An Economic Impact Assessment of the USAID/IFDC
Kosovo Agribusiness Development Program (KADP)
by
Carlos A. Baanante
Consultant
IFDC
IFDC
An International Center for Soil Fertility
and Agricultural Development
P.O. Box 2040
Muscle Shoals, Alabama 35662 (U.S.A.)
February 2003
i
Table of Contents
Page
Background and Program Rationale .......................................................................................................... 1
The Agricultural Sector........................................................................................................................... 1
Agribusiness Subsector........................................................................................................................... 3
Program Rationale................................................................................................................................... 6
Program Description ................................................................................................................................... 7
Goals, Areas of Support, and Activities................................................................................................. 7
Program Implementation ........................................................................................................................ 8
Performance Indicators and Outputs...................................................................................................... 9
Impacts on Economy, Resource Base, and Food Security ................................................................. 10
Program Performance and Impacts .......................................................................................................... 11
Impact on Agribusiness Development................................................................................................. 11
Impacts on Agricultural Sector and Resource Base............................................................................ 17
Impact on Agricultural Production and Productivity.......................................................................... 17
Impact on Resource Base...................................................................................................................... 24
Benefit-Cost Analysis ............................................................................................................................... 25
Economic Benefits................................................................................................................................ 25
Present Values and Benefit-Cost Ratios.............................................................................................. 26
Summary and Conclusions....................................................................................................................... 29
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Acronym List
AKA Alliance of Kosovo Agribusiness
ATA Agribusiness Trade Associations
CAN calcium ammonium nitrate
DAP diammonium phosphate
FYR Former Yugoslavia Republic
GDP gross domestic product 
ha hectare
KADP Kosovo Agribusiness Development Program
KODAA Kosovo Dealers of Agri-Inputs Association
LBK League of Beekeepers of Kosovo
NPV Net Present Values
SHMK Kosovo Flour Millers Association
SHPUK Kosovo Association of Poultry Producers and Feed Manufacturers
UNMIK United Nations Mission in Kosovo
USAID United States Agency for International Development
An Economic Impact Assessment of the USAID/IFDC
Kosovo Agribusiness Development Program (KADP)
Background and Program Rationale
As part of the Former Yugoslavia Republic (FYR), Kosovo was organized in 29 communes 
and based on a command economy. Within each commune a communal assembly and directorates
controlled all aspects of public service, education, finance, taxation, the agricultural sector, and food. 
After the armed conflict ended in the summer of 1999, Kosovar Albanian refugees returned to find
that institutional and physical infrastructure were seriously disrupted and often completely destroyed. 
That destruction resulted in a humanitarian crisis and a tremendous challenge to the local population 
and the international community. Donors responded generously with humanitarian aid and assistance 
to restore public services and the institutional infrastructure required to improve the productive
capacity of farmers, entrepreneurs, and the population in general. Initial support for agriculture in the 
amount of US $19 million was provided mainly by the United States. The assistance provided by the 
United States Agency for International Development (USAID) focused mainly on efforts to facilitate 
the timely and efficient supply and distribution of agri-inputs that are essential to enhance the
productivity of crop production in particular and the agricultural sector in general.
The Agricultural Sector
At least 35% of the gross domestic product (GDP) and 60% of employment in Kosovo is
based on a broadly defined agricultural sector that includes farmers and agribusiness enterprises
involved in the procurement, processing, and distribution of farm inputs and marketing and
processing of agricultural outputs. About 600,000 hectares (ha) of land in Kosovo is agricultural. Of
that area, approximately 408,000 ha are cultivated mostly with cereals (about 200,000 ha of maize
and wheat), pastures on about 176,000 ha, and vegetables, fruit, and vineyards. About 80% of the
agricultural land is at elevations ranging between 300 and 400 meters. The plains of Kosovo and the 
Dukagjini are the most productive areas for wheat with yields of 3.2-3.7 tonnes/ha and maize with
yields of 3.5-4.2 tonnes/ha. However, average yields of these cereals in Kosovo are, as a whole,
substantially lower. Most cereal production is used for human (wheat) and livestock (maize)
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consumption in the rural areas and urban populations depend on supplies from other sources. 
Vegetables are grown mainly for domestic consumption, with some exports to Croatia and Slovenia. 
Investments in fruit production were important in the 1990s, and because they are mostly privately
owned (about 85%), those orchards, in addition to vegetable production and possibly viticulture
(fresh grapes), will be important components of private sector participation in agriculture.
Although about 85% of the agricultural land is privately owned by thousands of small family 
farms of less than 3 ha, there are also a number of state-owned farms varying in size from 200 to 
600 ha. Some farms produce crops and others are engaged in livestock production and processing.
Before the 1999 conflict, there was a large livestock population of over 400,000 cattle and sheep,
60,000 pigs, and about 4.5 million poultry, but only limited private veterinary services and no
organized service for the protection and monitoring of livestock and food safety standards.
In 1999, 75% of all field operations of Kosovo agriculture were mechanized. On average
there was one tractor for every 14 ha of cultivated land; in recent years there has been large
investments in mini-tractors. However, none of the machinery was purchased with credit but
exclusively in cash.
Economic Policy Environment and Services—Prior to the armed conflict in 1999, prices for 
agricultural products and essential commodities were controlled by the state. Price controls were
established in the public and private sectors and included wheat, flour, bread, cooking oil, sugar, and 
milk. All other products were market priced. Currently, all prices are market determined, but
humanitarian food supplies appear to have depressed the prices of essential foodstuffs.
The availability of agricultural credit in Kosovo is seriously constrained. The National Bank 
of Kosovo was closed on May 5, 1990, and became an affiliate of the National Bank of Yugoslavia, 
which destroyed the banking system in Kosovo. For nearly a decade, no agricultural credit was
available in Kosovo. At present the Economic Bank in Gjakova provides some very basic banking
services to private shareholders as does the Institutuo Bankario di Torino, that is also considered a
private local bank. Donor-supported (European Agency for Reconstruction/Agri-Business Unit, 
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Micro-Enterprise Bank, and American Bank of Kosovo) banking services have provided most of the 
agricultural credit since the 1999 conflict.
In regard to the availability of services for the agricultural sector, it should be noted that the 
autonomy of Kosovo was suppressed and services in all areas of the economy, including agriculture, 
were reduced. This was particularly evident for the state enterprises that were substantially dependent 
on state support. Private farmers operated on a cash-only basis and supplemented incomes and
investments by remittances from emigrated family members. Although land titles were well
developed and legal, it was illegal to sell land between ethnic groups. The loss of land title
documentation may well be a factor that suppresses land markets and the use of land for collateral in 
the post-conflict era.
