North Macedonia - Agricultural SectorsNorth Macedonia - Agriculture
Overview
Exports of agriculture and food products in 2018 constituted 9.31 percent of North Macedonia’s total exports. The top markets for agriculture and food products are the EU (50.5 percent of total exports, including Greece 14.6, Germany 14.4, Bulgaria 13.2, and Croatia 12 percent), and CEFTA countries (33.9 percent). The main export products from North Macedonia are tobacco, lamb meat, fresh and processed vegetables and fruits, wine, and confectionary products. The main import products are meat (poultry, beef and pork accounted for 20 percent of total agriculture imports), chocolates and confectionary, cheese, processed foods, and grains.
North Macedonia-U.S. trade in agricultural products slightly dropped from USD 40.5 million in 2017 to USD 39.5 million in 2018. The U.S. share of North Macedonia’s agricultural imports increased 0.05 percent in 2018 to 1.06 percent of total imports, while the share of North Macedonia’s agricultural exports going to the United States dropped 0.12 percent compared to 2017 and was 4.88 percent .
Food and beverage processing are significant industries in North Macedonia, as well as fresh fruits and vegetables. Processed foods include both semi-finished products (frozen, dried, and concentrates) and finished products (canned and preserved). Over 75 percent of processed foods are exported, mostly to the EU and to neighboring countries. Most food-processing facilities are private companies.
The six-year National Strategy for Agriculture and Rural Development 2014 - 2020 aims to strengthen the ability of North Macedonia’s agricultural sector to compete in the EU and other regional markets and to promote sustainable development of rural areas. The strategy, which was a pre-requisite for receiving the EU Instrument for Pre–accession Assistance (IPA) II in agriculture, also aims to improve the marketing of agricultural products and implementation of minimum quality standards so they are aligned with EU laws on the quality of agricultural products. Consequently, the total agriculture budget (including financial support to agricultural development and subsidies to farmers) has increased from USD 49.3 million in 2007 to USD 214.8 million in 2018 (exchange rate USD 1 = 54.6 MKD), and accounted for around 4.51 percent of the national budget in 2018. The largest portion of the agriculture budget (USD 153 million in 2018) was support and direct payments for agriculture production and rural development. The government is working on preparation of the new Strategy and Action plan that will reflect changes in the sector influenced with the increased direct support given to the farmers in the past five years. The government has promoted agriculture as one of the most important sectors for the development of the economy in North Macedonia and adopted and amended several agriculture related laws to comply with EU requirements. As a result of financial support to the agriculture sector, the number of family farms in 2017 increased by 10,000 compared to 2016, bringing the total number of registered farm holdings in the State Farm Register to 160,000.
As of January 1, 2009, in accordance with the Law on Veterinary Public Health and the Rule Book on sanitary and hygiene conditions for food production, every establishment that is involved in production and/or trade of food products has to implement HACCP standards in order to be able to operate.
Agribusiness is one of North Macedonia's most promising sectors. In 2017, agribusiness (including agriculture, forestry, and fisheries) accounted for 7.9 percent of GDP, 10 percent of total trade and 15.7 percent of the total number of persons employed in the country.
| 2015 | 2016 | 2017 | 2018 | |
| Total Local Production | 1.581 bl$ | 1.532 bl$ | n/a | n/a |
| Total Exports | 537.56 ml$ | 583.86 ml$ | 630.56 ml$ | 613.43 ml$ |
| Total Imports | 773.82 ml$ | 790 ml$ | 905.26 ml$ | 890 ml$ |
| Imports from the US | 507 ml$ | 8.6 ml$ | 9.4 ml$ | |
| Total Market Size | 1.817 bl$ | n/a | n/a | n/a |
| Exchange Rates | 55.5 | 55.7 | 50 | 54.6 |
(total market size = (total local production + imports) - exports)
Leading Sub-Sectors
Wine production: North Macedonia produces approximately 1 million hectoliters of wine annually in 76 wineries, and approximately 1 million hectoliters of beer, mostly for domestic consumption. It is a net exporter of wine, a strategic export product for the country. Approximately 65 percent of wine exports are in bulk and 35 percent are bottled. Production of wine in 2017 slightly dropped compared to previous years, as a result a shift by wineries to focus on production of high quality bottled wine. Over 80 percent of domestic wine production is exported, mainly to the EU, former Yugoslav countries, China, Canada, Japan, and the United States. Export opportunities exist for U.S. companies for equipment that will increase the volume of wine bottled in North Macedonia and technology and supplies to stimulate grape production.
