell as empoweringsmall
and medium-sized businesses.
This lawalso setsa program, whichaims to support the developmentof agriculture inthe country,
to gradually guarantee the effectiveness of agricultural policy and rural development measures,
paying attention to the needs, project implementation planning and support measures.
The financial resources of the program are provided by:
o State Budget;
o International donors, in accordance with relevant agreements;
o Budget of the municipalities.
The agriculture and rural development program is permanent and administered by the ministry
responsible for agriculture through the Agency.
Also law 139/2015 “On local Self-Government” provides that LGU’s have the responsibility for the
creationandadministrationof localagriculture andrural developmentgrantschemes,fundedbythe
local budgetand / or co-financedbythirdparties,ensuringbalancedgenderequalityaccess.Inthis
regard there is no evidence that LGU’s allocate any funds for these responsibilities.
The Council of Ministers adopted DCM No. 709, dated 29.10.2014, “For the approval of the Cross-
Sectorial Strategy for Rural and Agricultural Development 2014-2020”. The Inter Sectorial
Agricultural and Rural Development Strategy (ISARDS) is designed according to the “Europe 2020”
strategicframeworkforarapid,sustainableandinclusive growthandthe general strategicobjective
of AlbaniaforEU membership,andinline withthe EU strategicplanningapproachforthe Common
Agriculture Policy (CAP) 2014-2020, at the same time focusing on the specific needs for the
development of agriculture, agro-processing and rural areas in Albania.
The main objective of ISARDS is to define the strategic framework to treat the challenges faced by
the agriculture andagro-processingsector,aswellasthe developmentof rural areasinasustainable
economic,environmentalandsocialmanner,proposingsimilarpolicyinstrumentstothe CAP,paying
a special attention to the preparation of the sectors, policy instruments and institutional
approximationforEUmembership,toachieveasustainableimprovementof competitioninAlbania.

12. Economic Instruments to promote sustainable use of land in Albania 8
6. Development of Incentivesin Agricultureand Rural DevelopmentinAlbania
for SLM
Albania, as a candidate country for EU membership, is struggling to fulfil its long-term strategic
objectivesandalignwiththe requirementsderivedfromEurope 2020 strategy.Since 2014, the year
in which the candidate status was awarded, the Government of Albania is making efforts to
formulate compliant agriculture and rural development policy as well as update the legal and
institutional base for alignment to Common Agriculture Policy (CAP). The agriculture policy is of
multi-dimensional importance, from meeting the EU standards related to food security and
agricultural practicesto preparingthe agricultural sector to withstandthe competitive pressuresof
the upcomingmembershipinthe singlemarket.Thatimpliesthat Albania’sagricultural policyshould
complywiththe EUCAPinordertoachieve economicallyviablefarming,improvedfoodsecurityand
sustainable rural livelihood. As such, this emerging political set-up requires a new vision for
policymaking as well as a new approach for designing the budgetary support measures for the
agricultural sector.
National support schemes providing incentives are determined by an annual budgeting program
and enforced by the decisions of the Council of Ministers. The main financial resource of the
programme for agriculture and rural development are EU funds through the IPARD II Programme.
The budgetarysupporttoagriculture inAlbaniaismodestwhencomparedto the agriculture sector
size,needsandcontributiontothe national economyaswell asthe supportgiveninotherWestern
Balkan countries and the EU for this sector (Volk et al. (eds) 2014). Although the recent budgetary
support is higher than in previous years.
The entire funding for structural and rural development measures is oriented to improve the
competitiveness of the agro-food sector. No funds are intended to support rural economy and
population or preserving of environment and ecosystems.
Among structural and rural development support measures the largest share of funds belongs to
financingof drainage,irrigationandotherwaterresourcemanagementinfrastructure (in2010-2015,
60% on average).
The on farm investment support has witnessed a decrease that started from 2010. This decreasing
trendiscausedmainly bythe reduction insupporttopermanentcropplantations(especiallyolives).
Higher importance was given to technology improvement (drop irrigation, wells and biomass
heating),plantationof medicinalherbs,expansionof greenhousesandmodernizationof farms(new
equipment,buildingsandlightconstructions).The foodprocessingindustrysupportstartedgaining
importance especiallyin2014 withthe introductionof twomain measures:the supportthat covers
50% of the value of investmentsinstorage,post-harvestandprocessinginfrastructure andsupport
covering70%of interestratesfornewinvestmentsin the agro-foodindustrysector.General support
measures consist of support to agriculture research and development, advisory and extension
servicesforagriculture,publicfinancingof measuresinthe fieldof foodsafetyandfoodqualityand
other measures of a general character (mostly technical assistance). In2015, budgetingfor general
support measures decreased considerably compared with 2014. This reduction was mainly a
consequence of reduced international funds relating to food safety and technical assistance.
The directproducersupportmeasuresinthe countrycontinuetobe verymodest,however,inrecent
years this support has been increasing constantly. The major part of direct payments goes for
supporting the livestock sector, mainly in the form of head age payments for small ruminants.