The University of Pristina has faculties of natural science, economics, medicine, philosophy, 
and agriculture. A veterinary school was opened some years ago, but there is no department of crop 
protection. Assistance is needed to improve the capacity and level of research and training in
agricultural sciences and to implement modern technological standards.
Agribusiness Subsector
Agri-Inputs Supply—Prior to the 1998/99 conflict, there was a multi-channel system for the 
distribution of agricultural inputs consisting of state-operated public sector agribusiness corporations 
(Agro-Kombinats), cooperatives, and private sector channels. The system included 17 Agro￾Kombinats, approximately 65 socialized cooperatives, about 70 producer association cooperatives,
and 150 to 200 private sector dealers or “apoteks.”
Private sector farm input dealers emerged during 1988-98. Three apparent types of business
enterprises emerged during that period: (a) sole owner businesses (150-200) usually with only a small 
retail outlet, (b) consolidated medium size enterprises (approximately 20) having between 2 and 
10 retail outlets and some having central warehouses, and (c) large private enterprises (18) that can 
procure farm inputs from regional and international markets and distribute them to farmers through
their own and independent marketing channels. The private sector input supply network conducts
businesses in seed, fertilizers, pesticides, irrigation equipment, small tools, and farm machinery.
4
Some are diversified integrated businesses, others are specialized (particularly machinery), and still
others provide market outlets for farm produce.
The Serbian repression imposed during the last decade stimulated the development of parallel 
Albanian Kosovar economic activity. The emergence of an active private agri-inputs supply network 
is part of that activity. Although, the agri-inputs supply system in Kosovo was far more advanced
than in other transitional economies, it confronted several important constraints and limitations,
namely, (a) lack of competition within and outside the private sector; (b) lack of access to market
information and markets for agri-inputs and farm outputs at regional and international levels, (c) lack 
of access to institutional and commercial credit for trade and commercial transactions that results in 
the inefficiencies of a cash-only economy, and (d) lack of access to modern updated technology and 
use to improve the economic efficiency and impact of a more dynamic farm inputs supply system.
Some large private enterprises are struggling to gain access to (and import) inputs from
sources outside Serbia, but restrictions in communications, information, and travel are difficult 
constraints and a barrier to such trade. A policy issue that requires attention emerges from the need to 
establish an extensive network of regional trade contacts. Without these developments, the
dependency on established suppliers in Serbia will continue, smuggling will increase, and there will 
be serious limitations in access to improved inputs, especially seeds, fertilizers and agrochemicals.
Also, the lack of competition will result in higher prices for agricultural inputs.
Processing of Agricultural Products—The food processing industry was partially state￾owned and partially private. Virtually all flour mills, bread factories, distilleries, and seed
conditioning plants in the public sector were associated with the state farms and cooperatives. Many 
smaller private-sector processing plants were also operating, particularly in the flour milling, feed
milling, fruit and vegetable processing, and wineries.
An evaluation of the private flour mills in Kosovo by IFDC in December 1999 determined
that there were 50 private flour mills that had sufficient capacity to meet the 500,000 tonnes of flour 
per year that were needed by the province but were constrained by poor power supply, wheat supply, 
and insufficient warehouse space. The flour mills in the public sector had a processing capacity
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equivalent to that of the private sector and confronted more drastic constraints imposed by the poor 
and intermittent supply of electric power.
Although there is considerable potential for developing a diverse small-scale agro processing 
enterprises that could have significant impact on rural employment, this effort would also require
substantial assistance and aid resources. A more effective means to achieve a greater and more
immediate impact is to focus on those agro-processing developments that will benefit the largest
number of farmers and entrepreneurs and provide the strongest and most immediate impact through 
rapid cash turnovers and multiplier effects. It was expected that such an impact in the agro-processing 
industry could be achieved through the revitalization of the flour mills (about 50) and the feed mills 
(about 40) considered to be economically viable and by improving seed production and supply for
key crops. All of these efforts should be conducted in conjunction with the efficient supply of
fertilizers and other required agro-chemicals. 
Flour Mills—A well-established demand for flour ensures revenues and rapid cash flow to
flour mills and wheat farmers producing surplus wheat. Imports of flour must be coordinated with the 
production of local flour mills to prevent the depression of flour prices due to excessive flour imports.
Feed Mills—Poultry production appears to have the greatest potential for rapid revitalization. 
The development of feed mills especially for producing poultry feed will (a) facilitate the
establishment of an efficient poultry and egg production industry, (b) promote the development of an 
expanding domestic market for animal feed, and (c) provide an outlet to the expected increased maize 
production.
In regard to seed production, the restoration of production of improved seed of wheat, and of 
alfalfa to meet the increased demand for seed, is important for Kosovo to increase its seed production 
and enhance food security.
Reliance on Serbian technology, especially for seeds and fertilizers, has been regressive.
Opportunities exist to improve access to improved seed varieties, hybrid maize, domestically selected 
wheat varieties, seed potato, and a wider range of fertilizer materials that are more cost effective and 
6
tailored to domestic soil and crop requirements. Such improved access needs to be matched with
technology transfer to ensure appropriate application of this technology.
Program Rationale
The circumstances that Kosovo (United Nations Mission in Kosovo [UNMIK]) confronted
after 1999 with a seriously damaged physical and institutional infrastructure required aid and
assistance programs that could provide (a) an immediate impact in alleviating the humanitarian crisis, 
(b) the rebuilding of the physical infrastructure, and (c) the rapid establishment of an effective and
efficient institutional infrastructure conducive to promote rapid economic growth and stability. The 
crucial importance of the agricultural sector in general and the agribusiness subsector in particular is 
described and briefly assessed above. This assessment clearly indicates that assistance to address and 
relax key constraints to agribusiness development will have a rapid and strong impact on economic
efficiency, growth and employment. A greater and more immediate impact of the program is
expected by focusing on the development of agribusinesses that will benefit the largest number of
farmers, entrepreneurs, workers, and consumers and also have the strongest and most rapid impact on 
employment and the economy. The USAID/IFDC program was designed to achieve such an impact 
by removing or relaxing key constraints to the development of more dynamic and efficient private
sector agribusinesses and a more open and competitive market for agricultural inputs and processed 
and unprocessed agricultural products. The program included assistance for (a) the development of
institutions such as trade associations, private sector extension services, information systems and
credit services and (b) support for development of policies that facilitate competition, availability and 
access to credit and information, and access to modern updated technology.
