The agricultural food industry in The agricultural food industry in Bosnia and HerzegovinaBosnia and Herzegovina

Prof. Dr. Gordana ĐurićProf. Dr. Gordana Đurić

Although the agriculture has a crucial importance for BiH economic Although the agriculture has a crucial importance for BiH economic recovering and one of the essential activities in rural area of BiH and recovering and one of the essential activities in rural area of BiH and considering that it is main mean of income for rural population (acc. 50 considering that it is main mean of income for rural population (acc. 50 % of total population), these facts were not enough stressed, both in % of total population), these facts were not enough stressed, both in speeches among official representatives in BiH as well as in contacts speeches among official representatives in BiH as well as in contacts with representatives of international community. with representatives of international community. Also, the adequate domestic support to agriculture and rural Also, the adequate domestic support to agriculture and rural development was missed.development was missed.

Agricultural production in Bosnia and Herzegovina is Agricultural production in Bosnia and Herzegovina is charged with numberless problems:charged with numberless problems:

small size of single farms,small size of single farms,

high rate of unused agricultural land because of high rate of unused agricultural land because of unrecoverable migration of population and bad privatization unrecoverable migration of population and bad privatization of former state agricultural enterprisesof former state agricultural enterprises

weak institutions coordination in Bosnia and Herzegovina,weak institutions coordination in Bosnia and Herzegovina,

weak measures of subsidies and absence of coordination in weak measures of subsidies and absence of coordination in subvention of agricultural productionsubvention of agricultural production

bad export/import share in agro-complex.bad export/import share in agro-complex.

Agro-complex import and export overview (mills. EUR)Agro-complex import and export overview (mills. EUR)

YearYear ExportExport ImportImport Export/ImportExport/Import ( (%%))

20002000 42.742.7 720.59720.59 5,945,94

20012001 55.555.5 773.87773.87 7,177,17

20022002 60.460.4 857.01857.01 7,057,05

20032003 75.975.9 941.62941.62 8,068,06

20042004 90.090.0 994.08994.08 9,059,05

Source: Foreign Trade Chamber of Bosnia and HerzegovinaSource: Foreign Trade Chamber of Bosnia and Herzegovina

Bosnian and Herzegovina economy is almost completely devastated Bosnian and Herzegovina economy is almost completely devastated during war time and economy like this can not recover and can not offer during war time and economy like this can not recover and can not offer significant quantity of goods for export even 10 years after war finished.significant quantity of goods for export even 10 years after war finished. On the other hand, today as well as before 10 years, Bosnia and On the other hand, today as well as before 10 years, Bosnia and Herzegovina is import-dependant country no matter if it is word about raw Herzegovina is import-dependant country no matter if it is word about raw materials, semi-final products or final products.materials, semi-final products or final products.

Budget for agriculture subvention are only 3Budget for agriculture subvention are only 3 –– 4% of total 4% of total Budget income per year. Budget income per year. Agricultural subventions on BAgricultural subventions on BiiH level is only 0.32% of total GDP H level is only 0.32% of total GDP during 2004 and 0.37% in 2005. during 2004 and 0.37% in 2005. Quite opposite, agricultural share in GDP and level of Quite opposite, agricultural share in GDP and level of employment in agriculture is 18-20%.employment in agriculture is 18-20%.

The agricultural subventions in Republika Srpska were The agricultural subventions in Republika Srpska were 9.45 mills. 9.45 mills. EUR EUR or 1,79% of total Budget income in 2004, and or 1,79% of total Budget income in 2004, and 16.86 mill. EUR 16.86 mill. EUR or or 3,49% of total Budget income in 2005.3,49% of total Budget income in 2005.

In Federation of BIn Federation of BiiH, the subventions in 2004 were H, the subventions in 2004 were 11.76 mills. 11.76 mills. EUR EUR or 1,84% of total Budget income, and during 2005 this amount or 1,84% of total Budget income, and during 2005 this amount was decreased to the was decreased to the 9.44 mill. EUR 9.44 mill. EUR or 1,82%. or 1,82%.

Interest of BiH entities in agricultural sector is different. Interest of BiH entities in agricultural sector is different. The main part of agricultural land as well as primary agricultural The main part of agricultural land as well as primary agricultural production are located in RS, and FBiH has more processingproduction are located in RS, and FBiH has more processing

This is the reason for different sounds in protection of domestic This is the reason for different sounds in protection of domestic production regarding to tariff customs and these facts should be taken production regarding to tariff customs and these facts should be taken into account in all negotiations process and policy designing.into account in all negotiations process and policy designing.

The BiH agriculture is in shadow of many problems The BiH agriculture is in shadow of many problems (security and defense reforms, obligation to Haque Tribunal, etc) (security and defense reforms, obligation to Haque Tribunal, etc) on one side, and bad agricultural policy on the BiH level and on one side, and bad agricultural policy on the BiH level and not adequate competent officiall representatives for agriculture not adequate competent officiall representatives for agriculture sector in previos period, on the other side.sector in previos period, on the other side.

The some competencies in agriculture on BiH level The some competencies in agriculture on BiH level (in framework of foreign trade and customs) are in MofTER, (in framework of foreign trade and customs) are in MofTER, but this is not good solution for agricultural production and food but this is not good solution for agricultural production and food industry.industry.

EU Functional Rewiev of the Agricultural Sector in BiH EU Functional Rewiev of the Agricultural Sector in BiH indicated the non-adequate sharing of competencies as well as indicated the non-adequate sharing of competencies as well as the conflict of protection and support of still week Bih agriculture the conflict of protection and support of still week Bih agriculture and MofTER general trade policies and interests. and MofTER general trade policies and interests.

This Rewiev This Rewiev alsoalso indicated the indicated the weak BiH institutions weak BiH institutions coordination and necessity of entities ministry strengthening as coordination and necessity of entities ministry strengthening as development ministries.development ministries.

The proposed changes of Constitutional Law include the The proposed changes of Constitutional Law include the clear sharing of competencies between State and Entity. clear sharing of competencies between State and Entity.

In that meaning, the proposal of EU Review for In that meaning, the proposal of EU Review for establishing of Ministry of Agriculture and Rural establishing of Ministry of Agriculture and Rural Development of BiH is accepted. MoARD should be Development of BiH is accepted. MoARD should be competent for:competent for: European IntegrationEuropean Integration International Agricultural TradeInternational Agricultural Trade Animal & Plant Health and Food Safety, andAnimal & Plant Health and Food Safety, and Policies & Strategies CoordinationPolicies & Strategies Coordination

Today, when three processes are negotiated in parallel:Today, when three processes are negotiated in parallel: Free Trade Treaty in South East Europe, Free Trade Treaty in South East Europe, Stabilization and Association Agreement.Stabilization and Association Agreement. WTO membership conditions; WTO membership conditions;

Bosnia and Herzegovina is faced with situation where it Bosnia and Herzegovina is faced with situation where it must be found out way to protect and stimulate industrial and must be found out way to protect and stimulate industrial and agricultural production without violation above mentioned agricultural production without violation above mentioned crucial processes. crucial processes. Bosnia and Herzegovina should estimate and protect these Bosnia and Herzegovina should estimate and protect these sectors that have potential to face up with concurrency on sectors that have potential to face up with concurrency on open-door market.open-door market.

BiH generally has a chance in fruit and vegetable, milk and BiH generally has a chance in fruit and vegetable, milk and milk products, fish, lamb meat, as well as in some organic milk products, fish, lamb meat, as well as in some organic production. production.

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