13. Economic Instruments to promote sustainable use of land in Albania 9
The enforcementof measureshasbeencharacterizedbyfrequentchangesalongthe yearsdue toa
“leakage of funds” in the past.
Decoupledpaymentsdonot exist,althoughtheyare core conceptof CAP2020.Basic elementssuch
as Farm Register and LPIS system required as a fundamental step for the establishment of IACS
(Integrated Administration and Control System) are not ready yet. Therefore, decoupled payments
will be missing in the near future (optimistic scenarioto be implementedin 2020). The recent two
yearswitnessed anincrease indirectpaymentsbased onoutput, ameasure initiatedto intensify and
formalize vertical relationsinthe value chains.In the pastdirectpaymentbasedonoutputwasused
to consolidate the supply forextravirginoliveoil whichwasexemptedin 2013. In 2013-2014 output
relatedpaymentswerebeingusedforsupportingthe collection anddelivery of forestry fruits, while
lately a price premium was grantedfor the milkdelivered to dairy industry as well as for fruits and
vegetables destined to collection and processing points.
Major agriculture subsectorsare characterized byhighinformalitydue toweakregistrationandlow
fiscal control duringthe recenttwodecades.Moreover,verticalcoordinationisveryweakduetolow
contracting activity and weak cooperation (Imami et al.2016; Gerdoci et al.2016).
The numberof supportschemesisstill deemedtoohigh(10measureswith17sub-measures) despite
the fact that they are reducedin number. The numberof measuresis changingfrequently,withno
solidlinkstopolicyvision.Schemesare not alwaysbasedon in-depthex-ante evaluationwhichhas
led to the one-time/year appearance of some schemes (such as meat or skin delivery to the
slaughterhouses). Moreover, some schemes survive for some years and then vanish and are not
repeated during the next budgetary program. It seems that also ex-post evaluation in terms of
efficiency and impact are rare (so far only one study available, see Shkreli et al.2015). Frequent
changes and short-term orientation do not provide reliable incentives and orientation to the
supportedsectors.Moreover, there are few schemesdeemedto be compatible with CAP. Despite
the commitmentof MARD expressedthroughthe masteractionplanwhere one of the objectivesis
to achieve compatibilitybetweenCAPand the national scheme of support,there existvariouslegal
weaknessesthathamperedthe introductionof theCAP-likeschemesontime.Inordertoschematize
the analysis a framework of measures is tabulated below, where in the left side of the table, the
majormeasuresof agriculture andrural development supportgapsare rankedandin the right side,
the institutional and legislative reasons and time targets are provided).

14. Economic Instruments to promote sustainable use of land in Albania 10
Table 1: Support measures and relation to Master Action Plan activities by status of achievement
These measures accompanied by technical assistance are designed and ready to be implemented
after accreditation of the implementing structure. However, except this part of first package other
activitiesplannedare still not implemented.Forinstance, issuessuchas strengtheningof collective
actions among farmers and other stakeholders, achieving land consolidation, supporting quality
schemes for agriculture products, enhancing agro-environment-climate measures and supporting
organic farming are not yet accomplished.
A second group of measures is related to support of advisory services, preparation and
implementationof localrural developmentstrategieswhichhasundergonesubsequentchangesdue
to the territorial reform. Territorial restructuring is accompanied with a vast number of changes
haltingthe reformsonveterinaryservice,advisoryservices,waterandirrigationmanagementaswell
as landand forestrymanagement.One of the mainproblemsforimplementingthissecondgroupof
measures is the lack of coordination between central and local institutions.