Given the circumstances and the nature of constraints prevailing in Kosovo in 1999, there was 
a very sound and rational basis for USAID to fund a program having as major goals the development 
of effective and sustainable Agribusiness Trade Associations (ATA), the expansion of markets for
targeted agribusinesses, and improvement of their economic efficiency and competitive edge.
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Program Description
A comprehensive approach to the development of the private sector and a more competitive 
market environment was adopted as a basis to design and implement the program. IFDC experiences 
in Albania were extremely useful and instructive in providing a general framework for designing and 
conducting the program under very challenging circumstances. The development of ATA is used as
the primary means for institutional capacity building and to enhance prospects for the sustainable
impact of the program after USAID assistance is discontinued. 
Goals, Areas of Support, and Activities
The program includes the achievement of two main goals or tasks:
1. Development of ATA.
2. Market development for targeted agribusinesses.
To achieve these goals, a set of key interrelated program areas of intervention and support to 
assist ATA and targeted agribusinesses were identified and implemented as critical components of
the program. These areas of support focus on the following highly complementary elements
contributing to the development and growth of Trade Associations and agribusiness enterprises:
1. Facilitation of Trade and Procurement.
2. Policy Analyses and Implementation.
3. Facilitation of Access to Institutional Credit.
4. Agro-Processing and Marketing Expertise.
5. Establishment of Private Sector Extension Service.
6. Access to Market Information.
7. Development of Technical Publications and Use of Mass Media.
8. Monitoring and Evaluation.
To provide support in these critical components, comprehensive work plans of activities were 
prepared, implemented, and updated frequently as required by the evolving demands and changing
circumstances that confronted the ATA and targeted agribusinesses. All activities are described in
8
detail in the program work plans and progress reports. However, the basic generic activities of the
program are summarized as follows:
1. Assist in the planning and implementation of Board and coordinating meetings of targeted ATA.
2. Provide services for conducting policy analyses and assist in policy advocacy on issues affecting 
ATA and targeted agribusinesses.
3. Continuous interaction with ATA officials and personnel and monitoring of ATA and targeted
agribusiness activities to identify constraints to the profitability, growth, and development of
agribusinesses and the financial situation of ATA.
4. Monitoring of potential demand for targeted agribusiness products and provision of assistance for 
assessing the need for restructuring agribusiness production and distribution systems.
5. Assistance for designing and implementing pilot credit programs for agri-input dealers and
farmers.
6. Provision of training and technical assistance to ATA and targeted agribusiness personnel on the 
efficient organization and financially sound management of targeted ATA.
7. Provision of services, training, and information to facilitate access to credit—preparation of
investment plans and business plans for loan applications.
8. Assist in the preparation of comprehensive business plans to enhance the effectiveness of
financial management and sustainability of targeted ATA.
9. Preparation of materials and design of strategies to use mass media for enhancing the image of
ATA, conducting membership drives, and gaining public support (advocacy).
10. Compilation and dissemination of market information useful to ATA and targeted agribusinesses.
11. Conduct surveys and studies to monitor implementation of program activities and assess their
effectiveness and shortcomings.
12. Provide support for establishing extension services and identifying technology packages (seed,
fertilizer, and crop protection products) to optimize maize and wheat production.
Program Implementation
A program entitled “Kosovo Emergency Agri-Input Program” covering the period October
1999-May 2000 was first implemented by IFDC. The first work plan for the Kosovo Agribusiness
Development Program (KADP) was submitted to the USAID Mission in Kosovo in June 2000. The 
KADP was initially a 2-year project but was amended and extended to 32 months and a total of
9
$4.2 million so that IFDC could incorporate in the program evolving demands and needs of ATA and 
achieve the objectives and goals of the programs.
Evolution in the program implementation shows an apparent gradual path toward the
disengagement of the targeted ATA and agribusiness enterprises from the assistance and advisory
services provided by IFDC. This should facilitate the sustainability of the ATA in Kosovo and
enhance their role in ensuring the continuous future success of agribusinesses and farmers.
Performance Indicators and Outputs
Several measurable elements of the consequences and benefits of the program on the targeted 
beneficiaries can be used as performance indicators. These indicators are usually the values of
quantifiable variables that are directly or indirectly affected by the program activities and
interventions. Performance indicators are often used to assess the consequences of program activities 
and interventions in terms of outputs that are in fact intermediate benefits to be transformed into
micro and aggregated impacts on the beneficiaries, the economy, and the resource base. Performance 
indicators should reflect changes in measures of properly defined variables that are associated with 
the program activities and interventions. Then, ideally, assessments are better conducted when
baseline values of performance indicator variables are well defined and established at the beginning 
of program implementation. Quantitative and qualitative variables can be used as performance
indicators.
Due to the challenging and extenuating circumstances surrounding the beginning of the
KADP, only limited information on baseline performance indicator variables were collected and are 
available. Some key indicators of performance that can be used to assess the success (or failure) and 
impact of the program in regard to the general goals of ATA Development and Market Development 
for targeted agribusinesses are described here.
· Change in number and size of agribusiness members in targeted ATA.
· Change in agribusiness diversification and specialization induced by ATA.
· Change in the number, scope, and diversity of services and products provided by ATA.
· Change in the financial situation of ATA and their prospects for long-term financial sustainability 
and self-reliance.
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· Production increase and per unit cost of production decrease due to investments of targeted
agribusinesses in refurbishing of plants, for example, flour millers.
· Volume and value of imported products (flour, animal feed) that are replaced with increased 
domestic production.
· Lower costs and increased profitability of targeted agribusinesses as a result of better trade
policies (tariffs, taxes) and access to credit and external markets.
· Increased use of fertilizers and improved seeds resulting in added crop production, employment
of farm labor, productivity of land, and fixed factors of production.
· Inflows and conservation of plant nutrients (N, P2O, K2O) in the soils of agricultural lands to
maintain high productivity on a sustainable basis.
Impacts on Economy, Resource Base, and Food Security
The effectiveness of a technical assistance program for development is ultimately determined 
by the tangible impact that a well structured set of activities and technology transfer efforts provide 
as a stream of measurable benefits to targeted beneficiaries, the economy, and the resource base.
Such benefits represent the impacts of the program and are outputs and outcomes of the program
expressed in terms of monetary values, quantities of goods, and/or services, and measures of proxy
variables that are sometimes used to assess impacts on the resource base, food security, and
socioeconomic welfare.
Key measures of impact of the KADP on the economy, the resource base, and food security 
are:
1. Economy:
· Increased volume of business generated by ATA and their effect on GDP, economic growth,
and employment as a result of direct and multiplier effects.
· Savings in costs of inputs purchased and gains in revenue attributable to better prices received 
for products sold, both as a result of economies of scale associated with ATA transactions.
