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n Commission, 1993). We define petitiveness as the ability of a Kosovar farmer/producer or a sector of Kosovar agriculture, say milk or wine, to survive and maintain market share at prices determined by international trade. To maximise economic welfare for Kosovar society, prices should be based on those available at its international borders, that is, the trade parity prices—import parity prices in the case of sectors for which Kosova imports (world prices plus transport charges) and export parity prices in the case of export sectors (world prices minus transport charges). These prices represent the economic value or opportunity cost of domestically produced goods within Kosova. Competitiveness is determined by a range of factors but a country’s natural resources endowment, resources mix and technology are underlying determinants. International trade theory and the theory of parative advantage are based on the concept that countries have different natural resource endowments. It implies that countries should ? specialise in (and trade in/export) those goods whose production uses the country’s most abundant resources。 ? import those goods whose production involves its relatively more scarce resources. Kosova is a small, landlocked country with a limited domestic market within which it will be difficult to realise economies of scale. It has difficult, expensive internal and international transport routes which are a serious impediment to exports but offer protection to the domestic market. Agricultural Resources Labour The agricultural population is 1 million people or 100,000–150,000 farm households out of a total population of 2 million. In 1997 the active population engaged in agriculture accounted for 50% of the total active population and 70% of the total labour force if upstream and downstream linkages are included. There is a considerable number of parttime, subsistence farmers loosely engaged in markets for inputs and farm output. Household food security is their priority, selling and marketing surplus production a secondary consideration. As elsewhere in Central and Eastern Europe, there has been a sharp increase in the proportion of the population engaged in agriculture during transition and following the conflict, as employees in state industries and sociallyowned enterprises lost their jobs and turned to parttime, subsistence farming to meet their household food security needs (Kostov amp。 Lingard, 2020). It is difficult to ‘connect with’ the subsistence sector using marketbased, agricultural policy instruments and other rural strategies are required. Land Kosova has an area of million hectares, of which 430,000 ha are forested (39%) and 577,000 ha are classified as agricultural land (52%). Of the latter, 180,000 ha (31%) are pastures and 400,000 ha (69%) are cultivable. Historically the main crops grown were wheat, maize, fodder crops, vegetables and barley along with small orchards and vineyards. Some 85% of the agricultural land is privately owned, including 96% of cultivable land, 30% of