Tobacco production: Tobacco was the top industrial crop in 2017, planted on 16,000 hectares or almost 80 percent of the total area for industrial crops. Although the area dedicated to tobacco decreased by about 2.6 percent in comparison with 2016, and the production of tobacco (22.885 tons) decreased by 3 percent, the purchase price had a growing tendency, due to improved quality of the final product and financial support given by the State. Almost the whole quantity of raw tobacco production is contracted by multinational companies through registered branches in the country and exported as fermented tobacco. The largest export market is the EU, followed by the United States and neighboring countries.
Organic production: Organic farming is an area for development. Over the past three years the amount of arable land certified for organic production and the number of companies involved grew, as a result of an increase of government support for the sector. In 2018, there were 800 registered small scale organic agricultural production entities in the country. They produce primarily meat and dairy (lamb, sheep, and goat dairy products), honey, cereals, industrial oil crops, wine, fruits, and vegetables.
Fresh fruit and vegetable production: Fresh fruit and vegetable production comprises 45.8 percent of agriculture output in the country and is export oriented. Almost 80 percent of production is exported as fresh, preserved, or processed. The production of crops is concentrated in the southern and eastern parts of the country, due to the favorable climate. Over 75 percent of vegetable production is in open fields, 20 percent in plastic tunnels, and the rest in glass greenhouses. Top vegetable crops are potatoes, beans, peppers and tomatoes, while top fruit crops are apples, plums, peaches and pears.
Preserved fruits and vegetables: The food processing industry in North Macedonia consists of 50 companies with a processing capacity of approximately 180,000 tons of fruits and vegetables per year. The most significant raw materials are red peppers, industrial tomatoes, sour cherries, apples, and plums. The industry is export oriented, with over 80 percent of production going to the EU and neighboring markets as fresh for further processing. The low amount of food processing in North Macedonia is due to problems with the supply of quality raw materials and unsophisticated suppliers, lack of skilled workers, and difficulty accessing financing.
Opportunities
U.S. food exporters should focus on establishing their business relationship with a reliable and efficient importer and distributor, with access to appropriate distribution and sales channels.
The Government of North Macedonia considers agriculture a target area for future investment, growth and development, including increased foreign direct investment. Although the government provided significant financial support to farmers in the past ten years, the lack of modern equipment and lack of investment in processing facilities remain key weaknesses of the agriculture sector.
Domestic production of agricultural machinery is minimal, and the market relies on imports. There are substantial opportunities for U.S. companies in the agribusiness area for equipment that will add value to the food processing sector, such as bottling, packaging, and refining equipment. Experts have also identified problems in waste treatment and waste disposal, hygiene, and in meeting environmental standards.
Meat: North Macedonia is net importer of meat, as it has insufficient meat production, and the number of farm animals continues to decrease. North Macedonia meets over 50 percent of its meat consumption through imports. The poultry industry is focused on egg production. There is a surplus of eggs, but poultry meat production is insufficient to satisfy the local fresh meat market. The domestic pork industry satisfies almost 90 percent of the market for fresh meat; while all of the needs for the meat processing industry comes from imports. There is a significant lack of beef, as most of the cattle in country are dairy cows. Lamb meat is the only net exported livestock product from the country. Around 85 percent of North Macedonia lamb is exported to EU countries, mainly Greece and Italy, mostly around Christmas and Easter.
Grain market: Macedonia imports most of its grain. There is insufficient domestic production of corn. The country imports one-third of its wheat annually. There is no production of soya beans; most of the soybean meal is purchased from Serbia and Hungary by large farms and concentrate producers, and U.S.-origin soybean meal comes through Greece and Bulgaria. Higher protein meal is in demand, but the market is price sensitive. In 2013 North Macedonia changed its legislation to prevent use of genetically engineered commodities in animal feed.
Web Resoruces
Ministry of Agriculture, Forestry and Water Economy
Food and Veterinary Agency
Food and Agriculture Organization of the United Nations North Macedonia country profile