· Increased domestic production and supply of agricultural products (wheat, maize) and
processed products (flour, animal feed), impacts measured in terms of quantities and value.
· Increased Euro earning and capacity to purchase goods and services from other countries
(import)—impact on foreign exchange purchasing power.
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· Expansion of GDP and employment associated with investments in refurbishing of processing 
plants and other facilities.
· Increased economic returns to land and fixed factors of production, farmers’ income and
earnings of hired labor due to increased use of fertilizer and improved seeds.
2. Resource Base:
· Natural resource base—Improved plant nutrient balances in soils of agricultural land will
increase and sustain the productivity and economic value of agricultural land.
· Human resource base—Increased economic returns to labor and the associated economic
value of “human capital” as a result of improved skills, knowledge and capabilities of
workers.
3. Food Security:
· Increased production of food products, namely, wheat, maize, potatoes, and poultry, will
improve the availability of food and food security situation in Kosovo and at the regional
level.
· Increased earning of Euros that may be generated through the export of the targeted
agribusinesses, and farmers will enhance the purchasing power of Kosovo to import food
from other countries.
The remaining sections of this report focus on the impact assessment of the KADP mainly on 
the basis of measures of impact of the program on the targeted beneficiaries, the economy, and the 
resource base.
Program Performance and Impacts
Impact on Agribusiness Development
The program efforts in agribusiness trade association development focused mainly on
strengthening the establishment and effectiveness of the three most important ATAs in Kosovo;
namely, the Kosovo Dealers of Agri-Inputs Association (KODAA); the Kosovo Flour Millers
Association (SHMK), and the Kosovo Association of Poultry Producers and Feed Manufacturers
(SHPUK). Later in the program implementation (2002), the program was also involved in the
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establishment of an apex association, the Alliance of Kosovo Agribusiness (AKA) to coordinate the 
work of the associations in policy formulation and advocacy. In addition to the three associations that 
IFDC assisted from the beginning of the program (KODAA, SHMK, and SHPUK), AKA also
includes the League of Beekeepers of Kosovo (LBK) with about 2,000 members, and the Drini
Valley Vegetable Producers Association.
Impact on Volume of Business—Impacts of the KADP on the volume of business, level of
investments, and employment observed in the three-targeted ATA are shown in Table 1. The volume 
of business includes sales and purchases of agribusinesses in each association. These data show that 
the volume of business increased substantially for these agribusinesses during the period 2000-2002. 
Increases of annual business volume between 2000 and 2002 were approximately (a) 64% or
€7 million for dealers of agri-inputs in KODAA, (b) 74% or €5 million for flour millers in SHMK,
and (c) 47% or €5.3 million for poultry producers and feed manufacturers in SHPUK. The impact of 
the KADP on the total volume of direct agribusiness transactions in the three targeted trade
associations was about €17.3 million.1
 That figure is an important contribution of the KADP to the 
economy of Kosovo and represents a substantial impact on the gross domestic product (GDP) of
Kosovo. Because multipliers associated with this type of growth in business activity are usually
greater than one, the actual impact of the growth in volume of business on GDP will be greater than 
estimated here.
Impact on Investments—The KADP, through the ATA, also had a significant impact on the 
investments of the targeted agribusinesses in the refurbishing and improvement of facilities. A
summary of the size of these investments for the three targeted trade associations is also presented in 
Table 1.
These results show that over the 3-year life of the program (2000 to 2002) agri-inputs dealers 
of KODAA invested €4.3 million, flour millers in SHMK invested €5.3 million, and poultry
producers and feed manufacturers in SHPUK invested €5.9 million. For agribusinesses in the three 
targeted ATAs, these investments amount to a total of €15.5 million over the 3-year life of the
 
1
 An exchange rate of 1 Euro (€) per US $ is adopted for the estimates and valuations presented in this paper. The €/US $ 
exchange rate has fluctuated from 0.90 in early 2002 to about 1.10 recently.
13
program. Investments of this nature have multipliers that are greater than one in terms of their effects 
on the GDP and the economy. Therefore, the impact of the KADP on the Kosovar GDP due to these 
investments are at least €16.0 million.
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Table 1. Impact of KADP on Business Volume, Investments, and Employment of Trade Associations
Investment in Improvement
of Facilities Employment
Trade Associations Year
Number
of
Members
Volume of Business
(VB)—Sales and
Purchases Average
Person/
Year Average
Percent Using
Averages as
Reference
Number
of Persons
Trained
(million
€/year) (%)
(million
€/year)
(€/year per
member)
(persons/year 
per member) (%)
2000 140 11.020 100 1.500 10,714 255 1.82 100 67
2001 90 15.280 139 1.000 11,111 183 2.03 112 32
Kosovo Dealers of 
Agri-Inputs Association 
(KODAA) 2002 53 18.030 164 1.800 33,962 147 2.77 152 21
3-year total 4.300 120
Increase 2000 to 2002 7.010
2000 85 6.732 100 1.500 17,647 460 5.41 100 0
2001 42 10.731 159 1.700 40,476 520 12.38 229 20
Kosovo Flour Millers 
Association (SHMK)
2002 45 11.723 174 2.127 47,267 543 12.07 223 34
3-year total 5.327 54
Increase 2000 to 2002 4.991
2000 120 11.450 100 3.039 25,325 271 2.26 100 57
2001 54 9.822 86 1.418 26,256 292 5.41 239 33
Kosovo Association of 
Poultry Producers and 
Feed Manufacturers 
(SHPUK)
2002 61 16.780 147 1.450 23,767 379 6.21 275 44
3-year total 5.907 134
Increase 2000 to 2002 5.330
2000 345 29.202 100 6.039 17,504 986 2.86 100 124
Totals 2001 186 35.833 123 4.118 22,139 995 5.35 187 85
2002 159 46.533 159 5.377 33,816 1,069 6.72 235 99
3-year total 15.534 308
Increase 2000 to 2002 17.331
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Impact on Employment—Another important benefit of the KADP, through the
development of trade associations, is the direct impact on the level of employment. The direct
effect on employment in targeted agribusinesses is presented in terms of increased employment 
in Table 1. Impact on labor employment was greater in the flour miller agribusinesses (over
450 persons/year) than among the agri-inputs dealers, and the poultry producers and feed
manufacturers. For agribusinesses in the three targeted trade associations, employment increased 
by about 1,000 persons/year, and in terms of the average number of persons per year per
member, the level of employment more than doubled.
