Tobacco Farming and the Effects of Tobacco Subsidies in North Macedonia

Abstract

This Report was written by Analytica in North Macedonia. The report discusses the economics of tobacco subsidies in North Macedonia. Tobacco subsidies comprise a quarter of the total agricultural subsidies in the country, which is a disproportionate amount of funding. Even with these substantial subsidies, tobacco growing is decreasing and the income it produces is lower than needed to sustain a household. Food imports in the country are increasing, including expensive processed foods, leading to a large and growing trade deficit in agricultural and food products. Furthermore, as a candidate country for EU membership, North Macedonia will need to phase out tobacco-specific subsidies in order to comply with the EU Common Agricultural Policy. The report concludes by recommending ways in which the country can shift its agricultural subsidies to improve productivity and efficiency in the future.