15. Economic Instruments to promote sustainable use of land in Albania 11
6.1. Development initiatives
Despite that the agriculture policy properly addresses the agriculture and rural development
challenges its implementation is still lagging behind. Overall funding for agriculture and rural
developmenthasincreasedbutisstillfarfromwhat the Albanian Governmenthastargetedfor2020.
Structural and rural development measures have expanded, gaining 60% of the overall support
funds.This policydoesproperlymetwiththe structural needsof the agriculture sector.It supports
the restructuringandincrease of competitivenessof the farms,reducestheirstructural vulnerability
and promotes the vertical and horizontal farm integration by supporting the investments in
postharvest and processing.
Despite the expansionof thispillar,againnofundsare orientedtothe supportof rural economyand
populationandforestry.The structural supportprovidedtorural developmentinAlbaniaisfocused
only on the improvement of the competitiveness of agricultural sector.
Directsupportmeasuresare alsoincreasingwiththemajorityof fundinggoingto the livestocksector.
Othermeasuressuchas supportof cooperation,landconsolidation,strengthenof advisoryservices
and schemes of quality support are also not developed.
Moreover,the institutionalcoordinationshouldbe fine-tunedsothatMARDcan exploitthe reforms
being carried out in other sectors.
LGU’s should have a clear pattern on how to comply with national policiesas definedby central
institutions in order to fulfil their role as the nearest institution to the farmers in terms of land
protection, forestry, irrigation and drainage etc.
The introduction of decoupled payments is still not possible due to legal and institutional
bottlenecks.
Moreover, gaps remain in the agriculture information system for farmers, such as Market
Information Systems, as well as other monitoring tools such as Farm Accountancy Data Network,
which are emerging due to the slow progress in establishing systematic farm surveys and
endorsement of the Census of Agriculture 2012 results (MARDWA 2016c).
Donor coordination is very much required in order to keep the momentum for speeding up the
necessary institutional reforms.
Othercountry recent reforms,suchas forestsreformsandterritorial reformsaswell asthe existing
institutional fragmentation have delayed the process of resolving these bottlenecks.
An approximation of national legislation and policy instruments to the EU Acquis and further
development of the institutions for its enforcement is therefore the main challenge.
7. Conclusions and recommendations
For successful upscaling of SLM, more attention must be paid to the social system from the first
involvementstage,uptothe long-termmaintenance.Ensuringstakeholderparticipationthroughout
decision-making processes, from the design of SLM projects all the way to implementation and
monitoring, will increase the likelihood for acceptance and implementation of SLM. From start to
finish, the process should be highly solution-oriented, emphasizing SLM and combining a local,
participatory approach with global knowledge sharing.

16. Economic Instruments to promote sustainable use of land in Albania 12
Integrating and mainstreaming SLM as land based solutions towards addressing land degradation
and climate change adaptationandmitigationacrosssectors,levelsandstakeholdergroups,making
it a consideration in policy in all related areas (e.g., water, land planning, energy, poverty) can
facilitate adoption, and also open new and previously inaccessible funding sources.
The lack of a frameworkto assessthe co-benefitsandtrade-offsandof informationtosupportthe
promotion of enabling conditions for optimal SLM technologies and practices limits the ability of
regulators, policy-makers and land managers to move towards more coherent SLM choices at
different scales (in time and space) of implementation.
Adoptionof SLMthatmeets theneedofaddressinglanddegradationandadaptingto,andmitigating,
climate change, requires more transdisciplinary approaches, including new tools that can lead to
betterinformeddecisionmakingandeffective knowledge-exchangemechanismsthatfacilitate new
learning and behavior change.
Since the country capacities are verylimited to support the enhancement of the actual situationin
the Sustainable Land Management and Agriculture it is recommended that the Government of
Albaniathroughthe GCF supportsthe investmentsinthe aforementionedsector. Thus, the GCFcan
supportthe developmentof anenablingenvironment byupgradingandenhancingthe resilience of
village irrigation systems and scaling up climate-smart agricultural practices in the river basins by
improvingtechnical capacityandknowledge managementof institutions,communityorganizations
and farmers.
Fundingandfinancingmechanism canbe attained forrestoringagricultural landscapesanddegraded
ecosystems, including forests, using climate-resilient tree and shrub species.
The GCF can also be utilised in order to trigger the integrated sustainable natural resource
management - introducing good practices on sustainable land use and soil management by: 1)
Strengthening climate and hydrological observation and forecasting systems to enhance water
managementandadaptationcapacityof smallholderfarmerstodroughtsandfloods;2) Introducing
agro-forestation(integration of trees intofarming systems) in the focal areas as a way to preserve
productive ecosystem and adapt to climate change.