Improvement of Human Resource Base—The human resource base benefited from
additional employment in targeted agribusinesses and also through improvement in the skills and 
knowledge of a number of employees that received training as part of the KADP. A total of
308 persons in the three targeted trade associations received training during the 3-year life of the 
program. Returns to investments in training occur over the life span of the persons receiving the 
training and are usually high when the economy is growing and there is need for well trained
personnel to facilitate the rapid transfer and adoption of improved technology, as is the case in
Kosovo.
Savings Due to Economies of Scale—Trade associations made it possible for
agribusinesses to take advantage of larger volume transactions to reduce the prices and costs for
inputs and raw materials. Large-scale operations and transactions may also lower operating costs 
and facilitate access to new markets. Size of operations has a limit because excessively large size 
of operation may result in increasing costs and diseconomies of scale. The impact of the KADP 
on savings in costs of input purchases, due to larger volume transactions facilitated by the trade 
associations, are shown on Table 2 for the three targeted trade associations, KODAA, SHMK,
and SHPUK. During the 3-years 2000-2002, estimated savings in these costs were approximately 
€5.28 million for the dealers of agri-inputs, €0.51 million for the flour millers, and €0.53 million 
for the poultry producers and feed manufacturers. Because of advantages gained in the
purchasing of larger quantities of agri-inputs, mainly fertilizers, savings were substantially
higher for the agri-input dealers (KODAA). The three targeted trade associations saved a total of 
€6.32 million during the 3-year program.
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Table 2. Impact of KADP on Savings in Transactions of Trade Associations and
 Agribusinesses Due to Economies of Scale
Estimated Savings in Transactions 
Due to Economies of Scale
Agribusiness Trade
Associations (ATA) Year
Volume of 
Business
Percent of Total 
Volume of Business
(million
€/year)
(million
€/year) (%)
2000 11.02 0
2001 15.28 2.40 16
Kosovo Dealers of Agri-Inputs 
Association (KODAA)
2002 18.03 2.88 16
3-year total 5.28
Increase 2000 to 2002 7.010 2.88
2000 6.73 0
2001 10.73 0.25 2
Kosovo Flour Millers 
Association (SHMK)
2002 11.72 0.26 2
3-year total 0.51
Increase 2000 to 2002 4.99 0.26
2000 11.45 0
2001 9.82 0.32 3
Kosovo Association of Poultry 
Producers and Feed 
Manufacturers (SHPUK) 2002 16.78 0.21 1
3-year total 0.53
Increase 2000 to 2002 5.33 0.21
2000 29.20 0.00
Totals 2001 35.83 2.97 8
2002 46.53 3.35 7
3-year total 6.32
Increase 2000 to 2002 17.33 3.35
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Impacts on Agricultural Sector and Resource Base
Impacts of the KADP on the agricultural sector and resource base occur as a result of the 
consequences that the outputs and outcomes of the program have on agribusiness development
and growth, the productivity of the agricultural sector, and their forward linkages to the resource 
base. In this section, impacts of the KADP on the agricultural sector and the resource base are
assessed and discussed.
Impact on Agricultural Production and Productivity
The impact of the KADP on agricultural production in general, and food production, in
particular, is a direct result of the impact that the KADP has had on the productivity of crop
production through the increased use of fertilizers in conjunction with improved seeds and weed 
control practices (herbicides). The development and increased effectiveness of the ATA in
Kosovo, specially the agri-inputs dealers association KODAA, contributed to the increased use
of fertilizers and improved wheat and maize seed by farmers. The timely and proper availability 
of agri-inputs to farmers supplied by a more effective network of dealers made an essential
contribution to the increased use of these inputs by farmers in 2000, 2001, and 2002.
Increased Use of Fertilizers—Impacts of the KADP on fertilizer use in Kosovo in years 
2000 to 2002 are presented in Table 3. The increase in fertilizer use was greater in 2000; possibly 
because the need for agri-inputs (demand) was greater just after the conflict in 1999, but one
must recognize that donor credit was more easily obtained at that time. In 2000, the increase in 
fertilizer use due to the KADP was 30,000 tonnes, 20,000 tonnes of 15-15-15, and 10,000 tonnes 
of calcium ammonium nitrate (CAN). About 56% of these fertilizers were for wheat, 42% for
maize, and 2% for other crops such as vegetables, potatoes, and fruit crops. In 2001, it is
estimated that fertilizer use increased by 21,000 tonnes as a result of the KADP. In that year, use 
of urea, 15-15-15, and CAN increased by 8,000, 10,000, and 3,000 tonnes, respectively. Most of 
the increase (10,300 tonnes) was for wheat (49%)—about 41% or 8,700 tonnes was used by
maize farmers and about 10% or 2,000 tonnes was used on other crops. In 2002, the impact of 
the KADP on fertilizer use was very similar to that in 2001, fertilizer use increased by
20,000 tonnes, 6,000 tonnes of urea, 12,000 tonnes of 15-15-15, and 2,000 tonnes of CAN.
18
Table 3. Impact of KADP on Fertilizer Use
Used on Wheat Applied on Maize and Other Crops
Fertilizer Use Increase
Fertilizer Product Quantities of Nutrients
Fertilizer Product 
Used on Maize
Fertilizer Product 
Used on Other 
Crops Quantities of Nutrients
Year Fertilizer 
Product
Total 
Quantity 
Supplied 
to 
Farmers
Percent 
Used Quantity N P2O5 K2O
Total 
Nutrient
Percent 
Used Quantity
Percent 
Used Quantity
Total Used 
on Maize 
and Other 
Crops N P2O5 K2O
Total 
Nutrient
(tonnes) (%) (tonnes) (tonnes) (%) (tonnes) (%) (tonnes) (tonnes) (tonnes)
2000 15-15-15 20,000 60 12,000 1,800 1,800 1,800 5,400 40 8,000 0 0 8,000 1,200 180 1,200 2,580
CAN 10,000 50 5,000 1,350 0 0 1,350 45 4,500 5 500 5,000 1,215 0 0 1,215
Total Year 2000 30,000 56 17,000 3,150 1,800 1,800 6,750 42 12,500 2 500 13,000 2,415 180 1,200 3,795
64% 36%
2001 Urea 8,000 55 4,400 2,024 0 0 2,024 40 3,200 5 400 3,600 1,472 0 0 1,472
15-15-15 10,000 50 5,000 750 750 750 2,250 40 4,000 10 1,000 5,000 600 600 600 1,800
CAN 3,000 30 900 243 0 0 243 50 1,500 20 600 2,100 405 0 0 405
Total Year 2001 21,000 49 10,3000 3,017 750 750 4,517 41 8,700 10 2,000 10,700 2,477 600 600 3,677
55% 45%
2002 Urea 6,000 60 3,600 1,656 0 0 1,656 35 2,100 5 300 2,400 966 0 0 966
15-15-15 12,000 50 6,000 900 900 900 2,700 40 4,800 10 1,200 6,000 720 720 720 2,160
CAN 2,000 20 400 108 0 0 108 40 800 40 800 1,600 216 0 0 216
Total Year 2002 20,000 50 10,000 2,664 900 900 4,464 39 7,700 12 2,300 10,000 1,902 720 720 3,342
57% 43%
19
It is interesting to note that in terms of major plant nutrients, N, P2O5, and K2O, the
proportions of nutrients added (inflows) to soils by wheat farmers compared to the nutrients
applied to maize and other crops are greater than those calculated on the basis of quantities of
fertilizer products. About 64%, 55%, and 57% of the increased quantities of plant nutrients
applied in 2,000, 2001, and 2002, respectively, were for wheat production.
