attitudes to spending and leverage. to say there have been some pretty powerful, and disparate, forces at work is something of an understatement, even for a central banker. at present, while growth in australia ’ s group of trading partners is about average, and is higher than the rate of growth for the world economy as a whole, the nature of that growth is shifting. the growth in chinese demand for iron ore, for example, has weakened at the same time that supply has been greatly increased, much of it from australia. iron ore prices are therefore falling and contributing to a fall in australia ’ s terms of trade. as the terms of trade fall, and national income grows more slowly than it would have otherwise, adjustment is occurring in several ways : see < http : / / www. rba. gov. au / publications / fsr / 2015 / mar / html / contents. html >. bis central bankers ’ speeches • incomes of those directly exposed to the resources sector, be it as employees, owners or service providers, are reduced. • nominal wages generally are lower than otherwise. • the australian dollar has declined and will very likely fall further yet, over time. this is one of the main ways that the lower national income is ‘ transmitted ’ to the population : purchasing power over foreign goods and services is reduced. at the same time, australians receive some price incentives to substitute towards domestically produced goods and services. and the purchasing power of foreigners over the value added by australian labour and capital is higher than otherwise. • saving by households, which rose when the terms of trade rose, is tending to decline as the terms of trade fall. this is a natural response to lower income growth and is being reinforced by easier monetary policy, which has reduced the return on safe financial assets. that said, the fact that many households already carry a considerable debt burden means that the extent to which they will be prepared to reduce saving to fund consumption may be less than it once was. more on this in a moment. • as part of the same adjustment, government saving is increasing more slowly ( more accurately, government dis - saving is lessening more slowly ) than otherwise. this is more or less automatic to the extent that lower commodity prices directly reduce state and federal government revenues. more generally, the more reluctant households are to lower their saving and increase their spending the harder the government may find it to increase its saving. macroeconomic policy is supporting the adjustment. on the fiscal

known as “ the economies of scale ”. there are many reasons behind this. we can mention the inheritance of the communist system and the separation of land after its collapse. as it was stated above, the lack of a normal land market also due to ownership problems, naturally plays an important role in establishing larger farms and, consequently, more competitive ones. these problems also affect the agricultural sector - bank relationship and the lending activity at home. the recent data show that lending to the agricultural sector accounts for 1. 25 % of total lending to businesses, on average. it is a considerably low figure, which should raise our concern, considering that this sector contributes by one / fifth to the gross domestic product. i believe that there are two reasons driving the banking system to be reluctant to finance different projects in this sector. first, risk classification and categorisation for credit to agricultural sector is a commitment different from the other activities. the lack of formalisation, even for matters such as regular maintenance of information and statistics bis central bankers ’ speeches about ownership, and financial statistics, damage the farmers ’ credibility from the early steps of lending. i find that there is room for prudential intervention by public institutions, not to condemn farmers, but to better prepare them and assist them in formalising their business. in light of this, the bank of albania has in the past years initiated a campaign to improve the financial education of the albanian people. the recent results of our questionnaires indicate that the albanian urban population shows increasing and a more complete knowledge related to various financial problems they encounter. but the results on rural areas reveal that the education level remains considerably lower. second, the albanian agricultural sector suffers from the lack of information and evaluation. as i noted above, one of the reasons why banks hesitate to increase their lending is the lack of complete information on farms and their products. further, the quality certification standards for albanian products remain low. one of the main reasons restricting higher exports and, consequently, higher production, is the lack of certification in accordance with the highest standards for all the albanian agricultural products. this type of certification does not only prove the elementary food security required by the european markets, but also establishes a starting point for competition in the market. the presence of these standards at a reliable level would lead to the improvement of all market mechanisms, by helping bank lending in proportion to the quality of products. in the framework of concerns facing the agricultural sector, the bank of albania has increased its interest in micro