Abstract

The undeveloped rural capital market in the Republic of Macedonia is constrained by an urban–rural development gap with limited capacities for rural development and imperfections in the rural capital market. Among the most striking hindrances are the illegal status of a large share of agricultural buildings and other real estate in rural areas, particularly, on the individual family farms that prevail in the country, and the insufficient knowledge and abilities of individual farmers in applying for credit. National, European Union and other donor funds are being used to improve knowledge, skills and other human resources, and to address the illegal status of buildings and facilities. During the most recent years, government support for agricultural, rural and regional development has been introduced to promote good agricultural practices, production and economic activity in rural areas. The elimination of imperfections and improvements to the functioning of the capital market – making access to credit and funds easier, especially, for small-scale family farms and for rural development are seen as measures contributing to agriculture and more balanced rural and regional development.

Key words: Capital market, farm income, subsidies, loans, agricultural and rural development, Former Yugoslav Republic of Macedonia.