Impact on Crop Productivity and Profitability—Estimated potential impacts of
fertilizer use on wheat and maize yields and on economic returns to farmers are presented in
Tables 4 and 5. The data in these tables are from reports on the results of field trials conducted 
by the KADP. Therefore, fertilizer use technologies shown in these tables are those of the field 
trials. The two technologies evaluated on wheat (Table 4) showed a significant impact on yields. 
The “traditional” and “modern” technologies increased yields by 2,640 kg/ha (64%) and
2,840 kg/ha (69%), respectively, while profitability in terms of net added returns to fixed factors 
increased to €132.6/ha and €202.6/ha, respectively.
The estimated impacts of fertilizer use on maize yields and economic returns to farmers 
are shown on Table 5. The “traditional technology” involving the use of 15-15-15 and CAN
increases maize yields by 5,460 kg/ha (133%) and provides €564.6/ha of net added returns to
fixed factors of production. Adoption of the “modern” technology using DAP and urea results in 
a higher maize yield increase, 6,200 kg/ha (150%) and greater net added returns, €726.5/ha. 
Estimated increases of maize yields and net added returns shown here are the result of the joint 
impact of using fertilizers in conjunction with the proper application of herbicides and the use of 
improved seeds.
Given the average crop yields that currently prevail in Kosovo, the results presented on
Tables 4 and 5 show that there is substantial but unrealized potential to improve the productivity 
of agriculture by increasing the use of fertilizers in conjunction with the adoption of improved
seeds and management practices.
20
Table 4. Potential Impact of Fertilizer Use on Wheat Yields and Economic Returns to Farmersa
Fertilizer Use Wheat Yields Added Costs of Fertilizer Use Technology
Technology
and Fertilizer 
Products
Product 
Rate
N 
Rate
P2O5
Rate
K2O 
Rate
NPK 
Rate
Average 
Yield
Average 
Yield 
Increase
Percent 
Yield 
Increase
Average 
Crop Prices 
Received by 
Farmers
Added 
Returns
Average 
Fertilizer 
Price Paid 
by Farmers
Added 
Cost of 
Fertilizer
Added 
Labor 
Cost
Added 
Herbicide 
Cost
Total 
Added 
Cost
Net Added 
Returns to 
Fixed 
Factors of 
Production
Value/
Cost
Ratios
(kg/ha) (kg/ha) (%) (€/kg) (€/ha) (€/kg) (€/ha) (€/ha)
1. No Fertilizer
No fertilizer 0 0 0 0 0 2,260 0 0
No herbicide
2. Traditional
15-15-15 300 45 45 45 135 4,900 2,640 64 0.14 369.6 0.24 112 95 30 237 132.6 1.56
CAN 200 54 0 0 54 0.20
Total 500 99 45 45 189
With herbicide
3. Modern
DAP 200 36 92 0 128 5,100 2,840 69 0.14 397.6 0.25 70 95 30 195 202.6 2.04
Urea 100 46 0 0 46 0.20
Total 300 82 92 0 174
With herbicide
a. Data used are from results of field trials conducted by the KADP.
21
Table 5. Potential Impact of Fertilizer Use on Maize Yields and Economic Returns to Farmersa
Fertilizer Use Wheat Yields Added Costs of Fertilizer Use Technology
Technology
and Fertilizer 
Products
Product 
Rate
N 
Rate
P2O5
Rate
K2O 
Rate
NPK 
Rate
Average 
Yield
Average 
Yield 
Increase
Percent 
Yield 
Increase
Average 
Crop Prices 
Received by 
Farmers
Added 
Returns
Average 
Fertilizer 
Price Paid 
by Farmers
Added 
Cost of 
Fertilizer
Added 
Labor 
Cost
Added 
Herbicide 
Cost
Total 
Added 
Cost
Net Added 
Returns to 
Fixed 
Factors of 
Production
Value/
Cost
Ratios
(kg/ha) (kg/ha) (%) (€/kg) (€/ha) (€/kg) (€/ha) (€/ha)
1. No Fertilizerb
No fertilizer 0 0 0 0 0 4,750 0 0
No herbicide
2. Traditional
15-15-15 400 60 60 60 180 10,210 5,460 133 0.16 873.6 0.24 156 125 28 309 564.6 2.83
CAN 300 81 0 0 81 0.20
Total 700 141 60 60 261
With herbicide
3. Modern
DAP 250 45 115 0 160 10,950 6,200 150 0.16 992 0.25 112.5 125 28 265.5 726.5 3.74
Urea 250 115 0 0 115 0.20
Total 500 160 115 0 275
With herbicide
a. Data used are from results of field trials conducted by the KADP.
b. Controls with no fertilizers were not included in field trials. Therefore, in order to obtain an estimate of yields with no fertilizer, the average maize yield for 
2002, 3.8 tonnes/ha, was adjusted upward by 25% to account for the better than average crop management associated with the implementation of the field trials.
22
Aggregated Farm-Level Impacts—A summary of the aggregated farm-level impacts of 
the KADP is presented in Table 6. Aggregate indicators or measures of impact are calculated on 
the basis of results of estimated impacts of increased use of fertilizers on crop yields and
profitability that are shown in Tables 3-5. Estimates of aggregated impact shown in Table 6 are 
calculated by using data and results pertaining to the “traditional technology” specified in
Tables 4 and 5. Also, in order to obtain estimates of impact that represent better the farmers’ 
management and circumstances, estimates of crop yield increases (and expenditures in
harvesting of additional output) were adjusted downward by 30%. Estimates of farm-level 
impact of the KADP over the 3 years of the program, 2000 to 2002, show the following:
1. Fertilizer use increased by 71,000 tonnes in terms of fertilizer products and 28,730 tonnes in 
terms of plant nutrients (N+P2O5+K2O).
