Vegetable production in North Macedonia – competitiveness, trends and challenges

Abstract

The aim of this paper is to provide an analysis of the vegetable production trends in North Macedonia and examine its comparative advantage. The study is based on desk research data concerning vegetable production and trade, and a tailor-made survey carried out at key informant growers during the period February-April 2019. Emphasis is put on the development of the country’s exports determined through the revealed comparative advantage index. Vegetable production is the major single subsector contributor to the agricultural gross product in the country, representing around one-third of its output value. The total production over the last decade averaged around 900 thousand tons annually, out of which 20% are exported (around 80% as fresh and the rest as processed or frozen). Key challenge for vegetable growers is competitiveness. Competition from neighboring countries is becoming more intensive in recent years and the comparative advantage of this important sector is weakening. Vegetable growers need to be differentiated from their competitors by better cost structure, efficient production systems, higher quality, product consistency, demand-side capability, flexibility to follow trends, and ability to rapidly change technology. Horizontal and vertical integration in the value chain, with appropriate backing from the advisory and knowledge transfer systems, as well as relevant policy support especially in terms of modernization and structural aids, need to constitute the backbone for increased competitiveness of the sector and overcoming the imminent challenges.