2. A total of about 83,000 ha of wheat and 50,000 ha of maize were fertilized with the 71,000 
additional tonnes of fertilizers used as a result of the KADP.
3. About €17 million were expended by farmers in fertilizers.
4. Although not all farmers that used fertilizers also used improved seeds and herbicides, an
apparent market (demand) of more than a million Euros per year was created by the
program—an apparent demand of about €3.9 million over the 3-year period.
5. Crop yield increases of about 1.85 tonnes/ha for wheat and 3.82 tonnes/ha for maize are
associated with the increased use of fertilizers.
6. Crop production increased by approximately 153,800 tonnes of wheat and 190,400 tonnes of 
maize during the 3-year program.
7. Net added returns to land and other factors that are fixed in the short-run (crop season)
increased by approximately €6.09 million, €4.94 million, and €4.63 million in years 2000,
2001, and 2002, respectively, that is a total of approximately €15.66 million over the 3-year 
program—these impacts represent the main stream of economic benefits to be included in the 
benefit/cost analysis presented in the next section of this paper, and are by and large,
increases of farmers incomes. In the economic analysis, however, adjustments are made to
account for the event that not all of the fertilizer use increase may be attributed to the KADP.
8. The increased use of fertilizers had an impact on the employment of hired labor to apply the 
fertilizers and also to harvest the additional crop output, about 216,000 workdays of
employment and an income of approximately €1.73 million for hired farm workers were
generated during the 3-year program.
23
Table 6. Aggregated Farm-Level Impact of the KADP
Year 2000 Year 2001 Year 2002 3-Year Totals
Impacts Measures of Impact Wheat Maize Totals Wheat Maize Totals Wheat Maize Totals Wheat Maize Totals
Increased quantities of fertilizer 
applied (tonnes)
a
17,000 13,000 30,000 10,300 10,700 21,000 10,000 10,000 20,000 37,300 33,700 71,000
Increased quantities of nutrients 
applied (N+P2O5+K2O) (tonnes)
6,750 4,950 11,700 4,517 4,173 8,690 4,464 3,876 8,340 15,731 12,999 28,730
Increased area fertilized (ha) 35,714 18,966 54,680 23,899 15,989 39,888 23,619 14,851 38,470 83,232.80 49,804.60 133,037
Increased use of 
fertilizers
Total added expenditure of farmers 
in fertilizers applied (€ million)
4.00 2.96 6.96 2.68 2.49 5.17 2.65 2.32 4.96 9.32 7.77 17.09
Added expenditure of farmers in
improved seeds and herbicide
(€/ha)
30.00 28.00 30.00 28.00 30.00 28.00
Potential additional sales of
improved seeds and herbicide
(€ million)
1.07 0.53 1.60 0.72 0.45 1.16 0.71 0.42 1.12 2.50 1.39 3.89
Added expenditures of farmers in
harvesting of increased yield (€/ha)
21.00 42.00 21.00 42.00 21.00 42.00
Increase in use of other 
inputs
Additional expenditures of farmers 
in harvesting of increased crop
production (€ million)
0.75 0.80 1.55 0.50 0.67 1.17 0.50 0.62 1.12 1.75 2.09 3.84
Increased productivity
of agriculture and food 
security
Crop yield increase (tonnes /ha) 1.85 3.82 1.85 3.82 1.85 3.82
Total increase in crop production
(‘000 tonnes)
66.0 72.5 44.2 61.1 43.6 56.8 153.8 190.4 344.2
Increased income to
farmers and rural labor
Net added returns to land and other 
fixed factors (€/ha)
30.7 263.2 30.7 263.2 30.7 263.2
Aggregated net added returns to
land and other fixed factors of
productionb
(€ million)
1.10 4.99 6.09 0.73 4.21 4.94 0.73 3.91 4.63 2.56 13.11 15.66
Total additional income of hired
labor (€ million)
0.464 0.247 0.711 0.311 0.208 0.519 0.307 0.193 0.500 1.082 0.647 1.729
Increased employment
of rural labor
Additional hired labor
(work hours/ha)
13 13 13 13 13 13
Additional hired labor
(workdays/year)
58,036 30,819 88,855 38,837 25,981 64,818 38,381 24,132 62,513 135,253 80,932 216,186
a. Quantities of fertilizers applied to maize also include the fertilizers used on other crops, namely, 500, 2,000, and 2,300 tonnes in years 2000, 2001, and 2002, respectively. This is to account for 
the benefits of these fertilizers by assuming that the benefits on the crops on which they were used (vegetables, potatoes, and others) would be similar to those for maize.
b. These are returns to land and fixed factors of production that result from the use of fertilizers and improved technology and include the impact on profits. Data on fertilizers use correspond to 
the “traditional technology” from Tables 4 and 5. Also, in order to reflect better farmer’s management and circumstances crop yield increases and expenditures in harvesting of additional output 
were adjusted downward by 30%.
24
Impact on Resource Base
Through the provision of short specialized and well-focused training programs, the
KADP had a significant impact on the human resource base by improving the technical and
managerial skills of agribusiness entrepreneurs, policymakers, farmers, and workers. About
300 persons in the agribusiness subsector and a number of personnel working in agricultural
extension services received training and acquired knowledge and skills useful to enhance the
potential for better management, efficiency, and growth of agribusiness enterprises. Because the 
impacts and benefits of investment in human resource development occur over the life span of 
those receiving the training and education, the benefits of these investments are substantial but
very difficult to measure in the short run. They are, however, essential components of
development assistance programs such as the KADP. The KADP has been successful in
providing the training required to facilitate the success of the program.
The KADP also contributed to the conservation of the agricultural resource base, namely, 
the conservation of the pool of plant nutrients in the soils of agricultural land. Increased
agricultural production without the use of fertilizers is difficult to achieve and always involve the 
mining of plant nutrients from the soil. In the long run, the continuous cultivation of cropland
without the application of fertilizers results in the gradual depletion of plant nutrients from the 
soil, decline of soil fertility, and lower crop yields and productivity.
Given the increases of maize and wheat production that are estimated to occur as a result 
of increased use of fertilizers associated with the KADP, it is possible to calculate the quantities 
of plant nutrients (N, P2O5, and K2O) that would have been “mined” from the soils of wheat and 
maize croplands to produce wheat and maize in quantities equal to those increases. Estimates of 
the quantities of nutrients in the soil that have been prevented from being mined by the KADP 
through the increased use of fertilizers are calculated here for three scenarios of possible (and
potential) increases of wheat and maize production.
25
Nutrients Mined From Soils (N+P2O5+K2O)
Scenarios
Wheat 
Production
Maize 
Production By Wheat By Maize Total
(tonnes) (tonnes) (tonnes)
If production 
increase is equal to 
field trials
219,735 271,933 8,284 4,892 13,176
If production 
increase is 80% of 
field trials
175,788 217,546 6,627 4,892 11,519
If production 
increase is 70% of 
field trials
153,815 190,353 5,799 4,892 10,691
These estimates show that the KADP has contributed to the conservation of cropland
resources in Kosovo by preventing the mining of at least 10,000 tonnes of plant nutrient (N,
P2O5, and K2O) during cropping seasons of 2000 to 2002. With a farm-level cost of €5.9 million, 
15,873 tonnes of 15-15-15 and 10,582 tonnes of CAN would be required to restore the
10,000 tonnes of nutrients that would have been mined from the soil.
Benefit-Cost Analysis
Economic Benefits
Economic benefits of the KADP are net added economic returns to factors of production 
that occur as result of the outputs and impacts of the KADP. These benefits are expressed in
monetary units and for the KADP are associated with (a) the increased use of fertilizers and
improved seeds and crop management practices that were induced by the activities of the
program and (b) the increased efficiency and profitability of targeted agribusinesses.
26
Estimates of economic benefits of the KADP are presented in Table 7. These estimates
are derived from the measures of impact shown on Table 6 in regard to returns to farm-level 
fixed factors of production and hired labor and from Table 2 regarding increases of
agribusinesses’ profits. Benefit estimates shown on Table 7 are based on the assumption that
(a) 100% of the increase in fertilizer use is attributed to the KADP and (b) increase in profits of 
agribusinesses are estimated to be equal to 50% of the estimated savings (or gains) in
transactions that occurred as a result of cost and price advantages provided by large-volume 
transactions (economies of scale).
To conduct a simple benefit/cost analysis in terms of present values and benefit/cost
(B/C) ratios, the annual stream of benefits was estimated and determined to be €6.8 million, 
€6.946 million, and €6.809 million for 2000, 2001, and 2002, respectively. Because of data
limitations, a very crude estimate of the increase of agribusinesses’ profits is included.
Present Values and Benefit-Cost Ratios
The flows or streams of benefits and costs and estimates of present values and B/C ratios 
of the KADP for three scenarios involving different levels of impact that may be attributed to the 
program are presented in Table 8. The stream of costs is actual annual expense incurred by IFDC 
(USAID) in the implementation of the program.2
Net present values (NPV) calculated using an annual rate of discount of 12% show a
NPV of US $208,000 and a B/C ratio of 2.9 for Scenario 1. That is, if only 50% of the fertilizer 
use increase is attributed to the program and the other two benefits are as estimated in Table 7. If 
only 50% of all three estimated benefits are attributed to the program, then, the NPV is reduced 
to US $140,000 and the B/C ratio is 2.28.
 
2
 Because the program started in June 2000, expenditures (costs) for that year are adjusted to reflect an estimate of 
the cost for the whole year.
27
 Table 7. Estimates of Economic Benefits of KADP
Year 2000 Year 2001 Year 2002 3-Year Totals
Economic Benefit Wheat Maize Totals Wheat Maize Totals Wheat Maize Totals Wheat Maize Totals
Aggregated net added returns to 
land and other fixed factors of 
production (€ million)
1.097 4.992 6.089 0.734 4.208 4.942 0.726 3.909 4.634 2.557 13.108 15.665
Additional income of hired labor 
(€ million)
0.464 0.247 0.711 0.311 0.208 0.519 0.307 0.193 0.500 1.082 0.647 1.729
Increase in profits of agribusiness 
estimated as 50% of the savings in 
transactions due to economies of
scale (€ million)
0.000 1.485 1.675 3.160
Total (€ million) 6.800 6.946 6.809 20.554
28
Table 8. Sensitivity Analysis for Estimates of Net Present Values and Benefit Cost Ratiosa
Scenario Year Benefit Cost Net Benefit
($ million) ($ million) ($ million)
2000 3.755 1.266 2.489
2001 4.475 1.910 2.565
1. Only 50% of fertilizer use
increases are attributed to the 
project 2002 4.492 1.535 2.957
Present value 0.317 0.109 0.208
B/C ratio 2.90
2000 3.044 1.266 1.778
2001 2.471 1.910 0.561
2. Only 50% of all estimated
benefits are attributed to the 
project 2002 2.317 1.535 0.782
Present value 0.250 0.109 0.140
B/C ratio 2.28
2000 1.522 1.266 0.256
2001 1.236 1.910 -0.674
3. Only 25% of all estimated
benefits are attributed to the 
project 2002 1.159 1.535 -0.376
Present value 0.125 0.109 0.016
B/C ratio 1.14
a. Calculated using an annual discount rate of 12%.
29
The economic effectiveness of USAID investment in the KADP is clearly demonstrated 
by the estimates obtained for Scenario 3. These very conservative estimates show that even in the 
extreme case of considering that only 25% of all estimated benefits are attributed to the KADP, 
the program still has a positive NPV of US $16,000 and a B/C ratio of 1.14.
Summary and Conclusions
Although this is not a comprehensive program assessment document, an effort has been 
made to conduct an economic assessment of the program in terms of its most relevant and
quantifiable benefits. Despite some data limitations, reliable estimates of key impacts and
benefits of the KADP were obtained. These estimates show clearly that the program had very
significant positive impacts on the development of a more dynamic and effective agribusiness
subsector and in the productivity of agriculture. Significant increases in the volume of business
and investments of agribusinesses occurred as a result of the impact of the KADP on ATA and 
targeted agribusiness enterprises. At the farm level, the program has increased the productivity
and income of farmers using fertilizers and, even more, in the case of those farmers adopting
improved seeds and weed control in conjunction with the use of fertilizers. Thus, in terms of
impacts the program has been very successful.
Despite the fact that all the economic benefits in the agribusiness subsector were not
properly included and estimated due to data limitations, the economic returns to USAID
investment in the KADP are positive and significant. Net present values (NPV) calculated at a
12% rate of discount vary from US $208,000 for a scenario reflecting realistic expectations to
US $16,000 for an extreme case scenario based on the assumption that only 25% of all estimated 
benefits are attributed to the KADP. B/C ratios vary from 2.9 to 1.14.
Finally, it is important to note that there is still a great potential for Kosovo to increase
agricultural productivity through the adoption of improved technology by farmers and the
development of agribusinesses that provide important value added to agricultural outputs and can 
become “captive” market outlets to farmers. Technical assistance for development programs that 
30
focus on these issues and are sponsored by USAID should have important impacts, good
economic returns on investment, and will be successful programs.